Document:

11092000 S8 Plan

Exhibit 4.3

RATIONAL SOFTWARE CORPORATION

2000 DIRECTOR OPTION PLAN

	Purposes of the Plan.  The purposes of this 2000 Director Option Plan are to attract and retain the best available
personnel for service as Outside Directors (as defined herein) of the Company, to provide additional incentive to the Outside
Directors of the Company to serve as Directors, and to encourage their continued service on the Board.

All Options granted hereunder shall be nonstatutory stock options.

	Definitions.  As used herein, the following definitions shall apply:

	"Board" means the Board of Directors of the Company.
	"Code" means the Internal Revenue Code of 1986, as amended.
	"Common Stock" means the common stock of the Company.
	"Company" means Rational Software Corporation, a Delaware corporation.
	"Director" means a member of the Board.
	"Disability" means total and permanent disability as defined in section 22(e)(3) of the Code.
	"Employee" means any person, including officers and Directors, employed by the Company or any Parent or
Subsidiary of the Company.  The payment of a Director's fee by the Company shall not be sufficient in and of itself to constitute
"employment" by the Company.
	"Exchange Act" means the Securities Exchange Act of 1934, as amended.
	"Fair Market Value" means, as of any date, the value of Common Stock determined as follows:

	If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales
price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination
as reported in The Wall Street Journal or such other source as the Administrator deems reliable;
	If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market
Value of a Share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock for the day of
determination, as reported in The Wall Street Journal or such other source as the Board deems reliable; or
	In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by
the Board.

	"Inside Director" means a Director who is an Employee.
	"Option" means a stock option granted pursuant to the Plan.
	"Optioned Stock" means the Common Stock subject to an Option.
	"Optionee" means a Director who holds an Option.
	"Outside Director" means a Director who is not an Employee. 
	"Parent" means a "parent corporation," whether now or hereafter existing, as defined in Section 424(e)
of the Code.
	"Plan" means this 2000 Director Option Plan.
	"Share" means a share of the Common Stock, as adjusted in accordance with Section 10 of the Plan.
	"Subsidiary" means a "subsidiary corporation," whether now or hereafter existing, as defined in
Section 424(f) of the Internal Revenue Code of 1986.

	Stock Subject to the Plan.  Subject to the provisions of Section 10 of the Plan, the maximum aggregate number of Shares
which may be optioned and sold under the Plan is 500,000 Shares (the "Pool").  The Shares may be authorized, but unissued,
or reacquired Common Stock.  

If an Option expires or becomes unexercisable without having been exercised in full, the unpurchased Shares which were subject
thereto shall become available for future grant or sale under the Plan (unless the Plan has terminated).  Shares that have actually
been issued under the Plan shall not be returned to the Plan and shall not become available for future distribution under the
Plan.

	Administration and Grants of Options under the Plan.

	Procedure for Grants.  All grants of Options to Outside Directors under this Plan shall be automatic and nondiscretionary
and shall be made strictly in accordance with the following provisions:

	No person shall have any discretion to select which Outside Directors shall be granted Options or to determine the number of
Shares to be covered by Options.
	Each Outside Director shall be automatically granted an Option to purchase 70,000 Shares (the "First Option") on the
date on which such person first becomes an Outside Director, whether through election by the shareholders of the Company or
appointment by the Board to fill a vacancy; provided, however, that an Inside Director who ceases to be an Inside Director but who
remains a Director shall not receive a First Option. 
	Each Outside Director shall be automatically granted an Option to purchase 20,000 Shares (a "Subsequent Option") on the
date of the Company's annual stockholder's meeting of each year, provided he or she is then an Outside Director and if as of such
date, he or she shall have served on the Board for at least the preceding six (6) months.
	Notwithstanding the provisions of subsections (ii) and (iii) hereof, any exercise of an Option granted before the Company has
obtained shareholder approval of the Plan in accordance with Section 16 hereof shall be conditioned upon obtaining such shareholder
approval of the Plan in accordance with Section 16 hereof.
	The terms of a First Option granted hereunder shall be as follows:

	the term of the First Option shall be ten (10) years.
	the First Option shall be exercisable only while the Outside Director remains a Director of the Company, except as set forth in
Sections 8 and 10 hereof.
	the exercise price per Share shall be 100% of the Fair Market Value per Share on the date of grant of the First Option.
	subject to Section 10 hereof, the First Option shall become exercisable as to 25% of the Shares subject to the First Option on
the first anniversary of its date of grant, and exercisable as to 1/48 of the Shares subject to the First  Option each month
thereafter, provided that the Optionee continues to serve as a Director on such dates.

	The terms of a Subsequent Option granted hereunder shall be as follows:

	the term of the Subsequent Option shall be ten (10) years.
	the Subsequent Option shall be exercisable only while the Outside Director remains a Director of the Company, except as set forth
in Sections 8 and 10 hereof.
	the exercise price per Share shall be 100% of the Fair Market Value per Share on the date of grant of the Subsequent Option.

	subject to Section 10 hereof, the Subsequent Option shall become exercisable as to as to 1/48 of the Shares subject to the
Subseuent  Option each month from the date of grant, provided that the Optionee continues to serve as a Director on such
dates

	In the event that any Option granted under the Plan would cause the number of Shares subject to outstanding Options plus the
number of Shares previously purchased under Options to exceed the Pool, then the remaining Shares available for Option grant shall be
granted under Options to the Outside Directors on a pro rata basis.  No further grants shall be made until such time, if any, as
additional Shares become available for grant under the Plan through action of the Board or the shareholders to increase the number of
Shares which may be issued under the Plan or through cancellation or expiration of Options previously granted hereunder.

	Eligibility.  Options may be granted only to Outside Directors.  All Options shall be automatically granted in accordance
with the terms set forth in Section 4 hereof. 

The Plan shall not confer upon any Optionee any right with respect to continuation of service as a Director or nomination to serve
as a Director, nor shall it interfere in any way with any rights which the Director or the Company may have to terminate the
Director's relationship with the Company at any time.

	Term of Plan.  The Plan shall become effective upon the earlier to occur of its adoption by the Board or its approval by
the shareholders of the Company as described in Section 16 of the Plan.  It shall continue in effect for a term of ten (10) years
unless sooner terminated under Section 11 of the Plan.

	Form of Consideration.  The consideration to be paid for the Shares to be issued upon exercise of an Option, including the
method of payment, shall consist of (i) cash, (ii) check, (iii) other Shares, provided Shares acquired directly from the Company, (x)
have been owned by the Optionee for more than six (6) months on the date of surrender, and (y) have a Fair Market Value on the date
of surrender equal to the aggregate exercise price of the Shares as to which said Option shall be exercised, (iv) consideration
received by the Company under a cashless exercise program implemented by the Company in connection with the Plan, or (v) any
combination of the foregoing methods of payment.

	Exercise of Option.

	Procedure for Exercise; Rights as a Shareholder. Any Option granted hereunder shall be exercisable at such times as are
set forth in Section 4 hereof; provided, however, that no Options shall be exercisable until shareholder approval of the Plan in
accordance with Section 16 hereof has been obtained.  An Option may not be exercised for a fraction of a Share.

An Option shall be deemed to be exercised when written notice of such exercise has been given to the Company in accordance with
the terms of the Option by the person entitled to exercise the Option and full payment for the Shares with respect to which the
Option is exercised has been received by the Company.  Full payment may consist of any consideration and method of payment allowable
under Section 7 of the Plan.  Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) of the stock certificate evidencing such Shares, no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option.  A
share certificate for the number of Shares so acquired shall be issued to the Optionee as soon as practicable after exercise of the
Option. No adjustment shall be made for a dividend or other right for which the record date is prior to the date the stock
certificate is issued, except as provided in Section 10 of the Plan.

Exercise of an Option in any manner shall result in a decrease in the number of Shares which thereafter may be available, both for
purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.

	Termination of Continuous Status as a Director.  Subject to Section 10 hereof, in the event an Optionee's status as a
Director terminates (other than upon the Optionee's death or Disability), the Optionee may exercise his or her Option, but only
within three (3) months following the date of such termination, and only to the extent that the Optionee was entitled to exercise it
on the date of such termination (but in no event later than the expiration of its ten (10) year term).  To the extent that the
Optionee was not entitled to exercise an Option on the date of such termination, and to the extent that the Optionee does not
exercise such Option (to the extent otherwise so entitled) within the time specified herein, the Option shall terminate.

	Disability of Optionee.  In the event Optionee's status as a Director terminates as a result of Disability, the Optionee
may exercise his or her Option, but only within twelve (12) months following the date of such termination, and only to the extent
that the Optionee was entitled to exercise it on the date of such termination (but in no event later than the expiration of its ten
(10) year term).  To the extent that the Optionee was not entitled to exercise an Option on the date of termination, or if he or she
does not exercise such Option (to the extent otherwise so entitled) within the time specified herein, the Option shall
terminate.

	Death of Optionee.  In the event of an Optionee's death, the Optionee's estate or a person who acquired the right to
exercise the Option by bequest or inheritance may exercise the Option, but only within twelve (12) months following the date of
death, and only to the extent that the Optionee was entitled to exercise it on the date of death (but in no event later than the
expiration of its ten (10) year term).  To the extent that the Optionee was not entitled to exercise an Option on the date of death,
and to the extent that the Optionee's estate or a person who acquired the right to exercise such Option does not exercise such Option
(to the extent otherwise so entitled) within the time specified herein, the Option shall terminate.

	Non-Transferability of Options.  The Option may not be sold, pledged, assigned, hypothecated, transferred, or disposed of
in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Optionee,
only by the Optionee.

	Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset Sale. 

	Changes in Capitalization.  Subject to any required action by the shareholders of the Company, the number of Shares
covered by each outstanding Option, the number of Shares which have been authorized for issuance under the Plan but as to which no
Options have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Option, as well as the
price per Share covered by each such outstanding Option, and the number of Shares issuable pursuant to the automatic grant
provisions of Section 4 hereof shall be proportionately adjusted for any increase or decrease in the number of issued Shares
resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued Shares effected without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of
consideration."  Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of Shares subject to an Option.

	Dissolution or Liquidation.  In the event of the proposed dissolution or liquidation of the Company, to the extent that an
Option has not been previously exercised, it shall terminate immediately prior to the consummation of such proposed action.

	Merger or Asset Sale.  In the event of a merger of the Company with or into another corporation or the sale of
substantially all of the assets of the Company, outstanding Options may be assumed or equivalent options may be substituted by the
successor corporation or a Parent or Subsidiary thereof (the "Successor Corporation").  If an Option is assumed or
substituted for, the Option or equivalent option shall continue to be exercisable as provided in Section 4 hereof for so long as the
Optionee serves as a Director or a director of the Successor Corporation.  Following such assumption or substitution, if the
Optionee's status as a Director or director of the Successor Corporation, as applicable, is terminated other than upon a voluntary
resignation by the Optionee, the Option or option shall become fully exercisable, including as to Shares for which it would not
otherwise be exercisable.  Thereafter, the Option or option shall remain exercisable in accordance with Sections 8(b) through (d)
above.

If the Successor Corporation does not assume an outstanding Option or substitute for it an equivalent option, the Option shall
become fully vested and exercisable, including as to Shares for which it would not otherwise be exercisable.  In such event the Board
shall notify the Optionee that the Option shall be fully exercisable for a period of thirty (30) days from the date of such notice,
and upon the expiration of such period the Option shall terminate.  

For the purposes of this Section 10(c), an Option shall be considered assumed if, following the merger or sale of assets, the
Option confers the right to purchase or receive, for each Share of Optioned Stock subject to the Option immediately prior to the
merger or sale of assets, the consideration (whether stock, cash, or other securities or property) received in the merger or sale of
assets by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice
of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares).  If such consideration
received in the merger or sale of assets is not solely common stock of the successor corporation or its Parent, the Administrator
may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Option, for
each Share of Optioned Stock subject to the Option, to be solely common stock of the successor corporation or its Parent equal in
fair market value to the per share consideration received by holders of Common Stock in the merger or sale of assets.

	Amendment and Termination of the Plan.

	Amendment and Termination.  The Board may at any time amend, alter, suspend, or discontinue the Plan, but no amendment,
alteration, suspension, or discontinuation shall be made which would impair the rights of any Optionee under any grant theretofore
made, without his or her consent.  In addition, to the extent necessary and desirable to comply with any applicable law, regulation
or stock exchange rule, the Company shall obtain shareholder approval of any Plan amendment in such a manner and to such a degree as
required.

	Effect of Amendment or Termination.  Any such amendment or termination of the Plan shall not affect Options already
granted and such Options shall remain in full force and effect as if this Plan had not been amended or terminated.

	Time of Granting Options.  The date of grant of an Option shall, for all purposes, be the date determined in accordance
with Section 4 hereof.

	Conditions Upon Issuance of Shares.  Shares shall not be issued pursuant to the exercise of an Option unless the exercise
of such Option and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, state securities laws, and the requirements of any stock exchange upon which the Shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such compliance.

As a condition to the exercise of an Option, the Company may require the person exercising such Option to represent and warrant at
the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or
distribute such Shares, if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned
relevant provisions of law.

Inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the
Company's counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability
in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

	Reservation of Shares.  The Company, during the term of this Plan, will at all times reserve and keep available such
number of Shares as shall be sufficient to satisfy the requirements of the Plan.

	Option Agreement.  Options shall be evidenced by written option agreements in such form as the Board shall approve.

	Shareholder Approval.  The Plan shall be subject to approval by the shareholders of the Company within twelve (12) months
after the date the Plan is adopted.  Such shareholder approval shall be obtained in the degree and manner required under applicable
state and federal law and any stock exchange rules.

 

FIRST OPTION

RATIONAL SOFTWARE CORPORATION

DIRECTOR OPTION AGREEMENT

Rational Software Corporation, (the "Company"), has granted to ___________________ (the "Optionee"), an
option to purchase a total of 70,000 shares of the Company's Common Stock (the "Optioned Stock"), at the price determined
as provided herein, and in all respects subject to the terms, definitions and provisions of the Company's 2000 Director Option Plan
(the "Plan") adopted by the Company which is incorporated herein by reference.  The terms defined in the Plan shall have
the same defined meanings herein.

	Nature of the Option.  This Option is a nonstatutory option and is not intended to qualify for any special tax benefits to
the Optionee.

	Exercise Price.  The exercise price is $_______ for each share of Common Stock.

	Exercise of Option.  This Option shall be exercisable during its term in accordance with the provisions of Section 8 of
the Plan as follows:

	Right to Exercise.

	This Option shall become exercisable in installments cumulatively with respect to 25% of the Optioned Stock on the first
anniversary of its date of grant plus an additional 1/48 of the Optioned Stock each month thereafter, so that one hundred percent
(100%) of the Optioned Stock shall be exercisable 4 years after the date of grant; provided, however, that in no event shall any
Option be exercisable prior to the date the stockholders of the Company approve the Plan.
	This Option may not be exercised for a fraction of a share.
	In the event of Optionee's death, disability or other termination of service as a Director, the exercisability of the Option is
governed by Section 8 of the Plan.

	Method of Exercise.  This Option shall be exercisable by written notice which shall state the election to exercise the
Option and the number of Shares in respect of which the Option is being exercised.  Such written notice, in the form attached hereto
as Exhibit A, shall be signed by the Optionee and shall be delivered in person or by certified mail to the Secretary of the
Company.  The written notice shall be accompanied by payment of the exercise price.

	Method of Payment.  Payment of the exercise price shall be by any of the following, or a combination thereof, at the
election of the Optionee:

	cash;
	check; 
	surrender of other Shares, provided Shares acquired directly from the Company, (x) have been owned by the Optionee for more than
six (6) months on the date of surrender, and (y) have a Fair Market Value on the date of surrender equal to the aggregate exercise
price of the Shares as to which said Option shall be exercised; or
	delivery of a properly executed exercise notice together with such other documentation as the Company and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to the Company of the sale or loan proceeds required to
pay the exercise price.

	Restrictions on Exercise.  This Option may not be exercised if the issuance of such Shares upon such exercise or the
method of payment of consideration for such shares would constitute a violation of any applicable federal or state securities or
other law or regulations, or if such issuance would not comply with the requirements of any stock exchange upon which the Shares may
then be listed.  As a condition to the exercise of this Option, the Company may require Optionee to make any representation and
warranty to the Company as may be required by any applicable law or regulation.

	Non-Transferability of Option.  This Option may not be transferred in any manner otherwise than by will or by the laws of
descent or distribution and may be exercised during the lifetime of Optionee only by the Optionee.  The terms of this Option shall be
binding upon the executors, administrators, heirs, successors and assigns of the Optionee.

	Term of Option.  This Option may not be exercised more than ten (10) years from the date of grant of this Option, and may
be exercised during such period only in accordance with the Plan and the terms of this Option.

	Taxation Upon Exercise of Option.  Optionee understands that, upon exercise of this Option, he or she will recognize
income for tax purposes in an amount equal to the excess of the then Fair Market Value of the Shares purchased over the exercise
price paid for such Shares.  Since the Optionee is subject to Section 16(b) of the Securities Exchange Act of 1934, as amended, under
certain limited circumstances the measurement and timing of such income (and the commencement of any capital gain holding period) may
be deferred, and the Optionee is advised to contact a tax advisor concerning the application of Section 83 in general and the
availability a Section 83(b) election in particular in connection with the exercise of the Option.  Upon a resale of such Shares by
the Optionee, any difference between the sale price and the Fair Market Value of the Shares on the date of exercise of the Option, to
the extent not included in income as described above, will be treated as capital gain or loss.

 

DATE OF GRANT:  ______________

RATIONAL SOFTWARE CORPORATION, 

A Delaware corporation

By: 

Optionee acknowledges receipt of a copy of the Plan, a copy of which is attached hereto, and represents that he or she is
familiar with the terms and provisions thereof, and hereby accepts this Option subject to all of the terms and provisions thereof.
Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any questions
arising under the Plan.

Dated: _________________

______________________________

Optionee

EXHIBIT A

DIRECTOR OPTION EXERCISE NOTICE

Rational Software Corporation

18880 Homestead Road

Cupertino, CA 95014

Attention:  Corporate Secretary

	Exercise of Option.  The undersigned ("Optionee") hereby elects to exercise Optionee's option to purchase ______
shares of the Common Stock (the "Shares") of Rational Software Corporation (the "Company") under and pursuant to
the Company's 2000 Director Option Plan and the Director Option Agreement dated _______________ (the "Agreement").

	Representations of Optionee.  Optionee acknowledges that Optionee has received, read and understood the Agreement.

	Federal Restrictions on Transfer.  Optionee understands that the Shares must be held indefinitely unless they are
registered under the Securities Act of 1933, as amended (the "1933 Act"), or unless an exemption from such registration is
available, and that the certificate(s) representing the Shares may bear a legend to that effect.  Optionee understands that the
Company is under no obligation to register the Shares and that an exemption may not be available or may not permit Optionee to
transfer Shares in the amounts or at the times proposed by Optionee.  

	Tax Consequences.  Optionee understands that Optionee may suffer adverse tax consequences as a result of Optionee's
purchase or disposition of the Shares.  Optionee represents that Optionee has consulted with any tax consultant(s) Optionee deems
advisable in connection with the purchase or disposition of the Shares and that Optionee is not relying on the Company for any tax
advice.

	Delivery of Payment.  Optionee herewith delivers to the Company the aggregate purchase price for the Shares that Optionee
has elected to purchase and has made provision for the payment of any federal or state withholding taxes required to be paid or
withheld by the Company.

	Entire Agreement.  The Agreement is incorporated herein by reference.  This Exercise Notice and the Agreement constitute
the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Optionee
with respect to thesubject matter hereof.  This Exercise Notice and the Agreement are governed by California law except for that body
of law pertaining to conflict of laws.

 

Submitted by:Accepted by:

OPTIONEE:RATIONAL SOFTWARE CORPORATION

By: By: 

Its: 

Address:

 

Dated: Dated: 

 

 

SUBSEQUENT OPTION

RATIONAL SOFTWARE CORPORATION

DIRECTOR OPTION AGREEMENT

Rational Software Corporation, (the "Company"), has granted to ___________________ (the "Optionee"), an
option to purchase a total of 20,000 shares of the Company's Common Stock (the "Optioned Stock"), at the price determined
as provided herein, and in all respects subject to the terms, definitions and provisions of the Company's 2000 Director Option Plan
(the "Plan") adopted by the Company which is incorporated herein by reference.  The terms defined in the Plan shall have
the same defined meanings herein.

	Nature of the Option.  This Option is a nonstatutory option and is not intended to qualify for any special tax benefits to
the Optionee.

	Exercise Price.  The exercise price is $_______ for each share of Common Stock.

	Exercise of Option.  This Option shall be exercisable during its term in accordance with the provisions of Section 8 of
the Plan as follows:

	Right to Exercise.

(i)This Option shall become exercisable in installments cumulatively with respect to 1/48 of the Optioned Stock each motnh
from its date of grant, so that one hundred percent (100%) of the Optioned Stock shall be exercisable 4 years after the date of
grant; provided, however, that in no event shall any Option be exercisable prior to the date the stockholders of the Company approve
the Plan. 

(ii)This Option may not be exercised for a fraction of a share.

(iii)In the event of Optionee's death, disability or other termination of service as a Director, the exercisability of the
Option is governed by Section 8 of the Plan.

	Method of Exercise.  This Option shall be exercisable by written notice which shall state the election to exercise the
Option and the number of Shares in respect of which the Option is being exercised.  Such written notice, in the form attached hereto
as Exhibit A, shall be signed by the Optionee and shall be delivered in person or by certified mail to the Secretary of the
Company.  The written notice shall be accompanied by payment of the exercise price.

	Method of Payment.  Payment of the exercise price shall be by any of the following, or a combination thereof, at the
election of the Optionee:

	cash;
	check; 
	surrender of other Shares, provided Shares acquired from the Company, (x) have been owned by the Optionee for more than six (6)
months on the date of surrender, and (y) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of
the Shares as to which said Option shall be exercised; or
	delivery of a properly executed exercise notice together with such other documentation as the Company and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to the Company of the sale or loan proceeds required to
pay the exercise price.

	Restrictions on Exercise.  This Option may not be exercised if the issuance of such Shares upon such exercise or the
method of payment of consideration for such shares would constitute a violation of any applicable federal or state securities or
other law or regulations, or if such issuance would not comply with the requirements of any stock exchange upon which the Shares may
then be listed.  As a condition to the exercise of this Option, the Company may require Optionee to make any representation and
warranty to the Company as may be required by any applicable law or regulation.

	Non-Transferability of Option.  This Option may not be transferred in any manner otherwise than by will or by the laws of
descent or distribution and may be exercised during the lifetime of Optionee only by the Optionee.  The terms of this Option shall be
binding upon the executors, administrators, heirs, successors and assigns of the Optionee.

	Term of Option.  This Option may not be exercised more than ten (10) years from the date of grant of this Option, and may
be exercised during such period only in accordance with the Plan and the terms of this Option.

	Taxation Upon Exercise of Option.  Optionee understands that, upon exercise of this Option, he or she will recognize
income for tax purposes in an amount equal to the excess of the then Fair Market Value of the Shares purchased over the exercise
price paid for such Shares.  Since the Optionee is subject to Section 16(b) of the Securities Exchange Act of 1934, as amended, under
certain limited circumstances the measurement and timing of such income (and the commencement of any capital gain holding period) may
be deferred, and the Optionee is advised to contact a tax advisor concerning the application of Section 83 in general and the
availability a Section 83(b) election in particular in connection with the exercise of the Option.  Upon a resale of such Shares by
the Optionee, any difference between the sale price and the Fair Market Value of the Shares on the date of exercise of the Option, to
the extent not included in income as described above, will be treated as capital gain or loss.

 

DATE OF GRANT:  ______________

RATIONAL SOFTWARE CORPORATION, 

A Delaware corporation

By: 

Optionee acknowledges receipt of a copy of the Plan, a copy of which is attached hereto, and represents that he or she is
familiar with the terms and provisions thereof, and hereby accepts this Option subject to all of the terms and provisions thereof.
Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any questions
arising under the Plan.

Dated: _________________

______________________________

Optionee

EXHIBIT A

DIRECTOR OPTION EXERCISE NOTICE

Rational Software Corporation

18880 Homestead Road

Cupertino, CA 95014

Attention:  Corporate Secretary

	Exercise of Option.  The undersigned ("Optionee") hereby elects to exercise Optionee's option to purchase ______
shares of the Common Stock (the "Shares") of Rational Software Corporation (the "Company") under and pursuant to
the Company's 2000 Director Option Plan and the Director Option Agreement dated _______________ (the "Agreement").

	Representations of Optionee.  Optionee acknowledges that Optionee has received, read and understood the Agreement.

	Federal Restrictions on Transfer.  Optionee understands that the Shares must be held indefinitely unless they are
registered under the Securities Act of 1933, as amended (the "1933 Act"), or unless an exemption from such registration is
available, and that the certificate(s) representing the Shares may bear a legend to that effect.  Optionee understands that the
Company is under no obligation to register the Shares and that an exemption may not be available or may not permit Optionee to
transfer Shares in the amounts or at the times proposed by Optionee.  

	Tax Consequences.  Optionee understands that Optionee may suffer adverse tax consequences as a result of Optionee's
purchase or disposition of the Shares.  Optionee represents that Optionee has consulted with any tax consultant(s) Optionee deems
advisable in connection with the purchase or disposition of the Shares and that Optionee is not relying on the Company for any tax
advice.

	Delivery of Payment.  Optionee herewith delivers to the Company the aggregate purchase price for the Shares that Optionee
has elected to purchase and has made provision for the payment of any federal or state withholding taxes required to be paid or
withheld by the Company.

	Entire Agreement.  The Agreement is incorporated herein by reference.  This Exercise Notice and the Agreement constitute
the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Optionee
with respect to thesubject matter hereof.  This Exercise Notice and the Agreement are governed by California law except for that body
of law pertaining to conflict of laws.

 

Submitted by:Accepted by:

OPTIONEE:RATIONAL SOFTWARE CORPORATION

By: By: 

Its: 

Address:

 

Dated: Dated: 

 

 

EXHIBIT B

FIRST OPTION 

DIRECTOR OPTION AGREEMENT

EXHIBIT C

SUBSEQUENT OPTION

DIRECTOR OPTION AGREEMENT$200,000,000

                   SIXTH AMENDED AND RESTATED CREDIT AGREEMENT

                          Dated as of October 26, 2000

                                  by and among

                       COMMERCIAL NET LEASE REALTY, INC.,
                            NET LEASE REALTY I, INC.,
                           NET LEASE REALTY II, INC.,
                           NET LEASE REALTY III, INC.,
                         NET LEASE REALTY IV, INC., and
                             NET LEASE FUNDING, INC.
                                  as Borrowers,

                     The financial institutions party hereto
                     and their assignees under Section 11.3,
                                    as Banks,

                              BANK OF AMERICA, N.A.
                              as Syndication Agent,

                          First Union Securities, inc.,
                                  as Arranger,
                                       and

                           First Union National Bank,
                                    as Agent
<PAGE>

                                TABLE OF CONTENTS

SECTION 1.  DEFINITIONS......................................................3

      1.1    Defined Terms...................................................3
      1.2    Other Definitional Provisions..................................16

SECTION 2.  THE CREDIT......................................................17

      2.1    The Revolving Credit Facility..................................17
      2.2    Advance Requests and Funding Mechanics.........................19
      2.3    Bid Rate Loans.................................................20
      2.4     Swingline Loans...............................................23
      2.5    Letters of Credit..............................................25
      2.6    Use of Proceeds................................................27
      2.7    Notes..........................................................27
      2.8    Interest.......................................................28
      2.9    Repayment......................................................29
      2.10   Fees...........................................................30
      2.11   Extension of Revolving Credit Maturity Date....................31
      2.12   Single Loan....................................................32
      2.13   Payments and Computations......................................32
      2.14   Prepayments....................................................34
      2.15   Compensation...................................................34
      2.16   Sharing of Payments, Etc.......................................35
      2.17   Conversion and Continuation of Advances;  Failure to Select
             Interest Period................................................36
      2.18   Increased Costs, Illegality, Etc...............................37
      2.19   Letters of Credit Obligations..................................38
      2.20   Amount Limitations.............................................40

SECTION 3.  [INTENTIONALLY OMITTED].........................................40

SECTION 4. REPRESENTATIONS AND WARRANTIES...................................40

      4.1    Existence of Borrower; Compliance with Law.....................40
      4.2    Authorization..................................................41
      4.3    Enforceable Obligations........................................41
      4.4    Financial Condition of the Borrowers...........................41
      4.5    No Litigation..................................................42
      4.6    Disclosure and No Untrue Statements............................42
      4.7    Title to Assets; Leases in Good Standing.......................42
      4.8    Payment of Taxes...............................................42
      4.9    Agreement or Contract Restrictions.............................42
      4.10   Patents, Trademarks, Etc.......................................43
      4.11   Racketeer Influenced and Corrupt Organization(s) Act...........43
      4.12   Investment Company Act; Regulation.............................43
      4.13   Labor Matters..................................................43
      4.14   ERISA Requirement..............................................43
      4.15   Compliance With Environmental Requirements.....................44
      4.16   Compliance with REIT Requirements..............................44
      4.17   Principal Office/Corporate Name................................44
      4.18   Use of Credit..................................................45

SECTION 5.  CONDITIONS OF LENDING...........................................45

      5.1    Request for Borrowing; Information.............................45
      5.2    Continuing Accuracy of Representations and Warranties..........45
      5.3    No Default.....................................................46
      5.4    Loan Documents.................................................46
      5.5    Supporting Documents...........................................46
      5.6    Opinion of the Borrowers' Counsel..............................47

SECTION 6.  AFFIRMATIVE COVENANTS...........................................47

      6.1    Financial Reports and Other Data...............................47
      6.2    Financial Covenants of the Borrowers...........................49
      6.3    Payment and Performance of the Borrowers Obligations...........50
      6.4    Depository Account.............................................50
      6.5    Conduct of Business; Maintenance of Existence..................50
      6.6    Right of Inspection; Discussions...............................50
      6.7    Notices........................................................50
      6.8    Payment of Taxes; Liens........................................51
      6.9    Maintenance of Property, Leases................................51
      6.10   ERISA Benefit Plans............................................52
      6.11   Insurance of Property..........................................52
      6.12   True Books.....................................................52
      6.13   Observance of Laws.............................................52
      6.14   Further Assurances.............................................52
      6.15   Change of Name,  Principal  Place of Business,  Office,  or
             the Agent......................................................53
      6.16   Status.........................................................53
      6.17   Syndication of Credit..........................................53
      6.18   Exchange Listing...............................................53
      6.19   Ownership of RE-Stores.........................................53
      6.20   New Borrowers..................................................53

SECTION 7.  NEGATIVE COVENANTS..............................................54

      7.1    Limitations on Unsecured Debt..................................54
      7.2    Limitations on Dividends.......................................55
      7.3    Merger, Sale of Assets, Dissolution, Etc.......................55
      7.4    Limitations on Loans, Advances, and Investments................56
      7.5    Regulation U...................................................56
      7.6    Insider Transactions...........................................56
      7.7    Changes in Governing Documents,  Accounting Methods, Fiscal
             Year...........................................................57
      7.8    Certain Permitted Investments..................................57
      7.9    Ownership of Assets............................................58

SECTION 8.  EVENTS OF DEFAULT...............................................58

      8.1    Payment of Obligations to the Banks............................58
      8.2    Representation or Warranty.....................................58
      8.3    Covenants......................................................58
      8.4    Any Borrower's Liquidation; Dissolution; Bankruptcy; Etc.......58
      8.5    Order of Dissolution...........................................59
      8.6    Reports and Certificates.......................................59
      8.7    Judgments......................................................59
      8.8    Liens Imposed by Law...........................................59
      8.9    Corporate Existence............................................59
      8.10   ERISA..........................................................59
      8.11   Cross-Default..................................................60
      8.12   Change of Control..............................................60

SECTION 9.  THE AGENT.......................................................61

      9.1    Appointment, Authorization, and Action.........................61
      9.2    Delegation of Duties...........................................62
      9.3    Exculpatory Provisions.........................................62
      9.4    Reliance by the Agent..........................................62
      9.5    Agent and Affiliates...........................................62
      9.6    Notice of Default..............................................63
      9.7    Non-Reliance on the Agent and Other Banks......................63
      9.8    Enforcement by the Agent.......................................63
      9.9    Indemnification................................................64
      9.10   Failure to Act.................................................64
      9.11   Successor Agent................................................64

SECTION 10.  INDEMNIFICATION BY BORROWERS...................................65

SECTION 11.  MISCELLANEOUS..................................................65

      11.1   Course of Dealing; Amendments..................................65
      11.2   Payment of Expenses, Including Attorneys' Fees and Taxes.......66
      11.3   Successors and Assigns.........................................66
      11.4   Assignments and Participations.................................67
      11.5   Confidential Information.......................................69
      11.6   Liens; Set-Off.................................................70
      11.7   Notices........................................................70
      11.8   Waiver of Default..............................................70
      11.9   No Waiver; Cumulative Remedies.................................71
      11.10  Venue and Jurisdiction.........................................71
      11.11  Governing Law..................................................71
      11.12  Title and Headings; Table of Contents..........................71
      11.13  Complete Agreement.............................................71
      11.14  Legal or Governmental Limitations..............................71
      11.15  Counterparts...................................................72
      11.16  WAIVER OF JURY TRIAL BY BORROWERS..............................72
      11.17  BORROWERS JOINTLY AND SEVERALLY LIABLE.........................72
      11.18  Contribution...................................................72

EXHIBIT A...Form of Notice of Borrowing
EXHIBIT B...Form of  Promissory  Note
EXHIBIT C...Form of Assignment  and  Acceptance
EXHIBIT D...Form of Notice of Prepayment
EXHIBIT E...Form of Notice of Conversion/Continuation
EXHIBIT F...Form of Notice of Swingline  Borrowing
EXHIBIT G...Form of Swingline Note
EXHIBIT H...Form of Bid Rate Quote Request
EXHIBIT I...Form of Bid Rate Quote
EXHIBIT J...Form of Acceptance/Nonacceptance of Bid Rate Quote
EXHIBIT K...Form of Joinder Agreement
EXHIBIT L...Form of Quarterly Advance Compliance Certificate
EXHIBIT M...Form of Bid Rate Note

<PAGE>

                           SIXTH AMENDED AND RESTATED
                                CREDIT AGREEMENT

      THIS SIXTH AMENDED AND RESTATED  CREDIT  AGREEMENT dated October 26, 2000,
by and among COMMERCIAL NET LEASE REALTY, INC., a Maryland corporation ("CNLR"),
NET LEASE REALTY I, INC., a Maryland corporation ("Net I"), NET LEASE REALTY II,
INC., a Maryland  corporation ("Net II"), NET LEASE REALTY III, INC., a Maryland
corporation ("Net III"), NET LEASE REALTY IV, INC., a Maryland corporation ("Net
IV"), and NET LEASE FUNDING, INC., a Maryland corporation ("Funding"); CNLR, Net
I, Net II, Net III, Net IV, and Funding are hereinafter  sometimes  individually
referred to as a "Borrower" and  collectively  referred to as the  "Borrowers"),
FIRST UNION  SECURITIES,  INC., as Arranger (the  "Arranger"),  BANK OF AMERICA,
N.A., as Syndication Agent (the "Syndication Agent"), FIRST UNION NATIONAL BANK,
a national  banking  association,  successor  to First  Union  National  Bank of
Florida  (individually,  "First  Union"),  as the Agent  (the  "Agent")  and the
financial institutions which are, or may from time to time become, listed on the
signature pages hereof (together with their successors and assigns, individually
a "Bank" and collectively the "Banks").

                                   BACKGROUND
                                   ----------

      CNLR and First Union entered into a Revolving  Line of Credit and Security
Agreement  dated as of June 21,  1994  (the  "Prior  Credit  Agreement"),  which
provided for a revolving line of credit in the amount of $30,000,000.00 in favor
of CNLR (the "Prior  Credit"),  evidenced by a promissory  note in the principal
amount of $30,000,000.00 (the "Prior Note"),  Collateral  Assignments of Leases,
Rents,  and  Profits  and  Security  Agreements,  Agreements  Not to Encumber or
Transfer   Property,   and  other  related   instruments  (the  "Prior  Security
Documents").

      Subsequently,  CNLR,  the Agent and certain Banks entered into a Revolving
Line of Credit  and  Security  Agreement  dated as of July 25,  1994 (the  "1994
Credit Agreement"),  which provided for a revolving line of credit in the amount
of  $100,000,000.00  in favor of CNLR pursuant to which First Union assigned the
Prior Credit (including but not limited to the Prior Note and the Prior Security
Documents)  to the Banks and  evidenced  by a Promissory  Note in the  principal
amount of $100,000,000.00 (the "1994 Note"),  Collateral  Assignments of Leases,
Rents and  Profits  and  Security  Agreements,  Agreements  Not to  Encumber  or
Transfer   Property,   and  other  related   instruments   (the  "1994  Security
Documents").  The 1994 Credit Agreement superseded and replaced the Prior Credit
Agreement and provided for an increased line of credit.

      CNLR, the Agent and the Banks subsequently agreed to amend and restate the
1994 Credit  Agreement to reflect  certain changes in the terms of the Revolving
Credit Facility pursuant to the terms of an Amended and Restated  Revolving Line
of Credit and Security  Agreement  dated as of April 13, 1995 (the "April,  1995
Agreement") which superseded the 1994 Credit Agreement.

      Subsequently,  CNLR requested certain additional  amendments to the April,
1995 Agreement to permit (i) CNLR to incur mortgage loans from Principal  Mutual
Life Insurance Company, or an affiliate thereof, in the total amount of not more
than  $52,600,000.00  with respect to certain properties  identified in the 1994
Security  Documents  and  (ii) to allow it to  place  certain  properties  to be
acquired in its Wholly-Owned Subsidiaries, Net I and Net II.

      The Agent and the Banks agreed to CNLR's  request so long as Net I and Net
II  agreed to  become  co-borrowers  under the  Revolving  Credit  Facility  and
pursuant to the other terms and  conditions  of the Second  Amended and Restated
Line of  Credit  and  Security  Agreement  dated as of  December  7,  1995  (the
"December,  1995 Agreement")  which superseded the April, 1995 Agreement and was
evidenced by a Renewal and Modification  Promissory Note (the "Renewal Note") in
the principal amount of $100,000,000.00, which renewed and modified the Original
Note and the 1994  Security  Documents.  The  Borrowers  subsequently  requested
certain  waivers  from the terms of the  December,  1995  Agreement  for certain
transactions  to be entered  into by the  Borrowers  which were  approved by the
Banks  pursuant  to  a  Letter  Agreement  dated  June  12,  1996  (the  "Letter
Agreement").

      CNLR,  Net  I  and  Net  II  subsequently   requested  certain  additional
amendments to the December,  1995 Agreement and the Renewal Note to (i) increase
the amount of the Revolving Credit Facility to  $150,000,000.00  and (ii) extend
the  Revolving  Credit  Maturity Date to June 30, 1998, as well as certain other
revisions.

      The Agent and the Banks agreed to Borrowers' request pursuant to the terms
and  conditions of the Third Amended and Restated  Revolving  Line of Credit and
Security  Agreement  dated  as  of  September  3,  1996  (the  "September,  1996
Agreement"), which superseded the December, 1995 Agreement, and was evidenced by
a Second Renewal and Modification Promissory Note (the "Second Renewal Note") in
the principal amount of $150,000,000.00,  which renewed and modified the Renewal
Note, and the Existing Security Documents.

      CNLR,  Net I and  Net II,  together  with  Net  III  and  Net  IV,  as new
co-borrowers,  subsequently  requested  certain  additional  amendments  to  the
September,  1996 Agreement and Second Renewal Note to (i) increase the amount of
the Revolving Credit Facility to  $200,000,000.00  and (ii) extend the Revolving
Credit Maturity Date to July 30, 1999, as well as certain other  revisions.  The
Borrowers also requested certain amendments to the Letter Agreement.

      The Agent and the Banks agreed to Borrowers'  requests pursuant to (i) the
terms and conditions of the Fourth Amended and Restated Revolving Line of Credit
and  Security  Agreement  dated as of August 6, 1997 (as  amended  and in effect
immediately  prior to the date  hereof,  the  "August,  1997  Agreement")  which
superseded the  September,  1996  Agreement,  and which was evidenced by a Third
Renewal and Modification  Promissory Note dated as of August 6, 1997 (as amended
and in effect immediately prior to the date hereof, the "Third Renewal Note") in
the principal  amount of  $200,000,000.00  which renewed and modified the Second
Renewal Note,  and the other Loan Documents and (ii) the terms and conditions of
a Letter  Agreement  dated as of  August  6,  1997  (the  "August,  1997  Letter
Agreement")  by and among the  Borrowers,  the Agent and the Banks which amended
and restated the Letter Agreement.

      CNLR,  Net I and Net II, Net III and Net IV,  together with Funding,  as a
new co-borrower,  subsequently  requested certain  additional  amendments to the
August,  1997  Agreement  and  Third  Renewal  Note  (a)  to  add  Funding  as a
co-borrower;  (b) to add a new financial  institution as a "bank";  (c) to amend
certain of the provisions of the August, 1997 Agreement;  (d) to incorporate the
terms of the August, 1997 Letter Agreement into this Agreement;  and (e) for the
other purposes provided for herein.

      The Agent and the Banks  agreed to  Borrowers'  requests  pursuant  to the
terms and conditions of the Fifth Amended and Restated  Revolving Line of Credit
and Security  Agreement dated as of September 23, 1999 (as amended and in effect
immediately prior to the date hereof, the "Existing Agreement") which superseded
the August, 1997 Agreement,  and those certain promissory notes each dated as of
September  23,  1999  in  the  aggregate   principal   amount  of   $200,000,000
(collectively, the "Existing Note") which renewed and modified the Third Renewal
Note.

      The  parties  hereto  desire  to enter  into this  Agreement  to amend and
restate  the  terms  of the  Existing  Agreement  (a) to  amend  certain  of the
provisions of the Existing  Agreement;  and (b) for the other purposes  provided
for herein.

      NOW,   THEREFORE,   in  consideration  of  the  premises  and  the  mutual
agreements,  covenants,  and conditions herein, the Existing Agreement is hereby
amended and restated in its entirety and the Borrowers, the Agent, and the Banks
agree as follows:

      SECTION 1.  DEFINITIONS

      1.1  Defined  Terms.  Except  as  otherwise  expressly  provided  in  this
Agreement,  the following  capitalized terms shall have the respective  meanings
ascribed to them for all purposes of this Agreement:

      "1994 Credit  Agreement"  has the meaning  specified  in the  Background
       ----------------------
section hereof.

      "1994 Note" has the meaning specified in the Background section hereof.
       ---------

      "1994 Security  Documents"  has the meaning  specified in the Background
       ------------------------
section hereof.

      "Advance"  means  a  Revolving  Credit  Advance,  a Bid  Rate  Loan or a
       -------
Swingline Loan.

      "Advisor  Acquisition  Costs" means all costs and other  charges  directly
       ---------------------------
associated with the acquisition by CNLR of CNL Realty Advisors,  Inc., a Florida
corporation.

      "Agent"  means  First  Union   National   Bank,   acting  as   contractual
       -----
representative  for the  Banks  hereunder,  together  with any  successor  agent
appointed pursuant to the provisions hereof.

      "Agreement"  means this Sixth Amended and Restated Credit Agreement (which
       ---------
supersedes the Existing  Agreement),  as the same may be amended,  supplemented,
restated, replaced, or otherwise modified from time to time.

      "Aggregate  Revolving  Credit  Commitment"  shall  mean  the  sum  of  the
       ----------------------------------------
Revolving Credit Commitment of each of the Banks at any time.

      "Amended  Letter  Agreement"  has the meaning  specified in the Background
       --------------------------
section hereof.

      "Applicable  Law"  means  all  applicable   provisions  of  constitutions,
       ---------------
statutes,  rules,  regulations and orders of all Governmental  Authority and all
orders and decrees of all courts, tribunals and arbitrators.

      "Applicable  Management Fee" means,  with respect to a real property asset
       --------------------------
leased by a Borrower  as lessor and for a given  period,  the greater of (i) the
actual  property  management fee paid a Borrower during such period with respect
to such property and (ii) an imputed management fee in the amount of two percent
(2.0%) of the Gross Lease Revenues  attributable to such real property asset for
such period.

      "April,  1995  Agreement"  has the  meaning  specified  in the  Background
       -----------------------
section hereof.

      "Assignment and Acceptance  Agreement"  means an Assignment and Acceptance
       ------------------------------------
Agreement among a Bank, an Assignee and the Agent,  substantially in the form of
Exhibit "C".

      "Bankruptcy  Proceeding"  means a case,  proceeding or condition of any of
       ----------------------
the types described in Section 8.4.

      "Banks" means each financial institution from time to time party hereto as
       -----
a "Bank", together with its respective successors and assigns.

      "Bid Rate" has the meaning given that term in Section 2.3(c)(ii)(C).
       --------

      "Bid Rate Borrowing" has the meaning given that term in Section 2.3(b).
       ------------------

      "Bid Rate Loan" means a loan made by a Lender under Section 2.3(b).
       -------------
      "Bid Rate Notes" has the meaning given that term in Section 2.7(b)
       --------------

      "Bid Rate Quote" means an offer in  accordance  with  Section  2.3(c) by a
       --------------

Bank to make a Bid Rate Loan with one single specified interest rate.

      "Bid Rate  Quote  Request"  has the  meaning  given  that term in  Section
       ------------------------
2.3(b).

      "Borrower"  means each of CNLR,  Net I, Net II, Net III, Net IV,  Funding,
       --------
and each other Person which becomes a "Borrower"  hereunder  pursuant to Section
6.20.

      "Business  Day"  means  (a) for all  purposes  other  than as set forth in
       -------------
clause (b)  below,  any day other than a  Saturday,  Sunday or legal  holiday on
which  banks in  Charlotte,  North  Carolina  are open for the  conduct of their
commercial banking business, and (b) with respect to all notices and interest on
any LIBOR Rate  Advance,  any day that is a Business Day described in clause (a)
and that is also a day for trading by and between banks in U.S.  dollar deposits
in the London interbank market.

      "Capital Lease  Obligations" means Debt represented by obligations under a
       -------------
lease that is required to be  capitalized  for financial  reporting  purposes in
accordance with GAAP, and the amount of such Debt is the  capitalized  amount of
such obligations determined in accordance with GAAP.

      "Closing Date" means the date this Agreement is executed by the Borrowers,
       ------------
the Agent and the Banks.

      "CNLR" means Commercial Net Lease Realty, Inc., a Maryland  corporation,
       ----
and its successors.

      "CNLRS" means  Commercial  Net Lease Realty  Services,  Inc., a Maryland
       -----
corporation,  and its  successors.  For  purposes of this  Agreement,  neither
CNLRS nor any Subsidiary of CNLRS  (including,  but not limited to, RE-Stores,
Inc.) shall be deemed to be a Subsidiary of CNLR.

      "Consistent  Basis" means,  in reference to the  application  of Generally
       -----------------
Accepted Accounting  Principles,  that the accounting principles observed in the
current period are  comparable in all material  respects to those applied in the
preceding period.

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

      "Continue,"  "Continuation,"  and  "Continued"  refer to a continuation of
       --------     ------------          ---------
Revolving  Credit Advances of the same Type from one Interest Period to the next
Interest Period.

      "Convert,"   "Conversion,"  and  "Converted"  refer  to  a  conversion  of
       -------      ----------          ---------
Revolving  Credit  Advances of one Type into  Revolving  Credit  Advances of the
other Type pursuant to Subsection 2.17 or 2.18 hereof.

      "Debt"  mean,  with  respect  to a  Person,  at  the  time of  computation
       ----
thereof,  all of the following  (without  duplication):  (a) obligations of such
Person in respect of money borrowed;  (b) obligations of such Person (other than
trade debt  incurred in the  ordinary  course of  business),  whether or not for
money borrowed (i)  represented by notes payable,  or drafts  accepted,  in each
case  representing  extensions of credit,  (ii) evidenced by bonds,  debentures,
notes or similar instruments, or (iii) constituting purchase money indebtedness,
conditional  sales contracts,  title retention debt instruments or other similar
instruments, upon which interest charges are customarily paid or that are issued
or  assumed  as  full  or  partial  payment  for  property;  (c)  Capital  Lease
Obligations  of such Person;  (d) all  reimbursement  obligations of such Person
under any  letters of credit or  acceptances  (whether or not the same have been
presented  for  payment);  (e)  obligations  of such Person with  respect to any
equity  issuance of such Person which is convertible  into or  exchangeable  for
indebtedness of such Person, valued at the amount of indebtedness resulting from
such  conversion or exchange;  (f) all  obligations  of such Person to purchase,
redeem,  retire,  defease or otherwise make any payment in respect of any equity
interests in such Person or any other  Person  (other than  obligations  of such
Person to make payments in respect of such equity interests in order to maintain
its REIT Status),  valued, in the case of redeemable  preferred equity issuance,
at the greater of its  voluntary  or  involuntary  liquidation  preference  plus
accrued  and unpaid  dividends  (excluding,  (i) in the case of the CNLR and its
Subsidiaries,  any obligation to acquire  limited  partnership  interests in any
Subsidiary  of CNLR or the Up-REIT  Borrower  which can be  satisfied in full by
exchanging  shares  of  common  stock  of  CNLR  for  such  limited  partnership
interests,  and (ii) in the case of CNLR, dividends declared and paid to holders
of  common  shares of CNLR);  and (g) all Debt of other  Persons  which (i) such
Person has guaranteed or is otherwise recourse to such Person or (ii) is secured
by a Lien on any property of such Person.

      "December,  1995  Agreement"  has the meaning  specified in the Background
       --------------------------
section hereof.

      "Default Rate" means (a) in the case of a LIBOR Rate Advance, at a rate of
       ------------
interest  per annum which shall be four percent  (4.0%) above the interest  rate
applicable to such LIBOR Rate Advance  (including any  applicable  margin) until
the end of the Interest Period during which such Event of Default occurred,  and
thereafter  at a rate of interest per annum which shall be four  percent  (4.0%)
above  the  Prime  Rate,  (b) or in the  case of a Bid Rate  Loan,  at a rate of
interest per annum which shall be four percent  (4.0%) above the  applicable Bid
Rate for such Bid Rate Loan until the end of the  Interest  Period  during which
such Event of Default  occurred,  and thereafter at a rate of interest per annum
which shall be four percent  (4.0%) above the Prime Rate, and (c) in the case of
a Prime Rate  Advance,  Swingline  Loan or any other amount  owing  hereunder or
under any other Loan  Document,  at a rate of interest  per annum which shall be
four percent (4.0%) above the Prime Rate.

      "EBITDA" shall mean,  without  duplication,  the Borrowers' net income for
       ------
any  accounting  period plus (i) the amount of the provision for federal,  state
and local income taxes for such period, plus (ii) the amount of interest expense
during such period for indebtedness for borrowed money, plus (iii) the amount of
the provision for depreciation  and  amortization for such period  determined in
accordance  with Generally  Accepted  Accounting  Principles,  plus (iv) Advisor
Acquisition  Costs and, in the case of amounts  described in clauses (i),  (ii),
(iii) and (iv),  only to the extent  deducted in determining net income for such
period.

      "Effective  Date" means the later of: (a) the  Closing Date; and (b) the
       ---------------
date on which all of the  conditions  precedent  set  forth in  Sections 5.4.,
5.5. and 5.6. shall have been fulfilled.

      "Eligible  Assignee" means any Person who is: (i) currently a Lender; (ii)
       ------------------
a  commercial  bank,  trust  company,   insurance  company,   savings  and  loan
association,  savings  bank,  investment  bank,  pension  fund  or  mutual  fund
organized under the laws of the United States of America,  or any state thereof,
and having total assets in excess of $5,000,000,000;  or (iii) a commercial bank
organized  under  the  laws  of any  other  country  which  is a  member  of the
Organization for Economic Cooperation and Development  ("OECD"),  or a political
subdivision  of  any  such  country,  and  having  total  assets  in  excess  of
$10,000,000,000,  provided  that such bank is acting  through a branch or agency
located in the United  States of  America.  If such  Person is not  currently  a
Lender,  such Person's senior unsecured long term indebtedness must be rated BBB
or higher by S&P,  Baa2 or higher by  Moody's,  or the  equivalent  or higher of
either  such  rating  by  another  rating  agency  of  national  reputation  and
reasonably   acceptable  to  the  Administrative   Agent.   Notwithstanding  the
foregoing,  if an Event of Default shall have  occurred and be continuing  under
Section 8.1, 8.4 or 8.5, the term "Eligible Assignee" shall mean any Person that
is not an individual.

      "Eligible  Mortgage  Income"  means,  for any given period,  the aggregate
       --------------------------
income of the Borrowers  from Eligible  Mortgage  Notes  Receivable  during such
period.

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

      "ERISA" means the Employee  Retirement Income Security Act of 1974, as the
       -----
same may be supplemented or amended from time to time.

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

      "Event of Default" means any of the events specified in Section 8 hereof.
       ----------------

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

      "Exsting  Agreement" has the meaning specified in the Background  section
       ------------------
hereof.

      "Existing  Note"  has the  meaning  specified  in the  Background  section
       --------------
hereof.

      "Federal Funds Rate" means,  for any period,  a fluctuating  interest rate
       ------------------
per annum equal for each day during such period to the  weighted  average of the
rates per annum,  rounded  upward to the  nearest  one-hundredth  of one percent
(1/100%),  on overnight  federal funds  transactions with members of the Federal
Reserve System, arranged by federal funds brokers, as published for such day (or
if such day is not a Business Day, for the next  preceding  Business Day) by the
Board of Governors of the Federal Reserve System in Publication  H.15 (519), or,
if such rate is not  published  for any day which is a Business Day, the average
of the quotations for such day for such transactions  received by the Agent from
three (3) federal funds brokers of recognized standing selected by the Agent.

      "Finance  Lease"  means a lease of a real  property  asset  which would be
       --------------
categorized as a capital lease under GAAP.

      "Fixed Charges" means, for any accounting  period, the sum of (a) Interest
       -------------
Expense for such period plus (b) regularly  scheduled principal payments on Debt
of  the  Borrowers  during  such  period,  including,  without  limitation,  the
principal   component  of  all  payments   made  in  respect  of  Capital  Lease
Obligations,  but excluding any scheduled  balloon,  bullet or similar principal
payment which repays such Debt in full plus (c) all Restricted  Payments paid or
accrued during such period in respect of any shares of preferred  stock or other
equity  interest  of any  Borrower  which,  in each  instance,  are  entitled to
preference or priority in respect of the payment of dividends or distribution of
assets upon  liquidation  or both over any other  capital  stock or other equity
interest  in any such  Person,  excluding,  however,  from this  clause  (c) any
dividends, distributions or payments payable to CNLR or any of its Subsidiaries.

      "Funding"  means  Net Lease  Funding,  Inc., a Maryland  corporation,  and
       -------
its successors.

      "Funds Available for Distribution"  means, for any accounting  period, (a)
       --------------------------------
Funds From Operations for such period minus (b) the aggregate  amount of capital
expenditures  actually  incurred by the Borrowers during such period,  excluding
(i) any capital  expenditures  which directly result in an aggregate increase in
the square  footage of real  property  assets owned by the  Borrowers  which are
available for lease, and (ii) any capital  expenditures  made in connection with
the acquisition of real property assets, provided that such capital expenditures
are fully  reflected in the budget  relating to such  acquisition,  and provided
further that such capital  expenditures  are made within twelve months following
consummation of such acquisition of real property assets.

      "Funds From Operations" means, for a given period, (i) net earnings of the
       ---------------------
Borrowers (before minority interests,  extraordinary and non-recurring items and
all Advisor  Acquisition  Costs) for such period  minus (or plus) (ii) gains (or
losses) from debt  restructuring  and sales of property  during such period plus
(iii)  depreciation  and  amortization of real property assets and the principal
component  of all  payments in respect of Finance  Leases for such  period,  and
after adjustments for unconsolidated partnerships and joint ventures.

      "Generally   Accepted   Accounting   Principles"  or  "GAAP"  means  those
       ----------------------------------------------
principles  of  accounting  set forth in  Opinions of the  Financial  Accounting
Standards  Board of the American  Institute of Certified  Public  Accountants or
which have other  substantial  authoritative  support and are  applicable in the
circumstances  as of the date of any report required herein or as of the date of
an application of such principles as required herein.

      "Governmental  Acts" shall have the meaning  specified in Section  2.19(b)
       ------------------
hereof.

      "Governmental  Authority" shall mean, as to any Person, any government (or
       -----------------------
any political  subdivision or jurisdiction  thereof),  court, bureau,  agency or
other governmental  authority having jurisdiction over such Person or any of its
business, operations or properties.

      "Gross Lease Revenues" means, for a given period,  the aggregate income of
       --------------------
the Borrowers from Finance Leases and from leases of real property  assets which
are not Finance  Leases,  excluding (a) with respect to such leases that are not
Finance Leases,  straight line rent  adjustments  (reported in the  consolidated
financial  statements  of the Borrowers for purposes of GAAP) in respect of such
leases for such period, and (b) the principal  component of all payments made in
respect of Finance Leases during such period.

      "Interest  Expense"  means,  for any period,  the total  interest  expense
       -----------------
(including,  without  limitation,  capitalized  interest  expense  and  interest
expense  attributable to Capital Lease Obligations) of the Borrowers  determined
in  accordance  with  Generally  Accepted  Accounting  Principles  applied  on a
Consistent Basis.

      "Interest Period" means:
       ---------------

      (a) with respect to any LIBOR Rate Advance,  each period commencing on the
date  such  LIBOR  Rate  Advance  is made or the last day of the next  preceding
Interest Period for such Advance and ending on the numerically corresponding day
in the first, second, third or sixth calendar month thereafter, as the Borrowers
may select,  as provided in  Subsections  2.2 or 2.17  hereof,  except that each
Interest  Period that commences on the last Business Day of a calendar month (or
on  any  day  for  which  there  is no  numerically  corresponding  day  in  the
appropriate subsequent calendar month) shall end on the last Business Day of the
appropriate  subsequent  calendar  month.  In  addition  to  such  periods,  the
Borrowers  may request up to two Interest  Periods at any time  outstanding  for
LIBOR Rate Advances having durations of 7 days; and

      (b) with respect to any Bid Rate Loan,  the period  commencing on the date
such Bid Rate Loan is made and  ending on any  Business  Day not less than 7 nor
more than 180 days  thereafter,  as the  Borrowers  may  select as  provided  in
Section 2.3(b).

Notwithstanding  the foregoing:  (i) if any Interest  Period would otherwise end
after the Revolving  Credit Maturity Date, such Interest Period shall end on the
Revolving  Credit  Maturity Date; (ii) each Interest Period that would otherwise
end on a day  which is not a  Business  Day  shall  end on the  next  succeeding
Business  Day  (or,  if such  next  succeeding  Business  Day  falls in the next
succeeding  calendar month, on the next preceding  Business Day); (iii) Interest
Periods  commencing  on the same date for LIBOR Rate Advances  constituting  the
same borrowing  hereunder  shall be of the same duration;  and (iv) any Interest
Period 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 a calendar month.

      "Investment  Grade  Rating"  shall  mean a rating of BBB- or better or the
       -------------------------
equivalent  thereof  from  two of the  following  three  debt  rating  agencies:
Standard  &  Poor's,  Moody's  Investors  Service  or Fitch  Investors  Service;
provided, however, that at least one such rating shall be from either Standard &
Poor's or Moody's Investor Service.

      "Issuing  Bank" means First Union National Bank, in its capacity as a Bank
       -------------
hereunder,  for so long as it remains the Agent hereunder.  Upon the appointment
of a successor  Agent,  the "Issuing Bank" shall be the successor  Agent, in its
capacity  as a Bank  hereunder,  for the  purposes  of all new Letters of Credit
issued hereunder.

      "Joinder Agreement" means a Joinder Agreement substantially in the form of
       -----------------
Exhibit "K".

      "Late Fee" has the meaning specified in Subsection 2.9(c) hereof.
       --------

      "Lease" means all leases, rents, income,  profits, and accounts receivable
       -----
arising from any and every lease,  rental,  or occupancy  agreement entered into
with respect to property owned by any Borrower.

      "Letter  Agreement" has the meaning  specified in the  Background  section
       -----------------
hereof.

      "Letters of Credit" has the meaning specified in Subsection 2.5 hereof.
       -----------------

      "Letter of Credit Contingent Obligation" and "Letters of Credit Contingent
       --------------------------------------
Obligations"  mean the amount available for drawings and remaining undrawn under
the Letter of Credit or Letters of Credit, respectively.

      "LIBOR Rate Advance" means a Revolving  Credit Advance that bears interest
       ------------------
at a rate  determined  by  reference  to the Reserve  Adjusted  LIBOR  Rate,  as
provided in Subsection 2.8(a)(ii) hereof.

      "LIBOR Reserve Requirement" means, for any day, the rate at which reserves
       -------------------------
(including,  without  limitation,  any  marginal,   supplemental,  or  emergency
reserves) are required to be  maintained by member banks of the Federal  Reserve
System on such day against Eurocurrency liabilities, expressed as a decimal.

      "Lien" as applied to the  property of any Person  means:  (a) any security
       ----
interest,  encumbrance,  mortgage,  deed to secure debt, deed of trust,  pledge,
lien,  charge,  Negative  Pledge,  conditional  sale or  other  title  retention
agreement,  or other security title or encumbrance of any kind in respect of any
property  of such  Person,  or upon the  income or  profits  therefrom;  (b) any
arrangement,  express or  implied,  under  which any  property of such Person is
transferred,  sequestered or otherwise  identified for the purpose of subjecting
the same to the  payment  of Debt or  performance  of any  other  obligation  in
priority to the payment of the general,  unsecured creditors of such Person; (c)
the filing of any financing  statement under the Uniform  Commercial Code or its
equivalent in any  jurisdiction;  and (d) any agreement by such Person to grant,
give or otherwise convey any of the foregoing.

      "Loan Documents" means the following  documents:  (a) this Agreement;  (b)
       --------------
the Notes; and (c) all other documents executed and delivered by any Borrower in
connection  with  this  Agreement  from  time to time  as  contemplated  by this
Agreement,  including any  modifications,  amendments,  or  restatements  of the
foregoing.

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

      "Mortgage" shall mean a mortgage, deed of trust, deed to secure debt, or a
       --------
similar  real  property  lien  instrument  including,   without  limitation,  an
assignment of rents and leases.

      "Negative  Pledge"  means a provision  of any  agreement  (other than this
       ----------------
Agreement or any other Loan Document) that prohibits the creation of any lien on
any assets of a Person; provided,  however, that an agreement that establishes a
maximum ratio of unsecured debt to  unencumbered  assets,  or of secured debt to
total assets,  or that otherwise  conditions a Person's  ability to encumber its
assets  upon the  maintenance  of one or more  specified  ratios that limit such
Person's  ability to encumber its assets but that do not generally  prohibit the
encumbrance  of its assets,  or the  encumbrance of specific  assets,  shall not
constitute a "Negative Pledge" for purposes of this Agreement.

      "Net I" means Net Lease Realty I, Inc., a Maryland corporation,  and its
       -----
successors.

      "Net II" means Net Lease Realty II, Inc.,  a Maryland  corporation,  and
       ------
its successors.

      "Net III" means Net Lease Realty III, Inc., a Maryland corporation,  and
       -------
its successors.

      "Net IV" means Net Lease Realty IV, Inc.,  a Maryland  corporation,  and
       ------
its successors.

      "Note" means a Revolving Note, a Bid Rate Note or a Swingline Note.
       ----

      "Notice of  Borrowing"  means a Notice of Borrowing  substantially  in the
       --------------------
form attached hereto as Exhibit "A".

      "Notice of Swingline  Borrowing" means a notice in the form of Exhibit "F"
       ------------------------------
to be delivered to the Swingline  Lender  pursuant to Section 2.4(b)  evidencing
the Borrowers' request for a Swingline Loan.

      "PBGC" means the Pension  Benefit  Guaranty  Corporation and any successor
       ----
agency.

      "Permitted  Lien"  means,  as to any  Person:  (a) Liens  securing  taxes,
       ---------------
assessments  and other charges or levies imposed by any  governmental  authority
(excluding  any Lien imposed  pursuant to any of the provisions of ERISA) or the
claims of materialmen, mechanics, carriers, warehousemen or landlords for labor,
materials,  supplies or rentals  incurred in the  ordinary  course of  business,
which are not at the time required to be paid or  discharged  under Section 4.8.
or which are being  contested in good faith and in  accordance  with  applicable
law; (b) Liens consisting of deposits or pledges made, in the ordinary course of
business,  in  connection  with,  or to secure  payment  of,  obligations  under
workmen's  compensation,  unemployment insurance or similar applicable laws; (c)
zoning restrictions, easements, rights-of-way, covenants, reservations and other
rights,  restrictions  or  encumbrances  of record on the use of real  property,
which do not  materially  detract from the value of such  property or materially
impair the use thereof in the business of such Person; (d) Liens in existence as
of the Closing  Date and set forth in Schedule  4.7;  and (e) Liens,  if any, in
favor of the Administrative Agent for the benefit of the Banks.

      "Person"   means   any   natural   person,   corporation,   unincorporated
       ------
organization,  trust,  joint  venture,  association,  company,  partnership,  or
government, or any agency or political subdivision of any government.

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

      "Prime Rate" means, for the purposes  hereof,  the greater of (i) the rate
       ----------
of interest  announced by the Agent from time to time as its Prime Rate and (ii)
the Federal Funds Rate plus 0.50%.  The Agent's  Prime Rate is a reference  rate
used by the Agent in  determining  interest  rates on certain  loans.  The Agent
loans at rates both above and below the Agent's  Prime Rate,  and the  Borrowers
acknowledge that the Agent's Prime Rate is not represented or intended to be the
lowest or most favorable rate of interest offered by the Agent.

      "Prime Rate Advance" means a Revolving  Credit Advance that bears interest
       ------------------
at a rate determined with reference to the Prime Rate, as provided in Subsection
2.8(a)(i) hereof.

      "Prior Credit" has the meaning specified in the Background section hereof.
       ------------

      "Prior  Credit  Agreement"  has the meaning  specified  in the  Background
       ------------------------
section hereof.

      "Prior Note" has the meaning specified in the Background section hereof.
       ----------

      "Prior  Security  Documents"  has the meaning  specified in the Background
       --------------------------
section hereof.

      "Pro Rata Portion" means,  with respect to any Bank, the quotient obtained
       ----------------
by  dividing  the  Revolving  Credit  Commitment  of such Bank by the  aggregate
Revolving Credit Commitments of all of the Banks.

      "Qualified REIT Subsidiary Status" means Net I's, Net II's, Net III's, Net
       --------------------------------
IV's and Funding's status as a qualified REIT subsidiary as defined in ss.856(i)
of the Internal Revenue Code, as amended.

      "REIT  Status" means CNLR's  status as a real estate  investment  trust as
       ------------
defined in ss. 856(a) of the Internal Revenue Code, as amended.

      "Related  Entities"  means any  "affiliated  person" as defined  under the
       -----------------
provisions of the United States Internal Revenue Code.

      "Renewal Note" has the meaning specified in the Background section hereof.
       ------------

      "Required  Banks" means at any time,  Banks having at least 66-2/3% of the
       ---------------
aggregate  amount of the  Revolving  Credit  Commitments,  or, if the  Revolving
Credit  Commitments  have been  terminated or reduced to zero,  Banks holding at
least 66-2/3% of the principal amount of the Advances; provided that outstanding
principal  amount of  Advances  owing to a Bank  which has  failed or refused to
perform any of its  obligations  under this Agreement or any other Loan Document
to which it is a party within the time period  specified for performance of such
obligation  shall be excluded for purposes hereof in making a  determination  of
Required Lenders and such Bank's right to participate in the  administration  of
this Agreement and the other Loan Documents,  including without limitation,  any
right to vote in respect  of, to consent to or to direct any action or  inaction
of the Agent, shall be suspended during the pendency of such failure or refusal.

      "Reserve  Adjusted LIBOR Rate" means, for any Interest Period, an interest
       ----------------------------
rate per annum  obtained by dividing  (i) the rate quoted on the  Telerate  page
3750 as of 11:00 a.m.  London time,  on the day that is two London  banking days
prior to the first day of the Interest Period, in an amount  substantially equal
to the LIBOR Rate Advance and with a term  substantially  equal to such Interest
Period,  by (ii) an amount equal to 1 minus the LIBOR  Reserve  Requirement  for
such  Interest  Period,  the result of which  shall be rounded up to the nearest
1/100 of one  percent  (.01%).  In the event  the rate  quoted  by  Telerate  is
discontinued  or the rate  otherwise  cannot  be  identified,  the  Agent  shall
determine  the LIBOR  Rate on the basis of quotes by major  banks in the  London
interbank Eurodollar market for dollar deposits in an amount substantially equal
to the LIBOR Rate Advance for a term substantially  equal to the Interest Period
selected.

      "Restricted Payment" means: (a) any dividend or other distribution, direct
       ------------------
or  indirect,  on account  of any  shares of any class of stock or other  equity
interest  of any  Borrower  or  any  of  their  Subsidiaries  now  or  hereafter
outstanding,  except a dividend  payable solely in shares of that class of stock
to the  holders  of  that  class;  (b)  any  redemption,  conversion,  exchange,
retirement,  sinking fund or similar payment,  purchase or other acquisition for
value,  direct or indirect,  of any shares of any class of stock or other equity
interest  of any  Borrower  or  any  of  their  Subsidiaries  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 shares of any class
of stock of any Borrower or any of its respective  Subsidiaries now or hereafter
outstanding.

      "Revolving  Credit Advance" has the meaning specified in Subsection 2.1(a)
       -------------------------
hereof.

      "Revolving  Credit  Commitment"  means,  as  to  each  Bank,  such  Bank's
       -----------------------------
obligation to make  Revolving  Credit  Advances  pursuant to Section 2.1. and to
issue (in the case of the Issuing  Bank) or  participate  in (in the case of the
other Banks) Letters of Credit  pursuant to Section 2.5, in an amount up to, but
not  exceeding  (but in the case of the Issuing  Bank  excluding  the  aggregate
amount of  participations  in Letters of Credit  held by the other  Banks),  the
amount  set forth  for such Bank on its  signature  page  hereto as such  Bank's
"Revolving Credit  Commitment" or as set forth in the applicable  Assignment and
Acceptance  Agreement,  or as the  same  may be  adjusted  from  time to time as
appropriate to reflect any assignments to or by such Bank effected in accordance
with Section 11.4.

      "Revolving  Credit  Facility"  means the  commitments of the Banks to make
       ---------------------------
Revolving  Credit  Advances  to and  issue  Letters  of  Credit  in favor of the
Borrowers pursuant to Subsection 2.1 hereof.

      "Revolving Credit Maturity Date" shall mean October 31, 2003 (as such date
       ------------------------------
may be  extended  pursuant  to the  provisions  hereof) or if such date is not a
Business  Day, the next  succeeding  Business Day, or such earlier date on which
all of the  Advances  shall be due and  payable  in full  pursuant  to the terms
hereof.

      "Revolving Note" has the meaning specified in Subsection 2.7 hereof.
       --------------

      "Second Renewal Note" has the meaning specified in the Background  section
       -------------------
hereof.

      "Secured  Debt"  means all Debt of the  Borrowers  which is  secured  by a
       -------------
Mortgage or other Lien.

      "September,  1996  Agreement" has the meaning  specified in the Background
       ---------------------------
section hereof.

      "Subsidiary" means, for any Person, any corporation,  partnership or other
       ----------
entity  of  which at  least a  majority  of the  securities  or other  ownership
interests  having by the terms thereof ordinary voting power to elect a majority
of the board of directors or other persons  performing similar functions of such
corporation,  partnership or other entity  (without  regard to the occurrence of
any  contingency)  is at the time directly or indirectly  owned or controlled by
such Person or one or more Subsidiaries of such Person or by such Person and one
or more  Subsidiaries of such Person.  "Wholly-Owned  Subsidiary" means any such
corporation,  partnership or other entity of which all of the equity  securities
or  other  ownership  interests  (other  than,  in the  case  of a  corporation,
directors' qualifying shares) are so owned or controlled.

      "Swingline  Commitment"  means the Swingline  Lender's  obligation to make
       ---------------------
Swingline  Loans  pursuant to Section 2.4 in an amount up to, but not exceeding,
$10,000,000,  as such amount may be reduced from time to time in accordance with
the terms hereof.

      "Swingline  Lender"  means First Union  National  Bank and its  respective
       -----------------
successors and assigns.

      "Swingline  Loan"  means  a loan  made  by  the  Swingline  Lender  to the
       ---------------
Borrowers pursuant to Section 2.4(a).

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

      "Tangible  Net Worth" means total  stockholder's  equity of the  Borrowers
       -------------------
determined  in  accordance  with GAAP,  plus (i)  accumulated  depreciation  and
amortization  to the extent  reflected  in the  determination  of  stockholder's
equity of the Borrowers,  plus (ii) the accumulated  principal  component of all
payments  made to the  Borrowers  in  respect  of  Finance  Leases to the extent
reflected in the determination of stockholder's  equity of the Borrowers,  minus
(iii) the aggregate value of all intangible assets of the Borrowers.

      "Total  Assets"  means  the  total  assets  of  the  Borrowers   excluding
       -------------
accumulated  depreciation,  amortization  and  the  principal  component  of all
payments  made to the  Borrowers in respect of Finance  Leases,  all computed in
accordance with Generally Accepted Accounting Principles applied on a Consistent
Basis.

      "Total  Intangible  Assets"  of  the  Borrowers  shall  be  determined  in
       -------------------------
accordance with Generally Accepted Accounting Principles applied on a Consistent
Basis,  but in any event shall be deemed to include the excess of costs over the
assets of acquired businesses, formulae, trademarks, patents, patent rights, and
deferred  expenses  (including,  but not limited to,  unamortized  debt discount
(offset by any  unamortized  debt  premium) and expense,  organization  expense,
experimental and developmental expenses, but excluding prepaid expenses).

      "Total   Liabilities"   means  the  total  liabilities  of  the  Borrowers
       -------------------
(including,  without  limitation,  all  obligations or indebtedness of any other
Person  which  the  Borrowers  have  assumed,  guaranteed,  or  endorsed  or  in
connection   with  which  the  Borrowers  have  otherwise   become  directly  or
contingently  liable  and the  amount  of any  outstanding  Letters  of  Credit)
computed in accordance with Generally Accepted Accounting  Principles applied on
a Consistent Basis.

      "Type" refers to the distinction  among Revolving  Credit Advances bearing
       ----
interest based on the Prime Rate and the Reserve Adjusted LIBOR Rate.

      "Unencumbered  Assets"  means  the sum  (without  duplication)  of (a) the
       --------------------
aggregate book value of all real property  assets of the Borrowers which are not
encumbered by one or more Liens, other than Permitted Liens plus (b) accumulated
depreciation and  amortization  with respect to such real property assets of the
Borrowers plus (c) all of the Borrowers'  cash and cash  equivalents  (excluding
tenant deposits and other cash and cash  equivalents the disposition of which is
restricted in any way); provided,  however,  that if the aggregate value of cash
and cash equivalents exceeds two percent (2%) of Total Assets, the value of such
cash and cash equivalents in excess of two percent (2%) of Total Assets shall be
excluded in the  determination of Unencumbered  Assets  hereunder,  plus (d) the
accumulated principal component of all payments made to the Borrowers in respect
of  Finance  Leases  plus (e)  Eligible  Mortgage  Notes  Receivable;  provided,
however,  that any such Eligible  Mortgage  Notes  Receivable  pursuant to which
CNLRS or a  Wholly-Owned  Subsidiary  of CNLRS is the obligor  shall cease to be
included  in  determining  Unencumbered  Assets  if CNLRS  or such  Wholly-Owned
Subsidiary has not become a Borrower  hereunder  pursuant to Section 6.20 hereof
on or before March 31, 2001;  provided further,  however,  that if the aggregate
value of Eligible  Mortgage Notes  Receivable  exceeds  fifteen percent (15%) of
Total Assets,  the value of such Eligible Mortgage Notes Receivable in excess of
fifteen percent (15%) of Total Assets shall be excluded in the  determination of
Unencumbered  Assets  hereunder,  all as determined in accordance with Generally
Accepted Accounting Principles applied on a Consistent Basis.

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

      "Unsecured  Debt"  means all Debt of  Borrowers  which is not  secured  by
       ---------------
Mortgages  or any  other  Liens  on one or  more  properties  or  assets  of any
Borrower.

      "Up-REIT  Borrower" means a limited  partnership  which is a Subsidiary of
       -----------------
CNLR and which becomes a Borrower hereunder pursuant to Section 6.20 hereof.

      1.2   Other Definitional Provisions.

            (a) The terms  "material" and  "materially"  shall have the meanings
      ascribed to such terms under Generally Accepted  Accounting  Principles as
      such would be  applied to the  business  of the  Borrowers,  except as the
      context shall clearly otherwise require;

            (b) all of the  terms  defined  in this  Agreement  shall  have such
      defined  meanings when used in other documents  issued under, or delivered
      pursuant to, this Agreement unless the context shall otherwise require;

            (c) all terms defined in this  Agreement in the singular  shall have
      comparable meanings when used in the plural, and vice versa;

            (d) accounting terms to the extent not otherwise  defined shall have
      the  respective  meanings  given them  under,  and shall be  construed  in
      accordance with, Generally Accepted Accounting Principles;

            (e) terms defined in, or by reference  to,  Article 9 of the Uniform
      Commercial Code as adopted in Florida to the extent not otherwise  defined
      herein shall have the respective  meanings given to them in Article 9 with
      the exception of the word "document"  unless the context clearly  requires
      such meaning;

            (f) the words "hereby," "hereto,"  "hereof," "herein,"  "hereunder,"
      and words of similar  import  when used in this  Agreement  shall refer to
      this  Agreement  as a whole and not to any  particular  provision  of this
      Agreement;

            (g)   the  masculine  and  neuter  genders  are  used  herein  and
      whenever  used shall  include  the  masculine,  feminine,  and neuter as
      well; and

            (h) wherever in this Agreement any of the parties hereto is referred
      to, such  reference  shall be deemed to include the successors and assigns
      of such parties unless the context shall expressly provide otherwise.

                              SECTION 2. THE CREDIT

      2.1   The Revolving Credit Facility.

            (a) Subject to the terms and conditions of this Agreement, each Bank
severally and not jointly agrees, that during the period from the Effective Date
to but excluding the Revolving  Credit Maturity Date and so long as there exists
no Event of Default or  circumstance  which with the giving of notice or passage
of time would become an Event of Default, it will make advances to the Borrowers
(all such advances and the Bank's Pro Rata Portion of any  unreimbursed  amounts
paid under Letters of Credit referred to herein as "Revolving  Credit Advances";
the term  "Revolving  Credit  Advances"  shall not  include any  advances  which
constitute Bid Rate Loans) in an aggregate  amount which,  when  aggregated with
Advances comprised of such Bank's Pro Rata Portion of unreimbursed  amounts paid
under Letters of Credit and with the Bank's Pro Rata Portion of Letter of Credit
Contingent Obligations, does not exceed at any time such Bank's Revolving Credit
Commitment.  During the aforesaid period,  the Borrowers may borrow,  repay, and
reborrow,  and request the issuance of Letters of Credit in accordance  with the
terms hereof. The Borrowers  acknowledge that the amount outstanding at any time
pursuant to this  Agreement and the other Loan  Documents is as reflected in the
books  and  records  of the Agent and shall be  conclusive  and  binding  absent
manifest error. Agent will, upon request, furnish the Borrowers with a statement
of the  amount  outstanding  pursuant  to  this  Agreement  and the  other  Loan
Documents  as reflected in the books and records of the Agent at the time of any
such request.

            (b) If at any time  the  principal  amounts  outstanding  under  any
Bank's Revolving Credit Advances  (including Advances in respect of unreimbursed
amounts paid under Letters of Credit), together with the aggregate amount of the
Bank's Pro Rata Portion of the Letter of Credit Contingent  Obligations,  exceed
such Bank's Revolving Credit  Commitment,  the Borrowers shall prepay the Bank's
Revolving  Credit  Advances  so as to cause the  aggregate  outstanding  amounts
thereunder to be equal to or less than such Bank's Revolving Credit Commitment.

            (c) Subject to the further terms and  limitations of this Agreement,
the Borrowers  may  designate  Advances  requested  under the  Revolving  Credit
Facility  and Advances  made  pursuant to draws under  Letters of Credit  issued
under the  Revolving  Credit  Facility  to be LIBOR Rate  Advances or Prime Rate
Advances,  and the Borrowers may Convert  Revolving  Credit Advances of one Type
into Revolving  Credit Advances of another Type (as provided in, and pursuant to
the terms and  conditions  set forth in,  Subsection  2.17 hereof),  or Continue
Revolving  Credit Advances of one Type as Revolving  Credit Advances of the same
Type (as  provided in, and  pursuant to the terms and  conditions  set forth in,
Subsection 2.17 hereof). All Revolving Credit Advances shall be made, Converted,
or Continued by the Banks  simultaneously and  proportionately to their Pro Rata
Portion of the aggregate Revolving Credit Commitments.

            (d) On the Closing Date, the aggregate  outstanding principal amount
under the Existing  Agreement shall be automatically  converted to an equivalent
principal  amount of Revolving  Credit Advances  hereunder (which shall be Prime
Rate Advances unless otherwise specified by the Borrowers in accordance with the
procedures contained in Subsection 2.17 hereof),  allocated to the then existing
Banks pro rata in accordance  with their Pro Rata Portions,  and shall be deemed
to be Revolving  Credit  Advances and  included in the Banks'  Revolving  Credit
Commitments for all purposes hereof.

            (e) The Borrowers  shall have the right to request  increases in the
aggregate amount of the Revolving Credit Commitments from time to time (provided
that  after  giving  effect to any such  increase  the  aggregate  amount of the
Revolving Credit Commitments shall not exceed $250,000,000) by providing written
notice  to the  Agent,  which  notice  shall  be  irrevocable  once  given.  The
Borrowers,  prior to requesting an increase in the Revolving Credit  Commitments
pursuant  to this  subsection  must  offer in  writing  each  Bank the  right to
increase its  Revolving  Credit  Commitment by an amount so that such Bank's Pro
Rata  Portion  shall  not be  decreased  as a  result  of such  increase  in the
Revolving Credit Commitments.  If a Bank does not accept the Borrowers' offer to
increase its Revolving Credit  Commitment as provided in the preceding  sentence
within 10 Business Days of the receipt of such offer, such offer shall be deemed
rejected  by such Bank.  No Bank shall be required  to  increase  its  Revolving
Credit  Commitment.  In the  event a new  Bank or  Banks  become a party to this
Agreement,  or if any  existing  Bank agrees to increase  its  Revolving  Credit
Commitment,  such  Bank  shall  on the  date it  becomes  a Bank  hereunder  (or
increases its Revolving Credit Commitment, in the case of an existing Bank) (and
as a  condition  thereto)  purchase  from the other  Banks its  Bank's  Pro Rata
Portion (as determined  after giving effect to the increase of Revolving  Credit
Commitments) of any outstanding  Revolving Credit Advances,  by making available
to the  Agent for the  account  of such  other  Banks at the  Agent's  principal
office,  in same day funds, an amount equal to the sum of (A) the portion of the
outstanding  principal  amount of such Revolving Credit Advances to be purchased
by such Bank plus (B) the aggregate  amount of payments  previously made by such
Bank under Section 2.5.(f) which have not been repaid plus (C) interest  accrued
and unpaid to and as of such date on such portion of the  outstanding  principal
amount of such Revolving Credit Advance. Upon any such assignment, the assigning
Bank  shall be deemed to  represent  and  warrant  to such  other Bank that such
assigning Bank is the legal and beneficial owner of such interest being assigned
by  it,  but  makes  no  other   representation   or  warranty  and  assumes  no
responsibility with respect to any Revolving Credit Advance being assigned,  the
Loan  Documents  or any party to this  Agreement.  No increase of the  Revolving
Credit  Commitments  may be effected under this subsection if a default or Event
of Default  shall be in existence on the  effective  date of such  increase.  In
connection  with any increase in the aggregate  amount of the  Revolving  Credit
Commitments  pursuant to this  subsection,  the Borrowers shall make appropriate
arrangements  so that  each new  Bank,  and any  existing  Bank  increasing  its
Revolving Credit  Commitment,  receives a new or replacement  Revolving Note, as
appropriate,  in the amount of such Bank's Revolving Credit  Commitment within 2
Business Days of the  effectiveness of the applicable  increase in the aggregate
amount of Revolving Credit Commitments.

      2.2   Advance Requests and Funding Mechanics.

            (a) The  Revolving  Credit  Advances  (other than  Advances  made by
honoring a draft drawn under a Letter of Credit) shall be made upon  irrevocable
notice from the  Borrowers to the Agent  (effective  upon receipt) no later than
10:00  a.m.  (Eastern  Time)  three (3)  Business  Days prior to the date of any
proposed LIBOR Rate Advances and no later than 10:00 a.m. (Eastern Time) one (1)
Business Day prior to the date of any proposed  Prime Rate  Advances.  Each such
notice shall be in writing,  or shall be by telephone or  telecopier,  confirmed
immediately  in writing,  specifying  the proposed (i) date of  borrowing,  (ii)
aggregate amount of borrowing, (iii) Type of Advances, (iv) in the case of LIBOR
Rate Advances,  the initial Interest Period for such Advances, and (v) manner of
receipt of the funds, and shall be evidenced by an executed Notice of Borrowing.
Each  request for such  Advances  shall be in the  aggregate  minimum  amount of
$100,000.00 or an integral multiple thereof, provided however, that with respect
to LIBOR Rate Advances, each request shall be in the aggregate minimum amount of
$1,000,000.00 and in integral multiples of $100,000.00.

            (b) Notwithstanding the foregoing,  the Borrowers may not select any
LIBOR Rate Advances if (i) the obligation of any of the Banks to make LIBOR Rate
Advances is suspended  pursuant to  Subsections  2.17(b)(iii)  or 2.18(c) or (d)
hereof,  or (ii) after giving effect to such Advances,  the aggregate  number of
different  Interest  Periods for  outstanding  LIBOR Rate  Advances and Bid Rate
Loans is greater than ten (10) (for purposes of this clause, Interest Periods of
the same  duration,  but  commencing  on  different  dates,  shall be treated as
different Interest Periods).

            (c) Neither the Agent nor any Bank shall incur any  liability to the
Borrowers in acting upon any telephonic notice referred to herein that the Agent
believes in good faith to have been given by a duly authorized  officer or other
person  authorized to borrow on behalf of the Borrowers or for otherwise  acting
in good faith under this Subsection,  and, upon funding of Advances by the Banks
in  accordance  with this  Agreement  pursuant  to any  telephonic  notice,  the
Borrowers shall be deemed to have received Advances hereunder.

            (d) Each notice of a proposed borrowing of Revolving Credit Advances
shall be  irrevocable  and binding on the  Borrowers.  In the case of LIBOR Rate
Advances,  the Borrowers shall  indemnify each Bank against any loss,  costs, or
expense  incurred  by such Bank as a result of any failure of the  Borrowers  to
fulfill on or before the date specified for such Advance all conditions for such
borrowing  set  forth in  Section  5  hereof,  or as a result  of any  purported
revocation  of such Advance  request or any other reason for  nonfunding of such
Advance, including,  without limitation, any loss (including loss of anticipated
profits), cost, or expense incurred by reason of the liquidation or reemployment
of deposits or other funds  acquired by the Bank to fund the Advance,  when such
Advance is not made on such date,  as more fully  described in  Subsection  2.15
hereof.

            (e) The  Agent  shall  give each Bank  notice  of each  request  for
Revolving  Credit  Advances in writing or by  telephone or  telecopier  promptly
after  receipt of such  request,  provided  that if the request was not received
prior to 10:00 a.m.  (Eastern  Time),  the Agent shall give such notice no later
than 9:00 a.m. (Eastern Time) on the following Business Day. Not later than 2:00
p.m.  (Eastern Time) on the date specified in such notice,  each Bank shall make
available to the Agent, at its Lending Office,  in immediately  available funds,
the Bank's Pro Rata Portion of such borrowing. After the Agent's receipt of such
funds,  the Agent will make such funds available to the Borrowers at the Agent's
office  referred  to above no later  than 2:00 p.m.  (Eastern  Time) on the date
specified in the notice.

            (f) Unless the Agent shall have received notice from a Bank prior to
the date of any proposed borrowing that such Bank will not make available to the
Agent such Bank's Pro Rata Portion of the  borrowing,  the Agent may assume that
such  Bank has made  such  portion  available  to the  Agent on the date of such
borrowing in accordance with the provisions  hereof.  The Agent may, in reliance
upon such  assumption  (but shall not be required  to),  make  available  to the
Borrowers  a  corresponding  amount.  If and to the extent that a Bank shall not
have so made such Bank's Pro Rata Portion of a borrowing available to the Agent,
such Bank and the Borrowers severally agree to repay to the Agent forthwith upon
demand,  to the extent not collected from the other, such  corresponding  amount
together with interest  thereon,  for each day from the date such amount is made
available to the Borrowers  until the date such amount is repaid to the Agent at
(i) in the case of the  Borrowers,  the interest rate  applicable at the time to
the Advances  comprising  the  borrowing,  and (ii) in the case of the Bank, the
Federal Funds Rate; provided,  however, that the Borrowers shall not be required
                    ------------------
to so repay such amount if and to the extent that the Agent,  in its capacity as
a Bank, has availability therefor under its Revolving Credit Commitment. In such
circumstances,  the Agent,  in its  capacity  as a Bank,  may,  but shall not be
required to, make an Advance under its Revolving Credit Commitment in respect of
such amount. If the delinquent Bank shall repay to the Agent (in its capacity as
Agent or Bank, as appropriate) such amount (with interest), the amount so repaid
shall  constitute  the Bank's  Advance as part of such borrowing for purposes of
this  Agreement.  If the Borrowers  shall repay to the Agent such  corresponding
amount,  or if the Agent, in its capacity as a Bank, makes an Advance  therefor,
such payment or Advance shall not relieve the delinquent Bank of its obligations
hereunder.

            (g) The  failure  of any Bank to make an Advance to be made by it as
part of any borrowing,  when required to do so by the provisions  hereof,  shall
not relieve any other Bank of its  obligation  hereunder  to make its Advance on
the date of such borrowing,  but no Bank shall be responsible for the failure of
any other Bank to make the Advance to be made by such other Bank. Nothing herein
shall  prejudice  any rights or remedies that the Borrowers may have against any
Bank as a result of any  failure  by such Bank to make an Advance  hereunder  if
such failure is in breach of its obligations hereunder.

      2.3   Bid Rate Loans.

      (a) Bid  Rate  Loans.  In  addition  to  borrowings  of  Revolving  Credit
          ----------------
Advances, at any time during the period from the Effective Date to but excluding
the  Revolving  Credit  Maturity  Date,  and so long as the  Borrower  has  been
assigned and at such time  maintains an Investment  Grade Rating,  the Borrowers
may, as set forth in this Section,  request the Banks to make offers to make Bid
Rate Loans to the Borrowers in lawful  currency of the United States of America.
The Banks  may,  but shall  have no  obligation  to,  make such  offers  and the
Borrowers  may, but shall have no  obligation  to, accept any such offers in the
manner set forth in this Section.

      (b) Requests for Bid Rate Loans.  When the Borrowers  wish to request from
          ---------------------------
the Banks  offers to make Bid Rate  Loans,  they shall give the Agent  notice (a
"Bid Rate Quote  Request")  so as to be received no later than 10:00 a.m. on the
Business  Day next  preceding  the date of borrowing  proposed  therein (or such
other  time and date as the  Borrowers  and the Agent,  with the  consent of the
Required Banks, may agree).  The Agent shall deliver to each Bank a copy of each
Bid Rate Quote Request promptly upon receipt thereof by the Agent. The Borrowers
may request offers to make Bid Rate Loans for up to [three]  different  Interest
Periods in each Bid Rate Quote  Request (for which purpose  Interest  Periods in
different lettered clauses of the definition of the term "Interest Period" shall
be  deemed  to be  different  Interest  Periods  even if they are  coterminous);
provided that the request for each separate  Interest  Period shall be deemed to
be a separate  Bid Rate Quote  Request  for a  separate  borrowing  (a "Bid Rate
Borrowing").  Each Bid Rate Quote Request shall be  substantially in the form of
Exhibit "H" and shall specify as to each Bid Rate Borrowing:

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

            (ii) the aggregate amount of such Bid Rate Borrowing, which shall be
      in the minimum amount of $5,000,000 and integral  multiples of $500,000 in
      excess  thereof and which shall not cause any of the limits  specified  in
      Section 2.20 to be violated; and

            (iii)  the  duration  of the  Interest  Period  applicable  thereto,
      subject  to the  limitations  set  forth  in the  definition  of the  term
      "Interest Period."

Except as otherwise  provided in this  subsection (b), no Bid Rate Quote Request
shall be given (x) within five  Business  Days (or such other  number of days as
the Borrowers and the Agent,  with the consent of the Required Banks, may agree)
of the giving of any other Bid Rate Quote  Request or (y) if after the making of
the requested Bid Rate Loan, the aggregate number of different  Interest Periods
for outstanding  LIBOR Rate Advances and Bid Rate Loans is greater than ten (10)
(for  purposes  of this  clause,  Interest  Periods  of the same  duration,  but
commencing on different dates, shall be treated as different Interest Periods).

      (c)   Bid Rate Quotes.
            ---------------

            (i)  Each  Bank  may  submit  one or  more  Bid  Rate  Quotes,  each
      containing  an offer to make a Bid Rate Loan in  response  to any Bid Rate
      Quote  Request;  provided  that, if the  Borrowers'  request under Section
      2.3(b)  specified  more  than one  Interest  Period,  such Bank may make a
      single  submission  containing  one or more Bid Rate  Quotes for each such
      Interest  Period.  Each Bid Rate Quote must be  submitted to the Agent not
      later than 12:00 noon on the  proposed  date of  borrowing  (or such other
      time and date as the  Borrowers  and the  Agent,  with the  consent of the
      Required Banks, may agree; provided that the Bank then acting as Agent may
      submit a Bid Rate Quote only if it notifies the  Borrowers of the terms of
      the offer contained therein not later than 11:30 a.m. on the proposed date
      of such borrowing. Subject to Sections 5 and 8, any Bid Rate Quote so made
      shall be  irrevocable  except  with the  consent of the Agent given at the
      request of the Borrowers.

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

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

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

                  (C) the  rate of  interest  per  annum  (rounded  upwards,  if
            necessary, to the nearest 1/1,000th of 1%) offered for each such Bid
            Rate Loan (the "Bid Rate"); and

                  (D) the identity of the quoting Bank.

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

      (d)  Notification  by Agent.  The Agent shall,  as promptly as practicable
           ----------------------
after the Bid Rate Quotes are  submitted  (but in any event not later than 12:30
p.m. on the proposed date of  borrowing),  notify the Borrowers of the terms (i)
of any Bid Rate Quote  submitted  by a Bank that is in  accordance  with Section
2.3(c) and (ii) of any Bid Rate  Quote that  amends,  modifies  or is  otherwise
inconsistent  with a previous Bid Rate Quote submitted by such Bank with respect
to the same Bid Rate Quote Request.  Any such subsequent Bid Rate Quote shall be
disregarded  by the Agent  unless such  subsequent  Bid Rate Quote is  submitted
solely to correct a manifest  error in such former Bid Rate  Quote.  The Agent's
notice to the Borrowers shall specify (A) the aggregate  principal amount of the
Bid Rate  Borrowing  for which offers have been  received and (B) the  principal
amounts  and Bid Rates so offered by each Bank  (identifying  the Bank that made
each Bid Rate Quote).

      (e)   Acceptance by Borrowers.
            -----------------------

            (i) Not later than 1:00 p.m. on the proposed  date of borrowing  (or
      such other time and date as the Borrowers and the Agent,  with the consent
      of the Required Banks, may agree), the Borrowers shall notify the Agent of
      its acceptance or  nonacceptance  of the offers so notified to it pursuant
      to Section 2.3(d) which notice shall be in the form of Exhibit "J". In the
      case of  acceptance,  such notice shall  specify the  aggregate  principal
      amount of offers for each Interest  Period that are accepted.  The failure
      of the  Borrowers  to give  such  notice  by such  time  shall  constitute
      nonacceptance.  The Borrowers may accept any Bid Rate Quote in whole or in
      part  (provided  any  acceptance  in part shall be in a minimum  amount of
      $5,000,000 and integral multiples of $500,000 in excess thereof); provided
      that:

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

                  (B) the aggregate  principal amount of each Bid Rate Borrowing
            shall  comply with the  provisions  of Section  2.2(a) but shall not
            cause the limits specified in Section 2.20 to be violated;

                  (C)  acceptance of offers may be made only in ascending  order
            of Bid Rates in each case beginning with the lowest rate so offered;
            and

                  (D) the  Borrowers  may not  accept  any offer  that  fails to
            comply with  Section  2.3(c) or  otherwise  fails to comply with the
            requirements of this Agreement).

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

      (f)  Obligation to Make Bid Rate Loans.  The Agent shall  promptly (and in
           ---------------------------------
any event not later than 2:00 p.m. on the  proposed  date of  borrowing)  notify
each Bank that  submitted  a Bid Rate Quote  which was  accepted as to whose Bid
Rate Quote has been accepted and the amount and rate  thereof.  No Bank shall be
relieved  of its  obligation  to fund a Bid  Rate  Loan  prior  to the  time the
applicable  Bid Rate Loan is funded.  Any Bank whose  offer to make any Bid Rate
Loan has been accepted shall, not later than 3:00 p.m. on the date specified for
the making of such  Advance,  make the amount of such  Advance  available to the
Agent  at  its  office  in  immediately  available  funds,  for  account  of the
Borrowers.  The amount so received by the Agent shall,  subject to the terms and
conditions of this  Agreement,  be made available to the Borrowers no later than
4:00 p.m. on such date by depositing the same, in immediately  available  funds,
in an account of the Borrowers designated by the Borrowers.

      (g) No Effect on  Commitment.  Except as otherwise  provided  herein,  the
           -----------------------
amount of any Bid Rate Loan made by any Bank shall not  constitute a utilization
of such Bank's Revolving Credit Commitment.

      2.4   Swingline Loans.

      (a) Swingline Loans.  Subject to the terms and conditions  hereof,  during
           --------------
the  period  from the  Effective  Date to but  excluding  the  Revolving  Credit
Maturity  Date,  the  Swingline  Lender  agrees to make  Swingline  Loans to the
Borrowers in an aggregate  principal  amount at any one time  outstanding up to,
but not exceeding,  the amount of the Swingline  Commitment.  If at any time the
aggregate  principal  amount of the  Swingline  Loans  outstanding  at such time
exceeds the  Swingline  Commitment in effect at such time,  the Borrowers  shall
immediately pay the Swingline  Lender the amount of such excess.  Subject to the
terms and  conditions of this  Agreement,  the  Borrowers may borrow,  repay and
reborrow Swingline Loans hereunder.

      (b) Procedure for Borrowing  Swingline Loans. The Borrowers shall give the
           ---------------------------------------
Swingline  Lender  notice  pursuant  to  a  Notice  of  Swingline  Borrowing  or
telephonic  notice  of each  borrowing  of a  Swingline  Loan.  Each  Notice  of
Swingline  Borrowing  shall be delivered to the  Swingline  Lender no later than
3:00 p.m. on the proposed date of such  borrowing.  Any such  telephonic  notice
shall include all  information  to be specified in a written Notice of Swingline
Borrowing and shall be promptly  confirmed in writing by the Borrowers  pursuant
to a Notice of Swingline  Borrowing sent to the Swingline  Lender by telecopy on
the same day of the giving of such telephonic  notice.  Not later than 4:00 p.m.
on the date of the requested  Swingline Loan and subject to  satisfaction of the
applicable  conditions set forth in Section 5 for such borrowing,  the Swingline
Lender will make the proceeds of such  Swingline Loan available to the Borrowers
in lawful  currency of the United States of America,  in  immediately  available
funds,  at the account  specified  by the  Borrowers  in the Notice of Swingline
Borrowing.

      (c)  Interest.  Swingline  Loans  shall bear  interest at a per annum rate
           --------
equal to the Prime Rate or at such other rate or rates as the  Borrowers and the
Swingline  Lender may agree from time to time in  writing.  Interest  payable on
Swingline Loans is solely for the account of the Swingline  Lender.  All accrued
and unpaid  interest on Swingline Loans shall be payable on the dates and in the
manner  provided in Section 2.9 with respect to interest on Prime Rate  Advances
(except  as the  Swingline  Lender  and the  Borrowers  may  otherwise  agree in
connection with any particular Swingline Loan).

      (d) Swingline  Loan  Amounts,  Etc.  Each  Swingline  Loan shall be in the
           -----------------------------
minimum amount of $100,000 and integral  multiples of $25,000 in excess thereof,
or  such  other  minimum  amounts  agreed  to by the  Swingline  Lender  and the
Borrower.  Any  voluntary  prepayment  of a  Swingline  Loan must be in integral
multiples  of  $100,000 or the  aggregate  principal  amount of all  outstanding
Swingline Loans (or such other minimum  amounts upon which the Swingline  Lender
and the  Borrowers may agree) and in connection  with any such  prepayment,  the
Borrowers  must give the Swingline  Lender prior written notice thereof no later
than 4:00 p.m. on the date of such  prepayment.  The Swingline  Loans shall,  in
addition to this Agreement, be evidenced by the Swingline Note.

      (e) Repayment and  Participations  of Swingline Loans. The Borrowers agree
           ------------------------------------------------
to repay each Swingline  Loan within one Business Day of demand  therefor by the
Swingline  Lender and in any event,  within 5 Business  Days after the date such
Swingline Loan was made. Notwithstanding the foregoing, the Borrower shall repay
the entire outstanding  principal amount of, and all accrued but unpaid interest
on, the Swingline  Loans on the Revolving  Credit Maturity Date (or such earlier
date as the Swingline Lender and the Borrower may agree in writing).  In lieu of
demanding  repayment of any outstanding  Swingline Loan from the Borrowers,  the
Swingline  Lender  may, on behalf of the  Borrowers  (which  hereby  irrevocably
direct the  Swingline  Lender to act on their  behalf),  request a borrowing  of
Revolving  Credit  Advances  which are Prime Rate  Advances from the Banks in an
amount  equal to the  principal  balance  of such  Swingline  Loan.  The  amount
limitations  of Section  2.2(a)  shall not apply to any  borrowing  of Revolving
Credit Advances made pursuant to this subsection.  Each Bank will make available
to the Agent for the  account of  Swingline  Lender,  in  immediately  available
funds,  the  proceeds  of such Prime Rate  Advance to be made by such Bank.  The
Agent  shall pay the  proceeds  of such LIBOR  Rate  Advances  to the  Swingline
Lender,  which shall apply such  proceeds to repay such  Swingline  Loan. If the
Banks are  prohibited  from  making  Advances  required  to be made  under  this
subsection  for  any  reason  whatsoever,   including  without  limitation,  the
occurrence  of any of the Events of Default  described  in Sections  8.4 or 8.5,
each  Bank  shall  purchase  from the  Swingline  Lender,  without  recourse  or
warranty,  an undivided  interest and participation to the extent of such Bank's
Pro Rata Portion of such Swingline Loan, by directly  purchasing a participation
in  such  Swingline  Loan in  such  amount  (regardless  of  whether  or not the
Borrowers  have submitted a Notice of Borrowing and whether or not the Revolving
Credit  Commitments  are then in effect,  any Event of Default exists or all the
Advances have been  accelerated) and paying the proceeds thereof to the Agent on
behalf of the  Swingline  Lender  in lawful  currency  of the  United  States of
America and in immediately  available  funds. If such amount is not in fact made
available to the Swingline  Lender by any Bank,  the  Swingline  Lender shall be
entitled to recover such amount on demand from such Bank,  together with accrued
interest  thereon for each day from the date of demand  thereof,  at the Federal
Funds Rate. If such Bank does not pay such amount  forthwith  upon the Swingline
Lender's  demand  therefor,  and until such time as such Bank makes the required
payment,  the Swingline  Lender shall be deemed to continue to have  outstanding
Swingline  Loans in the amount of such unpaid  participation  obligation for all
purposes of the Loan Documents (other than those provisions  requiring the other
Banks to purchase a participation  therein).  Further, such Bank shall be deemed
to have  assigned  any and all payments  made of  principal  and interest on its
Advances, and any other amounts due to it hereunder,  to the Swingline Lender to
fund Swingline Loans in the amount of the  participation in Swingline Loans that
such Bank failed to purchase pursuant to this Section until such amount has been
purchased (as a result of such assignment or otherwise).  A Bank's obligation to
purchase  participations in Swingline Loans under this Section shall be absolute
and  unconditional  and shall not be  affected by any  circumstance  whatsoever,
including without limitation, (i) any claim of setoff, counterclaim, recoupment,
defense or other  right  which  such Bank or any other  Person may have or claim
against the Agent, the Swingline Lender or any other Person, (ii) the occurrence
or continuation of an Event of Default (including without limitation, any of the
Defaults  or  Events  of  Default  described  in  Sections  8.4 or  8.5)  or the
termination of any Bank's Revolving Credit  Commitment,  (iii) the existence (or
alleged  existence)  of an  event of  condition  which  has had or could  have a
materially  adverse  effect  on the  business,  assets,  liabilities,  financial
condition, results of operations or business prospects of any Borrower, (iv) any
breach of any Loan  Document by the Agent,  any Bank or any  Borrower or (v) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing.

      2.5   Letters of Credit.

            (a) Subject to the terms and  conditions  hereof,  including but not
limited to the  limitations set forth in Subsection  2.1(a) and 2.6 hereof,  the
Revolving Credit Commitments may be utilized, upon the request of the Borrowers,
for the issuance of standby  letters of credit by the Issuing Bank  ("Letters of
Credit").  Each Letter of Credit issued hereunder shall be in such form, contain
such terms,  and  support  such  transactions  as shall be  satisfactory  to the
Issuing  Bank in its sole  discretion.  No Letter of  Credit  shall  have a term
extending  beyond the earlier of (i) one year after the date of issuance or (ii)
the Revolving Credit Maturity Date.

            (b) Each Letter of Credit  shall be  requested  by the  Borrowers by
irrevocable  notice  (effective  upon receipt) from the Borrowers to the Issuing
Bank and the Agent (which shall  promptly  give notice  thereof to the Banks) no
later than 10:00 a.m.  (Eastern  Time) three (3) Business Days prior to the date
of the  proposed  issuance  of the Letter of Credit.  Each such  notice from the
Borrowers shall be in writing, or shall be by telephone or telecopier, confirmed
immediately  in writing,  specifying  the  proposed (i) date of issuance of such
Letter of Credit, (ii) maximum amount of such Letter of Credit, (iii) expiration
date of such Letter of Credit,  (iv) name and address of the beneficiary of such
Letter of Credit,  (v) form of such Letter of Credit,  and (vi)  description  of
transaction  supported  by the Letter of Credit,  and shall be  evidenced  by an
executed  Notice of Borrowing.  The request shall be  accompanied  by such other
applications, agreements, information, and documents as the Agent or the Issuing
Bank shall  require,  and the payment of the fees and  commissions  described in
Subsection 2.10 hereof.

            (c) If the form of the Letter of Credit and transaction supported by
the Letter of Credit is satisfactory to the Issuing Bank in its sole discretion,
and subject to the other terms and  conditions  of this  Agreement,  the Issuing
Bank will make such Letter of Credit  available to the  Borrowers  designated in
the Notice of Borrowing at the Issuing Bank's  Lending  Office  described in the
signature  pages hereof or as otherwise  agreed with the Borrowers in connection
with such issuance.

            (d) Upon the  issuance of any Letter of Credit by the Issuing  Bank,
the Issuing Bank shall be deemed,  irrevocably and without further action by any
party  hereto,  to have  sold to each  Bank,  and each  Bank  shall  be  deemed,
irrevocably  and without  further action by any party hereto,  to have purchased
from the Issuing Bank, an undivided interest and participation in, to the extent
of such Bank's Pro Rata Portion,  the Letter of Credit and the related Letter of
Credit  Contingent  Obligation.  The Issuing  Bank shall notify the Agent of the
issuance of any Letter of Credit,  and the Agent shall promptly notify each Bank
of such  Bank's  Pro Rata  Portion of the amount of the Letter of Credit and the
related Letter of Credit Contingent Obligation.  Each Bank's Pro Rata Portion of
the Letter of Credit Contingent Obligation shall be deemed to utilize the Bank's
Revolving Credit Commitment and reduce the availability  thereunder,  until such
time as the  Letter  of Credit  Contingent  Obligation  terminates  by virtue of
expiration of or payment under the Letter of Credit.

            (e) The payment by the Issuing  Bank of a draft drawn under a Letter
of Credit shall constitute for all purposes  hereunder the making by the Issuing
Bank of a Revolving  Credit  Advance (which shall be a Prime Rate Advance unless
otherwise specified by the Borrowers in accordance with the procedures contained
in  Subsection  2.17  hereof),  in the amount of such  payment  (but without any
requirement for compliance with the  requirements  for the making of a Revolving
Credit Advance contained in Subsections 2.1 and 2.2 and Section 5 hereof).

            (f) The  Issuing  Bank  shall  give the Agent  prompt  notice of any
presentation  of a draw under a Letter of Credit in writing or by  telephone  or
telecopier,  and the Agent shall give prompt notice  thereof to the Banks.  Each
Bank shall,  on the date of receipt of such notice,  either (i) make a Revolving
Credit Advance (which shall be a Prime Rate Advance unless  otherwise  specified
by the Borrowers in accordance with the procedures  contained in Subsection 2.17
hereof)  in an amount  equal to its Pro Rata  Portion of the  payment  under the
Letter of Credit,  subject  to the  requirements  for the making of a  Revolving
Credit Advance  contained in Subsection  2.1 and 2.2 and Section 5 hereof),  and
shall  simultaneously  make  available to the Issuing Bank at its Lending Office
specified in the signature pages hereof,  in immediately  available  funds,  the
proceeds of such Revolving  Credit Advance,  or (ii) if for any reason Borrowers
is not  entitled on such day to receive a  Revolving  Credit  Advance  each Bank
shall pay to the  Issuing  Bank  such  Bank's  Pro Rata  Portion  of such  draw,
whereupon  such Bank shall  acquire a  participation,  to the extent of such Pro
Rata Portion,  in the claim of the Issuing Bank against  Borrowers in respect of
such draw.

            (g) If and to the  extent  that any Bank  shall not have so made the
proceeds of such a Revolving  Credit Advance  available to the Issuing Bank, the
Bank and the Borrowers  severally  agree to repay to the Issuing Bank  forthwith
upon demand,  to the extent not  collected  from the other,  such  corresponding
amount together with interest thereon,  for each day from the date of receipt of
notice of the draw until the date the Bank's Pro Rata Portion thereof is paid to
the  Issuing  Bank  at (i) in the  case  of the  Borrowers,  the  interest  rate
applicable  at the time to the Advances,  and (ii) in the case of the Bank,  the
Federal Funds Rate, provided,  however, that the Borrowers shall not be required
to so repay such amount if and to the extent that the Agent,  in its capacity as
a Bank, has availability therefor under its Revolving Credit Commitment. In such
circumstances,  the Agent,  in its  capacity  as a Bank,  may,  but shall not be
required  to,  make a  Revolving  Credit  Advance  under  its  Revolving  Credit
Commitment in respect of such amount.  If the Borrowers shall repay to the Agent
such corresponding  amount, or if the Agent, in its capacity as a Bank, makes an
Advance therefor,  such payment or Advance shall not relieve the delinquent Bank
of its obligations hereunder.

      2.6 Use of  Proceeds.  The Advances and Letters of Credit shall be used by
the Borrowers for general corporate purposes including,  but not limited to, the
acquisition,  renovation,  and development of real estate properties and for the
repayment of indebtedness;  provided, however, that Borrowers may acquire income
producing  unsubordinated  ground  leases which are  intended to support  income
producing  commercial  restaurant  and  retail  properties  upon  completion  of
development of such properties,  but only if (a) such completion occurs within a
reasonable  period of time  following  acquisition  of such ground lease and (b)
after giving effect to any such acquisitions, the aggregate Gross Lease Revenues
from such  properties does not at any time exceed five percent (5%) of the Gross
Lease Revenues of all real property assets of the Borrowers';  provided further,
however,  that the  aggregate  amount  available for the issuance and funding of
standby   Letters  of  Credit  shall  be  limited  to  Fifteen  Million  Dollars
($15,000,000.00).  From time to time and upon the Agent's request, the Borrowers
shall furnish to the Agent evidence satisfactory to the Agent that such proceeds
are being used according to the terms of this Subsection.

      2.7   Notes.

      (a) Revolving  Note. The aggregate  indebtedness  of the Borrowers to each
           --------------
Bank  resulting  from  Revolving  Credit  Advances  shall,  in  addition to this
Agreement,  also be evidenced by a promissory  note of the Borrowers  payable to
such Bank,  in a principal  amount equal to the amount of such Bank's  Revolving
Credit Commitment and in substantially in the form of Exhibit "B" hereto (each a
"Revolving  Note").  The Revolving Notes  collectively  constitute a renewal and
modification of the Existing Note.

      (b) Bid Rate Notes. The Bid Rate Loans made by any Bank shall, in addition
           -------------
to  this  Agreement,  also  be  evidenced  by a  single  promissory  note of the
Borrowers  substantially  in the form of Exhibit  "M" (each a "Bid Rate  Note"),
dated the date  hereof,  payable  to the order of such Bank and  otherwise  duly
completed.

      2.8   Interest.

            (a) The Borrowers shall pay interest on the unpaid  principal amount
of each Advance from the date of such Advance until such principal  amount shall
be paid in full, at the following rates per annum:

                  (i) during  such  periods as a Revolving  Credit  Advance is a
Prime Rate Advance,  a rate  equivalent to the Prime Rate in effect from time to
time,  which rate shall be adjusted daily to reflect  changes in the Prime Rate,
with each adjustment to be effective on the day the change occurs;

                  (ii) during such  periods as a Revolving  Credit  Advance is a
LIBOR Rate Advance,  a per annum rate  equivalent to the Reserve  Adjusted LIBOR
Rate for the  Interest  Period  for such  Advance  plus  the  applicable  margin
determined in accordance with the following table based on CNLR's credit rating;
provided,  however,  that such applicable  margin shall be adjusted from time to
------------------
time to reflect  changes in the ratings of CNLR such  adjustments to take effect
on the date of any change in any such  rating.  CNLR shall give the Agent prompt
written  notice of any change in any such rating.  If CNLR maintains two or more
credit ratings,  the lowest of the two highest ratings  received from any two of
the three rating  agencies  identified in the  definition  of  Investment  Grade
Rating shall determine such applicable margin.

    Level          Rating Received                    Applicable Margin
    -----          ---------------                    -----------------
      I            A-/A3                                   0.80%
     II            BBB+/Baa1                               0.90%
     III           BBB/Baa2                                1.00%
     IV            BBB-/Baa3                               1.15%
      V            Not Investment Grade Rating             1.50%

                  (iii) if such Advance is a Bid Rate Loan,  at the Bid Rate for
such Advance for the  Interest  Period  therefor  quoted by the Bank making such
Advance in accordance with Section 2.3.

Notwithstanding  the foregoing,  during the  continuance of an Event of Default,
the  Borrowers  shall pay to the Agent for the account of each Bank  interest at
the Default Rate on the outstanding principal amount of any Advance made by such
Bank and on any other  amount  payable by the  Borrowers  hereunder or under the
Notes held by such Bank to or for the  account of such Bank  (including  without
limitation, accrued but unpaid interest to the extent permitted under Applicable
Law).  Interest payable at the  Post-Default  Rate shall be payable from time to
time on demand.

      2.9   Repayment.

            (a) Interest on the Revolving  Credit  Advances shall be paid to the
Agent for the account of the Banks as follows:

                  (i) Accrued  interest on each Prime Rate Advance shall be paid
quarterly in arrears on the last  Business Day of March,  June,  September,  and
December of each year, and on the Revolving Credit Maturity Date.

                  (ii) In respect of any LIBOR Rate  Advance,  accrued  interest
shall be payable in arrears on the last Business Day of the applicable  Interest
Period,  provided  that interest on LIBOR Rate Advances  shall  additionally  be
payable on the last day of each three month period of any  Interest  Period that
exceeds three months in duration, and on the Revolving Credit Maturity Date.

                  (iii) In respect of any Bid Rate Loan,  accrued interest shall
be payable in arrears on the last day of the  Interest  Period for such Bid Rate
Loan, provided that interest on a Bid Rate Loan shall additionally be payable on
the last day of each three month period of any  Interest  Period with respect to
such Bid Rate Loan that exceeds  three months in duration,  and on the Revolving
Credit Maturity Date.

                  (iv) In addition  to the  interest  due and payable  under (i)
through (iii) above,  and as provided  elsewhere in the  Agreement,  all accrued
interest  on any  Advance  or other  amount  owing  hereunder  or under any Loan
Document shall be due and payable on each date when all of the unpaid  principal
balance of such Advance or other  obligation  shall be due (whether by maturity,
acceleration or otherwise).

            (b) Principal of the Revolving Credit Advances,  if not sooner paid,
shall be paid to the Agent on the Revolving Credit Maturity Date for the account
of the Banks. Principal of a Bid Rate Loan, if not sooner paid, shall be paid to
the Agent on the last day of the Interest  Period for such Bid Rate Loan for the
account of the Bank which made such Bid Rate Loan.

            (c) If any payment of principal or interest or both is more than ten
(10) days late,  the  Borrowers  will pay to the Agent,  for the  account of the
Banks, a late charge equal to five percent (5%) of the payment (the "Late Fee").
The provisions  herein for a Late Fee shall not be deemed to extend the time for
any payment or to  constitute a "grace  period"  giving the Borrowers a right to
cure such default.

      2.10  Fees.

            (a) As  consideration  for  making  the  Revolving  Credit  Facility
available, the Borrowers shall pay to the Agent, for the pro rata account of the
Banks based on the amounts of the then existing Revolving Credit Commitments,  a
fee from the  Effective  Date to the Revolving  Credit  Maturity Date (as may be
extended  hereunder)  equal to the percentage of the aggregate  Revolving Credit
Commitments  corresponding  to the  "Level"  in the  table  below at  which  the
applicable  margin for LIBOR Rate Advances is determined in accordance  with the
table set forth in Section 2.8(a)(ii);  provided,  however, that such percentage
shall be adjusted  from time to time to reflect  changes in the "Level" at which
such  applicable  margin is  determined in  accordance  with such Section,  such
adjustments  to take effect on the date of any change in any such "Level".  Such
fee shall be  computed  on the basis of  aggregate  amount  of the  Banks'  then
existing Revolving Credit  Commitments  (regardless of utilization) and shall be
payable quarterly in arrears on the last Business Day of March, June,  September
and December of each year and on the Revolving Credit Maturity Date.

                       Applicable Fee
    Level                Percentage
    -----              --------------
      I                    0.15%
     II                    0.15%
     III                   0.20%
     IV                    0.25%
      V                    0.25%

            (b) The  Borrowers  shall pay to the Agent,  for the  account of the
Issuing Bank and the other  Banks,  a letter of credit fee in an amount equal to
the product of (i) one  percent  (1%) per annum and (ii) the face amount of each
Letter of Credit on the date such fee is due. Such letter of credit fee shall be
payable  quarterly  in  arrears  (i) on the last  Business  Day of March,  June,
September and December of each year,  beginning with the first such day to occur
after the Closing Date and (ii) on the later of the  Revolving  Credit  Maturity
Date and the date of  termination  of the last  outstanding  Letter  of  Credit.
One-eighth  (0.125) of such fee shall be payable to the Issuing  Bank as issuing
bank and the remaining seven-eighths (0.875) of such fee shall be payable to and
shared by the Banks  (including  the Issuing Bank) based on the Pro Rata Portion
of each. In addition to the foregoing fee, the Borrowers  shall pay or reimburse
the  Issuing  Bank for such  normal  and  customary  costs and  expenses  as are
incurred or charged by the Issuing  Bank in issuing,  effecting  payment  under,
amending or otherwise administering any Letter of Credit.

            (c) If the Revolving  Credit  Maturity Date is extended  pursuant to
Subsection 2.11 of this Agreement,  the Borrowers shall pay to the Agent for the
account of each Bank  consenting to such extension an extension fee in an amount
equal to 0.15% of the Revolving  Credit  Commitment of such Bank. Such fee shall
be due and payable on the date which was the previous  Revolving Credit Maturity
Date prior to such extension.

            (d) The Borrowers  shall also pay to the Agent such agency and other
fees as the Agent and the Borrowers shall separately agree in writing.

      2.11  Extension of Revolving Credit Maturity Date.

            (a) The  Borrowers  may request  that the Agent and the Banks extend
the current  Revolving Credit Maturity Date by one additional year by all of the
Borrowers  executing  and  delivering  to the Agent at least 90 days but no more
than 150 days prior to the current  Revolving  Credit  Maturity  Date, a written
request in for such  extension.  The Agent shall  forward to each Bank a copy of
such extension request delivered to the Agent promptly upon receipt thereof.  If
all of the Banks shall have  notified the Agent on or prior to the date which is
30 days  subsequent  to the  date on  which  the  Borrowers  have  executed  and
delivered to the Agent a written request for such extension that they consent to
such  extension,  then the Revolving  Credit Maturity Date shall be extended for
one year.  Otherwise,  the Revolving  Credit Maturity Date shall not be extended
except as otherwise  permitted under the immediately  following  subsection (b).
The Agent shall promptly notify the Borrowers whether a requested  extension has
been consented to or rejected as well as which Bank or Banks,  if any,  rejected
such  extension  request  (each such Bank, a "Rejecting  Bank").  The  Borrowers
understand  and  acknowledge  that (i) this  Section  has been  included in this
Agreement  for the  Borrowers'  convenience  in  requesting  an extension of the
Revolving  Credit  Maturity  Date;  (ii)  none of the  Banks  nor the  Agent has
promised (either  expressly or impliedly),  nor has any obligation or commitment
whatsoever,  to extend the Revolving  Credit Maturity Date at any time and (iii)
the Banks may condition any such  extension on such terms and  conditions as the
Banks deem appropriate.

            (b) Notwithstanding  the preceding  subsection (a), if the Borrowers
receive  notification from the Agent that an extension request has been rejected
(a  "Notice  of  Rejection"),  and  provided  that the  aggregate  amount of all
Revolving Credit Commitments of the Rejecting Banks does not exceed 25.0% of the
aggregate amount of Revolving Credit Commitments then outstanding, the Borrowers
may elect,  with respect to each such  Rejecting  Bank, by giving written notice
from all of the Borrowers to the Agent of any such election within 15 days after
receipt by the  Borrowers of a Notice of  Rejection,  to either (i) require such
Rejecting  Bank to assign  its  respective  Revolving  Credit  Commitment  to an
Eligible  Assignee as contemplated in the  immediately  following  clause (x) or
(ii) pay in full the  amount of Loans,  interest  and  fees,  together  with all
amounts,  if any,  payable under Section 2.15,  owing to such Rejecting Bank and
terminate such Rejecting Bank's  Revolving Credit  Commitment as contemplated in
the  immediately  following  clause  (y).  If the  Borrowers  have made a timely
election as permitted by the preceding  sentence,  then the Borrowers shall take
either of the following  actions as specified in such election:  (x) demand that
such Rejecting Bank, and upon such demand such Rejecting Bank shall be obligated
to, assign its respective  Revolving Credit  Commitment to an Eligible  Assignee
designated by the Borrowers  subject to and in accordance with the provisions of
Section 11.4(b) for a purchase price equal to the aggregate principal balance of
Advances then  outstanding and owing to such Rejecting Bank plus any accrued but
unpaid  interest  thereon and  accrued  but unpaid fees owing to such  Rejecting
Bank,  any such  assignment to be effective as of the current  Revolving  Credit
Maturity Date (without having given effect to the pending extension  request) or
(y) effective as of the current  Revolving  Credit Maturity Date (without having
given effect to the pending extension  request),  pay to such Rejecting Bank the
aggregate  principal  balance of  Advances  then  outstanding  and owing to such
Rejecting  Bank plus any  accrued  but unpaid  interest  thereon and accrued but
unpaid fees owing to such  Rejecting  Bank,  together with all amounts,  if any,
payable under Section 2.15,  whereupon such Rejecting  Bank's  Revolving  Credit
Commitment shall  terminate,  and such Rejecting Bank shall no longer be a party
hereto or have any  rights or  obligations  hereunder  or under any of the other
Loan Documents.  None of the Agent, such Rejecting Bank, or any other Bank shall
be obligated in any way whatsoever to initiate any such replacement or to assist
in finding an Eligible  Assignee.  If the  Borrowers  have  elected to cause all
Rejecting  Banks either to assign  their  Commitments  to Eligible  Assignees as
contemplated by the preceding clause (x) or to be paid the amounts  specified in
the  preceding  clause (y),  then the  Borrowers'  extension  request  which was
initially  rejected  shall be deemed to have been  granted and  accordingly  the
Revolving  Credit  Maturity  Date shall be extended by one year,  otherwise  the
Revolving Credit Maturity Date shall not be extended. If the aggregate amount of
Commitments  of the Rejecting  Banks  exceeds  25.0% of the aggregate  amount of
Commitments  then  outstanding,  the Revolving Credit Maturity Date shall not be
extended.

      2.12  Single  Loan.  The  Advances  and all  other  obligations  arising
under  this  Agreement  and the other  Loan  Documents  shall  constitute  one
general obligation of the Borrowers.

      2.13  Payments and Computations.

            (a)  Except  as  otherwise  provided  in  Section  2.4  hereof,  the
Borrowers shall make each payment due under the Notes or otherwise due hereunder
not later  than 12:00  p.m.  (Eastern  Time) on the day when due to the Agent in
immediately  available  funds.  Any such payment  received later than 12:00 p.m.
(Eastern Time) shall be deemed  received by the Agent on the following  Business
Day. In the event any such payment is received by the Agent not later than 12:00
p.m.  (Eastern  Time),  the Agent will  thereafter  on the date such  payment is
received cause to be distributed  like funds ratably to the Banks,  in each case
to be  applied  in  accordance  with the  terms of this  Agreement.  If any such
payment is received by the Agent after 12:00 p.m. (Eastern Time), the Agent will
thereafter  on the  following  Business Day cause to be  distributed  like funds
ratably to the Banks, in each case to be applied in accordance with the terms of
this Agreement.  In the event the Agent does not so distribute such funds to the
Banks,  it shall  pay  interest  thereon,  for each  day from the  Business  Day
following  the date such  amount is  payable  to the Banks to the date the Agent
repays such amount to the Banks, at the Federal Funds Rate.

            (b) If the Agent  receives  funds for  application  to the Revolving
Credit  Advances  under  circumstances  for  which  the  Loan  Documents  or the
Borrowers  (to the extent  permitted by the Loan  Documents)  do not specify the
Revolving Credit Advances to which, or the manner in which, such funds are to be
applied,  the Agent shall distribute such funds for application to the Revolving
Credit  Advances to each Bank  ratably in  accordance  with such Bank's Pro Rata
Portion, in repayment or prepayment of such of the outstanding  Advances of such
Bank, and for application to such principal installments or interest.

            (c) Unless the Agent shall have  received  notice from the Borrowers
prior to the date on which any  payment is due to any Banks  hereunder  that the
Borrowers  will not make such  payment in full,  the Agent may  assume  that the
Borrowers  have made such  payment in full to the Agent on such date.  The Agent
may, in reliance upon such  assumption,  cause to be distributed to each Bank on
the Business Day  following the date when due an amount equal to the amount then
due to such Bank.  If and to the extent the  Borrowers  shall not have made such
payment in full to the Agent,  each such Bank shall repay to the Agent forthwith
on demand such amount  distributed to such Bank together with interest  thereon,
for each day from the date such  amount is  distributed  to such Bank  until the
date such Bank repays such amount to the Agent, at the Federal Funds Rate.

            (d) Each  payment and  prepayment  by the  Borrowers of principal or
interest  shall be made in such coin or currency of the United States of America
as at the time of payment is legal  tender for the payment of public and private
debt. If any  installment of principal or interest  becomes due and payable on a
day other than a Business  Day,  the due date  thereof  shall be extended to the
next succeeding Business Day (except as otherwise provided with respect to LIBOR
Rate Advances and Bid Rate Loans in the definition of "Interest  Period"),  and,
in the case of principal,  interest shall be payable during the extension at the
applicable interest rate.

            (e)  Unless  otherwise   specified   herein,   or  unless  otherwise
determined by the Required Banks in their sole  discretion,  all payments (other
than prepayments) of a particular  Revolving Credit Advance shall be applied pro
rata among the Banks first to interest and lawful  charges then accrued and then
to principal.  The Borrowers  shall, at the time of making payments of Advances,
specify to the Agent (which shall so notify the Banks to which such Advances are
owed)  of the  Advances  to be  paid.  Notwithstanding  anything  herein  to the
contrary, all payments of principal, interest, fees and other amounts in respect
of the  Swingline  Loans shall be for the account of the  Swingline  Lender only
(except to the extent any Bank shall have acquired a  participating  interest in
any such Swingline Loan pursuant to Section 2.4(e)).

            (f) Each Borrower hereby  authorizes the Agent and each Bank, if and
to the extent that any payments owed  hereunder are not made when due, to charge
such payments from time to time against any or all of such  Borrower's  accounts
with the  Agent or the  Bank,  in which  event  the  Agent or the Bank will give
prompt  notice to such  Borrower of such  charge;  provided,  however,  that the
failure to give such notice shall not affect the  validity of such  charge.  Any
such Bank will give notice to the Agent thereof.

            (g) Interest and any fees  hereunder  shall be computed on the basis
of a year of 360 days,  but charged for the actual number of days elapsed.  Each
determination by the Agent of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.

            (h) Notwithstanding anything contained herein to the contrary, in no
event shall any interest  rate  provided  for herein  exceed the maximum rate of
interest  allowed by applicable  law, as amended from time to time.  Neither the
Banks nor the Agent  intend to charge  any amount of  interest  or other fees or
charges in the nature of interest  that  exceeds the maximum  amount  allowed by
applicable  law. If any  payment of interest or in the nature of interest  would
cause the foregoing  interest rate  limitation to be exceeded,  then such excess
payment shall be credited as a payment of principal, unless the Borrowers notify
the Agent in writing that the excess  payment must be returned to the Borrowers,
together  with  interest at the rate  specified  in Section  687.04(2),  Florida
Statutes, or any successor statute.

            (i)  Notwithstanding any other provision in Sections 2.13 or 2.14 to
the contrary,  if an Event of Default shall have occurred and be continuing  and
the maturity of the Notes has been  accelerated,  all  payments  received by the
Agent  under  any of the Loan  Documents,  in  respect  of any  principal  of or
interest on any Advance or any other amounts payable by a Borrower  hereunder or
thereunder,  shall be applied by the Agent in the following  order and priority:
(i)  first,  to  amounts  due to the Agent and the Banks in  respect of fees and
expenses  due under any of the Loan  Documents;  (ii)  second,  to  payments  of
interest on all  Advances,  to be applied for the ratable  benefit of the Banks;
(iii) third,  to payments of principal  of all  Advances,  to be applied for the
ratable benefit of the Banks;  (iv) fourth,  to amounts due to the Agent and the
Banks  pursuant  to  Sections  9.9 and 10; (v) fifth,  to  payments of all other
amounts due and owing by any Borrower under any of the Loan  Documents,  if any,
to be applied for the ratable benefit of the Banks;  and (vi) sixth,  any amount
remaining after application as provided above, shall be paid to the Borrowers or
whomever else may be legally entitled thereto.

      2.14  Prepayments.

            (a) The Borrowers shall be entitled to prepay Prime Rate Advances in
whole or in part, at any time,  without  premium or penalty,  upon notice to the
Agent no later than 10:00 a.m. (Eastern Time) at least one Business Day prior to
the proposed  date of the  prepayment,  each notice  stating the proposed  date,
Advances to be prepaid,  and aggregate principal amount of the prepayment in the
form of the Notice of Prepayment attached hereto as Exhibit "D".

            (b) The Borrowers  shall be entitled to pay LIBOR Rate Advances only
on the last days of the applicable Interest Periods, without premium or penalty,
upon notice to the Agent no later than 10:00 a.m.  (Eastern Time) at least three
(3) Business  Days prior to the  proposed  date of the  prepayment,  each notice
stating the proposed date,  Advances to be paid, and aggregate  principal amount
of the  payment  in the form of the  Notice  of  Prepayment  attached  hereto as
Exhibit "D".

            (c) Any  prepayment of Prime Rate Advances shall be in the aggregate
principal amount of $100,000.00 or an integral multiple thereof, and any payment
of LIBOR Rate Advances shall be in the full amount of the LIBOR Rate Advances so
paid.

            (d)  On  or  prior  to  the  Revolving  Credit  Maturity  Date,  any
prepayment of any Advances (whether optional or required,  but not including any
payment after default or  acceleration)  shall be applied first to principal and
then  to  interest  and  lawful  charges,  unless  otherwise  specified  by  the
Borrowers.  In the event of a  prepayment  after  default or  acceleration,  any
prepayment  of any  Advances  shall be applied as  provided  in Section  2.13(i)
hereof.  The Borrowers  shall,  at the time of making  prepayments  of Advances,
specify to the Agent  (which  shall so notify the Banks) of the  Advances  to be
prepaid.

            (e)   Notwithstanding   the   provisions  of  Subsection   2.15(b)
hereof, Bid Rate Loans may not be prepaid.

      2.15  Compensation.

            (a)  Notwithstanding  the provisions of Subsection  2.14(b)  hereof,
which  prohibit  prepayment  of  LIBOR  Rate  Advances  prior  to the end of the
applicable  Interest  Period,  in the event that all or any portion of any LIBOR
Rate  Advances  are  repaid,  prepaid,  or  Converted  prior  to the  end of the
applicable Interest Period,  regardless of whether such payment or Conversion is
optional or  obligatory,  or in the event that any LIBOR Rate  Advances  are not
borrowed or Converted as specified in a notice given  pursuant to Subsection 2.2
or  2.17  hereof  for  any  reason,  including  the  failure  of any  conditions
precedent,  the Borrowers shall be required to pay to the Agent, for the account
of the Banks, compensation as follows. The Borrowers shall be required to pay an
amount  equal  to the  excess,  if any,  of (i) the  amount  of  interest  which
otherwise  would have accrued on the portion of the LIBOR Rate Advances  repaid,
prepaid, Converted, or not borrowed or Converted from and after the date of such
payment,  prepayment,  Conversion,  failure to borrow, or failure to Convert, to
the last day of the applicable  Interest Period (or, in the case of a failure to
borrow or  Convert,  to the last day of the  Interest  Period  which  would have
commenced)  at the  applicable  rate of  interest  for such  Advances  specified
herein, minus (ii) the amount of interest which would have accrued on such LIBOR
Rate  Advances  or  portion  thereof  from and after  the date of such  payment,
prepayment,  Conversion,  failure to borrow, or failure to Convert,  to the last
day of the applicable  Interest  Period at the  applicable  rate of interest for
such Advances  specified  herein,  but  calculated  with respect to a LIBOR Rate
based on an amount  substantially equal to the amount paid, prepaid,  Converted,
or not borrowed or Converted,  and an Interest Period substantially equal to the
number of days remaining in the applicable  Interest Period.  Whether or not the
foregoing  calculation  results  in a charge  to be paid by the  Borrowers,  the
Borrowers  shall also pay all  actual  out-of-pocket  expenses  other than those
taken into account in the  foregoing  calculation  incurred by the Banks and the
Agent  (excluding  any internal  expenses) and reasonably  attributable  to such
payment, prepayment,  Conversion, or failure to borrow or Convert. The Borrowers
acknowledge  that the Banks are  relying  in the LIBOR Rate  Advances  remaining
outstanding  or being  borrowed or  Converted  for the entire  Interest  Periods
selected, and that the foregoing  compensation  represents reasonable liquidated
damages  and is not a  penalty.  The  foregoing  compensation  shall  apply with
respect to all payments,  prepayments, and Conversions of LIBOR Rate Advance and
all failures to borrow and failures to Convert into LIBOR Rate Advances, whether
optional or obligatory  (including any required  principal  installments and any
required  Conversions  pursuant to the provisions of  Subsections  2.17 and 2.18
hereof),  and shall  include any  prepayment,  repayment,  or  Conversion  after
default or acceleration of the Note.

            (b) The  Borrowers  shall pay to the Agent for the  account  of each
affected Bank,  upon the request of such Bank through the Agent,  such amount or
amounts  as shall be  sufficient  (in the  reasonable  opinion  of such Bank) to
compensate  it for any  loss,  cost or  expense  that such  Bank  determines  is
attributable to (a) any payment or prepayment (whether mandatory or optional) of
a Bid Rate Loan made by such Bank for any reason (including, without limitation,
acceleration)  on a date other than the last day of the Interest Period for such
Advance,  or (b) any failure by a Borrower  for any reason  (including,  without
limitation,  the failure of any of the applicable conditions precedent specified
in Section 5 to be  satisfied) to borrow a Bid Rate Loan pursuant to Section 2.3
hereof from such Bank on the date established for such borrowing.

      2.16  Sharing of Payments, Etc.

            (a) If any Bank  shall  obtain  from  any  Borrower  payment  of any
principal  of or  interest  on any  Advance  owing to it or payment of any other
amount under this  Agreement or any other Loan Document  through the exercise of
any right of set-off,  banker's lien, counterclaim,  similar right, or otherwise
(other  than  from the  Agent as  provided  herein),  and,  as a result  of such
payment,  such Bank shall have received a greater percentage of the principal of
or interest on the  Advances or other  amounts  then due  hereunder by Borrowers
than the percentage which such Bank is entitled to receive  hereunder,  it shall
promptly  purchase from such other Banks  participations  in (or, if, and to the
extent  specified by such Bank,  direct interests in) the Advances or such other
amounts, respectively, owing to such other Banks (or in interest due thereon, as
the case may be) in such amounts,  and make such other  adjustments from time to
time as  shall be  equitable,  to the end that all the  Banks  shall  share  the
benefit of such excess  payment  (net of any  expenses  which may be incurred by
such Bank in obtaining or preserving such excess payment) pro rata in accordance
with the unpaid principal of and interest on the Advances or such other amounts,
respectively,  owing to each of the Banks.  To such end all the Banks shall make
appropriate  adjustments among themselves (by the resale of participations  sole
or otherwise) if such payment is rescinded or must otherwise be restored.

            (b) Nothing  contained herein shall require any Bank to exercise any
right  referenced in Subsection  (a) of this Section 2.16 or affect the right of
any Bank to exercise, and retain the benefits of exercising, any such right with
respect to any other  indebtedness or obligation of any Borrower.  If, under any
applicable  bankruptcy,  insolvency,  or other  similar law, any Bank receives a
secured claim in lieu of a set-off to which this Subsection  applies,  such Bank
shall, to the extent practicable, exercise its rights in respect of such secured
claim in a matter  consistent  with the rights of the Banks  entitled under this
Subsection to share in the benefits of any recovery on such secured claim.

      2.17  Conversion  and  Continuation  of  Advances;   Failure  to  Select
Interest Period.

            (a) The Borrowers may, upon notice given to the Agent in the form of
the Notice of Conversion/Continuation  attached hereto as Exhibit "E" (effective
upon  receipt)  no later  than  10:00  a.m.  (Eastern  Time) at least  three (3)
Business Days prior to the date of a proposed Conversion into or Continuation of
LIBOR Rate  Advances and not later than 10:00 a.m.  (Eastern  Time) at least one
(1)  Business  Day prior to the date of a  proposed  Conversion  into Prime Rate
Advances,  and  subject  to the  provisions  hereof,  Convert  Revolving  Credit
Advances  of one Type  into  Revolving  Credit  Advances  of the  other  Type or
Continue  Revolving  Credit Advances of one Type as Revolving Credit Advances of
the same Type at any time and from time to time on any Business  Day;  provided,
                                                                       --------
however, that (i) any Conversion or Continuation of LIBOR Rate Advances shall be
-------
made on,  and only on,  the last day of the  Interest  Period for the LIBOR Rate
Advances being  Converted or Continued,  (ii) any Conversion or  Continuation of
any Revolving  Credit  Advances into LIBOR Rate Advances shall be in amounts not
less than the minimum aggregate  amounts specified in Section 2.2(a),  and (iii)
no Conversion or  Continuation  of Advances  shall result in a greater number of
different  Interest  Periods for LIBOR Rate  Advances and Bid Rate Loans than is
permitted under Section  2.2(b).  Each such notice of Conversion or Continuation
shall  be  in  writing  or  shall  be  by  telephone  or  telecopier,  confirmed
immediately in writing, specifying, within the restrictions specified above, the
date of such  Conversion or  Continuation,  the Revolving  Credit Advances to be
Converted or Continued,  the portion  thereof to be Converted or Continued,  and
the Type of  Revolving  Credit  Advances  into which they will be  Converted  or
Continued and if such  Conversion or  Continuation  is into LIBOR Rate Advances,
the  duration  of the  Interest  Periods  for  such  Advances.  Each  notice  of
Conversion or Continuation shall be irrevocable and binding on the Borrowers.

            (b) (i) Whenever the unpaid  principal amount of LIBOR Rate Advances
comprising a borrowing shall be reduced,  by payment or prepayment or otherwise,
to less than $1,000,000.00, such Advances shall automatically Convert into Prime
Rate Advances on the last day of the then current  Interest  Period with respect
to such Advances.

                  (ii)  If  the  Borrowers  shall  fail  to  give  a  notice  of
Conversion or Continuation in respect of LIBOR Rate Advances prior to the end of
the Interest Period  applicable  thereto as provided in paragraph (a) hereof, or
to select the  duration of any  Interest  Period for any LIBOR Rate,  such LIBOR
Rate Advances will automatically,  on the last day of the then existing Interest
Period therefor, convert into Prime Rate Advances.

                  (iii) Upon the  occurrence  and during the  continuance of any
Event of Default,  (i) all LIBOR Rate Advances will  automatically,  on the last
days of the then existing  Interest  Periods  therefor,  Convert into Prime Rate
Advances  and (ii) the  obligation  of the Banks to make,  Continue,  or Convert
Revolving Credit Advances into LIBOR Rate Advances shall be suspended.

                  (iv)  LIBOR  Rate   Advances   may  be  subject  to  automatic
Conversion into Advances of other Types, as provided in Section 2.18(c) and (d).

      2.18  Increased Costs, Illegality, Etc.

            (a) If either  (i) the  introduction  of or any change in any law or
regulation or in the  interpretation  or administration of any law or regulation
by any  court or  administrative  or  governmental  authority  charged  with the
interpretation  of  administration  thereof  from  the date  hereof  or (ii) the
compliance with any guideline or request from any such  governmental  authority,
including, without limitation, any central bank (whether or not having the force
of law), (x) subjects any Bank or any  corporation  controlling  any Bank to any
tax of any kind  whatsoever  with respect to this  Agreement or any Advance,  or
changes  the  basis of  taxation  of  payments  to such Bank or  corporation  of
principal,  commissions,  fees, interest,  or any other amount payable hereunder
(except  for (A) taxes on or  measured by the overall net income of such Bank or
branch, office, or agency through which such Bank is acting for purposes of this
Agreement or (B) changes in the rate of such taxes); (y) imposes,  modifies,  or
holds  applicable  any reserve,  special  deposit,  compulsory  loan, or similar
requirement  against assets held by, or deposits or other  liabilities in or for
the account of,  advances or loans by, or other  credit or  commitment  therefor
extended by, or any other acquisition of funds by, any office of such Bank which
are not otherwise  included in any  determination  of the Reserve Adjusted LIBOR
Rate or other  interest  payable  hereunder;  or (z)  imposes on any Bank or the
corporation  controlling  the Bank any other  condition,  and as a result  there
shall be any increase in the cost to the Bank or the  corporation of agreeing to
make or making, funding, or maintaining Advances by an amount deemed by the Bank
to be material,  then the Borrowers  shall from time to time, upon demand by the
Bank, pay directly to the Bank additional  amounts  sufficient to compensate the
Bank for such  increased  cost. A certificate as to the amount of such increased
cost,  submitted to the Borrowers by the Bank,  shall be conclusive  and binding
for all purposes, absent manifest error.

            (b)  If  any  Bank  determines  that  compliance  with  any  law  or
regulation  or with any  guideline  or request  from any  central  bank or other
governmental  authority  (whether  or not  having  the force of law)  concerning
capital  adequacy or otherwise has or would have the effect of reducing the rate
of return on the capital of the Bank or the corporation controlling the Bank, as
a consequence of, or with reference to, the facilities hereunder,  or its making
or funding or  maintaining  Advances below the rate which the Bank or such other
corporation could have achieved but for such compliance (taking into account the
policies  of the Bank of such  corporation  with regard to capital) by an amount
deemed by the Bank to be material,  the Borrowers  shall from time to time, upon
demand by the Bank, pay to the Bank additional  amounts sufficient to compensate
the Bank or such other corporation for such reduction.  A certificate as to such
amounts, submitted to the Borrowers by the Bank, shall be conclusive and binding
for all purposes, absent manifest error.

            (c) If, with respect to any LIBOR Rate Advances,  the Required Banks
notify the Agent that the Reserve  Adjusted  LIBOR Rate for any Interest  Period
for such Advances will not  adequately  reflect the cost to the Banks of making,
funding,  or maintaining the LIBOR Rate Advances for such Interest  Period,  the
Agent shall forthwith so notify the Borrowers whereupon (i) each such LIBOR Rate
Advance will automatically, on the last day of the then existing Interest Period
therefor,  Convert into a Prime Rate  Advance,  and (ii) the  obligation  of the
Banks to make,  Continue,  or Convert Advances into LIBOR Rate Advances shall be
suspended  until the Agent  notifies  Borrowers  that the  Required  Banks  have
determined that the circumstances causing such suspension no longer exist.

            (d)  Notwithstanding  any other provision of this Agreement,  if the
introduction  of or  any  change  in or in  the  interpretation  of  any  law or
regulation  shall make it  unlawful or any  central  bank or other  governmental
authority  shall  assert  that it is  unlawful  for  any  Bank  to  perform  its
obligations  hereunder  to make LIBOR Rate  Advances  or to  continue to fund or
maintain  LIBOR Rate  Advances  hereunder,  then,  on notice  thereof and demand
therefor by the Bank through the Agent, (i) each LIBOR Rate Advance of the Banks
will automatically, upon such demand, Convert into a Prime Rate Advance and (ii)
the obligation of the Banks to make,  Continue,  or Convert  Advances into LIBOR
Rate Advances shall be suspended until the Agent shall notify the Borrowers that
the Bank has determined that the circumstances causing such suspension no longer
exist.

      2.19  Letters of Credit Obligations.

            (a) The payment  obligations  of the Borrowers  under this Agreement
with respect to the Letters of Credit shall be  unconditional  and  irrevocable,
and shall be paid strictly in accordance  with the terms of this Agreement under
all circumstances, including, without limitation, the following circumstances:

                  (i)   any lack of validity or  enforceability of the Letters
of Credit;

                  (ii)  any   amendment   or  waiver  of  or  any  consent  to
departure from all or any of the Letters of Credit;

                  (iii) the  existence of any claim,  set-off,  defense or other
right which the Borrowers may have at any time against any  beneficiary,  or any
transferee,  of the  Letters  of  Credit  (or  any  Person  for  whom  any  such
beneficiary  or transferee may be acting),  the Agent,  the Issuing Bank, any of
the other Banks, or any other person or entity,  whether in connection with this
Agreement, the transactions  contemplated herein or in the Letters of Credit, or
any unrelated transaction;

                  (iv) any statement or any other document  presented  under the
Letters of Credit proving to be forged,  fraudulent,  invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;

                  (v)  payment by the  Issuing  Bank under the Letters of Credit
against presentation of a draft or certificate which does not comply (other than
on its face) with the terms of the Letters of Credit; or

                  (vi)  any  other   circumstance  or  happening   whatsoever,
whether or not similar to any of the foregoing.

            (b) In addition to (but without  duplication of) the amounts payable
as  elsewhere  provided  in this  Agreement,  or any  obligation  arising out of
Letters of Credit,  the Borrowers hereby agree to protect,  indemnify,  pay, and
save the Agent,  the Issuing Bank, and each other Bank harmless from and against
any and all claims, demands,  liabilities,  damages, losses, costs, charges, and
expenses (including reasonable attorneys' fees) which such party may incur or be
subject to as a  consequence,  direct or  indirect,  of (i) the  issuance of the
Letters of Credit,  or (ii) the failure by the Issuing Bank to honor, or to make
payment  on, a  drawing  under the  Letters  of Credit as a result of any act or
omission,  whether rightful or wrongful,  of any present or future de jure or de
facto  Governmental   Authority  (all  such  acts  or  omissions  herein  called
"Governmental Acts").

            (c) As among the Borrowers,  the Issuing Bank, the other Banks,  and
the  Agent,  the  Borrowers  assume all risks of the acts and  omissions  of, or
misuse of the Letters of Credit.  In  furtherance,  and not in limitation of the
foregoing,  none of the Agent or the  Banks  shall be  responsible:  (A) for the
form,  validity,  sufficiency,  accuracy,  genuineness,  or legal  effect of any
document  submitted by any party as  beneficiary  or  transferee or otherwise in
connection with a drawing under the Letters of Credit, even if it should in fact
prove  to  be  in  any  or  all  respects  invalid,  insufficient,   inaccurate,
fraudulent,  or forged;  (B) for the validity or  sufficiency  of any instrument
transferring  or  assigning or  purporting  to transfer or assign the Letters of
Credit or the rights or benefits  thereunder or proceeds thereof, in whole or in
part,  which may prove to be  invalid or  ineffective  for any  reason;  (C) for
failure  of the  beneficiary  or  transferee  to comply  fully  with  conditions
required  in order to draw upon the  Letters  of Credit,  other than  conditions
expressly  stated  in  the  Letters  of  Credit;  (D)  for  errors,   omissions,
interruptions,  or delays in transmission or delivery of any messages,  by mail,
cable, telegraph, telex, or otherwise, whether or not they be in cipher; (E) for
errors in  interpretation  of technical  terms; (F) for any loss or delay in the
transmission  or otherwise  of any document  required in order to make a drawing
under  the  Letters  of  Credit  or  of  the  proceeds  thereof;   (G)  for  the
misapplication  by the  beneficiary  of the  Letters of Credit;  and (H) for any
consequences  arising from causes  beyond the control of the Agent,  the Issuing
Bank, or the other Banks including,  without limitation,  any Governmental Acts.
None of the above  shall  affect,  impair,  or prevent the vesting of any of the
Agent's, Issuing Bank's, or any other Bank's rights or powers hereunder.

            (d) In  furtherance  and  extension,  and not in  limitation  of the
specific  provisions  hereinabove set forth,  any action taken or omitted by the
Agent,  the  Issuing  Bank,  or any other Bank under or in  connection  with the
Letters  of Credit or the  related  certificates,  if taken or  omitted  in good
faith,  shall not result in any liability of the Agent, the Issuing Bank, or any
other Bank to the Borrowers.  The Issuing Bank may accept  documents that appear
on their face to be in order, without  responsibility for further investigation,
regardless of any notice or any information to the contrary.

            (e)  Notwithstanding  anything  to the  contrary  contained  in this
Subsection,  the  Borrowers  shall have no  obligation  to indemnify the Issuing
Bank,  any other Bank, or the Agent in respect of any liability  incurred by the
Borrowers  arising  solely out of the bad  faith,  gross  negligence  or willful
misconduct of the Agent, the Issuing Bank, or any other Bank, as determined by a
court of competent jurisdiction.

            (f) Without prejudice to the survival of any other obligation of the
Borrowers under this Agreement, the indemnities and obligations of the Borrowers
under this  Subsection  shall  survive the payment in full of all other  amounts
payable under this Agreement and the termination of the Letters of Credit.

      2.20  Amount Limitations.

      Notwithstanding  any  other  term  of this  Agreement  or any  other  Loan
Document,  at no time may (a) the aggregate  principal amount of all outstanding
Revolving Credit Advances,  together with the aggregate  principal amount of all
outstanding Bid Rate Loans and the aggregate principal amount of all outstanding
Swingline Loans exceed the aggregate amount of the Revolving Credit  Commitments
at such time, (b) the aggregate  principal  amount of all  outstanding  Bid Rate
Loans exceed 50% of the aggregate amount of the Revolving Credit  Commitments at
such time or (c) the aggregate  principal  amount of all  outstanding  Revolving
Credit  Advances owing to a Bank,  together with such Bank's Pro Rata Portion of
the aggregate  principal  amount of all  outstanding  Swingline Loans exceed the
aggregate amount of such Bank's Revolving Credit Commitment at such time.

                       SECTION 3. [INTENTIONALLY OMITTED].

                  SECTION 4. REPRESENTATIONS AND WARRANTIES.

      To induce  the Agent and the  Banks to enter  into this  Agreement  and to
establish  the  Revolving  Credit  Facility  provided for herein,  each Borrower
represents  and  warrants  to the  Agent and Banks  (which  representations  and
warranties shall survive the delivery of the documents  mentioned herein and the
establishment of the credit facilities contemplated hereby) as follows:

      4.1 Existence of Borrowers;  Compliance with Law. Each of the Borrowers is
a  corporation  or  limited  partnership,  duly  organized  or  formed,  validly
existing,   and  in  good  standing  under  the  laws  of  its  jurisdiction  of
incorporation or formation. Each of the Borrowers has the requisite power to own
its properties and assets,  and to carry on its business as now being conducted.
Each of the  Borrowers  is in  compliance  with all  other  requirements  of law
applicable to it and to its business.

      4.2 Authorization.  Each of the Borrowers has the power and authority, and
the legal right to execute,  deliver,  and  perform the Loan  Documents,  and to
borrow  thereunder,  and  has  taken  all  action  necessary  to  authorize  the
execution, delivery, and performance of the Loan Documents, and to authorize the
borrowings contemplated thereby. The execution, delivery, and performance of the
Loan Documents by the Borrowers is made by individuals of legal  capacity;  will
not  conflict  with,  result in the breach of, or  constitute  a violation of or
default under,  any applicable  law,  rule,  regulation,  writ, or decree or the
organizational documents of any of the Borrowers, or any agreement or instrument
to which any of the Borrowers is a party;  or result in the creation of any Lien
upon any property or assets of any of the Borrowers pursuant to any indenture or
other  agreement or instrument  to which any of the Borrowers is a party,  or by
which  any of the  Borrowers  or  their  respective  properties  may be bound or
affected.  No consent,  license, or authorization of, or filing with, any Person
or entity  (including,  without  limitation,  any  Governmental  Authority),  is
required in connection with the execution, delivery,  performance,  validity, or
enforceability  of  the  Loan  Documents  and  the  borrowings  as  contemplated
thereunder, except for consents, licenses, approvals, and filings referred to or
disclosed in the Loan Documents.

      4.3  Enforceable  Obligations.   The  Loan  Documents  when  executed  and
delivered to the Agent will  constitute  legal,  valid,  and binding  agreements
enforceable  against the respective  parties thereto and any property  described
therein in accordance with their respective terms,  except (i) as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
or similar laws affecting the  enforceability of creditor's  rights; and (ii) as
enforceability  may be limited or  qualified  by general  principles  of equity,
whether raised in a proceeding at law or in equity.

      4.4   Financial Condition of the Borrowers.

            (a) The  consolidated  financial  statements  of the Borrowers as of
June 30, 2000, a copy of which has been  furnished to the Agent,  are materially
correct,  complete,  and fairly present the financial condition of the Borrowers
as at the date of the financial statements and fairly present the results of the
operations of the Borrowers for the period covered thereby.

            (b) The Borrowers have no material direct or contingent liabilities,
liabilities  for  taxes,  long-term  leases,  or unusual  forward  or  long-term
commitments as of the date of the Agreement which are not disclosed by, provided
for, or reserved  against in the  financial  statements  or referred to in notes
thereto, and at such date there are no material unrealized or anticipated losses
from any  unfavorable  commitments  of the Borrowers.  The financial  statements
furnished to the Agent have been prepared in accordance with Generally  Accepted
Accounting  Principles  applied on a Consistent Basis maintained  throughout the
period  involved.  There has been no material  adverse  change in the  business,
properties or condition, financial or otherwise, of the Borrowers since the date
of such financial statements.

      4.5 No  Litigation.  Except as disclosed in a Form 10-K or Form 10-Q filed
by the Borrowers with the Securities and Exchange  Commission,  there is no suit
or  proceeding  at law or in equity  (including  proceedings,  by or before  any
court, arbitrator,  governmental or administrative commission,  board or bureau,
or other  administrative  agency)  pending,  or to the  knowledge  of any of the
Borrowers threatened, by or against or involving any of the Borrowers or against
any of their respective properties,  existence,  or revenues which, if adversely
determined,  would have a material  adverse effect on the property,  assets,  or
business or on the condition,  financial or otherwise, of the Borrowers or which
would be required to be disclosed  in notes to any balance  sheet as of the date
hereof  of the  Borrowers  prepared  in  reasonable  detail in  accordance  with
Generally Accepted Accounting Principles applied on a Consistent Basis.

      4.6 Disclosure and No Untrue  Statements.  No  representation  or warranty
made by any of the Borrowers in the Loan  Documents or which will be made by the
Borrowers  from time to time in connection  with the Loan Documents (a) contains
or will contain any  misrepresentation or untrue statement of fact; or (b) omits
or will omit to state any material fact necessary to make the statements therein
not misleading,  unless otherwise disclosed in writing to the Agent. There is no
fact  known  to any of the  Borrowers  or  any  of  their  respective  executive
financial  officers  which  adversely  affects,  or which  might  in the  future
adversely affect, the business, assets,  properties, or condition,  financial or
otherwise, of the Borrowers.

      4.7 Title to Assets;  Leases in Good  Standing.  Each of the Borrowers has
good and marketable title to their respective  properties and assets,  including
the  properties  and assets  reflected  in the  financial  statements  and notes
thereto  described  in Section 4.4  hereof,  except for such assets as have been
disposed of in the ordinary  course of  business,  and all such  properties  and
assets included in the  determination of Unencumbered  Assets are free and clear
of all Liens of any kind,  except for  Permitted  Liens.  Each of the  Borrowers
enjoys  peaceful and undisturbed  possession  under all leases under which it is
now operating,  none of which contain any unusual provisions which may adversely
affect its operations,  and all said leases are valid,  subsisting,  and in full
force and effect,  and one of the Borrowers is in violation of any material term
of any such lease.

      4.8  Payment  of Taxes.  Each of the  Borrowers  has filed or caused to be
filed all federal,  state,  and local tax returns which are required to be filed
by it and has paid or caused to be paid all taxes as shown on said returns or on
any  assessment  received  by it, to the extent that such taxes have become due,
except as otherwise  permitted by the provisions  hereof,  and no controversy in
respect of additional  income taxes of any of the  Borrowers is pending,  or, to
the knowledge of any such Borrower, threatened. Each of the Borrowers has set up
reserves  which are  believed by its  officers to be adequate for the payment of
all taxes for which a notice of assessment has been received and for the payment
of such taxes for the years that have not been  audited  by the  respective  tax
authorities.

      4.9 Agreement or Contract  Restrictions.  None of the Borrowers is a party
to, nor is any Borrower  bound by, any  agreement,  contract,  or  instrument or
subject to any  charter or other  corporate  or  partnership  restriction  which
materially adversely affects the business,  properties,  assets,  operations, or
condition,  financial or otherwise,  of such Borrower except as disclosed in the
financial  statements and notes thereto described in Subsection 4.4 hereof. None
of the Borrowers is in default in the performance, observance, or fulfillment of
any  obligations,  covenants,  or  conditions  contained  in  any  agreement  or
instrument to which it is a party, which would have a material adverse affect on
the Borrowers performing hereunder.

      4.10 Patents,  Trademarks,  Etc. Each of the Borrowers owns, possesses, or
has the right to use all necessary patents, patent rights, licenses, trademarks,
trademark rights,  trade names, trade name rights, and copyrights to conduct its
business as now conducted, without known conflict with any patent, patent right,
license, trademark,  trademark right, trade name, trade name right, or copyright
of any other Person or entity.

      4.11  Racketeer  Influenced and Corrupt  Organization(s)  Act. None of the
Borrowers  have ever been nor is any now engaged,  nor will any of the Borrowers
engage, directly or indirectly,  in any pattern of "racketeering activity" or in
any "collection of any unlawful debt," as each of the quoted terms or phrases is
defined or used by the Racketeer  Influenced and Corrupt  Organization(s) Act of
either the United States or the State of Florida,  Title 18, United States Code,
Section 1961 et seq.;  Chapter 895, Florida Statues,  respectively,  as each act
             ------
now exists or is hereafter  amended (the "RICO Lien Acts").  No real property of
any of the Borrowers, no interest or interests of any kind, including beneficial
interest or interests,  mortgages,  and leases, in or on real property of any of
the  Borrowers,  and  no  personal  property,  including  money,  of  any of the
Borrowers, has ever been, is now, or is in any way reasonably anticipated by any
of the Borrowers to become,  subject to any Lien,  notice,  civil  investigative
demand, action, suit, or any proceeding pursuant to the RICO Lien Acts.

      4.12  Investment Company Act; Regulation.

            (a) None of the Borrowers is an "investment company," an "affiliated
person" of any "investment company," or a company "controlled" by an "investment
company," and none of the Borrower is an "investment  advisor" or an "affiliated
person" of an  "investment  advisor"  (as each of the quoted terms is defined or
used in the Investment Company Act of 1940, as amended).

            (b) None of the  Borrowers  is not subject to  regulation  under any
state or local public  utilities  code or federal,  state,  or local  statute or
regulation  limiting the ability of any of the  Borrowers to incur  indebtedness
for money borrowed or to pledge assets of the type contemplated hereunder.

      4.13 Labor Matters.  There are no strikes or other labor disputes  against
any of the Borrowers pending or, to any of the Borrowers' knowledge, threatened.
Hours worked by and payment made to employees of each of the  Borrowers  has not
been in violation of the Fair Labor  Standards Act or any other  applicable  law
dealing with such matters. All payments due from any of the Borrowers on account
of  employee  health  and  welfare  insurance  have  been paid or  accrued  as a
liability on such Borrower's books.

      4.14  ERISA  Requirement.  Except  as  previously  disclosed  to  Agent in
writing,  none of the  Borrowers  has in force any  written or oral bonus  plan,
stock option plan,  employee  welfare,  pension or profit  sharing  plan, or any
other employee benefit  arrangement or understanding.  In addition,  no Borrower
nor any  predecessor  of any of the Borrowers is now or was formerly  during the
five year period  immediately  preceding the effective  date of this Agreement a
participating employer in any multi-employer or "multiple employer" plans within
the meaning of Sections  4001(1)(a)(3),  4063, and 4064 of ERISA.  Each employee
benefit  plan  subject to the  requirements  of ERISA  complies  with all of the
requirements  of ERISA and those plans  which are  subject to being  "qualified"
under  Sections  401(a)  and 501(a) of the  Internal  Revenue  Code of 1986,  as
amended from time to time,  have since their adoption been  "qualified" and have
received  favorable  determination  letters from the Internal Revenue Service so
holding.  There is no matter  which would  adversely  affect the  qualified  tax
exempt status of any such trust or plan,  and except as previously  disclosed to
the Agent,  there are no deficiencies or liabilities for any such plan or trust.
No employee  benefit  plan  sponsored by any of the  Borrowers  has engaged in a
non-exempt "prohibited transaction" as defined in ERISA.

      4.15 Compliance  With  Environmental  Requirements.  Each of the Borrowers
warrants  and  represents  to the Agent  and the  Banks  that to the best of its
knowledge, each of their respective real property assets is now and at all times
hereafter  will continue to be in full  compliance  with all federal,  state and
local  environmental  laws and  regulations  as they now exist or are  hereafter
enacted  and/or  amended,  including,  but not  limited  to,  the  Comprehensive
Environmental  Response,  Compensation  and Liability Act of 1980, as amended by
the  Superfund   Amendments  and  Reauthorization  Act  of  1986,  the  Resource
Conservation  and Recovery Act of 1976, as amended by the Used Oil Recycling Act
of 1980, and the Hazardous and Solid Waste  Amendments of 1984, as amended.  The
Borrowers  shall  indemnify  and hold the Agent and the Banks  harmless from and
against  any  and  all  damages,   penalties,   fines,  claims,   liens,  suits,
liabilities,  costs (including cleanup costs), judgments and expenses (including
attorneys', consultants' or experts' fees and expenses) of every kind and nature
suffered by or  asserted  against the Agent or the Banks as a direct or indirect
result of any warranty or representation made by the Borrowers in this paragraph
being false or untrue in any material respect or any requirement  under any law,
regulation or ordinance,  whether  local,  state or federal,  which requires the
elimination or removal of any hazardous materials,  substances,  wastes or other
environmentally regulated substances. The Borrowers' obligations hereunder shall
not be limited to any extent by the term of the indebtedness hereunder,  and, as
to any act or  occurrence  prior  to  payment  in full and  satisfaction  of the
indebtedness which gives rise to liability  hereunder,  shall continue,  survive
and  remain  in full  force  and  effect  notwithstanding  payment  in full  and
satisfaction of the indebtedness hereunder.

      4.16  Compliance  with REIT  Requirements.  CNLR is in compliance with all
requirements  applicable  to a  Real  Estate  Investment  Trust  imposed  by the
Internal  Revenue  Code of 1986,  as  amended,  and all  applicable  regulations
thereunder.  Net I, Net II, Net III,  Net IV and Funding are each in  compliance
with all requirements  applicable to a Qualified REIT Subsidiary  imposed by the
Internal  Revenue  Code of 1986,  as  amended,  and all  applicable  regulations
thereunder  and  each of the  Borrowers  is not  aware of any  fact  that  would
negatively impact such qualifications.

      4.17  Principal   Office/Corporate   Name.  The  principal  office,  chief
executive office, and principal place of business of each of the Borrowers is at
450  South  Orange  Avenue,  Suite  900,  Orlando,  Florida  32801.  Each of the
Borrowers maintains its principal records and books at such address.

      4.18  Use of  Credit.  The  Advances  shall  be used  exclusively  for the
purposes  specified in Section 2.6 hereof.  None of the  Borrowers is engaged in
the  business  of  extending  credit for the purpose of  purchasing  or carrying
"margin  stock" (within the meaning of Regulation U or Regulation X of the Board
of Governors of the Federal Reserve System),  and no part of the proceeds of any
Advance  hereunder  will be used to  purchase  or carry any  "margin  stock," to
extend  credit to others for the purpose of  purchasing  or carrying any "margin
stock," or for any other  purpose  which might  constitute  this  transaction  a
"purpose credit" within the meaning of Regulation U or Regulation X. Neither the
Borrowers  nor any Person  acting on behalf of any of the Borrowers has taken or
will take any action  which  might  cause any Note or any other Loan  Documents,
including this Agreement,  to violate  Regulation U or Regulation X or any other
regulation  of the Board of Governors of the Federal  Reserve  system or violate
Section  8 of the  Securities  Exchange  Act of 1934 or any  rule or  regulation
thereunder,  in each  case as now in effect  as the same may  hereinafter  be in
effect.  None of the Borrowers  owns "margin stock" except for that described in
the financial  statements  referred to in Section 4.4 hereof and, as of the date
hereof, the aggregate value of all "margin stock" owned by each of the Borrowers
does not exceed twenty-five percent (25%) of the value of all of such Borrower's
assets.  In connection with this  Agreement,  the Borrowers will upon request of
the Agent deliver to the Agent a statement in conformity  with the  requirements
of Federal Reserve Form U-1 referred to in said Regulation.

                        SECTION 5. CONDITIONS OF LENDING.

      The  obligation  of the  Agent,  the  Swingline  Lender  and the  Banks to
establish  the  Revolving  Credit  Facility or to permit any  borrowing or issue
Letters  of  Credit  hereunder  is  conditioned  upon  the  performance  of  all
agreements by the Borrowers  contained  herein,  as well as  satisfaction of the
following conditions precedent:

      5.1 Request for  Borrowing;  Information.  Each request for a borrowing or
the  issuance of a Letter of Credit  hereunder  shall be evidenced by (i) in the
case of the borrowing of a Revolving  Credit  Advance,  a Notice of Borrowing in
substantially  the  form of  Exhibit  "A"  hereto,  and  (ii) in the case of the
borrowing of a Swingline Loan, a Notice of Swingline  Borrowing in substantially
the form of  Exhibit  "F"  hereto.  At least  five (5)  business  days  prior to
requesting  such  Advance,  the  Borrowers  must deliver to the Agent all of the
information  as may be  reasonably  requested  by the Agent in  response  to the
Borrowers'  request for a borrowing or the  issuance of a Letter of Credit.  Any
Advance of funds by the Banks without  obtaining all such information  shall not
constitute  a  waiver  by the  Agent or any Bank of its  right to  receive  such
information and a failure of the Borrowers to deliver the same to the Agent upon
demand shall constitute a default hereunder.

      5.2 Continuing Accuracy of Representations and Warranties.  At the time of
each borrowing of any Advances or the issuance of a Letter of Credit  hereunder,
the  representations  and warranties set forth in this Agreement  shall be true,
correct,  and complete on and as of the date of such  borrowing of such Advances
or  Letter of  Credit  issuance  hereunder  with the same  effect as though  the
representations  and  warranties  had  been  made on and as of the  date of such
borrowing  of such  Advances  or  Letter of Credit  issuance.  Accordingly,  the
borrowing  of Advances and the  issuance of a Letter of Credit  hereunder  shall
constitute  a  certification  by the  Borrowers  to the  effect set forth in the
preceding sentence.

      5.3 No Default.  At the time of each  borrowing or issuance of a Letter of
Credit  hereunder,  the  Borrowers  shall be in  compliance  with all  terms and
conditions set forth herein,  and no Event of Default,  nor any event which upon
notice or lapse of time or both would constitute an Event of Default, shall have
occurred  and be  continuing  at the time of such  borrowing or Letter of Credit
issuance. Accordingly, the borrowing of Advances and the issuance of a Letter of
Credit hereunder shall constitute a certification by the Borrowers to the effect
set forth in the preceding sentence

      5.4 Loan Documents.  On or prior to the Closing Date, the Agent shall have
received,  duly executed,  this Agreement and the other Loan  Documents,  all in
form and substance satisfactory to the Agent and counsel for the Agent.

      5.5 Supporting Documents. On or prior to the Closing Date, the Agent shall
have received the following documents  satisfactory in form and substance to the
Agent and counsel for the Agent and, as  requested  by the Agent,  certified  by
appropriate corporate or governmental authorities:

            (a) a certificate of good standing of each Borrower certified by the
      Secretary of State, or other appropriate  governmental authority, of their
      respective jurisdictions of incorporation or formation;

            (b)   a certificate of  qualification of each Borrower to transact
      business in the State of Florida  certified by the Secretary of State of
      the State of Florida;

            (c) a copy  of the  articles  of  incorporation  or  certificate  of
      limited  partnership,  as appropriate,  of each Borrower  certified by the
      Secretary of State, or other appropriate  governmental authority, of their
      respective  jurisdictions of incorporation or formation,  accompanied by a
      certificate from an appropriate  officer of such Borrower that the copy is
      complete and that the articles of  incorporation or certificate of limited
      partnership have not been amended,  annulled,  rescinded, or revoked since
      the date of the certificate of the Secretary of State or other appropriate
      governmental authority;

            (d) a copy of the bylaws of each  Borrower  in effect on the date of
      this Agreement,  accompanied by a certificate from an appropriate  officer
      of such Borrower  that the copy is true and complete,  and that the bylaws
      have not been amended,  annulled,  rescinded, or revoked since the date of
      the bylaws or the last amendment reflected in the copy, if any;

            (e) a copy of resolutions of the Board of Directors of each Borrower
      authorizing the execution, delivery, and performance of the Loan Documents
      and the borrowing  thereunder,  and  specifying the officer or officers of
      such Borrower  authorized to execute the Loan Documents,  accompanied by a
      certificate from an appropriate  officer that the resolutions are true and
      complete, were duly adopted at a duly called meeting in which a quorum was
      present and acting throughout, or were duly adopted by written action, and
      have not been amended, annulled,  rescinded, or revoked in any respect and
      remain in full force and effect on the date of the certificate;

            (f) an incumbency  certificate  containing  the names,  titles,  and
      genuine  signatures  of all duly elected  officers  and  directors of each
      Borrower as of the date of this  Agreement,  accompanied  by a certificate
      from an appropriate  officer of such Borrower that the information is true
      and complete;

            (g)   such  additional  supporting  documents  as  the  Agent  may
      request.

      5.6 Opinion of the  Borrowers'  Counsel.  On or prior to the Closing Date,
and to the extent  required by the Agent at the time of any  borrowing or Letter
of Credit  issuance  hereunder,  the Agent  shall have  received  the  favorable
opinion of counsel for  Borrowers,  in form and  substance  satisfactory  to the
Agent.

                        SECTION 6. AFFIRMATIVE COVENANTS.

      The  Borrowers  covenant and agree that,  from the date of this  Agreement
until payment in full of all Advances and all other  obligations owing hereunder
or any other Loan Document and termination of the Revolving  Credit Facility and
expiration  of all Letters of Credit issued  thereunder,  unless the Agent shall
otherwise consent in writing, the Borrowers will fully comply with the following
provisions:

      6.1   Financial Reports and Other Data.

            (a) Quarterly Reports.  The Borrowers shall deliver to the Agent and
                -----------------
      the  Banks  within  forty-five  (45)  days  after  the  end of each of the
      Borrowers'  fiscal  quarters,  including  without  limitation,  the fourth
      quarter of each fiscal year:

                  (i) The  Borrowers'  Profit and Loss  Statement  and Cash Flow
            Statement  for such quarter and the  Borrower's  Balance Sheet as at
            the  last  day  of  such  quarter,  all  in  reasonable  detail  and
            satisfactory  in scope to the Agent and certified by each Borrower's
            chief  financial  officer as to the  fairness  and  accuracy of such
            financial  statements  and that  the  same  have  been  prepared  in
            accordance with Generally Accepted Accounting  Principles applied on
            a Consistent Basis; and

                  (ii)   a   Quarterly   Advance   Compliance   Certificate   in
            substantially  the form  attached  hereto as Exhibit "L" including a
            listing of each  Borrower's  properties  and  information on leases,
            stating that each Borrower is in compliance  with all covenants made
            pursuant  to  the  Loan   Documents  and  including  a  schedule  of
            computations in reasonable detail demonstrating  compliance with the
            financial  covenants  contained in Subsection 6.2 of this Agreement.
            Such certificate shall be executed by the chief financial officer of
            each Borrower  stating that to the best of the officer's  knowledge,
            such Borrower has kept, observed,  performed, and fulfilled each and
            every agreement  binding on it contained in the Loan Documents,  and
            is not at the time, nor was at any time during the period covered by
            such Quarterly  Advance  Compliance  Certificate,  in default of the
            keeping,  observance,  performance,  or  fulfillment  of  any of the
            terms,  provisions,  and  conditions  thereof,  and that none of the
            Events of Default or events  which upon  notice or the lapse of time
            or  both  would  constitute  Events  of  Default  has  occurred  (or
            specifying  all such  defaults and events of which  officer may have
            knowledge  and what actions  such  Borrower is taking or proposes to
            take with respect thereto).

            (b) Annual  Reports.  The Borrowers  shall  annually  furnish to the
                ---------------
      Agent and the Banks  within  ninety (90) days after the end of each fiscal
      year financial statements of the Borrowers which must be acceptable to the
      Agent in the Agent's sole discretion.  Such statements shall include,  but
      not be limited to, a statement of profit and loss, and  reconciliation  of
      surplus statement for such year, and a balance sheet as of the end of such
      year, all in reasonable detail and satisfactory in scope to the Agent. All
      financial  statements  shall be  prepared  in  accordance  with  Generally
      Accepted Accounting Principles, applied on a Consistent Basis, accompanied
      by an unqualified  opinion of independent  certified public accountants of
      recognized national standing selected by the Borrowers and satisfactory to
      the Agent. Together with each delivery of financial statements as required
      by this  subsection  6.1(b),  the  Borrowers  shall deliver to the Agent a
      certificate  of the  independent  certified  accountants  stating  that in
      making the examination  necessary to said  certification  of the financial
      statements,   they  obtained  no  knowledge  of  any  condition  or  event
      pertaining  to financial or  accounting  matters,  of the  Borrowers  that
      constitutes  an Event of Default or event which after  notice by the Agent
      or lapse of time, or both, would constitute an Event of Default; or if the
      accountants have obtained  knowledge of any Event of Default or other such
      event, a statement  specifying the nature and period of existence thereof.
      In addition,  such accountants'  certificate shall state that with respect
      to  the  fulfillment  of  any  of the  terms,  covenants,  provisions,  or
      conditions of the Loan  Documents,  other than those relating to financial
      or accounting  matters,  they have obtained no knowledge of any default or
      Event of Default,  or if the  accountants  have obtained  knowledge of any
      such default or Event of Default they shall make disclosure  thereof,  but
      the  accountants  shall  not be  liable  to the Agent or the Banks for any
      failure to obtain knowledge of any default or Event of Default referred to
      in this sentence.

            (c) Additional Data. With reasonable promptness,  the Borrowers will
                ---------------
      deliver such additional information  respecting the business,  operations,
      and financial  condition of any Borrower as the Agent or any Bank may from
      time to time reasonably request,  including,  without limitation,  (i) any
      and all correspondence  with any auditors and/or regulatory agencies which
      request  changes  in or  require  alterations  in the  procedures  used in
      administering or reporting in any Borrower's operations,  (ii) any and all
      financial statements,  reports, notices, and proxy statements sent or made
      available  by any  Borrower  to its  security  holders,  all  regular  and
      periodic reports,  and all registration  statements and prospectuses filed
      by any  Borrower  with  the  Securities  and  Exchange  Commission  or any
      governmental  authority succeeding to any of its functions,  and (iii) all
      press  releases  and other  statements  made  available  generally  by any
      Borrower to the public concerning material developments in the business of
      such Borrower.

            (d) Sharing of  Financial  Information.  The Agent and the Banks are
                ----------------------------------
      hereby  authorized  to deliver a copy of any  financial  statements or any
      other  information  relating  to  the  business  operations  or  financial
      condition of any Borrower  which may be furnished to them or come to their
      attention  pursuant to the Loan Documents or otherwise,  to any regulatory
      body or agency having jurisdiction over Agent or any Bank or to any Person
      which shall,  or shall have the right or obligation  to, succeed to all or
      any part of the Agent's or any Bank's interest in the Loan Documents.

      6.2 Financial Covenants of the Borrowers.  The Borrowers will maintain the
following  financial  covenants  and  such  computations  shall  be  made  on  a
consolidated basis in accordance with Generally Accepted  Accounting  Principles
applied on a Consistent Basis:

            (a) the  ratio of Total  Liabilities  to  Tangible  Net Worth of the
      Borrowers shall at all times not be more than 1 to 1.

            (b) the ratio of Secured Debt to Total Assets shall at all times not
      be more than .30 to 1.

            (c) the ratio of Unencumbered  Assets to Unsecured Debt shall at all
      times not be less than 1.75 to 1.

            (d) the ratio of EBITDA for the fiscal quarter most recently  ending
      to Interest Expense for such fiscal quarter shall not be less than 1.90 to
      1.

            (e) the ratio of EBITDA for the fiscal quarter most recently  ending
      to Fixed Charges for such fiscal quarter shall not be less than 1.60 to 1.

            (f) the ratio of (i) Gross Lease Revenues from assets which comprise
      Unencumbered  Assets for the fiscal quarter most recently ending minus the
      Applicable  Management Fees for such fiscal quarter plus Eligible Mortgage
      Income for such fiscal quarter to (ii) Interest  Expense on Unsecured Debt
      for such fiscal quarter shall not be less than 2.00 to 1.

            (g)  Tangible  Net  Worth  shall at any  time  not be less  than (i)
      $340,000,000  plus (ii) 85% of the net  proceeds  of all equity  issuances
      effected by any of the Borrowers at any time after June 30, 1999.

            (h) In addition to the foregoing, at all times during which CNLR has
      not received an Investment  Grade Rating from either  Standard & Poor's or
      Moody's Investors Service:

                  (i)   Unencumbered   Assets   shall   not   be   less   than
            $350,000,000 at any time; and

                  (ii) (A) 50% of the  value  of all  Excluded  Assets  shall be
            excluded from the calculation of Unencumbered Assets for purposes of
            determining  compliance with the financial  ratios set forth in this
            Section 6.2 (including the immediately preceding clause (i)), and

                        (B) all income which is  attributable to Excluded Assets
            shall be excluded from the  calculation  of Gross Lease Revenues and
            Eligible Mortgage Income for purposes of determining compliance with
            the financial ratios set forth in this Section 6.2.

      6.3 Payment and  Performance of the Borrowers  Obligations.  The Borrowers
will make full and  timely  payment  of the  principal  of and  interest  on the
indebtedness  owed hereunder.  The Borrowers will duly comply with all the terms
and covenants contained in the Loan Documents.

      6.4   Depository  Account.  Until the Notes and the other Loan Documents
are paid in full,  each Borrower shall maintain a depository  account with the
Agent.

      6.5 Conduct of Business;  Maintenance of Existence.  Each Borrower will do
or cause to be done all things  necessary  to preserve and to keep in full force
and effect its existence and rights and its  franchises,  trade names,  patents,
trademarks, and permits which are necessary for the continuance of its business;
maintain  management  satisfactory  to Required  Banks;  and  continue to engage
principally in the business currently operated by such Borrower.

      6.6 Right of Inspection; Discussions. Each Borrower will permit any person
designated by the Agent or any Bank, at such  Borrower's  expense,  to visit and
inspect any of the property,  books,  records,  papers, and financial reports of
such  Borrower,  including  the  making  of any  copies  thereof  and  abstracts
therefrom, and to discuss its affairs, finances, and accounts with its principal
officers, all at such reasonable times and as often as the Agent or any Bank may
reasonably request. Each Borrower will also permit the Agent or any Bank, or its
designated  representative,  to audit or appraise any of its assets or financial
and business  records.  Without limiting the foregoing in any way, each Borrower
also  agrees to allow the Agent  and any Bank or  certified  public  accountants
satisfactory  to the  Agent or such  Bank to review  such  Borrower's  financial
statements,  books, and records regarding  depreciation and reserves accounting.
Each  Borrower  further  agrees to permit the Agent and the Banks to review each
registration   statement  and  any  other  offering  documents   (including  any
amendments  thereto)  (collectively the "Offering  Documents")  prepared by such
Borrower or at the  direction  of such  Borrower for the purpose of effecting an
offering of an equity  interest in such Borrower.  The Agent and each Bank shall
have the right to approve  any  reference  to the Agent or such Bank and to this
Agreement in such Offering Documents.

      6.7   Notices.  Each  Borrower  will  promptly  give notice to the Agent
and the Banks of:

            (a) the  occurrence  of any  default or Event of  Default  (or event
      which  would  constitute  a  default  or  Event  of  Default  but  for the
      requirement  that  notice be given or time  elapse or both)  hereunder  or
      under any other  obligation  of any  Borrower,  in which case such  notice
      shall specify the nature thereof, the period of existence thereof, and the
      action that the Borrowers propose to take with respect thereto;

            (b) the  occurrence of any material  casualty to any property of any
      Borrower or any other force majeure (including,  without  limitation,  any
      strike or other labor disturbance)  materially  affecting the operation or
      value of any Borrower  (specifying  whether or not such  casualty or force
      majeure is covered by insurance); and

            (c) the occurrence of any material event of default  pursuant to any
      lease under which any  Borrower is a Lessor,  or the  commencement  of any
      material litigation, dispute, investigation or proceeding that may involve
      a claim  for  damages,  injunctive  relief,  enforcement  of other  relief
      pending, being instituted, or threatened by, against or involving a lessee
      under a lease  under  which any  Borrower  is a Lessor,  or any  filing or
      commencement by or against any such lessee of a petition, case, proceeding
      or other action seeking reorganization, arrangement or readjustment of its
      Debt,  or any  relief  under  any  existing  or  future  law  relating  to
      bankruptcy,  insolvency,  reorganization  or  relief  of  debtors,  or any
      adverse change which might impair the conduct of such lessee's business or
      might materially affect financially or otherwise its business, operations,
      assets,  properties,  prospects  or  condition  of which any  Borrower has
      notice or knowledge.

            (d) the  commencement or any material change in the nature or status
      of any litigation,  dispute, investigation, or proceeding that may involve
      a claim for  damages,  injunctive  relief,  enforcement,  or other  relief
      pending,  being  instituted,  or threatened  by,  against or involving any
      Borrower,  or any  attachment,  levy,  execution,  or other  process being
      instituted by or against any assets of any Borrower,  or any other adverse
      change which might impair the conduct of the business of the  Borrowers or
      might materially affect financially or otherwise the business, operations,
      assets, properties, prospects, or condition of the Borrowers.

      6.8 Payment of Taxes;  Liens. Each Borrower will promptly pay, or cause to
be paid,  all  taxes,  assessments  and  other  governmental  charges  which may
lawfully be levied or assessed (i) upon the income or profits of such  Borrower,
(ii) upon any property,  real, personal or mixed, belonging to such Borrower, or
upon any part thereof, or (iii) by reason of employee benefit plans sponsored by
such  Borrower,  and also any lawful  claims for labor,  material,  and supplies
which,  if unpaid,  might  become a Lien or charge  against  any such  property;
provided,  however,  no  Borrower  shall  be  required  to  pay  any  such  tax,
assessment,  charge,  levy,  or claim so long as the validity  thereof  shall be
actively  contested in good faith by proper  proceedings;  but provided  further
that any such tax,  assessment,  charge,  levy, or claim shall be paid forthwith
upon the commencement of proceedings to foreclose any Lien securing the same.

      6.9  Maintenance  of Property,  Leases.  Each  Borrower  will maintain its
property in good condition and repair and, from time to time, make all necessary
and proper repairs, renewals, replacements,  additions and improvements thereto,
so that any business carried on may be properly and advantageously  conducted at
all times in accordance  with prudent  business  management.  Each Borrower will
maintain all leases on its property and ground  leases to which it is a party in
good standing, will perform all of its obligations thereunder when due.

      6.10 ERISA Benefit Plans.  Each Borrower will comply with all requirements
of ERISA applicable to it and will not materially increase its liabilities under
or violate the terms of any present or future  benefit  plans  maintained  by it
without the prior approval of the Agent. Each Borrower will furnish to the Agent
as soon as possible and in any event within 10 days after the Borrower or a duly
appointed  administrator  of a plan (as defined in ERISA) knows or has reason to
know that any reportable event,  funding deficiency,  or prohibited  transaction
(as defined in ERISA) with respect to any plan has occurred,  a statement of the
chief financial  officer of such Borrower  describing in reasonable  detail such
reportable event, funding deficiency,  or prohibited  transaction and any action
which such Borrower proposes to take with respect thereof,  together with a copy
of the notice of such event given to the Pension Benefit Guaranty Corporation or
the Internal  Revenue Service or a statement that said notice will be filed with
the annual report of the United States  Department of Labor with respect to such
plan if such filing has been authorized.

      6.11  Insurance of Property.  Each Borrower will keep its business and its
Unencumbered Assets insured at all times for full replacement value or otherwise
in  amounts  acceptable  to  Agent  and  all  of its  other  assets  insured  in
commercially  reasonable  amounts,  all  by  commercially  reasonable  insurance
companies  against the risks for which  provision for such  insurance is usually
made  by  other  Persons  engaged  in  a  similar  business  similarly  situated
(including without limitation insurance for fire and other hazards and insurance
against  liability  on account of damage to persons or  property  and  insurance
under all applicable workmen's compensation laws) and to the same extent thereto
and carry such other types and amounts of  insurance  as are usually  carried by
Persons engaged in the same or a similar business similarly  situated,  and upon
request  deliver to the Agent,  on behalf of the Banks,  a certificate  from the
insurer  setting  forth the nature of the risks covered by such  insurance,  the
amount  carried  with respect to each risk,  and the name of the  insurer.  Each
Borrower  hereby agrees that any proceeds from such insurance  coverage shall be
applied to either (i) repair or rebuild the property for which such proceeds are
being  received,  (ii)  acquire  a  substantially  equivalent  property  with  a
substantially  equivalent  lease stream of similar credit quality or (iii) repay
any borrowings hereunder.

      6.12 True Books.  Each  Borrower will keep proper and true books of record
and account,  reasonably  satisfactory  to the Agent,  in which full,  true, and
correct  entries  will be  made of all of its  dealings  and  transactions,  and
establish on its books such  reserves as may be required by  Generally  Accepted
Accounting Principles with respect to all taxes,  assessments,  charges, levies,
and claims  referred to in Section 6.8 hereof,  and with respect to its business
in general,  and will include  such  reserves in any interim as well as year-end
financial statements.

      6.13  Observance  of Laws.  Each Borrower will conform to and duly observe
all  laws,  regulations,  and  other  valid  requirements  of  any  Governmental
Authority with respect to the conduct of its business, including but not limited
to, applicable ERISA, environmental and transportation laws.

      6.14  Further  Assurances.  At its cost and  expense,  upon request of the
Agent,  each Borrower will duly execute and deliver or cause to be duly executed
and  delivered to the Agent,  such further  instruments  or documents and do and
cause to be done such further acts as may be  reasonably  necessary or proper in
the  opinion  of the  Agent to carry out more  effectively  the  provisions  and
purposes of this Agreement.

      6.15 Change of Name,  Principal Place of Business,  Office,  or the Agent.
Each Borrower will notify the Agent of any change in the name of such  Borrower,
the principal place of business of such Borrower, the office where the books and
records of such Borrower are kept, or any change in the registered agent of such
Borrower  for the  purposes of service of process.  No Borrower  will change the
chief  executive  office of such Borrower from Orange County,  Florida,  without
first notifying the Agent.

      6.16  Status.  CNLR shall at all times  comply  with all  requirements  of
applicable laws and regulations  necessary for CNLR to maintain its REIT Status.
Net I, Net II, Net III,  Net IV and Funding  shall at all times  comply with all
requirements of applicable laws and regulations  necessary to maintain Qualified
REIT Subsidiary Status.

      6.17  Syndication  of Credit.  Each Borrower  agrees to cooperate with the
Agent in  connection  with its intended  further  syndication  of the  Revolving
Credit Facility,  such cooperation to include, but not be limited to, attendance
by management  personnel of the Borrowers at meetings arranged by the Agent with
representatives of potentially  participating  commercial lending  institutions,
provision of  information  regarding  the  Borrower's  business  operations  and
financial  condition,  and response to questions  and  inquiries  regarding  the
Borrowers.

      6.18 Exchange Listing. CNLR shall at all times maintain at least one class
of  common  shares  of CNLR  having  trading  privileges  on the New York  Stock
Exchange or the American Stock Exchange or which is subject to price  quotations
on The NASDAQ Stock Market's National Market System.

      6.19 Ownership of RE-Stores. The Borrowers and CNLRS, collectively,  shall
at all times own 100% of the outstanding equity or other ownership  interests in
RE-Stores, Inc.

      6.20 New  Borrowers.  Provided that no default or Event of Default  exists
immediately   prior  thereto  and  after  giving  effect  thereto,   CNLRS,  any
Wholly-Owned  Subsidiary of CNLRS, any Wholly-Owned  Subsidiary of CNLR and/or a
limited partnership which is a Subsidiary of CNLR may become Borrowers hereunder
by executing and delivering to the Agent a Joinder Agreement,  together with the
other  items  required  to be  delivered  as set forth  below,  each in form and
substance satisfactory to the Agent:

            (i)  the  articles  of  incorporation,   articles  of  organization,
      certificate  of limited  partnership  or other  comparable  organizational
      instrument  (if any) of such Person  certified  as of a recent date by the
      Secretary of State of the State of formation of such Person;

            (ii) a  Certificate  of Good  Standing  or  certificate  of  similar
      meaning  with  respect to such  Person  issued as of a recent  date by the
      Secretary  of  State  of  the  State  of  formation  of  such  Person  and
      certificates of  qualification  to transact  business or other  comparable
      certificates  issued by each Secretary of State (and any state  department
      of taxation, as applicable) of each state in which such Person is required
      to be so qualified;

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

            (iv) copies  certified by the  Secretary  or Assistant  Secretary of
      such Person (or other individual  performing similar functions) of (1) the
      by-laws of such Person, if a corporation, or the partnership agreement, if
      a limited  partnership,  and (2) all corporate or partnership action taken
      by such Person to authorize the execution, delivery and performance of the
      Loan Documents to which it is a party;

            (v) an opinion of counsel for the Borrowers,  addressed to the Agent
      and the Banks,  and regarding,  among other things,  the authority of such
      Person to  execute,  deliver and  perform  the  Agreement,  and such other
      matters as the Agent or its counsel may request;

            (vi) in the case of CNLRS, a copy of the documentation  effectuating
      the  conversion  of CNLRS to a Taxable  REIT  Subsidiary  (as  defined  in
      Section 856(l) of the Internal Revenue Code 1986, as amended); and

            (vii) such  other  documents  and  instruments  as the  Agent  may
      reasonably request.

                         SECTION 7. NEGATIVE COVENANTS.

      The  Borrowers  covenant  and agree  that from the date of this  Agreement
until payment in full of all Advances and all other  obligations owing hereunder
or under any  other  Loan  Document  and  termination  of the  Revolving  Credit
Facility  and  expiration  of all  Letters  of  Credit  issued  thereunder,  the
Borrowers will fully comply with the following provisions:

      7.1  Limitations  on Unsecured  Debt.  No Borrower  shall  create,  incur,
assume,  or  permit  or  suffer  to exist  any  Unsecured  Debt  other  than the
following:  (a) the Revolving  Credit Advances and the other  obligations  owing
hereunder and under the other Loan  Documents;  (b) Unsecured  Debt which is not
revolving  debt and  which  matures  by its  terms on a date  subsequent  to the
Revolving  Credit  Maturity Date; (c) other Unsecured Debt which was incurred in
connection with an offering of Debt securities (i) made pursuant to an effective
registration statement filed with the Securities and Exchange Commission or (ii)
exempt from the registration requirements of the Securities Act pursuant to Rule
144A thereof so long as such Debt  securities  are required to be exchanged  for
Debt securities referred to in the preceding clause (i); and (d) other Unsecured
Debt not to exceed $15,000,000 in aggregate  outstanding principal amount at any
time.  Notwithstanding the foregoing,  the Borrowers shall not create,  incur or
assume  any Debt after the date  hereof if  immediately  prior to the  creation,
incurring or assumption  thereof,  or  immediately  thereafter  and after giving
effect  thereto,  an Event of  Default  is or would be in  existence,  including
without limitation, an Event of Default resulting from a violation of any of the
covenants contained in Section 6.2.

      7.2 Limitations on Dividends.  The Borrowers will not, and will not permit
any of their Subsidiaries to, declare or make any Restricted Payments; provided,
however,  that (a) Subsidiaries of CNLR may make Restricted  Payments to CNLR or
other  Subsidiaries  of CNLR;  (b) CNLR and the Up-REIT  Borrower may declare or
make cash distributions to their shareholders and partners, respectively, during
any period of four  consecutive  fiscal  quarters in an aggregate  amount not to
exceed 100% of Funds  Available for  Distribution  for such four quarter period;
(c) CNLR may purchase up to five percent  (5%) of its  outstanding  common stock
during any calendar year (based upon the actual number of shares of common stock
outstanding  on January 1 of such  calendar  year)  pursuant to a stock  buyback
program  instituted by CNLR;  and (d) subject to the following  sentence,  if an
Event of  Default  (or event with the  passage of time,  the giving of notice or
both would become an Event of Default)  shall have  occurred and be  continuing,
CNLR and the Up-REIT  Borrower  may only declare or make cash  distributions  to
their  shareholders  and  partners,  respectively,  during any fiscal year in an
aggregate amount not to exceed the lesser of (i) the amount otherwise  permitted
to be declared or made under the immediately  preceding  clause (b) and (ii) the
minimum  amount  necessary for CNLR to remain in  compliance  with Section 6.16.
Notwithstanding the foregoing, if an Event of Default (or event with the passage
of time,  the  giving  of  notice  or both  would  become  an Event of  Default)
specified  in  Section  8.1,  Section  8.4 or 8.5  shall  have  occurred  and be
continuing,  or if as a result of the  occurrence  of any other Event of Default
the  obligations of the Borrowers  hereunder have been  accelerated  pursuant to
Section 8, no Borrower shall make any Restricted Payments whatsoever.

      7.3 Merger, Sale of Assets,  Dissolution,  Etc. No Borrower will, directly
or indirectly, (a) enter into any transaction of merger or consolidation; or (b)
allow any change in control of any  Borrower;  or (c)  transfer,  sell,  assign,
lease,  or otherwise  dispose of all or a substantial  part of its properties or
assets; or (d) transfer,  sell, assign,  lease,  convey, or otherwise dispose of
any of its real property, except that a Borrower may, so long as there exists no
Event of Default or  circumstance  which with the giving of notice or passage of
time would  become an Event of Default,  (i) transfer  real  property to another
Borrower,  and (ii) sell real  property  in the  ordinary  course of business to
third parties, including affiliates of the Borrowers, provided that such sale is
made upon fair and reasonable  terms that are no less favorable to the Borrowers
than those which might be obtained in an  arm's-length  transaction  at the time
from Persons which are not affiliates of the Borrowers; or (e) change the nature
of its business;  or (f) except as otherwise  specifically  contemplated by this
Agreement,  invest  in,  transfer  any  assets to, or do  business  through  any
Subsidiary except the Up-REIT Borrower and Wholly-Owned  Subsidiaries engaged in
the same business as the Borrower which agree to become borrowers hereunder upon
formation; or (g) wind up, liquidate, or dissolve itself or its business; or (h)
agree to any of the  foregoing.  Notwithstanding  the  foregoing,  no consent of
Agent or the Banks shall be required for (i) a merger  between CNLR and CNLRS so
long as CNLR is the survivor of such merger and no Event of Default results from
such merger or (ii) a merger between the Up-REIT Borrower and Funding so long as
the  Up-REIT  Borrower  is the  survivor  of such merger and no Event of Default
results from such merger.

      7.4 Limitations on Loans,  Advances,  and  Investments.  No Borrower will,
directly  or  indirectly,  make or have  outstanding  a loan or advance to or an
investment in, all or a substantial  part of the assets or properties of, or own
or acquire stock or other  securities of, any Person,  except (a) stock or other
securities  received in  settlement  of a debt that was created in the  ordinary
course of business,  (b) travel  advances in the ordinary  course of business to
its officers and  employees,  (c) readily  marketable  securities  issued by the
United  States  of  America,  and (d)  certificates  of  deposit  or  repurchase
agreements  of a Bank  or of  any  other  financial  institution  of  comparable
standing;  (e) investments in (i) the Up-REIT Borrower, and (ii) Subsidiaries of
the  Borrowers  engaged in the same  business  as the  Borrowers  which agree to
become Borrowers  hereunder upon formation;  (f) notes and mortgages in favor of
the Borrower which secure the obligation of seller under a property  acquisition
contract to refund an earnest money deposit or portion thereof;  (g) for so long
as  neither  CNLRS  nor  any  Subsidiary  of  CNLRS  is  a  Borrower  hereunder,
investments  in,  including  loans  to,  CNLRS and  Subsidiaries  of CNLRS in an
aggregate amount not to exceed $100,000,000,  provided that any such investments
in RE-Stores,  Inc.  shall not exceed at any time  $50,000,000 in the aggregate;
(h)  investments and loans in Eligible  Mortgage Notes  Receivable in favor of a
Borrower in  connection  with the sale of real  property  assets in the ordinary
course of business;  provided,  that any purchase  money  mortgage  executed and
delivered in connection with any such Eligible  Mortgage Note Receivable is duly
recorded in the appropriate real estate recording office; (i) investments in CNL
Commercial  Funding,  L.P.  in the  form of a loan in an  amount  not to  exceed
$7,000,000,  or, in the alternative,  investments in Commercial Finance, Inc. in
the form of equity in an  aggregate  amount  not to exceed  $7,000,000;  and (j)
investments to the extent permitted under Section 7.8.

      7.5  Regulation U. No Borrower will permit any part of the proceeds of any
Advance or any Letter of Credit to be used to  purchase or carry or to reduce or
retire any loan  incurred  to purchase or carry,  any margin  stock  (within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System)
in  violation of  Regulation U or to extend  credit to others for the purpose of
purchasing or carrying any such margin stock in violation of Regulation U, or to
be used for any other purpose  which  violates,  or which would be  inconsistent
with,  the  provisions  of  Regulation U or other  applicable  regulation.  Each
Borrower  covenants that it is not engaged and will not become engaged as one of
its  principal or important  activities  in extending  credit for the purpose of
purchasing  or carrying  such margin  stock.  If  requested  by the Agent,  each
Borrower  will  furnish  to the  Agent  in  connection  with  any  loan or loans
hereunder,  a statement in conformity  with the  requirements of Federal Reserve
Form U-1 or G-3, as  applicable,  referred to in said  Regulation.  In addition,
each  Borrower  covenants  that no part of the  proceeds  of any  Advance or any
Letter of Credit will be used for the purchase of commodity future contracts (or
margins  therefor for short sales) for any commodity not required for the normal
raw material inventory of such Borrower.

      7.6 Insider  Transactions.  No  Borrower  will,  directly  or  indirectly,
purchase,  acquire or lease any property or asset from,  or sell,  dispose of or
lease any property or assets to, or otherwise deal with, in the ordinary  course
of business or otherwise,  (i) any  stockholder or (ii) any other related entity
(except for any such transaction by and among the Borrowers),  except upon terms
and conditions not less favorable to such Borrower than if no such  relationship
existed and upon approval thereof by the independent  members of such Borrower's
board of directors (or other body of individuals performing a similar function),
or except for  transactions  of which the Agent has been  notified in writing by
such Borrower and Required Banks have consented thereto,  which consent will not
be unreasonably withheld.

      7.7 Changes in Governing  Documents,  Accounting Methods,  Fiscal Year. No
Borrower will amend in any material  respect its  organizational  documents from
that in existence on the date of this Agreement or make any material  changes to
its accounting methods or practices,  its depreciation or amortization policy or
rates,  or its  fiscal  year end from  that in  existence  as of the date of the
financial  statements  provided  to the Agent  pursuant  to Section  6.1 hereof,
except as  required  to comply with law or with  Generally  Accepted  Accounting
Principles  or except as  consented  to in writing by the Agent,  which  consent
shall not be unreasonably withheld.  Notwithstanding the foregoing,  the Up-REIT
Borrower may amend its partnership  agreement without the necessity of obtaining
the consent of the Agent for the sole  purpose of admitting  additional  limited
partners to the partnership so long as such amendment does adversely  affect the
rights of the Banks hereunder.

      7.8 Certain  Permitted  Investments.  Notwithstanding  the  provisions  of
Section  7.4,  the  Borrowers  shall  not,  and  shall not  permit  any of their
Subsidiaries  to, make any  investment in or otherwise  own the following  items
which would cause the  aggregate  value of such  holdings of the  Borrowers  and
their Subsidiaries to exceed the applicable limits set forth below:
            (a) common  stock,  preferred  stock and any other  capital stock or
      other equity interests in, or loans to,  unconsolidated  affiliates,  such
      that the  aggregate  value of such  interests,  calculated on the basis of
      cost, or loans,  exceeds ten percent  (10.0%) of Total  Assets;  provided,
      however,   that  CNLRS  and  Re-Stores,   Inc.  shall  not  be  considered
      unconsolidated affiliates for purposes of this Section 7.8(a) at all times
      prior to March 31, 2001;

            (b) investments  in, or loans to, general and limited  partnerships,
      joint  ventures and other  Persons  which are not  corporations  and which
      investments  are accounted for on an equity basis in accordance with GAAP,
      such that the aggregate book value of such  investments,  including loans,
      exceeds  ten  percent  (10.0%)  of Total  Assets.  The loan  from  CNLR to
      CorpREX, LLC in an amount up to $10,000,000 and the investments  described
      in Section 7.4(i),  shall be considered to be an investment subject to the
      limitations of this Section 7.8(b);

            (c)  unimproved  real  estate  which is not subject to a lease under
      which any Borrower is the lessor,  such that the  aggregate  book value of
      all such  unimproved  real estate  exceeds  five  percent  (5.0%) of Total
      Assets; and

            (d)  real  property  under  construction  such  that  the  aggregate
      Construction  Budget for all such real property  exceeds  fifteen  percent
      (15.0%) of Total Assets;  provided,  however, the Borrowers shall not make
      investments  in  real  property  under  construction  otherwise  permitted
      hereunder  unless  (i) at least  seventy-five  percent  (75%) of the total
      square footage under construction is the subject of executed leases,  (ii)
      all necessary  permits are in place and (iii) the project relating to such
      real property under  construction is subject to a guaranteed maximum price
      construction contract.

            (e)  investments  in loans and  interests  in  securitized  pools of
      promissory  notes,  mortgage  loans,  chattel  paper,  leases  or  similar
      financial assets originated by Commercial  Finance,  Inc., a joint venture
      between  CNL  Commercial  Funding,  L.P.  and BYL  BanCorp  such  that the
      aggregate  value  (determined on the basis of lower of cost or fair value)
      of all such loans and investments made pursuant to this clause (e) exceeds
      the  greater  of (x) the  lesser  of (i)  $60,000,000  or (ii)  seven  and
      one-half  percent  (7.5%)  of Total  Assets  or (y) ten  percent  (10%) of
      Tangible Net Worth;

In addition to the  foregoing  limitations,  the  aggregate  value of all of the
items subject to the limitations in the preceding  clauses (a) through (e) shall
not exceed twenty-five percent (25.0%) of Total Assets.

      7.9 Ownership of Assets. No general partner nor any limited partner of the
Up-REIT  Borrower,  which general  partner or limited partner is a Subsidiary of
CNLR,  shall own any assets other than their respective  ownership  interests in
the Up-REIT Borrower.

                          SECTION 8. EVENTS OF DEFAULT.

      It shall be an Event of Default if:

      8.1  Payment of  Obligations  to the  Banks.  Any  Borrower  fails to make
payment of any principal, interest, or other amount due on any indebtedness owed
the Agent or the Banks  hereunder,  or fails to make any  other  payment  to the
Agent or the Banks as  contemplated  hereunder  either  by the  terms  hereof or
otherwise.

      8.2  Representation  or Warranty.  Any  representation or warranty made or
deemed made by any Borrower  herein or in any writing  furnished  in  connection
with or  pursuant to the loan  application  and loan  commitment  for the credit
facilities  contemplated  by this Agreement or in connection with or pursuant to
the Loan Documents  shall be false in any material  adverse  respect on the date
when made or when deemed made.

      8.3 Covenants.  Any Borrower  defaults in the performance or observance of
or breaches any agreement,  covenant, term, or condition binding on it contained
in the Loan Documents.

      8.4  Any  Borrower's  Liquidation;   Dissolution;   Bankruptcy;  Etc.  Any
liquidation or  dissolution  of any Borrower,  suspension of the business of any
Borrower, or the filing or commencement by any Borrower of a voluntary petition,
case,  proceeding,   or  other  action  seeking   reorganization,   arrangement,
readjustment of its debts; or  commencement  of an involuntary  petition,  case,
proceeding or other action against Borrowers seeking reorganization, arrangement
or readjustment of its debts, which is not vacated,  discharged,  stayed, bonded
or dismissed  within 60 days of its  commencement;  or the entry of an order for
relief  under  any  existing  or future  law of any  jurisdiction,  domestic  or
foreign, state or federal, relating to bankruptcy, insolvency, reorganization or
relief of debtors,  or any other action of any Borrower  indicating  its consent
to, approval of, or acquiescence  in, any such petition,  case,  proceeding,  or
other action  seeking to have an order for relief  entered with respect to it or
its debts; the application by any Borrower for, or the  appointment,  by consent
or acquiescence of, a receiver,  trustee,  custodian,  or other similar official
for any Borrower or for all or a substantial part of its property; the making by
any Borrower of an assignment for the benefit of creditors;  or the inability of
any Borrower or the admission by any Borrower in writing of its inability to pay
its debts as they mature.

      8.5 Order of Dissolution.  Any order is entered in any proceedings against
any Borrower  decreeing the  dissolution or split-up of such Borrower,  and such
order remains in effect for more than sixty (60) days.

      8.6  Reports  and  Certificates.   Any  report,   certificate,   financial
statement,  or other  instrument  delivered  to the  Agent  or the  Banks by any
Borrower is at any time false or misleading in any material adverse respect.

      8.7 Judgments.  The rendition of a final judgment against any Borrower for
the payment of damages or money in excess of Ten Million  Dollars  ($10,000,000)
if the same is not discharged, bonded off or transferred to other security or if
a writ of execution or similar process is issued with respect thereto and is not
stayed  within the time allowed by law for filing  notice of appeal of the final
judgment.

      8.8 Liens  Imposed by Law. The violation of any law or any act or omission
by any Borrower that results in the  imposition of a Lien by operation of law on
any of its property, if the Lien is not discharged, bonded off or transferred to
other  security  within  sixty (60) days after it has  attached  and if the Lien
relates to a claim for the  payment of damages or money in excess of Ten Million
Dollars ($10,000,000).

      8.9 Corporate  Existence.  Any act or omission (formal or informal) of any
Borrower or its officers,  directors,  shareholders,  or partners leading to, or
resulting  in, the  termination,  invalidation  (partial or total),  revocation,
suspension,  interruption, or unenforceability of its existence, or the transfer
or disposition  (whether by sale, lease, or otherwise) to any Person of all or a
substantial part of its property.

      8.10  ERISA.  Any member of the ERISA  Group shall fail to pay when due an
amount or amounts aggregating in excess of $1,000,000 which it shall have become
liable to pay  under  Title IV of ERISA;  or  notice  of intent to  terminate  a
Material  Plan shall be filed under Title IV of ERISA by any member of the ERISA
Group, any plan  administrator or any combination of the foregoing;  or the PBGC
shall  institute  proceedings  under Title IV of ERISA to  terminate,  to impose
liability  (other than for premiums  under Section 4007 of ERISA) in respect of,
or to cause a trustee to be appointed to  administer  any  Material  Plan;  or a
condition  shall exist by reason of which the PBGC would be entitled to obtain a
decree  adjudicating  that any Material Plan must be terminated;  or there shall
occur a complete or partial withdrawal from, or a default, within the meaning of
Section  4219(c)(5) of ERISA, with respect to, one or more  Multiemployer  Plans
which  could  cause one or more  members  of the ERISA  Group to incur a current
payment obligation in excess of $1,000,000.

      8.11  Cross-Default.

            (i) Any Borrower  shall fail to pay when due and payable  (following
      the  expiration  of any  applicable  cure  periods) the  principal  of, or
      interest  on,  any  Debt  (other  than  the  Loans)  having  an  aggregate
      outstanding principal amount of $10,000,000 or more ("Material Debt"); or

            (ii)  The  maturity  of  any  material  Debt  shall  have  (x)  been
      accelerated in accordance  with the provisions of any indenture,  contract
      or  instrument  evidencing,  providing  for the  creation of or  otherwise
      concerning  such  Debt or (y) been  required  to be  prepaid  prior to the
      stated maturity thereof; or

            (iii) Any other event shall have  occurred and be  continuing  which
      would  permit any holder or holders of any Material  Debt,  any trustee or
      agent acting on behalf of such holder or holders or any other  Person,  to
      accelerate  the  maturity  of any such Debt or require any such Debt to be
      prepaid prior to its stated maturity.

      8.12 Change of Control. Neither CNLR nor a Wholly-Owned Subsidiary of CNLR
shall be the sole general  partner of the Up-REIT  Borrower  having the sole and
exclusive  power to  exercise  all  management  and  control  over  the  Up-REIT
Borrower.

            THEN (i) upon the  occurrence  of any Event of Default  described in
the foregoing Subsections 8.4 or 8.5, the unpaid principal amount of and accrued
interest on all  Advances  and all other  obligations  under the Loan  Documents
shall  automatically  become immediately due and payable,  without  presentment,
demand,  protest,  or other  requirement of any kind, all of which are expressly
waived  by each  Borrower  and the  commitments  of each  Bank to make  Advances
hereunder  and the  obligation  of the Issuing  Bank to issue  Letters of Credit
hereunder and the  obligation of the Swingline  Lender to make  Swingline  Loans
hereunder shall thereupon terminate; and (ii) upon the occurrence and during the
continuance of any other Event of Default: (a) the Agent shall, upon the written
request or with the written  consent of the Required  Banks take any one or more
of  the  following  actions:  (1)  declare  all or any  portion  of the  amounts
described in (i) to be, and the same shall forthwith become, immediately due and
payable, without presentment, demand, protest, or other requirement of any kind,
all of  which  are  expressly  waived  by each  Borrower,  and (2)  declare  all
commitments to make Revolving  Credit  Advances  hereunder and the obligation of
the Issuing Bank to issue Letters of Credit hereunder to be terminated,  and (b)
any Bank  may  give  notice  to the  Borrowers  and the  Agent  terminating  its
commitment to make further Revolving Credit Advances hereunder.  Further, if the
Agent has exercised any of the rights  provided  under clause (ii) the preceding
sentence,  the Swingline Lender shall: (x) declare the principal of, and accrued
interest on, the Swingline Loans and the Swingline Note at the time outstanding,
and all of the other  obligations owing to the Swingline Lender, to be forthwith
due and payable,  whereupon  the same shall  immediately  become due and payable
without presentment,  demand,  protest or other notice of any kind, all of which
are expressly waived by the Borrower and (y) terminate the Swingline  Commitment
and the obligation of the Swingline Lender to make Swingline Loans. In any case,
the  Borrowers  shall be required to pay to the Agent a sum equal to the maximum
amount available under any Letters of Credit,  which sum the Agent will hold for
reimbursement  of any amounts drawn under Letters of Credit and the Issuing Bank
may terminate any Letters of Credit  providing for such termination by sending a
notice of termination as provided therein.  The Agent may immediately proceed to
do all other  things  provided  for by law or the Loan  Documents to enforce the
rights of the Agent,  the Issuing Bank,  and the Banks  hereunder and to collect
all amounts owing to the Agent,  the Issuing Bank, the Swingline  Lender and the
Banks by the Borrowers. No right, power, or remedy conferred upon the Agent, the
Issuing Bank, the Swingline  Lender or the Banks by the Loan Documents  shall be
exclusive of any other  right,  power,  or remedy  referred to therein or now or
hereafter available at law or in equity. Notwithstanding the foregoing, an Event
of Default  under  subsection  8.3, 8.6 or 8.7 above shall not be deemed to have
occurred if the matter described  therein is cured within thirty (30) days after
written notice thereof has been given by the Agent to the Borrowers, an Event of
Default under  subsections 8.1 or 8.2 above shall not be deemed to have occurred
if the matter  described  therein is cured  within  five (5) days after  written
notice thereof has been given by the Agent to the Borrowers;  provided  however,
that notwithstanding  anything herein to the contrary, in the case of an default
in  performance  by the  Borrowers of Section  7.1.,  (i) each Bank's  Revolving
Credit  Commitment  and  the  Swingline  Lender's  Swingline   Commitment  shall
automatically terminate immediately upon such default in performance without the
necessity  of notice,  vote or any other  action on the part of the Agent or the
other Banks,  (ii) an Event of Default  shall be deemed to have  occurred if the
Borrowers fail to repay all  outstanding  Advances within thirty (30) days after
such Debt was incurred,  and (iii) if the  Borrowers  fail to repay all Advances
within  such thirty (30) day period,  the  Borrowers  shall pay  interest on all
Advances outstanding from and after the incurrence of the Debt which resulted in
a violation of Section 7.1. at the Default Rate.

                              SECTION 9. THE AGENT

      9.1   Appointment, Authorization, and Action.

            (a) Each Bank hereby  irrevocably  appoints and authorizes the Agent
to act as its contractual  representative  hereunder and take such action on its
behalf and to exercise such powers and  discretion  under this Agreement and the
other Loan Documents as are delegated to the Agent by the terms hereof, together
with such powers as are reasonably incidental thereto.  Nothing herein or in any
of the other Loan Documents shall be construed to constitute the Agent a trustee
for any Bank or to establish a fiduciary relationship with any Bank or impose on
the  Agent  any  duties,  responsibilities,  or  obligations  other  than  those
expressly set forth in this Agreement or the other Loan Documents.

            (b) The Agent  shall be entitled  to use its  reasonable  discretion
with respect to exercising or refraining  from  exercising  any rights or taking
any  actions  which may be vested in it or which it may be able to take under or
in respect of this Agreement and the other Loan Documents, unless this Agreement
expressly  otherwise  provides or unless the Agent shall have been instructed by
the Required Banks to exercise or refrain from  exercising such rights or taking
such  actions  (in which case it shall be  required  to so act or  refrain  from
acting  pursuant to the directions of the Required  Banks);  provided,  however,
                                                             ------------------
that the Agent shall not be  required to take any action or refrain  from acting
in any manner  which in its  reasonable  judgment  exposes the Agent to personal
liability or which is contrary to this  Agreement or  applicable  law. The Agent
agrees to give to each Bank  prompt  notice  of each  notice  given to it by any
Borrower pursuant to the terms of this Agreement.

      9.2  Delegation  of Duties.  The Agent may execute any of its duties under
this   Agreement  and  the  other  Loan   Documents  by  or  through  agents  or
attorneys-in-fact  and shall be  entitled  to advice of counsel  concerning  all
matters  pertaining to such duties.  The Agent shall not be responsible  for the
negligence  or  misconduct  of any agents or  attorneys-in-fact  selected by the
Agent with reasonable care.

      9.3  Exculpatory  Provisions.  Neither the Agent nor any of its  officers,
directors,  employees,  agents,  attorneys-in-fact,  Subsidiaries  or affiliates
shall be (a) liable for any action  lawfully  taken or omitted to be taken by it
or such Person  under or in  connection  with this  Agreement  or the other Loan
Documents (except for actions  occasioned solely by its or such Person's own bad
faith, gross negligence or willful misconduct), or (b) responsible in any manner
to any of the Banks for any recitals, statements, representations, or warranties
made by any Borrower or any officer  thereof  contained in this Agreement or the
other Loan Documents or in any certificate, report, statement, or other document
referred to or provided for in, or received by the Agent under or in  connection
with,  this  Agreement or the other Loan  Documents or for the value,  validity,
effectiveness,  genuineness, enforceability, or sufficiency of this Agreement or
the other Loan  Documents  or for any  failure of any  Borrower  to perform  its
obligations hereunder or thereunder. The Agent shall not be under any obligation
to any Bank to ascertain or to inquire as to the  observance or  performance  of
any of the  agreements  contained in, or conditions  of, this  Agreement,  or to
inspect the properties, books, or records of any Borrower.

      9.4 Reliance by the Agent.  The Agent shall be entitled to rely, and shall
be fully  protected  in relying,  upon any note,  writing,  resolution,  notice,
consent, certificate,  affidavit, letter, cablegram,  telegram, telecopy, telex,
or teletype message, statement, order or other document or conversation believed
by it to be genuine and correct,  and to have been signed,  sent, or made by the
proper  Person or  Persons,  and upon  advice and  statements  of legal  counsel
(including   without   limitation,   counsel  to  any   Borrower),   independent
accountants,  and other  experts  selected by the Agent.  The Agent may deem and
treat the payee of any Note as the owner  thereof for all  purposes  unless such
Note shall have been  transferred  in accordance  with Section 11.4 hereof.  The
Agent shall be fully  justified  in failing or refusing to take any action under
this Agreement and the other Loan  Documents  unless it shall first receive such
advice or concurrence of the Required Banks (or, when expressly  required hereby
or by the relevant other Loan Document,  all the Banks) as it deems  appropriate
and it shall first be indemnified to its  satisfaction  by the Banks against any
and all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action except for  liabilities  arising  solely from
its own gross negligence or willful misconduct.  The Agent shall in all cases be
fully protected in acting,  or in refraining  from acting,  under this Agreement
and the other Loan Documents in accordance  with a request of the Required Banks
(or, when expressly  required hereby,  all the Banks),  and such request and any
action  taken or failure to act pursuant  thereto  shall be binding upon all the
Banks and all future holders of the Note.

      9.5 Agent and Affiliates.  With respect to its Revolving Credit Commitment
and the  Advances  made by it, the Agent  shall have the same  rights and powers
under the Loan  Documents  as any other Bank and may exercise the same as though
it were not the Agent;  and the term "Bank" or "Banks" shall,  unless  otherwise
indicated,  include  the  Agent in its  individual  capacity.  The Agent and its
affiliates may (without having to account  therefor to any Bank) accept deposits
from,  lend money to, act as trustee  under  indentures  of,  accept  investment
banking engagements from, and generally engage in any kind of business with, any
Borrower,  and any  Person who may do  business  with or own  securities  of any
Borrower  all as if it were not the  Agent.  The  Agent and its  affiliates  may
accept fees and other consideration from any Borrower for services in connection
with this  Agreement or otherwise  without having to account for the same to the
Banks.

      9.6 Notice of Default.  The Agent shall not be deemed to have knowledge or
notice  of the  occurrence  of any  Event of  Default  hereunder  unless  it has
received written notice or telephonic  notice  confirmed  immediately in writing
from a Bank or any Borrower  referring to this Agreement,  describing such Event
of Default and stating that such notice is a "notice of  default".  In the event
that the Agent receives such a notice,  it shall promptly give notice thereof to
the  Banks.  The Agent  shall  take such  action  with  respect to such Event of
Default as shall be  reasonably  directed by the Required  Banks;  provided that
unless and until the Agent shall have  received such  directions,  the Agent may
(but shall not be obligated  to) take such  action,  or refrain from taking such
action,  with respect to such Event of Default as it shall deem advisable in the
best interests of the Banks.

      9.7  Non-Reliance  on the  Agent  and Other  Banks.  Each  Bank  expressly
acknowledges  that  neither  the  Agent  nor  any  of its  respective  officers,
directors, employees, agents, attorneys-in-fact,  Subsidiaries or affiliates has
made  any  representations  or  warranties  to it and  that no act by the  Agent
hereinafter taken, including any review of the affairs of any Borrower, shall be
deemed to constitute  any  representation  or warranty by the Agent to any Bank.
Each  Bank  represents  to the  Agent  that it has,  independently  and  without
reliance  upon the Agent or any other  Bank,  and  based on such  documents  and
information  as it  has  deemed  appropriate,  made  its  own  appraisal  of and
investigation  into the  business,  operations,  property,  financial  and other
condition and  creditworthiness  of the Borrowers,  and made its own decision to
enter into this Agreement. Each Bank also represents that it will, independently
and  without  reliance  upon the  Agent or any  other  Bank,  and  based on such
documents and information as it shall deem appropriate at the time,  continue to
make its own credit analysis,  appraisals, and decisions in taking or not taking
action  under  this  Agreement  and the other Loan  Documents,  and to make such
investigation  as it  deems  necessary  to  inform  itself  as to the  business,
operations,  property, financial and other condition and creditworthiness of the
Borrowers.  Except for notices,  reports, and other documents expressly required
to be  furnished  to the  Banks by the  Agent  hereunder  or by the  other  Loan
Documents,  the Agent shall not have any duty or  responsibility  to provide any
bank with any credit or other information  concerning the business,  operations,
property,  financial,  and other condition or  creditworthiness of the Borrowers
which  may  come  into the  possession  of the  Agent  or any of its  respective
officers,  directors,  employees, agents,  attorneys-in-fact,  Subsidiaries,  or
affiliates.

      9.8  Enforcement  by the Agent.  All rights of action under this Agreement
and the  other  Loan  Documents  may be  enforced  by the  Agent and any suit or
proceeding  instituted by the Agent in  furtherance of such  enforcement  may be
brought in its name as the Agent  without the  necessity of joining any Banks as
plaintiffs  or  defendants,  and the recovery of any  judgment  shall be for the
benefit of the Banks,  subject to the  expenses of the Agent.  Unless  otherwise
permitted by the Required Banks, no Bank (other than the Agent) shall attempt to
enforce any rights of action under this Agreement and the other Loan Documents.

      9.9  Indemnification.  The Banks agree to indemnify  each of the Agent and
the Arranger in its  respective  capacity as such and to the extent not promptly
reimbursed  by  the  Borrowers  and  without  limiting  the  obligations  of the
Borrowers to do so,  ratably  according to their  respective  Pro Rata Portions,
from  and  against  any  and  all  liabilities,  obligations,  losses,  damages,
penalties,  actions,  judgments, suits, costs, expenses, or disbursements or any
kind or nature  whatsoever  that may be imposed  on,  incurred  by, or  asserted
against the Agent or the  Arranger in any way relating to or arising out of this
Agreement or any other Loan Documents or the transactions  contemplated thereby,
or any  action  taken or  omitted  by the Agent or the  Arranger  in  connection
therewith (including,  without limitation, the costs and expenses payable by the
Borrowers  under  Subsection  11.2);  provided,  however,  that no Bank shall be
                                      ------------------
liable for any of the foregoing to the extent they arise from the Agent's or the
Arranger's gross negligence,  bad faith or willful misconduct.  Without limiting
the foregoing, each Bank agrees to reimburse the Agent and the Arranger promptly
upon demand for such Bank's  ratable share of any costs and expenses  payable by
the  Borrowers  under Section 11.2, to the extent that the Agent or the Arranger
is not promptly  reimbursed  for such costs and expenses by the  Borrowers.  The
agreements  contained  in this  Subsection  shall  survive the  repayment of the
Advances and termination of the facilities hereunder.

      9.10 Failure to Act.  Except for actions  expressly  required of the Agent
hereunder  and under the other Loan  Documents,  the Agent shall in all cases be
fully justified in failing or refusing to act hereunder and thereunder unless it
shall receive  further  assurances to its  satisfaction  from the Banks of their
indemnification  obligations hereunder against any and all liability and expense
which may be incurred by it by reason of taking or  continuing  to take any such
action.

      9.11  Successor  Agent.  Subject to the  appointment  and  acceptance of a
successor as provided below,  the Agent may resign at any time by giving written
notice thereof to the Banks and the  Borrowers.  Upon any such  resignation  and
after  consultation with the Borrowers,  the Required Banks shall have the right
to appoint a successor Agent. If no successor Agent shall have been so appointed
by the Required Banks and shall have accepted such  appointment,  within 30 days
after the retiring  Agent's giving of notice of  resignation,  then the retiring
Agent may, on behalf of the Banks,  and after  consultation  with the Borrowers,
appoint a successor Agent,  which shall be a commercial bank organized under the
laws of the  United  States of  America  or of any State  thereof  and  having a
combined capital and surplus of at least $500,000,000.00. Upon the acceptance of
any  appointment  as the Agent  hereunder by a successor  Agent,  such successor
Agent shall thereupon succeed to and become vested with all the rights,  powers,
discretion, privileges, and duties of the retiring Agent, and the retiring Agent
shall be discharged  from its duties and  obligations  under the Loan Documents.
After any retiring Agent's resignation hereunder as the Agent, the provisions of
this Section shall inure to its benefit as to any actions taken or omitted to be
taken by its while it was the Agent under this Agreement.

      9.12  Titled  Parties  Have  No  Duties.  Neither  the  Arranger  nor  the
Syndication  Agent  (each  in such  capacity,  a  "Titled  Party")  assumes  any
responsibility  or obligation  hereunder,  including,  without  limitation,  for
servicing,  enforcement or collection of any of the Advances,  nor any duties as
an agent  hereunder  for the Banks.  The titles of "Arranger"  and  "Syndication
Agent" are solely honorific and imply no fiduciary responsibility on the part of
the Titled  Parties to the Agent,  the Borrowers or any Bank and the use of such
titles does not impose on the Titled Parties any duties or  obligations  greater
than those of any other Lender.

                   SECTION 10.  INDEMNIFICATION BY BORROWERS.

      The Borrowers  hereby jointly and severally  agree to indemnify the Agent,
the  Issuing  Bank,  and each Bank and  their  respective  officers,  directors,
employees,  and agents (individually an "Indemnified Party" and collectively the
"Indemnified  Parties")  against  and  agrees  to hold the  Indemnified  Parties
harmless from, any and all liabilities,  losses,  claims,  damages, and expenses
(including  reasonable counsel fees and expenses) of any kind whatsoever arising
out of, or in any way  connected  with,  or as a result of (a) the  transactions
contemplated in the Loan Documents, (b) the use of proceeds of any Advance or of
any Letter of Credit,  (c) the execution and delivery of any  subsequent  credit
documentation  or other document  contemplated  hereby or thereby by the parties
hereto  or  the  performance  of  their  respective   obligations  hereunder  or
thereunder or (d) any claim, action, suit, investigation, or proceeding relating
to the foregoing or to any Borrower  whether or not the  Indemnified  Party is a
party  thereto;  provided  that in no event  shall any  Borrower  be liable  for
indemnity  hereunder  by reason of any act or omission  caused by the bad faith,
gross negligence,  or willful misconduct of any Indemnified Party. The foregoing
indemnity  shall be  effective  regardless  of any  investigation  made by or on
behalf of the Agent, the Issuing Bank, any Bank, or any Borrower.

                           SECTION 11. MISCELLANEOUS.

      11.1 Course of Dealing; Amendments;  Waiver. Except as otherwise expressly
provided in this  Agreement,  any consent or approval  required or  permitted by
this  Agreement  or in any Loan  Document to be given by the Banks may be given,
and any term of this Agreement or of any other Loan Document may be amended, and
the performance or observance by the Borrowers of any terms of this Agreement or
such other Loan Document or the  continuance  of any default or Event of Default
may  be  waived  (either  generally  or  in a  particular  instance  and  either
retroactively or prospectively)  with, but only with, the written consent of the
Required  Banks (and,  in the case of an  amendment  to any Loan  Document,  the
written  consent  of  each  Person  that  is a party  to  such  Loan  Document).
Notwithstanding the foregoing, no amendment,  waiver or consent shall, unless in
writing,  and signed by all of the Banks (or the Agent at the written  direction
of all of the Banks), do any of the following: (i) increase the Revolving Credit
Commitments of the Banks (except as permitted  under Section  2.1(e)) or subject
the Banks to any  additional  obligations;  (ii)  reduce  the  principal  of, or
interest  rates that have  accrued  or that will be  charged on the  outstanding
principal amount of, any Advances or other obligations;  (iii) reduce the amount
of any fees payable  hereunder;  (iv) postpone any date fixed for any payment of
any  principal  of,  interest  on, or fees with  respect to, any Advances or any
other obligations;  (v) amend this Section or amend the definitions of the terms
used in this Agreement or the other Loan Documents  insofar as such  definitions
affect the  substance of this  Section;  (vi) modify the  definition of the term
"Required  Banks" or modify in any other manner the number or  percentage of the
Banks required to make any  determinations  or waive any rights  hereunder or to
modify any provision hereof;  and (vii) modify the terms of Section 6.2.(c).  In
addition,  the  definitions of  Unencumbered  Assets and Unsecured Debt (and the
definitions  used in such  definitions and the percentages and rates used in the
calculation  thereof) may not be amended  without the written  consent of all of
the Banks.  Any  amendment,  waiver or consent  relating  to Section  2.4 or the
obligations  of the  Swingline  Lender  under this  Agreement  or any other Loan
Document  shall,  in addition  to the Banks  required  hereinabove  to take such
action,  require  the  written  consent of the  Swingline  Lender.  Further,  no
amendment,  waiver or  consent  unless in writing  and  signed by the Agent,  in
addition to the Banks required hereinabove to take such action, shall affect the
rights or duties of the Agent  under  this  Agreement  or any of the other  Loan
Documents.  No waiver shall  extend to or affect any  obligation  not  expressly
waived or impair  any right  consequent  thereon  and any  amendment,  waiver or
consent  shall be effective  only in the specific  instance and for the specific
purpose set forth therein. No course of dealing or delay or omission on the part
of the Agent or any Bank in  exercising  any  right  shall  operate  as a waiver
thereof or  otherwise be  prejudicial  thereto.  Except as otherwise  explicitly
provided for herein or in any other Loan  Document,  no notice to or demand upon
the Borrowers  shall entitle the Borrowers to other or further  notice or demand
in similar or other circumstances.

      11.2  Payment  of  Expenses,  Including  Attorneys'  Fees and  Taxes.  The
Borrowers  agree (a) to pay or reimburse the Agent,  the Issuing Bank,  and each
Bank for all of their reasonable and customary  out-of-pocket costs and expenses
incurred  in  connection  with  the  preparation,  negotiation,  execution,  and
delivery of, and any amendment,  supplement,  or  modification  to, or waiver or
consent under,  the Loan Documents,  and the  consummation  of the  transactions
contemplated  thereby,   including,   without  limitation,  the  reasonable  and
customary fees and disbursements of counsel for the Agent, the Issuing Bank, and
each Bank,  taxes, and all recording or filing fees, (b) to pay or reimburse the
Agent,  the  Issuing  Bank,  and each Bank for all of their  costs and  expenses
incurred in connection  with the  administration,  supervision,  collection,  or
enforcement of, or the  preservation of any rights under,  the Loan Documents or
the Letters of Credit, including, without limitation, the fees and disbursements
of counsel for the Agent, the Issuing Bank, and the Banks,  including attorneys'
fees out of court, in trial, on appeal, in bankruptcy proceedings, or otherwise,
(c) without limiting the generality of provision (a) hereof, to pay or reimburse
the Agent,  the Issuing  Bank,  and the Banks for,  and  indemnify  and hold the
Agent, the Issuing Bank, and the Banks harmless  against  liability for, any and
all documentary stamp taxes, annual and non-recurring intangible taxes, or other
taxes, together with any interest, penalties, or other liabilities in connection
therewith,  that the  Agent,  the  Issuing  Bank,  or any Bank now or  hereafter
determines  are payable  with  respect to the Loan  Documents,  the  obligations
evidenced by the Loan Documents,  any Advances,  the Letters of Credit,  and any
guaranties  or  mortgages  or  other  security  instruments,  and  (d)  to  pay,
indemnify, and hold the Agent, the Issuing Bank, and the Banks harmless from and
against any and all other liabilities,  obligations, losses, damages, penalties,
actions,  judgments,  suits,  costs,  expenses,  or disbursements of any kind or
nature  whatsoever  with  respect  to  the  execution,  delivery,   enforcement,
performance,  and administration of the Loan Documents or the Letters of Credit.
The agreements in this Subsection  shall survive  repayment of all other amounts
payable hereunder or pursuant hereto, now or in the future.

      11.3  Successors  and Assigns.  This  Agreement  shall be binding upon and
inure  to the  benefit  of the  Agent,  each  Bank,  each  Borrower,  and  their
respective successors and permitted assignees or transferees.

      11.4  Assignments and Participations.

            (a) No  Borrower  may  assign  or  transfer  any of  its  rights  or
obligations under this Agreement without the prior written consent of each Bank.

            (b) Any Bank may with the prior written consent of the Agent and the
Borrowers  (which consent,  in each case,  shall not be  unreasonably  withheld)
assign to one or more Eligible  Assignees  (each an "Assignee") all or a portion
of its Revolving  Credit  Commitment and its other rights and obligations  under
this  Agreement  and the Notes;  provided,  however,  (i) no such consent by the
Borrowers shall be required (x) in the case of any assignment to another Bank or
any  affiliate  of such Bank or  another  Bank or (y) if an Event of  Default or
default  shall then be  existing;  (ii) any  partial  assignment  shall be in an
amount at least equal to $10,000,000  and after giving effect to such assignment
the assigning Bank retains a Revolving  Credit  Commitment,  or if the Revolving
Credit  Commitments  have been  terminated,  holds  Notes  having  an  aggregate
outstanding   principal  balance,  of  $10,000,000  and  integral  multiples  of
$5,000,000 in excess thereof;  and (iii) each such assignment  shall be effected
by means of an Assignment and Acceptance  Agreement in the form attached  hereto
as Exhibit "C". Upon  execution and delivery of such  instrument  and payment by
such Assignee to such  transferor  Bank of an amount equal to the purchase price
agreed between such  transferor  Bank and such Assignee,  such Assignee shall be
deemed to be a Bank  party to this  Agreement  as of the  effective  date of the
Assignment  and  Acceptance   Agreement  and  shall  have  all  the  rights  and
obligations  of a Bank with a Revolving  Credit  Commitment as set forth in such
Assignment and Acceptance  Agreement,  and the transferor Bank shall be released
from its obligations hereunder to a corresponding extent, and no further consent
or  action  by any  party  shall  be  required.  Upon  the  consummation  of any
assignment  pursuant to this subsection,  the transferor Bank, the Agent and the
Borrowers  shall make  appropriate  arrangements so that new Notes are issued to
the Assignee and such transferor  Bank, as  appropriate.  In connection with any
such  assignment  (other than any  assignment  made pursuant to Section  2.11(b)
hereof),  the  transferor  Bank  (excluding the Agent in its capacity as a Bank)
shall pay to the Agent an  administrative  fee for processing such assignment in
the amount of $2,500.

            (c) By executing and  delivering an Assignment and  Acceptance,  the
assigning Bank thereunder and the assignee  thereunder confirm to and agree with
each other and the other parties hereto as follows:

                  (i) other than the  representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim,  such assigning Bank makes no  representation  or warranty
and assumes no  responsibility  with respect to any statements,  warranties,  or
representations  made in or in connection  with this Agreement or the execution,
legality, validity, enforceability,  genuineness,  sufficiency, or value of this
Agreement or any other instrument or document furnished pursuant hereto;

                  (ii) such assigning Bank makes no  representation  or warranty
and assumes no  responsibility  with respect to the  financial  condition of the
Borrowers  or  the  performance  or  observance  by any  Borrower  of any of its
obligations or any other instrument or document furnished pursuant hereto;

                  (iii) such  assignee  confirms  that it has received a copy of
this Agreement,  together with copies of the financial statements referred to in
Section  6.1  and  such  other  documents  and  information  as  it  has  deemed
appropriate  to make its own credit  analysis  and  decision  to enter into such
Assignment and Acceptance;

                  (iv) such assignee will,  independently  and without  reliance
upon the  Agent,  such  assigning  Bank or any  other  Bank,  and  based on such
documents and information as it shall deem appropriate at the time,  continue to
make its own  credit  decisions  in  taking  or not  taking  action  under  this
Agreement;

                  (v) such assignee  appoints and  authorizes  the Agent to take
such  action as the Agent on its behalf and to exercise  such powers  under this
Agreement  and the other Loan  Documents  as are  delegated  to the Agent by the
terms hereof and thereof, together with such powers as are reasonably incidental
thereto; and

                  (vi) such  assignee  agrees that it will perform in accordance
with their terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Bank.

            (d) Any  Bank may at any  time  grant to one or more  banks or other
financial  institutions  (each a "Participant")  participating  interests in its
Revolving  Credit  Commitment or the obligations  owing to such Bank;  provided,
                                                                       --------
however,  (i) any such  participating  interest must be for a constant and not a
-------
varying percentage interest,  (ii) no Bank may grant a participating interest in
its Revolving Credit  Commitment,  or if the Revolving  Credit  Commitments have
been terminated,  the aggregate  outstanding  principal balance of Notes held by
it, in an amount less than $10,000,000 and (iii) after giving effect to any such
participation  by a Bank, the amount of its Revolving Credit  Commitment,  or if
the Revolving Credit Commitments have been terminated, the aggregate outstanding
principal  balance  of  Notes  held  by it,  in  which  it has not  granted  any
participating  interests must be equal to $10,000,000 and integral  multiples of
$5,000,000  in  excess  thereof.   Except  as  otherwise   provided  herein,  no
Participant  shall have any rights or benefits under this Agreement or any other
Loan  Document.  In the  event  of any such  grant by a Bank of a  participating
interest  to  a  Participant,   such  Bank  shall  remain  responsible  for  the
performance of its obligations hereunder,  and the Borrowers and the Agent shall
continue  to deal solely and  directly  with such Bank in  connection  with such
Bank's rights and obligations  under this Agreement.  Any agreement  pursuant to
which any Bank may grant such a  participating  interest shall provide that such
Bank shall retain the sole right and  responsibility  to enforce the obligations
of the Borrowers hereunder including,  without limitation,  the right to approve
any  amendment,  modification  or waiver  of any  provision  of this  Agreement;
provided,  however,  such Bank may agree with the Participant  that it will not,
------------------
without the consent of the  Participant,  agree to (i)  increase  the  Revolving
Credit  Commitments of the Banks (except as permitted  under Section  2.1(e)) or
subject the Banks to any additional  obligations;  (ii) reduce the principal of,
or interest  rates that have accrued or that will be charged on the  outstanding
principal amount of, any Advances or other obligations;  (iii) reduce the amount
of any fees payable  hereunder;  (iv) postpone any date fixed for any payment of
any  principal  of,  interest  on, or fees with  respect to, any Advances or any
other  obligations;;  (v) amend Section 11.1.  or amend the  definitions  of the
terms  used in this  Agreement  or the  other  Loan  Documents  insofar  as such
definitions affect the substance of Section 11.1.; (vi) modify the definition of
the term "Required Banks" or modify in any other manner the number or percentage
of the Banks required to make any  determinations  or waive any rights hereunder
or to modify any provision  hereof;  (vii) modify the terms of Section  6.2.(c);
and (viii) amend the definitions of Unencumbered  Asset Value and Unsecured Debt
(and the definitions used in such definitions and the percentages and rates used
in the  calculation  thereof).  An  assignment  or other  transfer  which is not
permitted  by  subsection  (b) above shall be given  effect for purposes of this
Agreement only to the extent of a participating  interest  granted in accordance
with this subsection.  The selling Bank shall notify the Agent and the Borrowers
of the sale of any participation hereunder and the terms thereof.

            (e)  Notwithstanding  any of the foregoing to the contrary,  nothing
herein is intended to prohibit the assigning, discounting, or pledging of all or
any  portion of a Bank's  interest  in the  Advances  or the Note to any Federal
Reserve Bank as  collateral  security  pursuant to  regulations  of the Board of
Governors of the Federal  Reserve  System and any Operating  Circular  issued by
such Federal  Reserve  Bank,  and such Advances or interest in the Note shall be
fully  transferable as provided  therein.  No such assignment  shall release the
assigning Bank from its obligations hereunder.

            (f) The Borrowers  agree that any  participants  shall have the same
rights of set-off  against the Borrowers as granted the Banks in Subsection 11.6
hereof.  Upon the written  request of the  Borrowers,  the Banks will advise the
Borrowers  of the names of any  participants  and the  extent of their  interest
herein.

      11.5  Confidential Information.

            (a) The Agent and the Banks shall  exercise their good faith efforts
not to make any public disclosure of confidential  information obtained pursuant
to the Loan Documents;  provided,  that the foregoing shall not be construed to,
now  or in the  future,  apply  to any  information  reflected  in any  recorded
document,  information  obtained  from  sources  other  than the  Borrowers,  or
otherwise in the public domain nor shall it be construed to prevent the Agent or
any Bank from (i) making any disclosure of any information (A) if required to do
so by any applicable law or regulation or accepted banking practice,  (B) to any
governmental  agency or regulatory body having or claiming authority to regulate
or oversee  any  aspect of the  Agent's or such  Bank's  business  or any of its
Subsidiaries  or affiliates in connection with the exercise of such authority or
claimed authority, (C) pursuant to subpoena, (D) to the extent the Agent or such
Bank or their  respective  counsel deems  necessary or  appropriate  to do so to
enforce any remedy provided for in the Loan Documents or otherwise  available by
law,  (ii)  subject  to  the  immediately   succeeding  sentence,   making  such
disclosures as such Bank  reasonably  deems necessary or appropriate to any bank
or  financial  institution  (and/or  counsel  thereto)  which  is a  prospective
assignee  or  participant  under  Subsection  11.4 (each such bank or  financial
institution,  a "Prospective  Bank") or (iii) making,  on a confidential  basis,
such disclosures as the Agent or such Bank deems necessary or appropriate to the
Agent's or such Bank's counsel or accountants (including outside auditors).

            (b) Each Bank agrees that prior to (a) disclosing to any Prospective
Bank  any  information  which  the  Banks  have  agreed  hereunder  to  hold  as
confidential or (b) entering into an agreement granting to a Prospective Bank an
interest in the Advances,  the applicable Bank shall make a good faith effort to
obtain an  agreement  executed by such  Prospective  Bank in form and  substance
similar to the provisions of this Subsection;  provided,  that in no event shall
                                               --------
such  Bank or the  Agent be  liable  for any  breach  of such  agreement  by the
Prospective Bank.

      11.6 Liens;  Set-Off.  Each  Borrower  hereby  grants to the Agent and the
Banks  (including  any Banks added at a later time) a continuing  lien to secure
all  indebtedness of the Borrowers to the Agent and the Banks created  hereunder
or pursuant to the Loan Documents upon any and all monies, securities, and other
property of such  Borrower and the proceeds  thereof,  now or hereafter  held or
received by or in transit  to, the Agent or any Bank from or for the  Borrowers,
and also upon any and all  deposits  (general  or  special)  and  credits of the
Borrowers,  if any,  at the Agent or any Bank,  at any time  existing.  Upon the
occurrence  of any  Event of  Default,  the  Agent,  and the  Banks  are  hereby
authorized at any time and from time to time,  without  notice to such Borrower,
to set off,  appropriate,  and apply any or all items  hereinabove  referred  to
against  indebtedness  of the Borrowers owed to the Agent or the Banks under the
Loan Documents, whether now existing or hereafter arising. The Agent or any Bank
shall be deemed  to have  exercised  such  right of  set-off  and to have made a
charge  against  such items  immediately  upon the  occurrence  of such Event of
Default   although   made  or   entered   on  its  books   subsequent   thereof.
Notwithstanding  the  foregoing,  any  Bank  exercising  any  right  to  set-off
hereunder  shall  promptly  thereafter  deliver to the Agent and the Borrowers a
written notice  thereof,  provided that any failure to deliver such notice shall
                          --------
not,  in any  event,  limit  such  Bank's or any other  Bank's  right of set-off
hereunder.

      11.7 Notices. Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in writing
and may be personally served, telecopied, telexed, or sent by United States mail
or courier  service  and shall be deemed to have been given  when  delivered  in
person,  receipt of telecopy or telex or four Business Days after  depositing it
in the United States mail,  registered or  certified,  with postage  prepaid and
properly addressed. For the purposes hereof, the addresses of the parties hereto
(until  notice of a change  thereof is delivered as provided in this  Subsection
11.6)  shall be as set forth  under each  party's  name on the  signature  pages
hereof,  or in the case of any Bank  becoming a party  hereto  after the Closing
Date, in the applicable Assignment and Acceptance Agreement.

      11.8 Waiver of Default.  The Banks may, in accordance  with the provisions
of Subsection  11.1, by written  notice to the  Borrowers,  at any time and from
time to time, waive any Event of Default and its consequences, or any default in
the performance or observance of any condition,  covenant,  or other term hereof
and its  consequences.  Any such waiver  shall be for such period and subject to
such  conditions  as shall be specified  in any such notice.  In the case of any
such  waiver,  the  Borrowers  and the Banks shall be  restored to their  former
positions  prior to such Event of  Default  or  default  and shall have the same
rights as they had thereto,  and any Event of Default or default so waived shall
be deemed to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Event of Default or default,  or impair any right consequent
thereto.

      11.9 No Waiver;  Cumulative Remedies.  No omission or failure of the Agent
or the Banks to exercise and no delay in exercising by the Agent or the Banks of
any power, or privilege, shall operate as a waiver thereof or be construed to be
a waiver thereof;  nor shall any single or partial exercise of any right, power,
or privilege  hereunder  preclude any other or further  exercise  thereof or the
exercise  of any other  right,  power,  or  privilege.  The rights and  remedies
provided in the Loan Documents are cumulative and not exclusive of any rights or
remedies provided by law, and the warranties,  representations,  covenants,  and
agreements   made  therein   shall  be   cumulative,   except  in  the  case  of
irreconcilable  inconsistency,  in which case the  provisions of this  Agreement
shall control.

      11.10 Venue and  Jurisdiction.  In any litigation in connection with or to
enforce  this  Agreement  or any of the  other  Loan  Documents,  each  Borrower
irrevocably  consents to and confers personal  jurisdiction on the courts of the
State of Florida  located in Orange County or the United  States courts  located
within  the  Middle  District  of the State of  Florida,  expressly  waives  any
objections as to venue in any of such courts, and agrees that service of process
may be made on such  Borrower by mailing a copy of the summons and  complaint by
registered or certified mail, return receipt requested, to the address set forth
herein below the name of the Borrower on the signature page hereto (or otherwise
expressly provided in writing). Nothing contained herein shall, however, prevent
the Agent from  bringing any action or  exercising  any rights  within any other
state or jurisdiction or from obtaining personal jurisdiction by any other means
available by applicable law.

      11.11 Governing Law. The validity, interpretation, and enforcement of this
Agreement, of the rights and obligations of the parties hereto, and of the other
documents  delivered in connection  herewith shall be governed by, and construed
and interpreted in accordance with, the laws of the State of Florida,  excluding
those laws  relating to the  resolution  of conflicts  between laws of different
jurisdictions.

      11.12  Title and  Headings;  Table of  Contents.  The titles and  headings
preceding  the text of the Sections and  Subsections  of this  Agreement and the
Table of Contents  have been  inserted and included  solely for  convenience  of
reference and shall neither  constitute a part of this  Agreement nor affect its
meaning, interpretation, or effect.

      11.13 Complete Agreement.  The Loan Documents contain the final, complete,
and exclusive  expression of the understanding of the Borrowers,  the Agent, and
the Banks with respect to the  transactions  contemplated  by the Loan Documents
and supersede any prior or contemporaneous agreement or representation,  oral or
written, by or between the parties related to the subject matter hereof.

      11.14  Legal  or  Governmental  Limitations.  Anything  contained  in this
Agreement to the contrary  notwithstanding,  the Banks shall not be obligated to
extend  credit or make any loans to the  Borrowers  in an amount in violation of
any  limitations  or  prohibitions   provided  by  any  applicable   statute  or
regulation.

      11.15  Counterparts.  This  Agreement  and  any  amendment  hereof  may be
executed in several  counterparts  and by each party on a separate  counterpart,
each of which when so executed and  delivered  shall be an original,  and all of
which together shall constitute one instrument.

      11.16 WAIVER OF JURY TRIAL BY BORROWERS.  EACH BORROWER HEREBY  KNOWINGLY,
VOLUNTARILY,  AND  INTENTIONALLY  WAIVES ANY RESPECTIVE  RIGHTS IT MAY HAVE TO A
TRIAL BY JURY WITH  RESPECT TO ANY  LITIGATION  BASED ON THE LOAN  DOCUMENTS  OR
ARISING OUT OF, UNDER OR IN CONNECTION THEREWITH,  OR ANY AGREEMENT CONTEMPLATED
TO BE  EXECUTED IN  CONNECTION  THEREWITH,  OR ANY COURSE OF CONDUCT,  COURSE OF
DEALING,  STATEMENTS  (WHETHER  VERBAL OR  WRITTEN) OR ACTIONS OF ANY PARTY WITH
RESPECT  HERETO OR THERETO.  FURTHERMORE,  NO BORROWER SHALL SEEK TO CONSOLIDATE
ANY ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY ACTION IN WHICH A JURY
TRIAL  CANNOT BE  WAIVED.  THIS  WAIVER IS A MATERIAL  INDUCEMENT  FOR THE BANKS
ACCEPTING AND ENTERING INTO THE CREDIT  CONTEMPLATED  BY THE LOAN  DOCUMENTS (OR
ANY AGREEMENT EXECUTED IN CONNECTION WITH THE LOAN DOCUMENTS) FROM, OR WITH, THE
BORROWERS.

      11.17  BORROWERS  JOINTLY AND SEVERALLY  LIABLE.  the  obligationS  of the
borrowers HEREUNDER SHALL BE joint and several,  and ACCORDINGLY,  each BORROWER
CONFIRMS  THAT IT is liable for the full  amount of ALL OF THE  OBLIGATIONS  AND
LIABILITIES OF EACH OF THE OTHER borrowers HEREUNDER;  PROVIDED,  HOWEVER,  THAT
THE  MAXIMUM  AMOUNT  OF  LIABILITY  OF ANY  BORROWER  HEREUNDER  (after  giving
application  to Section 11.18 hereof) SHALL BE LIMITED TO THE MAXIMUM  AMOUNT OF
OBLIGATIONS AND LIABILITIES WHICH, AFTER GIVING EFFECT THERETO,  WOULD NOT CAUSE
SUCH  oBLIGATIONS  AND  LIABILITIES,  AS SO REDUCED,  TO BE SUBJECT TO AVOIDANCE
UNDER  APPLICABLE  LAW.  THIS SECTION  11.17 IS INTENDED  SOLELY TO PRESERVE THE
RIGHTS OF THE BANKS AND THE AGENT HEREUNDER TO THE MAXIMUM EXTENT THAT WOULD NOT
CAUSE THE  OBLIGATIONS  LIABILITIES  OF SUCH BORROWER TO BE SUBJECT TO AVOIDANCE
UNDER  APPLICABLE LAW, AND NEITHER SUCH BORROWER NOR ANY OTHER PERSON SHALL HAVE
ANY RIGHT OR CLAIM UNDER THIS  SECTION  11.17 AS AGAINST THE BANKS AND THE AGENT
THAT WOULD NOT OTHERWISE BE AVAILABLE TO SUCH PERSON UNDER APPLICABLE LAW.

      11.18  Contribution.  The Borrowers hereby agree as among themselves that,
if any Borrower shall make an Excess Payment (as defined  below),  such Borrower
shall have a right of  contribution  from each other Borrower in an amount equal
to such other  Borrower's  Contribution  Share (as defined below) of such Excess
Payment.  The payment obligations of any Borrower under this Section 11.18 shall
be  subordinate  and subject in right of payment to the prior payment in full to
the Agent and the Banks of the  obligations  arising under this  Agreement,  and
none of the  Borrowers  shall  exercise  any right or remedy  under this Section
11.18 against any other Borrower until payment and  satisfaction  in full of all
of any obligations  arising under this  Agreement.  For purposes of this Section
11.18, (a) "Excess Payment" shall mean the amount paid by any Borrower in excess
            --------------
of its Pro Rata Share of such obligations arising under this Agreement; (c) "Pro
                                                                             ---
Rata  Share"  shall  mean,  for  any  Borrower  in  respect  of any  payment  of
-----------
obligations arising under this Agreement,  the ratio (expressed as a percentage)
as of the date of such  payment of such  obligations  of (i) the amount by which
the  aggregate  present fair salable  value of all of its assets and  properties
exceeds  the amount of all debts and  liabilities  of such  Borrower  (including
contingent, subordinated, unmatured, and unliquidated liabilities, but excluding
the  obligations  of such  Borrower  hereunder)  to (ii) the amount by which the
aggregate  present fair salable value of all assets and other  properties of the
Borrowers  exceeds  the  amount of all of the debts and  liabilities  (including
contingent, subordinated, unmatured, and unliquidated liabilities, but excluding
the obligations of the Borrowers hereunder) of the Borrowers; provided, however,
                                                              -----------------
that,  for  purposes  of  calculating  the Pro Rata Shares of the  Borrowers  in
respect of any payment of the  obligations  arising  under this  Agreement,  any
Borrower that became a Borrower subsequent to the date of any such payment shall
be deemed to have been a Borrower on the date of such payment and the  financial
information  for such  Borrower as of the date such  Borrower  became a Borrower
shall be utilized for such  Borrower in connection  with such  payment;  and (d)
"Contribution  Share"  shall  mean,  for any  Borrower  in respect of any Excess
 -------------------
Payment made by any other Borrower,  the ratio (expressed as a percentage) as of
the date of such Excess Payment of (i) the amount by which the aggregate present
fair salable value of all of its assets and properties exceeds the amount of all
debts and  liabilities  of such Borrower  (including  contingent,  subordinated,
unmatured, and unliquidated  liabilities,  but excluding the obligations of such
Borrower  hereunder)  to (ii) the  amount by which the  aggregate  present  fair
salable value of all assets and other properties of the Borrowers other than the
maker  of such  Excess  Payment  exceeds  the  amount  of all of the  debts  and
liabilities (including  contingent,  subordinated,  unmatured,  and unliquidated
liabilities,  but excluding the  obligations of the Borrowers  hereunder) of the
Borrowers other than the maker of such Excess Payment; provided,  however, that,
                                                       ------------------
for purposes of calculating the Contribution  Shares of the Borrowers in respect
of any Excess  Payment,  any Borrower  that became a Borrower  subsequent to the
date of any such Excess  Payment  shall be deemed to have been a Borrower on the
date of such Excess Payment and the financial  information  for such Borrower as
of the date such Borrower  became a Borrower shall be utilized for such Borrower
in connection with such Excess  Payment.  This Section 11.18 shall not be deemed
to affect any right of  subrogation,  indemnity,  reimbursement  or contribution
that any  Borrower  may have  under  applicable  law  against  any of the  other
Borrowers  in  respect  of any  payment of the  obligations  arising  under this
Agreement.

                            [Signatures on Next Page]

<PAGE>

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

                              BORROWERS:

                              COMMERCIAL NET LEASE REALTY, INC.
                              NET LEASE REALTY I, INC.
                              NET LEASE REALTY II, INC.
                              NET LEASE REALTY III, INC.
                              NET LEASE REALTY IV, INC.
                              NET LEASE FUNDING, INC.

                              By:_____________________________________________
                              Name: Kevin B. Habicht
                              Title:Executive  Vice  President and
                                    Chief  Financial  Officer of each of
                                    the above-listed  entities on behalf
                                    of each such entity

                              Address for Notices:

                              450 S. Orange Avenue, Suite 900
                              Orlando, Florida 32801
                              Attention: Kevin B. Habicht

                              TELECOPY NO. 407/650-1044
                              CONFIRMING TEL. NO. 407/265-7348

<PAGE>

                                 SIGNATURE PAGE

      Sixth  Amended and  Restated  Credit  Agreement  dated as of October 26,
2000 among  Commercial  Net Lease Realty,  Inc., Net Lease Realty I, Inc., Net
Lease Realty II, Inc.,  Net Lease Realty III, Inc., Net Lease Realty IV, Inc.,
Net Lease  Funding,  Inc.,  First Union  National Bank, as Agent and the Banks
party thereto from time to time.

                              FIRST UNION NATIONAL BANK, individually,
                                as Agent and as Issuing Bank

                              By:_____________________________________________
                              Name:___________________________________________
                              Title:__________________________________________

                              Revolving Credit Commitment:

                              $70,000,000

                              Address for Notices:

                              First Union National Bank
                              One First Union Center, NC0166
                              301 South College Street
                              Charlotte, North Carolina  28288-0166
                              Attention:  Rex Rudy
                              Telecopy Number:  (704) 383-6205
                              Telephone Number: (704) 383-6506

                              and

                              First Union Securities, Inc.
                              Real Estate Syndications
                              One First Union Center, NC0608
                              301 South College Street
                              Charlotte, North Carolina  28288-0608
                              Attention:  David Blackman
                              Telecopy Number:  (704) 715-1964
                              Telephone Number: (704) 374-6272

                       [Signatures Continue on Next Page]

<PAGE>

                                 SIGNATURE PAGE

      Sixth  Amended and  Restated  Credit  Agreement  dated as of October 26,
2000 among  Commercial  Net Lease Realty,  Inc., Net Lease Realty I, Inc., Net
Lease Realty II, Inc.,  Net Lease Realty III, Inc., Net Lease Realty IV, Inc.,
Net Lease  Funding,  Inc.,  First Union  National Bank, as Agent and the Banks
party thereto from time to time.

                              BANK OF AMERICA, N.A.

                              By:_____________________________________________
                              Name:___________________________________________
                              Title:__________________________________________

                              Revolving Credit Commitment:

                              $40,000,000

                              Address for Notices:

                              Bank of America, N.A.
                              NC1-007-15-08
                              100 North Tryon Street, 15th Floor
                              Charlotte, NC  28255-0001
                              Attention: Mr. Wesley G. Carter, Associate
                              Telecopy Number:  (704) 388-8841
                              Telephone Number: (704) 386-8411

<PAGE>

                                 SIGNATURE PAGE

      Sixth  Amended and  Restated  Credit  Agreement  dated as of October 26,
2000 among  Commercial  Net Lease Realty,  Inc., Net Lease Realty I, Inc., Net
Lease Realty II, Inc.,  Net Lease Realty III, Inc., Net Lease Realty IV, Inc.,
Net Lease  Funding,  Inc.,  First Union  National Bank, as Agent and the Banks
party thereto from time to time.

                              AMSOUTH BANK

                              By:_____________________________________________
                              Name:___________________________________________
                              Title:__________________________________________

                              Revolving Credit Commitment:

                              $35,000,000

                              Address for Notices:

                              AmSouth Bank
                              111 North Orange Avenue
                              Orlando, FL  32858
                              Attention: John R. Gassie
                              Telecopy Number:  (407) 835-3015
                              Telephone Number: (407) 246-8944

<PAGE>

                                 SIGNATURE PAGE

      Sixth  Amended and  Restated  Credit  Agreement  dated as of October 26,
2000 among  Commercial  Net Lease Realty,  Inc., Net Lease Realty I, Inc., Net
Lease Realty II, Inc.,  Net Lease Realty III, Inc., Net Lease Realty IV, Inc.,
Net Lease  Funding,  Inc.,  First Union  National Bank, as Agent and the Banks
party thereto from time to time.

                              THE HUNTINGTON NATIONAL BANK

                              By:_____________________________________________
                              Name:___________________________________________
                              Title:__________________________________________

                              Revolving Credit Commitment:

                              $20,000,000

                              Address for Notices:

                              The Huntington National Bank
                              201 East Pine Street, Suite 1310
                              Orlando, FL  32801
                              Attention: Stewart A. Grashoff
                              Telecopy Number:  (407) 245-8422
                              Telephone Number: (407) 245-8406

<PAGE>

                                 SIGNATURE PAGE

      Sixth  Amended and  Restated  Credit  Agreement  dated as of October 26,
2000 among  Commercial  Net Lease Realty,  Inc., Net Lease Realty I, Inc., Net
Lease Realty II, Inc.,  Net Lease Realty III, Inc., Net Lease Realty IV, Inc.,
Net Lease  Funding,  Inc.,  First Union  National Bank, as Agent and the Banks
party thereto from time to time.

                                  COMERICA BANK

                              By:_____________________________________________
                              Name:___________________________________________
                              Title:__________________________________________

                              Revolving Credit Commitment:

                              $20,000,000

                              Address for Notices:

                              Comerica Bank
                              500 Woodward Avenue
                              Detroit, MI 48226-3256
                              Attention: Leslie Vogel
                              Telecopy Number:  (313) 222-9295
                              Telephone Number: (313) 222-9290

<PAGE>

                                 SIGNATURE PAGE

      Sixth  Amended and  Restated  Credit  Agreement  dated as of October 26,
2000 among  Commercial  Net Lease Realty,  Inc., Net Lease Realty I, Inc., Net
Lease Realty II, Inc.,  Net Lease Realty III, Inc., Net Lease Realty IV, Inc.,
Net Lease  Funding,  Inc.,  First Union  National Bank, as Agent and the Banks
party thereto from time to time.

                              CITIZENS BANK OF RHODE ISLAND

                              By:_____________________________________________
                              Name:___________________________________________
                              Title:__________________________________________

                              Revolving Credit Commitment:

                              $15,000,000

                              Address for Notices:

                              One Citizens Plaza
                              4th floor-RC0440
                              Providence, RI 02903
                              Attention: Craif Schermerhorn
                              Telecopy Number:  (401) 282-4485
                              Telephone Number: (401) 455-5425

<PAGE>

                                   EXHIBIT "A"

                               NOTICE OF BORROWING

                              _____________________
                                      Date

First Union National Bank
One First Union Center, NC0166
301 South College Street
Charlotte, North Carolina  28288-0166
Attention:  Syndication Agency Services

Ladies and Gentlemen:

      Pursuant to the Sixth Amended and Restated  Credit  Agreement  dated as of
October 26, 2000, as amended,  supplemented,  restated,  replaced,  or otherwise
modified  from time to time (the  "Agreement";  capitalized  terms  used but not
defined  herein  shall  have  the  meanings  assigned  in the  Agreement);  this
represents the undersigneds' request for a borrowing or the Issuance of a Letter
of Credit under the Revolving Credit Facility as follows:

__    ADVANCES

      __________  Proposed Date of Advance

      $__________ Aggregate Amount of Advance

      __________  Prime Rate Advance or __________ LIBOR Rate Advance

      If LIBOR Rate Advance: ____7 day, ____1, ____ 2, ____3 or ____6 month
      Interest Period

      The proceeds of the Advances are to be deposited in ____________________'s
account at Agent.

__    LETTER OF CREDIT

      __________  Proposed Date of Issuance of Letter of Credit

      $__________ Maximum Amount of Letter of Credit

      __________  Expiration Date of Letter of Credit

      The name and  address  of the,  beneficiary  and the form of the Letter of
Credit are as stated in the accompanying application for Letter of Credit.

      The    Letter    of    Credit    is   to   be    made    available    to
____________________________  at  the  Lending  Office  of the  Issuing  Bank,
unless otherwise specified herein: _________________________________________.

      This  Notice is given in order to induce  the Banks to make the  foregoing
Advances or issue the foregoing  Letter of Credit.  We understand that the Agent
and each of the Banks are relying on the truth and  accuracy  of the  statements
made in this Notice.

      1.    If Advances are being requested, the proceeds will be used solely
to:  ________________________________________________________________________.

      2.    If a Letter of Credit is being requested, the purpose of the
Letter of Credit or the transaction supported by the Letter of Credit is:
_____________________________________________________________________________.

      3.    The anticipated takeout source for the requested borrowing is
_____________________________________________________________________________.

      4. If a Letter of Credit is being requested, this Notice is accompanied by
an  executed  application  for  Letter  of  Credit  and such  other  agreements,
information,  and documents as the Agent or the Issuing Bank  requires,  and the
payment of fees and commissions described in the Agreement.

      5. All of the representations and warranties of the undersigned  contained
in the Agreement or in any of the other Loan  Documents are true,  correct,  and
complete  on and as of the date of this  Notice,  with the same effect as though
the representations and warranties had been made on and as of such date.

      6. Each of the  undersigned is in compliance with all terms and conditions
of the Agreement,  and no Event of Default,  nor any event which, upon notice or
lapse of time or both, would constitute an Event of Default, has occurred and is
continuing,  or would result from the  borrowing or the issuance or a draw under
the Letter of Credit.

      7. No liens,  claims,  encumbrances,  transfers,  or conveyances have been
made,  asserted,  delivered,  filed,  or recorded  with  respect to any property
purchased  by the  undersigned  using loan  proceeds,  other  than as  permitted
pursuant to the Agreement.

      8. After giving  effect to the  borrowing or the issuance of the Letter of
Credit requested herein, the aggregate amount of Advances  outstanding under the
Revolving  Credit  Facility  plus the  aggregate  amount  of  Letter  of  Credit
Contingent  Obligations will not exceed the Banks' Revolving Credit Commitments.
Further,  after giving  effect to the borrowing or the issuance of the Letter of
Credit requested herein, the aggregate amount of Advances used for funding under
Letters  of Credit  plus the  aggregate  amount  of Letter of Credit  Contingent
Obligations will not exceed $15,000,000.00.

      9. The undersigned  have no setoffs or defenses under the Agreement or any
other Loan Document. The Agreement,  the Notes, and all other Loan Documents are
valid, binding, and enforceable in accordance with their terms.

                              COMMERCIAL NET LEASE REALTY, INC.

                              By:_____________________________________________
                              Its:____________________________________________

                              NET LEASE REALTY I, INC.

                              By:_____________________________________________
                              Its:____________________________________________

                              NET LEASE REALTY II, INC.

                              By:_____________________________________________
                              Its:____________________________________________

                              NET LEASE REALTY III, INC.

                              By:_____________________________________________
                              Its:____________________________________________

                              NET LEASE REALTY IV, INC.

                              By:_____________________________________________
                              Its:____________________________________________

                              NET LEASE FUNDING, INC.

                              By:_____________________________________________
                              Its:____________________________________________

<PAGE>

                                   EXHIBIT "B"

                                 PROMISSORY NOTE

$______________                                   As of October 26, 2000
                                               Charlotte, North Carolina

      FOR VALUE RECEIVED, the undersigned,  COMMERCIAL NET LEASE REALTY, INC., a
Maryland corporation ("CNLR"),  NET LEASE REALTY I, INC., a Maryland corporation
("NET I"), NET LEASE  REALTY II, a Maryland  corporation  ("NET II"),  NET LEASE
REALTY III, INC., a Maryland corporation ("NET III"), NET LEASE REALTY IV, INC.,
a Maryland  corporation  ("NET IV"),  and NET LEASE  FUNDING,  INC.,  a Maryland
corporation  ("Funding";  CNLR,  NET I, NET II, NET III,  NET IV and Funding are
collectively  referred  to herein as the  "Borrowers"),  jointly  and  severally
promise to pay to the order of [BANK]  (the  "Lender"),  in care of First  Union
National  Bank,  as Agent (the  "Agent")  under that certain  Sixth  Amended and
Restated  Credit  Agreement of even date  herewith as amended and in effect from
time to time (the "Agreement"),  by and among the undersigned, the Banks and the
Agent,  to First Union National Bank, One First Union Center,  Charlotte,  North
Carolina  28288,  or at such other address as may be specified in writing by the
Agent to the Borrowers,  the principal sum of [ ]  ($_____________),  or so much
thereof  as  may  be  advanced,  and to pay  interest  on the  principal  amount
remaining  from time to time  outstanding  from the date hereof until due at the
rate and at the times specified in the Agreement. Capitalized terms used but not
defined herein shall have the meanings assigned those terms in the Agreement.

      In no event shall the interest rate  applicable  to principal  outstanding
under this Note exceed the maximum rate of interest  allowed by applicable  law,
as amended  from time to time.  The Agent and the Lender do not intend to charge
any amount of interest  or other fees or charges in the nature of interest  that
exceeds the maximum rate allowed by  applicable  law. If any payment of interest
or in the nature of interest  hereunder would cause the foregoing  interest rate
limitation  to be  exceeded,  then such  excess  payment  shall be credited as a
payment of principal  unless the undersigned  notifies the Agent in writing that
the undersigned wishes to have such excess sum returned,  together with interest
at the rate specified in Section 687.04(2),  Florida Statutes,  or any successor
statute.

      Principal  outstanding  hereunder  shall  be due and  payable  in a single
payment  at the  Revolving  Credit  Maturity  Date.  Interest  shall be  payable
quarterly  and at such other times  specified in the  Agreement,  as long as any
principal  amount remains  outstanding  hereunder,  and at the Revolving  Credit
Maturity Date.

      This Note is issued  pursuant to, and is subject to, the provisions of the
Agreement.  Reference  is made to  such  Loan  Documents  for a  description  of
additional rights and obligations of the undersigned,  the Agent and the Lender,
including events of default,  rights of prepayment and rights of acceleration of
maturity in the event of default.

      The undersigned agree to pay or reimburse the Agent and the Lender for all
of  their  costs  and  expenses  incurred  in  connection  with  administration,
supervision,  collection,  or  enforcement,  or preservation of any rights under
this Note and the Loan Documents,  including,  without limitation,  the fees and
disbursements of counsel for the Agent and the Banks,  including attorneys' fees
out of court, in trial, on appeal, in bankruptcy proceedings, or otherwise.

      All  persons  now or at any time  liable for  payment of this Note  hereby
waive  presentment,  protest,  notice of protest,  and notice of  dishonor.  The
undersigned  expressly  consent to any  extensions and renewals of this Note, in
whole or in part, and all delays in time of payment or other  performance  under
this  Note  which  may be  granted  at any time and from  time to time,  without
limitation  and without any notice or further  consent of the  undersigned.  All
notices,  demands, and other communications  required or permitted in connection
with this Note shall be given in the manner specified in the Agreement.

      Upon the  occurrence  of an Event of  Default,  the unpaid  balance of the
principal  amount of this Note may  become,  or may be  declared  to be, due and
payable in the manner,  upon the conditions and with the effect  provided in the
Agreement.

      The remedies of the Agent and the Lender,  as provided  herein,  or in any
other Loan Document are cumulative and concurrent  (except as may be provided in
the Agreement) and may be pursued singularly, successively, or together, and may
be exercised as often as the occasion therefor shall arise.

      This  Note  shall  be  governed  by,  and  construed  and  interpreted  in
accordance with, the laws of the State of Florida, excluding those laws relating
to the resolution of conflicts between the laws of different jurisdictions.

      This Note shall  constitute  a  modification  and renewal of that  certain
Promissory  Note from  CNLR,  NET I NET II, NET III,  NET IV and  Funding to the
Lender  dated as of  September  23,  1999.  THIS NOTE IS NOT INTENDED TO BE, AND
SHALL NOT BE CONSTRUED TO BE,  PAYMENT OF  INDEBTEDNESS  OR A NOVATION OF ANY OF
THE OBLIGATIONS OWING UNDER OR IN CONNECTION WITH SUCH OTHER NOTE.

      IN WITNESS  WHEREOF,  the undersigned have caused this Note to be executed
as of the day and year first above written.

                            COMMERCIAL NET LEASE REALTY, INC.,
                            a Maryland corporation

                            By:_______________________________________________
                            Kevin B. Habicht
                            Executive Vice President and Chief Financial Officer

                            Address:  450 S. Orange Avenue, Suite 900
                                      Orlando, Florida 32801

                            NET LEASE REALTY I, INC.,
                            a Maryland corporation

                            By:_______________________________________________
                            Kevin B. Habicht
                            Executive Vice President and Chief Financial Officer

                            Address:  450 S. Orange Avenue, Suite 900
                                      Orlando, Florida 32801

                            NET LEASE REALTY II, INC.,
                            a Maryland corporation

                            By:_______________________________________________
                            Kevin B. Habicht
                            Executive Vice President and Chief Financial Officer

                            Address:  450 S. Orange Avenue, Suite 900
                                      Orlando, Florida 32801

                            NET LEASE REALTY III, INC.,
                            a Maryland corporation

                            By:_______________________________________________
                            Kevin B. Habicht
                            Executive Vice President and Chief Financial Officer

                            Address:  450 S. Orange Avenue, Suite 900
                                      Orlando, Florida 32801

                            NET LEASE REALTY IV, INC.,
                            a Maryland corporation

                            By:_______________________________________________
                            Kevin B. Habicht
                            Executive Vice President and Chief Financial Officer

                            Address:  450 S. Orange Avenue, Suite 900
                                      Orlando, Florida 32801

                            NET LEASE FUNDING, INC.,
                            a Maryland corporation

                            By:_______________________________________________
                            Kevin B. Habicht
                            Executive Vice President and Chief Financial Officer

                            Address:  450 S. Orange Avenue, Suite 900
                                      Orlando, Florida 32801

<PAGE>

                                   EXHIBIT "C"

                                     FORM OF
                            ASSIGNMENT AND ACCEPTANCE

                          Dated as of __________, 19__

      Reference is made to the SIXTH Amended and Restated Credit Agreement dated
as of  October  26,  2000 (as  amended  and in  effect  from  time to time,  the
"Agreement"),  by and  among  Commercial  Net Lease  Realty,  Inc.,  a  Maryland
corporation,  Net Lease Realty I, Inc., a Maryland corporation, Net Lease Realty
II,  Inc.,  a Maryland  corporation,  Net Lease  Realty  III,  Inc.,  a Maryland
corporation,  Net Lease Realty IV, Inc., a Maryland  corporation,  and Net Lease
Funding,  Inc., a Maryland  corporation  (collectively,  the  "Borrowers"),  the
financial  institutions  listed from time to time on the signature pages thereof
(individually  a "Bank" and  collectively  the "Banks") and First Union National
Bank, as agent (in such capacity,  the "Agent") for the Banks.  Terms defined in
the  Agreement  and used herein  without  definition  shall have the  respective
meanings herein assigned to such terms in the Agreement.

      [Name of Assigning  Lender] (the  "Assignor")  and [Name of Assignee] (the
"Assignee") hereby agree as follows:

      1. The Assignor  hereby sells and assigns to the Assignee and the Assignee
hereby  purchases and assumes from the Assignor,  a __________  percent (_____%)
undivided  interest in all of the Assignor's  rights and  obligations  under the
Agreement  as of  the  Assignment  Date  (as  defined  in  paragraph  4  below),
including,  without limitation,  (a) the Assignor's  obligation to make Advances
thereunder and (b) the Assignor's interest in all unpaid interest and commitment
fees accrued as of the Assignment Date.

      2. The Assignor (i) represents and warrants that it is legally  authorized
to enter into this  Assignment and  Acceptance;  (ii)  represents that as of the
date hereof,  before giving effect to the assignment  contemplated  hereby,  its
Revolving  Credit  Commitment  is  $__________  and  the  aggregate  outstanding
principal balance of the Advances made by it equals $__________;  (iii) makes no
representation  or warranty  and assumes no  responsibility  with respect to any
statements, warranties or representations made in or in connection with the Loan
Documents or the execution,  legality,  validity,  enforceability,  genuineness,
sufficiency  or value of any Loan  Document or any other  instrument or document
furnished pursuant thereto, other than that it is the legal and beneficial owner
of the interest  being  assigned by it hereunder  and that such interest is free
and clear of any adverse claim; and (iv) makes no representation or warranty and
assumes  no  responsibility  with  respect  to the  financial  condition  of the
Borrowers or the performance or observance by the Borrowers of their obligations
under  the  other  Loan  Documents  to any  Borrower  is a  party  or any  other
instrument or document delivered or executed pursuant thereto.

      3. The Assignee (a) represents and warrants that it is legally  authorized
to enter into this Assignment and Acceptance;  (b) confirms that it has received
a copy of the Loan Documents,  together with copies of the most recent financial
statements  delivered  pursuant to Section 6.1 of the  Agreement  and such other
documents and  information  as it has deemed  appropriate to make its own credit
analysis and decision to enter into this Assignment and  Acceptance;  (c) agrees
that it will,  independently  and without reliance upon the Assignor,  any other
Bank, or the Agent and based on such documents and  information as it shall deem
appropriate at the time,  continue to make its own credit decisions in taking or
not taking  action under the Loan  Documents;  (d) appoints and  authorizes  the
Agent to take such action as agent on its behalf and to exercise  such powers as
are reasonably  incidental  thereto pursuant to the terms of the Loan Documents;
and (e) agrees  that it will  perform  in  accordance  with their  terms all the
obligations  which  by the  terms  of the  Loan  Documents  are  required  to be
performed by it as a Bank.

      4.  The  effective  date  for  this  Assignment  and  Acceptance  shall be
__________,  20__ (the  "Assignment  Date").  Following  the  execution  of this
Assignment and Acceptance,  each party hereto and each Person  consenting hereto
shall deliver its duly executed  counterpart  hereof to the Agent for acceptance
by the Agent.

      5.  Upon such  acceptance,  from and  after  the  Assignment  Date (i) the
Assignee shall be a party to the Agreement  and, to the extent  provided in this
Assignment and Acceptance, have the rights and obligations of a Bank thereunder,
and (ii) the Assignor shall,  with respect to that portion of its interest under
the Agreement assigned hereunder, relinquish its rights and be released from its
obligations under the Agreement.

      6. Upon such  acceptance  and after the  Assignment  Date, the Agent shall
make all  payments  in  respect  of the rights  and  interests  assigned  hereby
(including  payments  of  principal,  interest,  fees and other  amounts) to the
Assignee.  On the  Assignment  Date,  the Assignee will pay to the Agent for the
account of the  Assignor an amount  equal to the  percentage  of the  Assignor's
interest  assumed by the Assignee  hereunder,  times the  aggregate  outstanding
principal amount of the Advances made by the Assignor.

      7. THIS  ASSIGNMENT  AND  ACCEPTANCE  IS  INTENDED  TO BE  GOVERNED BY AND
CONSTRUED  IN  ACCORDANCE  WITH,  THE  LAWS OF THE  STATE  OF  FLORIDA  (WITHOUT
REFERENCE TO CONFLICT OF LAWS).

      8.    This  Assignment  and  Acceptance may be executed in any number of
counterparts which shall together constitute but one and the same agreement.

      IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned
has caused this  Assignment  and  Acceptance to be executed on its behalf by its
officer thereunto duly authorized as of the date first above written.

                                 [ASSIGNOR]

                                 By: __________________________________________
                                 Title:________________________________________

                                 [ASSIGNEE]

                                 By:___________________________________________
                                 Title: _______________________________________
CONSENTED TO:

FIRST UNION NATIONAL BANK
  as Agent

By:_____________________________
Title:__________________________

COMMERCIAL NET LEASE REALTY, INC.

By:_____________________________
Title:__________________________

NET LEASE REALTY I, INC.

By:_____________________________
Title:__________________________

NET LEASE REALTY II, INC.

By:_____________________________
Title:__________________________

NET LEASE REALTY III, INC.

By:_____________________________
Title:__________________________

NET LEASE REALTY IV, INC.

By:_____________________________
Title:__________________________

NET LEASE FUNDING, INC.

By:_____________________________
Title:__________________________

<PAGE>

                                   EXHIBIT "D"

                              NOTICE OF PREPAYMENT

First Union National Bank
One First Union Center, NC0166
301 South College Street
Charlotte, North Carolina  28288-0166
Attention:  Syndication Agency Services

Ladies and Gentlemen:

      This irrevocable  Notice of Prepayment is delivered to you by Commercial
Net Lease Realty,  Inc.,  Net Lease Realty I, Inc., Net Lease Realty II, Inc.,
Net Lease Realty III,  Inc., Net Lease Realty IV, Inc., and Net Lease Funding,
Inc.,  corporations  organized under the laws of Maryland  (collectively,  the
"Borrowers"),  under  Section 2.14 of the Sixth  Amended and  Restated  Credit
Agreement  dated as of October  26, 2000  (together  with all  amendments  and
other  modifications,  if any,  from time to time made  thereto,  the  "Credit
Agreement"),  by and among the  Borrowers,  the Banks listed on the  signature
pages thereof, and First Union National Bank, as the Agent.

      1. The  Borrowers  hereby  provide  notice to the Agent that the Borrowers
shall repay the  following  Prime Rate  Advances,  Floating  LIBOR Rate Advances
and/or  LIBOR Rate  Advances.  (Complete in  accordance  with Section 2.2 of the
Credit Agreement.)

      2. The Borrowers  hereby provide notice that the Borrowers shall repay the
above-referenced  Loans on the following  Business Day:  (Complete in accordance
with Section 2.2 of the Credit Agreement.)

      3.    All  capitalized  undefined  terms used herein  have the  meanings
assigned thereto in the Credit Agreement.

      IN WITNESS WHEREOF, the undersigned has executed this Notice of Prepayment
this ____ day of __________, 19__.

                                 COMMERCIAL NET LEASE REALTY, INC.
[CORPORATE SEAL]

                                 By:__________________________________________
                                 Name: _______________________________________
                                 Title: ______________________________________

                                 NET LEASE REALTY I, INC.
[CORPORATE SEAL]

                                 By:__________________________________________
                                 Name: _______________________________________
                                 Title: ______________________________________

                                 NET LEASE REALTY II, INC.
[CORPORATE SEAL]

                                 By:__________________________________________
                                 Name: _______________________________________
                                 Title: ______________________________________-

                                 NET LEASE REALTY III, INC.
(CORPORATE SEAL)

                                 By:__________________________________________
                                 Name: _______________________________________
                                 Title: ______________________________________

                                 NET LEASE REALTY IV, INC.
[CORPORATE SEAL]

                                 By:__________________________________________
                                 Name: _______________________________________
                                 Title: ______________________________________

                                 NET LEASE FUNDING, INC.
[CORPORATE SEAL]

                                 By:__________________________________________
                                 Name: _______________________________________
                                 Title: ______________________________________

<PAGE>

                                   EXHIBIT "E"

                        NOTICE OF CONVERSION/CONTINUATION

First Union National Bank
One First Union Center, NC0166
301 South College Street
Charlotte, North Carolina  28288-0166
Attention:  Syndication Agency Services

Ladies and Gentlemen:

      This  irrevocable  Notice of  Conversion/Continuation  (the "Notice") is
delivered to you under Section 2.17 of the Sixth  Amended and Restated  Credit
Agreement  dated as of October 26,  2000 (as  amended,  restated or  otherwise
modified,  the "Credit Agreement"),  by and among Commercial Net Lease Realty,
Inc.,  Net Lease Realty I, Inc.,  Net Lease Realty II, Inc.,  Net Lease Realty
III,  Inc.,  Net  Lease  Realty  IV,  Inc.,  and  Net  Lease  Funding,   Inc.,
corporations  organized  under  the  laws  of  Maryland   (collectively,   the
"Borrowers"),   the  Banks  listed  on  the   signature   pages  thereof  (the
"Lenders"), and First Union National Bank, as the Agent.

      1.    This  Notice  of  Conversion/Continuation  is  submitted  for  the
purpose of:
 (Complete applicable information)

      (a)   [Converting]  [continuing] an ____________________  Advance [into]
      [as] an ____________________ Advance.1

            (b)   The aggregate  outstanding principal balance of such Advance
                  is $__________.

            (c)   The  last  day of  the  current  Interest  Period  for  such
                  Advance is ____________________.2

            (d)   The  principal  amount  of such  Advance  to be  [converted]
                  [continued] is $__________.3

            (e)   The   requested   effective   date   of   the   [conversion]
                  [continuation] of such Advance is ____________________.4

      2. No  Default or Event of  Default  exists,  and none will exist upon the
conversion or continuation of the Advance requested herein.

      3.    All  capitalized  undefined  terms used herein  have the  meanings
assigned thereto in the Credit Agreement.

      IN  WITNESS   WHEREOF,   the  undersigned  has  executed  this  Notice  of
Conversion/Continuation this ____ day of __________, 20__.

                                 COMMERCIAL NET LEASE REALTY, INC.

                                 By:__________________________________________
                                 Name: _______________________________________
                                 Title: ______________________________________

                                 NET LEASE REALTY I, INC.

                                 By:__________________________________________
                                 Name: _______________________________________
                                 Title: ______________________________________

                                 NET LEASE REALTY II, INC.

                                 By:__________________________________________
                                 Name: _______________________________________
                                 Title: ______________________________________

                                 NET LEASE REALTY III, INC.

                                 By:__________________________________________
                                 Name: _______________________________________
                                 Title: ______________________________________

                                 NET LEASE REALTY IV, INC.

                                 By:__________________________________________
                                 Name: _______________________________________
                                 Title: ______________________________________

                                 NET LEASE FUNDING, INC.

                                 By:__________________________________________
                                 Name: _______________________________________
                                 Title: ______________________________________

<PAGE>

1.    Delete the bracketed  language and insert "Prime Rate", or "LIBOR Rate",
      as applicable, in each blank.

2.    Insert  applicable  date for any LIBOR Rate Advance  being  converted or
      continued.

3.    Complete  with an amount in  compliance  with  Section 2.2 of the Credit
      Agreement.

4.    Complete  with a Business Day at least three (3)  Business  Days after the
      date of this Notice.

<PAGE>

                                   EXHIBIT "F"

                      FORM OF NOTICE OF SWINGLINE BORROWING

                             ______________,_____

First Union National Bank
One First Union Center, NC0166
301 South College Street
Charlotte, North Carolina  28288-0166
Attention:  Syndication Agency Services

Ladies and Gentlemen:

      Reference is made to that  certain  Sixth  Amended and  Restated  Credit
Agreement  dated as of October 26,  2000 (as  amended,  restated or  otherwise
modified,  the "Credit Agreement"),  by and among Commercial Net Lease Realty,
Inc.,  Net Lease Realty I, Inc.,  Net Lease Realty II, Inc.,  Net Lease Realty
III,  Inc.,  Net  Lease  Realty  IV,  Inc.,  and  Net  Lease  Funding,   Inc.,
corporations  organized  under  the  laws  of  Maryland   (collectively,   the
"Borrowers"),   the  Banks  listed  on  the   signature   pages  thereof  (the
"Lenders"),  and First Union  National Bank, as the Agent.  Capitalized  terms
used herein, and not otherwise defined herein,  have their respective meanings
given them in the Credit Agreement.

      1.    Pursuant  to   Section 2.4.(b)   of  the  Credit  Agreement,   the
            Borrowers   hereby  request  that  the  Swingline  Lender  make  a
            Swingline   Loan  to  the   Borrowers   in  an  amount   equal  to
            $____________________________.

      2.    The Borrowers  request that such  Swingline Loan be made available
            to the Borrowers on ____________, _____.

      3.    The  proceeds  of  this  Swingline  Loan  will  be  used  for  the
            following purpose:________________________________________________
            __________________________________________________________________

      4.    The Borrowers  request that the proceeds of such Swingline Loan be
            made available to the Borrowers by ______________________________.

      The  Borrowers  hereby  certify  to the Agent and the Banks that as of the
date hereof and as of the date of the making of the requested Swingline Loan and
after  giving  effect  thereto,  (a) no default or Event of Default has or shall
have occurred and be continuing, and (b) the representations and warranties made
or deemed made by the Borrowers in the Loan  Documents to which any of them is a
party,  are and  shall be true and  correct,  except  to the  extent  that  such
representations  and warranties  expressly  relate solely to an earlier date (in
which case such  representations and warranties were true and accurate on and as
of  such  earlier  date)  and  except  for  changes  in  factual   circumstances
specifically and expressly  permitted under the Credit  Agreement.  In addition,
the  Borrowers  certify  to the Agent and the Banks that all  conditions  to the
making of the  requested  Swingline  Loan  contained in Section 5. of the Credit
Agreement will have been satisfied at the time such Swingline Loan is made.

      If notice of the requested borrowing of this Swingline Loan was previously
given by telephone,  this notice is to be considered the written confirmation of
such telephone notice required by Section 2.4.(b) of the Credit Agreement.

                                 COMMERCIAL NET LEASE REALTY, INC.

                                 By:__________________________________________
                                 Name: _______________________________________
                                 Title: ______________________________________

                                 NET LEASE REALTY I, INC.

                                 By:__________________________________________
                                 Name: _______________________________________
                                 Title: ______________________________________

                                 NET LEASE REALTY II, INC.

                                 By:__________________________________________
                                 Name: _______________________________________
                                 Title: ______________________________________

                                 NET LEASE REALTY III, INC.

                                 By:__________________________________________
                                 Name: _______________________________________
                                 Title: ______________________________________

                                 NET LEASE REALTY IV, INC.

                                 By:__________________________________________
                                 Name: _______________________________________
                                 Title: ______________________________________

                                 NET LEASE FUNDING, INC.

                                By:__________________________________________
                                 Name: _______________________________________
                                 Title: ______________________________________

<PAGE>

                                   EXHIBIT "G"

                             FORM OF SWINGLINE NOTE

$10,000,000                                       As of October 26, 2000
                                               Charlotte, North Carolina

      FOR VALUE RECEIVED, the undersigned,  COMMERCIAL NET LEASE REALTY, INC., a
Maryland corporation ("CNLR"),  NET LEASE REALTY I, INC., a Maryland corporation
("NET I"), NET LEASE  REALTY II, a Maryland  corporation  ("NET II"),  NET LEASE
REALTY III, INC., a Maryland corporation ("NET III"), NET LEASE REALTY IV, INC.,
a Maryland  corporation  ("NET IV"),  and NET LEASE  FUNDING,  INC.,  a Maryland
corporation  ("Funding";  CNLR,  NET I, NET II, NET III,  NET IV and Funding are
collectively  referred  to herein as the  "Borrowers"),  jointly  and  severally
promise  to pay to the  order of  First  Union  National  Bank  (the  "Swingline
Lender"), under that certain Sixth Amended and Restated Credit Agreement of even
date herewith as amended and in effect from time to time (the  "Agreement"),  by
and among the  undersigned,  the Banks and the Swingline  Lender,  as Agent,  to
First Union  National Bank,  One First Union Center,  Charlotte,  North Carolina
28288,  or at such other  address as may be specified in writing by the Agent to
the   Borrowers,   the  principal   sum  of  TEN  MILLION  AND  00/100   DOLLARS
($10,000,000), or so much thereof as may be advanced, and to pay interest on the
principal  amount  remaining from time to time  outstanding from the date hereof
until due at the rate and at the times  specified in the Agreement.  Capitalized
terms used but not defined  herein shall have the meanings  assigned those terms
in the Agreement.

      In no event shall the interest rate  applicable  to principal  outstanding
under  this  Swingline  Note  exceed the  maximum  rate of  interest  allowed by
applicable  law, as amended  from time to time.  The  Swingline  Lender does not
intend to charge any amount of  interest  or other fees or charges in the nature
of interest  that  exceeds the maximum rate  allowed by  applicable  law. If any
payment of  interest  or in the nature of  interest  hereunder  would  cause the
foregoing  interest  rate  limitation to be exceeded,  then such excess  payment
shall be credited as a payment of principal unless the undersigned  notifies the
Swingline Lender in writing that the undersigned  wishes to have such excess sum
returned,  together  with interest at the rate  specified in Section  687.04(2),
Florida Statutes, or any successor statute.

      Principal  outstanding  hereunder  shall  be due and  payable  in a single
payment  at the  Revolving  Credit  Maturity  Date.  Interest  shall be  payable
quarterly  and at such other times  specified in the  Agreement,  as long as any
principal  amount remains  outstanding  hereunder,  and at the Revolving  Credit
Maturity Date.

      This  Swingline  Note is  issued  pursuant  to,  and is  subject  to,  the
provisions  of the  Agreement.  Reference is made to such Loan  Documents  for a
description  of  additional  rights  and  obligations  of the  undersigned,  the
Swingline Lender,  including events of default,  rights of prepayment and rights
of acceleration of maturity in the event of default.

      The undersigned  agree to pay or reimburse the Swingline Lender for all of
their  costs  and  expenses   incurred  in   connection   with   administration,
supervision,  collection,  or  enforcement,  or preservation of any rights under
this Swingline Note and the Loan Documents,  including,  without limitation, the
fees and disbursements of counsel for the Swingline Lender, including attorneys'
fees out of court, in trial, on appeal, in bankruptcy proceedings, or otherwise.

      All  persons  now or at any time  liable for  payment of this Note  hereby
waive  presentment,  protest,  notice of protest,  and notice of  dishonor.  The
undersigned  expressly  consent to any extensions and renewals of this swingline
Note,  in  whole  or in  part,  and  all  delays  in time of  payment  or  other
performance  under this swingline Note which may be granted at any time and from
time to time,  without  limitation and without any notice or further  consent of
the undersigned.  All notices,  demands,  and other  communications  required or
permitted in connection  with this  swingline  Note shall be given in the manner
specified in the Agreement.

      Upon the  occurrence  of an Event of  Default,  the unpaid  balance of the
principal  amount of this Swingline  Note may become,  or may be declared to be,
due and payable in the manner,  upon the conditions and with the effect provided
in the Agreement.

      The remedies of the Swingline  Lender, as provided herein, or in any other
Loan Document are cumulative  and  concurrent  (except as may be provided in the
Agreement) and may be pursued singularly,  successively, or together, and may be
exercised as often as the occasion therefor shall arise.

      This Swingline Note shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Florida, excluding those laws relating
to the resolution of conflicts between the laws of different jurisdictions.

<PAGE>

      IN WITNESS WHEREOF,  the undersigned have caused this Swingline Note to be
executed as of the day and year first above written.

                           COMMERCIAL NET LEASE REALTY, INC.,
                           a Maryland corporation

                           By:__________________________________________
                           Kevin Habicht
                           Executive Vice President and Chief Financial Officer

                           Address:  450 S. Orange Avenue, Suite 900
                                     Orlando, Florida 32801

                           NET LEASE REALTY I, INC.,
                           a Maryland corporation

                           By:__________________________________________
                           Kevin Habicht
                           Executive Vice President and Chief Financial Officer

                           Address:  450 S. Orange Avenue, Suite 900
                                     Orlando, Florida 32801

                           NET LEASE REALTY II, INC.,
                           a Maryland corporation

                           By:__________________________________________
                           Kevin Habicht
                           Executive Vice President and Chief Financial Officer

                           Address:  450 S. Orange Avenue, Suite 900
                                     Orlando, Florida 32801

                           NET LEASE REALTY III, INC.,
                           a Maryland corporation

                           By:__________________________________________
                           Kevin Habicht
                           Executive Vice President and Chief Financial Officer

                           Address:  450 S. Orange Avenue, Suite 900
                                     Orlando, Florida 32801

                           NET LEASE REALTY IV, INC.,
                           a Maryland corporation

                           By:__________________________________________
                           Kevin Habicht
                           Executive Vice President and Chief Financial Officer

                           Address:  450 S. Orange Avenue, Suite 900
                                     Orlando, Florida 32801

                           NET LEASE FUNDING, INC.,
                           a Maryland corporation

                           By:__________________________________________
                           Kevin Habicht
                           Executive Vice President and Chief Financial Officer

                           Address:  450 S. Orange Avenue, Suite 900
                                     Orlando, Florida 32801

<PAGE>

                           SCHEDULE OF SWINGLINE LOANS

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

                       Principal      Amount Paid    Unpaid Principal  Notation
   Date of Loan     Amount of Loan     or Prepaid         Amount        Made By
   ------------     --------------    -----------    ----------------  --------

<PAGE>

                                   EXHIBIT "H"

                         FORM OF BID RATE QUOTE REQUEST

                            _________________, _____

First Union National Bank
One First Union Center, NC0166
301 South College Street
Charlotte, North Carolina  28288-0166
Attention:  Syndication Agency Services

Ladies and Gentlemen:

______Reference is made to that  certain  Sixth  Amended and  Restated  Credit
Agreement  dated as of October 26,  2000 (as  amended,  restated or  otherwise
modified,  the "Credit Agreement"),  by and among Commercial Net Lease Realty,
Inc.,  Net Lease Realty I, Inc.,  Net Lease Realty II, Inc.,  Net Lease Realty
III,  Inc.,  Net  Lease  Realty  IV,  Inc.,  and  Net  Lease  Funding,   Inc.,
corporations  organized  under  the  laws  of  Maryland   (collectively,   the
"Borrowers"),   the  Banks  listed  on  the   signature   pages  thereof  (the
"Lenders"),  and First Union  National Bank, as the Agent.  Capitalized  terms
not  otherwise  defined  herein are used herein with the  respective  meanings
given them in the Credit Agreement.

______The  Borrowers  hereby request Bid Rate Quotes for the following  proposed
Bid Rate Borrowings:

     Borrowing Date             Amount1                Interest Period2
     --------------             -------                -----------------

  ___________, ______       $______________            ___________ days

______________________________
1  Minimum amount of $5,000,000 or larger multiple of $500,000.
2. No less than 7 days and up to 180 days after  the borrowing date and must end
   on a Business Day.

                           COMMERCIAL NET LEASE REALTY, INC.,
                           a Maryland corporation

                           By:________________________________________________
                           Kevin Habicht
                           Executive Vice President and Chief Financial Officer

                           Address:  450 S. Orange Avenue, Suite 900
                                     Orlando, Florida 32801

                           NET LEASE REALTY I, INC.,
                           a Maryland corporation

                           By:________________________________________________
                           Kevin Habicht
                           Executive Vice President and Chief Financial Officer

                           Address:  450 S. Orange Avenue, Suite 900
                                     Orlando, Florida 32801

                           NET LEASE REALTY II, INC.,
                           a Maryland corporation

                           By:________________________________________________
                           Kevin Habicht
                           Executive Vice President and Chief Financial Officer

                           Address:  450 S. Orange Avenue, Suite 900
                                     Orlando, Florida 32801

                           NET LEASE REALTY III, INC.,
                           a Maryland corporation

                           By:________________________________________________
                           Kevin Habicht
                           Executive Vice President and Chief Financial Officer

                           Address:  450 S. Orange Avenue, Suite 900
                                     Orlando, Florida 32801

                           NET LEASE REALTY IV, INC.,
                           a Maryland corporation

                           By:________________________________________________
                           Kevin Habicht
                           Executive Vice President and Chief Financial Officer

                           Address:  450 S. Orange Avenue, Suite 900
                                     Orlando, Florida 32801

                           NET LEASE FUNDING, INC.,
                           a Maryland corporation

                           By:________________________________________________
                           Kevin Habicht
                           Executive Vice President and Chief Financial Officer

                           Address:  450 S. Orange Avenue, Suite 900
                                     Orlando, Florida 32801

<PAGE>

                                   EXHIBIT "I"

                             FORM OF BID RATE QUOTE

                            __________________,_____

First Union National Bank
One First Union Center, NC0166
301 South College Street
Charlotte, North Carolina  28288-0166
Attention:  Syndication Agency Services

Ladies and Gentlemen:

      Reference is made to that  certain  Sixth  Amended and  Restated  Credit
Agreement  dated as of October 26,  2000 (as  amended,  restated or  otherwise
modified,  the "Credit Agreement"),  by and among Commercial Net Lease Realty,
Inc.,  Net Lease Realty I, Inc.,  Net Lease Realty II, Inc.,  Net Lease Realty
III,  Inc.,  Net  Lease  Realty  IV,  Inc.,  and  Net  Lease  Funding,   Inc.,
corporations  organized  under  the  laws  of  Maryland   (collectively,   the
"Borrowers"),   the  Banks  listed  on  the   signature   pages  thereof  (the
"Lenders"),  and First Union  National Bank, as the Agent.  Capitalized  terms
not  otherwise  defined  herein are used herein with the  respective  meanings
given them in the Credit Agreement.

      In response to the Borrowers' Bid Rate Quote Request dated  _____________,
19__,  the  undersigned  hereby  makes the  following  Bid Rate  Quote(s) on the
following terms:

      1.    Quoting Lender:____________________________

      2.    Person to contact at quoting Lender:____________________________

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

  Borrowing Date       Amount1        Interest Period      Bid Rate
  --------------       -------        ---------------      --------

__________, 19___   $_____________     _________days       __________%

                          [Signature on Following Page]

_____________________________
1  Minimum amount of $5,000,000 or larger multiple of $500,000.

<PAGE>

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

                           By:________________________________________________
                           Name: _____________________________________________
                           Title: ____________________________________________

<PAGE>

                                   EXHIBIT "J"

                        FORM OF BID RATE QUOTE ACCEPTANCE

                            __________________, 19__

First Union National Bank
One First Union Center, NC0166
301 South College Street
Charlotte, North Carolina  28288-0166
Attention:  Syndication Agency Services

Ladies and Gentlemen:

      Reference is made to that  certain  Sixth  Amended and  Restated  Credit
Agreement  dated as of October 26,  2000 (as  amended,  restated or  otherwise
modified,  the "Credit Agreement"),  by and among Commercial Net Lease Realty,
Inc.,  Net Lease Realty I, Inc.,  Net Lease Realty II, Inc.,  Net Lease Realty
III,  Inc.,  Net  Lease  Realty  IV,  Inc.,  and  Net  Lease  Funding,   Inc.,
corporations  organized  under  the  laws  of  Maryland   (collectively,   the
"Borrowers"),   the  Banks  listed  on  the   signature   pages  thereof  (the
"Lenders"),  and First Union  National Bank, as the Agent.  Capitalized  terms
not  otherwise  defined  herein are used herein with the  respective  meanings
given them in the Credit Agreement.

      The Borrowers hereby accept the following offer(s) of Bid Rate Quotes:

       Quote Date            Quoting Lender         Amount Accepted1
       ----------            --------------         ----------------

  ____________, 19____     __________________       $_______________

  ____________, 19____     __________________       $_______________

  ____________, 19____     __________________       $_______________

_________________________________
1  Minimum amount of $5,000,000 or larger multiple of $500,000.

<PAGE>

                            COMMERCIAL NET LEASE REALTY, INC.,
                            a Maryland corporation

                            By:_____________________________________________
                            Kevin Habicht
                            Executive Vice President and Chief Financial Officer

                            Address:  450 S. Orange Avenue, Suite 900
                                      Orlando, Florida 32801

                            NET LEASE REALTY I, INC.,
                            a Maryland corporation

                            By:_____________________________________________
                            Kevin Habicht
                            Executive Vice President and Chief Financial Officer

                            Address:  450 S. Orange Avenue, Suite 900
                                      Orlando, Florida 32801

                            NET LEASE REALTY II, INC.,
                            a Maryland corporation

                            By:_____________________________________________
                            Kevin Habicht
                            Executive Vice President and Chief Financial Officer

                            Address:  450 S. Orange Avenue, Suite 900
                                      Orlando, Florida 32801

                            NET LEASE REALTY III, INC.,
                            a Maryland corporation

                            By:_____________________________________________
                            Kevin Habicht
                            Executive Vice President and Chief Financial Officer

                            Address:  450 S. Orange Avenue, Suite 900
                                      Orlando, Florida 32801

                            NET LEASE REALTY IV, INC.,
                            a Maryland corporation

                            By:_____________________________________________
                            Kevin Habicht
                            Executive Vice President and Chief Financial Officer

                            Address:  450 S. Orange Avenue, Suite 900
                                      Orlando, Florida 32801

                            NET LEASE FUNDING, INC.,
                            a Maryland corporation

                            By:_____________________________________________
                            Kevin Habicht
                            Executive Vice President and Chief Financial Officer

                            Address:  450 S. Orange Avenue, Suite 900
                                      Orlando, Florida 32801

<PAGE>

                                   EXHIBIT "K"

                            FORM OF JOINDER AGREEMENT

      THIS JOINDER  AGREEMENT  dated as of  ____________,  ____,  executed and
delivered by  ______________________,  a _____________ (the "New Borrower") in
favor of  (a) FIRST  union  national  bank,  in its  capacity  as  Agent  (the
"Agent") for the Banks under that certain  Sixth  Amended and Restated  Credit
Agreement dated as of October 26, 2000 (as the same may be amended,  restated,
supplemented  or otherwise  modified from time to time in accordance  with its
terms,  the "Credit  Agreement"),  by and among  Commercial  Net Lease realty,
inc.,  NET LEASE RELTY I, INC., NET LEASE RELTY II, INC., NET LEASE RELTY III,
INC.,  NET LEASE RELTY IV, INC.  and NET LEASE  FUNDING,  INC.  (collectively,
the "Borrowers"),  FIRST UNION NATIONAL BANK, as the Agent (the "Agent"),  and
the financial  institutions which are, or may from time to time become, listed
on the signature  pages thereof  (together with their  successors and assigns,
individually a "Bank" and collectively the "Banks").

      WHEREAS,  pursuant to the Credit  Agreement,  the Agent and the Banks have
agreed to make available to the Borrowers  certain  financial  accommodations on
the terms and conditions set forth in the Credit Agreement;

      WHEREAS, the Borrowers, the New Borrower and the other Subsidiaries of the
Borrowers,  though separate legal entities, are mutually dependent on each other
in the conduct of their  respective  businesses as an  integrated  operation and
have determined it to be in their mutual best interests to obtain financing from
the Agent and the Banks through their collective efforts; and

      WHEREAS,  the New Borrower's execution and delivery of this Agreement is a
condition to the Agent and the Banks making such financial accommodations to the
New Borrower.

      NOW,  THEREFORE,  for good and  valuable  consideration,  the  receipt and
sufficiency  of which  are  hereby  acknowledged  by the New  Borrower,  the New
Borrower agrees as follows:

      Section 1. Accession to Credit  Agreement.  The New Borrower hereby agrees
that it is a "Borrower"  under the Credit  Agreement and assumes all obligations
of a  "Borrower"  thereunder,  all as if the New  Borrower  had been an original
signatory  to the Credit  Agreement.  Without  limiting  the  generality  of the
foregoing, the New Borrower hereby:

      (a)  irrevocably  and  unconditionally  undertakes,  upon its  becoming  a
Borrower,  to perform all the obligations  expressed to be undertaken  under the
Credit Agreement and the other Loan Documents by a Borrower,  including  without
limitation the due and punctual  payment and  performance  when due,  whether at
stated  maturity,  by  acceleration  or  otherwise,  of all  obligations  of the
Borrowers under the Credit Agreement and the other Loan Documents;

      (b) makes to the Agent  and the  Banks as of the date  hereof  each of the
representations  and warranties  contained in Section 4 of the Credit  Agreement
and agrees to be bound by each of the covenants contained in Sections 6 and 7 of
the Credit Agreement; and

      (c)   consents  and  agrees to each  provision  set forth in the  Credit
Agreement.

      SECTION  2.  GOVERNING  LAW.  THIS  AGREEMENT  SHALL BE  GOVERNED  BY, AND
CONSTRUED  AND  ENFORCED IN  ACCORDANCE  WITH,  THE LAWS OF THE STATE OF FLORIDA
APPLICABLE  TO CONTRACTS  EXECUTED,  AND TO BE FULLY  PERFORMED,  IN SUCH STATE,
EXCLUDING  THOSE LAWS RELATING TO THE  RESOLUTION  OF CONFLICTS  BETWEEN LAWS OF
DIFFERENT JURISDICTIONS.

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

                            [Signatures on Next Page]

<PAGE>

      IN WITNESS WHEREOF,  the New Borrower has caused this Joinder Agreement to
be duly executed and delivered under seal by its duly authorized  officers as of
the date first written above.

                                   [NEW BORROWER]

                                   By:______________________________________
                                   Name:____________________________________
                                   Title:___________________________________

                                   ATTEST:

                                   By:______________________________________
                                   Name:____________________________________
                                   Title:___________________________________

                                    (CORPORATE SEAL)

                              Address for Notices:

Accepted:

FIRST UNION NATIONAL BANK,
   as Agent

By:________________________________
Name:______________________________
Title:_____________________________

<PAGE>

                                   EXHIBIT "L"

                   FORM OF QUARTERLY COMPLIANCE CERTIFICATE

First Union National Bank
One First Union Center, NC0166
301 South College Street
Charlotte, North Carolina  28288-0166
Attention:  Syndication Agency Services

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

Ladies and Gentlemen:

      Reference is made to that  certain  Sixth  Amended and  Restated  Credit
Agreement  dated as of October 26,  2000 (as  amended,  restated or  otherwise
modified,  the "Credit Agreement"),  by and among Commercial Net Lease Realty,
Inc.,  Net Lease Realty I, Inc.,  Net Lease Realty II, Inc.,  Net Lease Realty
III,  Inc.,  Net  Lease  Realty  IV,  Inc.,  and  Net  Lease  Funding,   Inc.,
corporations  organized  under  the  laws  of  Maryland   (collectively,   the
"Borrowers"),   the  Banks  listed  on  the   signature   pages  thereof  (the
"Lenders"),  and First Union  National Bank, as the Agent.  Capitalized  terms
used herein, and not otherwise defined herein,  have their respective meanings
given them in the Credit Agreement.

      Pursuant  to  Section  6.1.(a) of the Credit  Agreement,  the  undersigned
hereby certifies to the Agent and the Lenders as follows:

      (1)  The  undersigned  is  the  chief  financial  officer  of  each of the
Borrowers.

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

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

      (4)  The  representations  and  warranties  made  or  deemed  made  by the
Borrowers in the Loan Documents are true and correct in all material respects on
and as of the date  hereof  except to the extent that such  representations  and
warranties  expressly  relate  solely to an  earlier  date (in  which  case such
representations  and  warranties  shall have been true and accurate on and as of
such earlier date) and except for changes in factual circumstances  specifically
and expressly permitted under the Credit Agreement.

      (5)  Attached    hereto    as   Schedule 1   are    reasonably    detailed
calculations  establishing  whether or not the  Borrowers  were in  compliance
with the covenants contained in Section 6.2. of the Credit Agreement.

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

                                   _________________________________________
                                   Title: Chief Financial Officer of each of
                                         Commercial Net Lease Realty, Inc.,
                                         Net Lease Realty I, Inc.,
                                         Net Lease Realty II, Inc.,
                                         Net Lease Realty III, Inc.,
                                         Net Lease Realty IV, Inc., and
                                         Net Lease Funding, Inc.

<PAGE>

                                     Schedule 1

                          [Calculations to be Attached]

<PAGE>

                                   EXHIBIT "M"

                              FORM OF BID RATE NOTE

                                                  As of October 26, 2000
                                               Charlotte, North Carolina

      FOR VALUE RECEIVED, the undersigned,  COMMERCIAL NET LEASE REALTY, INC., a
Maryland corporation ("CNLR"),  NET LEASE REALTY I, INC., a Maryland corporation
("NET I"), NET LEASE  REALTY II, a Maryland  corporation  ("NET II"),  NET LEASE
REALTY III, INC., a Maryland corporation ("NET III"), NET LEASE REALTY IV, INC.,
a Maryland  corporation  ("NET IV"),  and NET LEASE  FUNDING,  INC.,  a Maryland
corporation  ("Funding";  CNLR,  NET I, NET II, NET III,  NET IV and Funding are
collectively  referred  to herein as the  "Borrowers"),  jointly  and  severally
promise to pay to the order of  __________________  (the  "Lender"),  under that
certain  Sixth  Amended and Restated  Credit  Agreement of even date herewith as
amended  and in effect  from time to time  (the  "Agreement"),  by and among the
undersigned,  the Lender and the other Banks,  and First Union National Bank, as
Agent (the  "Agent"),  in care of the Agent,  to First Union  National Bank, One
First Union Center, Charlotte, North Carolina 28288, or at such other address as
may be specified in writing by the Agent to the Borrowers,  the aggregate unpaid
principal amount of Bid Rate Loans made by the Lender to the Borrowers under the
Agreement,  and to pay interest on the unpaid  principal amount of each such Bid
Rate Loan, at the rate and at the times specified in the Agreement.  Capitalized
terms used but not defined  herein shall have the meanings  assigned those terms
in the Agreement.

      In no event shall the interest rate  applicable  to principal  outstanding
under  this  Bid  RateNote  exceed  the  maximum  rate of  interest  allowed  by
applicable  law,  as amended  from time to time.  The Lender  does not intend to
charge any amount of interest or other fees or charges in the nature of interest
that  exceeds  the maximum  rate  allowed by  applicable  law. If any payment of
interest  or in the  nature of  interest  hereunder  would  cause the  foregoing
interest  rate  limitation  to be exceeded,  then such excess  payment  shall be
credited as a payment of principal unless the undersigned notifies the Lender in
writing that the undersigned  wishes to have such excess sum returned,  together
with interest at the rate specified in Section 687.04(2),  Florida Statutes,  or
any successor statute.

      Principal  outstanding  hereunder  shall  be due and  payable  in a single
payment at the Revolving Credit Maturity Date. Interest shall be payable at such
times  specified  in the  Agreement,  as long as any  principal  amount  remains
outstanding hereunder, and at the Revolving Credit Maturity Date.

      This  Bid  Rate  Note is  issued  pursuant  to,  and is  subject  to,  the
provisions  of the  Agreement.  Reference is made to such Loan  Documents  for a
description of additional rights and obligations of the undersigned, the Lender,
including events of default,  rights of prepayment and rights of acceleration of
maturity in the event of default.

      The  undersigned  agree to pay or  reimburse  the  Lender for all of their
costs and expenses  incurred in  connection  with  administration,  supervision,
collection,  or  enforcement,  or preservation of any rights under this Note and
the Loan Documents, including, without limitation, the fees and disbursements of
counsel for the Lender,  including  attorneys'  fees out of court,  in trial, on
appeal, in bankruptcy proceedings, or otherwise.

      ALL  PERSONS  NOW OR AT ANY TIME  LIABLE FOR  PAYMENT OF THIS NOTE  HEREBY
WAIVE  PRESENTMENT,  PROTEST,  NOTICE OF PROTEST,  AND NOTICE OF  DISHONOR.  THE
UNDERSIGNED  EXPRESSLY  CONSENT TO ANY  EXTENSIONS AND RENEWALS OF THIS BID RATE
NOTE,  IN  WHOLE  OR IN  PART,  AND  ALL  DELAYS  IN TIME OF  PAYMENT  OR  OTHER
PERFORMANCE  UNDER  THIS BID RATE NOTE WHICH MAY BE GRANTED AT ANY TIME AND FROM
TIME TO TIME,  WITHOUT  LIMITATION AND WITHOUT ANY NOTICE OR FURTHER  CONSENT OF
THE UNDERSIGNED.  ALL NOTICES,  DEMANDS,  AND OTHER  COMMUNICATIONS  REQUIRED OR
PERMITTED  IN  CONNECTION  WITH THIS BID RATE NOTE  SHALL BE GIVEN IN THE MANNER
SPECIFIED IN THE AGREEMENT.

      Upon the  occurrence  of an Event of  Default,  the unpaid  balance of the
principal amount of this Bid Rate Note may become, or may be declared to be, due
and payable in the manner,  upon the conditions and with the effect  provided in
the Agreement.

      The  remedies of the  Lender,  as  provided  herein,  or in any other Loan
Document  are  cumulative  and  concurrent  (except  as may be  provided  in the
Agreement) and may be pursued singularly,  successively, or together, and may be
exercised as often as the occasion therefor shall arise.

      This Bid Rate Note shall be governed by, and construed and  interpreted in
accordance with, the laws of the State of Florida, excluding those laws relating
to the resolution of conflicts between the laws of different jurisdictions.

<PAGE>

      IN WITNESS  WHEREOF,  the undersigned have caused this Bid Rate Note to be
executed as of the day and year first above written.

                            COMMERCIAL NET LEASE REALTY, INC.,
                            a Maryland corporation

                            By:______________________________________________-
                            Kevin Habicht
                            Executive Vice President and Chief Financial Officer

                              Address:  450 S. Orange Avenue, Suite 900
                                        Orlando, Florida 32801

                            NET LEASE REALTY I, INC.,
                            a Maryland corporation

                            By:______________________________________________
                            Kevin Habicht
                            Executive Vice President and Chief Financial Officer

                              Address:  450 S. Orange Avenue, Suite 900
                                        Orlando, Florida 32801

                            NET LEASE REALTY II, INC.,
                            a Maryland corporation

                            By:______________________________________________
                            Kevin Habicht
                            Executive Vice President and Chief Financial Officer

                              Address:  450 S. Orange Avenue, Suite 900
                                        Orlando, Florida 32801

                            NET LEASE REALTY III, INC.,
                            a Maryland corporation

                            By:______________________________________________-
                            Kevin Habicht
                            Executive Vice President and Chief Financial Officer

                              Address:  450 S. Orange Avenue, Suite 900
                                        Orlando, Florida 32801

                            NET LEASE REALTY IV, INC.,
                            a Maryland corporation

                            By:______________________________________________-
                            Kevin Habicht
                            Executive Vice President and Chief Financial Officer

                              Address:  450 S. Orange Avenue, Suite 900
                                        Orlando, Florida 32801

                            NET LEASE FUNDING, INC.,
                            a Maryland corporation

                            By:______________________________________________
                            Kevin Habicht
                            Executive Vice President and Chief Financial Officer

                              Address:  450 S. Orange Avenue, Suite 900
                                        Orlando, Florida 32801

<PAGE>

                           SCHEDULE OF BID RATE LOANS

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

                                                       Unpaid
                    Principal         Amount Paid     Principal      Notation
 Date of Loan     Amount of Loan      or Prepaid       Amount        Made By
 ------------     --------------      -----------     ---------      --------

<PAGE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}]]