Document:

<PAGE>   1

                                                                   Exhibit 10.44

                                   $35,000,000

                      UNSECURED REVOLVING CREDIT AGREEMENT

                                      among

                      LEXINGTON CORPORATE PROPERTIES TRUST,
                      LEPERCQ CORPORATE INCOME FUND, L.P.,
                     LEPERCQ CORPORATE INCOME FUND II L.P.,
                             Jointly and Severally;

                                       and

                               FLEET NATIONAL BANK

                           Dated as of March 30, 2001
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<TABLE>
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SECTION 1. DEFINITIONS ............................................................      1

  DEFINED TERMS ...................................................................      1

  1.2. COMPUTATION OF TIME PERIODS ................................................      1

  1.3. ACCOUNTING TERMS ...........................................................      1

  1.4. OTHER TERMS ................................................................      2

SECTION 2. AMOUNT AND TERMS OF LOANS ..............................................      2

  2.1. LOAN FACILITY ..............................................................      2

  2.2. AUTHORIZED AGENTS ..........................................................      2

  2.3. PROMISE TO REPAY; EVIDENCE OF INDEBTEDNESS; BORROWERS' OBLIGATIONS; ........      3

  2.4. JOINT AND SEVERAL LIABILITY OF THE BORROWERS AND GUARANTORS ................      5

  2.5. PROCEDURE FOR BORROWING UNDER THE REVOLVING CREDIT FACILITY ................      7

  2.6. INTENTIONALLY OMITTED ......................................................      8

  2.7. INTEREST ON THE LOANS AND OTHER OBLIGATIONS ................................      8

  2.8. DURATION AND DETERMINATION OF INTEREST PERIOD; DETERMINATION OF INTEREST ...      9

  2.9. OPTIONAL PREPAYMENTS; MANDATORY PREPAYMENTS ................................     11

  2.10. COMPUTATION OF INTEREST AND FEES ..........................................     11

  2.11. PAYMENTS ..................................................................     11

  2.12. USE OF LOAN PROCEEDS AND LETTERS OF CREDIT ................................     13

  2.13. INCREASED COSTS ...........................................................     13

  2.14. CHANGE IN LAW RENDERING LIBOR LOANS UNLAWFUL ..............................     15

  2.15. LIBOR AVAILABILITY ........................................................     15

  2.16. INDEMNITIES ...............................................................     16

  2.17. FEES ......................................................................     16

  2.18. USURY .....................................................................     17
</TABLE>
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  2.19. UNENCUMBERED ELIGIBLE PROPERTIES ..........................................     17

  2.20. WITHDRAWAL OF UNENCUMBERED ELIGIBLE PROPERTY ..............................     22

  2.21. EXCLUSION OF UNENCUMBERED ELIGIBLE PROPERTIES .............................     22

SECTION 3. LETTERS OF CREDIT ......................................................     22

  3.1. LETTERS OF CREDIT ..........................................................     22

SECTION 4. REPRESENTATIONS AND WARRANTIES .........................................     26

  4.1. FINANCIAL CONDITION ........................................................     26

  4.2. NO MATERIAL ADVERSE EFFECT .................................................     27

  4.3. EXISTENCE; BORROWER'S AND GUARANTOR'S COMPLIANCE WITH LAW ..................     27

  4.4. POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS ..............................     27

  4.5. NO LEGAL BAR ...............................................................     28

  4.6. NO MATERIAL LITIGATION .....................................................     28

  4.7. NO DEFAULT .................................................................     28

  4.8. OWNERSHIP OF PROPERTY; LIENS ...............................................     28

  4.10. FEDERAL REGULATIONS .......................................................     30

  4.11. ERISA .....................................................................     30

  4.12. STATUS AS REIT ............................................................     31

  4.13. INVESTMENT COMPANY ACT ....................................................     31

  4.14. SUBSIDIARIES; OWNERSHIP OF CAPITAL STOCK AND PARTNERSHIP INTERESTS ........     31

  4.15. POLLUTION; HAZARDOUS MATERIALS ............................................     31

  4.16. DECLARATION OF TRUST, PARTNERSHIP AGREEMENT, ETC ..........................     32

  4.17. DISCLOSURES ...............................................................     32

  4.18. GUARANTORS ................................................................     32

SECTION 5. CONDITIONS PRECEDENT ...................................................     32
</TABLE>

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  5.1. CONDITIONS TO LOANS ........................................................     32

  5.2. CONDITIONS PRECEDENT TO ALL SUBSEQUENT LOANS ...............................     35

SECTION 6. AFFIRMATIVE COVENANTS ..................................................     36

  6.1. FINANCIAL STATEMENTS .......................................................     36

  6.2. CERTIFICATES; OTHER INFORMATION ............................................     37

  6.3. PUNCTUAL PAYMENT ...........................................................     38

  6.4. PAYMENT OF OTHER OBLIGATIONS ...............................................     38

  6.5. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE ...........................     38

  6.6. LEASES .....................................................................     38

  6.7. MAINTENANCE OF PROPERTY, INSURANCE .........................................     39

  6.8. INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS .....................     39

  6.9. NOTICES ....................................................................     39

  6.10. REIT REQUIREMENTS .........................................................     40

  6.11. ENVIRONMENTAL ACTIONS .....................................................     40

  6.12. CHANGES IN GAAP ...........................................................     41

  6.13. NYSE LISTING ..............................................................     42

  6.14. INTENTIONALLY OMITTED .....................................................     42

  6.15. MANAGEMENT OF BORROWER AND UNENCUMBERED ELIGIBLE PROPERTY .................     42

  6.16. SUBORDINATION OF PAYABLES TO AFFILIATES ...................................     42

  6.17. SUBORDINATED DEBT .........................................................     42

  6.18. ERISA NOTICES .............................................................     42

  6.19. ERISA COMPLIANCE ..........................................................     44

  6.20. PAYMENT OF TAXES AND CLAIMS ...............................................     44

  6.21. INTER-BORROWER OR GUARANTOR ADVANCES OF LOAN PROCEEDS .....................     44
</TABLE>

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  6.22. SOLVENCY OF GUARANTORS ....................................................     44

  6.23. NO AMENDMENTS TO CERTAIN DOCUMENTS ........................................     44

  6.24. YEAR 2000 .................................................................     44

SECTION 7. NEGATIVE COVENANTS .....................................................     45

  7.1. FINANCIAL COVENANTS ........................................................     45

  7.2. COVENANT CALCULATIONS ......................................................     46

  7.3. RESTRICTED PAYMENTS ........................................................     47

  7.4. DISSOLUTION; MERGER; SALE OF ASSETS; TERMINATION AND OTHER ACTIONS .........     47

  7.5. TRANSACTIONS WITH AFFILIATES ...............................................     47

  7.6. ACCOUNTING CHANGES .........................................................     47

  7.7. NO LIENS ...................................................................     47

  7.8. FISCAL YEAR ................................................................     47

  7.9. CHIEF EXECUTIVE OFFICE .....................................................     47

  7.10. SELF-DIRECTED REIT ........................................................     48

  7.11. LIMITATIONS ON CERTAIN ACTIVITIES .........................................     48

  7.12. DISTRIBUTIONS .............................................................     48

  7.13. ERISA .....................................................................     48

  7.14. COMPLIANCE WITH ENVIRONMENTAL LAWS ........................................     49

  7.15. LIMITATION ON DEBT AND ACTION .............................................     49

SECTION 8. EVENTS OF DEFAULT ......................................................     49

  8.1. EVENTS OF DEFAULT ..........................................................     49

  8.2. REMEDIES ...................................................................     51

  8.3. ANNULMENT OF ACCELERATION ..................................................     51

  8.4. COOPERATION BY EACH BORROWER AND GUARANTOR .................................     52
</TABLE>

                                      -iv-
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SECTION 9. INTENTIONALLY OMITTED ..................................................     52

SECTION 10. GENERAL ...............................................................     52

  10.1. AMENDMENTS AND WAIVERS ....................................................     52

  10.2 MARSHALING; PAYMENTS SET ASIDE .............................................     52

  10.3 COUNTERPARTS; EFFECTIVENESS; INCONSISTENCIES ...............................     52

  10.4 DISCLAIMER BY LENDER .......................................................     53

  10.5 NOTICES; CERTAIN PAYMENTS ..................................................     53

  10.6 NO WAIVERS; CUMULATIVE REMEDIES; ENTIRE AGREEMENT; HEADINGS ................     54

  10.7 SURVIVAL ...................................................................     54

  10.8 PAYMENT OF EXPENSES AND TAXES ..............................................     55

  10.9 FURTHER ASSURANCES .........................................................     55

  10.10 NO BROKERS ................................................................     55

  10.11 CONFIDENTIALITY ...........................................................     56

  10.12 CAPTIONS ..................................................................     56

  10.13 GENDER ....................................................................     56

  10.14 SUCCESSORS ................................................................     56

  10.15 ENTIRE AGREEMENT ..........................................................     56

  10.16 DELAY NOT WAIVER ..........................................................     56

  10.17 SETOFF ....................................................................     56

  10.18 SEVERABILITY ..............................................................     57

  10.19 LENDER'S RIGHT TO PARTICIPATE, ASSIGN AND PLEDGE ..........................     57
    10.19.1 LENDER'S RIGHT TO SELL A PORTION OF A LOAN TO A PROSPECTIVE PARTICIPANT     57
    10.19.2 LENDER'S RIGHT TO SELL A LOAN TO A THIRD PARTY ........................     57
    10.19.3 LENDER'S RIGHT TO PLEDGE ..............................................     58

  10.20 LOST OR DAMAGED LOAN DOCUMENTS ............................................     58

  10.21 CLAIMS AGAINST LENDER .....................................................     58
</TABLE>

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<TABLE>
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     10.21.1 BORROWERS MUST NOTIFY ................................................     58
     10.21.2 REMEDIES .............................................................     58

  10.22 TIME OF THE ESSENCE .......................................................     59

  10.23 PLACE OF DELIVERY .........................................................     59

  10.24 GOVERNING LAW .............................................................     59

  10.25 CONSENT TO JURISDICTION ...................................................     59

  10.26 JURY TRIAL WAIVER .........................................................     59

  10.27 USE OF PROCEEDS (REGULATION U) ............................................     60

  10.28 INTEGRATION ...............................................................     60

SECTION 11. THE BORROWERS' REPRESENTATIVE .........................................     60

  11.1. APPOINTMENT OF BORROWERS' REPRESENTATIVE ..................................     60
</TABLE>

EXHIBITS

         EXHIBIT A    -     DEFINITIONS
         EXHIBIT B    -     FORM OF NOTE
         EXHIBIT C    -     FORM OF NOTICE OF BORROWING
         EXHIBIT D    -     FORM OF CERTIFICATE OF UNENCUMBERED
                            ELIGIBLE PROPERTIES
         EXHIBIT E    -     FORM OF NOTICE OF CONTINUATION/CONVERSION
         EXHIBIT F    -     LIST OF ENVIRONMENTAL REPORTS
         EXHIBIT G    -     RENT ROLL
         EXHIBIT H    -     ORGANIZATIONAL STRUCTURE AND RELATED MATTERS
         EXHIBIT I    -     CERTIFICATE OF COVENANT COMPLIANCE
         EXHIBIT J    -     FORM OF TENANT ESTOPPEL CERTIFICATE
         EXHIBIT K    -     ERISA MATTERS
         EXHIBIT L    -     FORM OF GUARANTY

                                      -vi-
<PAGE>   8
SCHEDULES

         SCHEDULE 1        INITIAL APPROVED UNENCUMBERED ELIGIBLE
                           PROPERTIES AND THEIR OWNERS

                                     -vii-
<PAGE>   9
                      UNSECURED REVOLVING CREDIT AGREEMENT
                           DATED AS OF MARCH 30, 2001

         This UNSECURED REVOLVING CREDIT AGREEMENT (the "AGREEMENT") is made as
of the 30th day of March, 2001, by and among LEXINGTON CORPORATE PROPERTIES
TRUST ("LEXINGTON"), LEPERCQ CORPORATE INCOME FUND L.P. ("LCIF") AND LEPERCQ
CORPORATE INCOME FUND II L.P. ("LCIF II"), jointly and severally (collectively,
the "BORROWERS" and individually, a "BORROWER") acting by and through LEXINGTON
CORPORATE PROPERTIES TRUST ("BORROWERS' REPRESENTATIVE") and FLEET NATIONAL
BANK, a national banking association ("LENDER"),

         WHEREAS, the Borrowers desire to obtain a Revolving Credit Commitment
from Lender pursuant to which Lender will make Loans (as hereinafter defined) to
and for the benefit of one or more of the Borrowers in an amount not to exceed
$35,000,000 (minus the face amount of any Letter of Credit outstanding or
requested hereunder) at any one time; and

         WHEREAS, Lender is willing, on the terms and conditions hereinafter set
forth, to extend a Revolving Credit Commitment and to make Loans to and for the
benefit of the Borrowers.

         NOW, THEREFORE, the parties hereto hereby agree as follows:

         SECTION 1.        DEFINITIONS

         1.1. DEFINED TERMS. As used in this Agreement all capitalized terms not
otherwise defined shall have the meanings set forth on Exhibit A, applicable
both to the singular and the plural forms of the terms defined.

         1.2. COMPUTATION OF TIME PERIODS. In this Agreement, in the computation
of periods of time from a specified date to a later specified date, the word
"FROM" means "FROM AND INCLUDING" and the words "TO" and "UNTIL" each mean "TO
BUT EXCLUDING". Periods of days referred to in this Agreement shall be counted
in calendar days unless Business Days are expressly prescribed. Any period
determined hereunder by reference to a month or months or year or years shall
end on the day in the relevant calendar month in the relevant year, if
applicable, immediately preceding the date numerically corresponding to the
first day of such subsequent period, provided that if such period commences on
the last day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month during which such period is to end),
such period shall, unless otherwise expressly required by the other provisions
of this Agreement, end on the last day of the calendar month.

         1.3. ACCOUNTING TERMS. Subject to Section 6.12, for purposes of this
Agreement, all accounting terms not otherwise defined herein shall have the
meanings assigned to them in conformity with GAAP.
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         1.4. OTHER TERMS. All other terms contained in this Agreement shall,
unless the context indicates otherwise, have the meanings assigned to such terms
by the Uniform Commercial Code to the extent the same are defined therein.

         SECTION 2. AMOUNT AND TERMS OF LOANS

         2.1. LOAN FACILITY.

                  (a) AVAILABILITY. Subject to the terms and conditions set
forth in this Agreement, Lender hereby agrees to make Revolving Credit Loans to
any Borrower from time to time during the period from the Initial Funding Date
to the Business Day next preceding the Revolving Credit Termination Date, in an
amount not to exceed $35,000,000 (minus the face amount of any Letter of Credit
requested or outstanding hereunder) at such time. Subject to the provisions of
this Agreement, any Borrower may repay any outstanding Revolving Credit Loan on
any day which is a Business Day and any amounts so repaid may be reborrowed by
any Borrower, up to the amount available under this Section 2.1(a), at the time
of such Borrowing, until the Business Day next preceding the Revolving Credit
Termination Date.

                  (b) REVOLVING CREDIT TERMINATION DATE. The Revolving Credit
Commitment shall terminate, and all outstanding Obligations shall be paid in
full on the Revolving Credit Termination Date. Lender's obligation to make Loans
shall terminate on the Business Day next preceding the Revolving Credit
Termination Date.

         2.2. AUTHORIZED AGENTS. On the Closing Date and from time to time
thereafter, the Borrowers' Representative shall deliver to the Lender a
certificate from a Responsible Officer setting forth the names of the employees
and agents authorized to request Loans and Letters of Credit for each Borrower
and to request a conversion/continuation of any Loan and containing a specimen
signature of each such employee or agent. The employees and agents so authorized
shall also be authorized to act for any Borrower in respect of all other matters
relating to the Loan Documents. The Lender shall be entitled to rely
conclusively on such employee's or agent's authority to request such Loan or
Letter of Credit or such conversion/continuation until the Lender receive
written notice to the contrary. The Lender shall not have any duty to verify the
authenticity of the signature appearing on any written Notice of Borrowing or
Notice of Conversion/Continuation or any other document, and, with respect to an
oral request for such a Loan or Letter of Credit or such
conversion/continuation, the Lender shall have no duty to verify the identity of
any person representing himself or herself as one of the employees or agents
authorized to make such request or otherwise to act on behalf of such Borrower.
Lender shall not incur any liability to any Borrower or any other Person in
acting upon any telephonic or facsimile notice referred to above which the
Lender believes to have been given by a person duly authorized to act on behalf
of such Borrower and such Borrower hereby indemnifies and holds harmless the
Lender from any loss or expense Lender might incur in acting in good faith as
provided in this Section 2.2.

         2.3. PROMISE TO REPAY; EVIDENCE OF INDEBTEDNESS; BORROWERS'
              OBLIGATIONS;

                                     - 2 -
<PAGE>   11
                  JOINT AND SEVERAL LIABILITY.

                  (a) PROMISE TO REPAY. Each Borrower hereby, jointly and
severally, agrees to pay when due the principal amount of each Loan, and further
agrees to pay all unpaid interest accrued thereon, in accordance with the terms
of this Agreement and the Note. Each Borrower shall execute and deliver to
Lender on the Closing Date, a joint and several promissory note, substantially
in the form of Exhibit B, with appropriate insertions, evidencing the Loans and
thereafter shall execute and deliver such other promissory notes substantially
in the form of Exhibit B as are necessary to evidence the Loans owing to the
Lender after giving effect to any assignment thereof.

                  (b) LOAN RECORDS. Lender shall maintain in accordance with its
usual practice a record (a "LOAN ACCOUNT") evidencing the Indebtedness of the
Borrowers to Lender resulting from each Loan owing to Lender from time to time,
including the amount of principal and interest payable and paid to Lender from
time to time hereunder and under the Note.

                  (c) ENTRIES BINDING. The entries made in the Loan Account
shall be conclusive and binding for all purposes, absent manifest error.

                  (d) BORROWERS' OBLIGATIONS.

                           (i) Upon any Event of Default each Borrower jointly,
severally and unconditionally promises to pay to the Lender such amounts as are
necessary to cure the Event of Default or, at the option of the Lender as
provided in Section 8.2, to pay the outstanding Obligations in full.

                           (ii) Each Borrower's Obligation is unconditional
except as expressly set forth herein, and each Borrower agrees that the Lender,
upon the occurrence of an Event of Default, shall not be required to assert any
claim or cause of action against the Borrowers' Representative or any other
Borrower or Guarantor before asserting any claim or cause of action against a
specific Borrower under this Agreement. Each Borrower further agrees that the
Lender shall not be required to pursue or foreclose on any Collateral that it
may receive from any Borrower or Guarantor as security for any of the
Obligations before making a claim or asserting a cause of action against a
specific Borrower under this Agreement.

                           (iii) Lender's failure to perfect (by recording or
otherwise), protect, secure or insure any security interest or lien in any
Collateral given as security for the Obligations or any other collateral now or
hereafter securing all or any part of the Obligations shall not release any
Borrower from its liabilities and obligations under this Agreement.

                           (iv) Except as otherwise expressly provided herein or
in the Loan Documents, presentment, protest, demand, and notice of protest and
demand, and notice of receipt of any and all Collateral, and of the exercise of
possessory remedies or foreclosure on any and all Collateral received by Lender
from any Borrower or Guarantor are hereby waived.

                                     - 3 -
<PAGE>   12
                           (v) No Borrower's Obligation under this Agreement
shall be affected, modified, or impaired by the voluntary or involuntary
liquidation, dissolution, sale, or other disposition of all or substantially all
of the assets, marshaling of assets and liabilities, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangements, composition with creditors or readjustment of, or other similar
proceedings affecting any other Borrower or Guarantor or the Borrowers'
Representative, or any of the assets belonging to any of them, nor shall this
Agreement be affected, modified, or impaired by the invalidity of the Note or
any of the other Loan Documents.

                           (vi) Without notice to any other Borrower or
Guarantor or the Borrowers' Representative, without the consent of a specific
Borrower or Borrowers' Representative, the Lender may:

                                    (a) grant a specific Borrower or Guarantor
                           extensions of the time for payment of the Obligations
                           or any part hereof;

                                    (b) renew any of the Obligations;

                                    (c) grant a specific Borrower or Guarantor
                           extensions of time for performance of agreements or
                           other indulgences;

                                    (d) at any time release any Collateral, or
                           any mortgage, deed of trust or security interest in
                           any Collateral, that may hereafter secure any of the
                           Obligations;

                                    (e) compromise, settle, release, or
                           terminate any or all of the obligations, covenants,
                           or agreements of any specific Borrower or Guarantor
                           under the Note or other Loan Documents;

                                    (f) at any time release any Guarantor from
                           its Guaranty of any of the Obligations; and

                                    (g) with a specific Borrower's written
                           consent, modify or amend any obligation, covenant, or
                           agreement of such Borrower as set forth in its Note
                           or any of the other Loan Documents (and such
                           amendments shall nevertheless be binding upon the
                           other Borrowers).

                           (vii) This Agreement shall continue to be effective,
or be reinstated, as the case may be, if at time any whole or partial payment or
performance of any Obligations is or is sought to be rescinded or must otherwise
be restored or returned by the Lender upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of any Borrower or Guarantor upon or
as a result of the appointment of a receiver, intervenor, or conservator of, or
trustee or similar officer for, any Borrower or Guarantor or for any substantial
part of its property, or

                                     - 4 -
<PAGE>   13
otherwise, all as though such payments and performance had not been made, in any
case to the extent of the performance rescinded or payments restored or
returned. This Agreement and each Borrower's Obligations hereunder shall not be
affected in any way by the transfer or other disposition of any Collateral
granted to Lender whether by deed, operation of law, or otherwise.

                           (viii) Notwithstanding any provision contained in
this Agreement or any Loan Document to the contrary, in the event of any
bankruptcy or insolvency proceeding involving LCIF, LCIFII, or any Guarantor or
in the event of any challenge to the full enforceability of all or any of the
Loan Documents by any creditor of LCIF, LCIFII, or any Guarantor or a trustee,
receiver or debtor-in-possession of, for or in respect of LCIF, LCIFII, or any
Guarantor the liability of LCIF, LCIFII, or any Guarantor under the Loan
Documents shall be limited to the lesser of the following amounts minus, in
either case, one dollar ($1.00):

                  (a) the lowest amount which would render the undertakings of
LCIF, LCIFII, or any Guarantor under the Loan Documents a fraudulent conveyance
under the laws of the State of New York or other similar or analogous law or
statute of the state having jurisdiction over the subject matter; or

                  (b) the lowest amount which would render the undertakings of
LCIF, LCIFII, or any Guarantor under the Loan Documents a fraudulent transfer
under Section 548 of the Bankruptcy Code of 1978, as amended.

        Section 2.3 (d) (viii) shall control every other provision of the Loan
Documents except, however, this provision shall not be construed to prohibit a
valuation of the assets of LCIF LCIFII, or any Guarantor for an amount exceeding
(a) or (b) above, minus $1.00, at a date subsequent to the date hereof,
whereupon the individual liability of LCIF LCIFII, or any Guarantor under the
Loan Documents shall increase with the value of such assets up to a maximum of
$35,000,000.

         2.4 JOINT AND SEVERAL LIABILITY OF THE BORROWERS AND GUARANTORS.

                  (a) Each of the Borrowers and Guarantors is or will be
accepting joint and several liability hereunder and under the other Loan
Documents in consideration of the financial accommodations to be provided by the
Lender under this Agreement, for the mutual benefit, directly and indirectly, of
each of the Borrowers and Guarantors and in consideration of the undertakings of
each other Borrower and Guarantor to accept joint and several liability for the
Obligations.

                  (b) Each of the Borrowers and Guarantors, jointly and
severally, hereby irrevocably and unconditionally accepts, not merely as a
surety but also as a co-debtor, joint and several liability with the other
Borrowers, with respect to the payment and performance of all of the Obligations
(including, without limitation, any Obligations arising under this Section
2.4(b)), it being the intention of the parties hereto that all the Obligations
shall be the joint and several

                                      -5-
<PAGE>   14
Obligations of each of the Borrowers and Guarantors without preferences or
distinction among them.

                  (c) If and to the extent that any of the Borrowers or
Guarantors shall fail to make any payment with respect to any of the Obligations
as and when due or to perform any of the Obligations in accordance with the
terms thereof, then in each such event, subject to the grace periods set forth
therein, the other Borrowers and Guarantors will make such payment with respect
to, or perform, such Obligation.

                  (d) The Obligations of each of the Borrowers and Guarantors
under the provisions of this Section 2.4 constitute full recourse Obligations of
each of the Borrowers and Guarantors enforceable against each such Person to the
full extent of its properties and assets, irrespective of the validity,
regularity or enforceability of this Agreement or any other circumstance
whatsoever.

                  (e) Except as otherwise expressly provided in this Agreement
or the other Loan Documents, each of the Borrowers and Guarantors hereby waives
notice of acceptance of its joint and several liability, notice of any Loans
made under this Agreement, notice of any action at any time taken or omitted by
the Lender under or in respect of any of the Obligations, and, generally, to the
extent permitted by applicable law, all demands, notices and other formalities
of every kind in connection with this Agreement. Except as otherwise expressly
provided in this Agreement or the other Loan Documents, each of the Borrowers
and Guarantors hereby assents to, and waives notice of, any extension or
postponement of the time for the payment of any of the Obligations, the
acceptance of any payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
the Lender at any time or times in respect of any default by any of the
Borrowers or Guarantors in the performance or satisfaction of any term,
covenant, condition or provision of this Agreement, any and all other
indulgences whatsoever by the Lender in respect of any of the Obligations, and
the taking, addition, substitution or release, in whole or in part, at any time
or times, of any security for any of the Obligations or the addition,
substitution or release, in whole or in part, of any of the Borrowers or
Guarantors. Without limiting the generality of the foregoing, each of the
Borrowers and Guarantors assents to any other action or delay in acting or
failure to act on the part of the Lender with respect to the failure by any of
the Borrowers or Guarantors to comply with any of its respective Obligations,
including, without limitation, any failure strictly or diligently to assert any
right or to pursue any remedy or to comply fully with applicable laws or
regulations thereunder, which might, but for the provisions of this Section 2.4,
afford grounds for terminating, discharging or relieving any of the Borrowers or
Guarantors, in whole or in part, from any of its Obligations under this Section
2.4, it being the intention of each of the Borrowers and Guarantors that, so
long as any of the Obligations hereunder remain unsatisfied, the obligations of
such Borrowers and Guarantors under this Section 2.4 shall not be discharged
except by performance and then only to the extent of such performance. The
Obligations of each of the Borrowers and Guarantors under this Section 2.4 shall
not be diminished or rendered unenforceable by any winding up, reorganization,
arrangement, liquidation, re-construction or similar proceeding with respect to
any of the Borrowers and

                                     - 6 -
<PAGE>   15
Guarantors or the Lender. The joint and several liability of the Borrowers and
Guarantors hereunder shall continue in full force and effect notwithstanding any
absorption, merger, amalgamation or any other change whatsoever in the name,
membership, constitution or place of formation of any of the Borrowers and
Guarantors or the Lender.

                  (f) The provisions of this Section 2.4 are made for the
benefit of the Lender and their permitted successors and assigns, and may be
enforced against any or all of the Borrowers and Guarantors as often as occasion
therefor may arise and without requirement on the part of the Lender first to
marshal any of its claims or to exercise any of its rights against any other
Borrower or Guarantor or to exhaust any remedies available to them against any
other Borrower or Guarantor or to resort to any other source or means of
obtaining payment of any of the Obligations hereunder or to elect any other
remedy. The provisions of this Section 2.4 shall remain in effect until all of
the Obligations shall have been paid in full or otherwise fully satisfied. If at
any time, any payment, or any part thereof, made in respect of any of the
Obligations, is rescinded or must otherwise be restored or returned by the
Lender upon the insolvency, bankruptcy or reorganization of any of the Borrowers
or Guarantor or otherwise, the provisions of this Section 2.4 will forthwith be
reinstated in effect, as though such payment had not been made.

         2.5. PROCEDURE FOR BORROWING UNDER THE REVOLVING CREDIT FACILITY.

                  (a) NOTICE OF BORROWING. Whenever any Borrower desires to
borrow under Section 2.1, Borrowers' Representative shall deliver to Lender a
notice of borrowing (a "NOTICE OF BORROWING") substantially in the form of
Exhibit C accompanied by a Certificate of Unencumbered Eligible Properties no
later than 10:00 A.M. (New York time) at least three (3) Business Days in
advance of the proposed Funding Date for any Libor Loan and no later than the
Business Day immediately preceding the proposed Funding Date for any Base Rate
Loan. The Notice of Borrowing shall specify and include (as appropriate):

                           (i) the Borrower and proposed Funding Date (which
shall be a Business Day);

                           (ii) the amount of the proposed Borrowing (which
amount shall be in a minimum aggregate amount of $1,000,000 and integral
multiples of $100,000 in excess of that amount);

                           (iii) whether such Loans will be Base Rate Loans or
Libor Loans and, if Libor Loans are specified, the initial Interest Period
requested for such Libor Loans;

                           (iv) the account into which the net proceeds of the
requested Borrowing are to be credited;

                                     - 7 -
<PAGE>   16
                           (v) a statement as to whether the representations and
warranties contained in the Loan Documents are true, correct and accurate in all
material respects to the same extent as though made on and as of the date of
such Notice of Borrowing;

                           (vi) a statement as to whether any Default or Event
of Default has occurred and is continuing or would result from the proposed
Borrowing; and

                           (vii) a statement as to whether the Borrowers have
met and maintained the Preferred Interest Rate Standard and if so for what
period of time.

        If Borrowers' Representative fails to specify the type of Revolving
Credit Loan (i.e. Base Rate Loan or Libor Loan) or an initial Interest Period,
Borrowers' Representative will be deemed, in each case, to have requested a Base
Rate Loan.

                  (b) MAKING OF REVOLVING CREDIT LOANS. Subject to the
fulfillment of the conditions precedent set forth in Section 5.1 or Section 5.2,
as applicable, the Lender shall make the proceeds of each Loan available to the
Borrowers' Representative at the Lender's office in Boston, Massachusetts on
such Funding Date and shall disburse such proceeds in accordance with the
Borrowers' Representative's disbursement instructions set forth in the
applicable Notice of Borrowing.

         2.6. INTENTIONALLY OMITTED.

         2.7. INTEREST ON THE LOANS AND OTHER OBLIGATIONS.

                  (a) GENERALLY. Each Revolving Credit Loan shall be (i) a Libor
Loan or a Base Rate Loan as selected or deemed to have been selected by
Borrowers' Representative initially at the time a Notice of Borrowing is given
pursuant to Section 2.5(a); or (ii) as selected pursuant to Section 2.8(c);
except in each case for any portion of a Libor Loan which is converted to a Base
Rate Loan pursuant to Section 2.1 or 2.5. All Loans and the outstanding
principal balance of all other Obligations shall bear interest on the unpaid
principal amount thereof from the date such Loans are made and such other
Obligations are due and payable until paid in full but excluding the date of
repayment (whether by acceleration or otherwise), at the interest rates
specified as follows (the "APPLICABLE RATE"):

                           (iii) in the case of a Libor Loan, at an interest
rate per annum for and during each Interest Period equal to the Libor Rate for
such Interest Period; and

                           (iv) in the case of the Base Rate Loan or any other
Obligation, at an interest rate per annum equal to the Base Rate in effect from
time to time.

The applicable basis for determining the rate of interest on the Loans shall be
selected by the Borrowers' Representative at the time a Notice of Borrowing or a
Notice of Conversion/Continuation is delivered by the Borrowers' Representative
to the Lender; provided,

                                     - 8 -
<PAGE>   17
however, the Borrowers' Representative may not select the Libor Rate as the
applicable basis for determining the rate of interest on any Loan if at the time
of such selection a Default or Event of Default would occur from such Borrowing
or conversion or continuation or has occurred and is continuing and provided
further that, from and after the occurrence and during the continuance of an
Event of Default, each Libor Loan then outstanding may, at the Lender's option,
convert to a Base Rate Loan. If on any day any Revolving Credit Loan is
outstanding with respect to which a Notice of Continuation/Conversion has not
been delivered to the Lender in accordance with the terms of this Agreement
specifying the basis for determining the rate of interest on that day, then for
that day interest on that Revolving Credit Loan shall be determined by reference
to the Base Rate.

                  (b) INTEREST PAYMENTS. (i) Interest accrued on each Loan shall
be payable in arrears (A) on each Interest Payment Date, (B) upon the payment or
prepayment thereof in full or in part, and (C) if not previously paid in full,
(whether by acceleration or otherwise) on the Revolving Credit Termination Date.

                           (ii) Interest accrued on the principal balance of any
outstanding Reimbursement Obligation shall be calculated on the last day of each
calendar month and shall be payable in arrears (A) on the first day of the
calendar month, commencing on the first such day following the incurrence of
such Reimbursement Obligation, (B) upon repayment thereof in full or in part,
and (C) if not previously paid in full, at the time such other Reimbursement
Obligations become due and payable (whether by acceleration or otherwise).

                  (c) LATE CHARGE; DEFAULT INTEREST. If any payment of principal
or interest on any portion of a Loan or any other Obligation becoming due
hereunder or under any of the Loan Documents is not made within ten (10) days of
the date such payment is due, Borrowers shall be subject to a late charge of
five percent (5%) of the amount of such payment. Borrowers shall be entitled to
a one-time waiver of the late charge prior to the Revolving Credit Termination
Date. Subsequent waivers during the term of the Loan shall be at the Lender's
discretion. Upon the occurrence and during the continuance of an Event of
Default, Borrowers shall pay interest (to the extent permitted by law in the
case of interest on overdue interest) on such defaulted amount accruing from and
including the date of such Event of Default up to but excluding the date of
actual payment (after as well as before judgment) at a rate per annum which is
the sum of (i) four percent (4%) plus (ii) the Applicable Rate otherwise
payable. All payments due under this Section 2.7(c) shall be payable upon
demand.

         2.8. DURATION AND DETERMINATION OF INTEREST PERIOD; DETERMINATION OF
              INTEREST RATE; CONTINUATION/CONVERSION OF LOANS.

                  (a) DURATION AND DETERMINATION OF INTEREST PERIOD. Each notice
as set forth in Section 2.5(a) (with respect to a Borrowing of Libor Rate Loans)
or Section 2.8(c) (with respect to a conversion into or continuation of Libor
Loans) shall designate an Interest Period, provided, that no more than six (6)
Interest Periods shall be in effect at any one time for any Libor Loans or Base
Rate Loans or any combination of the two.

                                     - 9 -
<PAGE>   18

            (b) DETERMINATION OF INTEREST RATE. As soon as practicable on the
second Business Day prior to the first day of each Interest Period in the case
of a Libor Rate Loan (the "Interest Rate Determination Date"), the Lender shall
determine (pursuant to the procedures set forth in the definition of Libor Base
in the case of a Libor Rate Loan) the interest rate which shall apply to the
Loans for which an interest rate is then being determined for the applicable
Interest Period and shall promptly give notice thereof (in writing or by
telephone confirmed in writing) to the Borrowers' Representative and to each
Lender. The Lender's determination shall be presumed to be correct, absent
manifest error, and shall be binding upon each Borrower. Any failure by Lender
to take into account any reserve percentage when calculating interest due on
Libor Loans shall not constitute, whether by course of dealing or otherwise,
waiver by such Lender of its right to collect such amount for any future period.

            (c) CONVERSION/CONTINUATION OF LOANS.

                  (i) Subject to the provisions of Sections 2.14 and 2.15,
Borrowers' Representative shall have the option (A) to convert at any time all
or any part of outstanding Base Rate Loans to Libor Loans or (B) to convert all
or any part of outstanding Libor Loans having Interest Periods which expire on
the same date to Base Rate Loans on such expiration date; or (C) to continue all
or any part of outstanding Libor Loans having Interest Periods which expire on
the same date as Libor Loans, and the succeeding Interest Period of such
continued Libor Loans shall commence on such expiration date; provided, however,
no such outstanding Libor Loan may be continued as, or be converted into, a
Libor Loan (i) if the continuation of, or the conversion into, would violate any
of the provisions of Section 2.14 or 2.15 or (ii) if a Default or Event of
Default would occur as a result thereof or has occurred and is continuing. Any
conversion into or continuation of Libor Rate Loans under this Section 2.8(c)
shall be in a minimum amount of $1,000,000 and in integral multiples of $100,000
in excess of that amount.

                  (ii) To convert or continue a Loan Borrowers' Representative
shall deliver a Notice of Continuation/Conversion substantially in the form of
Exhibit E to Lender no later than 10:00 A.M. (New York City time) at least three
(3) Business Days in advance of the proposed continuation/conversion date in the
case of a conversion to, or a continuation of, Libor Loans or at least one (1)
Business Day in advance of the proposed continuation/conversion date in the case
of a conversion to a Base Rate Loan. A Notice of Continuation/Conversion shall
specify (A) the proposed continuation/conversion date (which shall be a Business
Day), (B) the principal amount of the Loans to be continued/converted, (C)
whether such Loan shall be converted and/or continued, (D) in the case of a
continuation of, or conversion to, a Libor Loan, the requested Interest Period,
and (E) that no Default or Event of Default has occurred and is continuing or
would result from the proposed continuation/conversion and (F) a statement as to
whether the Borrowers have met and maintained the Preferred Interest Rate
Standard and if so for what period of time.

      Except as otherwise provided in Sections 2.14 and 2.15, a Notice of
Continuation/Conversion shall be irrevocable on and after the related Interest
Rate Determination

                                      -10-
<PAGE>   19
Date, and Borrowers shall be bound to effect a continuation and/or conversion
(as applicable) in accordance therewith.

      If Borrowers' Representative fails to give a valid Notice of
Continuation/Conversion in respect of any portion of a Libor Loan which is not
repaid in accordance with the terms hereof at the end of the relevant Interest
Period, such portion shall be converted automatically into a Base Rate Loan;
provided that if Borrowers' Representative subsequently gives a valid Notice of
Continuation/Conversion in respect of such Base Rate Loan, it shall be converted
into a Libor Loan in accordance with the requirements for a
continuation/conversion under this Section 2.8.

      2.9. OPTIONAL PREPAYMENTS; MANDATORY PREPAYMENTS.

            (a) Subject to Section 2.9(c), Borrowers may, at their option,
prepay any Loans on (i) the last day of the applicable Interest Period, in whole
or in part, without premium or penalty or additional cost or expense, or (ii)
any other time subject to the indemnification obligations contained in Section
2.16; upon, in each case, at least three (3) Business Days' prior written notice
to Lender, specifying the amount of prepayment. Base Rate Loans may be prepaid
without premium or penalty or additional cost or expense at any time. Each
notice of prepayment pursuant to this clause (a) shall be irrevocable and the
payment amount specified in such notice shall be due and payable on the date
specified, together with accrued interest to such date on the Loans and all
amounts (if any) payable pursuant to Section 2.16. Partial prepayments of the
Loans pursuant to this clause (a) shall be in an aggregate principal amount of
$100,000 or an integral multiple thereof.

            (b) The Loans shall be subject to certain mandatory repricing
pursuant to and upon the occurrence of the events described in the provisions of
Sections 2.14 and 2.15.

            (c) Subject to the provisions of Section 2.11, Borrowers'
Representative may designate the application of any prepayments to be applied to
principal on the Revolving Credit Loans to the Libor Loans or Base Rate Loans as
it may select, provided that if Borrowers' Representative does not designate
such application, such prepayments shall be applied (i) first to outstanding
Base Rate Loans, and (ii) second to outstanding Libor Loans.

      2.10. COMPUTATION OF INTEREST AND FEES. Interest, fees and other amounts
calculated on the basis of a rate per annum shall be computed on the basis of a
360-day year for the actual number of days elapsed. In computing interest on any
Loan, the date of the making of the Loan or the first day of an Interest Period,
as the case may be, shall be included and the date of payment or the expiration
date of an Interest Period, as the case may be, shall be excluded; provided,
however, if a Loan is repaid on the same day on which it is made, one (1) day's
interest shall be paid on such Loan.

      2.11. PAYMENTS.

                                      -11-
<PAGE>   20
            (a) MANNER AND TIME OF PAYMENT. All payments of principal of and
interest on the Loans and Reimbursement Obligations and other Obligations
(including, without limitation, fees and expenses) which are payable to the
Lender shall be made without condition or reservation of right, in immediately
available funds, delivered to the Lender not later than 3:00 p.m. (New York
time) on the date and at the place due, to such account of the Lender as it may
designate, for the account of the Lender and funds received by the Lender,
including, without limitation, funds in respect of any Loans to be made on that
date, not later than 3:00 p.m. (New York time) on any given Business Day shall
be credited against payment to be made that day and, for purposes of calculation
of interest, funds received by the Lender after that time shall be deemed to
have been paid on the next succeeding Business Day.

            (b) APPORTIONMENT OF PAYMENTS. (i) All payments of principal and
interest in respect of outstanding Libor Loans and Base Rate Loans, all payments
in respect of Reimbursement Obligations shall be applied in the following order:

                        (A) First, to pay principal of and interest on Letter of
                  Credit Obligations (or, to the extent such Obligations are
                  contingent, deposited with the Lender to provide cash
                  collateral in respect of such Obligations which cash
                  collateral shall be released and applied in accordance with
                  the provisions of this Section 2.11(b) in the event such
                  Letter of Credit shall expire undrawn upon);

                        (B) Second, to pay Obligations in respect of any fees,
                  expenses reimbursements or indemnities then due to the Lender;

                        (C) Third, to pay interest due in respect of Loans;

                        (D) Fourth, to the ratable payment or prepayment of
                  principal outstanding on Loans; and

                        (E) Fifth, to the ratable payment of all other
                  Obligations.

                  (iii) The Lender, in its sole discretion subject only to the
terms of this Section 2.11(b)(iii), may pay from the proceeds of Loans made to
the Borrower hereunder if made pursuant to a deemed request as provided in this
Section 2.11(b)(iii), all amounts payable by the Borrower hereunder, including,
without limitation, amounts payable with respect to payments of principal,
interest, Reimbursement Obligations and fees and all reimbursements for expenses
pursuant to Section 10.12 in any case, after the occurrence and during the
continuance of an Event of Default with respect to nonpayment of such amounts.
Each Borrower hereby irrevocably authorizes the Lender to make Loans, which
Loans shall be Base Rate Loans, in each case, upon notice from the Lender as
described in the following sentence for the purpose of paying principal,
interest, Reimbursement Obligations and fees due from any Borrower, reimbursing
expenses pursuant to Section 10.12 and paying any and all other amounts due and
payable by any Borrower hereunder, under the Note or under any other Loan
Document, from

                                      -12-
<PAGE>   21
and after the occurrence and during the continuance of an Event of Default with
respect to nonpayment of such amounts, and agrees that all such Loans so made
shall be deemed to have been requested by it pursuant to Section 2.1 as of the
date of the aforementioned notice. Any Loans made under this Section
2.11(b)(iii) shall cure the Event of Default for which such Loans were advanced
to the extent such Event of Default can be cured by the payment of money and the
making of such a Loan does not create a Default or Event of Default.

            (c) PAYMENTS ON NON-BUSINESS DAYS. Whenever any payment to be made
by any Borrower hereunder or under the Note is stated to be due on a day which
is not a Business Day, the payment shall instead be due on the next succeeding
Business Day (or, as set forth in Section 2.7(b), the next preceding Business
Day), and any such extension of time shall be included in the computation of the
payment of interest and fees hereunder.

      2.12. USE OF LOAN PROCEEDS AND LETTERS OF CREDIT. Except for any amounts
advanced by Lender under Section 2.11(b)(iii), the proceeds of the Loans and the
Letters of Credit issued for the account of any Borrower hereunder shall be used
directly (or indirectly in the case of Letters of Credit) only (i) to refinance
existing indebtedness; (ii) to provide financing for income-producing
properties; (iii) to fund leasehold improvements, renovation, expansion and
construction of income-producing properties; or (iv) for working capital
purposes.

      2.13. INCREASED COSTS.

            (a) If any change in existing law or future applicable law, which
expression, as used herein, includes statutes, rules and regulations thereunder
and interpretations thereof by any competent court or by any governmental or
other regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time hereafter made upon or otherwise issued to Lender by
any central bank or other fiscal, monetary or other authority (whether or not
having the force of law), shall:

                  (i) subject Lender to any tax, levy, impost, duty, charge,
fee, deduction or withholding of any nature with respect to this Agreement, the
Loan Documents, Revolving Credit Commitment or the Loans (other than Excluded
Taxes); or

                  (ii) materially change the basis of taxation (except for
changes in taxes on income or profits) of payments to Lender of the principal of
or the interest on any Loans or any other amounts payable to Lender under this
Agreement or the other Loan Documents; or

                  (iii) impose or increase or render applicable (other than to
the extent specifically provided for elsewhere in this Agreement) any special
deposit, reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held by, or
deposits in or for the account of, or loans by, or commitments of Lender; or

                                      -13-
<PAGE>   22
                  (iv) impose on any party any other conditions or requirements
with respect to this Agreement, the Loan Documents, the Loans, the Revolving
Credit Commitment, or any class of loans or commitments of which any of the
Loans or the Revolving Credit Commitment forms a part;

and the result of any of the foregoing is:

                                   (A) to increase the cost to Lender of making,
                        funding, issuing, renewing, extending or maintaining any
                        of the Loans; or

                                   (B) to reduce the amount of principal,
                        interest or other amount payable to such Lender
                        hereunder; or

                                   (C) to require Lender to make any payment or
                        to forgo any interest or other sum payable hereunder,
                        the amount of which payment or foregone interest or
                        other sum is calculated by reference to the gross amount
                        of any sum receivable or deemed received by Lender from
                        the Borrowers hereunder;

then, and in each such case, the Borrowers will, within thirty (30) days after
written demand made by Lender at any time and from time to time and as often as
the occasion therefor may arise, pay to Lender, such additional amounts as
Lender shall determine in good faith will be sufficient to compensate Lender for
such additional cost, reduction, payment or foregone interest or other sum. It
is agreed that Lender shall make a reasonable allocation of additional costs,
reductions, payments or foregone interest amounts or other sums among its Loans
made hereunder and loans to other borrowers affected thereby; shall treat the
Borrowers hereunder in a manner substantially the same as its treatment of its
other customers under other loan facilities affected thereby and shall notify
Borrowers' Representative of any such event as soon as reasonably possible after
Lender's discovery thereof.

            (b) If any change in existing law or future law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) or the interpretation thereof by a court or governmental authority with
appropriate jurisdiction affects the amount of capital required or expected to
be maintained by banks or bank holding companies and as a result thereof a
Lender determines in good faith that the amount of capital required to be
maintained by it must be increased as a result of the Loans made or deemed to be
made pursuant hereto, then such Lender shall notify the Borrowers'
Representative of such fact as soon as reasonably possible after the discovery
thereof, and the Borrowers' Representative shall pay to Lender from time to time
within 30 days after written demand, as an additional fee payable hereunder,
such amount as Lender shall determine in good faith and certify in a notice to
the Borrowers' Representative to be an amount that will adequately compensate
such Lender in light of these circumstances for its increased costs of
maintaining such capital.

                                      -14-
<PAGE>   23
      2.14. CHANGE IN LAW RENDERING LIBOR LOANS UNLAWFUL. Notwithstanding
anything to the contrary herein contained, in the event that any Requirements of
Law or any change in any existing Requirements of Law or in the interpretation
thereof by any Governmental Authority charged with the administration thereof,
in any case adopted, issued or effective after the date hereof, shall make it
unlawful for Lender to fund any portion of the Libor Loans or to give effect to
its obligations as contemplated hereby with respect to its making Libor Loans
Lender shall, upon the happening of such event, notify Borrowers' Representative
thereof in writing stating the reason therefor and the effective date of such
event, and upon the effectiveness of any such event the obligation of Lender to
make or maintain its Libor Loans to any Borrower shall forthwith be suspended
for the duration of such illegality and during such illegality Lender shall,
upon payment of any amounts owing under Section 2.16 with respect to such
conversion, convert its share of the Libor Loans to (upon effectiveness of any
such event and during the continuance of such event) Base Rate Loans. If and
when such illegality with respect thereto ceases to exist, such suspension shall
cease and Lender shall notify Borrowers' Representative that the Base Rate Loan
into which such share of the Libor Loans was converted pursuant to this Section
2.11 was converted to a Libor Loan, respectively, on the first day of the next
succeeding Interest Period.

      2.15. LIBOR AVAILABILITY. In the event, and on each occasion, that on the
Business Day two Business Days prior to the commencement of any Interest Period
for the Libor Loans, Lender shall have determined in good faith (which
determination shall, in the absence of manifest error, be conclusive and binding
upon Borrowers) that U.S. Dollar deposits in the amount of the principal amount
of the Libor Loans which is to have such Interest Period are not generally
available in the London interbank market, or that the rate at which such U.S.
Dollar deposits are being offered will not accurately reflect the cost to Lender
making or funding such principal amount of such Libor Loans during such Interest
Period, or that reasonable means do not exist for ascertaining the Libor Rate,
Lender shall, as soon as practicable thereafter, give written or telephonic
notice of such determination to Borrowers' Representative and (i) such principal
amount of such Libor Loans shall automatically be converted, as of the last day
of the Interest Period during which such determination is made, to Base Rate
Loans and (ii) any request by Borrowers' Representative for such Libor Loans
pursuant to Section 2.5 hereof shall thereupon, and until the circumstances
giving rise to such notice no longer exist (as notified by Lender to Borrowers'
Representative) be deemed a request for the making of Base Rate Loans. If at any
time Lender shall have determined in good faith (which determination shall, in
the absence of manifest error, be conclusive and binding upon Borrowers) that
any contingency has occurred which adversely affects the London interbank market
or that any Requirement of Law or any change in any existing Requirement of Law
or in the interpretation thereof, in any case adopted, issued or effective after
the date hereof, or other circumstance affecting Lender or the London interbank
market makes the funding of the Libor Loans impracticable, Lender shall, as soon
as practicable thereafter, give written or telephonic notice of such
determination to Borrowers' Representative and (i) the Libor Loans shall
automatically be converted, as of the last day of each Interest Period during
which such determination is made and in each case in respect of the principal
amount of the Libor Loans having an Interest Period ending on such date, to Base
Rate Loans and (ii) any request by Borrowers' Representative for the Libor Loans
pursuant to

                                      -15-
<PAGE>   24
Section 2.5 hereof shall thereupon, and until the circumstances giving rise to
such notice no longer exist (as notified by Lender to Borrowers'
Representative), be deemed a request for the making of Base Rate Loans. Upon
such circumstances no longer existing, Borrowers' Representative may thereafter
request Libor Loans in accordance with the terms hereof.

      2.16. INDEMNITIES. Each Borrower hereby jointly and severally agrees to
indemnify Lender on demand against any actual loss or expense (including but not
limited to any loss or expense sustained or incurred in liquidating or employing
or redeploying deposits from third parties acquired to effect or maintain any
Loan or any portion thereof other than loss of profit or margin) and reasonable
administrative costs which any Lender or its branch or Affiliate may sustain or
incur as a consequence of (i) any default in payment or prepayment of the
principal amount of any Loan or any portion thereof or interest accrued thereon,
as and when due and payable (at the due date thereof, by irrevocable notice of
payment or prepayment, or otherwise), (ii) the effect of the occurrence of any
Event of Default upon any Loan, (iii) the payment or prepayment of any principal
amount of any Loan or the conversion of any portion of any Libor Loan to Base
Rate Loans on any day other than the last day of an Interest Period or the
payment of any interest on such Loan, or portion thereof, on a day other than an
Interest Payment Date for the Loan or (iv) any failure of any Borrower to accept
or make a Borrowing of the Loans or continue or convert a Loan after delivery of
a notice requesting a Loan under Section 2.5 or, as the case may be, a notice
requesting a continuation or conversion under Section 2.8(c) or any failure by
any Borrower to satisfy any of the conditions precedent to the making of Loans
hereunder after it has requested the borrowing thereof (other than any such
conditions that are waived in accordance with the provisions hereof). The
determination of Lender of any amount payable under this Section 2.16 shall, in
the absence of manifest error, be conclusive and binding upon each Borrower.

      2.17. FEES.

            (a) STANDBY FEE. The Borrowers' Representative shall pay to the
Lender an annual fee (the "STANDBY FEE"), on the daily amount by which the
Revolving Credit Commitment exceeds the Outstanding Amount, for the period
commencing on the Closing Date and ending on the Revolving Credit Termination
Date, such fee being payable quarterly, in arrears, commencing on the first day
of the calendar quarter next succeeding the Closing Date. If the Outstanding
Amount equals or exceeds 50% of the Revolving Commitment the Standby Fee shall
be fifteen (15) basis points (.15%) per annum of the daily unused portion of the
Maximum Revolving Credit Commitment. If the Outstanding Amount is less than 50%
of the Maximum Revolving Commitment, the Standby Fee shall be twenty five (25)
basis points (.25%) per annum of the daily unused portion of the Maximum
Revolving Credit Commitment.

            (b) LETTER OF CREDIT FEE. In addition to any charges paid pursuant
to Section 3.1(g), the Borrowers' Representative shall pay to the Lender a fee
(the "LETTER OF CREDIT FEE") accruing at a per annum rate equal to the undrawn
face amount of each outstanding Letter of Credit multiplied by the Applicable
Libor Margin and payable monthly, in advance, on the date such Letter of Credit
is issued and the first day of each calendar month thereafter; provided,

                                      -16-
<PAGE>   25
however, upon the occurrence of an Event of Default and for so long thereafter
as such Event of Default shall be continuing, the rate at which the Letter of
Credit Fee shall accrue and be payable shall be equal to three percent (3%) per
annum.

            (c) COMMITMENT FEE. Borrowers jointly and severally agree to pay to
the Lender a commitment fee (the "COMMITMENT FEE") as set forth in that certain
letter agreement dated December 4, 2000, as revised on March 28, 2001 between
the Borrowers' Representative and the Lender.

            (d) CALCULATION AND PAYMENT OF FEES. The Standby Fee shall be
calculated on the basis of the actual number of days elapsed in a 360 day year.
All such fees shall be payable in addition to, and not in lieu of, interest,
expense reimbursements, indemnification and other Obligations. All fees shall be
payable to the Lender in immediately available funds and shall be fully earned
and nonrefundable when paid. All fees specified or referred to in this Agreement
due to the Lender, including, without limitation, those referred to in this
Section 2.17, shall bear interest at the interest rate specified in Section
2.7(c) upon the occurrence and during the continuance of an Event of Default
with respect to the nonpayment thereof and shall constitute Obligations.

      2.18. USURY. All agreements between Borrower, each Guarantor and Lender
are hereby expressly limited so that in no contingency or event whatsoever,
whether by reason of acceleration of maturity of the indebtedness evidenced
hereby or otherwise, shall the amount paid or agreed to be paid to Lender for
the use or the forbearance of the indebtedness evidenced hereby exceed the
maximum permissible under applicable law. As used herein, the term "applicable
law" shall mean the law in effect as of the date hereof, provided, however, that
in the event there is a change in the law which results in a higher permissible
rate of interest, then this Note shall be governed by such new law as of its
effective date. In this regard, it is expressly agreed that it is the intent of
each Borrower and Lender in the execution, delivery and acceptance of this Note
to contract in strict compliance with the laws of the State of New York from
time to time in effect. If, under or from any circumstances whatsoever,
fulfillment of any provision hereof or of any of the Loan Documents or the
Security Documents at the time performance of such provision shall be due, shall
involve transcending the limit of validity prescribed by applicable law, then
the obligation to be fulfilled shall automatically be reduced to the limit of
such validity, and if under or from any circumstances whatsoever Lender should
ever receive as interest an amount which would exceed the highest lawful rate,
such amount which would be excessive interest shall be applied to the reduction
of the principal debt balance evidenced hereby and not to the payment of
interest. This provision shall control every other provision of all agreements
between each Borrower, each Guarantor and the Lender.

      2.19. UNENCUMBERED ELIGIBLE PROPERTIES.

            (a) "UNENCUMBERED ELIGIBLE PROPERTY" means a Property which is and
continues to be at all times:

                                      -17-
<PAGE>   26
                  (i) wholly owned in fee simple or ground leased pursuant to a
Financeable Ground Lease by a Borrower or Guarantor; and

                  (ii) unencumbered, free and clear of any Liens and other
matters effecting title other than for Permitted Exceptions and Customary
Permitted Liens; and

                  (iii) leased by Borrower or Guarantor to a single Class I or
Class II Credit Tenant subject to an Approved Lease; and

                  (iv) shall not be used for the following purposes:
restaurants, hotels, movie theaters, parking facilities (except for on-site
parking made available to tenants and visitors of the Property), car
dealerships, gambling enterprises, convenience stores or gas stations or any
other purpose which is not acceptable to the Lender; it being acknowledged and
agreed by the Lender that the following uses shall be permitted uses hereunder:
office, retail, industrial, warehouse, distribution, research and development or
data processing.

            (b) In addition, no Property shall be accepted as or continue to be
an Unencumbered Eligible Property unless the following are true, correct and
accurate in all material respects:

            (i) TITLE. The Borrower or Guarantor owning or ground leasing such
Property has good, record, marketable and indefeasible Fee Interest or Leasehold
Interest in such Property except for Permitted Exceptions and Customary
Permitted Liens.

            (ii) LEASES. Each of the Approved Leases and each Financeable Ground
Lease is in full force and effect and is a legally valid and binding obligation
of the Borrower or Guarantor who owns the Property and the other parties
thereto. None of the Approved Leases or any Financeable Ground Lease has been
amended, modified or terminated, nor has there been any change in or waiver of
any obligation contained in any such Approved Lease or Financeable Ground Lease
nor any set-off or counterclaim asserted by any tenant (or landlord) that in any
such case could result in a MAC. Such Borrower or Guarantor has not mortgaged,
pledged or otherwise encumbered any Approved Lease or Financeable Ground Lease
or its right to obtain rental, interest or other payments under any Approved
Lease. Rent has not been collected more than 30 days in advance (except for
security deposits in an amount not in excess of one month's installment of
rent). No material default beyond any applicable grace period or notice of
termination under any Approved Lease or Financeable Ground Lease is outstanding.
Such Borrower or Guarantor has performed all of its material repair and
maintenance obligations (if any) and, to the knowledge and belief of such
Borrower or Guarantor, each tenant under each Approved Lease and each ground
lessor under any Financeable Ground Lease has performed all of its material
repair, maintenance or other obligations.

                                      -18-
<PAGE>   27
            (iii) SURVEYS. There have not been any encumbrances, encroachments
or other survey matters materially and adversely affecting such Property after
the date of the most recent Survey of such Property furnished to Lender that
would result in a change to such Survey.

            (iv) OFF-SITE UTILITIES. All water, sewer, electric, gas, telephone
and other utilities are available to be installed or installed to the property
lines of such Property and, except in the case of drainage facilities, are
connected to the Buildings located thereon with valid permits and are adequate
to service the Buildings in material compliance with applicable law; and the
Buildings are properly and legally connected directly to, and served exclusively
by, public water and sewer systems. No easements over land of others are
required for any such utilities, and no drainage of surface or other water
across land of others is required except in either case as disclosed in the
Title Policy or the Surveys accepted by Lender.

            (v) ACCESS; ETC. The streets abutting such Property are public
roads, to which the Property has direct access by trucks and other motor
vehicles and by foot, or are private ways (with direct access by trucks and
other motor vehicles and by foot to public roads) to which the Property has
direct access without charge or liability for maintenance or repair except as
required in connection with the payment of association or owner's fees pursuant
to recorded instruments. No easements over land of others are required for such
means of access and egress except as disclosed in the Title Policy or Surveys.

            (vi) INDEPENDENT BUILDINGS. The Buildings are fully independent in
all respects from any other buildings or improvements not located on the
Property including, without limitation, in respect of structural integrity,
heating, ventilating and air conditioning, plumbing, mechanical and other
operating and mechanical systems, all of which are connected directly to
off-site utilities located in recorded easements or public streets or ways. The
Buildings are located on lots which are separately assessed for purposes of real
estate tax assessment and payment. The Buildings, all Building Service Equipment
and all paved or landscaped areas related to or used in connection with the
Buildings are located wholly within the perimeter lines of the lot or lots on
which the Properties are located except any real property covered by any
easement benefiting the Property or as disclosed in the Surveys.

            (vii) CONDITION OF BUILDING; NO ASBESTOS. There are no material
defects in the roof, foundation, structural elements and masonry walls of the
Buildings or their heating, ventilating and air conditioning, electrical,
sprinkler, plumbing or other mechanical systems or their Building Service
Equipment; the Buildings are fully sprinklered; and no asbestos is located in or
on the Buildings except as may be disclosed in the Environmental Reports.

            (viii) BUILDING COMPLIANCE WITH LAW; PERMITS. The Buildings as
presently constructed and used do not materially violate any applicable federal
or state law or governmental regulation, or any local ordinance, order or
regulation, including but not limited to laws, regulations, or ordinances
relating to zoning, building use and occupancy, subdivision control, fire
protection, health and sanitation; zoning laws permit use of the Buildings for
their current use; there is a sufficient number of parking spaces on the lot or
lots on which the Property

                                      -19-
<PAGE>   28
is located or on any real property covered by any easement benefiting such
Property or to permit the Buildings to be used under the zoning laws for their
current use; and all private ways providing access to such Property are zoned in
a manner which will permit access to the Buildings over such ways by trucks and
other commercial and industrial vehicles. All permits (collectively, the
"PERMITS") required for the operation and maintenance of the Property, including
without limitation, building permits, curb-cut permits, water connection
permits, sewer extension or connection permits and other permits (if any)
required under the Federal Clean Air Act, as amended, the Federal Clean Water
Act, as amended (including, without limitation a so-called "404 PERMIT"), and by
state law or regulations consistent with the requirements of said Acts, have
been validly issued by the appropriate Governmental Authority and are now in
full force and effect.

            (ix) NO REQUIRED REAL PROPERTY CONSENTS, PERMITS, ETC. No Borrower
or Guarantor has received any notice of, nor has any knowledge of, any Permits,
utility installations and connections (including, without limitation, drainage
facilities, curb cuts and street openings), or private consents required for the
maintenance, operation, servicing and use of such Property for its current use
which have not been granted, effected, or performed and completed (as the case
may be) or any fees or charges therefor which have not been fully paid.

            (x) SUITS; JUDGMENTS. There are no outstanding notices, suits,
orders, decrees or judgments relating to zoning, building use and occupancy,
subdivision control, fire protection, health, sanitation, or other violations
affecting, against, or with respect to, such Property or any part thereof.

            (xi) INSURANCE. No Borrower or Guarantor has received any notices
from any insurer or its Lender requiring performance of any work with respect to
such Property.

            (xii) REAL PROPERTY TAXES; SPECIAL ASSESSMENTS. There are no unpaid
or outstanding real estate or other taxes or assessments on or against such
Property or any part thereof (except only real estate taxes not yet due and
payable). There are no betterment assessments or other special assessments
presently pending with respect to any portion of such Property and no Borrower
or Guarantor has received any notice of any such special assessment being
contemplated.

            (xiii) HISTORIC STATUS. No Building is a historic structure or
landmark, and no Property is within any historic district pursuant to any
federal, state or local law or governmental regulations.

            (xiv) EMINENT DOMAIN. There are no pending eminent domain
proceedings against such Property or any part thereof, and, to the best of each
Borrower's and Guarantor's knowledge, no such proceedings are presently
threatened or contemplated by any taking authority.

                                      -20-
<PAGE>   29
            (xv) COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as specifically set
forth in the Environmental Reports accepted for such Property delivered to
Lender and listed on Exhibit L, to the knowledge of each Borrower or Guarantor
each tenant is in compliance with all applicable statutes, laws, rules,
regulations and orders of all Governmental Authorities relating to environmental
protection, pollution control and Hazardous Materials and with respect to the
conduct of its business and the ownership of its properties, except for such
noncompliance which would not result in imposition of Liens, fines, penalties,
injunctive relief or other civil or criminal liabilities or which, in the
aggregate, could not have a MAC.

            (xvi) POLLUTION; HAZARDOUS MATERIALS. In connection with the
acquisition and ownership of its interests in such Property, the Borrower or
Guarantor who owns such Property has made and will continue to make such
inquiries, and has and will continue to cause such testing, surveying,
inspection or other action, with respect to such Property as is necessary or
desirable in connection with Hazardous Materials which might be present in the
air, soil, surface water or groundwater at such Property. Except as set forth in
the Environmental Reports listed on Exhibit F, to the best of such Borrower's or
Guarantor's knowledge there are no Hazardous Materials present in the air, soil,
surface water or groundwater at such Property and no Hazardous Materials (except
(i) Hazardous Materials maintained in accordance with all Requirements of Law
and necessary for the business operations of any such Property, including,
without limitation, petroleum used for heating oil and (ii) Hazardous Materials
that are not reasonably likely to result in a MAC in respect of such Property or
to have a material adverse effect on the value of such Property as security for
the Loans) are used in the operation of such Property.

            (xvii) MATERIALS PROVIDED TO LENDER. The Borrower or Guarantor who
is the owner of the applicable Property submitted for acceptance as an
Unencumbered Eligible Property has satisfied the requirements of paragraphs (g),
(h) and (i), of Section 5.1 in respect of such Property.

            (xviii) UNENCUMBERED ELIGIBLE PROPERTY APPLICATION. In order to
achieve or maintain the Preferred Interest Rate Standard any Borrower or
Guarantor may submit to Lender from time to time one or more Unencumbered
Eligible Property Applications which Lender shall review as promptly as possible
but nothing contained in this Agreement shall be construed as to require Lender
to approve any Unencumbered Eligible Property Application made by any Borrower
or Guarantor. All information submitted in connection with an Unencumbered
Eligible Property Application is subject to the reasonable approval of the
Lender. The Borrowers' Representative shall be notified of such Property's
rejection as an Unencumbered Eligible Property together with the basis for such
rejection in reasonable detail by the Lender as promptly as possible and in any
event within ten (10) Business Days after receipt of a complete Unencumbered
Eligible Property Application. If Lender has not accepted or rejected an
Unencumbered Eligible Property Application within five (5) Business Days after
receipt, Borrowers' Representative shall send a written reminder notice to
Lender and Lender's failure to reject an Unencumbered Eligible Property within
five (5) Business Days after receipt of such reminder notice shall be deemed
acceptance of same by Lender. In the event information

                                      -21-
<PAGE>   30
required to be submitted in connection with an Unencumbered Eligible Property
Application is submitted on a piecemeal basis, the ten (10) Business Day review
period shall not commence until Lender receives a transmittal letter from the
Borrowers' Representative accompanying the final submission stating that the
Borrowers' Representative now considers the Unencumbered Eligible Property
Application to be complete. Each Property listed on Schedule 1 has been approved
by the Lender as an Unencumbered Eligible Property.

            (xix) GUARANTIES. In the event an Unencumbered Eligible Property
Application is submitted for any Property that is not owned by a Borrower or
existing Guarantor, such Property shall only be accepted as an Unencumbered
Eligible Property pursuant to this Section 2.19 if a Guaranty has been executed
by the owner of such Unencumbered Eligible Property and delivered to the Lender.

            (xx) APPROVED UNENCUMBERED ELIGIBLE PROPERTIES. Subject to the
continued requirements of Sections 2.19(a) and (b), the Properties identified on
Schedule 1 hereto are hereby approved as Unencumbered Eligible Properties.

      2.20. WITHDRAWAL OF UNENCUMBERED ELIGIBLE PROPERTY. Borrowers'
Representative shall have the ability to withdraw any Unencumbered Eligible
Property from the terms of this Agreement so long as no Default or Event of
Default exists or occurs as a result (and upon such withdrawal, the applicable
Borrower or Guarantor (other than Lexington, LCIF and LCIFII) which owns such
Unencumbered Eligible Property (provided that same is the only Unencumbered
Eligible Property owned by such Borrower or Guarantor) shall be released from
all obligations in respect of this Agreement).

      2.21 EXCLUSION OF UNENCUMBERED ELIGIBLE PROPERTIES. If any Unencumbered
Eligible Property fails to continue to meet the requirements of Sections 2.19(a)
and (b), then such Unencumbered Eligible Property shall no longer be considered
to be an Unencumbered Eligible Property for the purposes of determining whether
Borrowers have met or maintained the Preferred Interest Rate Standard. Within
two (2) Business Days after any Unencumbered Eligible Property fails to continue
to meet the requirements of Section 2.19(a) or Section 2.19(b), the Borrowers'
Representative shall submit a new Certificate of Unencumbered Eligible Property
to the Lender.

      SECTION 3. LETTERS OF CREDIT

      3.1. LETTERS OF CREDIT. Subject to the terms and conditions set forth in
this Agreement hereby agrees to issue for the account of any Borrower one or
more Letters of Credit having an aggregate undrawn face amount of up to the
lesser of (i) the Revolving Credit Commitment minus the Outstanding Amount or
(ii) $5,000,000, subject to the following provisions:

            (a) TYPES AND AMOUNTS. Lender shall not have any obligation to
issue, amend or extend, and shall not issue, amend or extend, any Letter of
Credit at any time:

                                      -22-
<PAGE>   31
                  (i) if the aggregate Letter of Credit Obligations with respect
to Lender, after giving effect to the issuance, amendment or extension of the
Letter of Credit requested hereunder, shall exceed any limit imposed by law or
regulation upon Lender;

                  (ii) if on the date of the proposed issuance, amendment or
extension of such Letter of Credit (A) immediately after giving effect to the
issuance, amendment or extension of such Letter of Credit the Letter of Credit
Obligations at such time would exceed $5,000,000 at such time, or (B) one or
more of the conditions precedent contained in Section 5.2 would not on such date
be satisfied, unless such conditions are thereafter or have previously been
satisfied and written notice of such satisfaction is given to the Issuing Bank
by the Lender (and an Issuing Bank shall not otherwise be required to determine
that, or take notice whether, the conditions precedent set forth in Section 5.2,
have been satisfied):

                  (iii) which has an expiration date later than the earlier of
(A) the date one (1) year after the date of issuance or (B) the Business Day
next preceding the scheduled Revolving Credit Termination Date; or

                  (iv) which is in a currency other than Dollars.

         (b) CONDITIONS. In addition to being subject to the satisfaction of the
conditions precedent contained in Sections 5.1 and 5.2, as applicable, the
obligation of Lender to issue, amend or extend any Letter of Credit is subject
to the satisfaction in full of the following conditions:

                  (i) if Lender so requests, the Borrower on whose behalf the
Letter of Credit has been issued and the Borrowers' Representative shall have
executed and delivered to Lender a Letter of Credit Reimbursement Agreement and
such other documents and materials as may be required pursuant to the terms
thereof; provided, however, that such Letter of Credit Reimbursement Agreement
and other documents and agreements shall in no event require delivery of any
additional security by any Borrower or otherwise increase the obligations or
reduce the rights of the Borrowers hereunder or otherwise be inconsistent with
such rights or obligations; and

                  (ii) the terms of the proposed Letter of Credit shall
otherwise be satisfactory to the Lender in its reasonable discretion.

         (c) ISSUANCE OF LETTERS OF CREDIT The Borrowers' Representative shall
give Lender written notice to issue or cause to be issued a Letter of Credit not
later than 10:00 a.m. (New York time) on the third (3rd) Business Day preceding
the requested date for issuance thereof under this Agreement, or such shorter
notice as may be acceptable to Lender. Such notice shall be irrevocable unless
and until such request is denied by the Lender and shall include a Notice of
Borrowing which complies with the requirements of Section 2.5(a) (modified as
appropriate) and specify (A) that such Letter of Credit is solely for the
account of and the name of a specific Borrower, (B) the stated amount of the
Letter of Credit requested, (C) the effective

                                     - 23 -
<PAGE>   32
date (which shall be a Business Day) of issuance of such Letter of Credit, (D)
the date on which such Letter of Credit is to expire (which shall be a Business
Day and no later than the Business Day immediately preceding the then existing
Revolving Credit Termination Date), (E) the Person for whose benefit such Letter
of Credit is to be issued, (F) all other relevant terms of such Letter of
Credit, (G) the Current Availability at such time, and (H) the amount of the
then outstanding Letter of Credit Obligations.

         (d) REIMBURSEMENT OBLIGATIONS. (i) Notwithstanding any provisions to
any Letter of Credit Reimbursement Agreement:

                           (A) provided that no Event of Default shall be
                  continuing hereunder and provided that there is then unfunded
                  availability hereunder, the Lender shall make Loan advances to
                  repay amounts drawn under such Letter of Credit, or if either
                  of the foregoing conditions are not satisfied, the Borrowers'
                  Representative shall reimburse the Lender for amounts drawn
                  under such Letter of Credit, in Dollars, no later than the
                  date (the "REIMBURSEMENT DATE") which is the 10 Business Days
                  after the Borrowers' Representative receives written notice
                  from the Lender that payment has been made under such Letter
                  of Credit; and

                           (B) all Reimbursement Obligations with respect to any
                  Letter of Credit shall bear interest at the rate applicable to
                  Base Rate Loans in accordance with Section 2.7(a) from the
                  date of the relevant drawing under such Letter of Credit until
                  the Reimbursement Date and thereafter at the rate applicable
                  to Base Rate Loans in accordance with Section 2.7(c).

                  (ii) No action taken or omitted in good faith by Lender under
or in connection with any Letter of Credit shall put Lender under any resulting
liability to any Borrower.

                  (iii) If requested, an Issuing Bank shall furnish to the
Lender and each Lender, copies of any Letter of Credit, Letter of Credit
Reimbursement Agreement, and related amendment to which such Issuing Bank is
party and such other documentation as may be requested by Lender or such Lender.

                  (iv) The obligations Borrower to make payments to the Lender
with respect to a Letter of Credit shall be irrevocable, shall not be subject to
any qualification or exception whatsoever except willful misconduct or gross
negligence of Lender, and shall be honored in accordance with this entire
Section 3 (irrespective of the satisfaction of the conditions described in
Sections 5.1 and 5.2, as applicable) under all circumstances, including, without
limitation, any of the following circumstances:

                                     - 24 -
<PAGE>   33
                           (A) any lack of validity or enforceability of this
                  Agreement or any of the other Loan Documents;

                           (B) the existence of any claim, setoff, defense or
                  other right which any Borrower may have at any time against a
                  beneficiary named in a Letter of Credit or any transferee of a
                  beneficiary named in a Letter of Credit (or any Person for
                  whom any such transferee may be acting), the Lender, or any
                  other Person, whether in connection with this Agreement, any
                  Letter of Credit, the transactions contemplated herein or any
                  unrelated transactions (including any underlying transactions
                  between the account party and beneficiary named in any Letter
                  of Credit);

                           (C) any draft, certificate or any other document
                  presented under the Letter of Credit having been determined to
                  be forged, fraudulent, invalid or insufficient in any respect
                  or any statement therein being untrue or inaccurate in any
                  respect;

                           (D) the surrender or impairment of any security for
                  the performance or observance of any of the terms of any of
                  the Loan Documents; or

                           (E) the occurrence of any Default or Event of
                  Default.

         (f) PAYMENT OF REIMBURSEMENT OBLIGATIONS. Unless paid with a Loan
advance hereunder, each Borrower unconditionally agrees, on a joint and several
basis, to pay to Lender, in Dollars, the amount of all Reimbursement
Obligations, interest and other amounts payable to Lender under or in connection
with the Letters of Credit when such amounts are due and payable, irrespective
of any claim, setoff, defense or other right which any Borrower may have at any
time against Lender or any other Person.

         (g) LENDER'S CHARGES. Borrowers' Representative shall pay to Lender,
solely for its own account, the standard administrative charges assessed by
Lender (not to exceed $500 each) in connection with the issuance,
administration, amendment and payment or cancellation of Letters of Credit and
such compensation in respect of such Letters of Credit for the Borrowers'
Representative's account as may be agreed upon by the Borrowers' Representative
and Lender from time to time.

         (h) INTENTIONALLY OMITTED.

         (i) INDEMNIFICATION; EXONERATION. (a) In addition to all other amounts
payable to Lender, each Borrower hereby agrees to defend (by counsel selected by
Borrowers' Representative and reasonably acceptable to Lender), indemnify, and
save the Lender harmless from and against any and all claims, demands,
liabilities, penalties, damages, losses (other than loss of profits), costs,
charges and expenses (including reasonable attorneys' fees but excluding

                                     - 25 -
<PAGE>   34
taxes) which the Lender may incur or be subject to as a consequence, direct or
indirect, of (A) the issuance of any Letter of Credit other than as a result of
the gross negligence or willful misconduct of the Lender, as determined by a
court of competent jurisdiction, or (B) the failure of the Lender to honor a
drawing under such Letter of Credit as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto government or
Governmental Authority.

                  (b) As between each Borrower on the one hand and the Lender on
the other hand, each Borrower assumes all risks of the acts and omissions of, or
misuse of Letters of Credit by, the respective beneficiaries of the Letters of
Credit. In furtherance and not in limitation of the foregoing, subject to the
provisions of the Letter of Credit Reimbursement Agreements, the Lender shall
not be responsible, for: (A) the form, validity, legality, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of 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) the validity, legality or sufficiency of
any instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason;
(C) failure of the beneficiary of a Letter of Credit to duly comply with
conditions required in order to draw upon such Letter of Credit; provided,
however that with respect to any Letter of Credit, the foregoing subclause (C)
shall not relieve the Lender of any liability it may have to any Borrower for
any actual damages sustained by such Borrower arising from a wrongful payment
under such Letter of Credit made as a result of the Lender's gross negligence or
willful misconduct; (D) 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) errors in interpretation of
technical terms; (F) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of Credit or of
the proceeds thereof (other than anything for which Lender would be liable under
clause (C)); (G) the misapplication by the beneficiary of a Letter of Credit of
the proceeds of any drawing under such Letter of Credit.

         (j) EXISTING LETTERS OF CREDIT. Two Letters of Credit aggregating
approximately $3,200,000 are currently outstanding on behalf of the Borrowers'
Representative under the Fleet Revolving Loan. Such Letters of Credit shall be
transferred to and deemed to be issued under this Agreement as of the Closing
Date.

         SECTION 4. REPRESENTATIONS AND WARRANTIES

         In order to induce the Lender and each Lender to enter into this
Agreement and to make the Loans herein provided for, each Borrower on behalf of
itself and each Guarantor hereby covenants, represents and warrants to Lender
and each Lender that:

         4.1. FINANCIAL CONDITION The consolidated balance sheet of Lexington as
of December 31, 1999 and the related statements of income, stockholders' equity
and cash flows for the fiscal years ended on such dates, certified by KPMG LLP,
copies of which have heretofore

                                     - 26 -
<PAGE>   35
been furnished to Lender, are complete and correct and present fairly the
financial condition and performance of Lexington as at such dates and fiscal
periods. The unaudited consolidated balance sheet of Lexington as of 9/30/00 and
the related unaudited statements of income, for the three month period ended on
9/30/00 certified by a Responsible Officer, copies of which have heretofore been
furnished to Lender, are complete and correct and present fairly the financial
condition of Lexington as at such date, and the stockholders' equity and cash
flows for the three month period then ended (subject to normal year-end audit
adjustment). All such financial statements, including the related schedules and
notes thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except for changes in GAAP compliance methods
as approved by such accountants or Responsible Officer, as the case may be, and
as disclosed therein). Lexington does not have any material Contingent
Obligation, contingent liabilities or liability for taxes, long-term leases or
unusual forward or long-term commitment, which is not reflected in the foregoing
statements or in the notes thereto. Lexington has previously delivered to Lender
copies of its annual report on Form 10-K for the fiscal year ended 1999 filed
with the Commission.

         4.2. NO MATERIAL ADVERSE EFFECT. Since the date of the most recent
financial statements delivered to Lender there has been no Material Adverse
Effect, and no event has occurred and no condition exists which could reasonably
be expected to have a Material Adverse Effect on any Borrower or Guarantor.

         4.3. EXISTENCE; BORROWER'S AND GUARANTOR'S COMPLIANCE WITH LAW.
Lexington is a trust duly organized, validly existing and in good standing under
the laws of the State of Maryland. Each Borrower and Guarantor is duly organized
and validly existing in its jurisdiction of organization. Each Borrower and
Guarantor (a) has full power and authority and the legal right to own and lease
its property and to conduct the business in which it is currently engaged, (b)
is duly qualified or licensed and is in good standing under the laws of each
jurisdiction where its ownership or lease of property or the conduct of its
business require such qualification, and (c) is in compliance with all
Requirements of Law, except to the extent that the failure to comply therewith
is not reasonably likely to have, in the aggregate, a Material Adverse Effect.

         4.4. POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each Borrower and
Guarantor has the power and authority and the legal right to execute, deliver
and perform each of the Loan Documents and to borrow hereunder and has taken all
necessary action to authorize the borrowings hereunder on the terms and
conditions of the Loan Documents and to authorize the execution, delivery and
performance of each of the Loan Documents. No consent or authorization of,
filing with, or other act by or in respect of any Governmental Authority is
required to be made or obtained by the Borrowers or Guarantors in connection
with the borrowings hereunder or with the execution, delivery, performance,
validity or enforceability of the Loan Documents. The Agreement has been, and
each Loan Document will be, duly executed and delivered on behalf of each
Borrower and Guarantor and this Agreement constitutes, and each other Loan
Document when executed and delivered will constitute, a legal, valid and binding
obligation of each Borrower and Guarantor enforceable against such Borrower and

                                     - 27 -
<PAGE>   36
Guarantor in accordance with its terms subject to the effect of bankruptcy,
reorganization, insolvency and similar laws and general principles of equity.

         4.5. NO LEGAL BAR. The execution, delivery and performance of this
Agreement and the other Loan Documents, the borrowing hereunder and the use of
the proceeds thereof, will not violate any Requirement of Law or any Contractual
Obligation of any Borrower or Guarantor and will not result in, or require, the
creation or imposition of any Lien on any of its properties or revenues pursuant
to any Requirement of Law or Contractual Obligation other than the Liens for the
benefit of Lender expressly contemplated by this Agreement and the Security
Documents.

         4.6. NO MATERIAL LITIGATION. No litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the best
knowledge and belief of each Borrower and Guarantor, threatened against any
Borrower or Guarantor or against any of its properties or revenues (a) with
respect to this Agreement or the other Loan Documents, the Leases, or any of the
transactions contemplated hereby or thereby, or (b) relating to the Properties,
or the ownership or the operation thereof or the conduct of business thereon as
presently conducted, which, in the case of (a) or (b), is reasonably likely to
have, in the aggregate, a Material Adverse Effect.

         4.7. NO DEFAULT. No Default or Event of Default has occurred and is
continuing.

         4.8. OWNERSHIP OF PROPERTY; LIENS.

                  (a) Schedule 1 accurately sets forth the ownership of each
Unencumbered Eligible Property. Each Borrower and Guarantor that is shown by
Schedule 1 to be the owner of an Unencumbered Eligible Property is the sole
owner of such Unencumbered Eligible Property and has a good record, marketable
and indefeasible Fee Interest or a valid Leasehold Interest in such Unencumbered
Eligible Property, in each case free and clear of all Liens and other matters
affecting title except for Permitted Exceptions and Customary Permitted Liens.

                  (b) To the best of each Borrower's and Guarantor's knowledge,
the Buildings located on each Unencumbered Eligible Property are in good
operating condition and repair, free of any structural or engineering defects
known to any Borrower or Guarantor on the date hereof and are suitable for their
present uses, subject to such exceptions which are not reasonably likely to
have, in the aggregate, a Material Adverse Effect.

                  (c) To the best of each Borrower's and Guarantor's knowledge,
all water, sewer, gas, electricity, telephone and other utilities serving each
Unencumbered Eligible Property are supplied directly to such Unencumbered
Eligible Property by public utilities and enter such Unencumbered Eligible
Property through adjoining public streets or, if they pass through adjoining
private land, do so in accordance with valid public easements which inure to
Borrower's or Guarantor's benefit subject to such exceptions which are not
reasonably likely to have, in the aggregate, a Material Adverse Effect. All of
such utilities are presently installed and operating and are in good and safe
condition, subject to such exceptions which are not reasonably

                                     - 28 -
<PAGE>   37
likely to have, in the aggregate, a Material Adverse Effect. All assessments for
public improvements that have been made against the Unencumbered Eligible
Properties have been paid or provided for, except that in the case of any
assessments that are payable in installments, all installments due as of the
date hereof have been paid or provided for, subject to such exceptions which are
not reasonably likely to have, in the aggregate, a Material Adverse Effect.

                  (d) No Borrower or Guarantor has received notice of any
pending, threatened or contemplated condemnation proceeding or similar taking
affecting any of the Unencumbered Eligible Properties, or any portion thereof,
or any sale or other disposition of any of the Unencumbered Eligible Properties
or any portion thereof in lieu of condemnation or similar taking, in each case,
subject to such exceptions which are not reasonably likely to have, in the
aggregate, a Material Adverse Effect.

                  (e) All Permits from all Governmental Authorities having
jurisdiction over any Unencumbered Eligible Property or any portion thereof, the
absence of which could impair the use of any Unencumbered Eligible Property for
the purposes for which it is currently used have been issued and are in full
force and effect, subject to such exceptions which are not reasonably likely to
have, in the aggregate, a Material Adverse Effect. No Borrower or Guarantor has
received or been informed by a third party, of the receipt by it of any notice
from any Governmental Authority having jurisdiction over any of the Unencumbered
Eligible Properties or any portion thereof or from any insurance company or fire
rating or similar board or organization threatening a suspension, revocation,
modification or cancellation of any Permit, subject to such exceptions which are
not reasonably likely to have, in the aggregate, a Material Adverse Effect.

                  (f) A true, correct and complete copy of each Approved Lease
and a true, correct and complete copy of any Financeable Ground Lease identified
on Exhibit G and has been delivered to Lender. The Approved Leases (and any
subleases permitted thereunder) constitute the sole and complete agreements and
understandings relating to leasing or licensing of space in the Buildings or
otherwise at such Unencumbered Eligible Properties. There are no occupancies,
rights, privileges or licenses in or to the Buildings or any other part of the
Unencumbered Eligible Properties other than pursuant to the Approved Leases,
Financeable Ground Leases or pursuant to Permitted Exceptions. Except as set
forth in Exhibit G, the Approved Leases and Financeable Ground Leases are in
full force and effect, in accordance with their respective terms, without any
payment default or any other material default thereunder beyond applicable grace
periods, nor to the best of each Borrower's or Guarantor's knowledge are there
any defenses, counterclaims, offsets, concessions or rebates available to any
tenant thereunder except as may be provided in the Approved Leases, and the
landlord has not given or made, or received, any notice of default, or any
claim, which remains uncured or unsatisfied, with respect to any of the Approved
Leases or Financeable Ground Leases and, to the best of each Borrower's or
Guarantor's knowledge there is no basis for any such claim or notice of default
by any tenant which would have a Material Adverse Effect. No tenant has paid
more than one month's rent in advance except for any security deposits. Except
as set forth on the rent roll, all tenants under all Approved Leases are in
occupancy and operating the premises covered

                                     - 29 -
<PAGE>   38
by Approved Leases within the permitted uses under such Approved Leases. No
Borrower or Guarantor has mortgaged, pledged or otherwise encumbered any of the
Approved Leases or any Financeable Ground Lease except for Permitted Exceptions
or Customary Permitted Liens.

         4.9. TAXES. Each Borrower and Guarantor has filed or caused to be filed
all tax returns which to the best knowledge and belief of each Borrower are
required to be filed, and has paid or caused to be paid all taxes shown to be
due and payable on said returns or on any assessments made against it or any of
its property and all other taxes, fees or other charges imposed on it or any of
its property by any Governmental Authority (other than Customary Permitted Liens
and those the amount or validity of which is currently being contested in good
faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of each).

         4.10. FEDERAL REGULATIONS. No Borrower or Guarantor is engaged and will
not engage, principally or as one of its important activities, in the business
of extending credit for the purpose of "PURCHASING" or "CARRYING" any "MARGIN
STOCK" within the respective meanings of each of the quoted terms under
Regulation U of the Board of Governors of the Federal Reserve System as now and
from time to time hereafter in effect. No part of the proceeds of the Loans
hereunder will be used for "PURCHASING" or "CARRYING" "MARGIN STOCK" as so
defined or for any purpose which violates, or which would be inconsistent with,
the provisions of the Regulations of such Board of Governors. If requested by
Lender, each Borrower will furnish to Lender a statement in conformity with the
requirements of Federal Reserve Form U-1 referred to in said Regulation U to the
foregoing effect.

         4.11. ERISA. No Borrower or Guarantor nor any ERISA Affiliate maintains
or contributes to any Plan or Multiemployer Plan other than those listed on
Exhibit K hereto. Each such Plan which is intended to be qualified under Section
401(a) of the Internal Revenue Code as currently in effect has been determined
by the IRS to be so qualified, and each trust related to any such Plan has been
determined to be exempt from federal income tax Section 501(a) of the Internal
Revenue Code as currently in effect. Except as disclosed in Exhibit K, no
Borrower or Guarantor or any of its Subsidiaries maintains or contributes to any
employee welfare benefit plan within the meaning of Section 3(1) of ERISA. Each
Borrower or Guarantor and its Subsidiaries are in compliance in all material
respects with the responsibilities, obligations and duties imposed on it by
ERISA, the Internal Revenue Code and regulations promulgated thereunder with
respect to all Plans. No Benefit Plan has incurred any accumulated funding
deficiency (as defined in Sections 302 (a) (2) of ERISA and 412 (a) of the
Internal Revenue Code) whether or not waived. No Borrower or Guarantor nor any
ERISA Affiliate nor any fiduciary of any Plan which is not a Multiemployer Plan
(i) has engaged in an nonexempt prohibited transaction described in Sections 406
of ERISA or 4975 of the Internal Revenue Code or (ii) has taken or failed to
take any action which would constitute or result in a Termination Event. Neither
the Borrower nor any ERISA Affiliate is subject to any liability under Sections
4063, 4064, 4069, 4204 or 4212 (c) or ERISA. No Borrower or Guarantor nor any
ERISA Affiliate has incurred any liability to the PBGC which remains outstanding
other than the payment of premiums. Schedule B to the most recent annual report
filed with the IRS with

                                     - 30 -
<PAGE>   39
respect to each Plan is complete and accurate in all material respects. Since
the date of each such Schedule B, there has been no material adverse change in
funding status or financial condition of the Plan relating to such Schedule B.
No Borrower or Guarantor nor any ERISA Affiliate has (i) failed to make a
required contribution or payment to a Multiemployer Plan or (ii) made a complete
or partial withdrawal under Sections 4203 or 4205 of ERISA from a Multiemployer
Plan. No Borrower or Guarantor nor any ERISA Affiliate has failed to make a
required installment or any other required payment under Section 412 of the
Internal Revenue Code on or before the due date for such installment or other
payment. No Borrower or Guarantor nor any ERISA Affiliate is required to provide
security to a Plan under Section 401 (a) (29) of the Internal Revenue Code due
to a Benefit Plan amendment that results in an increase in current liability for
the plan year. Except as disclosed on Exhibit K, no Borrower or Guarantor or any
of its Subsidiaries has, by reason of the transactions contemplated hereby, any
obligation to make any payment to any employee pursuant to any Plan or existing
contract or arrangement.

         4.12. STATUS AS REIT. Lexington has been organized in conformity with
the requirements for qualification as a real estate investment trust under the
Code and has met such requirements since 1993. Lexington is in a position to
qualify for its current fiscal year as a real estate investment trust under the
Code and its proposed methods of operation will enable it to so qualify.

         4.13. INVESTMENT COMPANY ACT. No Borrower or Guarantor is an
"INVESTMENT COMPANY" or a company "CONTROLLED" by an "INVESTMENT COMPANY,"
within the meaning of the Investment Company Act of 1940, as amended.

         4.14. SUBSIDIARIES; OWNERSHIP OF CAPITAL STOCK AND PARTNERSHIP
INTERESTS.

                  (i) Exhibit H (A) contains diagrams and schedules indicating
the corporate structure of Lexington, each Borrower, and any other Person in
which Lexington or any Borrower holds a direct or indirect partnership, joint
venture or other equity interest indicating the percentage and nature of such
interest with respect to each Person included in such diagram; and (B)
accurately sets forth the correct legal name of such Person, the jurisdiction of
its incorporation or organization and the jurisdictions in which it is qualified
to transact business as a foreign corporation, or otherwise.

                  (ii) Except where any failure or breach would not have a
Material Adverse Effect on any of the Borrowers, each Subsidiary: (A) is a
corporation, partnership or limited liability company, as indicated on Exhibit
H, duly organized, validly existing and, if applicable, in good standing under
the laws of the jurisdiction of its organization, (B) is duly qualified to do
business and, if applicable, is in good standing under the laws of each
jurisdiction required to conduct its business as presently conducted and (C) has
all requisite power and authority to own, operate and encumber its Property and
to conduct its business as presently conducted.

         4.15. POLLUTION; HAZARDOUS MATERIALS. In connection with the
acquisition and ownership of their interests in the Unencumbered Eligible
Properties, the Borrowers and

                                     - 31 -
<PAGE>   40
Guarantors have made and will continue to make such inquiries, and has and will
continue to cause such testing, surveying, inspection or other action, with
respect to the Unencumbered Properties as is reasonably necessary or desirable
in connection with Hazardous Materials which might be present in the air, soil,
surface water or groundwater at such Unencumbered Eligible Property. Except as
specifically set forth in the Environmental Reports listed on Exhibit F (as
amended or supplemented from time to time by additional Environmental Reports
with respect to future Unencumbered Eligible Properties or otherwise amended or
supplemented with the consent of the Lender) and except for such exceptions
which are not reasonably likely to have, in the aggregate, a Material Adverse
Effect, to the best of any Borrower's or Guarantor's knowledge, there are no
Hazardous Materials present in the air, soil, surface water or groundwater at
any Unencumbered Eligible Property and no Hazardous Materials (except Hazardous
Materials maintained in accordance with all Requirements of Law and necessary
for the business operations of any such Unencumbered Eligible Property,
including, without limitation, petroleum used for heating oil) are used in the
operation of any Unencumbered Eligible Property.

         4.16. DECLARATION OF TRUST, PARTNERSHIP AGREEMENT, ETC. The copies of
the Declaration of Trust of Lexington and the organizational documents of each
Borrower which have been furnished to Lender are true, correct and complete
copies thereof as in effect on the date of this Agreement and will be true,
correct and complete in the case of each Guarantor when submitted to Lender
under Section 5.2.

         4.17. DISCLOSURES. The financial statements referred to in Section 4.1
do not, nor does this Agreement, the other Loan Documents, or any other written
statement furnished by or on behalf of any Borrower to Lender in connection with
the transactions contemplated hereby or thereby, contain any untrue statement of
a material fact or omit a material fact necessary to make the statement
contained therein or herein not misleading.

         4.18 GUARANTORS. The representations and warranties in Sections 4.2
through 4.11, 4.15 through 4.17, shall be true, correct and complete with
respect to each Guarantor.

         SECTION 5. CONDITIONS PRECEDENT

         5.1. CONDITIONS TO LOANS. The obligation of Lender to make a Loan
hereunder on the Initial Funding Date is subject to the satisfaction of the
following conditions precedent:

                  (a) NOTE; LOAN DOCUMENTS. On or before the Closing Date Lender
shall have received a Note executed by a Responsible Officer of each Borrower
and each of the other Loan Documents shall have been duly executed and delivered
by the respective parties thereto and all shall be in full force and effect.

                  (b) REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by each Borrower or Guarantor herein or in the other Loan
Documents or which are contained in any certificate, document or financial or
other statement furnished at any time under

                                     - 32 -
<PAGE>   41
or in connection with any of the Loan Documents, shall be true, correct and
accurate on and as of the Funding Date for the Loan as if made on and as of such
date unless stated to relate to a specific earlier date, in which case such
representations and warranties shall have been true, correct and complete in all
material respects as of such earlier dates.

                  (c) NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of
Default shall have occurred and be continuing on such date either before or
after giving effect to the Loan to be made on the Funding Date.

                  (d) LEGAL OPINION. Lender shall have received a favorable
opinion of counsel to each Borrower and each Guarantor indicating the
enforceability of the Loan Documents, addressed to Lender as of the Closing Date
and covering such other matters as are customarily required by Lender in similar
transactions, all in form and substance reasonably satisfactory to Lender.

                  (e) ORGANIZATIONAL DOCUMENTS; RESOLUTIONS; INCUMBENCY
CERTIFICATE; AUTHORIZED SIGNERS. Lender shall have received certified copies of
the Declaration of Trust of Lexington and a copy of the Partnership Agreement
and Certificate of Limited Partnership or Certificate of Incorporation and by
laws or other organizational documents of each Borrower and Guarantor (as
appropriate) and all resolutions of the Board of Trustees of Lexington and a
certificate of partnership, corporate or limited liability company action of
each Borrower authorizing the transactions described herein and evidencing the
due authorization, execution and delivery of and this Agreement and the other
Loan Documents, and all required approvals, if any, of Governmental Authorities
with respect to this Agreement and the other Loan Documents. Lender shall have
received from each of the Borrowers and for each of the Guarantors an incumbency
certificate, dated as of the Closing Date, signed by a duly authorized offer of
such Person and giving the name of each individual who shall be authorized: (a)
to sign, in the name and on behalf of such Person, each of the Loan Documents to
which such person is or is to be come a party; (b) in the case of the Borrowers'
Representative, to submit Notices of Borrowings on behalf of the Borrowers; and
(c) in the case of the Borrowers' Representative, to give notices to take other
action on behalf of the Borrowers or Guarantors under the Loan Documents.

                  (f) CERTIFICATIONS FROM GOVERNMENT OFFICIALS; UCC SEARCHES.
Lender shall have received (i) certifications from government officials
evidencing the legal existence and good standing of each Borrower and any
Guarantor in its state of organization and as to the foreign qualification of
each Borrower or Guarantor in the respective states in which it owns
Unencumbered Eligible Properties, along with a certified copy of the certificate
of limited partnership or certificate of incorporation of each Borrower and
Guarantor, all as of the most recent practicable date; and (ii) UCC Searches
from the appropriate jurisdictions for each Borrower and Guarantor with respect
to the Unencumbered Eligible Properties.

                  (g) UNENCUMBERED ELIGIBLE PROPERTIES.

                                     - 33 -
<PAGE>   42

                  (i) Subject to the provisions of Section 2.19(b)(xviii),
Lender shall have received and approved and shall have such access to each of
the Unencumbered Eligible Properties as it shall have requested.

                  (ii) Lender shall have received and approved a completed
Certificate of Unencumbered Eligible Properties.

            (h)   CERTIFICATES OF INSURANCE. Lender shall have received (a)
current certificates of insurance as to all of the insurance maintained by each
Borrower on each Unencumbered Eligible Property (including flood insurance if
applicable) from the insurer or an independent insurance broker, identifying
insurers, types of insurance, insurance limits, and policy terms; and (b) such
further information and certificates from the Borrowers, their insurers and
insurance brokers as the Lender may reasonably request.

            (i)   ESTOPPEL CERTIFICATES. Unless waived or receipt is deferred by
Lender, an original copy of an estoppel certificate executed by each tenant and
each lease guarantor in respect of each Approved Lease in the form attached
hereto as Exhibit J to this Agreement or as may otherwise be accepted by the
Lender in its reasonable discretion.

            (j)   NO MATERIAL ADVERSE EFFECT. No Material Adverse Effect shall
have occurred.

            (k)   SOLVENCY OF EACH BORROWER AND GUARANTOR. Both after and
immediately before the making of the Loan on any Funding Date, each Borrower and
Guarantor shall be Solvent.

            (l)   FEES. All obligations of Borrowers to pay fees and provide
compensation and reimbursement of costs and expenses to Lender or their
designees as of the Funding Date hereunder or otherwise in connection with the
financing contemplated hereby shall have been satisfied.

            (m)   LEGALITY OF LOANS. The making of the Loans hereunder by Lender
and the acquisition of the Notes shall be permitted as of the Funding Date by
all applicable Requirements of Law and shall not subject Lender to any penalty
or other onerous condition in or pursuant to any such Requirement of Law or
result in a Material Adverse Effect.

            (n)   NOTICE OF BORROWING. Lender shall have received a Notice of
Borrowing as provided in Section 2.5(a), and each other certificate or document
required under Section 2.5 with appropriate insertions and attachments
reasonably satisfactory in form and substance to Lender and its counsel,
executed by a Responsible Officer of Borrowers' Representative.

            (o)   PAY-OFF OF EXISTING LOANS. Upon the initial funding of the
Loans the Borrowers shall payoff and terminate that certain $100,000,000
Unsecured Revolving Credit Agreement, dated as of July 22, 1998, (the "FLEET
REVOLVING LOAN"), between the Borrowers and

                                      -34-
<PAGE>   43
Fleet, as Lender, and Fleet shall execute, acknowledge and deliver satisfactions
and reconveyances of all mortgages and deeds of trust, (if any) UCC-3's, and any
and all other documents and instruments necessary to terminate and release all
liens and security interest created thereunder. Once such indebtedness under the
Fleet Revolving Loan has been paid in full Borrowers' original promissory notes
for such loan facility shall be marked "canceled" or "paid in full" and returned
to Borrowers' Representative.

            (p)   CERTIFICATE OF COVENANT COMPLIANCE. Lender shall have received
a Certificate of Covenant Compliance in the form attached as Exhibit I to this
Agreement.

      5.2.  CONDITIONS PRECEDENT TO ALL SUBSEQUENT LOANS. The obligation of
Lender to make any Loan requested to be made by it on any date after the Initial
Funding Date is subject to the following conditions precedent as of each such
date:

            (a)   REPRESENTATIONS AND WARRANTIES. As of such date, both before
and after giving effect to the Loans to be made on such date, all of the
representations and warranties of each Borrower and Guarantor contained in this
Loan Agreement and in any other Loan Document (other than representations and
warranties which expressly speak as of a different date) shall be true and
correct in all material respects.

            (b)   NO DEFAULTS. No Default or Event of Default shall have
occurred and be continuing or would result from the making of the requested
Loan.

            (c)   NO LEGAL IMPEDIMENTS. No law, regulation, order, judgment or
decree of any Governmental Authority shall, and no Lender shall have received
notice that, in the reasonable judgment of such Lender, litigation is pending or
threatened which is likely to, enjoin, prohibit or restrain, or impose or result
in the imposition of any material adverse condition upon, such Lender's making
of the requested Loan.

            (d)   NO MATERIAL ADVERSE EFFECT. No Borrower or Guarantor shall
have received written notice that an event has occurred since the date of this
Agreement which has had and continues to have, or is reasonably likely to have,
a Material Adverse Effect.

            (e)   SOLVENCY OF EACH BORROWER AND GUARANTOR. Both after and
immediately before the making of the Loan on any Funding Date, each Borrower and
Guarantor shall be Solvent.

            (f)   FEES. All obligations of Borrowers and Guarantors to pay fees
and provide compensation and reimbursement of costs and expenses to Lender or
their designees as of the Funding Date hereunder or otherwise in connection with
the financing contemplated hereby shall have been satisfied.

            (g)   NOTICE OF BORROWING. Lender shall have received a Notice of
Borrowing, and each other certificate or document required under Section 2.5
with appropriate insertions and

                                      -35-
<PAGE>   44
attachments reasonably satisfactory in form and substance to Lender and its
counsel, executed by a Responsible Officer of Borrowers' Representative.

            (h)   GUARANTORS. Each Guarantor shall deliver the documents,
agreements, instruments and opinions as the Lender shall require as to such
Guarantor and the Unencumbered Eligible Property owned by such Guarantor that
are required to be delivered by the Borrowers as of the Closing Date pursuant to
Sections 5.1 (b) and (d) through (j).

            (i)   NEW UNENCUMBERED ELIGIBLE PROPERTIES. Borrowers'
Representative shall have complied with Section 5.1(g),(h) and (i) for any
Unencumbered Eligible Property Applications submitted after the Closing Date.

            (j)   CERTIFICATE OF UNENCUMBERED ELIGIBLE PROPERTIES. Borrower's
Representative shall have delivered to Lender an updated Certificate of
Unencumbered Eligible Properties.

Each submission of a Notice of Borrowing with respect to any Loan and each
acceptance by a Borrower of the proceeds of each Loan made hereunder, shall
constitute a representation and warranty by each Borrower and Guarantor as of
the date of funding in respect of such Loan, that all the conditions contained
in this Section 5.2 have been satisfied or waived in accordance with Section
10.1 and that no MAC has occurred and is continuing as of the relevant date in
respect of the facts, circumstances or laws relevant to the conditions precedent
set forth in paragraphs (d), (e), (f), and (k) of Section 5.1.

      SECTION 6. AFFIRMATIVE COVENANTS

      Each Borrower hereby agrees that, so long as the Revolving Credit
Commitment remains in effect, any Note remains outstanding and unpaid or any
other amount is owing to Lender, such Borrower shall and shall cause each
Guarantor (to the extent applicable) to:

      6.1.  FINANCIAL STATEMENTS. Furnish to Lender or cause Borrowers'
Representative to furnish to Lender:

            (a)   ANNUAL. As soon as available, but in any event within ninety
(90) days after the end of each fiscal year (A) audited consolidated financial
statements of Lexington consisting of (i) a balance sheet; (ii) an income
statement; (iii) a statement of cash flow; (iv) a statement of retained
earnings; and (v) changes in stockholders' equity, for such year, setting forth
in each case in comparative form the figures for the previous year, certified
without material qualification by its certified public accountants of nationally
recognized standing; and (B) unaudited consolidating financial statements of
Lexington certified by a Responsible Officer of Lexington; and

            (b)   QUARTERLY. As soon as available, but in any event not later
than sixty (60) days after the end of each fiscal quarter of Lexington, copies
of each of the following for

                                     -36-
<PAGE>   45
Lexington: (i) an unaudited balance sheet prepared on a consolidated and
consolidating basis as at the end of each such quarter and the related unaudited
statements of income for the fiscal quarter; (ii) stockholders' equity and cash
flows for such quarterly period, and the portion of the fiscal year through such
date; (iii) operating statements and a rent roll certified by Lexington
(including a schedule of the aging of all rent payments and indicating whether
any tenant is no longer in occupancy) for each Unencumbered Eligible Property
for such quarterly period, the portion of the fiscal year through such date,
setting forth in each case in comparative form the figures for the previous
year, certified by a Responsible Officer of such entity (subject to normal
year-end audit adjustments); all such financial statements referred to in
Section 5.1 (a) and (b) to be complete and correct in all material respects and
be prepared in reasonable detail and in accordance with GAAP applied
consistently throughout the periods reflected therein (except as disclosed
therein and for normal year-end adjustments).

      6.2.  CERTIFICATES; OTHER INFORMATION. Furnish to Lender or cause
Borrowers' Representative to furnish to Lender:

            (a)   concurrently with the delivery of Lexington's financial
statements referred to in Section 6.1(a) and (b) above, (i) a certificate of a
Responsible Officer stating that he or she has no knowledge of any Default or
Event of Default except as specified in such certificate, (ii) a Certificate of
Covenant Compliance, (iii) a Certificate of Unencumbered Eligible Properties;
and (iv) that the representations and warranties contained in the Loan Documents
are true, correct and accurate in all material respects to the same extent as
though made on and as of the date of such delivery.

            (b)   (i) whenever additional debt in excess of $10,000,000 is
incurred by any Borrower or Guarantor, a Certificate of Covenant Compliance;
(ii) upon the sale of any Property owned by a Borrower or Guarantor, a
Certificate of Covenant Compliance and an updated Certificate of Unencumbered
Eligible Properties; and (iii) at any other time as Borrowers' Representative
wishes to submit an updated Certificate of Covenant Compliance or Certificate of
Unencumbered Eligible Properties.

            (c)   within ten days of receipt thereof, copies of any financial
statements or other information furnished to a Borrower or Guarantor pursuant to
the Approved Leases;

            (d)   on an annual basis, a copy of a one year projected operating
statement of Lexington including a projected operating budget and cash flow of
Lexington;

            (e)   promptly after the same are sent, copies of all financial
statements and reports which Lexington sends to its holders of its equity
securities, and promptly after the same are filed by Lexington, copies of all
financial statements and reports which Lexington may make to, or file with, the
NYSE and the Commission or any successor or analogous Governmental Authority;

                                      -37-
<PAGE>   46
            (f)   upon request by Lender, no later than thirty (30) days after
the same are filed with the Internal Revenue Service ("IRS") and other
applicable taxing authorities, copies of its income tax returns and all related
correspondence;

            (g)   Within ten (10) days after the filing thereof, evidence
indicating that Lexington has maintained its status as a real estate investment
trust ("REIT") under the applicable provisions of the Code such evidence to
consist of annual tax returns certified by its independent public accounting
firm or such other national accounting firm which is a "Big 5" firm or otherwise
reasonably acceptable to Lender; and

            (h)   promptly thereafter, such additional financial and other
information respecting the financial or other condition of any Borrower or
Guarantor or the status or condition of the Unencumbered Eligible Properties or
the operation thereof which such Borrower or Guarantor is entitled to or can
otherwise reasonably obtain and as Lender may from time to time reasonably
request.

      6.3   PUNCTUAL PAYMENT. The Borrowers will duly and punctually pay or
cause to be paid the principal and interest on the Loans and all interest, fees,
charges and other amounts provided for in this Agreement and the other Loan
Documents, all in accordance with the terms of this Agreement and the Note, and
the other Loan Documents.

      6.4.  PAYMENT OF OTHER OBLIGATIONS. Discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
Indebtedness and other obligations of whatever nature except when the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings, and reserves in conformity with GAAP with respect thereto have been
provided on the books of such Borrower or Guarantor or where the failure to do
so does not violate Section 8.1(e).

      6.5.  CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Continue to engage
in business of the same general type as now conducted by it, and preserve, renew
and keep in full force and effect its existence and take all reasonable action
to maintain all rights, privileges and franchises necessary or desirable in the
normal conduct of its business; and comply with all Contractual Obligations and
Requirements of Law except to the extent that the failure to comply therewith
could not, in the aggregate, have a Material Adverse Effect.

      6.6.  LEASES. (a) Maintain the Approved Leases and any Financeable Ground
Lease in full force and effect and enforce the obligations of the tenants under
the Approved Leases and the landlord under each Financeable Ground Lease, in a
timely manner and obtain the consent of the Lender in connection with any change
in or waiver of any obligation of any tenant or landlord, contained in, or any
right or remedy of any Borrower under any Approved Lease or Financeable Ground
Lease (as appropriate) which alone or together with any other such change or
waiver could reasonably be expected to have a Material Adverse Effect on such
Unencumbered Eligible Property; and (b) give notice to Lender, together with a
copy thereof, of each renewal,

                                      -38-
<PAGE>   47
amendment, modification or termination of the Approved Leases or any Financeable
Ground Lease.

      6.7.  MAINTENANCE OF PROPERTY, INSURANCE. Keep or cause the tenants to
keep all Property in good condition, working order and repair; maintain or cause
the tenants of its Properties to maintain with financially sound and reputable
insurance companies, such hazard, liability and other insurance with respect to
its Property and its business against such casualties and contingencies in
amounts and minimum scope of coverage as shall be in accordance with the general
practices of businesses having similar operations in similar geographic
location; and furnish to Lender, on the Closing Date and upon written request,
full information as to the insurance carried.

      6.8.  INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. Keep proper
books of record and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives of Lender and any Lender to visit and inspect any of its
properties for any purpose including performing environmental inspections and
examine and make abstracts from any of its books and records at any reasonable
time and on reasonable notice and as often as may reasonably be desired (subject
to applicable provisions of any lease affecting any Unencumbered Eligible
Property), and to discuss the business, operations, properties, prospects and
financial and other condition of such Borrower with officers and employees of
such Borrower and with its independent certified public accountants.

      6.9.  NOTICES. Promptly, and in any event within ten (10) Business Days
after an officer of any Borrower or Guarantor obtains knowledge thereof (except
as set forth below) give notice to Lender:

            (a)   of the occurrence of any Default or Event of Default;

            (b)   of (i) any default or event of default or termination under
any (a) Approved Lease or any other Contractual Obligation of or in favor of any
Borrower or Guarantor which is reasonably likely to have a Material Adverse
Effect or (b) Financeable Ground Lease as to which any Borrower has received
notice from the ground lessor and which remains uncured and (ii) any litigation,
investigation or proceeding which may exist at any time between any Borrower or
any tenant and any Governmental Authority or other Person, which if adversely
determined is reasonably likely to have a Material Adverse Effect;

            (c)   of any litigation or proceeding pending or any judgment
against any Borrower, Guarantor or Unencumbered Eligible Property in which the
amount involved which is not covered by insurance is $100,000 or more or in
which injunctive or similar relief is sought; or

            (d)   of the occurrence or existence of any event or condition which
would cause any of the representations and warranties set forth in Section 4.8
to be untrue.

                                      -39-
<PAGE>   48
            (e)   of any setoff, claims, withholdings or other defenses to which
any of the Unencumbered Eligible Properties are subject, which (i) would have a
Material Adverse Effect on (x) the business, assets or financial condition of
any Borrower, any Guarantor or any of their respective Subsidiaries, or (y) the
value of such Unencumbered Eligible Property, or (ii) with respect to such
Unencumbered Eligible Property, which is not a Permitted Exception or a
Customary Permitted Lien.

Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action a Borrower or Guarantor proposes to take with respect
thereto.

      6.10. REIT REQUIREMENTS. Cause Lexington to operate its business at all
times so as to satisfy or be deemed to have satisfied all requirements necessary
to qualify as a real estate investment trust under the Code. Lexington shall
maintain adequate records so as to comply with all record-keeping requirements
relating to the qualification of Lexington as a real estate investment trust as
required by the Code and applicable regulations of the Department of the
Treasury promulgated thereunder and will properly prepare and timely file with
the IRS all returns and reports required thereby. Lexington shall request from
its shareholders all shareholder information required by the Code and applicable
regulations of the Department of Treasury promulgated thereunder.

      6.11. ENVIRONMENTAL ACTIONS.

            (a)   INDEMNIFICATION. On a joint and several basis, indemnify,
defend (with counsel reasonably acceptable to the indemnified party) and hold
Lender and the directors, officers, shareholders, employees and agents of Lender
harmless from any claims (including without limitation third party claims for
personal injury or real or personal property damage), actions, administrative
proceedings, judgments, damages, punitive damages, penalties, fines, reasonable
costs, liabilities (including sums paid in settlements of claims), interest or
losses, including reasonable attorneys' fees, consultant fees and expert fees,
that arise directly or indirectly from or in connection with the presence,
suspected presence, release or suspected release of any Hazardous Material in
the air, soil, surface water or groundwater at or from the real property or any
portion thereof with respect to a Property, or any other real property in which
any Borrower has any interest (all of the foregoing real property shall be
referred to collectively as the "REAL PROPERTY") or any violation of any
Environmental Law. Without limiting the generality of the foregoing, the
indemnification provided by this Section shall specifically cover (i) costs,
including capital, operating and maintenance costs, incurred in connection with
any investigation or monitoring of site conditions or any clean-up, remedial,
removal or restoration work required or performed by any federal, state or local
governmental agency or political subdivision or performed by any
non-governmental Person, including any tenant of a Property, because of the
presence, suspected presence, release or suspected release of Hazardous Material
in the air, soil, surface water or groundwater at or from the Real Property; and
(ii) costs incurred in connection with (A) Hazardous Material present or
suspected to be

                                      -40-
<PAGE>   49
present in the air, soil, surface water or groundwater at the Real Property
before the date of this Agreement, or (B) Hazardous Material that migrates,
flows, percolates, diffuses or in any way moves onto or under or from the Real
Property, or (C) Hazardous Material present at the Real Property as a result of
any release, discharge, disposal, dumping, spilling or leaking (accidental or
otherwise) (any of the foregoing, a "RELEASE") onto or from the Property before
or after the date of this Agreement by any Person; provided, however, that the
indemnification provided by this Section shall not include claims to the extent
arising from the gross negligence or willful misconduct of any party seeking
indemnification. The indemnification provided in this Section 6.11 shall survive
the termination of this Agreement; provided, however, that no Borrower shall
have any liability under the foregoing indemnity in connection with any Release
of any Hazardous Materials on, under or about any Property which occurs after
the date of any transfer of the Property to Lender, or its designee or any other
Person(s), by foreclosure deed-in-lieu thereof or otherwise which was not
present on the Property prior to such date.

            (b)   RESPONSE ACTIONS. Each Borrower and Guarantor covenants and
agrees that if any Release or disposal of Hazardous Material shall occur or
shall have occurred on any Real Property owned by it, such Borrower or Guarantor
will cause the prompt containment and removal of such Hazardous Material and
remediation of such Real Property as necessary to comply with all Environmental
Laws or to preserve the value of such Real Property.

            (c)   ENVIRONMENTAL ASSESSMENTS. If Lender has reasonable grounds to
believe that an adverse environmental event which could have a Material Adverse
Effect has occurred with respect to any Unencumbered Eligible Property, after
reasonable notice by the Lender, whether or not a Default or an Event of Default
shall have occurred, the Lender may determine that the affected Unencumbered
Eligible Property no longer qualifies as an Unencumbered Eligible Property;
provided that prior to making such determination, the Lender shall give the
Borrowers' Representative (i) reasonable notice and the opportunity to obtain
one or more environmental assessments or audits of such Unencumbered Eligible
Property prepared by a hydrogeologist, an independent engineer or other
qualified consultant or expert approved by the Lender, which approval will not
be unreasonably withheld, to evaluate or confirm (A) whether any Release of
Hazardous Materials has occurred in the soil or water at such Unencumbered
Eligible Property and (B) whether the use and operation of such Unencumbered
Eligible Property materially complies with all Environmental Laws (including not
being subject to a matter that is a material environmental event) and (ii) if
such assessments or audits discloses that a Release has occurred, a reasonable
period to clean up or remediate such condition in accordance with applicable
Environmental Laws unless such Release could reasonably be expected to have a
Material Adverse Effect on the operation, value or financeability of such
Property, in which event the consent of the Lender must be obtained. Such
assessments and audits will then be used by the Lender to determine whether a
Material Adverse Effect has in fact occurred with respect to such Unencumbered
Eligible Property. All such environmental assessments shall be at the sole cost
and expense of the Borrowers.

      6.12. CHANGES IN GAAP. In the event of a change in GAAP which would cause
the financial covenants set forth in Section 7.1 to provide less protection to
Lender or be more

                                      -41-
<PAGE>   50
restrictive for the Borrowers than presently provided for hereunder, cause such
financial covenants to be reset, in good faith, by Lender and the Borrowers to
maintain the protection to each Lender equivalent to that in place prior to such
change and Lender and each Borrower shall execute one or more amendments to this
Agreement to effect such reset.

      6.13. NYSE LISTING. Cause Lexington at all times to keep its common stock
duly listed on the NYSE and to file all reports on a timely basis required by
the NYSE.

      6.14. INTENTIONALLY OMITTED.

      6.15. MANAGEMENT OF BORROWER AND UNENCUMBERED ELIGIBLE PROPERTY. Insure
that the management of Lexington shall be self-directed and self-administered.

      6.16. SUBORDINATION OF PAYABLES TO AFFILIATES. After the occurrence and
continuance of a Default or Event of Default, make no payments on any loans owed
by any Borrower or Guarantor to any Affiliate or Subsidiary and all such amounts
shall be fully subordinated to the Loans pursuant to the terms of an agreement
in form and substance satisfactory to the Lender.

      6.17. SUBORDINATED DEBT. Not amend, modify or obtain a waiver of any
provision of any document or instrument evidencing or relating to subordinated
indebtedness (including, but not limited to the $25,000,000 of exchangeable
notes issued by LCIF in March, 1997) which would move up the maturity date on
such subordinated indebtedness prior to the Revolving Credit Termination Date or
otherwise have a Material Adverse Effect on the Lender, or purchase, redeem
(except redemptions made in connection with the conversion of any subordinate
indebtedness to preferred stock or common stock pursuant to the terms of the
documentation evidencing such subordinated indebtedness), retire or otherwise
acquire or make any payment or prepayment of the principal of or any other
amount owing in respect of any subordinated indebtedness except for payments
(but not prepayments) permitted or required under the present provisions of the
documentation evidencing the subordinated indebtedness (without amendment) and
redemptions of the exchangeable notes and prepayments made with proceeds of the
Loans, or incur subordinated indebtedness after the Closing Date, without the
prior written consent of Lender, which consent will not be unreasonably withheld
under the provisions of documentation approved by the Lender.

      6.18. ERISA NOTICES. Deliver or cause to be delivered to the Lender, at
such Borrower's expense, the following information and notices as soon as
reasonably possible, and in any event:

            (a)   within thirty (30) Business Days after Borrower or any ERISA
Affiliate knows or has reason to know that a Termination Event has occurred, a
written statement of the chief financial officer of the Borrower describing such
Termination Event and the action, if any, which such Borrower or any ERISA
Affiliate has taken, is taking or proposes to take with respect thereto, and
when known, any action taken or threatened by the IRS, DOL or PBGC with respect
thereto;

                                      -42-
<PAGE>   51
            (b)   within thirty (30) Business Days after the Borrower knows or
has reason to know that a prohibited transaction (defined in Sections 406 of
ERISA and Section 4975 of Code) has occurred, a statement of the chief financial
officer of the Borrower describing such transaction and the action which the
Borrower or any ERISA Affiliate has taken, is taking or proposes to take with
respect thereto;

            (c)   within thirty (30) Business Days after the filing of the same
with the DOL, IRS or PBGC, copies of each annual report (form 5500 series),
including Schedule B thereto, filed with respect to each Plan;

            (d)   within thirty (30) Business Days after receipt by such
Borrower or any ERISA Affiliate of each actuarial report for any Plan or
Multiemployer Plan and each annual report for any Multiemployer Plan, copies of
each such report;

            (e)   within thirty (30) Business Days after the filing of the same
with the IRS, a copy of each funding waiver request filed with respect to any
Plan and all communications received by such Borrower or any ERISA Affiliate
with respect to such request;

            (f)   within thirty (30) Business Days after the occurrence any
material increase in the benefits of any existing Plan or Multiemployer Plan or
the establishment of any new Plan or the commencement of contributions to any
Plan or Multiemployer Plan to which such Borrower or any ERISA Affiliate to
which such Borrower or any ERISA Affiliate was not previously contributing,
notification of such increase, establishment or commencement;

            (g)   within thirty (30) Business Days after such Borrower or any
ERISA Affiliate receives notice of the PBGC's intention to terminate a Plan or
to have a trustee appointed to administer a Plan, copies of each such notice;

            (h)   within thirty (30) Business Days after such Borrower or any of
its Subsidiaries receives notice of any unfavorable determination letter from
the IRS regarding the qualification of a Plan under Section 401(a) of the Code,
copies of each such letter;

            (i)   within thirty (30) Business Days after such Borrower or any
ERISA Affiliate receives notice from a Multiemployer Plan regarding the
imposition of withdrawal liability, copies of each such notice;

            (j)   within thirty (30) Business Days after such Borrower or any
ERISA Affiliate fails to make a required installment or any other required
payment under Section 412 of Code on or before the due date for such installment
or payment, a notification of such failure; and

            (k)   within thirty (30) Business Days after such Borrower or any
ERISA Affiliate knows or has reason to know (i) a Multiemployer Plan has been
terminated, (ii) the

                                      -43-
<PAGE>   52
administrator or plan sponsor of a Multiemployer Plan intends to terminate a
Multiemployer Plan, or (iii) the PBGC has instituted or will institute
proceedings under Section 4042 of ERISA to terminate a Multiemployer Plan,
notification of such termination, intention to terminate or institution of
proceedings.

      6.19. ERISA COMPLIANCE. Cause, and shall cause each of its Subsidiaries
and ERISA Affiliates to, establish, maintain and operate all Plans to comply in
all material respects with the provisions of ERISA, the Code, all other
applicable laws, and the regulations and interpretations thereunder and the
respective requirements of the governing documents for such Plans.

      6.20. PAYMENT OF TAXES AND CLAIMS (a) Pay or cause to be paid, and cause
each of its Subsidiaries to pay or cause to be paid, (i) all taxes, assessments
and other governmental charges imposed upon it or on any of its property or
assets or in respect of any of its franchises, licenses, receipts, sales, use,
payroll, employment, business, income or property before any penalty or interest
accrues thereon, and (ii) all claims (including, without limitation, claims for
labor, services, materials and supplies) for sums which have become due and
payable and which by law have or may become a Lien on an Unencumbered Eligible
Property (other than a Lien permitted by Section 7.7) ; provided, however, that
no such taxes, assessments, fees and governmental charges referred to in clause
(i) above or claims referred to in clause (ii) above need be paid if being
contested in good faith by appropriate proceedings diligently instituted and
conducted and if such reserve or other appropriate provision, if any, as shall
be required in conformity with GAAP shall have been made therefor.

      6.21. INTER-BORROWER OR GUARANTOR ADVANCES OF LOAN PROCEEDS Cause all
transfers of Loan proceeds from one Borrower or Guarantor to another or any
Affiliate or Subsidiary thereof to be documented and treated for all purposes by
the lending and receiving Borrower or Guarantor, Affiliate or Subsidiary as an
intercorporate loan transaction.

      6.22. SOLVENCY OF GUARANTORS. Lexington, LCIF or LCIFII shall cause each
of the Guarantors to remain Solvent and shall provide each of the Guarantors
with such funds and assets as such Guarantor shall require in the operation of
its business, all in consideration of such Guarantor's execution and delivery of
its Guaranty.

      6.23. NO AMENDMENTS TO CERTAIN DOCUMENTS. The Borrowers will not, and will
not permit any Guarantor to, at any time cause or permit its certificate of
limited partnership, agreement of limited partnership, articles of
incorporation, by-laws or other charter documents, as the case may be, to be
modified, amended or supplemented in any respect whatever, without (in each
case) the express prior written consent or approval of the Lender, if such
changes would adversely affect Lexington's REIT status or otherwise materially
adversely affect the rights of the Lender hereunder or under any other Loan
Document.

      6.24. YEAR 2000. The Borrowers and each Guarantor and their Subsidiaries
shall notify the Lender promptly upon detecting any occurrence whereby the
representation contained in Section 4.18 above becomes untrue.

                                      -44-
<PAGE>   53
      SECTION 7. NEGATIVE COVENANTS

      Each Borrower hereby agrees that, so long as the Revolving Credit
Commitment remains in effect or any Note remains outstanding and unpaid or any
other amount is owing to Lender hereunder or under any other Loan Document, such
Borrower shall not and shall not permit any Guarantor to directly or indirectly:

      7.1.  FINANCIAL COVENANTS. Fail to comply with the covenants set forth in
this Section 7.1 on a consolidated basis, tested as of the end of each fiscal
quarter.

            (a)   MINIMUM ESTIMATED NET WORTH OF BORROWERS AND GUARANTORS.
Suffer or permit the Minimum Estimated Net Worth of the Borrowers on a
consolidated basis to be less than the aggregate of (i) $350,000,000, plus (ii)
75% of the Net Securities Proceeds of all issues of any Common Shares, Preferred
Shares or other equity securities by Lexington in one or more transactions
received after the date hereof, excluding Net Securities Proceeds used to redeem
Preferred Shares or other equity securities of Lexington.

            (b)   DEBT SERVICE COVERAGE. Suffer or permit the ratio of EBIDA
less non-incremental revenue generating capital expenditures to Debt Service
obligations (including principal and interest on the Loans) for the two (2) most
recent fiscal quarters to be less than 1.60:1.0 from the date of closing through
the Revolving Credit Termination Date, all as determined within 60 days of the
close of each fiscal quarter.

            (c)   MAXIMUM TOTAL DEBT TO CAPITALIZED VALUE. Suffer or permit
Total Debt to Capitalized Value to exceed 65%.

            (d)   MINIMUM UNENCUMBERED LIQUIDITY. Suffer or permit the total sum
of (i) unrestricted cash, (ii) unrestricted Cash Equivalents and (iii) Current
Availability under the Revolving Credit Commitment, to be less than $2,500,000
on a consolidated basis.

            (e)   MAXIMUM SECURED RECOURSE DEBT TO CAPITALIZED VALUE. Suffer or
permit secured Recourse debt in respect of money borrowed or guarantees in
respect thereof by the Borrowers and Guarantors on a consolidated basis to (i)
exceed (a) 7.5% of Capitalized Value from the date of closing through September
30, 2002 and (b) 5% from October 1, 2002 through the Revolving Credit
Termination Date or (ii) have a scheduled maturity date prior to the Revolving
Credit Termination Date (other than the maturity date of $25,000,000 of
exchangeable notes issued by LCIF in March 1977 (the "LCIF Debt")). The maximum
Loan to Value of secured Recourse debt for any Property as of the date such
secured Recourse debt is incurred, (excluding the LCIF Debt or any renewal or
replacement thereof up to $25,000,000), shall not exceed 75% (value for purposes
of the foregoing shall be determined by multiplying the net operating income for
the two (2) most recent fiscal quarters for such Property as of the date such
secured Recourse debt is incurred by two (2) and dividing by 9.5%). Such net
operating income shall be adjusted for any

                                      -45-
<PAGE>   54
newly acquired Property or any Property as to which two (2) fiscal quarters of
earnings information is not available in accordance with the last two (2)
sentences of Section 7.2 below.

            (f)   MAXIMUM PERMITTED INVESTMENTS. Suffer or permit investments in
(i) notes or mortgages or (ii) unimproved real estate to exceed 5% of
Capitalized Value in each case.

            (g)   INTEREST RATE PROTECTION. Fail to maintain in effect interest
rate protection arrangements, in form and substance reasonably satisfactory to
Lender, for all variable rate Indebtedness in excess of 12.5% of Capitalized
Value, providing for the rate of interest applicable to such indebtedness to be
capped at a rate satisfactory to Lender. Such arrangements shall be maintained
in full force and effect until all Obligations are repaid in full or until and
so long as variable rate Indebtedness shall be less than 12.5% of Capitalized
Value.

            (h)   LIMITATION ON CONSTRUCTION ACTIVITY. Have construction in
process (defined as total estimated completed cost of new construction,
expansions and redevelopment in process, excluding tenant improvements and
property renovation and refurbishment) whose value exceeds 10% of Capitalized
Value.

            (i)   MINIMUM FIXED CHARGE COVERAGE. Suffer or permit the ratio of
EBIDA less non-incremental revenue generating capital expenditures to Debt
Service plus dividends on Preferred Stock or other preferred securities for the
two (2) most recent fiscal quarters to be less than 1.50 to 1.0.

            (j)   LIMITATIONS ON DISTRIBUTIONS TO FFO. Suffer or permit
distributions to shareholders of Lexington to exceed 85% of Lexington's funds
from operations over the four (4) most recent fiscal quarters. Notwithstanding
the foregoing, Lexington may make distributions that are necessary to preserve
its REIT status.

            (k)   JOINT VENTURE OWNERSHIP INTEREST. Suffer or permit Joint
Venture Ownership Interest Value to exceed 15% of Capitalized Value at the end
of any fiscal quarter.

      7.2   COVENANT CALCULATIONS. For purposes of Section 7.1 hereof (with the
exception of subsections 7.1(b) and 7.1(i)), EBIDA and Unencumbered Eligible
Property NOI (and all defined terms and calculations using such terms) shall be
adjusted to (i) deduct the actual results of any Property disposed of by a
Borrower or Guarantor during the relevant fiscal period, and (ii) include the
pro forma results of any Property (including sale/leasebacks) acquired by a
Borrower or Guarantor or any existing Property on which new construction is
completed, in each case during the relevant fiscal period, with such pro forma
results being calculated by (x) using the Borrower's or Guarantor's pro forma
projections for such acquired Property, subject to the Lender's reasonable
approval, if such Property has been owned by a Borrower or Guarantor for less
than the relevant fiscal period or (y) using the actual results for such
acquired Property and adjusting such results for the appropriate period of time
required by the applicable financial covenant, if such Property has been owned
by a Borrower or a Guarantor for at least one complete fiscal quarter.

                                      -46-
<PAGE>   55
      7.3.  RESTRICTED PAYMENTS.

            (a)   Declare, make or pay any Restricted Payment while any Event of
Default is continuing either before or after giving effect to such Restricted
Payment, unless Borrowers have sufficient funds or availability under its credit
facilities (including this Agreement) to pay the next installment of principal
or interest payable in respect of the Obligations and except for minimum
distributions necessary to maintain Lexington's REIT status; or

            (b)   While any Event of Default is continuing, make any payment of
Indebtedness of Borrowers in contravention of the terms of any agreement or
instrument subordinating or purporting to subordinate any rights to receive
payments in respect of any Indebtedness of Borrowers to any rights to receive
payments under this Agreement.

      7.4.  DISSOLUTION; MERGER; SALE OF ASSETS; TERMINATION AND OTHER ACTIONS.

            Become a party to any dissolution, merger, consolidation or
reorganization without the approval of the Lender; or (b) convey, sell, lease or
otherwise dispose of (i) any of the Unencumbered Eligible Properties unless
withdrawn under Section 2.20 or (ii) any substantial part of its property or
assets (other than the Unencumbered Eligible Properties) unless, in the case of
this clause (b), no Default or Event of Default results therefrom.

      7.5.  TRANSACTIONS WITH AFFILIATES. Enter into or be a party to any
transaction directly or indirectly with or for the benefit of any Affiliate of
any Borrower or Guarantor, other than (i) in the ordinary course of business and
(ii) for fair consideration and on terms no less favorable to any Borrower or
Guarantor than are available in an arm's-length transaction from unaffiliated
third parties.

      7.6.  ACCOUNTING CHANGES. Make any significant change in accounting
treatment and reporting practices, except as required by GAAP or with which
Borrowers' or Guarantors' independent certified public accountants have agreed.
Such Borrower or Guarantor shall advise Lender sufficiently in advance of any
change to permit representatives of Lender to discuss the proposed change with
the officers of such Borrower or Guarantor.

      7.7.  NO LIENS. Until withdrawal under Section 2.20, suffer or permit
after the date hereof any Lien on any Unencumbered Eligible Property other than
Permitted Exceptions or Customary Permitted Liens.

      7.8.  FISCAL YEAR. Change the fiscal year end of any Borrower or Guarantor
from December 31 to any other date without the prior written consent of Lender.

      7.9.  CHIEF EXECUTIVE OFFICE. Change the name of any Borrower or Guarantor
or the chief executive office of such Borrower or Guarantor or the address where
such Borrower's or Guarantor's books and records are maintained unless such
Borrower or Guarantor gives Lender prompt written notice of any such change
thereafter.

                                      -47-
<PAGE>   56
         7.10. SELF-DIRECTED REIT. Suffer or permit Lexington to be other than
self-directed and self-administered or fail to obtain the consent of Lender
prior to any change to third-party management or leasing.

         7.11. LIMITATIONS ON CERTAIN ACTIVITIES. Except in connection with
withdrawals of Unencumbered Eligible Properties under Section 2.20 or sales,
transfers or encumbrances to another Borrower or Guarantor (i) no sale,
transfer, pledge or assignment of more than 49% of the ownership interests in
any of the Borrowers or Guarantors excluding Lexington; and (ii) no material
changes in any Borrower's or Guarantor's business of owning, managing and
investing in predominantly (75% or more by value) net-lease, office, industrial
and retail properties.

         7.12. DISTRIBUTIONS. Suffer or permit Lexington to use any portion of
the Loans to make any distributions to partners or shareholders which exceed 95%
of the greater of Lexington's (a) Funds From Operations or (b) taxable income.

         7.13. ERISA. No Borrower, Guarantor nor any of its Subsidiaries or
ERISA Affiliates shall:

                  (a) engage in any prohibited transaction described in Sections
406 of ERISA or 4975 of the Code for which a statutory or class exemption is not
available or a private exemption has not been previously obtained from the DOL;

                  (b) permit to exist any accumulated funding deficiency (as
defined in Sections 302 of ERISA and 412 of the Code), with respect to any Plan,
whether or not waived;

                  (c) fail to pay timely required contributions or annual
installments due with respect to any waived funding deficiency to any Plan;

                  (d) terminate any Plan which would result in any liability of
any Borrower or any ERISA Affiliate under Title IV of ERISA;

                  (e) fail to make any contribution or payment to any
Multiemployer Plan which any Borrower or any ERISA Affiliate may be required to
make under any agreement relating to such Multiemployer Plan, or any law
pertaining thereto;

                  (f) fail to pay any required installment or any other payment
required under Section 412 of the Internal Revenue Code on or before the due
date for such installment or other payment; or

                  (g) amend a Benefit Plan resulting in an increase in current
liability for the plan year such that any Borrower or any ERISA Affiliate is
required to provide security to such Plan under Section 401 (a) (29) of the
Code.

                                      -48-
<PAGE>   57

         7.14 COMPLIANCE WITH ENVIRONMENTAL LAWS. Do any of the following: (a)
use any of its Real Property or any portion thereof as a facility for the
handling, processing, storage or disposal of Hazardous Materials except for
quantities of Hazardous Materials used in the ordinary course of business and in
compliance with all applicable Environmental Laws, (b) cause or permit to be
located on any of its Real Property any underground tank or other underground
storage receptacle for Hazardous Materials except in full compliance with
Environmental Laws, (c) generate any Hazardous Materials on any of its Real
Property except in full compliance with Environmental Laws, or (d) conduct any
activity at any Real Property or use any Real Property in any manner so as to
cause a Release or a violation of any Environmental Law; provided that a breach
of this covenant shall result in the exclusion of the affected Real Property
from the calculation of the covenants set forth in Section 7.1, but shall only
constitute an Event of Default hereof if such breach has a Material Adverse
Effect on the Borrowers or Guarantors, taken as a whole, or materially impairs
the ability of any Borrower or Guarantor to fulfill their obligations to the
Lender under the Loan Documents.

         7.15. LIMITATION ON DEBT AND ACTION. Without the prior written consent
of the Lender incur any Recourse debt other than (i) the Loans, (ii) the limited
secured recourse debt permitted at Section 7.1(e) herein, or (iii) subordinated
debt provided that the terms, conditions and level of subordination of such
subordinated debt are approved by Lender (such approval in this instance not to
be unreasonably withheld).

         SECTION 8. EVENTS OF DEFAULT

         8.1. EVENTS OF DEFAULT. Upon the occurrence of any of the following
events (each an "EVENT OF DEFAULT"):

                  (a) PAYMENTS. Any Borrower or Guarantor shall fail to pay any
principal of or interest on any Note or Loan within ten (10) days after the due
date thereof, or any other amount payable hereunder shall not be paid within ten
(10) days after notice from Lender; or

                  (b) REPRESENTATIONS AND WARRANTIES. Any representation or
warranty made or deemed made by any Borrower or Guarantor herein or in any other
Loan Document or which is contained in any certificate, document or financial or
other statement furnished at any time under or in connection with this Agreement
or any other Loan Document shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or

                  (c) CERTAIN COVENANT DEFAULTS. Any Borrower shall default in
the observance or performance of any agreement contained in Section 7.1 of this
Agreement and such default shall continue unremedied for a period of 45 days
after notice to Borrowers' Representative by Lender; or

                  (d) CERTAIN OTHER COVENANT DEFAULTS. Any Borrower or Guarantor
shall default in the observance or performance of any other covenant or
provision of this Agreement or any of the other Loan Documents, and such default
shall continue unremedied for the period of

                                      -49-
<PAGE>   58

time set forth in such covenant or provision, if any, or, if not, a period of 30
days after notice from Lender or such longer period as may be reasonably
necessary to cure such default (but in no event more than ninety (90) days in
total) provided such Borrower or Guarantor commences such cure within said
thirty (30) day period and diligently prosecutes same to completion; or

                  (e) CROSS-DEFAULT. Any Borrower or Guarantor shall (i) default
in any payment of principal of or interest on any recourse Indebtedness, beyond
the period of grace, if any, provided in the instrument or agreement under which
such recourse Indebtedness was created; or (ii) default beyond applicable grace
periods in the observance or performance of any other agreement or condition
relating to any non-recourse Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur, the effect of which default beyond applicable grace periods or other
event is to cause, or to permit the holder or holders non-recourse Indebtedness
of such Borrower individually or together with defaults beyond applicable grace
periods of other Borrowers to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity.

                  (f) QUALIFICATION AS REIT. Lender shall have determined in
good faith, and shall have so given notice to Borrowers' Representative that
Lexington has at any time ceased to qualify, or has not qualified, as a real
estate investment trust for any of the purposes of the provisions of the Code
applicable to real estate investment trusts; provided, however, that no Event of
Default under this Section (f) shall be deemed to have occurred and be
continuing if, within thirty (30) days after notice of any such determination is
given Borrowers' Representative shall have furnished Lender with an opinion of
Borrowers' Representative's tax counsel (who shall be reasonably satisfactory to
Lender provided that the Lender may not unreasonably withhold its approval) to
the effect that the Lexington is then in a position to so qualify, or has so
qualified, as the case may be, which opinion shall not contain any material
qualification unsatisfactory to the Lender; or

                  (g) INSOLVENCY, ETC. There shall be an Insolvency Event with
respect to any Borrower or Guarantor; or

                  (h) ERISA. (i) Any Borrower, Guarantor or ERISA Affiliate
shall engage in any "PROHIBITED TRANSACTION" (as defined in Section 406 of ERISA
or Section 4975 of the Code) involving any Plan, (ii) any "ACCUMULATED FUNDING
DEFICIENCY" (as defined in Section 302 of ERISA), whether or not waived, shall
exist with respect to any Plan, (iii) a Termination Event shall occur or (iv)
any other event or condition shall occur or exist with respect to a Plan or a
Multiemployer Plan; and in each case in clauses (i) through (iv) above, such
event or condition, together with all other such events or conditions, if any,
could subject any Borrower to any tax, penalty or other liabilities in the
aggregate material in relation to the business, operations, property or
financial or other condition of any Borrower or Guarantor and any of the
foregoing are not corrected or cured within 30 days after notice to such
Borrower or Guarantor; or

                  (i) CERTAIN JUDGMENTS. One or more judgments or decrees shall
be entered against any Borrower or Guarantor involving in the aggregate a
liability (not paid or fully covered

                                      -50-
<PAGE>   59

by insurance) of $5,000,000 or more and all such judgments or decrees shall not
have been vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or

                  (j) MANAGEMENT. Prior to the Revolving Credit Termination Date
any change in the identity of the persons holding a majority of the Board of
Trustees of Lexington (other than due to death, retirement, disability or
similar causes and so long as the replacement trustee is approved by the
remaining trustees who were trustees prior to such change in the composition of
the Board of Trustees) without Lender approval.

                  (k) LOAN DOCUMENTS. From and after the Closing Date, any Loan
Document shall be terminated or otherwise shall cease to be in full force and
effect except in accordance with this Agreement or shall cease to give the
Lender any Liens purported to be given thereby or any party thereto other than a
Lender shall cease to be, or shall assert that it is not, bound thereby in
accordance with its terms and in the case of any party other than a Borrower or
Guarantor, Borrowers' Representative shall not have taken such steps as may be
reasonably necessary to enforce such Loan Document promptly after notice thereof
by Lender.

         8.2 REMEDIES. In the event that one or more Events of Default shall
have occurred and be continuing, then (i) if such event is an Event of Default
specified in paragraph (g) above, the Revolving Credit Commitment shall
automatically and immediately terminate and the Obligations hereunder (with
accrued interest thereon) and all other amounts owing under this Agreement, any
Note and any other Loan Documents shall immediately become due and payable, and
(ii) if such event is any other Event of Default, any of the following actions
may be taken: (a) Lender may, by notice to Borrowers' Representative, declare
the Revolving Credit Commitment to be terminated forthwith, whereupon the
Revolving Credit Commitment shall immediately terminate; (b) Lender may by
notice of default to Borrowers' Representative, declare the Loans hereunder
(with accrued interest thereon) and all other amounts owing under this
Agreement, any Note and any other Loan Document to be due and payable forthwith,
whereupon the same shall immediately become due and payable or (c) Lender may
exercise any other right or remedy available at law or in equity or by statute.
Except as expressly provided above in Section 8.1, presentment, demand, protest
and all other notices of any kind are hereby expressly waived; or

         8.3. ANNULMENT OF ACCELERATION. If payment on the Loans and any Note is
accelerated in accordance with Section 8.2 of this Agreement, then and in every
such case, the Lender may by an instrument delivered to Borrowers'
Representative annul such acceleration and the consequences thereof, provided,
that at the time such acceleration is annulled:

                  (a) all arrears of interest on the Loans and any Note and all
other sums payable in respect of the Loans and pursuant to this Agreement, any
Note and each other Loan Document (except any principal of or interest or
premium on the Loans and any Note and other sums which have become due and
payable only by reason of such acceleration) shall have been duly paid; and

                                      -51-
<PAGE>   60

                  (b) every other Default or Event of Default shall have been
duly waived or otherwise cured;

provided, further, that no such annulment shall extend to or affect any
subsequent Default or Event of Default or impair any right consequent thereon.
The provisions of this Section 8.3 is for the sole benefit of the Lender and is
not intended to benefit any Borrower or Guarantor and does not give any Borrower
or Guarantor the right to require Lender to rescind or annul any acceleration
hereunder, even if the conditions set forth herein are met.

         8.4. COOPERATION BY EACH BORROWER AND GUARANTOR. To the extent that it
lawfully may, each Borrower agrees and shall cause each Guarantor to agree that
it will not at any time insist upon or plead, or in any manner whatever claim or
take any benefit or advantage of any applicable present or future stay,
extension or moratorium law, which may affect observance or performance of the
provisions of this Agreement or of any Note or any other Loan Document.

         SECTION 9. INTENTIONALLY OMITTED

         SECTION 10. GENERAL

         10.1. AMENDMENTS AND WAIVERS. Unless otherwise provided for or required
in this Agreement, no amendment or modification of any provision of this
Agreement or any of the other Loan Documents shall be effective without the
written agreement of the Lender and the Borrowers' Representative. No
termination or waiver of any provision of this Agreement or any of the other
Loan Documents, or consent to any departure by any Borrower or Guarantor
therefrom, shall be effective without the written concurrence of the Lender,
which Lender shall have the right to grant or withhold in their sole discretion.
Any waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given. No notice to or demand on any
Borrower or Guarantor in any specific instance shall entitle such Borrower or
Guarantor to any other or further notice or demand in similar or other
circumstances.

         10.2 MARSHALING; PAYMENTS SET ASIDE. Lender shall not be under any
obligation to marshall any assets in favor of any Borrower or Guarantor or any
other party or against or in payment of any or all of the Obligations. To the
extent that such Borrower or Guarantor makes a payment or payments to the Lender
or any such Person exercise its rights of setoff, and such payment or payments
or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party, then to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, right and remedies therefor, shall be revived and
continued in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.

         10.3 COUNTERPARTS; EFFECTIVENESS; INCONSISTENCIES. This Agreement and
any amendments, waivers, consents, or supplements hereto may be executed in
counterparts, each of

                                      -52-
<PAGE>   61

which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. This
Agreement shall become effective against each Borrower and Lender on the Closing
Date. This Agreement and each of the other Loan Documents shall be construed to
the extent reasonable to be consistent one with the other, but to the extent
that the terms and conditions of this Agreement are actually inconsistent with
the terms and conditions of any other Loan Document, this Agreement shall
govern.

         10.4 DISCLAIMER BY LENDER. Lender shall not be liable to any
contractor, subcontractor, supplier, laborer, architect, engineer, tenant or
other party for services performed or materials supplied in connection with any
work performed on any of the Properties. Lender shall not be liable for any
debts or claims accruing in favor of any such parties against any Borrower or
Guarantor or others or against any of the Properties. No Borrower is nor shall
be an Lender of the Lender for any purposes and the Lender, shall not be deemed
a partner or joint venturer with any Borrower or Guarantor or any of its
Affiliates or Subsidiaries. Lender shall not be deemed to be in privity of
contract with any contractor or provider of services to any of the Properties,
nor shall any payment of funds directly to a contractor or subcontractor or
provider of services be deemed to create any third party beneficiary status or
recognition of same by Lender and each of the Borrowers agree to hold the Lender
harmless from any of the damages and expenses resulting from such a construction
of the relationship of the parties or any assertion thereof.

         10.5 NOTICES; CERTAIN PAYMENTS. (a) All notices, consents and other
communications to Borrowers, Lender or any Lender relating hereto to be
effective shall be in writing and shall be deemed made (i) if by certified mail,
return receipt requested, four (4) Business Days after deposit in the United
States mail, or if by facsimile, when received (in each case unless otherwise
specified in this Agreement), (ii) if delivered by hand or overnight courier,
when receipted for, in each case addressed to them as follows or at such other
address as either of them may designate by written notice to the other in the
manner set forth in this Section 10.10; (x) any Borrower or Guarantor or the
Borrowers' Representative: c/o Lexington Corporate Properties Trust, 355
Lexington Avenue, New York, New York 10017 Attention : T. Wilson Eglin with a
copy to Richard C. Hamlin, Esq., Paul, Hastings, Janofsky & Walker LLP, 75 East
55th Street, New York, NY 10022; or to (y) Lender: Fleet National Bank, 100
Federal Street, Boston, Massachusetts 02110 Attention: James B. McLaughlin with
a copy to Lorne W. McDougall, Esq., Edwards & Angell, LLP, 101 Federal Street,
Boston, MA 02110; or to (z) any Lender: at the address set forth below each
Lender's name on the signature pages hereof or the signature page of any
applicable Assignment and Acceptance.

                  (b) All payments on account of the Loans and the Note pursuant
hereto or pursuant to the other Loan Documents shall be made for the account of
Lender at: By mail: Fleet National Bank, 100 Federal Street, Boston,
Massachusetts 02110, Mail Code MA DE 10009A, Attn: Dwayne Nelson. By wire: Fleet
National Bank, ABA #011-000-138, Credit Account #15103566156, Re: Lexington
Attn: Dwayne Nelson (617) 434-2098.

                  (c) Notices to the Lender pursuant to Section 2 or 9 shall not
be effective until received by the Lender.

                                      -53-
<PAGE>   62

Lender may by written notice to Borrowers' Representative specify or change its
account and address for payment instructions hereunder.

         10.6 NO WAIVERS; CUMULATIVE REMEDIES; ENTIRE AGREEMENT; HEADINGS. No
action, failure, delay or omission by Lender in exercising any rights and
remedies under this Agreement, any Note or any other Loan Document, or
otherwise, shall constitute a waiver of, or impair, any of the rights or
privileges of Lender hereunder or thereunder. No single or partial exercise of
any such right or remedy shall preclude any other or further exercise thereof or
the exercises of any other right or remedy. Such rights and remedies are
cumulative and not exclusive of any rights and remedies provided by law or
otherwise available, including, but not limited to, rights to specific
performance (to the extent permitted by law) or any covenant or agreement
contained in this Agreement or any of the Loan Documents. No waiver of any such
right or remedy shall be effective unless given in writing or as otherwise
provided in Section 10.2. No waiver of any such right or remedy shall be deemed
a waiver of any other right or remedy hereunder or thereunder. Except as
otherwise specifically provided in this Agreement, every right and remedy given
by this Agreement or by applicable law to Lender may be exercised from time to
time and as often as may be deemed expedient by Lender. This Agreement, Note and
the other Loan Documents constitute the entire agreement of the parties relating
to the subject matter hereof and thereof and there are no verbal agreements
relating hereto or thereto. Section headings herein shall have no legal effect.
This Agreement, Note and the other Loan Documents (including all covenants,
representations, warranties, privileges, rights, and remedies made or granted
herein or therein) shall inure to the benefit of, and be enforceable by Lender
or any Lender and its respective successors and assigns, except as otherwise
expressly provided in this Agreement. Borrowers may not directly or indirectly
assign or transfer (whether by agreement, by operation of law or otherwise) any
of their rights or obligations and liabilities hereunder without the prior
written consent of Lender affected thereby. Subject to the provisions of Section
10.1, Lender may make, carry or transfer the Loans at, to or for the account of,
any of its branch offices or the office of one or more of its Affiliates.

         10.7 SURVIVAL. The obligations of each Borrower under Sections 2.13,
2.16, 2.17, 2.18, 6.11, 10.11 and 10.13 (and all other indemnification and
expense reimbursement obligations of Borrower under this Agreement) shall
survive the repayment of the Loans and the cancellation of the Notes and the
termination of the other obligations of such Borrower hereunder and under the
other Loan Documents for a period of three (3) years after the date of such
payment, except in the case of Section 6.11 and any other indemnification
obligations which shall survive for a period of five (5) years; provided,
however, that the Borrowers shall not be liable for any liability, claim, loss,
cost or expense arising from any act or omission of any Lender or other
indemnified party after the transfer of any Property by foreclosure,
deed-in-lieu thereof or otherwise which doesn't arise from or deal with
pre-existing conditions. The receipt by Borrowers' Representative, prior to the
expiration of the above three (3) and five (5) year limitation periods, of a
notice, in good faith, of any liability, claim, loss, cost or expense arising
from the obligations of Borrowers referenced above shall toll the running of the
above limitation periods with regard to such liability, claim, loss, cost or
expense.

                                      -54-
<PAGE>   63

         10.8 PAYMENT OF EXPENSES AND TAXES. Each Borrower agrees (a) to pay or
reimburse Lender within fifteen (15) Business Days after demand for all its
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement, the Note and any other Loan Documents or other documents
prepared in connection herewith, and the consummation of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements of counsel to Lender, (b) to pay or reimburse Lender,
within fifteen (15) Business Days after demand for all its costs and expenses
incurred in connection with the enforcement or preservation of any rights under
this Agreement, the Note and any Loan Documents, or the satisfaction or review
of conditions precedent to any borrowing other than that occurring on the
Closing Date, including, without limitation, reasonable fees and disbursements
of counsel to Lender and (c) to pay, indemnify, and to hold Lender, and its
officers, directors, employees and agents (the "Indemnified Parties") harmless
from, any and all recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the Notes the Loan Documents
and any such other documents, and (d) to pay, indemnify, and hold Lender, and
its officers, directors, employees and agents harmless from and against any and
all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, reasonable costs, reasonable expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement or the other Loan Documents
except to the extent resulting from the gross negligence or willful misconduct
of any of the Indemnified Parties (all the foregoing, collectively, the
"INDEMNIFIED LIABILITIES").

         10.9 FURTHER ASSURANCES. Each Borrower and Guarantor will, on request
of Lender, (a) promptly correct any defect, error or omission in any Loan
Document; (b) execute, acknowledge, deliver, procure, record or file such
further instruments and do such further acts deemed reasonably necessary,
desirable or proper by Lender to carry out the purposes of the Loan Documents
and to identify and subject to the liens and security interests of the Loan
Documents any property intended to be covered thereby, including any renewals,
additions, substitutions, replacements, or appurtenances to any such Property;
and (c) provide such certificates, documents, reports, information, affidavits
and other instruments and do such further acts deemed reasonably necessary,
desirable or proper by Lender to comply with the requirements of any agency
having jurisdiction over Lender.

         10.10 NO BROKERS. Each Borrower hereby agrees to indemnify Lender from
any liability, claim or loss arising by reason of claims for any brokerage
commission made by any Person claiming to have dealt with and Borrower or any
Affiliate of such Borrower in connection with the Loans. Lender agrees to
indemnify each Borrower from any liability, claim or loss arising by reason of
claims for any brokerage commission made by any Person claiming to have dealt
with Lender in connection with the Loans. The provisions of this Section shall
survive the

                                      -55-
<PAGE>   64

repayment of the Loan and shall continue in full force and effect so long as the
possibility of such liability (including attorneys' fees), claim or loss exists.

         10.11 CONFIDENTIALITY. Subject to Section 10.11, Lender shall hold all
confidential information obtained pursuant to the requirements of this Agreement
in accordance with such party's customary procedures for handling confidential
information of this nature and in accordance with safe and sound banking
practices and in any event may make disclosure reasonably required by a bona
fide offeree, transferee or participant in connection with the contemplated
transfer or participation or as required or requested by any Governmental
Authority or representative thereof or pursuant to legal process and shall
require any such offeree, transferee or participant to agree (and require any of
its offerees, transferees or participants to agree) to comply with this Section
10.15. In no event shall Lender be obligated or required to return any materials
furnished by any Borrower.

         10.12 CAPTIONS. The captions in this instrument are for convenience and
reference only and do not define, limit or describe the scope of the provisions
hereof.

         10.13 GENDER. Whenever the context so requires, reference herein to the
neuter gender shall include the masculine and/or feminine gender, and the
singular number shall include the plural and, in each case, vice versa.

         10.14 SUCCESSORS. The terms, covenants, agreements and conditions
contained herein shall extend to, include, and inure to the benefit of and be
binding upon the respective successors and assigns of each Borrower and the
successors and assigns of Lender.

         10.15 ENTIRE AGREEMENT. This Agreement, the Note, the Guaranty, the
Security Documents, and the other documents being executed in connection
herewith express the entire understanding of the parties with respect to the
transactions contemplated thereby. No modification or waiver of any provision of
this Agreement, the Note, or any related documents nor consent to any departure
by any Borrower therefrom, shall in any event be effective unless the same shall
be in writing, and then such waiver of consent shall be effective only in the
specific instance, and for the purpose, for which given. No notice to, or demand
on any Borrower, in any case, shall entitle such Borrower to any other or future
notice of demand in the same, similar or other circumstances.

         10.16 DELAY NOT WAIVER. Neither any failure nor any delay on the part
of Lender in exercising any right, power or privilege hereunder, or under the
Note, or any other instrument given as security therefor, shall operate as a
waiver thereof, nor shall a single or partial exercise thereof preclude any
other or future exercise, or the exercise of any other right, power or
privilege.

         10.17 SET-OFF. Each Borrower and any Guarantor hereby grant to Lender,
a continuing lien, security interest and right of setoff as security for all
liabilities and obligations to Lender, whether now existing or hereafter
arising, upon and against all deposits, credits, collateral and property, now
existing or hereafter arising, upon and against all deposits, credits,
collateral and property, now or hereafter in the possession, custody,
safekeeping or control of Lender or any entity under the control of FleetBoston
Financial Corporation and its successors or assigns or in transit to any of them
except for that certain Lease dated November 13, 1997 between Lepercq Corporate
Income Fund L.P., as landlord and Fleet Mortgage Group, Inc., as tenant. At any
time,

                                      -56-
<PAGE>   65

without demand or notice (any such notice being expressly waived by each
Borrower), Lender may set off the same or any part thereof and apply the same to
any liability or obligation of such Borrower and any Guarantor even though
unmatured and regardless of the adequacy of any other collateral securing the
Loan. ANY AND ALL RIGHTS TO REQUIRE LENDER TO EXERCISE ITS RIGHTS TO REMEDIES
WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOAN, PRIOR TO EXERCISING
ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF
BORROWER OR ANY GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY
WAIVED.

         10.18 SEVERABILITY. In case any one or more of the provisions contained
in this Agreement or any related document shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof or thereof, and
this Agreement or any such related document shall be construed as if such
invalid, illegal or unenforceable provision had never been included.

         10.19 LENDER'S RIGHT TO PARTICIPATE, ASSIGN AND PLEDGE.

                  10.19.1 LENDER'S RIGHT TO SELL A PORTION OF A LOAN TO A
PROSPECTIVE PARTICIPANT. Lender shall have the unrestricted right any time and
from time to tie, and without the consent of or notice of any Borrower or any
Guarantor, to grant to one or more Lenders or other financial institutions
(each, a "Participant") participating interests in Lender's obligation to lend
hereunder and/or any or all of the loans held by Lender hereunder. In the event
of such grant by Lender of a participating interest to a Participant, whether or
not upon notice to Borrowers, Lender shall remain responsible for the
performance of its obligations hereunder and Borrowers shall remain responsible
for the performance of its obligations hereunder and Borrowers shall continue to
deal solely and directly with Lender in connection with Lender's rights and
obligations hereunder. Lender may furnish any information concerning Borrowers
in its possession from time to time to prospective Participants, provided that
Lender shall require any such prospective Participant to agree in writing to
maintain the confidentiality of such information.

                  10.19.2 LENDER'S RIGHT TO SELL A LOAN TO A THIRD PARTY. Lender
shall have the unrestricted right at any time or from time to time and without
any Borrower's or any Guarantor's consent, to assign all or any portion of its
rights and obligations hereunder to one or more Lenders or other financial
institutions (each, an "Assignee"), and each Borrower and each Guarantor agrees
that it shall execute, or cause to be executed, such documents, including
without limitation, amendments to this Agreement and to any other documents,
instruments and agreements executed in connection herewith as Lender shall deem
necessary to effect the foregoing. In addition, at the request of Lender and any
such Assignee, each Borrower shall issue one or more promissory notes, as
applicable, to any such Assignee and, if Lender has retained any of its rights
and obligations hereunder following such assignment, to Lender, which new
promissory notes shall be issued in replacement of but not in discharge of, the
liability evidenced by the promissory note held by Lender and loans held by such
Assignee and Lender after giving effect to such assignment. Upon the execution
and delivery of appropriate assignment documentation, amendments and any other
documentation required by Lender in

                                      -57-
<PAGE>   66

connection with such assignment, and the payment by Assignee of the purchase
price agreed to by Lender, and such Assignee, such Assignee shall be a party to
this Agreement and shall have all of the rights and obligations of Lender
hereunder (and under any and all other guaranties, documents, instruments and
agreements executed in connection herewith) to the extent that such rights and
obligations have been assigned by Lender pursuant to the assignment
documentation between Lender and such Assignee, and Lender shall be released
from its obligations hereunder and thereunder to a corresponding extent. Lender
may furnish any information concerning Borrower in its possession from time to
time to prospective Assignees, provided that Lender shall require any such
prospective Assignees to agree in writing to maintain the confidentiality of
such information.

                  10.19.3 LENDER'S RIGHT TO PLEDGE. Lender may at any time
pledge or assign all or any portion of its rights under the loan documents
including any portion of the promissory note to any of the twelve (12) Federal
Reserve Lenders organized under Section 4 of the Federal Reserve Act, 12 U.S.C.
Section 341. No such pledge or assignment or enforcement thereof shall release
Lender from its obligations under any of the loan documents.

         10.20 LOST OR DAMAGED LOAN DOCUMENTS. Upon receipt of an affidavit of
an officer of Lender as to the loss, theft, destruction or mutilation of the
Note or any other Loan Document which is not of public record, and, in the case
of any such loss, theft, destruction or mutilation, upon surrender and
cancellation of such Note or other Loan Document, each Borrower will issue, in
lieu thereof, a replacement Note or other Loan Document in the same principal
amount thereof and otherwise of like tenor.

         10.21 CLAIMS AGAINST LENDER.

                  10.21.1 BORROWERS MUST NOTIFY. Lender shall not be in default
under this Agreement, or under any other Loan Document, unless a written notice
specifically setting forth the claim of any Borrower shall have been given to
Lender within six (6) months after such Borrower first had knowledge or notice
of the occurrence of the event which such Borrower alleges gave rise to such
claim and Lender do not remedy or cure the default, if any there be, with
reasonable promptness thereafter.

                  10.21.2 REMEDIES. If it is determined by the final order of a
court of competent jurisdiction, which is not subject to further appeal, that
Lender has breached any of its obligations under the Loan Documents and has not
remedied or cured the same with reasonable promptness following notice thereof,
Lender's responsibilities shall be limited to: (i) where the breach consists of
the failure to grant consent or give approval in violation of the terms and
requirements of a Loan Document, the obligation to grant such consent or give
such approval and to pay such Borrower's reasonable costs and expenses
including, without limitation, reasonable attorneys' fees and disbursements in
connection with such court proceedings; and (ii) the case of any such failure to
grant such consent or give such approval, or in the case of any other such
default by Lender, where it is also so determined that Lender acted in bad
faith, the payment of any actual, direct, compensatory damages sustained by such
Borrower as a result thereof plus

                                      -58-
<PAGE>   67

such Borrower's reasonable costs and expenses, including, without limitation,
reasonable attorneys' fees and disbursements in connection with such court
proceedings.

         10.22 TIME OF THE ESSENCE. Time is of the essence for each provision of
this Agreement and each other Loan Document.

         10.23 PLACE OF DELIVERY. Each Borrower agrees to furnish to Lender at
the Lender's office in Boston, Massachusetts all further instruments,
certifications and documents to be furnished hereunder.

         10.24 GOVERNING LAW. This Agreement and each of the other Loan
Documents shall in all respects be governed, construed, applied and enforced in
accordance with the internal laws of the State of New York (excluding the laws
applicable to conflicts or choice of law).

         10.25 CONSENT TO JURISDICTION. Each Borrower hereby irrevocably submits
generally and unconditionally for itself and in respect of its property to the
jurisdiction of the courts in the State of New York and to the jurisdiction of
any court sitting in the province in which any of the Property is located, over
any suit, action or proceeding arising out of or relating to this Agreement or
the Loan. Each Borrower hereby irrevocably waives, to the fullest extent
permitted by law, any objection that such Borrower may now or hereafter have to
the laying of venue in any such court and any claim that any such court is an
inconvenient forum. Each Borrower hereby agrees and consents that, in addition
to any methods of service or process provided for under applicable law, all
service of process in any such suit, action or proceeding in any court sitting
in the State of New York may be made by certified or registered mail, return
receipt requested, directed to Borrowers' Representative at its address for
notice stated in the Loan Documents, or at a subsequent address of which Lender
received actual notice from Borrowers' Representative in accordance with the
Loan Documents, and service so made shall be complete five (5) days after the
same shall have been so mailed. Nothing herein shall affect the right of Lender
to serve process in any manner permitted by law or limit the right of Lender to
bring proceedings against any Borrower in any other court or jurisdiction.

         10.26 JURY TRIAL WAIVER.

         EACH BORROWER AND LENDER MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED
HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE
OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY, INCLUDING WITHOUT LIMITATION, ANY COURSE OF CONDUCT,
COURSE OF DEALINGS, STATEMENTS OR ACTION OF LENDER RELATING TO THE
ADMINISTRATION OF THE LOAN OR ENFORCEMENT OF THE LOAN DOCUMENTS, AND AGREE THAT
NO PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH
A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. EXCEPT AS PROHIBITED BY LAW,

                                      -59-
<PAGE>   68

EACH BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH BORROWER CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF LENDER HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT LENDER WOULD NOT IN THE EVENT OF LITIGATION SEEK TO ENFORCE
THE FOREGOING WAIVER. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR LENDER
TO ACCEPT THIS AGREEMENT AND MAKE THE LOAN.

         10.27 USE OF PROCEEDS (REGULATION U). No portion of the proceeds of the
loan shall be used, in whole or in part, for the purpose of the purchasing or
carrying any "margin stock" as such term is defined in Regulation U of the Board
of Governors of the Federal Reserve System.

         10.28 INTEGRATION. This Agreement is intended by the parties as the
final, complete and exclusive statement of the transactions evidenced by this
Agreement. All prior or contemporaneous promises, agreements and understandings,
whether oral or written, are deemed to be superceded by this Agreement, and no
party is relying on any promise, agreement or understanding not set forth in
this Agreement. This Agreement may not be amended or modified except by Borrower
and Lender.

         SECTION 11. THE BORROWERS' REPRESENTATIVE

         11.1. APPOINTMENT OF BORROWERS' REPRESENTATIVE.

                  (a) Each Borrower hereby irrevocably designates and appoints
Lexington (sometimes referred to in this Agreement as Borrowers'
Representative), as its agent under this Agreement and the Loan Documents and
the other documents or instruments delivered pursuant to or in connection
herewith or therewith and each Borrower hereby authorizes Lexington, for such
Borrower, to take such action on behalf of such Borrower under the provisions of
the Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to Lexington or Borrowers' Representative by the terms of
the Loan Documents, together with such other powers as are reasonably incidental
thereto.

                  (b) Lender 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 reasonably believed
by it to be genuine and correct and to have been signed, sent or made by the
Borrowers' Representative in connection with this Agreement or any of the Loan
Documents and upon advice and statements of legal counsel (including, without
limitation, counsel to Borrowers), independent accountants and other experts
selected by Borrowers' Representative in connection with the Loan Documents.

                                      -60-
<PAGE>   69

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

BORROWERS:

LEXINGTON CORPORATE PROPERTIES TRUST

By: /s/ T. Wilson Eglin
   -----------------------------------------
     T. Wilson Eglin
     Its: President

LEPERCQ CORPORATE INCOME FUND L.P.

BY:      LEX GP-1, Inc. its general partner

         By:  /s/ T. Wilson Eglin
             -------------------------------
              T. Wilson Eglin
              Its: Vice President

LEPERCQ CORPORATE INCOME FUND II L.P.

BY:      LEX GP-1, Inc., its general

         By:  /s/ T. Wilson Eglin
             -------------------------------
              T. Wilson Eglin
              Its: Vice President

                                      -61-
<PAGE>   70

                                                                REVOLVING CREDIT
LENDER:                           ADDRESS:                         COMMITMENT
FLEET NATIONAL BANK               100 Federal Street             $35,000,000
                                  Boston, Massachusetts 02110
By: /s/ James B. McLaughlin
   ----------------------------
        James B. McLaughlin

                                      -62-
<PAGE>   71

                   ACKNOWLEDGMENT BY BORROWERS' REPRESENTATIVE

        We hereby acknowledge and accept the designation of Borrowers'
Representative and agree to discharge the duties and responsibilities of
Borrowers' Representative as set forth in the Loan Agreement until the Loans are
paid in full.

                      LEXINGTON CORPORATE PROPERTIES TRUST

                                          By:  /s/ T. Wilson Eglin
                                             -----------------------------------
                                               T. Wilson Eglin
                                               Its:  President

                                      -63-<PAGE>   1
                                                                     EXHIBIT 4.7

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

                                PULTE CORPORATION

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

                              INDENTURE SUPPLEMENT

                            DATED AS OF JULY 31, 2001

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

                  BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION
          (successor-in-interest to the First National Bank of Chicago)

                                     TRUSTEE

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

                             SENIOR DEBT SECURITIES

<PAGE>   2

         INDENTURE SUPPLEMENT dated as of July 31, 2001, among PULTE HOMES, INC.
(formerly known as PULTE CORPORATION), a Michigan corporation (the "Company"),
located at 33 Bloomfield Hills Parkway, Suite 200, Bloomfield Hills, Michigan
48304, BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION (successor-in-interest to
the First National Bank of Chicago) (the "Trustee"), PULTE HOME CORPORATION
("Pulte Home"), the wholly-owned subsidiaries of Pulte Home set forth on the
attached Exhibit A (Pulte Home and such subsidiaries, all together the "Existing
Guarantors"), Del Webb Corporation ("Del Webb") and the wholly-owned
subsidiaries of Del Webb set forth on the attached Exhibit B (Del Webb and such
subsidiaries, all together the "New Guarantors") (the Existing Guarantors and
the New Guarantors are referred to in the Indenture, as amended by this
Indenture Supplement and as may be further amended, collectively as the
"Guarantors" and individually as a "Guarantor")

         The Company, the Trustee and the Existing Guarantors have entered into
an Indenture dated as of October 24, 1995, as amended by the Indenture
Supplement dated as of August 27, 1997, the Indenture Supplement dated as of
March 20, 1998, the Indenture Supplement dated as of January 31, 1999 and the
Indenture Supplement dated as of April 3, 2000 (the "Indenture"), pursuant to
which the Trustee acts as trustee for the holders of the Company's 7.3% Senior
Notes due October 24, 2005, the Company's 7.625% Senior Notes due October 15,
2017, the Company's 9.5% Senior Notes due April 1, 2003 and the Company's 8.125%
Senior Notes, due March 1, 2011. Capitalized terms used in this Indenture
Supplement and not otherwise defined herein shall have the meanings set forth in
the Indenture.

         The parties desire to add the following companies as guarantors of the
Guaranteed Obligations under the Indenture:

                              Anthem Arizona L.L.C.

                                Asset Five Corp.

                                Asset Seven Corp.

                                 Bellasera Corp.

                            Del Webb California Corp.

                           Del Webb Communities, Inc.

                              Del Webb Corporation

                               Del Webb Golf Corp.

                        Del Webb Home Construction, Inc.

                          Del Webb Limited Holding Co.

                             Del Webb Southwest Co.

                       Del Webb Texas Limited Partnership

                   Del Webb's Coventry Homes Construction Co.

                         Del Webb's Coventry Homes, Inc.

                                        2

<PAGE>   3

                    Del Webb's Coventry Homes of Nevada, Inc.

                    Del Webb's Spruce Creek Communities, Inc.

                      Del Webb's Sunflower of Tucson, Inc.

                        Del E. Webb Development Co., L.P.

                        Del E. Webb Foothills Corporation

                             Mountain View Two, LLC

                          New Mexico Asset Corporation

                      New Mexico Asset Limited Partnership

                          PH 1 Acquisition Corporation

                          PH 2 Acquisition Corporation

                       Spruce Creek South Utilities, Inc.

                                 Terravita Corp.

                         Terravita Home Construction Co.

         Section 901 of the Indenture permits the Company and the Trustee to
execute supplements to the Indenture for the purpose of adding guarantors of the
Guaranteed Obligations without the consent of any Holders.

         NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:

         For and in consideration of the premises and the mutual covenants and
agreements contained herein, it is mutually covenanted and agreed, for the equal
and proportionate benefit of all Holders of the Securities or of any series
thereof, as follows:

         1. The following companies are hereby added as guarantors of the
Guaranteed Obligations under the Indenture:

                              Anthem Arizona L.L.C.

                                Asset Five Corp.

                                Asset Seven Corp.

                                 Bellasera Corp.

                            Del Webb California Corp.

                           Del Webb Communities, Inc.

                              Del Webb Corporation

                               Del Webb Golf Corp.

                                        3

<PAGE>   4

                        Del Webb Home Construction, Inc.

                          Del Webb Limited Holding Co.

                             Del Webb Southwest Co.

                       Del Webb Texas Limited Partnership

                   Del Webb's Coventry Homes Construction Co.

                         Del Webb's Coventry Homes, Inc.

                    Del Webb's Coventry Homes of Nevada, Inc.

                    Del Webb's Spruce Creek Communities, Inc.

                      Del Webb's Sunflower of Tucson, Inc.

                        Del E. Webb Development Co., L.P.

                        Del E. Webb Foothills Corporation

                             Mountain View Two, LLC

                          New Mexico Asset Corporation

                      New Mexico Asset Limited Partnership

                          PH 1 Acquisition Corporation

                          PH 2 Acquisition Corporation

                       Spruce Creek South Utilities, Inc.

                                 Terravita Corp.

                         Terravita Home Construction Co.

         2. The Indenture, as supplemented by and together with this Indenture
Supplement, shall be read, taken and construed as one and the same instrument.

         3. This Indenture Supplement may be executed in any number of
counterparts, each of which so executed shall be deemed an original, but all of
such counterparts shall together constitute but one and the same instrument.

         4. This Indenture Supplement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
principles of conflicts of laws.

                     [signatures appear on pages following]

                                       4

<PAGE>   5

         IN WITNESS WHEREOF, the parties hereto have caused this Indenture
Supplement to be duly executed as of the day and year first above written.

                                    BANK ONE TRUST COMPANY,
                                    NATIONAL ASSOCIATION
                                    as Trustee

                                    By:
                                        ----------------------------------------
                                         Name:
                                         Title:

                                    PULTE CORPORATION

Attest:                             By:
        -------------------------       ----------------------------------------
         Calvin R. Boyd                  Bruce E. Robinson, Vice President

                                    PULTE HOME CORPORATION and the
                                    Existing Guarantors listed on the attached
                                    Exhibit A

Attest:                             By:
        -------------------------       ----------------------------------------
         Calvin R. Boyd                  Bruce E. Robinson, Vice President

                                    DEL WEBB CORPORATION and the
                                    New Guarantors listed on the
                                    attached Exhibit B

Attest:                             By:
         ------------------------       ----------------------------------------
          Calvin R. Boyd            Name:
                                          --------------------------------------
                                    Title:
                                           -------------------------------------

                                       5

<PAGE>   6

                         EXHIBIT A: EXISTING GUARANTORS

American Title of the Palm Beaches Acquisition Corp.
Carr's Grant, L.L.C.
Devtex Land, L.P.
Harrison Hills, LLC
Homesite Solutions Corporation
One Willowbrook, L.L.C.
PC/BRE Development L.L.C.
PC/BRE Springfield L.L.C.
PC/BRE Venture L.L.C.
PC/BRE Whitney Oaks L.L.C.
PC/BRE Winfield L.L.C.
PC/Palm Beach, Inc.
PN I, Inc.
Pulte Home Corporation of New England
Pulte Homes of Texas, L.P.
Pulte Homes Tennessee Limited Partnership
Pulte Land Company, LLC
Riverwalk Commerce Acquisition Corp.
Wilben, LLLP

                                       6

<PAGE>   7

                            EXHIBIT B: NEW GUARANTORS

Anthem Arizona L.L.C.
Asset Five Corp.
Asset Seven Corp.
Bellasera Corp.
Del Webb California Corp.
Del Webb Communities, Inc.
Del Webb Golf Corp.
Del Webb Home Construction, Inc.
Del Webb Limited Holding Co.
Del Webb Southwest Co.
Del Webb Texas Limited Partnership
Del Webb's Coventry Homes Construction Co.
Del Webb's Coventry Homes, Inc.
Del Webb's Coventry Homes of Nevada, Inc.
Del Webb's Spruce Creek Communities, Inc.
Del Webb's Sunflower of Tucson, Inc.
Del E. Webb Development Co., L.P.
Del E. Webb Foothills Corporation
Mountain View Two, LLC
New Mexico Asset Corporation
New Mexico Asset Limited Partnership
PH 1 Acquisition Corporation
PH 2 Acquisition Corporation
Spruce Creek South Utilities, Inc.
Terravita Corp.
Terravita Home Construction Co.

                                       7

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