Document:

Exhibit
      10.06

    

    WAIVER

    

    Reference
      is made to the Excusive Radiology Services Agreement dated October 25, 2005
      between The Sagemark Companies Ltd. (“Sagemark”)
      and
      Michael Fagien, M.D. (“Fagien”),
      as
      amended March 22, 2007, such agreement (as amended) being referred to herein
      as
      the “Reading
      Agreement”.
      

    

    This
      shall confirm that Fagien hereby waives his entitlement to all compensation
      payable to him by Sagemark for services rendered by Fagien under the Reading
      Agreement, through and including the date hereof.

    

    This
      Waiver is dated and effective as of the 17th
      day of
      April, 2008.

    

    
      	 	
              /s/
                Michael Fagien

            	 
	 	
              Michael
                Fagien, M.D.Exhibit
      10.07

    

    AGREEMENT
      FOR 

    

    CANCELLATION
      OF LEASEHOLD INTEREST

    

    This
      Agreement for Cancellation and Surrender of Lease, dated this 31st day of March,
      2008 is made and entered into by and between Tamarac Center, LLC, a Florida
      Limited Liability Company hereinafter referred to "Landlord" and The Sagemark
      Companies, Ltd., a New York Corporation referred to as "Tenant".

    

    WHEREAS,
      On
      May
      25, 2006, Landlord entered into a written Lease Agreement (the “Lease”) with
      Tenant for those certain “Premises” known as 7180 No. University Drive Unit 2 ,
      Tamarac, Florida 33321 in that certain mixed use center known as Tamarac Center,
      LLC., (Jewelry Exchange Center), Tamarac, Florida (the “Property”);

     

    WHEREAS, Tenant
      is
      in default of the Lease and unable to continue the conduct of business from
      the
      Premises;

    

    WHEREAS,
      Landlord and Tenant mutually desire to terminate the Lease, as modified, so
      that
      Landlord and Tenant can be released and discharged from further performance
      of
      any obligations for the Leasehold including the payment of any future sums
      hereunder which would accrue after March 31,
      2008 so
      that, in order to mitigate damages under the Lease, Landlord can enter into
      a
“New Lease” with a replacement tenant effective April 1, 2008. 

    

    NOW
      THEREFORE,
      in
      consideration of the mutual promises and covenants herein contained, and other
      good and valuable consideration the receipt of which is hereby acknowledged,
      Landlord and Tenant hereby agree as follows:

    

    1. TERMINATION
      DATE:
      March
      31, 2008

    

    2.
       RELEASE
      OF LIABILITY:
      Conditioned upon the performance of the provisions of this Agreement, Landlord
      and Tenant shall, effective March 31, 2008, be fully and unconditionally
      released and discharged from all obligations arising from or connected with
      the
      Lease. 

    

    3. TENANT'S
      AUTHORITY:
      Tenant
      represents and warrants to Landlord that (a) Tenant holds all right, title
      and
      interest in and to the Lease as Tenant hereunder including, without limitation,
      the sole right to occupation of the Premises and the enjoyment of all rights
      and
      privileges as Tenant under the Lease; (b) this Agreement and the performance
      by
      Tenant of all its obligations hereunder has been duly executed and delivered
      by
      Tenant and constitutes a legally valid and binding obligation of Tenant,
      enforceable in accordance with its terms; (c) there is no claim,
      demand,
      obligation, liability, action or cause of action arising under the Lease; and
      (d) the Premises are in good order and repair. These representations and
      warranties shall survive delivery of this Agreement for Cancellation of the
      Leasehold Interest, and the surrender of the Premises, and the termination
      of
      the Lease.

    

    4. HOLD
      HARMLESS: 
      Except
      for Landlord’s gross negligence or willful misconduct, Tenant shall indemnify,
      defend and hold Landlord harmless from and against any and all claims, actions,
      and obligations arising out of the Lease or out of Tenant's occupation of the
      Premises.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    5. ATTORNEY'S
      FEES:
      If
      either party commences an action against the other party arising out of or
      in
      connection with this Agreement, the prevailing party shall be entitled to
      recover from the losing party reasonable attorney's fees and cost of
      suit.

    

    6. SUCCESSORS:
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their respective heirs, successors and assigns.

    

    IN
      WITNESS WHEREOF,
      Tenant
      and Landlord have executed this Agreement as of the date first above
      written.

     

    
      	
              Tamarac Center, LLC

            	
              The Sagemark Companies Ltd.

            
	
              a Florida limited Liability Corporation

            	
              a New York Corporation

            
	 	 
	
              CBA Financial Inc, its Manager

            	
              George W. Mahoney

            
	 	 
	
              BY:

            	
              /s/ Conrad Baker

            	 	
              BY:

            	
              /s/ George W. Mahoney

            	 
	 	
              Conrad C. Baker, President

            	 	
              George
                W. Mahoney

            
	 	 	
              Chief
                Financial Officer

            
	
              "LANDLORD"

            	 
	 	
              "TENANT"

            

    

    

    
      
        
        

      

      
        2Unassociated Document

     

     

     

    
      
        

      

    

    

    $250,000,000

    

    

    CREDIT
      AGREEMENT

    

    among

    

    CAPLEASE
      DEBT FUNDING, LP,

    as
      Borrower,

    

    PREFCO
      II
      LIMITED PARTNERSHIP,

    CAPLEASE,
      INC.,

    CAPLEASE,
      LP, and

    CAPLEASE
      SERVICES CORP.,

    as
      Guarantors,

    

    THE
      LENDERS PARTY HERETO,

    

    and

    

    WACHOVIA
      BANK, NATIONAL ASSOCIATION,

    as
      Administrative Agent

    

    Dated
      as
      of April 29, 2008

    

    

    WACHOVIA
      CAPITAL MARKETS, LLC,

    as
      Sole
      Lead Arranger and Sole Bookrunner

     

     

      
        

      

    

     

    Prepared
      by:

    

    

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

    Page

     

    
      
        	
                ARTICLE
                  I DEFINITIONS

              	
                1

              
	
                Section
                  1.1

              	
                Defined
                  Terms.

              	
                1

              
	
                Section
                  1.2

              	
                Other
                  Definitional Provisions.

              	
                23

              
	
                Section
                  1.3

              	
                Accounting
                  Terms.

              	
                23

              
	
                Section
                  1.4

              	
                Time
                  References.

              	
                23

              
	
                Section
                  1.5

              	
                Execution
                  of Documents.

              	
                23

              
	
                Section
                  1.6

              	
                UCC
                  Terms.

              	
                23

              
	
                Section
                  1.7

              	
                References
                  to Discretion.

              	
                24

              
	
                Section
                  1.8

              	
                References
                  to Payment.

              	
                24

              
	 	 
	
                ARTICLE
                  II THE LOANS; AMOUNT AND TERMS

              	
                24

              
	
                Section
                  2.1

              	
                Revolving
                  Loans.

              	
                24

              
	
                Section
                  2.2

              	
                Term
                  Loan.

              	
                27

              
	
                Section
                  2.3

              	
                Fees.

              	
                28

              
	
                Section
                  2.4

              	
                Commitment
                  Reductions.

              	
                28

              
	
                Section
                  2.5

              	
                Prepayments.

              	
                28

              
	
                Section
                  2.6

              	
                Default
                  Rate and Payment Dates.

              	
                30

              
	
                Section
                  2.7

              	
                Conversion
                  Options.

              	
                30

              
	
                Section
                  2.8

              	
                Computation
                  of Interest and Fees; Usury.

              	
                30

              
	
                Section
                  2.9

              	
                Pro
                  Rata Treatment and Payments.

              	
                31

              
	
                Section
                  2.10

              	
                Non-Receipt
                  of Funds by the Administrative Agent.

              	
                33

              
	
                Section
                  2.11

              	
                Inability
                  to Determine Interest Rate.

              	
                33

              
	
                Section
                  2.12

              	
                Yield
                  Protection.

              	
                34

              
	
                Section
                  2.13

              	
                Indemnity;
                  Eurocurrency Liabilities.

              	
                34

              
	
                Section
                  2.14

              	
                Taxes.

              	
                35

              
	
                Section
                  2.15

              	
                Illegality.

              	
                36

              
	
                Section
                  2.16

              	
                Obligations
                  Absolute.

              	
                36

              
	
                Section
                  2.17

              	
                Additional
                  Collateral. 

              	
                37

              
	 	 
	
                ARTICLE
                  III REPRESENTATIONS AND WARRANTIES

              	
                37

              
	
                Section
                  3.1

              	
                Financial
                  Condition.

              	
                37

              
	
                Section
                  3.2

              	
                No
                  Material Adverse Effect; Internal Control Event.

              	
                37

              
	
                Section
                  3.3

              	
                Corporate
                  Existence; Compliance with Law.

              	
                37

              
	
                Section
                  3.4

              	
                Corporate
                  Power; Authorization; Enforceable Obligations.

              	
                38

              
	
                Section
                  3.5

              	
                No
                  Legal Bar; No Default.

              	
                38

              
	
                Section
                  3.6

              	
                No
                  Material Litigation.

              	
                38

              
	
                Section
                  3.7

              	
                Investment
                  Company Act; Federal Power Act; Interstate Commerce Act; and Federal
                  and
                  State Statutes and Regulations.

              	
                38

              
	
                Section
                  3.8

              	
                Margin
                  Regulations.

              	
                38

              
	
                Section
                  3.9

              	
                ERISA.

              	
                38

              
	
                Section
                  3.10

              	
                Environmental
                  Matters.

              	
                38

              
	
                Section
                  3.11

              	
                Use
                  of Proceeds.

              	
                39

              
	
                Section
                  3.12

              	
                Subsidiaries;
                  Joint Ventures; Partnerships.

              	
                39

              
	
                Section
                  3.13

              	
                Ownership.

              	
                39

              
	
                Section
                  3.14

              	
                Indebtedness.

              	
                39

              
	
                Section
                  3.15

              	
                Taxes.

              	
                39

              
	
                Section
                  3.16

              	
                Solvency.

              	
                39

              
	
                Section
                  3.17

              	
                Investments.

              	
                39

              
	
                Section
                  3.18

              	
                Location.

              	
                40

              
	
                Section
                  3.19

              	
                No
                  Burdensome Restrictions.

              	
                40

              
	
                Section
                  3.20

              	
                Brokers’
                  Fees.

              	
                40

              
	
                Section
                  3.21

              	
                Labor
                  Matters.

              	
                40

              
	
                Section
                  3.22

              	
                Accuracy
                  and Completeness of Information.

              	
                40

              
	
                Section
                  3.23

              	
                Material
                  Contracts.

              	
                40

              
	
                Section
                  3.24

              	
                Insurance.

              	
                40

              
	
                Section
                  3.25

              	
                Security
                  Documents.

              	
                40

              
	
                Section
                  3.26

              	
                Anti-Terrorism
                  Laws.

              	
                40

              
	
                Section
                  3.27

              	
                Compliance
                  with OFAC Rules and Regulations.

              	
                41

              
	
                Section
                  3.28

              	
                Compliance
                  with FCPA.

              	
                41

              
	
                Section
                  3.29

              	
                Consent;
                  Governmental Authorizations.

              	
                41

              
	
                Section
                  3.30

              	
                Bulk
                  Sales.

              	
                41

              
	
                Section
                  3.31

              	
                Income
                  and Required Payments.

              	
                41

              
	
                Section
                  3.32

              	
                Full
                  Payment.

              	
                41

              
	
                Section
                  3.33

              	
                Irrevocable
                  Instructions.

              	
                41

              
	
                Section
                  3.34

              	
                Compliance
                  with Covenants.

              	
                41

              
	
                Section
                  3.35

              	
                Collateral
                  Agreements.

              	
                41

              

      

       

      
        
          
          

        

        
          -
            i -

          
            

          

        

        
          
          

        

      

       

      
        	
                Section
                  3.36

              	
                No
                  Reliance.

              	
                42

              
	
                Section
                  3.37

              	
                Collateral.

              	
                42

              
	
                Section
                  3.38

              	
                REIT
                  Status.

              	
                42

              
	
                Section
                  3.39

              	
                Insider.

              	
                42

              
	
                Section
                  3.40

              	
                No
                  Defenses.

              	
                42

              
	
                Section
                  3.41

              	
                Interest
                  Rate Protection Agreements.

              	
                42

              
	
                Section
                  3.42

              	
                Selection
                  Procedures.

              	
                42

              
	
                Section
                  3.43

              	
                Value
                  Given.

              	
                42

              
	
                Section
                  3.44

              	
                Separateness.

              	
                42

              
	
                Section
                  3.45

              	
                Qualified
                  Transferees.

              	
                42

              
	
                Section
                  3.46

              	
                Eligibility
                  of Mortgage Assets.

              	
                43

              
	
                Section
                  3.47

              	
                Ability
                  to Perform.

              	
                43

              
	
                Section
                  3.48

              	
                Certain
                  Tax Matters.

              	
                43

              
	
                Section
                  3.49

              	
                Set-Off,
                  etc.

              	
                43

              
	
                Section
                  3.50

              	
                Representations
                  and Warranties.

              	
                43

              
	 	 
	
                ARTICLE
                  IV CONDITIONS PRECEDENT

              	
                43

              
	
                Section
                  4.1

              	
                Conditions
                  to Closing Date.

              	
                43

              
	
                Section
                  4.2

              	
                Conditions
                  to All Extensions of Credit.

              	
                45

              
	 	 
	
                ARTICLE
                  V AFFIRMATIVE COVENANTS

              	
                48

              
	
                Section
                  5.1

              	
                Financial
                  Statements.

              	
                48

              
	
                Section
                  5.2

              	
                Certificates;
                  Other Information.

              	
                49

              
	
                Section
                  5.3

              	
                Payment
                  of Taxes and Other Obligations.

              	
                50

              
	
                Section
                  5.4

              	
                Conduct
                  of Business and Maintenance of Existence.

              	
                50

              
	
                Section
                  5.5

              	
                Maintenance
                  of Property; Insurance.

              	
                50

              
	
                Section
                  5.6

              	
                Inspection
                  of Property; Books and Records; Discussions.

              	
                50

              
	
                Section
                  5.7

              	
                Notices.

              	
                51

              
	
                Section
                  5.8

              	
                Environmental
                  Laws.

              	
                52

              
	
                Section
                  5.9

              	
                Financial
                  Covenants.

              	
                52

              
	
                Section
                  5.10

              	
                Additional
                  Credit Parties.

              	
                52

              
	
                Section
                  5.11

              	
                Compliance
                  with Law.

              	
                52

              
	
                Section
                  5.12

              	
                Pledged
                  Assets.

              	
                53

              
	
                Section
                  5.13

              	
                Interest
                  Rate Protection Agreements.

              	
                53

              
	
                Section
                  5.14

              	
                Control
                  Agreements.

              	
                53

              
	
                Section
                  5.15

              	
                Further
                  Assurances.

              	
                53

              
	
                Section
                  5.16

              	
                Performance
                  and Compliance with Collateral.

              	
                53

              
	
                Section
                  5.17

              	
                Delivery
                  of Income and Required Payments.

              	
                53

              
	
                Section
                  5.18

              	
                Exceptions.

              	
                54

              
	
                Section
                  5.19

              	
                Distributions
                  in Respect of Collateral.

              	
                54

              
	
                Section
                  5.20

              	
                REIT
                  Status.

              	
                54

              
	
                Section
                  5.21

              	
                Issuances.

              	
                54

              
	
                Section
                  5.22

              	
                Remittance
                  of Prepayments.

              	
                54

              
	
                Section
                  5.23

              	
                Escrow
                  Imbalance.

              	
                54

              
	
                Section
                  5.24

              	
                Separateness.

              	
                54

              
	
                Section
                  5.25

              	
                Registration
                  of Securities.

              	
                55

              
	
                Section
                  5.26

              	
                Termination
                  of Securities Account.

              	
                55

              
	
                Section
                  5.27

              	
                Independence
                  of Covenants.

              	
                55

              
	
                Section
                  5.28

              	
                ERISA.

              	
                55

              
	 	 
	
                ARTICLE
                  VI NEGATIVE COVENANTS

              	
                55

              
	
                Section
                  6.1

              	
                Indebtedness.

              	
                56

              
	
                Section
                  6.2

              	
                Liens.

              	
                56

              
	
                Section
                  6.3

              	
                Nature
                  of Business.

              	
                56

              
	
                Section
                  6.4

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

              	
                56

              
	
                Section
                  6.5

              	
                Advances,
                  Investments and Loans.

              	
                56

              
	
                Section
                  6.6

              	
                Transactions
                  with Affiliates.

              	
                56

              
	
                Section
                  6.7

              	
                Ownership
                  of Subsidiaries; Restrictions.

              	
                57

              
	
                Section
                  6.8

              	
                Corporate
                  Changes; Material Contracts.

              	
                57

              
	
                Section
                  6.9

              	
                Limitation
                  on Restricted Actions.

              	
                57

              
	
                Section
                  6.10

              	
                Restricted
                  Payments.

              	
                57

              
	
                Section
                  6.11

              	
                Sub-Limits.

              	
                57

              
	
                Section
                  6.12

              	
                No
                  Further Negative Pledges.

              	
                57

              
	
                Section
                  6.13

              	
                Collateral
                  Not to be Evidenced by Instruments.

              	
                57

              
	
                Section
                  6.14

              	
                Deposits.

              	
                57

              
	
                Section
                  6.15

              	
                Servicing
                  Agreements.

              	
                58

              
	
                Section
                  6.16

              	
                Extension
                  or Amendment of Collateral.

              	
                58

              
	
                Section
                  6.17

              	
                Stock
                  Repurchase.

              	
                58

              
	
                Section
                  6.18

              	
                No
                  Future Liens.

              	
                58

              

      

       

      
        
          
          

        

        
          -
            ii -

          
            

          

        

        
          
          

        

      

       

      
        	
                Section
                  6.20

              	
                Senior
                  and Pari Passu Interests.

              	
                58

              
	
                Section
                  6.21

              	
                Portfolio
                  Assets.

              	
                58

              
	
                Section
                  6.22

              	
                Inconsistent
                  Agreements.

              	
                58

              
	 	 
	
                ARTICLE
                  VII EVENTS OF DEFAULT

              	
                58

              
	
                Section
                  7.1

              	
                Events
                  of Default.

              	
                58

              
	
                Section
                  7.2

              	
                Acceleration;
                  Remedies.

              	
                61

              
	 	 
	
                ARTICLE
                  VIII THE ADMINISTRATIVE AGENT

              	
                61

              
	
                Section
                  8.1

              	
                Appointment
                  and Authority.

              	
                61

              
	
                Section
                  8.2

              	
                Nature
                  of Duties.

              	
                61

              
	
                Section
                  8.3

              	
                Exculpatory
                  Provisions.

              	
                61

              
	
                Section
                  8.4

              	
                Reliance
                  by Administrative Agent.

              	
                62

              
	
                Section
                  8.5

              	
                Notice
                  of Default.

              	
                62

              
	
                Section
                  8.6

              	
                Non-Reliance
                  on Administrative Agent and Other Lenders.

              	
                62

              
	
                Section
                  8.7

              	
                Indemnification.

              	
                62

              
	
                Section
                  8.8

              	
                Administrative
                  Agent in Its Individual Capacity.

              	
                63

              
	
                Section
                  8.9

              	
                Successor
                  Administrative Agent.

              	
                63

              
	
                Section
                  8.10

              	
                Collateral
                  and Guaranty Matters.

              	
                63

              
	 	 
	
                ARTICLE
                  IX ADMINISTRATION AND SERVICING

              	
                64

              
	
                Section
                  9.1

              	
                Servicing.

              	
                64

              
	
                Section
                  9.2

              	
                Borrowers
                  as Servicer.

              	
                64

              
	
                Section
                  9.3

              	
                Third
                  Party Servicer.

              	
                64

              
	
                Section
                  9.4

              	
                Duties
                  of the Borrowers.

              	
                64

              
	
                Section
                  9.5

              	
                Authorization
                  of the Borrowers.

              	
                65

              
	
                Section
                  9.6

              	
                Event
                  of Default.

              	
                65

              
	
                Section
                  9.7

              	
                Modification.

              	
                65

              
	
                Section
                  9.8

              	
                Inspection.

              	
                65

              
	
                Section
                  9.9

              	
                Servicing
                  Compensation.

              	
                65

              
	
                Section
                  9.10

              	
                Payment
                  of Certain Expenses by Servicer.

              	
                65

              
	
                Section
                  9.11

              	
                Pooling
                  and Servicing Agreements.

              	
                66

              
	
                Section
                  9.12

              	
                Servicer
                  Default.

              	
                66

              
	 	 
	
                ARTICLE
                  X MISCELLANEOUS

              	
                66

              
	
                Section
                  10.1

              	
                Amendments,
                  Waivers and Release of Collateral.

              	
                66

              
	
                Section
                  10.2

              	
                Notices.

              	
                67

              
	
                Section
                  10.3

              	
                No
                  Waiver; Cumulative Remedies.

              	
                68

              
	
                Section
                  10.4

              	
                Survival
                  of Representations and Warranties.

              	
                69

              
	
                Section
                  10.5

              	
                Payment
                  of Expenses and Taxes; Indemnity.

              	
                69

              
	
                Section
                  10.6

              	
                Successors
                  and Assigns; Participations.

              	
                71

              
	
                Section
                  10.7

              	
                Right
                  of Set off; Sharing of Payments.

              	
                72

              
	
                Section
                  10.8

              	
                Table
                  of Contents and Section Headings.

              	
                73

              
	
                Section
                  10.9

              	
                Counterparts;
                  Integration; Effectiveness; Electronic Execution.

              	
                73

              
	
                Section
                  10.10

              	
                Severability.

              	
                73

              
	
                Section
                  10.11

              	
                Integration.

              	
                73

              
	
                Section
                  10.12

              	
                Governing
                  Law.

              	
                73

              
	
                Section
                  10.13

              	
                Consent
                  to Jurisdiction; Service of Process and Venue.

              	
                73

              
	
                Section
                  10.14

              	
                Confidentiality.

              	
                74

              
	
                Section
                  10.15

              	
                Acknowledgments.

              	
                74

              
	
                Section
                  10.16

              	
                Waivers
                  of Jury Trial.

              	
                75

              
	
                Section
                  10.17

              	
                Patriot
                  Act Notice.

              	
                75

              
	
                Section
                  10.18

              	
                Resolution
                  of Drafting Ambiguities.

              	
                75

              
	
                Section
                  10.19

              	
                Continuing
                  Agreement.

              	
                75

              
	
                Section
                  10.20

              	
                Lender
                  Consent.

              	
                75

              
	
                Section
                  10.21

              	
                Appointment
                  of the Administrative Borrower.

              	
                75

              
	
                Section
                  10.22

              	
                Counterclaims.

              	
                75

              
	
                Section
                  10.23

              	
                Legal
                  Matters.

              	
                76

              
	
                Section
                  10.24

              	
                Recourse
                  Against Certain Parties.

              	
                76

              
	
                Section
                  10.25

              	
                Protection
                  of Right, Title and Interest in the Collateral; Further Action
                  Evidencing
                  Loans.

              	
                76

              
	
                Section
                  10.26

              	
                Credit
                  Parties’ Waiver of Setoff.

              	
                77

              
	
                Section
                  10.27

              	
                Periodic
                  Due Diligence Review.

              	
                77

              
	
                Section
                  10.28

              	
                Character
                  of Loans for Income Tax Purposes.

              	
                77

              
	
                Section
                  10.29

              	
                Joint
                  and Several Liability; Full Recourse Obligations.

              	
                77

              

      

       

      
        
          
          

        

        
          -
            iii -

          
            

          

        

        
          
          

        

      

       

      
        	
                Schedules

              	 	 
	 	 	 
	
                Schedule
                  1.1(a)

              	
                Investments

              	 
	
                Schedule
                  1.1(b)

              	
                Collection
                  Account

              	 
	
                Schedule
                  1.1(c)

              	
                Asset
                  Representations

              	 
	
                Schedule
                  1.1(d)

              	
                Securities
                  Account

              	 
	
                Schedule
                  1.1(f)

              	
                Construction
                  Draw Deliveries

              	 
	
                Schedule
                  2.5

              	
                Targeted
                  Term Loan Outstanding Balances

              	 
	
                Schedule
                  3.3

              	
                Jurisdictions
                  of Organization and Qualification

              	 
	
                Schedule
                  3.12

              	
                Subsidiaries

              	 
	
                Schedule
                  3.18

              	
                Location

              	 
	
                Schedule
                  6.1(b)

              	
                Indebtedness

              	 
	
                Schedule
                  9.3

              	
                Servicers

              	 
	 	 	 
	
                Exhibits

              	 	 
	 	 	 
	
                Exhibit
                  1.1(a)

              	
                Form
                  of Account Designation Notice

              	 
	
                Exhibit
                  1.1(b)

              	
                Form
                  of Assignment and Assumption

              	 
	
                Exhibit
                  1.1(c)

              	
                Form
                  of Account Control Agreement

              	 
	
                Exhibit
                  1.1(d)(i)

              	
                Form
                  of Borrower Joinder Agreement 

              	 
	
                Exhibit
                  1.1(d)(ii)

              	
                Form
                  of Guarantor Joinder Agreement

              	 
	
                Exhibit
                  1.1(e)

              	
                Form
                  of Notice of Borrowing

              	 
	
                Exhibit
                  1.1(f)

              	
                Form
                  of Notice of Conversion

              	 
	
                Exhibit
                  1.1(g)

              	
                Form
                  of Assignment

              	 
	
                Exhibit
                  1.1(h)

              	
                Form
                  of Borrower Release Letter

              	 
	
                Exhibit
                  1.1(i)

              	
                Form
                  of Compliance Certificate

              	 
	
                Exhibit
                  1.1(j)

              	
                Form
                  of Irrevocable Instruction

              	 
	
                Exhibit
                  1.1(k)

              	
                Form
                  of Servicer Redirection Notice

              	 
	
                Exhibit
                  1.1(l)

              	
                Form
                  of Warehouse Lender’s Release Letter

              	 
	
                Exhibit
                  1.1(m)

              	
                Form
                  of Securities Account Control Agreement

              	 
	
                Exhibit
                  2.1(a)

              	
                Form
                  of Funding Indemnity Letter

              	 
	
                Exhibit
                  2.1(b)

              	
                Form
                  of Confirmation

              	 
	
                Exhibit
                  2.1(f)

              	
                Form
                  of Revolving Note

              	 
	
                Exhibit
                  2.2(d)

              	
                Form
                  of Term Loan Note

              	 
	
                Exhibit
                  4.1(a)

              	
                Form
                  of Lender Consent

              	 
	
                Exhibit
                  4.1(n)

              	
                Form
                  of Closing Officer’s Certificate

              	 
	
                Exhibit
                  4.1(o)

              	
                Form
                  of Patriot Act Certificate

              	 
	
                Exhibit
                  4.1(q)(i)

              	
                Form
                  of Power of Attorney ࿓ Borrower

              	 
	
                Exhibit
                  4.1(q)(ii)

              	
                Form
                  of Power of Attorney ࿓ Pledgor

              	 
	
                Exhibit
                  5.2(h)

              	
                Form
                  of Mortgage Asset Data Summary 

              	 

      

    

     

    
      
        
        

      

      
        -
          iv -

        
          

        

      

      
        
        

      

    

     

    CREDIT
      AGREEMENT,
      dated
      as of April 29, 2008, among CAPLEASE DEBT FUNDING, LP, a Delaware limited
      partnership (together with its successors and permitted assigns, “Funding”),
      as a
      Borrower, PREFCO II LIMITED PARTNERSHIP, a Connecticut limited partnership
      (together with its successors and permitted assigns, “Prefco”),
      as a
      Guarantor, CAPLEASE, INC. (f/k/a Capital Lease Funding, Inc.), a Maryland
      corporation (together with its successors and permitted assigns, “Caplease
      Inc.”),
      as a
      Guarantor, CAPLEASE, LP, a Delaware limited partnership (together with its
      successors and permitted assigns, “Caplease”),
      as a
      Guarantor, CAPLEASE SERVICES CORP., a Delaware corporation (together with its
      successors and permitted assigns, “Services”),
      as a
      Guarantor, the other entities from time to time party hereto pursuant to Section
      5.10, the several banks and other financial institutions as are, or may from
      time to time become parties to this Agreement (each, together with its
      successors and assigns, a “Lender”
and,
      collectively, the “Lenders”),
      and
      WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as
      administrative agent for the Lenders hereunder (in such capacity, the
“Administrative
      Agent”).

     

    WITNESSETH:

     

    WHEREAS,
      the
      Credit Parties (as hereinafter defined) have requested that the Lenders make
      loans and other financial accommodations to the Credit Parties in an aggregate
      principal amount of up to $250,000,000, as more particularly described herein;
      and

    

    WHEREAS,
      the
      Lenders have agreed to make such loans and other financial accommodations to
      the
      Credit Parties on the terms and conditions contained herein.

    

    NOW,
      THEREFORE,
      for
      good and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged by the parties hereto, such parties hereby agree as
      follows:

     

    ARTICLE
      I

    

    DEFINITIONS

    

    Section
      1.1 Defined
      Terms.

    

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

    

    “40
      Act”
shall
      mean the Investment Company Act of 1940, as amended, restated or modified from
      time to time.

    

    “ABR
      Default Rate”
shall
      have the meaning set forth in Section 2.6. 

    

    “Accepted
      Servicing Practices”
shall
      mean, with respect to each item of Collateral, those mortgage, mezzanine loan
      and/or secured lending servicing practices, as applicable, of prudent lending
      institutions that service Collateral of the same type, size and structure as
      such Collateral in the jurisdiction where the related Underlying Mortgaged
      Property is located, as applicable, but in any event, (a) in accordance
      with the terms of the Credit Documents and Requirements of Law, (b) without
      prejudice to the interests of the Administrative Agent or any Lender,
      (c) with a view to the maximization of the recovery on such Collateral on a
      net present value basis and (d) without regard to (i) any relationship
      that any Credit Party or any Affiliate or any Subsidiary of the foregoing may
      have with the related Obligor, mortgagor, any Servicer, any PSA Servicer, any
      Credit Party or any Affiliate or any Subsidiary of any of the foregoing;
      (ii) the right of any Credit Party or any Subsidiary or Affiliate of the
      foregoing to receive compensation or other fees for its services rendered
      pursuant to this Agreement, the other Credit Documents, the Mortgage Loan
      Documents or any other document or agreement; (iii) the ownership,
      servicing or management by any Credit Party or any Affiliate or any Subsidiary
      of the foregoing for others of any other mortgage loans, assets or mortgaged
      property; (iv) any obligation of any Credit Party or any Affiliate or any
      Subsidiary of the foregoing to repurchase, repay or substitute any item of
      Collateral; (v) any obligation of any Credit Party or any Affiliate or any
      Subsidiary of the foregoing to cure a breach of a representation and warranty
      with respect to any Collateral and (vi) any debt any Credit Party or any
      Affiliate or any Subsidiary of the foregoing has extended to any Obligor,
      mortgagor or any Affiliate of such Obligor or mortgagor.

    

    “Account
      Control Agreement”
shall
      mean that certain letter agreement, dated as of the date hereof, among the
      Borrowers, Prefco, the Administrative Agent and Wachovia substantially in the
      form of Exhibit
      1.1(c)
      attached
      hereto, as amended, restated, modified or supplemented from time to
      time.

    

    “Account
      Designation Notice”
shall
      mean the Account Designation Notice dated as of the Closing Date from the
      Borrowers to the Administrative Agent in substantially the form attached hereto
      as Exhibit 1.1(a),
      as
      amended, restated, modified or supplemented from time to time.

    

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

    

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

    

    “Administrative
      Borrower”
shall
      mean Funding. 

    

    “Administrative
      Questionnaire”
shall
      mean an Administrative Questionnaire in a form supplied by the Administrative
      Agent, as amended, restated, modified or supplemented from time to
      time.

    
      
        
        

      

      
        -
          1 -

        
          

        

      

      
        
        

      

    

    

    “Affiliate”
shall
      mean, with respect to a specified Person, another Person that directly, or
      indirectly through one or more intermediaries, Controls or is Controlled by
      or
      is under common Control with the Person specified.

    

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

    

    “Allocated
      Revolving Loan Amount”
shall
      mean, for each item of Revolving Loan Collateral, the outstanding principal
      amount of the Revolving Loans allocated by the Administrative Agent, in its
      discretion, to the related Revolving Loan Collateral, which Allocated Revolving
      Loan Amount shall be set forth in the related Confirmation, as such Allocated
      Revolving Loan Amount may be increased (based on the funding of additional
      Revolving Loans) pursuant to one or more additional Confirmations or reduced
      (based on the application of principal payments under this Agreement) from
      time
      to time. The Administrative Agent shall maintain a schedule of all reductions
      in
      the Allocated Revolving Loan Amount for all Revolving Loan Collateral and such
      schedules shall be conclusive and binding absent manifest error.

    

    “Allocated
      Term Loan Amount”
shall
      mean, for each item of Term Loan Collateral, the outstanding principal amount
      of
      the Term Loan allocated by the Administrative Agent, in its discretion, to
      the
      related Term Loan Collateral, which Allocated Term Loan Amount shall be set
      forth in the related Confirmation, as such Allocated Loan Amount may be reduced
      (based on the application of principal payments under this Agreement) from
      time
      to time. The Administrative Agent shall maintain a schedule of all reductions
      in
      the Allocated Term Loan Amount for all Term Loan Collateral and such schedules
      shall be conclusive and binding absent manifest error.

    

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

    

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

    

    “A
      Note”
shall
      mean one of up to three promissory notes issued in connection with a Commercial
      Real Estate Loan secured primarily by the Underlying Mortgaged Property and
      an
      assignment of leases and rents on the Underlying Mortgaged Property. An A Note
      shall be characterized by a first Lien against the Underlying Mortgaged Property
      and payments under the related leases and a first Lien (subordinate only to
      the
      related B Note) on any unsecured claim in bankruptcy for past due rents owing
      under the leases. The Mortgage Loan Documents for the A Note shall contain
      appropriate intercreditor provisions acceptable to the Administrative Agent
      in
      its discretion.

    

    “A-1
      Note”
shall
      mean one of up to three promissory notes issued in connection with a Commercial
      Real Estate Loan secured primarily by the Underlying Mortgaged Property and
      an
      assignment of leases and rents on the Underlying Mortgaged Property. An
      A-1
      Note
      shall be characterized by a first Lien (subordinate only to the related A Note)
      against the Underlying Mortgaged Property and payments under the related leases
      and a first Lien (subordinate to the related B Note and A Note) on any unsecured
      claim in bankruptcy for past due rents owing under the leases. The Mortgage
      Loan
      Documents for the A-1
      Note
      shall contain appropriate intercreditor provisions acceptable to the
      Administrative Agent in its discretion.

    

    “Applicable
      Advance Rate”
shall
      mean, with respect to each Mortgage Asset, (a)
      with
      respect to Term Loan Collateral under the Term Loans, the Applicable Advance
      Rate set forth on Schedule
      1
      to the
      Fee Letter and (b)
      in the
      case of Revolving Loan Collateral under the Revolving Loans, the Applicable
      Advance Rate determined by the Administrative Agent in its discretion and set
      forth in the related Confirmation.

    

    “Applicable
      Percentage”
shall
      have the meaning set forth in the Fee Letter, which definition is incorporated
      herein by reference.

    

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

    

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

    

    “Arranger”
shall
      mean Wachovia Capital Markets, LLC, together with its successors and
      assigns.

    

    “Asset
      Schedule and Exception Report”
shall
      have the meaning set forth in the Custodial Agreement.

    

    “Asset
      Value”
shall
      have the meaning set forth in the Fee Letter, which definition is incorporated
      herein by reference.

    
      
        
        

      

      
        -
          2 -

        
          

        

      

      
        
        

      

    

    “Assignment
      and Assumption”
shall
      mean an assignment and assumption entered into by a Lender and an Eligible
      Assignee (with the consent of any party whose consent is required by the
      definition of Eligible Assignee and Section 10.6), and accepted by the
      Administrative Agent, in substantially the form of Exhibit 1.1(b)
      or any
      other form approved by the Administrative Agent.

    

    “Assignment
      of Leases”
shall
      mean, with respect to any Mortgage, an assignment of leases thereunder, notice
      of transfer or equivalent instrument in recordable form, sufficient under the
      laws of the jurisdiction wherein the Underlying Mortgaged Property is located
      to
      reflect the assignment of leases to the holder of the Mortgage or any secured
      party, as applicable, as any such Assignment of Leases may be amended, restated,
      modified or supplemented from time to time.

    

    “Assignment
      of Mortgage”
shall
      mean, with respect to any Mortgage, an assignment of the Mortgage, notice of
      transfer or equivalent instrument in recordable form, sufficient under the
      laws
      of the jurisdiction wherein the related Mortgaged Property is located to reflect
      the assignment of the Mortgage to the holder of the Mortgage or any secured
      party, as applicable, as any such Assignment of Mortgage may be amended,
      restated, modified or supplemented from time to time.

    

    “Assignments”
shall
      mean the transfer of all of the Borrowers’ rights and interests under an
      Eligible Asset pursuant to an assignment executed by the Borrowers in blank,
      which assignment shall be in the form of Exhibit
      1.1(g)
      and
      shall be otherwise satisfactory to the Administrative Agent in its discretion,
      as any such Assignments may be amended, restated, modified or supplemented
      from
      time to time.

    

    “Authority
      Documents”
shall
      mean, as to any Person, the articles or certificate of incorporation or
      formation, by-laws, limited liability company agreement, general partnership
      agreement, limited partnership agreement, trust agreement, joint venture
      agreement or other applicable organizational or governing documents and the
      applicable resolutions of such Person. 

    

    “Availability”
shall
      mean at any time, an amount equal to the positive excess (if any) of
      (a)
      the
      lesser of (i)
      the
      Revolving Committed Amount, and (ii)
      the
      Asset Value of all Revolving Loan Collateral, minus
      (b)
      the
      aggregate outstanding principal amount for all Revolving Loans on such day;
      provided,
      however,
      for so
      long as and to the extent that the Administrative Agent does not have a first
      priority perfected security interest in any item of Collateral, then such
      Collateral shall be disregarded for the purposes of calculating Availability;
      provided,
      further,
      however,
      on and
      after the occurrence of the Maturity Date or an Event of Default, the
      Availability shall be zero (0).

    

    “Availability
      Correction Deadline”
shall
      have the meaning set forth in Section 2.5.

    

    “Average
      Advance Rate”
shall
      mean a fraction, the numerator of which is the outstanding principal amount
      of
      all Revolving Loans and Term Loans and the denominator of which is the Asset
      Value of all Revolving Loan Collateral and Term Loan Collateral (without taking
      into account any Applicable Advance Rates), as such Asset Values are determined
      by the Administrative Agent in accordance with the definition of Asset Value.
      

    

    “Bailee”
shall
      mean, with respect to each Table Funded Mortgage
      Asset, the related title company or other settlement agent, in each case,
      approved in writing by the Administrative Agent in its discretion.

    

    “Bailee
      Agreement”
shall
      mean, the Bailee Agreement among the applicable Borrower, the Administrative
      Agent and the Bailee in the form of Annex 13
      to the
      Custodial Agreement. 

    

    “Bailee’s
      Trust Receipt”
shall
      have the meaning set forth in the Custodial Agreement.

    

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

    

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

    

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

    

    “Basic
      Mortgage Asset Documents”
shall
      have the meaning set forth in the Custodial Agreement.

    

    “B
      Note”
shall
      mean one of up to three promissory notes issued in connection with a Commercial
      Real Estate Loan secured primarily by the Underlying Mortgaged Property and
      an
      assignment of leases and rents on the Underlying Mortgaged Property. A B Note
      shall be characterized by a first Lien (subordinate to the related A Note and
      A-1
      Note)
      against the Underlying Mortgaged Property and payments under the related leases
      and a first Lien on any unsecured claim in bankruptcy for past due rents owing
      under the leases. The Mortgage Loan Documents for the B Note shall contain
      appropriate intercreditor provisions acceptable to the Administrative Agent
      in
      its discretion.

    

    “Book
      Value”
shall
      mean, with respect to any Mortgage Asset at any time (other than FM Global
      Pledged Mortgage Asset), an amount as certified by the applicable Borrower,
      equal to the lesser of (a)
      face or
      par value and (b)
      the
      price that the applicable Borrower initially paid or advanced in respect thereof
      plus
      any
      additional amounts advanced by the applicable Borrower for or in respect of
      such
      Mortgage Asset, as such Book Value may be marked down by the applicable Borrower
      from time to time, including, as applicable, any loss/loss reserve/price
      adjustments, less
      an
      amount equal to the sum of all principal payments, prepayments or paydowns
      paid
      and realized losses and other writedowns recognized relating to such Mortgage
      Asset; provided,
      however,
      any
      such markdowns or adjustments must be made in good faith and shall be disclosed
      contemporaneously therewith in writing to the Administrative Agent, which mark
      downs or adjustments, without a corresponding payment and application of
      principal, may result in a mandatory payment under Section 2.5.

    

    “Borrower”
or
      “Borrowers”
shall
      mean, individually and/or collectively, Funding and any other entity that
      becomes a party to this Agreement pursuant to Section 5.10 from time to time,
      in
      each case together with their successors and permitted assigns.

    
      
        
        

      

      
        -
          3 -

        
          

        

      

      
        
        

      

    

    “Borrower
      Joinder Agreement”
shall
      mean a Borrower Joinder Agreement in substantially the form of Exhibit 1.1(d)(i),
      executed and delivered by an Additional Credit Party in accordance with the
      provisions of Section 5.10, as amended, restated, supplemented or modified
      from time to time.

    

    “Borrower
      Asset Schedule”
shall
      have the meaning set forth in the Custodial Agreement.

    

    “Borrower
      Release Letter”
shall
      mean a letter in the form of Exhibit
      1.1(h),
      duly
      executed by the applicable Borrower.

    

    “Borrowing
      Date”
shall
      mean the date any Loan is made or any item of Collateral is pledged to the
      Administrative Agent pursuant to the terms hereof and the other Credit
      Documents. 

    

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

    

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

    

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

    

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

    

    “Capital
      Lease”
shall
      mean any lease of (or other agreement conveying the right to use) Property,
      real
      or personal, the obligations with respect to which are required to be
      capitalized on a balance sheet of the lessee in accordance with GAAP.

    

    “Capital
      Lease Obligations”
shall
      mean, for any Person and its Consolidated Subsidiaries, all obligations of
      such
      Person to pay rent or other amounts under a Capital Lease, and, for purposes
      of
      this Agreement, the amount of such obligations shall be the capitalized amount
      thereof, determined in accordance with GAAP.

    

    “Cash
      Collateral”
shall
      mean the cash or payments received by the Administrative Agent pursuant to
      Section 2.5 of this Agreement or as Income on any Collateral. 

    

    “Cash
      Equivalents”
shall
      mean any of the following: (a)
      securities issued or directly and fully guaranteed or insured by the United
      States or any agency or instrumentality thereof (provided that the full faith
      and credit of the United States is pledged in support thereof) having maturities
      of not more than one (1) year from the date of acquisition, (b)
      time
      deposits or certificates of deposit of any commercial bank incorporated under
      the laws of the United States or any state thereof, of recognized standing
      having capital and unimpaired surplus in excess of $1,000,000,000 and whose
      short-term commercial paper rating at the time of acquisition is at least A-1
      or
      the equivalent thereof by S&P or at least P-1 or the equivalent thereof by
      Moody’s (any such bank, an “Approved
      Bank”),
      with
      such deposits or certificates having maturities of not more than one (1)
      year from the date of acquisition, (c)
      repurchase obligations with a term of not more than seven (7) days for
      underlying securities of the types described in clauses (a) and (b) above
      entered into with any Approved Bank, (d)
      commercial paper or finance company paper issued by any Person incorporated
      under the laws of the United States or any state thereof and rated at least
      A-1
      or the equivalent thereof by S&P or at least P-1 or the equivalent thereof
      by Moody’s, and in each case maturing not more than one (1) year after the
      date of acquisition, and (e)
      investments in money market funds that are registered under the 40 Act,
      which have net assets of at least $1,000,000,000 and at least 85% of whose
      assets consist of securities and other obligations of the type described in
      clauses (a) through (e) above. All such Cash Equivalents must be
      denominated solely for payment in Dollars.

    

    “CDO
      Issuance”
shall
      mean any securitization transaction involving the issuance of collateralized
      debt obligations. 

    

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

    

    “Change
      of Control”
shall
      mean, with respect to any Borrower or any Guarantor, a change of control
      shall be deemed to have occurred upon the occurrence of any of the following:
      (a) a
      Person
      or two or more Persons acting in concert shall have acquired “beneficial
      ownership”, directly or indirectly, of, or shall have acquired by contract or
      otherwise, or shall have entered into a contract or arrangement that, upon
      consummation, will result in its or their acquisition of, or control over,
      Voting Interests of such Borrower or such Guarantor (or other securities
      convertible into such Voting Interests) representing more than 25% of the
      combined voting power of all Voting Interests of any Borrower or any Guarantor,
      (b) Continuing
      Directors shall cease for any reason to constitute a majority of the members
      of
      the board of directors of any
      Borrower or any Guarantor then
      in
      office,
      (c) the
      sale,
      lease, transfer, conveyance or other disposition (other than by way of merger
      or
      consolidation), in one or a series of related transactions, of all or
      substantially all of the assets of any Borrower (together with its
      Subsidiaries), or any Guarantor (together with its Subsidiaries) taken as a
      whole to any “person” (as such term is used in Sections 13(d) and 14(d) of
      the Exchange Act) or (d) the adoption by the equity holders of any
      Borrower or any Guarantor of
      a plan
      or proposal for the liquidation or dissolution of any
      Borrower or any Guarantor. As used herein, “beneficial ownership” shall have the
      meaning provided in Rule 13d-3 and 13d-5 of the Exchange Act.
      Notwithstanding the foregoing, neither the Administrative Agent nor any Lender
      shall be deemed to approve or have approved any internalization of management
      as
      a result of this definition or any other provision. 

    

    “Class”
shall
      mean with respect to a Mortgage Asset, such Mortgage Asset’s classification as a
      Whole Loan, a Floater, a Junior Interest, a Mezzanine Loan, a Construction
      Loan,
      a CMBS Security, a Letter of Credit Loan or a Direct CTL
      Transaction.

    
      
        
        

      

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

    

    “Closing
      Officer’s Certificate”
shall
      mean a certificate substantially in the form of Exhibit
      4.1(n),
      duly
      executed by each of the Credit Parties.

    

    “CMBS
      Security”
shall
      mean (a) a security representing a class of a commercial mortgage loan
      securitization backed by first lien mortgage loans secured by commercial and/or
      multifamily properties or other loans secured directly or indirectly by a
      mortgage encumbering an interest in property or (b) a security representing
      non-recourse or limited recourse collateralized debt obligations issued by
      a
      special purpose vehicle, secured solely by the assets thereof. 
Notwithstanding anything contained in the Credit Documents to the contrary,
      subject to the other requirements contained in this Agreement, CMBS Securities
      may be financed under the Term Loans and pledged as Term Loan Collateral, but
      CMBS Securities may not be financed under the Revolving Loans or pledged as
      Revolving Loan Collateral.

    

    “CMBS
      Security Certificate”
shall
      have the meaning set forth in the Custodial Agreement. 

    

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

    

    “Collateral”
shall
      mean the collective reference to the collateral described in the Security
      Documents which secures all Obligations (including, without limitation, the
      Term
      Loan and the Revolving Loan).

    

    “Collateral
      Default”
shall
      mean any Mortgage Asset included or proposed to be included in the Collateral
      (a)
      that is
      thirty (30) or more days delinquent under the terms of the related Mortgage
      Loan
      Documents, (b)
      for
      which there is a non-monetary default (beyond any applicable notice and cure
      period) under the terms of the related Mortgage Loan Documents, (c) for which
      there is any breach of a representation or warranty under Schedule
      1.1(c)
      or (d)
      with respect to which the related Obligor is the subject of an Insolvency
      Proceeding or Insolvency Event.

    

    “Collection
      Account”
shall
      mean the account set forth on Schedule
      1.1(b),
      which
      is established in the name of one or more Borrowers and subject to the Account
      Control Agreement and into which all Income and Cash Collateral shall be
      deposited. Funds in the Collection Account may be invested at the direction
      of
      the Administrative Agent in Cash Equivalents.

    

    “Commercial
      Real Estate”
shall
      mean any real estate included in the definition of Property Type.

    

    “Commercial
      Real Estate Loan”
shall
      mean any loan secured directly or indirectly by Commercial Real Estate or,
      as
      applicable, Equity Interests in an entity that owns directly or indirectly
      Commercial Real Estate.

    

    “Commitment”
shall
      mean the Revolving Commitments and the Term Loan Commitments, individually
      or
      collectively, as appropriate.

    

    “Commitment
      Fee”
shall
      mean the “Commitment Fee” payable under the Fee Letter.

    

    “Commitment
      Percentage”
shall
      mean the Revolving Commitment Percentage and/or the Term Loan Commitment
      Percentage, as appropriate.

    

    “Commitment
      Period”
shall
      mean the period from and including the Closing Date to but excluding the
      Revolver Maturity Date.

    

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

    

    “Compliance
      Certificate”
shall
      mean a certificate in the form of Exhibit
      1.1(i)
      attached
      hereto, duly executed by the Credit Parties.

    

    “Confirmation”
shall
      have the meaning set forth in Section 2.1. 

    

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

    

    “Consolidated
      Tangible Net Worth”
shall
      mean, as of a particular date: (a)
      all
      amounts that would be included under capital or stockholder equity (or the
      equivalent) on a consolidated balance sheet of the Guarantor and its
      Consolidated Subsidiaries at such date determined in accordance with
      GAAP, less
      (b)
      in each
      case with respect to the Guarantor and its Consolidated Subsidiaries
      (i) amounts owing to the Guarantor from Affiliates, or from officers,
      employees, partners, members, directors, shareholders or other Persons similarly
      affiliated with the Guarantor or its respective Affiliates, (ii) intangible
      assets of the Guarantor (other than real estate intangibles under Statement
      of
      Financial Accounting Standards No. 141, but including, without limitation,
      synthetic or derivative products or positions), as determined in accordance
      with
      GAAP, (iii) prepaid taxes and/or expenses, and (iv) the value of any REO
      Property and Foreclosed Loans; provided,
      however,
      for the
      avoidance of doubt, Consolidation Tangible Net Worth shall add back accumulated
      depreciation and amortization on real estate investments .

    

    “Construction
      Loan”
shall
      mean a performing Whole Loan (except that the Underlying Mortgaged Property
      is
      not stabilized or is transitional) entirely owned by a Borrower and the proceeds
      of which are applied to finance the acquisition of the Underlying Mortgaged
      Property and the initial construction of improvements thereon and as to which
      scheduled construction and occupancy shall occur on or before 30 days prior
      to
      the Maturity Date.

    
      
        
        

      

      
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          5 -

        
          

        

      

      
        
        

      

    

    “Construction
      Costs”
shall
      mean with respect to a Mortgage Asset that is a Construction Loan, as of any
      date of determination, the reasonable hard and soft costs of proposed
      construction of the improvements on the Underlying Mortgaged Property, which
      reasonable costs shall be disclosed to and approved by the Administrative in
      its
      discretion, plus
      the
      market value of the related Underlying Mortgaged Property at such time, as
      determined by the Administrative Agent in its discretion based on such sources
      of information as the Administrative Agent may determine to rely on in its
      discretion.

    

    “Construction
      Draw Deliveries”
shall
      mean the deliveries required under Schedule
      1.1(f)
      to this
      Agreement.

    

    “Contingent
      Liabilities”
shall
      mean, with respect to any Person and its Consolidated Subsidiaries (without
      duplication): (a)
      liabilities and obligations (including any Guarantee Obligations) of such Person
      or any Consolidated Subsidiary of such Person in respect of “off-balance sheet
      arrangements” (as defined in the SEC Off-Balance Sheet Rules), (b)
      any
      obligation, including, without limitation, any Guarantee Obligation, whether
      or
      not required to be disclosed in the footnotes to such Person’s and its
      Consolidated Subsidiaries’ financial statements, guaranteeing partially or in
      whole any Non-Recourse Indebtedness, lease, dividend or other obligation,
      exclusive of (i)
      contractual indemnities (including, without limitation, any indemnity or
      price-adjustment provision relating to the purchase or sale of securities or
      other assets) and (ii)
      guarantees of non-monetary obligations (other than guarantees of completion,
      environmental indemnities and guarantees of customary carve-out matters made
      in
      connection with Non-Recourse Indebtedness, such as (but not limited to) fraud,
      misappropriation, bankruptcy and misapplication) which have not yet been called
      on or quantified, of such Person or of any other Person, and (c)
      any
      forward commitment or obligation to fund or provide proceeds with respect to
      any
      loan or other financing which is obligatory and non-discretionary on the part
      of
      the lender. The amount of any Contingent Liabilities described in
      clause (b) shall be deemed to be, (i)
      with
      respect to a guarantee of interest or interest and principal, or operating
      income guarantee, the sum of all payments required to be made thereunder (which,
      in the case of an operating income guarantee, shall be deemed to be equal to
      the
      debt service for the note secured thereby), through, (x) in the case of an
      interest or interest and principal guarantee, the stated date of maturity of
      the
      obligation (and commencing on the date interest could first be payable
      thereunder), or (y) in the case of an operating income guarantee, the date
      through which such guarantee will remain in effect, and (ii)
      with
      respect to all guarantees not covered by the preceding clause (i), an
      amount equal to the stated or determinable amount of the primary obligation
      in
      respect of which such guarantee is made or, if not stated or determinable,
      the
      maximum reasonably anticipated liability in respect thereof (assuming such
      Person is required to perform thereunder) as recorded on the balance sheet
      and
      on the footnotes to the most recent financial statements of such Person. As
      used
      in this definition, the term “SEC Off-Balance Sheet Rules” means the Disclosure
      in Management’s Discussion and Analysis About Off-Balance Sheet Arrangements and
      Aggregate Contractual Obligations, Securities Act Release No. 33-8182,
      34-47264; FR-67 International Series Release No. 1266 File No. S7-42-02, 68
      Fed.
      Reg. 5982 (Feb. 5, 2003) (codified at 17 CFR pts. 228, 229 and
      249).

    

    “Continuing
      Director”
shall
      mean (a)
      an
      individual who is a member of any Person’s board of directors (or the equivalent
      thereof) on the date hereof or (b)
      any new
      director (or the equivalent thereof) whose appointment was approved by a
      majority of the individuals who were already Continuing Directors at the time
      of
      such appointment, election or approval.

    

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

    

    “Control”
shall
      mean the possession, directly or indirectly, of the power to direct or cause
      the
      direction of the management or policies of a Person, whether through the ability
      to exercise voting power, by contract or otherwise. “Controlling”
and
      “Controlled”
have
      meanings correlative thereto.

    

    “Correction
      Amount”
shall
      have the meaning set forth in Section 2.5.

    

    “Credit
      Documents”
shall
      mean this Agreement, each of the Notes, any Joinder Agreement, the Fee Letter,
      the Guaranty, each Notice of Borrowing, each Confirmation, the Custodial Fee
      Letter and the Security Documents and all other agreements, documents,
      certificates and instruments delivered to the Administrative Agent or any Lender
      by any Credit Party in connection therewith, as each such agreement, document,
      certificate or instrument is amended, restated, modified or supplemented from
      time to time.

    

    “Credit
      Party”
shall
      mean any of the Borrowers, the Guarantor, the Pledgors, any Additional Credit
      Party or any pledgor or obligor under the Security Documents.

    

    “Credit
      Party-Related Obligations”
shall
      mean any obligations, liabilities and/or Indebtedness of the Credit Parties
      under each Credit Document and under any other arrangement between any Credit
      Party or any Affiliate or Subsidiary of any Credit Party, on the one hand,
      and
      the Administrative Agent, any Affiliate or Subsidiary of the Administrative
      Agent and/or any commercial paper conduit for which Wachovia or an Affiliate
      or
      Subsidiary of Wachovia acts as a liquidity provider, administrator or agent,
      on
      the other hand, including, without limitation, such obligations, liabilities
      and/or Indebtedness under the Wachovia Letter of Credit and any Derivatives
      Contract involving Wachovia, as any such Credit Party-Related Obligations are
      amended, restated or modified from time to time.

    

    “Credit
      Tenant Lease”
shall
      mean a financeable lease to a tenant or guaranteed by a Person with a rating
      of
      BBB- by S&P or Baa3 by Moody’s, or better, which lease provides that the
      tenant will pay all maintenance, insurance, and property and sales taxes, or,
      to
      the extent such maintenance, insurance and/or property and/or sales tax
      obligations are the responsibility of a Borrower, such obligations will be
      paid
      by insurance, from reserves or by such other means acceptable to the
      Administrative Agent. Notwithstanding the foregoing, leases to tenants or
      guaranteed by Persons not meeting such requirements may be deemed Credit Tenant
      Leases in the Administrative Agent’s discretion.

    

    “Current
      Appraisal”
shall
      mean an appraisal dated within twelve (12) months of the date of
      determination; provided,
      however,
      (i) in the case of the valuation of an Underlying Mortgaged Property, such
      appraisal shall be a FIRREA Appraisal and (ii) in the case of the valuation
      of a Mortgage Asset, such appraisal shall be from a nationally recognized
      appraisal firm (other than the Borrowers, the Guarantor or any Affiliate of
      the
      foregoing) (A) with substantial experience valuing assets similar in type,
      size and structure to the Mortgage Asset in question, (B) having
      substantial familiarity with the market for such Mortgage Asset and
      (C) that is otherwise acceptable to the Administrative Agent in its
      discretion.

    
      
        
        

      

      
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          6 -

        
          

        

      

      
        
        

      

    

    “Custodial
      Agreement”
shall
      mean that certain Custodial Agreement, dated as of even date herewith, by and
      among the Borrowers, the Administrative Agent and the Custodian, as the same
      shall be amended, modified, waived, supplemented, extended, replaced or restated
      from time to time.

    

    “Custodial
      Fee Letter”
shall
      mean that certain Custodial Fee Letter between the Borrowers and the Custodian,
      as such letter may be amended, modified, waived, supplemented, extended,
      restated or replaced from time to time.

    

    “Custodial
      Identification Certificate”
shall
      have the meaning set forth in the Custodial Agreement. 

    

    “Custodian”
shall
      mean Wells Fargo Bank, National Association, and its successor in interest
      as
      the custodian under the Custodial Agreement, and any successor Custodian under
      the Custodial Agreement.

    

    “Dark”
shall
      have the meaning set forth in the Fee Letter, which definition is incorporated
      herein by reference.

    

    “Debt
      Issuance”
shall
      mean the issuance of any indebtedness for borrowed money by any Borrower, any
      Guarantor or any Consolidated Subsidiary or Affiliate of any Borrower or
      Guarantor, including, without limitation, (a)
      Preferred Securities to the extent such Preferred Securities constitute
      Indebtedness and (b) any
      such issuance in accordance with Requirements of Law relating to Taxes;
provided,
      however,
      the
      term Debt Issuance shall not include (i) any Equity Issuances and (ii)
      Indebtedness permitted by Section 6.1(a) of this Agreement. 

    

    “Debt
      Service Coverage Ratio”
or
      “DSCR”
shall
      mean with respect to any Mortgage Asset (other than the FM Global Pledged
      Mortgage Asset), as of any date of determination, for the period of time to
      be
      determined in the Administrative Agent’s discretion (it being understood that it
      is the Administrative Agent’s intent to make the determination based on the
      period of twelve (12) consecutive complete calendar months preceding such
      date (or, if such Mortgage Asset was originated less than twelve (12)
      months from the date of determination, the number of months from the date of
      origination)), the ratio of (a) the aggregate Net Cash Flow in respect of
      the Underlying Mortgaged Properties relating to such Mortgage Asset for such
      period (including, in the case of Construction Loans, interest reserves held
      by
      a Borrower or a Servicer with respect to such asset), to
      (b) the sum of (i) the aggregate of all amounts due for such period in
      respect of all Indebtedness that was outstanding from time to time during such
      period that is secured, directly or indirectly, by such Underlying Mortgaged
      Properties (including, without limitation, by way of a pledge of the equity
      of
      the owner(s) of such Underlying Mortgaged Properties) or that is otherwise
      owing
      by the owner(s) of such Underlying Mortgaged Properties, including, without
      limitation, all scheduled principal and/or interest payments due for such period
      in respect of each Mortgage Asset that is secured or supported by such
      Underlying Mortgaged Properties plus
      (ii) the amount of all Ground Lease payments to be made in respect of such
      Underlying Mortgaged Properties during such period, as any of the foregoing
      elements of DSCR may be adjusted by the Administrative Agent as determined
      by
      the Administrative Agent in its discretion; provided,
      however,
      that
      all such calculations shall be made taking into account any senior or
pari
      passu
      debt or
      other obligations including debt or other obligations secured directly or
      indirectly by the applicable Underlying Mortgaged Property.

    

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

    

    “Deficit”
shall
      have the meaning set forth in Section 2.5(b)(vi).

    

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

    

    “Derivatives
      Contract”
shall
      mean any and all rate swap transactions, basis swaps, credit derivative
      transactions, forward rate transactions, commodity swaps, commodity options,
      forward commodity contracts, equity or equity index swaps or options, bond
      or
      bond price or bond index swaps or options or forward bond or forward bond price
      or forward bond index transactions, interest rate options, forward foreign
      exchange transactions, cap transactions, floor transactions, collar
      transactions, currency swap transactions, cross-currency rate swap transactions,
      currency options, spot contracts, or any other similar transactions or any
      combination of any of the foregoing (including any options to enter into any
      of
      the foregoing), whether or not any such transaction is governed by or subject
      to
      any master agreement. Not in limitation of the foregoing, the term “Derivatives
      Contract” includes any and all transactions of any kind, and the related
      confirmations, which are subject to the terms and conditions of, or governed
      by,
      any form of master agreement published by the International Swaps and
      Derivatives Association, Inc., any International Foreign Exchange Master
      Agreement, or any other master agreement, including any such obligations or
      liabilities under any such master agreement.

    

    “Derivatives
      Termination Value”
shall
      mean, in respect of any one or more Derivatives Contracts, after taking into
      account the effect of any legally enforceable netting agreement relating to
      such
      Derivatives Contracts, (a) for any date on or after the date such
      Derivatives Contracts have been closed out and termination value(s) determined
      in accordance therewith, such termination value(s), and (b) for any date
      prior to the date referenced in clause (a), the amount(s) determined as the
      mark-to-market value(s) for such Derivatives Contracts, as determined based
      upon
      one or more mid-market or other readily available quotations provided by any
      recognized dealer in such Derivatives Contracts (which may include the
      Administrative Agent). 

    

    “Direct
      CTL Transaction”
shall
      mean a Whole Loan, an A-1
      Note or
      B Note made by a Subsidiary wholly-owned
      by
      Caplease Inc. or Caplease and payable to a Borrower secured by Underlying
      Mortgaged Property owned by such Subsidiary, which includes a Credit Tenant
      Lease under which the Subsidiary is the lessor under the Credit Tenant Lease.
      With respect to Direct CTL Transactions involving Whole Loans, the Subsidiary
      owning the Underlying Mortgaged Property shall be an SPE Subsidiary and the
      Equity Interests in such SPE Subsidiary shall be subject to Section
      6.18.

    

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

    
      
        
        

      

      
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          7 -

        
          

        

      

      
        
        

      

    

    

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

    

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

    

    “DTC”
shall
      mean The Depository Trust Company, a limited purpose company under the banking
      laws of the State of New York.

    

    “Due
      Diligence Review”
shall
      mean the performance by the Administrative Agent of any or all of the reviews
      permitted under Section 10.27 with respect to any or all of the Collateral,
      as
      desired by the Administrative Agent from time to time.

    

    “Electronic
      Transmission”
shall
      mean the delivery of information and executed documents in an electronic format
      acceptable to the applicable recipient thereof. 

    

    “Eligible
      Asset”
shall
      mean a Mortgage Asset that as of any date of determination:

    

    (a) is
      not
      subject to a Collateral Default;

    

    (b) with
      respect to the portion of such Mortgage Asset to be pledged to the
      Administrative Agent, the funding obligations have been satisfied in full and
      there is no unfunded commitment with respect thereto; 

    

    (c) has
      been
      approved in writing by the Administrative Agent in its discretion; 

    

    (d) has,
      to
      the extent applicable, an LTV not in excess of the Maximum LTV, and, with
      respect to Construction Loans, an LTC not in excess of the Maximum
      LTC;

    

    (e) has,
      to
      the extent applicable, a DSCR equal to or greater than the Minimum
      DSCR;

    

    (f) other
      than a Construction Loan, is not a construction loan;

    

    (g) is
      not a
      loan to an operating business (other than a hotel); 

    

    (h) the
      pledge of such Mortgage Asset will not violate any applicable
      Sub-Limit;

    

    (i) satisfies
      each of the applicable representations and warranties set forth in
      Article III of this Agreement and the Security Documents (to the extent any
      such representations or warranties relate to the Mortgage Assets or
      the Administrative Agent’s rights or remedies with respect thereto), in
      Schedule 1.1(c) hereto, the Mortgage Loan Documents and in any statement,
      affirmation or certification made or information, document, agreement, notice
      or
      report provided to the Administrative Agent with respect to such Mortgage
      Asset;

    

    (j) in
      the
      case a Ground Lease, the Ground Lease has a remaining term including extensions
      of no less than twenty (20) years from the maturity date of the Mortgage
      Asset; 

    

    (k) in
      the
      case of any Mortgage Asset the Mortgage Property for which is a hotel, that
      hotel must be a national flag hotel;

    

    (l) the
      Underlying Mortgage Property is located, and the Obligor is domiciled, in
      the United States of America;

    

    (m) such
      Mortgage Asset (other than a CMBS Security and the FM Global Pledged Mortgage
      Asset) includes an original Mortgage Note, Participation Certificate or
      Mezzanine Note, as applicable; 

    

    (n) such
      Mortgage Asset is denominated and payable in Dollars;

    

    (o) the Obligor
      is not a Sanctioned Person or Sanctioned Entity; and

    

    (p) does
      not
      involve an equity or similar interest by any Credit Party that would result
      in (i) except with respect to Direct CTL Transactions involving
      A-1
      Notes
      and B Notes, a conflict of interest or a potential conflict of interest or
      (ii) an affiliation with an Obligor under the terms of the Mortgage
      Loan Documents which results or could reasonably be expected to result in the
      loss or impairment of any material rights of the holder of the Mortgage Asset;
      provided,
      however,
      the Borrowers must disclose to the Administrative Agent prior to
      the related Borrowing Date all equity or similar interests held or to be
      held by any Credit Party regardless of whether it satisfies any of the
      foregoing clauses (i) or (ii);

    

    provided,
      however,
      (i)
      CMBS Securities shall not be Eligible Assets for the purposes of the Revolving
      Loans and may not be pledged as Revolving Loan Collateral and (ii)
      notwithstanding a Mortgage Asset’s failure to conform to the criteria set forth
      above, the Administrative Agent may, in its discretion, designate in writing
      any
      such non-compliant Mortgage Asset as an Eligible Asset, which may include a
      temporary or permanent waiver of one (1) or more Eligible Asset
      requirements. 

    
      
        
        

      

      
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    “Eligible
      Assignee”
shall
      mean (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved
      Fund, and (d) any other Person (other than a natural person) approved by
      the Administrative Agent; provided
      that
      notwithstanding the foregoing, “Eligible Assignee” shall not include the
      Borrowers, Guarantor or any Borrower’s or Guarantor’s Affiliates or
      Subsidiaries.

    

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

    

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

    

    “Equity
      Issuance”
shall
      mean any issuance by any Borrower, Guarantor or any Consolidated Subsidiary
      or
      Affiliate of any Borrower or any Guarantor to any Person that is not a Borrower,
      Guarantor or Consolidated Subsidiary or Affiliate of a Borrower or Guarantor
      of
      (a) shares or interests of its Equity Interests, (b) any shares or
      interests of its Equity Interests pursuant to the exercise of options, warrants
      or similar rights, (c) any shares or interests of its Equity Interests
      pursuant to the conversion of any debt securities to equity or
      (d) warrants, options or similar rights that are exercisable or convertible
      into shares or interests of its Equity Interests; provided,
      however,
“Equity
      Issuance” shall not include the items excluded in the Fee Letter, which
      exclusions are incorporated herein by reference. 

    

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

    

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

    

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

    

    “Exceptions”
shall
      have the meaning set forth in the Custodial Agreement.

    

    “Exception
      Report”
shall
      have the meaning set forth in the Custodial Agreement. 

    

    “Excluded
      Taxes”
shall
      mean, with respect to the Administrative Agent, any Lender, or any other
      recipient of any payment to be made by or on account of any obligation of the
      Borrowers hereunder, (a) taxes imposed on or measured by its overall net
      income (however denominated), and franchise taxes imposed on it (in lieu of
      net
      income taxes), by the jurisdiction (or any political subdivision thereof) under
      the laws of which such recipient is organized or in which its principal office
      is located or, in the case of any Lender, in which its applicable lending office
      is located, (b) any branch profits taxes imposed by the United States of
      America or any similar tax imposed by any other jurisdiction in which a Borrower
      is located and (c) in the case of a Foreign Lender, any withholding tax
      that is imposed on amounts payable to such Foreign Lender at the time such
      Foreign Lender becomes a party hereto (or designates a new lending office)
      or is
      attributable to such Foreign Lender’s failure or inability (other than as a
      result of a Change in Law) to comply with Section 2.14, except to the
      extent that such Foreign Lender (or its assignor, if any) was entitled, at
      the
      time of designation of a new lending office (or assignment), to receive
      additional amounts from the Borrowers with respect to such withholding tax
      pursuant to Section 2.14. 

    

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

    

    “Extraordinary
      Receipt”
shall
      mean any Income received by or paid to or for the account of any Credit Party
      relating to any item of Collateral and not in the ordinary course of business,
      including tax refunds, pension plan reversions, proceeds of insurance (other
      than proceeds of business interruption insurance to the extent such proceeds
      constitute compensation for lost earnings), condemnation awards (and payments
      in
      lieu thereof), indemnity payments and any purchase price
      adjustments.

    

    “Fair
      Market Value”
shall
      mean, with respect to (a) a security listed on a national securities
      exchange or recognized automated quotation system, the price of such security
      as
      reported on such exchange by any widely recognized reporting method customarily
      relied upon by financial institutions, and (b) with respect to any other
      assets or Property, including realty, the price that could be negotiated in
      an
      arm’s-length free market transaction, for cash, between a willing seller and a
      willing buyer, neither of which is under pressure or compulsion to complete
      the
      transaction.

    

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

    

    “Fee
      Letter”
shall
      mean the letter agreement dated as of the date hereof, among the Borrowers
      and
      the Administrative Agent, as amended, modified, extended, restated, replaced,
      or
      supplemented from time to time.

    

    “Financial
      Covenants”
shall
      mean the covenants set forth in Section 5.9 of this Agreement.

    

    “FIRREA
      Appraisal”
shall
      mean an appraisal prepared by an independent third party appraiser approved
      in
      writing by the Administrative Agent in its discretion and satisfying the
      requirements of Title XI of the Federal Institutions, Reform, Recovery and
      Enforcement

    
      
        
        

      

      
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    Act
      of 1989 and the regulations promulgated thereunder (as the foregoing are
      amended, modified, restated, replaced, waived, substituted, supplemented or
      extended from time to time), as in effect on the date of such
      appraisal.

    

    “Fitch”
shall
      mean Fitch
      Ratings, Inc.

    

    “Floater”
shall
      mean a performing Whole Loan with a floating rate of interest payable under
      the
      related Mortgage Loan Documents.

    

    “FM
      Global Pledged Mortgage Asset”
shall
      mean the FM Global Real Estate pledged to the Administrative Agent on behalf
      of
      the Lenders under the Security Documents.

    

    “FM
      Global Real Estate”
shall
      mean all interests of Prefco in that certain Commercial Real Estate located
      in
      Johnston, Providence County, Rhode Island and more specifically described in
      the
      Prefco Mortgage.

    

    “Foreclosed
      Loan”
shall
      mean a loan the security for which has been foreclosed upon by the
      Borrowers.

    

    “Foreign
      Lender”
shall
      mean any Lender that is organized under the laws of a jurisdiction other than
      that in which a Borrower is resident for tax purposes. For purposes of this
      definition, the United States of America, each State thereof and the District
      of
      Columbia shall be deemed to constitute a single jurisdiction.

    

    “Fund”
shall
      mean any Person (other than a natural person) that is (or will be) engaged
      in
      making, purchasing, holding or otherwise investing in commercial loans and
      similar extensions of credit in the ordinary course of its
      business.

    

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

    

    “GAAP”
shall
      mean generally accepted accounting principles in effect in the United States
      of
      America applied on a consistent basis, subject,
      however,
      in the
      case of determination of compliance with the financial covenants set out in
      Section 5.9, to the provisions of Section 1.3.

    

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

    

    “Ground
      Lease”
shall
      mean with respect to any Underlying Mortgaged Property for which the Obligor
      has
      a leasehold interest in the related Underlying Mortgaged Property or space
      lease
      within such Underlying Mortgaged Property, the lease agreement creating such
      leasehold interest.

    

    “GSA”
shall
      mean U.S. General Services Administration, or any successor Governmental
      Authority.

    

    “Guarantee
      Obligation”
shall
      mean, as to any Person (the “guaranteeing
      person”),
      without duplication, any obligation of (a) the guaranteeing person or
      (b) another Person (including, without limitation, any bank under any
      letter of credit) to induce the creation of the obligations for which the
      guaranteeing person has issued a reimbursement, counterindemnity or similar
      obligation, in either case guaranteeing or in effect guaranteeing any
      Indebtedness, leases, dividends, Contractual Obligation, Derivatives Contract
      or
      other obligations (the “primary
      obligations”)
      of any
      other third Person (the “primary
      obligor”)
      in any
      manner, whether directly or indirectly, including, without limitation, any
      obligation of the guaranteeing person, whether or not contingent, (i) to
      purchase any such primary obligation or any Property constituting direct or
      indirect security therefor, (ii) to advance or supply funds (1) for
      the purchase or payment of any such primary obligation or (2) to maintain
      working capital or equity capital of the primary obligor or otherwise to
      maintain the net worth or solvency of the primary obligor, (iii) to
      purchase Property, securities or services primarily for the purpose of assuring
      the owner of any such primary obligation of the ability of the primary obligor
      to make payment of such primary obligation or (iv) otherwise to assure or
      hold harmless the owner of any such primary obligation against loss in respect
      thereof; provided,
      however,
      that
      the term Guarantee Obligation shall not include endorsements of instruments
      for
      deposit or collection in the ordinary course of business. The amount of any
      Guarantee Obligation of any guaranteeing person shall be deemed to be the
      maximum stated amount of the primary obligation relating to such Guarantee
      Obligation (or, if less, the maximum stated liability set forth in the
      instrument embodying such Guarantee Obligation); provided,
      however,
      that in
      the absence of any such stated amount or stated liability, the amount of such
      Guarantee Obligation shall be such guaranteeing person’s maximum reasonably
      anticipated liability in respect thereof as reasonably determined by such Person
      in good faith.

    

    “Guarantor”
shall
      mean, Prefco, Caplease Inc., Caplease, Services and any other entity that
      becomes party to this Agreement pursuant to Section 5.10 from time to time,
      in
      each case together with their successors and permitted assigns.

    

    “Guarantor
      Joinder Agreement”
shall
      mean a Guarantor Joinder Agreement in substantially the form of Exhibit 1.1(d)(ii),
      executed and delivered by an Additional Credit Party in accordance with the
      provisions of Section 5.10, as amended, restated, supplemented or modified
      from time to time.

    

    “Guaranty”
shall
      mean the guaranty of the Guarantor set forth in that certain Guaranty Agreement,
      dated as of the date hereof, by and among the Guarantor and the Administrative
      Agent, as amended, restated, supplemented or modified from time to
      time.

    

    “Income”
shall
      mean with respect to the Collateral and
      to
      the extent of a Borrower’s or the holder’s interest therein, at any time, all of
      the following: all payments, collections, prepayments, recoveries, proceeds
      (including, without limitation, insurance and condemnation proceeds),
      Extraordinary Receipts and all other payments or amounts of any kind or nature
      whatsoever paid, received, collected, recovered or distributed on, in connection
      with or in respect of the Collateral or any other collateral for the
      Obligations, including, without limitation, principal payments, interest
      payments, principal and interest payments, prepayment fees, extension fees, exit
      fees, defeasance fees, transfer fees, late

    
      
        
        

      

      
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          10 -

        
          

        

      

      
        
        

      

    

    charges,
      late fees and all other fees or charges of any kind or nature, premiums, yield
      maintenance charges, penalties, default interest, dividends, gains, receipts,
      allocations, rents, interests, profits, payments in kind, returns or repayment
      of contributions and all other distributions, payments and other amounts of
      any
      kind or nature whatsoever payable thereon, in connection therewith, or with
      respect thereto, together with amounts received from any Interest Rate
      Protection Agreement; provided,
      however,
      (i)
      prior
      to an Event of Default, the Borrowers may net the Servicing Fee from Income
      and
      (ii)
      Income
      shall not include any Obligor Reserve Payments unless a Borrower, a Servicer
      or
      a PSA Servicer has exercised rights with respect to such payments under the
      terms of the related Mortgage Loan Documents, the Servicing Agreements or the
      Pooling and Servicing Agreements, as applicable. For purposes of the FM Pledged
      Mortgage Asset, Income shall also include all amounts paid or payable by any
      tenant of the related Underlying Mortgaged Property or any Obligor under a
      lease
      of the related Underlying Mortgaged Property.

    

    “Indebtedness”
shall
      mean, with respect to any Person, including such Person’s Consolidated
      Subsidiaries determined on a consolidated basis, at the time of computation
      thereof, all indebtedness of any kind including, without limitation (without
      duplication): (a) all obligations of such Person in respect of money
      borrowed (including, without limitation, principal, interest, assumption fees,
      prepayment fees, yield maintenance charges, penalties, exit fees, contingent
      interest and other monetary obligations whether choate or inchoate and whether
      by loan, the issuance and sale of debt securities or the sale of Property or
      assets to another Person subject to an understanding or agreement, contingent
      or
      otherwise, to repurchase such Property or assets, or otherwise); (b) all
      obligations of such Person, whether or not for money borrowed
      (i) represented by notes payable, letters of credit or drafts accepted, in
      each case representing extensions of credit, (ii) evidenced by bonds,
      debentures, notes or similar instruments, (iii) constituting purchase money
      indebtedness, conditional sales contracts, title retention debt instruments
      or
      other similar instruments, upon which interest charges are customarily paid
      or
      that are issued or assumed as full or partial payment for property or services
      rendered, or (iv) in connection with the issuance of preferred equity or
      trust preferred securities; (c) Capital Lease Obligations of such Person;
      (d) all reimbursement obligations of such Person under any letters of
      credit or acceptances (whether or not the same have been presented for payment);
      (e) all Off-Balance Sheet Obligations of such Person; (f) all
      obligations of such Person to purchase, redeem, retire, defease or otherwise
      make any payment in respect of any Mandatory Redeemable Stock issued by such
      Person or any other Person (inclusive of forward equity contracts), valued
      at
      the greater of its voluntary or involuntary liquidation preference plus accrued
      and unpaid dividends; (g) as applicable, all obligations of such Person
      (but not the obligation of others) in respect of any keep well arrangements,
      credit enhancements, contingent or future funding obligations under any Mortgage
      Asset or any obligation senior to the Mortgage Asset, unfunded interest reserve
      amount under any Mortgage Asset or any obligation that is senior to the Mortgage
      Asset, purchase obligation, repurchase obligation, sale/buy-back agreement,
      takeout commitment or forward equity commitment, in each case evidenced by
      a
      binding agreement (excluding any such obligation to the extent the obligation
      can be satisfied by the issuance of Equity Interests (other than Mandatory
      Redeemable Stock)); (h) net obligations under any Derivatives Contract not
      entered into as a hedge against existing indebtedness, in an amount equal to
      the
      Derivatives Termination Value thereof; (i) all Non-Recourse Indebtedness,
      recourse indebtedness and all indebtedness of other Persons which such Person
      has guaranteed or is otherwise recourse to such Person; (j) all
      indebtedness of another Person secured by (or for which the holder of such
      indebtedness has an existing right, contingent or otherwise, to be secured
      by)
      any Lien (other than certain Permitted Liens) on Property or assets owned by
      such Person, even though such Person has not assumed or become liable for the
      payment of such indebtedness or other payment obligation; provided,
      however,
      if such
      Person has not assumed or become liable for the payment of such indebtedness,
      then for the purposes of this definition the amount of such indebtedness shall
      not exceed the market value of the property subject to such Lien; (k) all
      Contingent Liabilities; (l) all obligations of such Person incurred in
      connection with the acquisition or carrying of fixed assets by such Person
      or
      obligations of such Person to pay the deferred purchase or acquisition price
      of
      Property or assets, including contracts for the deferred purchase price of
      Property or assets that include the procurement of services;
      (m) indebtedness of general partnerships of which such Person is liable as
      a general partner (whether secondarily or contingently liable or otherwise);
      and
      (n) obligations of such Person to fund capital commitments under any
      Authority Document, subscription agreement or otherwise.

    

    “Indemnified
      Amounts”
shall
      have the meaning set forth in Section 10.5(b).

    

    “Indemnified
      Taxes”
shall
      mean Taxes other than Excluded Taxes.

    

    “Indemnitee”
shall
      have the meaning set forth in Section 10.5(b).

    

    “Independent
      Director”
shall
      mean natural Person who (a) is not at the time of initial appointment as
      Independent Director, and may not have been at any time during the five (5)
      years preceding such initial appointment or at any time while serving as
      Independent Director, (i) a stockholder, partner, member or direct or
      indirect legal or beneficial owner of a Borrower, a Guarantor or any Subsidiary
      or Affiliate of any Credit Party; (ii) a contractor, creditor, customer,
      supplier, director (with the exception of serving as the Independent Director
      of
      a Borrower), officer, employee, attorney, manager or other Person who derives
      any of its purchases or revenues from its activities with a Borrower, a
      Guarantor or any Affiliate or Subsidiary of any Credit Party; (iii) a
      natural Person who controls (directly or indirectly or otherwise) a Borrower,
      a
      Guarantor or any Affiliate or Subsidiary of any Credit Party or who controls
      or
      is under common control with any Person that would be excluded from serving
      as
      an Independent Director under (i) or (ii), above; or (iv) a member of the
      immediate family of a natural Person excluded from servicing as an Independent
      Director under clauses (i) or (ii) above and (b) otherwise satisfies the
      then current requirements of the Rating Agencies. A Person who is an employee
      of
      a nationally recognized organization that supplies independent directors and
      who
      otherwise satisfies the criteria in clause (a) but for the fact that such
      organization receives payment from a Borrower or a Guarantor for providing
      such
      independent director shall not be disqualified from serving as an Independent
      Director hereunder.

    

    “Information
      Materials”
shall
      have the meaning set forth in Section 5.15.

    

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

    

    “Insolvency
      Event”
shall
      mean, with respect to a specified Person, (a) the filing of a decree or
      order for relief by a court having jurisdiction in the premises in respect
      of
      such Person or any substantial part of its Property in an involuntary case
      under
      any applicable Insolvency Law now or hereafter in effect, or appointing a
      receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
      official for such Person or for any substantial part of its Property, or
      ordering the winding-up or liquidation of such Person’s affairs, and such decree
      or order shall remain

    
      
        
        

      

      
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    unstayed
      and in effect for a period of sixty (60) consecutive days; or (b) the
      commencement by such Person of a voluntary case under any applicable Insolvency
      Law now or hereafter in effect,
      or the consent by such Person to the entry of an order for relief in an
      involuntary case under any such law, or the consent by such Person to the
      appointment of or taking possession by a receiver, liquidator, assignee,
      custodian, trustee, sequestrator or similar official for such Person or for
      any
      substantial part of its Property, or the making by such Person of any general
      assignment for the benefit of creditors, or the failure by such Person generally
      to pay its debts as such debts become due, or the taking of action by such
      Person in furtherance of any of the foregoing.

    

    “Insolvency
      Laws”
shall
      mean the Bankruptcy Code and all other applicable liquidation, conservatorship,
      bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization,
      suspension of payments or similar debtor relief laws from time to time in effect
      affecting the rights of creditors generally. 

    

    “Insolvency
      Proceeding”
shall
      mean any case, action or proceeding before any court or other Governmental
      Authority relating to any Insolvency Event.

    

    “Instrument”
shall
      mean any “instrument” (as defined in Article 9 of the UCC), other than an
      instrument that constitutes part of chattel paper.

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

    (v) no
      more
      than six (6) LIBOR
      Rate Loans may be in effect at any time. For purposes hereof, LIBOR Rate Loans
      with different Interest Periods shall be considered as separate LIBOR Rate
      Loans, even if they shall begin on the same date and have the same duration,
      although borrowings, extensions and conversions may, in accordance with the
      provisions hereof, be combined at the end of existing Interest Periods to
      constitute a new LIBOR Rate Loan with a single Interest Period.

    

    “Interest
      Rate Protection Agreement”
shall
      mean with respect to any or all of the Mortgage Assets, (a)
      any
      Derivatives Contract required under the terms of the related Mortgage Loan
      Documents providing for protection against fluctuations in interest rates or
      the
      exchange of nominal interest obligations, either generally or under specific
      contingencies, and acceptable to the Administrative Agent in its discretion
      and
      (b)
      any
      Derivatives Contract put in place by any Borrower, any Guarantor or any
      Subsidiary or Affiliate of the foregoing with respect to any Mortgage Asset.
      

    

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

    

    “Investment”
shall
      mean, with respect to any Person, any acquisition or investment (whether or
      not
      of a controlling interest) by such Person, whether by means of (a) the
      purchase or other acquisition of any Equity Interests in another Person,
      (b) a loan, advance or extension of credit to, capital contribution to,
      guaranty or credit enhancement of Indebtedness of, or purchase or other
      acquisition of any Indebtedness of, another Person, including any partnership
      or
      joint venture interest in such other Person, or (c) the purchase or other
      acquisition (in one transaction or a series of transactions) of assets of
      another Person that constitute the business or a division or operating unit
      of
      another Person. Any binding commitment or option to make an Investment in any
      other Person shall constitute an Investment. Except as expressly provided
      otherwise, for purposes of determining compliance with any covenant contained
      in
      the Credit Documents, the amount of any Investment shall be the amount actually
      invested, without adjustment for subsequent increases or decreases in the value
      of such Investment.

    
      
        
        

      

      
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    “Irrevocable
      Instruction”
shall
      mean an irrevocable instruction letter in the form of Exhibit 1.1(j)
      hereto
      duly executed by the applicable Credit Party, as amended, restated, modified
      or
      supplemented from time to time.

    

    “Joinder
      Agreement”
shall
      mean a Borrower Joinder Agreement and/or a Guarantor Joinder Agreement, as
      applicable, as each may be amended, restated, supplemented or modified from
      time
      to time.

    

    “Junior
      Interest”
shall
      mean (a) a senior, pari
      passu
      or
      junior participation interest in one or more performing Commercial Real Estate
      Loans or (b) a senior, pari
      passu
      or
      junior note or certificate in an “A/B” or similar structure in one or more
      performing Commercial Real Estate Loans (including without limitation, an A
      Note, an A-1
      Note
      and a B Note), in each case where the Underlying Mortgaged Property is
      stabilized and non-transitional.

    

    “Junior
      Interest Document”
shall
      mean the original executed promissory note, Participation Certificate,
      Participation Agreement and any other evidence of a Junior Interest, as
      applicable.

    

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

    

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

    

    “Lender
      Consent”
shall
      mean any lender consent delivered by a Lender on the Closing Date in the form
      of
Exhibit 4.1(a).

    

    “Lender
      Intercreditor Agreement”
shall
      mean that certain Intercreditor Agreement to be entered into by and among the
      Administrative Agent and Wachovia, in its capacity as issuer of the Wachovia
      Letter of Credit, as amended, restated, modified or supplemented from time
      to
      time.

    

    “Letter
      of Credit”
shall
      mean, with respect to any Letter of Credit Loan, a freely transferable,
      irrevocable and unconditional standby letter of credit (in form and content
      and
      having durations and credit quality acceptable to Administrative Agent in its
      discretion) issued by a bank that has a credit rating at least as high as the
      credit tenant being financed, but in no event less than BBB-/Baa3 by
      S&P/Moody’s.

    

    “Letter
      of Credit Loan”
shall
      mean a performing Construction Loan which is entirely owned by a Borrower and
      for which the indebtedness thereunder is also secured by a Letter of Credit,
      which loan includes, without limitation, (i) a Mortgage Note and related
      Mortgage, (ii) a Letter of Credit supporting payments under such loan, and
      (iii)
      all right, title and interest of a Borrower in and to the Mortgaged Property
      covered by such Mortgage.

    

    “LIBOR”
shall
      mean, for
      any
      LIBOR Rate Loan for any Interest Period therefor, the rate per annum (rounded
      upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters
      Screen LIBORO1 Page (or
      any
      successor page) as the London interbank offered rate for deposits in Dollars
      at
      approximately 11:00 A.M.
      (London
      time) two (2) Business Days prior to the first day of such Interest Period
      for a term comparable to such Interest Period. If for any reason such rate
      is
      not available, then
      “LIBOR” shall mean the rate per annum at which, as determined by the
      Administrative Agent in accordance with its customary practices, Dollars in
      an
      amount comparable to the Loans then requested are being offered to leading
      banks
      at approximately 11:00 A.M. London time, two (2) Business Days prior
      to the commencement of the applicable Interest Period for settlement in
      immediately available funds by leading banks in the London interbank market
      for
      a period equal to the Interest Period selected.

    

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

    

    “LIBOR
      Rate”
shall
      mean a LIBOR rate per annum (rounded upwards, if necessary, to the next higher
      1/100th of 1%) determined by the Administrative Agent in accordance with the
      definition of “LIBOR”.

    

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

    

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

    

    “Liquidity”
shall
      mean an amount equal to the (a) sum of (without duplication) (i) the
      amount of unrestricted cash and unrestricted Cash Equivalents plus
      (ii) the borrowing availability (if any) under the Revolving Commitments
      under this Agreement, less,
      (b) amounts necessary to satisfy prepayment obligations under this
      Agreement.

    

    “Loan”
shall
      mean a Revolving Loan and/or the Term Loan, as appropriate.

    

    “Loan-to-Value
      Ratio”
or
      “LTV”
shall
      mean with respect to any Mortgage Asset (other than any CMBS Security and the
      FM
      Global Pledged Mortgage Asset), as of any date of determination, the ratio
      of
      the outstanding principal amount of such Mortgage Asset to the market value
      of
      the related Underlying Mortgaged Property at such time, as determined by the
      Administrative Agent in its discretion, as such LTV may be adjusted by the
      Administrative Agent as the Administrative Agent determines in its discretion;
      provided,
      however,
      that
      all such calculations

    
      
        
        

      

      
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          13 -

        
          

        

      

      
        
        

      

    

    shall
      be
      made taking into account any senior or pari
      passu debt
      or
      other obligations including debt or other obligations secured directly or
      indirectly by the applicable Underlying Mortgaged Property.

    

    “LTC”
shall
      mean, with respect to any Mortgage Asset that is a Construction Loan, as of
      any
      date of determination, the ratio of the outstanding principal amount of such
      Mortgage Asset to the Construction Costs for such Mortgage Asset, as determined
      by the Administrative Agent in its discretion, as such LTC may be adjusted
      by
      the Administrative Agent as the Administrative Agent determines in its
      discretion; provided,
      however,
      that
      all such calculations shall be made taking into account any senior or
pari
      passu debt
      or
      other obligations including debt or other secured directly or indirectly by
      the
      applicable Underlying Mortgaged Property.

    

    “Mandatory
      Redeemable Stock”
shall
      mean, with respect to any Person and any Subsidiary thereof, any Equity
      Interests of such Person which by the terms of such Equity Interests (or by
      the
      terms of any security into which it is convertible or for which it is
      exchangeable or exercisable), upon the happening of any event or otherwise
      (a) matures or is required to be redeemed, pursuant to a sinking fund
      obligation or otherwise (other than an Equity Interest to the extent redeemable
      in exchange for common stock or other equivalent common Equity Interests),
      (b) is convertible into or exchangeable or exercisable for Indebtedness or
      Mandatory Redeemable Stock, or (c) is redeemable at the option of the
      holder thereof, in whole or in part (other than an Equity Interest which is
      redeemable solely in exchange for common stock or other equivalent common Equity
      Interests); in the case of each clause (a) through (c), on or prior to the
      Maturity Date. 

    

    “Market
      Value”
shall
      mean, as of any date of determination in respect of any Mortgage Asset, the
      price at which such Mortgage Asset could readily be sold, as determined by
      the Administrative Agent in its discretion based on such sources and
      information (if any) as the Administrative Agent may determine to rely on
      in its discretion (which value may be determined to be zero (0)), as such Market
      Value may be adjusted at any time by the Administrative Agent as the
      Administrative Agent determines in its discretion (subject to the last
      sentence of the definition of Asset Value).

    

    “Material
      Adverse Effect”
shall
      mean, any material adverse effect on or change in or to (a) the Properties,
      assets, business, operations, financial condition, credit quality or prospects
      of any Borrower or any Guarantor, taken as a whole, (b) the ability of any
      Borrower, any Guarantor or any other Credit Party to perform its obligations
      under any of the Credit Documents or any of the Mortgage Loan Documents to
      which
      it is a party, (c) the validity, enforceability, legality or binding effect
      of any of the Credit Documents or any Loan granted thereunder, (d) the
      rights and remedies of the Administrative Agent or any Lender under any of
      the
      Credit Documents or the Collateral, (e) the timely payment of any amounts
      payable under the Credit Documents or the Mortgage Loan Documents, or
      (f) any Collateral, the perfection or priority of any Collateral granted
      with respect to any Loan or the value, Asset Value, rating or liquidity of
      any
      Collateral. 

    

    “Material
      Contract”
shall
      mean (a)
      any
      contract or other agreement listed in Form 8-K
      filed
      with the SEC, (b)
      any
      contract or other agreement, written or oral, of the Credit Parties or any
      of
      their Subsidiaries involving monetary liability of or to any such Person in
      an
      amount in excess of $1,000,000 per annum, (c) any
      contract or other agreement, written or oral, of the Credit Parties or any
      of
      their Subsidiaries representing at least $1,000,000 of
      the
      total Consolidated revenues of the Credit Parties and their Subsidiaries for
      any
      fiscal year and (d) any
      other contract, agreement, permit or license, written or oral, of the Credit
      Parties or any of their Subsidiaries as to which the breach, nonperformance,
      cancellation or failure to renew by any party thereto, individually or in the
      aggregate, could reasonably be expected to have a Material Adverse Effect.
      

    

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

    

    “Maturity
      Date”
shall
      mean the Revolver Maturity Date and/or the Term Loan Maturity Date, as
      applicable.

    

    “Maximum
      LTC”
shall
      mean with respect to any Mortgage Asset that is a Construction Loan, at any
      time
      the Maximum LTC for related Underlying Mortgaged Property (a)
      in the
      case of Term Loan Collateral for the Term Loans, as set forth on Schedule 1
      to the
      Fee Letter and (b)
      in the
      case of Revolving Loan Collateral for the Revolving Loans, the Maximum LTC
      determined by the Administrative Agent in its discretion and set forth in the
      related Confirmation; provided,
      however,
      that
      all such calculations shall be made taking into account any senior or
pari
      passu
      debt or
      other obligations, including debt or other obligations secured directly or
      indirectly by the applicable Underlying Mortgaged Property.

    

    “Maximum
      LTV”
shall
      mean with respect to any Mortgage Asset (other than any CMBS Security and the
      FM
      Global Pledged Mortgage Asset), at any time, the Maximum LTV for the related
      Underlying Mortgaged Property (a)
      in the
      case of Term Loan Collateral for the Term Loans, as set forth on Schedule 1
      to the
      Fee Letter and (b)
      in the
      case of Revolving Loan Collateral for the Revolving Loans, the Maximum LTV
      determined by the Administrative Agent in its discretion and set forth in the
      related Confirmation; provided,
      however,
      that
      all such calculations shall be made taking into account any senior or
pari
      passu
      debt or
      other obligations, including debt or other obligations secured directly or
      indirectly by the applicable Underlying Mortgaged Property.

    

    “Mezzanine
      Loan”
shall
      mean a performing mezzanine loan secured by pledges of all (or, in the
      Administrative Agent’s discretion, less than all) the Equity Interest of the
      Person that owns, directly or indirectly, income producing Underlying Mortgaged
      Property that is stabilized and non-transitional.

    

    “Mezzanine
      Note”
shall
      mean the original executed promissory note or other evidence of Mezzanine Loan
      Indebtedness.

    

    “Minimum
      DSCR”
shall
      mean with respect to any Mortgage Asset (other than any CMBS Security and the
      FM
      Global Pledged Mortgage Asset), at any time, the Minimum DSCR for the related
      Underlying Mortgaged Property (a)
      in the
      case of Term Loan Collateral for the Term Loans, as set forth on Schedule
      1
      to the
      Fee Letter and (b)
      in the
      case of Revolving Loan Collateral for the Revolving Loans, the Minimum DSCR
      determined by the Administrative Agent in its discretion and set forth in the
      related Confirmation; provided,
      however,
      that
      all such

    
      
        
        

      

      
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          14 -

        
          

        

      

      
        
        

      

    

    calculations
      shall be made taking into account any senior or pari
      passu
      debt or
      other obligations, including debt or other obligations secured directly or
      indirectly by the applicable Underlying Mortgaged Property.

    

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

    

    “Mortgage”
shall
      mean each mortgage, assignment of rents, security agreement and fixture filing,
      or deed of trust, assignment of rents, security agreement and fixture filing,
      or
      similar instrument creating and evidencing a Lien on real property, fixtures
      and
      other Property and rights incidental thereto.

    

    “Mortgage
      Asset”
shall
      mean a Whole Loan, a Junior Interest, a Mezzanine Loan or a CMBS Security,
      in
      each case, the Underlying Mortgaged Property for which is included in the
      categories for Property Types of Mortgage Assets; provided,
      however,
      the
      portion of any Mortgage Asset to be pledged to the Administrative Agent shall
      not include any Retained Interest (if any). Notwithstanding the foregoing,
      FM
      Global Real Estate is deemed a Mortgage Asset.

    

    “Mortgage
      Asset Data Summary”
shall
      have the meaning set forth in Section 5.2(h).

    

    “Mortgage
      Asset File”
shall
      have the meaning set forth in the Custodial Agreement.

    

    “Mortgage
      Asset File Checklist”
shall
      have the meaning set forth in the Custodial Agreement.

    

    “Mortgage
      Asset Security Agreement”
shall
      mean, with respect to any Mortgage Asset, any contract, instrument or other
      document related to security for repayment thereof (other than the related
      Mortgage, Mortgage Note, Mezzanine Note or any other note, certificate or
      instrument) executed by an Obligor and/or others in connection with such
      Mortgage Asset, including, without limitation, any security agreement, UCC
      financing statement, Liens, warranties, guaranty, title insurance policy, hazard
      insurance policy, chattel mortgage, letter of credit, accounts, bank accounts
      or
      certificates of deposit or other pledged accounts, and any other documents
      and
      records relating to any of the foregoing. 

    

    “Mortgage
      Loan Documents”
shall
      have the meaning set forth in the Custodial Agreement.

    

    “Mortgage
      Note”
shall
      mean, that certain original executed promissory note or other evidence of the
      Indebtedness of an Obligor under a Whole Loan which is secured by a Mortgage
      on
      the related Underlying Mortgaged Property.

    

    “Mortgaged
      Property”
shall
      mean the Commercial Real Estate (including all improvements, buildings,
      fixtures, building equipment and personal property thereon and all additions,
      alterations and replacements made at any time with respect to the foregoing
      and
      any Credit Tenant Lease to which such real property is subject) and all other
      collateral securing repayment of the related debt evidenced by the Mortgage
      Loan
      Documents.

    

    “Mortgagee”
shall
      mean the record holder of a Mortgage Note secured by a Mortgage.

    

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

    

    “Net
      Cash Flow”
shall
      mean, with respect to any Underlying Mortgaged Property, for any period, (i)
      if
      the Underlying Mortgaged Property is subject to a Credit Tenant Lease, the
      net
      rents paid during such period under the related Credit Tenant Lease and (ii)
      if
      the Underlying Mortgaged Property is not subject to a Credit Tenant
      Lease, the
      net
      income (or deficit) attributable to such Underlying Mortgaged Property for
      such
      period, determined in accordance with GAAP, less
      the
      amount of all (a) capital expenditures incurred, (b) reserves
      established, (c) leasing commissions paid and (d) tenant improvements
      paid during such period, in each case attributable to such Property,
plus
      all
      non-cash charges deducted in the calculation of such net income.

    

    “Net
      Cash Proceeds”
shall
      mean the aggregate cash proceeds, Cash Equivalents and the Fair Market Value
      of
      all other Property and assets received by, or payable to, any Credit Party
      or
      any Subsidiary or Affiliate in respect of any Equity Issuance, Debt Issuance,
      Securitization or any sale or other disposition of any Collateral, net of
      (a) direct costs (including, without limitation, legal, accounting and
      investment banking fees, and sales commissions) associated therewith, and
      (b) taxes paid or payable as a result thereof; it being understood that
“Net Cash Proceeds” shall include, without limitation, any cash received upon
      the sale or other disposition of any non-cash consideration received by any
      Credit Party, any Subsidiary or any Affiliate in any Equity Issuance, Debt
      Issuance, Securitization or any sale or other disposition of any Collateral.
      

    

    “Non-Recourse
      Indebtedness”
shall
      mean, with respect to any Person, Indebtedness for borrowed money in respect
      of
      which recourse for payment (except for customary exceptions for fraud,
      misapplication of funds, environmental indemnities, and other similar exceptions
      to non-recourse provisions (including exceptions relating to bankruptcy,
      insolvency, receivership, non-approved transfers or other customary or similar
      events)) is contractually limited to specific assets of such Person encumbered
      by a Lien securing such Indebtedness.

    

    “Non-Table
      Funded Mortgage Asset”
shall
      mean a Mortgage Asset that is not a Table Funded Mortgage Asset.

    

    “Non-Wachovia
      Assets”
shall
      mean any Mortgage Asset issued, extended or originated by a Person other than
      Wachovia Corporation or an Affiliate of Wachovia Corporation.

    

    “Note”
or
      “Notes”
shall
      mean the Revolving Notes and/or the Term Loan Notes, collectively, separately
      or
      individually, as appropriate, as any shall be amended, restated, modified or
      supplemented from time to time.

    

    “Notice
      of Borrowing”
shall
      mean a request for a Revolving Loan borrowing pursuant to
      Section 2.1(b)(i), as amended, restated, modified or supplemented from time
      to time. A Form of Notice of Borrowing is attached as Exhibit 1.1(e).

    
      
        
        

      

      
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          15 -

        
          

        

      

      
        
        

      

    

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

    

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

    

    “Obligor”
shall
      mean, individually and collectively, as the context may expressly provide or
      require, the borrowers, mortgagors, obligors or debtors under a Mortgage Asset,
      including, but not limited to, any guarantor, any pledgor, any subordinator,
      any
      credit support party, any indemnitor, any tenant under a lease and any Person
      that is directly or indirectly obligated in respect thereof, the borrowers,
      mortgagors, obligors or debtors of any debt, including any guarantor, any
      pledgor, any subordinator, any credit support party, any indemnitor, any tenant
      under a lease and any Person that is directly or indirectly obligated in respect
      thereof, senior to the Mortgage Asset, including any of the foregoing such
      Persons with respect to the debt secured by any Underlying Mortgaged Property,
      and any Person that has not signed the related Mortgage Note, Junior Interest
      Documents, Mezzanine Note or other note, certificate or instrument but owns
      an
      interest in the related Underlying Mortgaged Property, which interest has been
      encumbered to secure such Mortgage Asset. For the purposes of the FM Global
      Pledged Mortgage Asset, Obligor shall include any tenant of the related
      Underlying Mortgaged Property and Prefco in its capacity as lessee under the
      related ground lease.

    

    “Obligor
      Reserve Payments”
shall
      mean any payments made by an Obligor under the applicable Mortgage Loan
      Documents which, pursuant to the terms of such Mortgage Loan Documents, are
      required to be deposited into escrow or into a reserve to be used for a specific
      purpose (e.g., tax and insurance escrows).

    

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

    

    “Off-Balance
      Sheet Obligations”
shall
      mean, with respect to any Person and its Consolidated Subsidiaries, as of any
      date of determination thereof, without duplication and to the extent not
      included as a liability on the consolidated balance sheet of such Person and
      its
      Consolidated Subsidiaries in accordance with GAAP: (a) the monetary
      obligations under any financing lease or so-called “synthetic”, tax retention or
      off-balance sheet lease transaction which, upon the application of any
      Insolvency Laws to such Person or any of its Consolidated Subsidiaries, would
      be
      characterized as indebtedness; (b) the monetary obligations under any sale
      and leaseback transaction which does not create a liability on the consolidated
      balance sheet of such Person and its Consolidated Subsidiaries; or (c) any
      other monetary obligation arising with respect to any other transaction which
      (i) is characterized as indebtedness for tax purposes but not for
      accounting purposes in accordance with GAAP or (ii) is the functional
      equivalent of or takes the place of borrowing but which does not constitute
      a
      liability on the consolidated balance sheet of such Person and its Consolidated
      Subsidiaries (for purposes of this clause (c), any transaction structured
      to provide tax deductibility as interest expense of any dividend, coupon or
      other periodic payment will be deemed to be the functional equivalent of a
      borrowing).

    

    “Officer’s
      Certificate”
shall
      mean, a certificate signed by a Responsible Officer of a Borrower or a
      Guarantor, as applicable. 

    

    “Opinion
      of Counsel”
shall
      mean, a written opinion of counsel, which opinion and counsel are acceptable
      to
      the Administrative Agent in its discretion. 

    

    “Originator”
shall
      mean, with respect to each Mortgage Asset, the Person who originated such
      Mortgage Asset.

    

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

    

    “Participant”
has
      the
      meaning assigned to such term in Section 10.6(d).

    

    “Participation
      Agreement”
shall
      mean, with respect to any Junior Interest, any executed participation agreement,
      sub-participation agreement, intercreditor, servicing, loan or administrative
      agreement or any agreement that is similar to any of the foregoing agreements
      under which the Junior Interest is created, evidenced, issued, serviced,
      administered and/or guaranteed.

    

    “Participation
      Certificate”
shall
      mean, with respect to any Junior Interest, an executed certificate, note,
      instrument or other document representing the interest, participation interest
      or sub-participation interest granted under a Participation
      Agreement.

    

    “Patriot
      Act”
shall
      mean The Uniting and Strengthening America by Providing Appropriate Tools
      Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub.
      L. No. 107-56 (signed into law October 26, 2001)), as amended,
      restated modified or supplemented from time to time.

    

    “paying
      Borrower”
shall
      have the meaning set forth in Section 10.29(b).

    

    “Payment
      Date”
shall
      mean (a) the 20th day of each calendar month; provided,
      however,
      if such
      day is not a Business Day (i)
      if the
      next Business Day occurs during the succeeding month, the previous Business
      Day
      and (ii)
      if the
      next Business Day does not occur during the succeeding month, the next
      succeeding Business Day and (b) as to any Loan which is the subject of a
      mandatory prepayment required pursuant to Section 2.5(b), the date on which
      such mandatory prepayment is due. 

    

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

    
      
        
        

      

      
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          16 -

        
          

        

      

      
        
        

      

    

    “Permitted
      Investments”
shall
      mean:

    

    (a) cash
      and
      Cash Equivalents;

    

    (b) Investments
      existing as of the Closing Date as referenced in the financial statements
      referenced in Section 3.1 (and as set forth more specifically on Schedule 1.1(a));
      

    

    
      	 	
              (c)

            	
              Derivatives
                Contracts to the extent permitted hereunder;
                and

            

    

    

    (d) acquisition
      or financing of real estate or real estate-related
      assets after the Closing Date. 

    

    “Permitted
      Liens”
shall
      mean any of the following as to which no enforcement, collection, execution,
      levy or foreclosure proceeding shall have been commenced: (a) Liens for
      state, municipal or other local Taxes if such Taxes shall not at the time be
      due
      and payable, (b) Liens imposed by Requirements of Law, such as
      materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and other
      similar Liens, arising in the ordinary course of business securing obligations
      that are not overdue for a period of more than thirty (30) days,
      (c) Liens granted pursuant to or by the Security Documents, and (d) in
      the case of the Mortgage Assets only and not any Borrower’s interest therein,
      with respect to any Underlying Mortgaged Property, Liens which are permitted
      pursuant to the terms of the Mortgage Loan Documents.

    

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

    

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

    

    “Pledge
      Agreement”
shall
      mean the Pledge and Security Agreement, dated as of the date hereof, between
      the
      Administrative Agent, the Pledgor and the other parties from time to time party
      thereto and any other Pledge and Security Agreement entered into after the
      date
      hereof between the Administrative Agent, a Pledgor and the other parties from
      time to time party thereto, as each such amendment is amended, modified, waived,
      supplemented, extended, restated or replaced from time to time.

    

    “Pledged
      Collateral”
shall
      have the meaning given to such term in the Pledge Agreements.

    

    “Pledged
      Mortgage Asset”
shall
      mean the Mortgage Assets that have been pledged to the Administrative Agent
      as
      Collateral under the Security Documents. 

    

    “Pledgor”
shall
      mean Caplease Inc. and CLF OP General Partner LLC, a Delaware limited liability
      company, in each case together with their successors and permitted
      assigns.

    

    “Pooling
      and Servicing Agreements”
shall
      mean any and all pooling and servicing agreements governing servicing and other
      matters entered into in connection with (a)
      a CMBS
      Security or (b)
      a
      securitization of one (1) or more interests that are senior, junior or
pari
      passu
      with a
      Mortgage Asset.

    

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

    

    “Prefco
      Mortgage”
shall
      mean the Open-End Leasehold and Fee Mortgage to Secure Present and Future Loans
      Under Chapter 25 Of Title 34 Of Rhode Island General Laws, Security Agreement
      and Fixture Filing, dated as of even date herewith, executed by Prefco in favor
      of the Administrative Agent, as amended,
      modified, restated, replaced, waived, substituted, supplemented or extended
      from
      time to time.

    

    “Prefco
      Assignment of Leases”
shall
      mean the Assignment of Leases and Rents, dated as of even date herewith,
      executed by Prefco in favor of the Administrative Agent, as amended,
      modified, restated, replaced, waived, substituted, supplemented or extended
      from
      time to time.

    

    “Preferred
      Securities”
shall
      mean, with respect to any Person, Equity Interests in such Person that are
      entitled to preference or priority over any other Equity Interests in such
      Person in respect of the payment (or accrual) of dividends or distribution
      of
      assets upon liquidation, or both.

    

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

    

    “Private
      Information”
shall
      have the meaning set forth in Section 5.15.

    

    “Property”
shall
      mean any right or interest in or to property of any kind whatsoever, whether
      real, personal or mixed, and whether tangible or intangible; provided
      that the
      term “Property” or “Properties” as used in Section 3.10 shall include only the
      right or interest in or to property of any kind whatsoever, whether real,
      personal or mixed, and whether tangible or intangible of any Credit
      Party.

    

    “Property
      Type”
shall
      mean, with respect to a Mortgage Asset, such Mortgaged Property’s classification
      as one of the following: multifamily, retail, office, medical office,
      industrial, warehouse, GSA, hotel, self-storage facility or such other
      classification as may be approved by the Administrative Agent in its discretion
      from time to time.

    

    “PSA
      Servicer”
shall
      mean a third party servicer (other than a Borrower) servicing all or a portion
      of the Collateral under a Pooling and Servicing Agreement.

    
      
        
        

      

      
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    “Public
      Information”
shall
      have the meaning set forth in Section 5.15.

    

    “Purchase
      Agreement”
shall
      mean any purchase agreement by and between a Borrower and any third party,
      including, without limitation, any Affiliate of a Borrower, pursuant to
      which a Borrower has purchased Mortgage Assets which are
      subsequently pledged to the Administrative Agent
      hereunder.

    

    “Rating
      Agencies”
shall
      mean each of S&P, Moody’s, Fitch and any other nationally recognized
      statistical rating agency that has been requested to issue a rating with respect
      to the matter at issue, including successors of the foregoing.

    

    “Register”
shall
      have the meaning set forth in Section 10.6(c).

    

    “REIT”
shall
      mean a “real estate investment trust” within the meaning of the
      Code.

    

    “Related
      Parties”
shall
      mean, with respect to any Person, such Person’s Subsidiaries and Affiliates and
      the partners, directors, officers, employees, agents and
      advisors of such Person and of such Person’s Subsidiaries and
      Affiliates.

    

    “Related
      Party Loan”
shall
      mean any loan, Indebtedness or preferred equity investment identified or
      presented as a related party loan in such Person’s and its Consolidated
      Subsidiaries’ consolidated financial statements or in the notes to the
      consolidated financial statements, in accordance with GAAP; provided,
      however,
      Related
      Party Loan shall not include any loan or preferred equity investment to
      which the Administrative Agent in its discretion has consented in writing to
      its
      exclusion from the definition of Related Party Loan.

    

    “Release”
shall
      mean any generation, treatment, use, storage, transportation, manufacture,
      refinement, handling, production, removal, remediation, disposal, presence
      or
      migration of Materials of Environmental Concern on, about, under or within
      all
      or any portion of any Property or Underlying Mortgaged Property.

    

    “Release
      Amount”
shall
      mean with respect to any Term Loan Collateral, the aggregate Allocated Term
      Loan
      Amount for such item of Term Loan Collateral as set forth in Schedule 2 to
      the
      Fee Letter, in each case, without reduction for or on account of any principal
      payments, prepayments or reductions in such Allocated Term Loan Amount.

    

    “Remedial
      Work”
shall
      mean any investigation, inspection, site monitoring, containment, clean-up,
      removal, response, corrective action, mitigation, restoration or other remedial
      work of any kind or nature because of, or in connection with, the current or
      future presence, suspected presence, Release or threatened Release in or about
      the air, soil, ground water, surface water or soil vapor at, on, about, under
      or
      within all or any portion of any Property or Underlying Mortgaged Property
      of
      any Materials of Environmental Concern, including any action to comply with
      any
      applicable Environmental Laws or directives of any Governmental Authority with
      regard to any Environmental Laws.

    

    “REMIC”
shall
      mean a real estate mortgage investment conduit.

    

    “REO
      Property”
shall
      mean real property acquired by the Borrowers, including a Mortgaged Property,
      acquired through foreclosure of a Mortgage Asset or by deed in lieu of such
      foreclosure.

    

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

    

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

    

    “Repurchase
      Facility”
shall
      mean that certain facility evidenced by, among other agreements, the Master
      Repurchase Agreement, dated as of September 22, 2004, by and among Caplease,
      Funding and Services, as the sellers, Wachovia, as the purchaser, and Caplease
      Inc., as the guarantor, as such agreements are amended, modified, restated,
      replaced, waived, substituted, supplemented or extended from time to
      time.

    

    “Required
      Lenders”
shall
      mean, as of any date of determination, Lenders holding at least a majority
      of
      (a) the outstanding Revolving Commitments and Term Loan or (b) if the
      Revolving Commitments have been terminated, the outstanding Loans; provided,
      however,
      that if
      any Lender shall be a Defaulting Lender at such time, then there shall be
      excluded from the determination of Required Lenders the Obligations owing to
      such Defaulting Lender and such Defaulting Lender’s Commitments.

    

    “Required
      Payments”
shall
      mean all payments required under Section 2.5(b)(ii) through (v) of this
      Agreement or subject to or required to be subject to an Irrevocable Instruction,
      which amounts shall be free of any deductions for or on account of any set-off,
      counterclaim or defense and shall be deposited into the Collection Account
      for
      application in accordance with the terms of this Agreement.

    

    “Requirement
      of Law”
shall
      mean, as to any Person, (a) the Authority Documents of such Person, and
      (b) all international, foreign, Federal, state and local statutes,
      treaties, rules, guidelines, regulations, ordinances, codes, executive orders,
      and administrative or judicial precedents or authorities, including the
      interpretation or administration thereof by any Governmental Authority charged
      with the enforcement, interpretation or administration thereof, and all
      applicable administrative orders, directed duties, requests, licenses,
      authorizations and permits of, and agreements with, any Governmental Authority
      (in each case whether or not having the force of law); in each case applicable
      to or binding upon such Person or any of its Property or to which such Person
      or
      any of its Property is subject.

    

    “Responsible
      Officer”
shall
      mean, for any Credit Party, any duly authorized officer thereof with direct
      responsibility for the administration of the Credit Documents, and also, with
      respect to any particular matter, any other duly authorized officer with
      knowledge of or familiarity with the particular subject matter and, in each
      case, the Administrative Agent has an incumbency certificate indicating such
      officer is a duly authorized officer thereof.

    
      
        
        

      

      
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          18 -

        
          

        

      

      
        
        

      

    

    

    “Retained
      Interest”
shall
      mean (a) with respect to any Mortgage Asset with an unfunded
      commitment on the part of a Borrower, all of the obligations, if any, to
      provide additional funding, contributions, payments or credits with respect
      to
      such Mortgage Asset, (b) all duties, obligations and liabilities of a
      Borrower under any Mortgage Asset or any related Interest Rate Protection
      Agreement, including but not limited to any payment or indemnity obligations
      and
      (c) with respect to any Mortgage Asset that is pledged or to be
      pledged to the Administrative Agent, (i) all of the obligations,
      if any, of the agent(s), trustee(s), servicer(s), administrators or other
      similar Persons under the documentation evidencing such Mortgage Asset and
      (ii) the applicable portion of the interests, rights and obligations under
      the documentation evidencing such Mortgage Asset that relate to such
      portion(s) of the Indebtedness that is owned by another lender or is being
      retained by a Borrower pursuant to clause (a) of this
      definition.

    

    “Revolver
      Maturity Date”
shall
      mean the date that is two (2) years following the Closing Date or as may be
      extended on the anniversary of such date pursuant to Section 2.1(f).

    

    “Revolving
      Prepayment”
shall
      have the meaning set forth in Section 2.5(b)(viii)(A).

    

    “Revolving
      Commitment”
shall
      mean, with respect to each Revolving Lender, the commitment of such Revolving
      Lender to make Revolving Loans in an aggregate principal amount at any time
      outstanding up to an amount equal to such Revolving Lender’s Revolving
      Commitment Percentage of the Revolving Committed Amount.

    

    “Revolving
      Commitment Percentage”
shall
      mean, for each Lender, the percentage identified as its Revolving Commitment
      Percentage in its Lender Commitment Letter or in the Assignment and Assumption
      pursuant to which such Lender became a Lender hereunder, as such percentage
      may
      be modified in connection with any assignment made in accordance with the
      provisions of Section 10.6(b).

    

    “Revolving
      Committed Amount”
shall
      have the meaning set forth in Section 2.1(a).

    

    “Revolving
      Lender”
shall
      mean, as of any date of determination, a Lender holding a Revolving Commitment
      or a Revolving Loan on such date.

    

    “Revolving
      Loan”
shall
      have the meaning set forth in Section 2.1(a).

    

    “Revolving
      Loan Average Advance Rate”
shall
      mean a fraction, the numerator of which is the outstanding principal amount
      of
      all Revolving Loans, and the denominator of which is the Asset Value of all
      Revolving Loan Collateral (without taking into account any Applicable Advance
      Rates), as such Asset Values are determined by the Administrative Agent in
      accordance with the definition of Asset Value. 

    

    “Revolving
      Loan Collateral”
shall
      mean the portion of the Pledged Mortgage Assets included in the Collateral
      with
      respect to which Revolving Loans (if any) are calculated and
      determined.

    

    “Revolving
      Loan Facility”
shall
      mean that certain facility evidenced by, among other agreements, that certain
      Revolving Loan Agreement by and among Capital Lease Funding, Inc., Prefco II
      Limited Partnership and Wachovia, dated as of July 17, 2007, as such agreements
      are amended, modified, restated, replaced, waived, substituted, supplemented
      or
      extended from time to time. 

    

    “Revolving
      Note”
or
      “Revolving
      Notes”
shall
      mean the promissory notes of the Borrowers provided pursuant to
      Section 2.1(f) in favor of any of the Revolving Lenders evidencing the
      Revolving Loans provided by any such Revolving Lender pursuant to
      Section 2.1(a), individually or collectively, as appropriate, as such
      promissory notes may be amended, modified, extended, restated, replaced, or
      supplemented from time to time.

    

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

    

    “Sale”
shall
      have the meaning set forth in Section 5.7(j).

    

    “Sanctioned
      Entity”
shall
      mean (a) a country or a government of a country, (b) an agency of the
      government of a country, (c) an organization directly or indirectly
      controlled by a country or its government, or (d) a person or entity
      resident in or determined to be resident in a country, that is subject to a
      country sanctions program administered and enforced by OFAC described or
      referenced at http://www.ustreas.gov/offices/enforcement/ofac/
      or as
      otherwise published from time to time. 

    “Sanctioned
      Person”
shall
      mean a person named on the list of Specially Designated Nationals maintained
      by
      OFAC available at or through http://www.ustreas.gov/offices/enforcement/ofac/
      or as
      otherwise published from time to time.

    

    “Sarbanes-Oxley”
shall
      mean the Sarbanes-Oxley Act of 2002, as amended or modified from time to
      time.

    

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

    

    “Secured
      Parties”
shall
      mean the Administrative Agent and the Lenders.

    

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

    

    “Securities
      Account”
shall
      mean the securities account set forth on Schedule 1.1(d)
      established in the name of the Borrowers into which all CMBS Securities that
      are
      Pledged Mortgage Assets and other Collateral related thereto shall be deposited
      (except those CMBS Securities that are certificated securities within the
      meaning of Article 8 of the UCC), which Securities Account shall be subject
      to the Securities

    
      
        
        

      

      
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          19 -

        
          

        

      

      
        
        

      

    

    Account
      Control Agreement. Any Income on deposit or credited to the Securities Account
      shall be transferred by the Administrative Agent from the Securities Account
      to
      the Collection Account on or prior to each Payment Date. 

    

    “Securities
      Account Control Agreement”
shall
      mean a letter agreement, dated as of even date herewith, among the Borrowers,
      the Administrative Agent and Wachovia in the form of Exhibit 1.1(m)
      attached
      hereto. 

    

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

    

    “Securitization”
shall
      have the meaning set forth in Section 2.5(b)(iv).

    

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

    

    “Security
      Documents”
shall
      mean the Security Agreement, the Account Control Agreement, the Securities
      Account Control Agreement, the Custodial Agreement, the Lender Intercreditor
      Agreement, all Assignments, all Irrevocable Instructions, the Pledge Agreements,
      the Prefco Mortgage, the Prefco Assignment of Leases and all other agreements,
      documents and instruments relating to, arising out of, or in any way connected
      with any of the foregoing documents or granting to the Administrative Agent
      Liens or security interests to secure, inter alia, the Obligations, whether
      now
      or hereafter executed and/or filed, executed and delivered in connection with
      the granting, attachment and perfection of the Administrative Agent’s security
      interests and Liens arising thereunder, including, without limitation, UCC
      financing statements, as such agreements or instruments are amended, restated,
      modified or supplemented from time to time.

    

    “Servicer”
shall
      mean a Person (other than a Borrower) servicing all or a portion of a Mortgage
      Asset under a Servicing Agreement, which Servicer shall be acceptable to the
      Administrative Agent in its reasonable discretion.

    

    “Servicer
      Account”
shall
      mean any account established by a Servicer or a PSA Servicer in connection
      with
      the servicing of the Mortgage Asset.

    

    “Servicer
      Default”
shall
      have the meaning set forth in Section 9.12.

    

    “Servicer
      Redirection Notice”
shall
      mean a notice from a Borrower to a Servicer, substantially in the form of
Exhibit
      1.1(k)
      attached
      hereto, duly executed by the parties thereto.

    

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

    

    “Servicing
      Agreement”
shall
      mean an agreement entered into by the applicable Borrower and a third party
      for
      the servicing of a Mortgage Asset, the form and substance of which has been
      approved in writing by the Administrative Agent in its reasonable
      discretion.

    

    “Servicing
      Fee”
shall
      have the meaning set forth in Section 9.9.

    

    “Servicing
      File”
shall
      mean, with respect to each Mortgage Asset, the file retained by a Borrower
      consisting of the originals of all documents in the Mortgage Asset File that
      are
      not delivered to the Custodian and copies of all documents in the Mortgage
      Asset
      File set forth in Section 3.1 of
      the
      Custodial Agreement.

    

    “Servicing
      Records”
shall
      have the meaning set forth in Section 9.2.

    

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

    

    “SPE
      Subsidiary”
shall
      mean a Subsidiary of Caplease or Caplease Inc. formed under a Direct CTL
      Transaction that involves a Whole Loan, which Subsidiary shall have such
      corporate and capital structure, and have Authority Documents having such terms
      and restrictions, as shall be consistent with bankruptcy-remote
      “special-purpose
      entities”, satisfying Section 5.24 and otherwise reasonably satisfactory to the
      Administrative Agent. 

    

    “Solvent”
shall
      mean, as to any Person at any time, having a state of affairs such that all
      of
      the following conditions are met: (a) the fair value of the Property of
      such Person is greater than the amount of such Person’s liabilities (including
      disputed, contingent and unliquidated liabilities) as such value is established
      and liabilities evaluated for purposes of Section 101(32) of the Bankruptcy
      Code; (b) the present fair salable value of the Property of such Person in
      an orderly liquidation of such Person is not less than the amount that will
      be
      required to pay the probable liability of such Person on its debts as they
      become absolute and matured; (c) such Person is able to realize upon its
      Property and pay its debts and other liabilities (including disputed, contingent
      and unliquidated liabilities) as they mature in the normal course of business;
      (d) such Person does not intend to, and does not believe that it will,
      incur debts or liabilities beyond such Person’s ability to
      pay as
      such debts and liabilities mature;
      and (e) such Person is not
      engaged in a business or a transaction, and is not about to engage in a business
      or a transaction, for which such Person’s Property would constitute unreasonably
      small capital. 

    

    “Stock
      Exchange”
shall
      have the meaning set forth in Section 3.38.

    

    “Sub-Limit”
shall
      mean, with respect to the characteristics of the Revolving Loan Collateral:
      

    
      
        
        

      

      
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          20 -

        
          

        

      

      
        
        

      

    

    (a) the
      aggregate Allocated Revolving Loan Amount for all outstanding Revolving Loans
      involving Mortgage Assets the Obligor of which is a single named credit or
      tenant concentration shall not exceed 50% of the Revolving Committed
      Amount;

    

    (b) the
      aggregate Allocated Revolving Loan Amount for all outstanding Revolving Loans
      involving Mezzanine Loans and B Notes shall not collectively exceed 50% of
      the
      Revolving Committed Amount;

    

    (c) the
      aggregate Allocated Revolving Loan Amount for all outstanding Revolving Loans
      involving Mortgage Assets having maturity dates that are less than five (5)
      years from the date such Mortgage Asset is pledged to the Administrative Agent
      under the Credit Documents shall not exceed 15% of the Revolving Committed
      Amount; and

    

    (d) the
      aggregate Allocated Revolving Loan Amount for all outstanding Revolving Loans
      involving Construction Loans or Floaters shall not collectively exceed 5% of
      the
      Revolving Committed Amount.

    

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

    

    “Table
      Funded Mortgage Asset”
shall
      mean a Mortgage Asset which is pledged to the Administrative Agent
      simultaneously with the origination or acquisition thereof, which origination
      or
      acquisition, pursuant to a Borrower’s request, is financed with the proceeds of
      a Revolving Loan and paid directly to a title company or other settlement agent,
      in each case, approved in writing by the Administrative Agent in its discretion,
      for disbursement to the parties entitled thereto in connection with such
      origination or acquisition. A Mortgage Asset shall cease to be a Table Funded
      Mortgage Asset after the Custodian has delivered a Trust Receipt (along with
      a
      completed Mortgage Asset File Checklist attached thereto) to the Administrative
      Agent certifying its receipt of the Mortgage Asset File therefor. 

    

    “Table
      Funded Trust Receipt”
shall
      mean a Trust Receipt in the form of Annex 2-B
      to the
      Custodial Agreement.

    

    “Targeted
      Term Loan Average Advance Rate”
shall
      mean a Term Loan Average Advance Rate of 77% or less.

    

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

    

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

    

    “Term
      Loan Average Advance Rate”
shall
      mean a fraction, the numerator of which is the outstanding principal amount
      of
      all Term Loans, and the denominator of which is the Asset Value of all Term
      Loan
      Collateral (without taking into account any Applicable Advance Rates), as such
      Asset Values are determined by the Administrative Agent in accordance with
      the
      definition of Asset Value.

    

    “Term
      Loan Collateral”
shall
      mean the portion of the Pledged Mortgage Assets included in the Collateral
      with
      respect to which advances under the Term Loan (if any) are calculated and
      determined and the FM Global Pledged Mortgage Asset.

    

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

    

    “Term
      Loan Commitment Percentage”
shall
      mean, for any Term Loan Lender, the percentage identified as its Term Loan
      Commitment Percentage in its Lender Commitment Letter, or in the Assignment
      and
      Assumption pursuant to which such Lender became a Lender hereunder, as such
      percentage may be modified in connection with any assignment made in accordance
      with the provisions of Section 10.6(c).

    

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

    

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

    

    “Term
      Loan Maturity Date”
shall
      mean the date that is two (2) years following the Closing Date or as may be
      extended on the anniversary of such date pursuant to Section 2.2(e).

    

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

    

    “Test
      Period”
shall
      mean the
      immediately preceding calendar quarter.

    

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

    
      
        
        

      

      
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          21 -

        
          

        

      

      
        
        

      

    

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

    

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

    

    “Transferor”
shall
      mean the seller of mortgage assets under a Purchase Agreement.

    

    “True
      Sale Opinion” shall
      mean an Opinion of Counsel to the Borrowers opining that the subject
      transaction constitutes a “true sale”.

    

    “Trust
      Receipt”
shall
      have the meaning set forth in the Custodial Agreement.

    

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

    

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

    

    “Unconsolidated
      Affiliates”
shall
      mean, with respect to any Person, any other Person in whom such Person holds
      an
      Investment, which Investment is accounted for in the financial statements of
      such Person on an equity basis of accounting and whose financial results would
      not be consolidated under GAAP with the financial results of such Person on
      the
      consolidated financial statements of such Person. 

    

    “Underlying
      Mortgaged Property”
shall
      mean (a) in the case of a Whole Loan, the Mortgaged Property securing the
      Whole Loan, (b) in the case of a Junior Interest, the Mortgaged Property
      securing such Junior Interest (if the Junior Interest is of the type described
      in clause (b) of the definition thereof), or the Mortgaged Property
      securing the mortgage loan in which such Junior Interest represents a
      participation (if the Junior Interest is of the type described in
      clause (a) of the definition thereof), (c) in the case of a Mezzanine
      Loan or a Junior Interest in a Mezzanine Loan, the Mortgaged Property that
      is
      owned directly or indirectly by the Person the Equity Interests of which are
      pledged as collateral security for such Mezzanine Loan, (d) in the case of
      a Construction Loan, the Mortgaged Property securing such Construction Loan,
      (e)
      in the case of a CMBS Security, the Mortgaged Property or other collateral
      securing the mortgage loans or debt obligations related to such security, (f)
      in
      the case of a Letter of Credit Loan, the Mortgaged Property securing such Letter
      of Credit Loan and (g) in the case of the FM Global Pledged Mortgage Asset,
      the
      FM Global Real Estate.

    

    “Underwriting
      Package”
shall
      mean, any internal document prepared by the applicable Borrower for its
      evaluation of a Mortgage Asset, to include at a minimum the data required in
      the
      relevant Confirmation. In addition, with respect to each Mortgage Asset (other
      than a CMBS Security), the Underwriting Package shall include, to the extent
      applicable, (a)
      a copy
      of the Current Appraisal or, if unavailable, any other recent appraisal,
      (b)
      the
      lease of the current tenant, (c)
      the
      current rent roll, (d)
      a
      minimum of two (2) years of property level financial statements to the
      extent available, (e)
      the
      current financial statements of the Obligor under the Mortgage Asset, and,
      if
      such Mortgage Asset is not a Whole Loan, the Obligor under the Commercial Real
      Estate Loan to the extent provided to or reasonably available to the applicable
      Borrower upon request, (f)
      current
      financial statement and credit information regarding the lessee of the property
      for any credit tenant, (g)
      current
      form of the estoppel certificate to be obtained from the credit tenant,
      (h)
      the
      complete Mortgage Asset File, (i)
      the
      loan documents, Authority Documents and title commitment/policy to be included
      in the Mortgage Asset File, together with copies of any appraisals,
      environmental reports, studies or assessments (to include, at a minimum, a
      phase
      I report), evidence of zoning compliance, property management agreements,
      assignments of property management agreements, contracts, licenses and permits,
      in each case to the extent in the Borrower’s possession or reasonably available
      to the Borrower, (j)
      any
      financial analysis, site inspection, market studies, environmental reports
      and
      any other diligence conducted by or provided to the Borrower, (k)
      a copy
      of the most recent property tax bill, (l)
      a copy
      of the property insurance certificates, showing the Administrative Agent as
      loss
      payee, (m)
      a copy
      of the Obligor’s tax returns, (n)
      a
      resume of the principals/developer, (o)
      copies
      of UCC, bankruptcy, lien and judgment searches on the Obligor and its principal,
      (p)
      a copy
      of the contract of sale for the underlying property if the Mortgage Asset is
      an
      acquisition financing, (q)
      a copy
      of the property management agreement, if applicable, (r)
      a copy
      of Borrower’s offset memorandum, (s)
      a copy
      of the operating and capital improvements budget if the Credit Tenant Lease
      is
      not a “triple net” lease, (t)
      copies
      of credit or other reports obtained regarding the Obligor and/or its principals,
      (u)
      for any
      Letter of Credit Loan, copies of the form of the applicable Letter of Credit
      and
      financial and rating information as to the issuer of such Letter of Credit,
      (v)
      a
      detailed cash flow analysis of any Credit Tenant Lease and/or the Mortgage
      Asset, (w) with respect to Construction Loans, the Construction Draw Deliveries
      for each Extension of Credit and (x) such further documents or information
      as
      the Administrative Agent may reasonably request. With respect to any CMBS
      Security, the Underwriting Package shall consist of, to the extent applicable,
      (i) the related prospectus or offering circular, (ii) all structural
      and collateral term sheets and all other computational or other similar
      materials provided to the applicable Borrower in connection with its acquisition
      of such CMBS Security, (iii) all distribution date statements issued in
      respect thereof during the immediately preceding twelve (12) months (or, if
      less, since the date such CMBS Security was issued), (iv) all monthly
      reporting packages issued in respect of such CMBS Security during the
      immediately preceding twelve (12) months (or, if less, since the date such
      CMBS Security was issued), (v) all Rating Agency pre-sale reports,
      (vi) all asset summaries and any other due diligence materials, including,
      without limitation, reports prepared by third parties, provided to the Borrower
      in connection with its acquisition of such CMBS Security, and (vii) such
      further documents or information as the Administrative Agent may reasonably
      request. 

    

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

    

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

    

    “Wachovia
      Assets”
shall
      mean, any Mortgage Asset issued, extended or originated by Wachovia Corporation
      or an Affiliate of Wachovia Corporation.

    
      
        
        

      

      
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          22 -

        
          

        

      

      
        
        

      

    

    “Wachovia
      Letter of Credit”
shall
      mean that certain Irrevocable Standby Letter of Credit Number SM202194W in
      the
      amount of $2,850,000.00 issued on behalf of Caplease Inc. by Wachovia on
      February 26, 2003 and expiring on February 18, 2009, listing LaSalle
      Bank National Association as beneficiary thereunder, and
      all
      documents and agreements which govern or otherwise control such Irrevocable
      Standby Letter of Credit or upon which such Irrevocable Standby Letter of Credit
      is drawn, as each of the foregoing is amended, restated, modified or
      supplemented from time to time.

    

    “Warehouse
      Lender’s Release Letter”
shall
      mean a letter in the form of Exhibit
      1.1(l)
      hereto,
      duly executed by the applicable warehouse lender.

    

    “Whole
      Loan”
shall
      mean a performing Commercial Real Estate whole loan owned entirely by the
      Borrower and secured by a first priority security interest in all of the related
      Underlying Mortgaged Property, which is stabilized and non-transitional,
      which includes, without limitation, a Mortgage Note and related Mortgage and
      all
      rights, title and interest of a Borrower in and to the Mortgaged Property
      covered by such Mortgage. For the avoidance of doubt, but subject to the
      definitions thereof, Floaters, Construction Loans, Direct CTL Transactions
      and
      Letter of Credit Loans are also Whole Loans.

    

    Section
      1.2 Other
      Definitional Provisions.

    

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

    

    Section
      1.3 Accounting
      Terms.

    

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

    

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

    

    Section 1.4 Time
      References.

    

    Unless
      otherwise specified, all references herein to times of day shall be references
      to Eastern time (daylight or standard, as applicable). Reference to day or
      days
      without further qualification means calendar days. Unless otherwise stated
      in
      this Agreement, in the computation of a period 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”.

    

    Section 1.5 Execution
      of Documents.

    

    Unless
      otherwise specified, all Credit Documents and all other certificates executed
      in
      connection therewith must be signed by a Responsible Officer. Unless otherwise
      expressly provided in this Agreement, reference to any notice, request,
      approval, consent or determination provided for, permitted or required under
      the
      terms of the Credit Documents with respect to the Credit Parties,
      the Administrative Agent and the Lenders means, in order for such notice,
      request, approval, consent or determination to be effective hereunder, such
      notice, request, approval or consent must be in writing.

    

    Section 1.6 UCC
      Terms.

    

    All
      terms
      used in Articles 8 and 9 of the UCC in the State of New York, and used but
      not specifically defined herein, are used herein as defined in such
      Article 8 and 9.

    
      
        
        

      

      
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          23 -

        
          

        

      

      
        
        

      

    

    Section 1.7 References
      to Discretion.

    

    Reference
      herein or in any Credit Document to the Administrative Agent’s
      or a Lender’s discretion shall mean, unless otherwise stated herein or
      therein, the Administrative Agent’s or a Lender’s (as the case may be) sole
      and absolute discretion, and the exercise of such discretion shall be final
      and
      conclusive. In addition, whenever the Administrative Agent or a Lender has
      a decision or right of determination or request, exercises any right given
      to it
      to agree, disagree, accept, consent, grant waivers, take action or no action
      or
      to approve or disapprove, or any arrangement or term is to be satisfactory
      or
      acceptable to or approved by (or any similar language or terms)
      the Administrative Agent or a Lender (as the case may be), the decision of
      the Administrative Agent or a Lender with respect thereto shall be in the
      sole and absolute discretion of the Administrative Agent or the Lender (as
      the case may be), and such decision shall be final and conclusive, except as
      may
      be otherwise specifically provided herein.

    

    Section 1.8 References
      to Payment.

    

    Unless
      otherwise specifically provided herein, all payments due by any Credit Party
      to
      the Administrative Agent or the Lenders shall be due by 3:00p.m. on the date
      due.

     

    ARTICLE
      II

    

    THE
      LOANS; AMOUNT AND TERMS

    

    Section
      2.1 Revolving
      Loans.

    

    (a) Revolving
      Commitment.
      During
      the Commitment Period, subject to the terms and conditions hereof, each
      Revolving Lender severally, but not jointly, agrees to make revolving credit
      loans in Dollars (“Revolving
      Loans”)
      to the
      Borrowers from time to time in an aggregate principal amount of up to
TWO
      HUNDRED FIFTY MILLION DOLLARS
      ($250,000,000) less the
      aggregate outstanding principal balance of all Term Loans (as
      such
      aggregate maximum amount may be reduced from time to time as provided in
      Section 2.4, the “Revolving
      Committed Amount”)
      for
      the purposes hereinafter set forth; provided,
      however,
      that
      (i) with regard to each Revolving Lender individually, the sum of such
      Revolving Lender’s Revolving Commitment Percentage of the aggregate principal
      amount of outstanding Revolving Loans shall not exceed such Revolving Lender’s
      Revolving Commitment and (ii) with regard to the Revolving Lenders
      collectively, the sum of the aggregate principal amount of outstanding Revolving
      Loans shall not exceed the Revolving Committed Amount then in effect. No
      Revolving Loan shall be made by any Revolving Lender if (i) such Revolving
      Loan
      and the Revolving Loan Collateral therefor are not approved by the
      Administrative Agent in its discretion, (ii) before or after giving effect
      to
      such Revolving Loan, the Availability is or would be negative, (iii) the
      conditions to Extensions of Credit in Section 4.2 are not satisfied or (iv)
      the
      aggregate outstanding principal balance of all Term Loans is equal to or greater
      than $200,000,000. Revolving Loans may consist of Alternate Base Rate Loans
      or
      LIBOR Rate Loans, or a combination thereof, as the Borrowers may request, and
      may be repaid and reborrowed in accordance with the provisions hereof;
provided,
      however,
      the
      Revolving Loans made on the Closing Date or any of the three (3) Business
      Days following the Closing Date, may only consist of Alternate Base Rate Loans
      unless the Borrowers deliver a funding indemnity letter, substantially in the
      form of Exhibit 2.1(a),
      reasonably acceptable to the Administrative Agent not less than three (3)
      Business Days prior to the Closing Date. LIBOR Rate Loans shall be made by
      each
      Revolving Lender at its LIBOR Lending Office and Alternate Base Rate Loans
      at
      its Domestic Lending Office. 

    

    (b) Revolving
      Loan Borrowings.

    

    (i) Notice
      of Borrowing.
      

    

    (1)
      The
      Borrowers may request Revolving Loans for the purpose of financing Eligible
      Assets (other than CMBS Securities) approved by the Administrative Agent in
      its
      discretion and for no other purpose. The Borrowers shall request a Revolving
      Loan borrowing by delivering a written Notice of Borrowing (or telephone notice
      promptly confirmed in writing by delivery of a written Notice of Borrowing,
      which delivery may be by Electronic Transmission) to the Administrative Agent
      along with a Compliance Certificate, Borrower Asset Schedule and Underwriting
      Package for the related Eligible Asset(s) to be financed not later than (A)
      twelve (12) Business
      Days for Non-Wachovia Assets and (B) seven (7) Business Days for Wachovia Assets
      from the delivery of the applicable Notice of Borrowing. Each such Notice of
      Borrowing shall be irrevocable and shall specify (A) that a Revolving Loan
      is requested, (B) the date of the requested borrowing (which shall be a
      Business Day), (C) the aggregate principal amount to be borrowed,
      (D) whether the borrowing shall be comprised of Alternate Base Rate Loans,
      LIBOR Rate Loans or a combination thereof, and if LIBOR Rate Loans are
      requested, the Interest Period(s) therefor, (E) the applicable Borrower and
      the
      Eligible Asset to be financed and (F) a calculation of the Availability. If
      the
      Borrowers shall fail to specify in any such Notice of Borrowing (1) an
      applicable Interest Period in the case of a LIBOR Rate Loan, then such notice
      shall be deemed to be a request for an Interest Period of one month, or
      (2) the Type of Revolving Loan requested, then such notice shall be deemed
      to be a request for a LIBOR Rate Loan hereunder. 

    

    (2) The
      Administrative Agent shall notify the applicable Borrower in writing of the
      Administrative Agent’s tentative approval (and the proposed Allocated Revolving
      Loan Amount for each Eligible Asset) or final disapproval of each proposed
      Eligible Asset within, (i) in the case of Non-Wachovia Assets,
      ten (10) Business Days (or such greater time as the Administrative Agent
      determines in its discretion for multiple assets or assets with multiple
      Mortgaged Properties) and, (ii) in the case of Wachovia Assets,
      five (5) Business Days (or such greater time as the Administrative Agent
      determines in its discretion for multiple assets

    
      
        
        

      

      
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          24 -

        
          

        

      

      
        
        

      

    

    or
      assets
      with multiple Mortgaged Properties) after its receipt of the Notice of
      Borrowing, the Borrower Asset Schedule, the Compliance Certificate, the complete
      Underwriting Package and any supplemental requests (requested orally or in
      writing) relating to such proposed Eligible Asset. Unless the Administrative
      Agent notifies the Borrowers in writing of the Administrative Agent’s approval
      of such proposed Eligible Asset within the applicable period, the Administrative
      Agent shall be deemed not to have approved such proposed Eligible Asset. The
      Administrative Agent in its discretion may waive, shorten or increase any of
      the
      applicable time periods for the review of proposed Eligible Assets or the
      delivery of documents.

    

    (3) Provided
      that the Administrative Agent on behalf of the Lenders has tentatively agreed
      to
      finance the Eligible Asset described in the Notice of Borrowing and the proposed
      Allocated Revolving Loan Amount is acceptable to the applicable Borrower, the
      applicable Borrower shall forward to the Administrative Agent, via Electronic
      Transmission, at least two (2) Business Days prior to the requested
      Borrowing Date (which must be received by the Administrative Agent no later
      than
      10:00 a.m. two (2) Business Days prior to the requested Borrowing
      Date) an executed confirmation for each Eligible Asset, substantially in the
      form of Exhibit 2.1(b)
      attached
      hereto (a “Confirmation”).
      The
      Confirmation shall specify the Allocated Revolving Loan Amount for the related
      Eligible Asset and any additional terms or conditions of the related Revolving
      Loan not inconsistent with this Agreement. The Confirmation shall be
      irrevocable. The delivery of the Confirmation to the Administrative Agent shall
      be deemed to be a certification by the applicable Borrower that, among other
      things, all conditions precedent to such Revolving Loan set forth in
      Articles II and IV have been satisfied (except the Administrative Agent’s
      consent). Unless otherwise agreed in writing, upon receipt of the Confirmation,
      the Administrative Agent, on behalf of the Lenders, may, in the Administrative
      Agent’s discretion, agree to enter into the requested Revolving Loan with
      respect to an Eligible Asset, and such agreement shall be evidenced by the
      Administrative Agent’s signature on the Confirmation. Any Confirmation executed
      by the Administrative Agent shall be deemed to have been received by the
      applicable Borrower on the date actually received by the applicable
      Borrower.

    

    (4) Upon
      receipt of the Confirmation executed by the Administrative Agent, (i) the
      applicable Borrower shall release or cause to be released to the Custodian
      in
      accordance with the Custodial Agreement (1) in the case of a Non-Table
      Funded Mortgage Asset, no later than 3:00 p.m. two (2) Business Days
      prior to the requested Borrowing Date, and (2) in the case of a Table
      Funded Mortgage Asset, no later than 1:00 p.m. three (3) Business Days
      following the applicable Borrowing Date, the Mortgage Asset File pertaining
      to
      each Eligible Asset to be financed by the Revolving Lenders, and (ii) the
      applicable Borrower shall deliver to the Custodian, in connection with the
      applicable delivery under clause (i) above, a Custodial Identification
      Certificate and a Mortgage Asset File Checklist required under Section 3.2
      of the Custodial Agreement. 

    

    (5) Each
      Confirmation, together with this Agreement, shall constitute conclusive evidence
      of the terms agreed between the Administrative Agent and the applicable Borrower
      with respect to the Revolving Loan to which the Confirmation relates, and the
      applicable Borrower’s acceptance of the related proceeds shall constitute the
      applicable Borrower’s agreement to the terms of such Confirmation. It is the
      intention of the parties that each Confirmation shall not be separate from
      this
      Agreement but shall be made a part of this Agreement. To the extent of a
      conflict between this Agreement and the related Confirmation, the Confirmation
      shall control.

    

    (6) Pursuant
      to the Custodial Agreement, the Custodian shall deliver to the Administrative
      Agent and the applicable Borrower by 11:00 a.m. on the Borrowing Date for
      each Non-Table Funded Mortgage Asset a Trust Receipt (along with a completed
      Mortgage Asset File Checklist attached thereto) and an Asset Schedule and
      Exception Report relating to the Basic Mortgage Asset Documents with respect
      to
      the Eligible Assets that the applicable Borrower has requested the Revolving
      Lenders to finance on such Borrowing Date. With respect to each Table Funded
      Mortgage Asset, the applicable Borrower shall cause the Bailee to deliver to
      the
      Custodian with a copy to the Administrative Agent no later than 10:00 a.m.
      on the Borrowing Date by facsimile the related Basic Mortgage Asset Documents,
      the insured closing letter (if any), the escrow instructions (if any), a fully
      executed Bailee Agreement, a Bailee’s Trust Receipt issued by the Bailee
      thereunder and such other evidence satisfactory to the Administrative Agent
      in
      its discretion that all documents necessary to effect a pledge of the related
      Eligible Asset and the related Collateral to the Administrative Agent on behalf
      of the Lenders have been delivered to Bailee. With respect to each Table Funded
      Mortgage Asset, the Custodian shall deliver to the Administrative Agent a Table
      Funded Trust Receipt no later than 1:00 p.m. on the Borrowing Date, which
      documents shall be acceptable to the Administrative Agent in its discretion.
      In
      the case of a Table Funded Mortgage Asset, on the second (2nd) Business Day
      following the Custodian’s receipt of the related Mortgage Loan Documents
      comprising the Mortgage Asset File, the Custodian shall deliver to the
      Administrative Agent a Trust Receipt (along with a completed Mortgage Asset
      File
      Checklist attached thereto) certifying its receipt of the documents required
      to
      be delivered pursuant to the Custodial Agreement, together with an Asset
      Schedule and Exception Report relating to the Basic Mortgage Asset Documents,
      with any Exceptions identified by the Custodian as of the date and time of
      delivery of such Asset Schedule and Exception Report. The Custodian shall
      deliver to the Administrative Agent an Asset Schedule and Exception Report
      relating to all of the Mortgage Loan Documents within five (5) Business
      Days of its receipt of the related Mortgage Asset Files.

    
      
        
        

      

      
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          25 -

        
          

        

      

      
        
        

      

    

    (7) Once
      the
      Confirmation is executed by the Administrative Agent, the Administrative Agent
      shall give notice to each Revolving Lender at least one (1) Business Day prior
      to the Borrowing Date of
      each
      such Revolving Lender’s share thereof.

    

    (ii) Minimum
      Amounts.
      Each
      Revolving Loan that is made as an Alternate Base Rate Loan shall be in a minimum
      aggregate amount of $1,000,000 and in integral multiples of $1,000,000 in excess
      thereof (or the remaining amount of the Revolving Committed Amount, if less).
      Each Revolving Loan that is made as a LIBOR Rate Loan shall be in a minimum
      aggregate amount of $100,000 and in integral multiples of $100,000 in excess
      thereof (or the remaining amount of the Revolving Committed Amount, if
      less).

    

    (iii) Advances.
      Each
      Revolving Lender will make its Revolving Commitment Percentage of each Revolving
      Loan borrowing available to the Administrative Agent for the account of the
      applicable Borrower at the office of the Administrative Agent specified in
      Section 10.2, or at such other office as the Administrative Agent may designate
      in writing, by 1:00 p.m. on the Borrowing Date, in Dollars and in funds
      immediately available to the Administrative Agent. Such borrowing will then
      be
      made available to the applicable Borrower by 5:00 p.m. on the Borrowing Date
      by
      the Administrative Agent by crediting the account of the applicable Borrower
      on
      the books of such office (or such other account that the Borrowers may designate
      in writing to the Administrative Agent) with the aggregate of the amounts made
      available to the Administrative Agent by the Revolving Lenders and in like
      funds
      as received by the Administrative Agent. 

    

    (iv) Additional
      Revolving Loans.
      Subject
      to Section 2.1(a), the Borrowers may request additional Revolving Loans with
      respect to the then existing Revolving Loan Collateral; provided
      that
      (A)
      such
      request is subject to the Administrative Agent’s approval in its discretion,
      (B)
      before
      and after giving effect to such Extension of Credit, the Availability is not
      and
      would not be negative, (C)
      no
      Default or Event of Default exists, (D)
      the
      Borrowers deliver a Notice of Borrowing and Compliance Certificate, the
      Construction Draw Deliveries to the extent the Extension of Credit relates
      to a
      Construction Loan or involves construction and such other information and
      documents as the Administrative Agent shall require in its discretion at least
      three (3) Business Days prior to the requested Borrowing Date and (E)
      to the
      extent approved by the Administrative Agent, the Administrative Agent shall
      notify the Borrowers of the amount of Revolving Loans so approved and the
      Borrowers and the Administrative Agent shall execute one (1) or more amended
      Confirmations evidencing the new Allocated Revolving Loan Amounts for the
      Revolving Loan Collateral with respect to which the Administrative Agent has
      determined to permit such additional Extension of Credit, together with such
      other terms and conditions as the Administrative Agent may require in its
      discretion, and the Borrowers shall deliver to the Custodian any additional
      Mortgage Loan Documents, as applicable, in connection with such funding. Unless
      the Administrative Agent notifies the Borrowers in writing of its approval
      of
      such Revolving Loans, the Administrative Agent shall be deemed not to have
      approved such request.

    

    (c) Repayment.
      Subject
      to the terms of this Agreement, Revolving Loans may be borrowed, repaid and
      reborrowed during the Commitment Period. The principal amount of all Revolving
      Loans shall be due and payable in full on the Revolver Maturity Date, unless
      accelerated sooner pursuant to Section 7.2. The Borrowers shall have the
      right to repay Revolving Loans in whole or in part from time to time;
provided,
      however;
      that
      each partial repayment of a Revolving Loan shall be in a minimum principal
      amount of $1,000,000 and integral multiples of $100,000 in excess thereof (or
      the remaining outstanding principal amount). Such repayment will be applied
      to
      the outstanding Revolving Loans and Revolving Loan Collateral in such manner
      as
      the Administrative Agent may elect in its discretion.

    

    (d) Interest.
      Subject
      to the provisions of Section 2.6, Revolving Loans shall bear interest as
      follows:

    

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

    

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

    

    Interest
      on Revolving Loans shall be payable in arrears on each Payment
      Date.

    

    (e) Revolving
      Notes; Covenant to Pay.
      The
      Borrowers’ obligation to pay each Revolving Lender shall be evidenced by this
      Agreement and, upon such Revolving Lender’s request, by a duly executed
      promissory note of the Borrowers to such Revolving Lender in substantially
      the
      form of Exhibit 2.1(f).
      The
      Borrowers covenant and agree to pay the Revolving Loans in accordance with
      the
      terms of this Agreement.

    

    (f) Extension
      of Revolver Maturity Date.
      Not
      less than sixty (60) days, but not more than ninety (90) days, prior to the
      Revolver Maturity Date, the Borrowers may request in writing that the Revolving
      Lenders extend the Revolver Maturity Date for an additional year (and the
      Administrative Agent shall promptly give the Revolving Lenders notice of any
      such request). Such request to extend the Revolver Maturity Date shall be
      granted so long as (i)
      no
      Default or Event of Default has occurred and is continuing, (ii)
      no
      Collateral is in a Collateral Default, (iii)
      the
      Average Advance Rate for all Pledged Mortgage Assets included in the Collateral
      is not greater than 70%, (iv)
      all
      amounts outstanding under the Revolving
      Loans and Term Loans, both as of the date of such extension request and
      immediately after giving effect to such extension request, shall not exceed
      $135,000,000 and (v)
      the
      Borrowers pay any extension fee due under the Fee Letter. 

    

    (g) Confirmations.
      Notwithstanding anything to the contrary in this Section 2.1 and notwithstanding
      any oral or verbal approval of an Extension of Credit by the Administrative
      Agent, no Extension of Credit shall be deemed approved until a

    
      
        
        

      

      
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    Confirmation
      or revised Confirmation, as applicable, has been executed by the Administrative
      Agent. Each pledge of a Mortgage Asset, regardless of whether a Loan is made
      to
      the Borrowers in connection therewith, shall be evidenced by a Confirmation.
      Each Confirmation, together with this Agreement, shall constitute conclusive
      evidence of the terms agreed between the Administrative Agent and the applicable
      Borrower with respect to the Revolving Loan to which the Confirmation relates,
      and the applicable Borrower’s acceptance of the related proceeds shall
      constitute the applicable Borrower’s agreement to the terms of such
      Confirmation. It is the intention of the parties that each Confirmation shall
      not be separate from this Agreement but shall be made a part of this Agreement.
      To the extent of a conflict between this Agreement and the related Confirmation,
      the Confirmation shall control.

    

    Section
      2.2 Term
      Loan.

    

    (a) Term
      Loan.
      Subject
      to the terms and conditions hereof (including, without limitation, Sections
      4.1
      and 4.2 of this Agreement) and in reliance upon the representations and
      warranties set forth herein, each Term Loan Lender severally, but not jointly,
      agrees to make available to the Borrowers (through the Administrative Agent)
      on
      the Closing Date such
      Term
      Loan Lender’s Term Loan Commitment Percentage of a term loan in Dollars (the
“Term
      Loan”)
      in the
      aggregate principal amount of TWO
      HUNDRED TEN MILLION, THREE HUNDRED NINETY TWO THOUSAND, FOUR HUNDRED ELEVEN
      DOLLARS AND FIFTEEN CENTS ($210,392,411.15),
      which
      amount shall equal the aggregate Allocated Term Loan Amount approved by the
      Administrative Agent in its discretion for the Eligible Assets approved by
      the
      Administrative Agent in its discretion and included in the Term Loan Collateral
      (the “Term
      Loan Committed Amount”)
      for
      the purposes hereinafter set forth. The Term Loan Collateral and the Allocated
      Term Loan Amount for each item of Term Loan Collateral shall be evidenced by
      Confirmations executed by the applicable Borrower and the Administrative Agent.
      Upon receipt by the Administrative Agent of the proceeds of the Term Loan,
      such
      proceeds will then be made available to the Borrowers by the Administrative
      Agent by crediting the account of the Borrowers on the books of the office
      of
      the Administrative Agent specified in Section 10.2, or at such other office
      as
      the Borrowers may designate in writing, with the aggregate of such proceeds
      made
      available to the Administrative Agent by the Term Loan Lenders and in like
      funds
      as received by the Administrative Agent (or by crediting such other account(s)
      as directed by the Borrowers). The Term Loan may consist of Alternate Base
      Rate
      Loans or LIBOR Rate Loans, or a combination thereof, as the Borrowers’ may
      request; provided,
      however,
      that
      the Term Loan made on the Closing Date or any of the three (3) Business
      Days following the Closing Date may only consist of Alternate Base Rate Loans
      unless the Borrowers deliver a funding indemnity letter, substantially in the
      form of Exhibit 2.1(a),
      reasonably acceptable to the Administrative Agent not less than three (3)
      Business Days prior to the Closing Date. LIBOR Rate Loans shall be made by
      each
      Term Loan Lender at its LIBOR Lending Office and Alternate Base Rate Loans
      at
      its Domestic Lending Office. 

    

    (b) Repayment
      of Term Loan.
      All
      outstandings under the Term Loan shall be due and payable in full on the Term
      Loan Maturity Date unless accelerated sooner pursuant to Section 7.2. Amounts
      repaid or prepaid on the Term Loan may not be reborrowed. Any repayment
      hereunder will be applied to the outstanding Term Loans in accordance with
      Section 2.5(b)(x)(1)(A) until the outstanding principal amount of the Term
      Loans
      has been paid in full.

    

    (c) Interest
      on the Term Loan.
      Subject
      to the provisions of Section 2.6, the Term Loan shall bear interest as
      follows:

    

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

    

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

    

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

    

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

    

    (e) Extension
      of Term Loan Maturity Date.
      Not
      less than sixty (60) days, but not more than ninety (90) days, prior to the
      Term
      Loan Maturity Date, the Borrowers may request in writing that the Term Loan
      Lenders extend the Term Loan Maturity Date for an additional year (and the
      Administrative Agent shall promptly give the Term Loan Lenders notice of any
      such request). Such request to extend the Term Loan Maturity Date shall be
      granted so long as (i)
      no
      Default or Event of Default has occurred, (ii)
      no
      Collateral is in a Collateral Default, (iii)
      the
      Average Advance Rate for all Pledged Mortgage Assets included in the Collateral
      is not greater than 70%, (iv)
      all
      amounts outstanding under the Revolving
      Loans and Term Loans, both as of the date of such extension request and
      immediately after giving effect to such extension request, shall not exceed
      $135,000,000  and
      (v)
      the
      Borrowers pay any extension fee due under the Fee Letter. 

    

    (f) Confirmations.
      Notwithstanding anything to the contrary in this Section 2.2 and notwithstanding
      any oral or verbal approval of an Extension of Credit by the Administrative
      Agent, no Extension of Credit shall be deemed approved until a Confirmation
      or
      revised Confirmation, as applicable, has been executed by the Administrative
      Agent. Each pledge of a Mortgage Asset, regardless of whether a Loan is made
      to
      the Borrowers in connection therewith, shall be evidenced by a Confirmation.
      Each Confirmation, together with this Agreement, shall constitute conclusive
      evidence of the terms agreed between the Administrative Agent and the applicable
      Borrower with respect to the Term Loan to which the Confirmation relates, and
      the applicable Borrower’s

    
      
        
        

      

      
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          27 -

        
          

        

      

      
        
        

      

    

    acceptance
      of the related proceeds shall constitute the applicable Borrower’s agreement to
      the terms of such Confirmation. It is the intention of the parties that each
      Confirmation shall not be separate from this Agreement but shall be made a
      part
      of this Agreement. To the extent of a conflict between this Agreement and the
      related Confirmation, the Confirmation shall control.

    

    Section
      2.3 Fees.

    

    The
      Borrowers shall pay all fees provided for in the Fee Letter to the
      Administrative Agent for distribution to the Lenders and the Administrative
      Agent in accordance therewith.

    

    Section
      2.4 Commitment
      Reductions.

    

    (a) Voluntary
      Reductions.
      The
      Borrowers shall have the right to terminate or permanently reduce the unused
      portion of the Revolving Committed Amount at any time or from time to time
      upon
      not less than five (5) Business Days’ prior written notice to the
      Administrative Agent (which shall notify the Lenders thereof as soon as
      practicable) of each such termination or reduction, which notice shall specify
      the effective date thereof and the amount of any such reduction which shall
      be
      in a minimum amount of $1,000,000 or a whole multiple of $500,000 in excess
      thereof and shall be irrevocable and effective upon receipt by the
      Administrative Agent; provided
      that no
      such reduction or termination shall be permitted if after giving effect thereto,
      and to any prepayments of the Revolving Loans made on the effective date
      thereof, (i)
      the sum
      of the aggregate principal amount of outstanding Revolving Loans would exceed
      the Revolving Committed Amount then in effect or (ii) the Availability
      would be negative.

    

    (b) Maturity
      Date.
      The
      Commitments shall automatically terminate on the Maturity Date unless
      accelerated sooner pursuant to Section 7.2 hereof.

    

    Section
      2.5 Prepayments.

    

    (a)  Optional
      Prepayments.
      The
      Borrowers shall have the right to prepay the Term Loans and the Revolving Loans
      in whole or in part from time to time; provided,
      however,
      that
      each partial prepayment of a Term Loan or a Revolving Loan shall be in a minimum
      principal amount of $1,000,000 and integral multiples of $100,000 in excess
      thereof (or the remaining outstanding principal amount). The Borrowers shall
      give three Business Days’ irrevocable notice of prepayment in the case of LIBOR
      Rate Loans, and same-day irrevocable notice on any Business Day in the case
      of
      Alternate Base Rate Loans, to the Administrative Agent (which shall notify
      the
      Lenders thereof as soon as practicable). To the extent that the Borrowers elect
      to prepay the Term Loans, amounts prepaid under this Section shall be applied
      to
      the remaining principal installments of the Term Loans as the Administrative
      Agent may elect in its discretion. To the extent the Borrowers elect to prepay
      the Revolving Loans, amounts prepaid under this Section shall be applied as
      the
      Administrative Agent may elect in its discretion. Within the foregoing
      parameters, prepayments under this Section shall be applied first to Alternate
      Base Rate Loans and then to LIBOR Rate Loans in direct order of Interest Period
      maturities. All prepayments under this Section shall be subject to
      Section 2.13, but otherwise without premium or penalty. Interest on the
      principal amount prepaid shall be payable on the next occurring Payment Date
      that would have occurred had such loan not been prepaid or, at the request
      of
      the Administrative Agent, interest on the principal amount prepaid shall be
      payable on any date that a prepayment is made hereunder through the date of
      prepayment. 

    

    (b) Mandatory
      Prepayments.

    

    (i) Availability
      and Revolving Committed Amount.
      

    

    (A) Availability.
      The
      Administrative Agent may calculate Availability on any day. If the Availability
      is negative on any day, as determined by the Administrative Agent in its
      discretion, the Borrowers shall, immediately upon notice from the Administrative
      Agent and, in any event, within one (1) Business Day upon notice from the
      Administrative Agent (the “Availability
      Correction Deadline”),
      prepay the Revolving Loans in cash in an amount determined by the Administrative
      Agent so that, after giving effect to such payment, the Availability will not
      be
      negative (each such amount, a “Correction
      Amount”).

    

    (B) Revolving
      Loan Committed Amount.
      If at
      any time after the Closing Date, the sum of the aggregate principal amount
      of
      outstanding Revolving Loans shall exceed the Revolving Committed Amount, the
      Borrowers shall immediately prepay the Revolving Loans in an amount sufficient
      to eliminate such excess.

    

    (ii) Issuances
      of Debt.
      In
      connection with the closing of any Debt Issuance, the Borrowers shall prepay
      the
      Loans, within one (1) Business Day of the closing of any Debt Issuance, in
      an
      aggregate amount equal to the applicable percentage set forth in the Fee Letter
      (which percentages are incorporated herein by reference) of the Net Cash
      Proceeds of each such Debt Issuance and, in connection therewith, shall,
      pursuant to Irrevocable Instructions, cause the Persons obligated to pay such
      Net Cash Proceeds
      to remit such amount by wire transfer in immediately available funds directly
      to
      the Collection Account on
      the
      closing date of the Debt Issuance instead of paying such amounts to any Credit
      Party or a Subsidiary or Affiliate of a Credit Party. Such prepayment to be
      paid
      (1) first, to the Term Loans pursuant to Section 2.5(b)(x)(1)(A), until paid
      in
      full, and (2) second, to the Revolving Loans pursuant to Section
      2.5(b)(x)(1)(B).

    

    (iii) Issuances
      of Equity.
      In
      connection with the closing of any Equity Issuance, the Borrowers shall prepay
      the Loans, within one (1) Business Day of the closing of any Equity Issuance,
      in
      an aggregate amount equal to the applicable percentage set forth in the Fee
      Letter (which percentages are incorporated herein by reference) of the Net
      Cash
      Proceeds of each such Equity Issuance and, in connection therewith, shall,
      pursuant to Irrevocable Instructions, cause the Persons obligated to pay such
      Net Cash Proceeds to remit such amount by wire transfer in immediately available
      funds

    
      
        
        

      

      
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          28 -

        
          

        

      

      
        
        

      

    

    directly
      to the Collection Account on the closing date of the Equity Issuance instead
      of
      paying such amounts to any Credit Party or a Subsidiary or Affiliate of a Credit
      Party. Such prepayment to be paid (1) first, to the Term Loans pursuant to
      Section 2.5(b)(x)(1)(A), until paid in full, and (2) second, to the Revolving
      Loans pursuant to Section 2.5(b)(x)(1)(B).

    

    (iv) Securitizations.
      In
      connection with the closing of any securitization (“Securitization”)
      by any
      Credit Party or any Subsidiary or Affiliate of a Credit Party, the Borrowers
      shall prepay the Loans, within one (1) Business Day of any such Securitization,
      in an aggregate amount equal to the applicable percentage set forth in the
      Fee
      Letter (which percentages are incorporated herein by reference) of the Net
      Cash
      Proceeds of such Securitization, and, in connection therewith, shall, pursuant
      to Irrevocable Instructions, cause the Persons obligated to pay such amounts
      to
      remit such Net Cash Proceeds by wire transfer in immediately available funds
      directly to the Collection Account on the closing date of the Securitization
      instead of paying such amounts to any Credit Party or a Subsidiary or Affiliate
      of a Credit Party. Such prepayment to be paid (1) first, to the Term Loans
      pursuant to Section 2.5(b)(x)(1)(A), until paid in full, and (2) second, to
      the
      Revolving Loans pursuant to Section 2.5(b)(x)(1)(B).

    

    (v) Extraordinary
      Receipts.
      Immediately, and in any event, within one (1) Business Day upon receipt by
      any
      Credit Party or any of its Subsidiaries of proceeds from any Extraordinary
      Receipt, the Borrowers shall prepay the Term Loans and/or the Revolving Loans,
      as applicable, in an aggregate principal amount equal to one hundred percent
      (100%) of such Extraordinary Receipt to be applied to the Term Loan and/or
      the
      Revolving Loans depending on whether the Extraordinary Receipt is from Term
      Loan
      Collateral or Revolving Loan Collateral, or both.

    

    (vi) Reduction
      of Asset Value Prepayment.
      If the
      Administrative Agent determines at any time in its discretion that (A)
      the
      Asset Value for any item of Term Loan Collateral is or should be reduced for
      any
      reason in its discretion (other than as excluded in the definition of Asset
      Value), the Borrowers shall prepay the outstanding Term Loans, within one (1)
      Business Day of the Administrative Agent’s request, in an amount equal to the
      reduction determined by the Administrative Agent, (B)
      the
      Asset Value for any item of Revolving Loan Collateral is or should be reduced
      for any reason in its discretion (other than as excluded in the definition
      of
      Asset Value), the Borrowers shall prepay the outstanding Revolving Loans, within
      one (1) Business Day of the Administrative Agent’s request, in an amount equal
      to the reduction determined by the Administrative Agent and (C)
      the
      Asset Value of all Pledged Mortgage Assets as determined by the Administrative
      Agent in its discretion is less (including by reason of reductions in the Asset
      Value as determined by the Administrative Agent) (other than as excluded in
      the
      definition of Asset Value) than the outstanding principal amount of all Loans
      (including Term Loans and Revolving Loans) (in each case a “Deficit”)
      the
      Borrowers shall prepay the Revolving Loans and the Term Loans within one (1)
      Business Day of the Administrative Agent’s request, in the amount of the
      Deficit. The Administrative Agent’s election, in its discretion, not to deliver
      any notice under this clause (vi) shall not in any way limit or impair its
      right
      to deliver such notice at any time.

    

    (vii) Defaulted
      Collateral Prepayment.
      To the
      extent any (A)
      Term
      Loan Collateral is in a Collateral Default, the Borrowers shall prepay the
      Term
      Loans, within one (1) Business Day of such Collateral Default, in an amount
      equal to Allocated Term Loan Amount for such item of defaulted Collateral which
      shall be applied to such defaulted Collateral and (B)
      Revolving Loan Collateral is in a Collateral Default, the Borrowers shall prepay
      the outstanding Revolving Loans, within one (1) Business Day of such Collateral
      Default, in an amount equal to Allocated Revolving Loan Amount for such item
      of
      defaulted Collateral which shall be applied to such defaulted
      Collateral.

     

    (viii) Collateral
      Release Prepayment.
      The
      terms and provisions governing mandatory prepayments in connection with
      repayments, prepayments and/or reductions of the Loans and/or under the
      Collateral and the releases of Collateral are set forth in the Fee Letter and
      are hereby incorporated by reference. 

    

    (ix) [Reserved].

    

    (x) Application
      of Mandatory Prepayments.
      

    

    (1) Unless
      otherwise set forth in this Section 2.5, all amounts required to be paid
      pursuant to this Section shall be applied as follows: (A) first, to the
      outstanding Term Loans and Term Loan Collateral, as the Administrative Agent
      may
      elect in its discretion, in each case until the outstanding principal amount
      of
      the Term Loans has been paid and full and (B) second, to the outstanding
      Revolving Loans and Revolving Loan Collateral in such manner as the
      Administrative Agent may elect in its discretion until the outstanding principal
      amount of the Revolving Loans has been paid in full. Within the parameters
      of
      the applications set forth above, prepayments shall be applied first to
      Alternate Base Rate Loans and then to LIBOR Rate Loans in direct order of
      Interest Period maturities. All prepayments under this Section shall be
      subject to Section 2.13 and be accompanied by interest on the principal
      amount prepaid through the date of prepayment, but otherwise without premium
      or
      penalty; and

    

    
      	 	 	
              (2)

            	
              All
                amounts required to be paid pursuant to this Section shall be deposited
                in
                the Collection Account and shall be accompanied by any applicable
                costs
                incurred pursuant to Section 2.13 (if any) and any applicable interest
                payments.

            

    

    

    (c) Junior/Senior
      Positions.
      Notwithstanding anything contained in this Agreement to the contrary, in the
      event the Borrowers pledge to the Administrative Agent (whether simultaneously
      or on separate occasions) the senior and junior positions with respect to
      certain Commercial Real Estate and the Loans with respect to the Eligible
      Asset(s) that are senior in priority have been repaid or prepaid by the
      Borrowers or the related Obligors, (i) the Asset Value of the junior-most
      Eligible Asset(s) shall be reduced to

    
      
        
        

      

      
        -
          29 -

        
          

        

      

      
        
        

      

    

    zero (0)
      and (ii) the Administrative Agent shall not release its Lien on the
      Eligible Asset(s) (including any Income related thereto) that are senior in
      priority to the junior-most Eligible Asset(s) that the Administrative Agent
      continues to have a Lien on (regardless of whether the outstanding Allocated
      Revolving Loan Amount, Allocated Term Loan Amount or Release Amount, as
      applicable, and related amounts due have been paid in full) until the
      junior-most Eligible Asset(s) is repaid or prepaid and the outstanding Allocated
      Revolving Loan, Allocated Term Loan Amount or Release Amount, as applicable,
      for
      the junior-most Eligible Asset plus any accrued and unpaid interest and any
      related breakage costs under Section 2.3 are paid in full; provided,
      however,
      if (A)
      the Loans with respect to the senior position are repaid due to repayments
      or
      prepayments by the related Obligor, (B)  the Administrative Agent has
      reevaluated the remaining junior-most Eligible Asset(s), including, without
      limitation, a reassessment and possible redetermination of the Asset Value
      of
      such Eligible Asset, and, based on the reevaluation, the Administrative Agent
      is
      satisfied in its discretion with continuing to hold the junior-most Eligible
      Asset(s) as Collateral as is or upon certain specified conditions, including,
      without limitation, assigning a new Asset Value to such Eligible Asset, which
      approval shall be in writing to be effective, and (C) there are no Events
      of Default or Defaults outstanding (each to be evidenced by an Officer’s
      Certificate), then the Administrative Agent will consent in writing to and
      effect the release of the senior Eligible Asset from the
      Collateral.

     

    Section
      2.6 Default
      Rate and Payment Dates.

    

    (a) If
      all or
      a portion of the principal amount of any Loan which is a LIBOR Rate Loan shall
      not be paid when due or continued as a LIBOR Rate Loan in accordance with the
      provisions of Section 2.7 (whether at the stated maturity, by acceleration
      or otherwise), such overdue principal amount of such Loan shall be converted
      to
      an Alternate Base Rate Loan at the end of the Interest Period applicable
      thereto.

    

    (b) (i) If
      all or a portion of the principal amount of any LIBOR Rate Loan shall not be
      paid when due, such overdue amount shall bear interest at a rate per annum
      which
      is equal to the rate that would otherwise be applicable thereto plus
      2%,
      until the end of the Interest Period applicable thereto, and thereafter at
      a
      rate per annum which is equal to the Alternate Base Rate plus
      the sum
      of the Applicable Percentage then in effect for Alternate Base Rate Loans and 2%
      (the “ABR
      Default Rate”)
      or
      (ii) if any interest payable on the principal amount of any Loan or any fee
      or other amount, including the principal amount of any Alternate Base Rate
      Loan,
      payable hereunder shall not be paid when due (whether at the stated maturity,
      by
      acceleration or otherwise), such overdue amount shall bear interest at a rate
      per annum which is equal to the ABR Default Rate, in each case from the date
      of
      such non-payment until such amount is paid in full (after as well as before
      judgment). Upon the occurrence, and during the continuance, of any other Event
      of Default hereunder, at the option of the Required Lenders, the principal
      of
      and, to the extent permitted by Requirements of Law, interest on the Loans
      and
      any other amounts owing hereunder or under the other Credit Documents shall
      bear
      interest, payable on demand, at a per annum rate which is (A) in the case
      of principal, the rate that would otherwise be applicable thereto plus
      2% or
      (B) in the case of interest, fees or other amounts, the ABR Default Rate
      (after as well as before judgment).

    

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

    

    Section
      2.7 Conversion
      Options.

    

    (a) The
      Borrowers may, in the case of Revolving Loans and the Term Loan, elect from
      time
      to time to convert Alternate Base Rate Loans to LIBOR Rate Loans by delivering
      a
      Notice of Conversion to the Administrative Agent at least three Business Days
      prior to the proposed date of conversion. In addition, the Borrowers may elect
      from time to time to convert all or any portion of a LIBOR Rate Loan to an
      Alternate Base Rate Loan by giving the Administrative Agent irrevocable written
      notice thereof by 11:00 a.m. one (1) Business Day prior to the
      proposed date of conversion. If the date upon which an Alternate Base Rate
      Loan
      is to be converted to a LIBOR Rate Loan is not a Business Day, then such
      conversion shall be made on the next succeeding Business Day and during the
      period from such last day of an Interest Period to such succeeding Business
      Day
      such Loan shall bear interest as if it were an Alternate Base Rate Loan. LIBOR
      Rate Loans may only be converted to Alternate Base Rate Loans on the last day
      of
      the applicable Interest Period. If the date upon which a LIBOR Rate Loan is
      to
      be converted to an Alternate Base Rate Loan is not a Business Day, then such
      conversion shall be made on the next succeeding Business Day and during the
      period from such last day of an Interest Period to such succeeding Business
      Day
      such Loan shall bear interest as if it were an Alternate Base Rate Loan. All
      or
      any part of outstanding Alternate Base Rate Loans may be converted as provided
      herein; provided
      that
      (i) no Loan may be converted into a LIBOR Rate Loan when any Default or
      Event of Default has occurred and is continuing and
      (ii) partial
      conversions shall be in an aggregate principal amount of $1,000,000 or a whole
      multiple of $100,000 in excess thereof. All or any part of outstanding LIBOR
      Rate Loans may be converted as provided herein; provided
      that
      partial conversions shall be in an aggregate principal amount of $1,000,000
      or a
      whole multiple of $100,000 in excess thereof.

    

    (b) Any
      LIBOR
      Rate Loan may be continued as such upon the expiration of an Interest Period
      with respect thereto unless and until a Notice of Conversion is received by
      the
      Administrative Agent or the LIBOR Rate Loan is automatically converted as
      provided below. No LIBOR Rate Loan may be continued as such when any Default
      or
      Event of Default has occurred and is continuing, in which case such Loan shall
      be automatically converted to an Alternate Base Rate Loan at the end of the
      applicable Interest Period with respect thereto and the Borrower may not convert
      to LIBOR Rate Loans when any Default or Event of Default has occurred and is
      continuing. If the continuation of LIBOR Rate Loans is not permitted hereunder,
      such LIBOR Rate Loans shall automatically be converted to Alternate Base Rate
      Loans at the end of the applicable Interest Period with respect
      thereto.

    

    Section
      2.8 Computation
      of Interest and Fees; Usury.

    

    (a) Interest
      payable hereunder with respect to any Alternate Base Rate Loan based on the
      Prime Rate shall be calculated on the basis of a year of 365 days (or 366 days,
      as applicable) for the actual days elapsed. All other fees, interest and all
      other amounts payable hereunder shall be calculated on the basis of a 360-day
      year for the actual days elapsed. The Administrative Agent shall as soon as
      practicable notify the Borrowers and the Lenders of each determination of a
      LIBOR Rate on the Business Day

    
      
        
        

      

      
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    of
      the
      determination thereof. Any change in the interest rate on a Loan resulting
      from
      a change in the Alternate Base Rate shall become effective as of the opening
      of
      business on the day on which such change in the Alternate Base Rate shall become
      effective. The Administrative Agent shall as soon as practicable notify the
      Borrowers and the Lenders of the effective date and the amount of each such
      change.

    

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

    

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

    

    Section
      2.9 Pro
      Rata Treatment and Payments.

    

    (a) Allocation
      of Payments Prior to Exercise of Remedies.
      

    

    (i)
      Each
      borrowing of Revolving Loans and any reduction of the Revolving Commitments
      shall be made pro rata according to the respective Revolving Commitment
      Percentages of the Revolving Lenders. Each payment on account of any fees
      pursuant to Section 2.3 shall be made pro rata in accordance with the
      respective amounts due and owing. Each payment (other than prepayments) by
      the
      Borrowers on account of principal of and interest on the Revolving Loans and
      on
      the Term Loan, as applicable, shall be applied to such Loans, as applicable,
      on
      a pro rata basis in accordance with the terms of Section 2.5(a) hereof.
      Each optional prepayment on account of principal of the Loans shall be applied
      in accordance with Section 2.5(a). Each mandatory prepayment on account of
      principal of the Loans shall be applied in accordance with Section 2.5(b).
      Unless this Agreement otherwise expressly provides for or requires a different
      manner for application of payments, all payments are shared pari
      passu
      and pro
      rata (based on the amounts of such Loans) between Revolving Loans and Term
      Loans. All payments (including prepayments) to be made by the Borrowers on
      account of principal, interest and fees shall be made without defense, set-off
      or counterclaim and shall be made to the Administrative Agent for the account
      of
      the Lenders at the Administrative Agent’s office specified on Section 10.2 in
      Dollars and in immediately available funds not later than 1:00 p.m. on the
      date when due. The Administrative Agent shall distribute such payments to the
      Lenders entitled thereto promptly upon receipt in like funds as received. If
      any
      payment hereunder (other than payments on the LIBOR Rate Loans) becomes due
      and
      payable on a day other than a Business Day, such payment shall be extended
      to
      the next succeeding Business Day, and, with respect to payments of principal,
      interest thereon shall be payable at the then applicable rate during such
      extension. If any payment on a LIBOR Rate Loan becomes due and payable on a
      day
      other than a Business Day, such payment date shall be extended to the next
      succeeding Business Day unless the result of such extension would be to extend
      such payment into another calendar month, in which event such payment shall
      be
      made on the immediately preceding Business Day. 

    

    (ii) The
      Administrative Agent as agent for the Secured Parties shall be entitled to
      receive an amount equal to all Income paid or distributed on or in respect
      of
      the Collateral, which amount shall be deposited by the Borrowers, the Credit
      Parties and any Servicer or PSA Servicer under a Pooling and Servicing Agreement
      into the Collection Account. The Borrowers hereby agree to instruct each
      applicable Servicer to transfer within two (2) Business Days of receipt
      thereof, and each applicable PSA Servicer under a Pooling and Servicing
      Agreement to deposit within two (2) Business Days of the date on which such
      Person is obligated under the applicable Pooling and Servicing Agreement to
      disburse such funds, all Income with respect to the Collateral directly into
      the
      Collection Account. On each Payment Date, any Cash Collateral and any amounts
      on
      deposit in the Collection Account shall be withdrawn by the Administrative
      Agent
      and shall be applied as follows: 

    

    FIRST,
      pari
      passu
      and pro
      rata (based on the amounts owed to such Persons under this clause) to the
      payment of all fees, expenses, and other obligations then due to the
      Administrative Agent and the Lenders pursuant to this Agreement and/or the
      Fee
      Letter, other than the interest and principal on the Loans;

    
      
        
        

      

      
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          31 -

        
          

        

      

      
        
        

      

    

    SECOND,
      to the
      extent not paid by the Borrowers, to the payment of fees and expenses owed
      to
      the Custodian under the Custodial Agreement or Custodial Fee
      Letter;

    

    THIRD,
      pari
      passu
      and pro
      rata (based on the amounts owed to such Persons under this clause) to the
      Lenders for the payment of accrued and unpaid interest on the Loans outstanding;
      

    

    FOURTH,
      without
      limiting the Borrowers’ obligations to make mandatory prepayments under Section
      2.5(b) in a timely manner as provided in this Article II, pari
      passu
      and pro
      rata (based on the amounts owed to such Persons under this clause) for the
      payment of the amounts and Loans provided for in Section 2.5(b);

    

    FIFTH,
      pari
      passu
      and pro
      rata (based on the amounts owed to such Persons under this clause) to the extent
      any Income or Cash Collateral includes payments or prepayments of principal
      on
      or from any Collateral (including, without limitation, insurance or condemnation
      proceeds or recoveries from any foreclosures not otherwise applied under Section
      2.5(b) or clause FOURTH
      above),
      such payments shall be applied to reduce the Allocated Term Loan Amount and/or
      Allocated Revolving Loan Amount for the related Term Loan Collateral or
      Revolving Loan Collateral, as applicable; 

    

    SIXTH,
      pari
      passu
      and pro
      rata (based on the amounts owed to such Persons under this clause) to the extent
      not previously paid pursuant to Article II, to the Lenders to pay any other
      principal payments then due or required to be paid; 

    

    SEVENTH,
      pari
      passu
      and pro
      rata (based on the amounts owed to such Persons under this clause) to the
      payment of all other amounts then due and owing to the Administrative Agent,
      the
      Lenders or any other Person pursuant to this Agreement and the other Credit
      Documents; and 

    

    EIGHTH,
      to the
      Borrowers, for such purposes as the Borrowers shall determine in their sole
      discretion;

    

    provided,
      however,
      that if
      a Default or Event of Default has occurred and is continuing or a mandatory
      prepayment under Section 2.5 is due but the applicable time period for payment
      of such amount has not expired, such amounts under clause “EIGHTH” shall not be
      transferred to the Borrowers but shall remain in the Collection Account and
      applied (i) in the case of a mandatory prepayment under Section 2.5, in
      reduction of such mandatory prepayments when due and payable, with the balance
      being remitted to the Borrowers and (ii) in the case of a Default or Event
      of
      Default, in reduction of the Obligations in accordance with Section 2.9(b).

    

    Notwithstanding
      anything to the contrary contained herein, in the event any Obligor Reserve
      Payments are
      deposited into the Collection Account, such Obligor Reserve Payments shall,
      upon written request of the Borrowers, be promptly transferred from the
      Collection Account to the Borrowers for the Borrowers to transfer into the
      appropriate escrow or reserve accounts. 

    

    In
      carrying out the foregoing, amounts received shall be applied in the numerical
      order provided until exhausted prior to application of the next succeeding
      category.

    

    (b) Allocation
      of Payments After Exercise of Remedies.
      Notwithstanding any other provisions of this Agreement to the contrary, after
      the exercise of remedies (other than the invocation of default interest pursuant
      to Section 2.6) by the Administrative Agent or the Lenders pursuant to
      Section 7.2 (or after the Commitments shall automatically terminate and the
      Loans (with accrued interest thereon) and all other amounts under the Credit
      Documents shall automatically become due and payable in accordance with the
      terms of such Section), all amounts collected or received by the Administrative
      Agent or any Lender on account of the Obligations or any other amounts
      outstanding under any of the Credit Documents or in respect of the Collateral
      and all amounts on deposit in the Collection Account and the Securities Account
      shall be paid over or delivered to the Administrative Agent and applied as
      follows (irrespective of whether the following costs, expenses, fees, interest,
      premiums, scheduled periodic payments or Obligations are allowed, permitted
      or
      recognized as a claim in any proceeding resulting from the occurrence of a
      Bankruptcy Event):

    

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

    

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

    

    THIRD,
      pari
      passu
      and pro
      rata (based on the amounts owed to such Persons under this clause) to the
      payment of all reasonable out-of-pocket costs and expenses (including without
      limitation, reasonable attorneys’ fees) of each of the Lenders in connection
      with enforcing its rights under the Credit Documents or otherwise with respect
      to the Obligations owing to such Lender;

    

    FOURTH
      pari
      passu
      and pro
      rata (based on the amounts owed to such Persons under this clause) to the
      payment of all of the Obligations consisting of accrued fees and
      interest;

    

    FIFTH
      pari
      passu
      and pro
      rata (based on the amounts owed to such Persons under this clause) to the
      payment of the outstanding principal amount of the Obligations;

    

    SIXTH,
      pari
      passu
      and pro
      rata (based on the amounts owed to such Persons under this clause) to all other
      Obligations and other obligations which shall have become due and payable under
      the Credit Documents or otherwise and not repaid pursuant to
      clauses ”FIRST” through “FIFTH” above; and

    
      
        
        

      

      
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          32 -

        
          

        

      

      
        
        

      

    

    SEVENTH,
      pari
      passu
      and pro
      rata (based on the amounts owed to such Persons under this clause) to the
      payment of the surplus, if any, to whoever may be lawfully entitled to receive
      such surplus.

    

    In
      carrying out the foregoing, (a) amounts received shall be applied in the
      numerical order provided until exhausted prior to application to the next
      succeeding category and
      (b) each
      of
      the Lenders shall receive an amount equal to its pro rata share (based on the
      proportion of the then outstanding Loans held by such Lender) of amounts
      available to be applied pursuant to clauses “THIRD”, “FOURTH”, “FIFTH” and
“SIXTH” above. 

    

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

    

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

    

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

    

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

    

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

    

    (d) Obligations
      of Lenders Several.
      The
      obligations of the Lenders hereunder to make Term Loans and Revolving Loans,
      and
      to make payments pursuant to Section 10.5(c) are several and not joint. The
      failure of any Lender to make any Loan, to fund any such participation or to
      make any such payment under Sections 8.7 and 10.5(c) on any date required
      hereunder shall not relieve any other Lender of its corresponding obligation
      to
      do so on such date, and no Lender shall be responsible for the failure of any
      other Lender to so make its Loan, to purchase its participation or to make
      its
      payment under Sections 8.7 and 10.5(c).

    

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

    

    Section
      2.11 Inability
      to Determine Interest Rate.

    

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

    
      
        
        

      

      
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          33 -

        
          

        

      

      
        
        

      

    

    

    Section
      2.12 Yield
      Protection.

    

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

    

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

    

    (ii) subject
      any Lender to any tax of any kind whatsoever with respect to this Agreement
      or
      any LIBOR Rate Loan made by it, or change the basis of taxation of payments
      to
      such Lender in respect thereof (except for Indemnified Taxes or Other Taxes
      covered by Section 2.14 and the imposition of, or any change in the rate
      of, any Excluded Tax payable by such Lender); or

    

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

    

    and
      the
      result of any of the foregoing shall be to increase the cost to such Lender
      of
      making or maintaining any LIBOR Rate Loan (or of maintaining its obligation
      to
      make any such Loan), or to reduce the amount of any sum received or receivable
      by such Lender hereunder (whether of principal, interest or any other amount),
      then, upon request of such Lender, the Borrowers will pay to such Lender, such
      additional amount or amounts as will compensate such Lender for such additional
      costs incurred or reduction suffered. Each Lender agrees to use reasonable
      efforts (including reasonable efforts to change its LIBOR Lending Office) to
      avoid or to minimize any amounts which may otherwise be payable pursuant to
      this
      Section; provided, however, that such efforts shall not cause the imposition
      on
      such Lender of any additional costs or legal or regulatory burdens deemed by
      such Lender in its sole discretion to be material

    

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

    

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

    

    (d) Delay
      in Requests.
      Failure
      or delay on the part of any Lender to demand compensation pursuant to this
      Section shall not constitute a waiver of such Lender’s right to demand such
      compensation.

    

    The
      provisions of this Section shall survive the termination of this Agreement
      and
      the payment in full of the Obligations.

    

    Section
      2.13 Indemnity;
      Eurocurrency Liabilities.

    

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

    
      
        
        

      

      
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          34 -

        
          

        

      

      
        
        

      

    

    

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

    

    Section
      2.14 Taxes.

    

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

    

    (b) Payment
      of Other Taxes by the Borrowers.
      Without
      limiting the provisions of paragraph (a) above, the Credit Parties shall
      timely pay any Other Taxes to the relevant Governmental Authority in accordance
      with Requirements of Law.

    

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

    

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

    

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

    

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

    

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

    
      
        
        

      

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

    

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

    

    (iv) any
      other
      form prescribed by Requirements of Law as a basis for claiming exemption from
      or
      a reduction in United States Federal withholding tax duly completed together
      with such supplementary documentation as may be prescribed by Requirements
      of
      Law to permit the Credit Parties to determine the withholding or deduction
      required to be made.

    

    (g) Treatment
      of Certain Refunds.
      If the
      Credit Parties pay any additional amount pursuant to this Section
      2.14
      with
      respect to a Lender, such Lender shall use reasonable efforts to obtain a refund
      of Tax or credit against its Tax liabilities on account of such payment;
provided
      that
      such Lender shall have no obligation to use such reasonable efforts if either
      (i) it is in an excess foreign Tax credit position or (ii) it believes in good
      faith, in its sole discretion, that claiming a refund or credit would cause
      adverse Tax consequences to it. If the Administrative Agent or a Lender
      determines, in its discretion, that it has received a refund of any Taxes or
      Other Taxes as to which it has been indemnified by the Borrowers or with respect
      to which the Credit Parties have paid additional amounts pursuant to this
      Section, it shall pay to the Credit Parties an amount equal to such refund
      (but
      only to the extent of indemnity payments made, or additional amounts paid,
      by
      the Credit Parties under this Section with respect to the Taxes or Other Taxes
      giving rise to such refund), net of all out-of-pocket expenses of the
      Administrative Agent or such Lender, as the case may be, and without interest
      (other than any interest paid by the relevant Governmental Authority with
      respect to such refund), provided
      that the
      Credit Parties, upon the request of the Administrative Agent or such Lender
      agrees to repay the amount paid over to the Credit Parties (plus any penalties,
      interest or other charges imposed by the relevant Governmental Authority) to
      the
      Administrative Agent or such Lender, in the event the Administrative Agent
      or
      such Lender is required to repay such refund to such Governmental Authority.
      In
      the event that no refund or credit is obtained with respect to the Credit
      Parties’ payments to such Lender pursuant to this Section
      2.14,
      then
      such Lender shall upon request provide a certification that such Lender has
      not
      received a refund or credit for such payments. This paragraph shall not be
      construed to require the Administrative Agent, or any Lender to make available
      its tax returns (or any other information relating to its taxes that it deems
      confidential) to the Credit Parties or any other Person. Each Lender agrees
      to
      use reasonable efforts (including reasonable efforts to change its LIBOR Lending
      Office) to avoid or to minimize any amounts which may otherwise be payable
      pursuant to this Section; provided,
      however,
      that
      such efforts shall not cause the imposition on such Lender of any additional
      costs or legal or regulatory burdens deemed by such Lender in its sole
      discretion to be material.

    

    The
      provisions of this Section shall survive the termination of this Agreement
      and
      the payment in full of the Obligations.

    

    Section
      2.15 Illegality.

    

    Notwithstanding
      any other provision of this Credit Agreement, if any Change in Law shall make
      it
      unlawful for such Lender or its LIBOR Lending Office to make or maintain LIBOR
      Rate Loans as contemplated by this Credit Agreement or to obtain in the
      interbank eurodollar market through its LIBOR Lending Office the funds with
      which to make such Loans,
      (a) such
      Lender shall promptly notify the Administrative Agent and the Borrowers
      thereof,
      (b) the
      commitment of such Lender hereunder to make LIBOR Rate Loans or continue LIBOR
      Rate Loans as such shall forthwith be suspended until the Administrative Agent
      shall give notice that the condition or situation which gave rise to the
      suspension shall no longer exist, and
      (c) such
      Lender’s Loans then outstanding as LIBOR Rate Loans, if any, shall be converted
      on the last day of the Interest Period for such Loans or within such earlier
      period as required by Requirements of Law as Alternate Base Rate Loans. The
      Borrowers hereby agree to promptly pay any Lender, upon its demand, any
      additional amounts necessary to compensate such Lender for actual and direct
      costs (but not including anticipated profits) reasonably incurred by such Lender
      in making any repayment in accordance with this Section including, but not
      limited to, any interest or fees payable by such Lender to lenders of funds
      obtained by it in order to make or maintain its LIBOR Rate Loans hereunder.
      A
      certificate (which certificate shall include a description of the basis for
      the
      computation) as to any additional amounts payable pursuant to this
      Section submitted by such Lender, through the Administrative Agent, to the
      Borrowers shall be conclusive in the absence of manifest error. Each Lender
      agrees to use reasonable efforts (including reasonable efforts to change its
      LIBOR Lending Office) to avoid or to minimize any amounts which may otherwise
      be
      payable pursuant to this Section; provided,
      however,
      that
      such efforts shall not cause the imposition on such Lender of any additional
      costs or legal or regulatory burdens deemed by such Lender in its sole
      discretion to be material. 

    

    Section
      2.16 Obligations
      Absolute.

    

    Except
      as
      set forth to the contrary in the Credit Documents, all sums payable by the
      Credit Parties hereunder or under the Credit Documents shall be paid without
      notice, demand, counterclaim, setoff, deduction or defense (as to any Person
      or
      any reason whatsoever) and without abatement, suspension, deferment, diminution
      or reduction (as to any Person or any reason whatsoever), and the obligations
      and liabilities of each Credit Party hereunder shall in no way be released,
      discharged or otherwise affected (except as expressly provided herein) by reason
      of: (a) any damage to or destruction of or any taking of any asset, any
      Property, any Collateral or any portion of the foregoing; (b) any
      restriction or prevention of or interference with any use of any asset, any
      Property, any Collateral or any portion of the foregoing; (c) any title
      defect or encumbrance or any eviction from any Property, by title paramount
      or
      otherwise; (d) any Insolvency Proceeding relating to any Credit Party, any
      Affiliate or Subsidiary of the foregoing or any Obligor, account debtor or
      indemnitor under the Collateral, or any action taken with respect to this
      Agreement or any other Credit Document by any trustee or receiver of any Credit
      Party, any Affiliate or Subsidiary of the

    
      
        
        

      

      
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    foregoing
      or any Obligor, account debtor or indemnitor under the Collateral, or by any
      court, in any such proceeding; (e) any claim that any
      Credit Party
      has or
      might have against the Administrative Agent, any Lender and/or any Indemnitee;
      (f) any default or failure on the part of the Administrative Agent, any
      Lender and/or any Indemnitee to perform or comply with any of the terms hereof,
      the Credit Documents or of any other agreement with any Credit Party, any
      Subsidiary or Affiliate of the foregoing and/or any other Person; (g) the
      invalidity or unenforceability of any Collateral or Loan; (h) anything
      related to or arising out of any Credit-Party-Related Obligation; or
      (i) any other occurrence whatsoever, whether similar or dissimilar to the
      foregoing, whether or not any Credit Party or any Affiliate or Subsidiary of
      the
      foregoing shall have notice or knowledge of any of the foregoing.

    

    Section
      2.17 Additional
      Collateral. The
      terms
      and conditions governing the Administrative Agent’s release of its Lien on the
      FM Global Pledged Mortgage Asset are set forth in the Fee Letter, which terms
      and provisions are hereby incorporated by reference.

     

    ARTICLE
      III

    

    REPRESENTATIONS
      AND WARRANTIES

    

    To
      induce
      the Lenders to enter into this Agreement and to make the Extensions of Credit
      herein provided for, the Credit Parties hereby represent and warrant, as of
      the
      date of this Agreement and on any date a Loan is made hereunder and at all
      times
      while any Credit Document or any Loan is in full force and effect, to the
      Administrative Agent and to each Lender that:

    

    Section
      3.1 Financial
      Condition. 

    

    (a) The
      audited consolidated balance sheet of the Guarantor, the Borrowers and the
      Guarantor’s and the Borrowers’ Consolidated Subsidiaries as of December 31, 2007
      provided to the Administrative Agent and the related consolidated statements
      of
      income, of
      changes in stockholders’ equity and of cash flows for the fiscal year ended
      December 31, 2007, copies of which have heretofore been furnished to the
      Administrative Agent, are complete and correct and present fairly in all
      material respects the consolidated financial condition of the Guarantor, the
      Borrowers and the Guarantor’s and the Borrowers’ Consolidated Subsidiaries as at
      such date, and the consolidated results of their operations and their
      consolidated cash flows as of the date of such financial statements and other
      information. All such financial statements, including the related schedules
      and
      notes thereto (if any), have been prepared in accordance with GAAP applied
      consistently throughout the periods involved (except as disclosed therein).
      Except as disclosed in writing, neither the Guarantor, the Borrowers nor any
      of
      the Guarantor’s or the Borrowers’ Consolidated Subsidiaries had, at the date of
      the most recent balance sheet referred to above, any material contingent
      liability or liability for taxes, or any long term lease or unusual forward
      or
      long term commitment, including, without limitation, any interest rate or
      foreign currency swap or exchange transaction or other financial derivative,
      that is not reflected in the foregoing statements or in the notes thereto.
      During the period from the date of the financial statements and other financial
      information delivered to the Administrative Agent, to and including the date
      hereof, there has been no sale, transfer or other disposition by the Guarantor,
      the Borrowers or any of the Guarantor’s or the Borrowers’ Consolidated
      Subsidiaries of any material part of their business or Property and no purchase
      or other acquisition of any business or Property (including any Equity Interests
      of any other Person) material in relation to the consolidated financial
      condition of the Guarantor, the Borrower and the Guarantor’s or the Borrowers’
Consolidated Subsidiaries on the date hereof. 

    

    (b) The
      operating forecast and cash flow projections of the Guarantor, the Borrowers
      and
      the Guarantor’s and the Borrowers’ Consolidated Subsidiaries, copies of which
      have heretofore been furnished to the Administrative Agent, have been prepared
      in good faith under the direction of a Responsible Officer of the Guarantor
      and
      the Borrowers. The Guarantor and
      the
      Borrowers have
      no
      reason to believe that as of the date of delivery thereof such operating
      forecast and cash flow projections are materially incorrect or misleading in
      any
      material respect or omit to state any material fact which would render them
      misleading in any material respect. The Guarantor and the Borrowers shall not
      be
      required to provide information in its projections if the disclosure of such
      information would violate any Requirement of Law relating to insider trading.
      

    

    Section
      3.2 No
      Material Adverse Effect; Internal Control Event.

    

    Since December
      31, 2007 (a) (and, in addition, after delivery of annual audited financial
      statements in accordance with Section 5.1(a), from the date of the most
      recently delivered annual audited financial statements), there has been no
      development or event which has had or could reasonably be expected to have
      a
      Material Adverse Effect and (b) no Internal Control Event has
      occurred.

    

    Section
      3.3 Corporate
      Existence; Compliance with Law.

    

    Each
      of
      the Credit Parties
      (a) is
      duly
      organized, validly existing and in good standing under the laws of the
      jurisdiction of its incorporation, organization or formation,
      (b) has
      the
      requisite power and authority and the legal right to own, operate and pledge
      all
      its Property, to lease the Property it operates as lessee and to conduct the
      business in which it is currently engaged and has taken all actions necessary
      to
      maintain all rights, privileges, licenses and franchises necessary or required
      in the normal conduct of its business,
      (c) is
      duly
      qualified to conduct business and in good standing under the laws of
      (i) the jurisdiction of its organization or formation and (ii) each
      other jurisdiction where its ownership, lease or operation of Property or the
      conduct of its business requires such qualification, in each case, except for
      any failure to qualify that would not have a Material Adverse Effect,
(d) is
      in
      compliance with all Requirements of Law (including, without limitation, all
      government permit and licensing requirements), Authority Documents, government
      permits and government licenses and (e) is in material compliance with all
      Contractual Obligations, Guarantee Obligations and Indebtedness. The
      jurisdictions in which the Credit Parties are organized and qualified to do
      business, and each Credit Party’s organizational identification number and tax
      identification number, are described on Schedule 3.3.
      The
      Borrowers shall update Schedule 3.3
      from
      time to time, in accordance with Section 5.2, to update information and to
      add Additional Credit Parties.

    
      
        
        

      

      
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    Section
      3.4 Corporate
      Power; Authorization; Enforceable Obligations.

    

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

    

    Section
      3.5 No
      Legal Bar; No Default.

    

    The
      execution, delivery and performance by each Credit Party of the Credit Documents
      to which such Credit Party is a party, the borrowing of Loans hereunder, the
      pledge of Collateral under the Credit Documents and the use of the proceeds
      of
      the Loans (a) will not violate any Requirement of Law, (b) will not
      conflict with, result in a breach of or constitute a default under the Authority
      Documents of the Credit Parties or any Contractual Obligation, Indebtedness
      or
      Guarantee Obligations of any Credit Party (except those as to which waivers
      or
      consents were obtained) or any material approval or material consent from any
      Governmental Authority relating to such Credit Party, and (c) will not
      result in, or require, the creation or imposition of any Lien on any Credit
      Party’s Properties or revenues pursuant to any Requirement of Law, Contractual
      Obligations, Indebtedness or Guarantee Obligations other than the Permitted
      Liens. No Credit Party is in default under or with respect to any of its
      Contractual Obligation, Indebtedness or Guarantee Obligations in any material
      respect. No Default or Event of Default has occurred and is
      continuing.

    

    Section
      3.6 No
      Material Litigation.

    

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

    

    Section
      3.7 Investment
      Company Act; Federal Power Act; Interstate Commerce Act; and Federal and State
      Statutes and Regulations.

    

    No
      Credit
      Party is an “investment company”, or a company “controlled” by an “investment
      company”, within the meaning of the 40 Act. No Credit Party is subject to
      regulation under the Federal Power Act, the Interstate Commerce Act, or any
      federal or state statute or regulation limiting its ability to incur the
      Obligations.

    

    Section
      3.8 Margin
      Regulations.

    

    No
      part
      of the proceeds of any Extension of Credit hereunder will be used directly
      or
      indirectly for any purpose that violates, or that would require any Lender
      to
      make any filings in accordance with, the provisions of Regulation T, U
      or X of the Board of Governors of the Federal Reserve System as now and
      from time to time hereafter in effect. The Credit Parties and their Subsidiaries
      and Affiliates (a) are not engaged, principally or as one of their
      important activities, in the business of extending credit for the purpose of
      “purchasing” or “carrying” “margin stock” within the respective meanings of each
      of such terms under Regulation U and (b) taken as a group do not own
“margin stock”. No Borrower is subject to any Requirement of Law that purports
      to restrict or regulate its ability to borrow money. No portion of the proceeds
      of any Extension of Credit will be used to repurchase any Equity Interests
      in,
      or to fund dividends or distributions by, any Credit Party or any Subsidiary
      or
      Affiliate.

    

    Section
      3.9 ERISA.

    

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

    

    Section
      3.10 Environmental
      Matters.

    

    Except
      as
      could not reasonably be expected, individually or in the aggregate, to have
      a
      Material Adverse Effect:

    

    (a) The
      Properties owned, leased or operated by the Credit Parties or any of their
      Subsidiaries do not contain any Materials of Environmental Concern in amounts
      or
      concentrations which (i) constitute a violation of, or
      (ii) could
      reasonably be expected to give rise to liability on behalf of any Credit Party
      under, any Environmental Law.

    
      
        
        

      

      
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    (b) The
      Properties and all operations of the Credit Parties and/or their Subsidiaries
      at
      the Properties are in compliance, and have in the last five years been in
      compliance, in all material respects with all applicable Environmental Laws,
      and
      to the knowledge of the Credit Parties there is no contamination at, under
      or
      about the Properties or violation of any Environmental Law with respect to
      the
      Properties or the business operated by the Credit Parties or any of their
      Subsidiaries (the “Business”).

    

    (c) Neither
      the Credit Parties nor their Subsidiaries have received any written or actual
      notice of violation, alleged violation, non-compliance, liability or potential
      liability on behalf of any Credit Party with respect to environmental matters
      or
      Environmental Laws regarding any of the Properties or the Business, nor do
      the
      Credit Parties or their Subsidiaries have knowledge or reason to believe that
      any such notice will be received or is being threatened.

    

    (d) None
      of
      the Credit Parties and to the knowledge of the Credit Parties no other Person
      has transported or disposed of any Materials of Environmental Concern from
      the
      Properties in violation of, or in a manner or to a location that could
      reasonably be expected to give rise to liability on behalf of any Credit Party
      under any Environmental Law, and none of the Credit Parties and to the knowledge
      of the Credit Parties no other Person has generated, treated, stored or disposed
      of any Materials of Environmental Concern at, on or under any of the Properties
      in violation of, or in a manner that could reasonably be expected to give rise
      to liability on behalf of any Credit Party under, any applicable Environmental
      Law.

    

    (e) No
      judicial proceeding or governmental or administrative action is pending or,
      to
      the knowledge of the Credit Parties and their Subsidiaries, threatened, under
      any Environmental Law to which any Credit Party or any Subsidiary is or could
      reasonably be expected to be named as a party with respect to the Properties
      or
      the Business, nor are there any consent decrees or other decrees, consent
      orders, administrative orders or other orders, or other administrative or
      judicial requirements outstanding under any Environmental Law with respect
      to
      the Properties or the Business.

    

    (f) There
      has
      been no release or threat of release of Materials of Environmental Concern
      at or
      from the Properties, or arising from or related to the operations of any Credit
      Party or any Subsidiary in connection with the Properties or otherwise in
      connection with the Business, in violation of or in amounts or in a manner
      that
      could reasonably be expected to give rise to liability on behalf of any Credit
      Party under Environmental Laws.

    

    Section
      3.11 Use
      of Proceeds.

    

    The
      proceeds of the Extensions of Credit shall be used by the Borrowers solely
      to
      acquire or finance Eligible Assets.

    

    Section
      3.12 Subsidiaries;
      Joint Ventures; Partnerships.

    

    The
      organizational chart attached as Schedule
      3.12
      sets
      forth the name of each Consolidated Subsidiary of each Credit
      Party.

    

    Section
      3.13 Ownership.

    

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

    

    Section
      3.14 Indebtedness.

    

    Except
      as
      otherwise permitted under Section 6.1, the Credit Parties and their Subsidiaries
      have no Indebtedness or Guarantee Obligations. To each Credit Party’s knowledge,
      no material defaults or events of default exist under the Indebtedness and
      Guarantee Obligations permitted under Section 6.1.

    

    Section
      3.15 Taxes.

    

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

    

    Section
      3.16 Solvency.

    

    No
      Credit
      Party is the subject of any Insolvency Proceeding or Insolvency Event. The
      Loans
      under this Agreement and any other Credit Document do not and will not render
      any Credit Party not Solvent. The Credit Parties are not entering into the
      Credit Documents or any Extension of Credit with the intent to hinder, delay
      or
      defraud any creditor of the Credit Parties or any Subsidiary and the Credit
      Parties have received or will receive reasonably equivalent value for the Credit
      Documents and each Extension of Credit.

    

    Section
      3.17 Investments.

    

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

    
      
        
        

      

      
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    Section
      3.18 Location.

    

    Each
      Credit Parties’ location (within the meaning of Article 9 of the UCC) is
      set forth on Schedule
      3.18.
      The
      office where each Credit Party keeps all the records (within the meaning of
      Article 9 of the UCC) is at the address set forth on Schedule
      3.18
      to this
      Agreement (or at such other locations as to which the notice and other
      requirements specified in Section 10.2 shall have been satisfied). 

    

    Section
      3.19 No
      Burdensome Restrictions.

    

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

    

    Section
      3.20 Brokers’
      Fees.

    

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

    

    Section
      3.21 Labor
      Matters.

    

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

    

    Section
      3.22 Accuracy
      and Completeness of Information.

    

    To
      each
      Credit Parties’ actual knowledge, the information, reports, certificates,
      documents, financial statements, books, records, files, exhibits and schedules
      furnished in writing by or on behalf of each Credit Party to the Administrative
      Agent in connection with the negotiation, preparation or delivery of this
      Agreement and the other Credit Documents or included herein or therein or
      delivered pursuant hereto or thereto, when taken as a whole, do not contain
      any
      untrue statement of material fact or omit to state any material fact necessary
      to make the statements herein or therein, in light of the circumstances under
      which they were made, not misleading. All written information furnished after
      the date hereof by or on behalf of each Credit Party to the Administrative
      Agent
      and the Lenders in connection with this Agreement and the other Credit Documents
      and the transactions contemplated hereby and thereby will be true, complete
      and
      accurate in every material respect, or (in the case of projections) based on
      reasonable estimates, on the date as of which such information is stated or
      certified. There is no fact known to a Responsible Officer of any Credit Party,
      after due inquiry, that could reasonably be expected to have a Material Adverse
      Effect that has not been disclosed to the Administrative Agent. All projections
      furnished on behalf of each Credit Party to the Administrative Agent were
      prepared and presented in good faith by or on behalf of each Credit
      Party.

    

    Section
      3.23 Material
      Contracts.

    

    Each
      Material Contract is, and after giving effect to the Transactions will be,
      in
      full force and effect in accordance with the terms thereof. To the extent
      requested by the Administrative Agent, the Credit Parties have delivered to
      the
      Administrative Agent a true and complete copy of each requested Material
      Contract. 

    

    Section
      3.24 Insurance.

    

    Each
      Credit Party has and maintains, with respect to its Properties and business,
      insurance which meets the requirements of Section 5.5.

    

    Section
      3.25 Security
      Documents.

    

    The
      Security Documents create valid security interests in, and Liens on, the
      Collateral purported to be covered thereby. Except as set forth in the Security
      Documents, such security interests and Liens are currently (or will be, upon
      (a) the filing of appropriate financing statements with the Secretary of
      State of the state of incorporation or organization for each Credit Party,
      in
      each case in favor of the Administrative Agent, on behalf of the Lenders, and
      (b) the Administrative Agent obtaining control or possession over those
      items of Collateral in which a security interest is perfected through control
      or
      possession) perfected security interests and Liens, prior to all other Liens
      other than Permitted Liens. None of the Collateral is subject to any Lien other
      than Permitted Liens. None of the Credit Parties nor any Person claiming through
      or under any Credit Party shall have any claim to or interest in the Collection
      Account or the Securities Account, except for the interest of the Borrowers
      in
      such property as a debtor for purposes of the UCC.

    

    Section
      3.26 Anti-Terrorism
      Laws.

    

    Neither
      any Credit Party nor any of its Subsidiaries or Affiliates is an “enemy” or an
“ally of the enemy” within the meaning of Section 2 of the Trading with the
      Enemy Act of the United States of America (50 U.S.C. App. §§ 1 et
      seq.),
      as
      amended. None of the Credit Parties or their Subsidiaries or Affiliates is
      in
      violation of (a) the Trading with the Enemy Act, as amended, (b) any
      of the foreign assets control regulations of the United States Treasury
      Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
      legislation or executive order relating thereto or (c) the Patriot Act.
      None of the Credit Parties nor any Subsidiary or Affiliate of any Credit Party
      (i) is a blocked person

    
      
        
        

      

      
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    described
      in Section 1 of the Anti-Terrorism Order or (ii) to the best of its
      knowledge, engages in any dealings or transactions, or is otherwise associated,
      with any such blocked person.

    

    Section
      3.27 Compliance
      with OFAC Rules and Regulations.

    (a) None
      of
      the Credit Parties or their Subsidiaries or their respective Affiliates is
      in
      violation of and shall not violate any of the country or list based economic
      and
      trade sanctions administered and enforced by OFAC that are described or
      referenced at http://www.ustreas.gov/offices/enforcement/ofac/
      or as
      otherwise published from time to time.

    

    (b) None
      of
      the Credit Parties or their Subsidiaries or their respective Affiliates
      (i) is a Sanctioned Person or a Sanctioned Entity, (ii) has a more
      than 10% of its assets located in Sanctioned Entities, or (iii) derives
      more than 10% of its operating income from investments in, or transactions
      with
      Sanctioned Persons or Sanctioned Entities. The proceeds of any Loan will not
      be
      used and have not been used to fund any operations in, finance any investments
      or activities in or make any payments to, a Sanctioned Person or a Sanctioned
      Entity.

    

    Section
      3.28 Compliance
      with FCPA.

    

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

    

    Section
      3.29 Consent;
      Governmental Authorizations.

    

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

    

    Section
      3.30 Bulk
      Sales.

    

    The
      execution, delivery and performance of this Agreement, the Credit Documents
      and
      the transactions contemplated hereby do not require compliance with any “bulk
      sales” act or similar law by any Credit Party.

    

    Section
      3.31 Income
      and Required Payments.

    

    Each
      Credit Party acknowledges that all Income and Required Payments received after
      the Closing Date by it or its Affiliates or its Subsidiaries or any Person
      acting on its behalf with respect to the Collateral shall be held for the
      benefit of the Administrative Agent until deposited into the Collection Account
      as required herein.

    

    Section
      3.32 Full
      Payment.

    

    No
      Credit
      Party has any knowledge of any fact that should lead it to expect that each
      Loan
      will not be paid in full.

    

    Section
      3.33 Irrevocable
      Instructions.

    

    The
      Borrowers have delivered each Irrevocable Instruction required to be delivered
      by the terms of this Agreement. The Credit Parties are not aware of any Required
      Payment that has been made after the date of this Agreement but has not been
      deposited into the Collection Account. No Irrevocable Instruction violates
      any
      Requirement of Law, any Contractual Obligation or other prohibition and such
      Irrevocable Instructions are the valid and binding obligations of the parties
      thereto.

    

    Section
      3.34 Compliance
      with Covenants.

    

    The
      Guarantor and its Consolidated Subsidiaries and the Borrowers are in full
      compliance with the Financial Covenants and all Credit Parties are in full
      compliance with all other applicable covenants, duties and agreements contained
      in the Credit Documents.

    

    Section
      3.35 Collateral
      Agreements.

    

    The
      Credit Parties have delivered to the Administrative Agent or the Custodian
      all
      documents and agreements related to, governing or affecting the Collateral,
      including, without limitation, the Mortgage Loan Documents, the Servicer
      Agreements, the Pooling and Servicing Agreements and all documents relating
      to
      any Debt Issuance, Equity Issuance or Securitization or any proposed Debt
      Issuance, proposed Equity Issuance or proposed Securitization, and, to the
      best
      of the Borrowers’ knowledge, no material default or event of default exists
      thereunder.

     

     

    
      
        
        

      

      
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    Section
      3.36 No
      Reliance.

     

    Each
      Credit Party has made its own independent decisions to enter into the Credit
      Documents and each Loan and as to whether such Loan is appropriate and proper
      for it based upon its own judgment and upon advice from such advisors
      (including, without limitation, legal counsel and accountants) as it has deemed
      necessary. No Credit Party is relying upon any advice from the Administrative
      Agent or any Lender as to any aspect of the Loans, including, without
      limitation, the legal, accounting or tax treatment of such Loans.

    

    Section
      3.37 Collateral.

    

    (a)
      There
      are no outstanding rights, options, warrants or agreements for the purchase,
      sale or issuance of the Collateral created by, through, or as a result of any
      Credit Party’s actions or inactions; (b) there
      are no agreements on the part of any Credit Party to issue, sell or distribute
      the Collateral, other than this Agreement and the Credit Documents; and
      (c)
      no
      Credit Party has any obligation (contingent or otherwise) to purchase, redeem
      or
      otherwise acquire any securities or any interest therein or to pay any dividend
      or make any distribution in respect of the Collateral, except, in the case
      of
      (a) and (b), for purchase rights that may be contained in any applicable
      intercreditor agreement included in the Mortgage Asset File.

    

    Section
      3.38 REIT
      Status.

    

    Caplease
      Inc. is a REIT, a publicly traded company that is listed, quoted or traded
      on
      and is in good standing in respect of the New York Stock Exchange, NASDAQ or
      any
      other nationally recognized stock exchanges (each, a “Stock
      Exchange”)
      and is
      not subject to any ratings downgrade by any Rating Agency. Caplease Inc. has
      not
      engaged in any material “prohibited transactions” as defined in
      Section 857(b)(6)(B)(iii) and (C) of the Code. Caplease Inc. for its
      current “tax year” (as defined in the Code) is and for all prior tax years
      subsequent to its election to be a REIT has been entitled to a dividends paid
      deduction under the requirements of Section 857 of the Code with respect to
      any dividends paid by it with respect to each such year for which it claims
      a
      deduction in its Form 1120-REIT filed with the United States Internal Revenue
      Service for such year. 

    

    Section
      3.39 Insider.

    

    No
      Credit
      Party is an “executive officer”, “director”, or “person who directly or
      indirectly or acting through or in concert with one or more persons owns,
      controls, or has the power to vote more than 10% of any class of voting
      securities” (as those terms are defined in 12 U.S.C. § 375(b) or in
      regulations promulgated pursuant thereto) of any Lender, of a bank holding
      company of which any Lender is a Subsidiary, or of any Subsidiary, of a bank
      holding company of which any Lender is a Subsidiary, of any bank at which any
      Lender maintains a correspondent account or of any Lender which maintains a
      correspondent account with any Lender.

    

    Section
      3.40 No
      Defenses.

    

    There
      are
      no defenses, offsets, counterclaims, abatements, rights of rescission or other
      claims, legal or equitable, available to any Credit Party with respect to this
      Agreement, the Credit Documents, the Collateral or any other instrument,
      document and/or agreement described herein or in the other Credit Documents,
      or
      with respect to the obligation of the Credit Parties to repay the Obligations
      or
      any other obligation under the Credit Documents.

    

    Section
      3.41 Interest
      Rate Protection Agreements.

    

    Borrowers
      have entered into all Interest Rate Protection Agreements contemplated by
      Borrowers’ hedging strategy (as disclosed to the Administrative Agent) and to
      the actual knowledge of Borrowers, as of the date of this Agreement and as
      of
      the Borrowing Date for the financing of any Pledged Mortgage Asset subject
      to an
      Interest Rate Protection Agreement, each such Interest Rate Protection Agreement
      is in full force and effect in accordance with its terms and no default or
      event
      of default exists thereunder. The Borrowers and the Guarantors represent and
      warrant that no “default” has occurred or is continuing under any Interest Rate
      Protection Agreement to which it is a party.

    

    Section
      3.42 Selection
      Procedures.

    

    No
      procedures believed by any Credit Party to be adverse to the interests of the
      Administrative Agent or the Lenders were utilized by any Credit Party in
      identifying and/or selecting the Collateral. In addition, each Mortgage Asset
      shall have been underwritten in accordance with and satisfy any applicable
      standards that have been established by the Credit Parties and any of their
      Subsidiaries or Affiliates and are then in effect.

    

    Section
      3.43 Value
      Given.

    

    To
      the
      extent the Borrowers acquired Mortgage Assets from Transferors,
      the Borrowers have given reasonably equivalent value to each Transferor
      in consideration
      for the transfer to the Borrowers of the Collateral under the applicable
      Purchase Agreement, no such transfer has been made for or on account
      of an antecedent debt owed by the Transferor thereunder to the Borrowers,
      and no such transfer is or may be voidable or subject to avoidance under any
      section of the Bankruptcy Code.

    

    Section
      3.44 Separateness.

    

    Each
      SPE
      Subsidiary is in compliance with the requirements of Section 5.24.

    

    Section
      3.45 Qualified
      Transferees.

    

    With
      respect to each Mortgage Asset, each Borrower and the Administrative Agent
      are
“qualified transferees”, “qualified institutional lenders” or “qualified
      lenders” (however such terms are phrased or denominated) under the terms of the
      applicable Mortgage Loan Documents with respect to each party’s ability to hold
      and/or to be a pledgee and/or transferee of each such Mortgage Asset. The
      Assignments and the

    
      
        
        

      

      
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    pledge
      of
      the Mortgage Assets to the Administrative Agent, on behalf of the Lenders,
      do
      not violate any provisions of the underlying Mortgage Loan
      Documents.

    

    Section
      3.46 Eligibility
      of Mortgage Assets.

    

    With
      respect to each Mortgage Asset, such asset is an Eligible Asset and each
      representation and warranty set forth in Schedule
      1.1(c) applicable
      thereto is true and correct. Each of the representations and warranties
      contained in the Mortgage Loan Documents and in any statement, affirmation
      or
      certification made or any information, document, report, notice or agreement
      provided to the Administrative Agent relating to any Mortgage Asset is true
      and
      correct in all material respects.

    

    Section
      3.47 Ability
      to Perform.

    

    None
      of
      the Credit Parties believes, or has any reason or cause to believe, that it
      cannot perform each and every agreement, duty, obligation and covenant contained
      in the Credit Documents applicable to it and to which it is a party. None of
      the
      Credit Parties is subject to any restriction which would unduly burden its
      ability to timely and fully perform each and every applicable covenant, duty,
      obligation and agreement contained in the Credit Documents and/or the Mortgage
      Loan Documents. None of the Credit Parties is a party to any agreement or
      instrument or subject to any restriction which could reasonably be expected
      to
      have a Material Adverse Effect. 

    

    Section
      3.48 Certain
      Tax Matters.

    

    Each
      Credit Party represents and warrants, and acknowledges and agrees, that it
      does
      not intend to treat the Loans and the related transactions hereunder as being
      a
“reportable transaction” (within the meaning of United States Treasury
      Department Regulation Section 1.6011-4). In the event a Credit Party determines
      to take any action inconsistent with such intention, it will promptly notify
      the
      Administrative Agent and the Lenders. If a Credit Party so notifies the
      Administrative Agent and the Lenders, the Credit Parties acknowledge and agree
      that the Administrative Agent and the Lenders may treat the Loans as part of
      a
      transaction that is subject to United States Treasury Department Regulation
      Section 301.6112-1, and the Administrative Agent and the Lenders will maintain
      the lists and other records required by such Treasury Regulation.

    

    Section
      3.49 Set-Off,
      etc.

    

    No
      Collateral has been compromised, adjusted, extended, satisfied, subordinated,
      rescinded, set-off or modified by the Credit Parties, any Transferor or any
      obligor thereof, and no Collateral is subject to compromise, adjustment,
      extension (except as set forth in the related documents provided to the
      Administrative Agent), satisfaction, subordination, rescission, set-off,
      counterclaim, defense, abatement, suspension, deferment, deduction, reduction,
      termination or modification, whether arising out of transactions concerning
      the
      Collateral or otherwise, by the Credit Parties, any Transferor or any obligor
      with respect thereto. 

    

    Section
      3.50 Representations
      and Warranties.

    

    The
      representations and warranties contained herein, required by or identified
      in
      this Agreement and the other Credit Documents and the review and inquiries
      made
      on behalf of the Credit Parties in connection therewith have all been made
      by
      Persons having the requisite expertise, knowledge and background to provide
      such
      representations and warranties. On the Borrowing Date for each Extension of
      Credit and on each day that Collateral becomes and/or remains subject to this
      Agreement and the Credit Documents, the Credit Parties shall be deemed to
      restate and make each of the representations and warranties made by it in this
      Article III and in Schedule
      1.1(c)
      of this
      Agreement.

    

    Section
      3.51 Purchase
      Agreement.

    

    The
      representations and warranties made by the Transferors to a Borrower in the
      Purchase Agreements are hereby remade by the Borrowers on each date to
      which they speak in the Purchase Agreement as if such representations and
      warranties were set forth herein. For purposes of this Section 3.51, such
      representations and warranties are incorporated herein by reference as if made
      by the Borrowers to the Administrative Agent and Lenders under the
      terms hereof mutatis mutandis.

     

    ARTICLE
      IV

    

    CONDITIONS
      PRECEDENT

    

    Section
      4.1 Conditions
      to Closing Date.

    

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

    

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

    

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

    
      
        
        

      

      
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    (i) Authority
      Documents.
      Original certified Authority Documents of each Credit Party certified
      (A) by a Responsible Officer of such Credit Party (pursuant to the Closing
      Officer’s Certificate) as of the Closing Date to be true and correct and in
      force and effect as of such date, and (B) in the case of the articles of
      incorporation, certificates of formation or other Authority Documents filed
      with
      a Governmental Authority, to be true and complete as of a recent date by
      the appropriate Governmental Authority of the state of its incorporation or
      organization, as applicable.

    

    (ii) Resolutions.
      Copies
      of resolutions of the board of directors or comparable managing body of each
      Credit Party approving and adopting the Credit Documents, the transactions
      contemplated therein and authorizing execution and delivery thereof, certified
      by a Responsible Officer of such Credit Party (pursuant to the Closing Officer’s
      Certificate) as of the Closing Date to be true and correct and in force and
      effect as of such date.

    

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

    

    (iv) Incumbency.
      An
      incumbency certificate of each Credit Party certified by a Responsible Officer
      (pursuant to the Closing Officer’s Certificate) to be true and correct as of the
      Closing Date.

    

    (c) Legal
      Opinion of Counsel.
      The
      Administrative Agent shall have received one (1) or more Opinions of Counsel
      (including, if requested by the Administrative Agent, local counsel opinions)
      for the Credit Parties, dated the Closing Date and addressed to the
      Administrative Agent and the Lenders, in form and substance acceptable to the
      Administrative Agent (which shall include, without limitation, opinions with
      respect to the due organization and valid existence of each Credit Party,
      opinions as to perfection of the Liens granted to the Administrative Agent
      pursuant to the Security Documents and opinions as to the non-contravention
      of
      the Credit Parties’ organizational documents and Material Contracts).

    

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

    

    (i) (A) searches
      of UCC filings in the jurisdiction of incorporation or formation, as applicable,
      of each Credit Party, copies of the financing statements on file in such
      jurisdictions and evidence that no Liens exist (or the same have been
      appropriately terminated) other than Permitted Liens and (B) tax lien,
      judgment, bankruptcy and pending litigation searches, the results of which
      shall
      be acceptable to the Administrative Agent in its discretion;

    

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

    

    (iii) stock
      or
      membership certificates, if any, evidencing the Equity Interests pledged to
      the
      Administrative Agent pursuant to the Pledge Agreements and duly executed in
      blank undated stock or transfer powers;

    

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

    

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

    

    (vi) the
      Account Control Agreement and the Securities Account Control Agreement;
      and

    

    (vii) if
      applicable, executed control agreements necessary to perfect any Collateral
      where the perfection thereof is by control.

    

    (e) Liability,
      Casualty, Property and Business Interruption Insurance.
      The
      Administrative Agent shall have received, to the extent requested, copies of
      insurance policies or certificates and endorsements of insurance evidencing
      liability, casualty, property and business interruption insurance meeting the
      requirements set forth herein or in the Security Documents. 

    

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

    

    (g) Notice
      of Borrowing.
      The
      Administrative Agent shall have received a Notice of Borrowing with respect
      to
      the Loans to be made on the Closing Date, together with all other documents,
      agreements or instruments required by Section 4.2.

    

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

    

    (i) Compliance
      with Laws.
      The
      financings and other Transactions contemplated hereby shall be in compliance
      with all Requirements of Law (including all applicable Securities Laws and
      banking laws, rules and regulations).

    
      
        
        

      

      
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    (j) Bankruptcy.
      There
      shall be no Insolvency Proceedings pending with respect to any Credit Party
      or
      any Affiliate or Subsidiary thereof.

    

    (k) Existing
      Indebtedness of the Credit Parties.
      All of
      the existing Indebtedness for borrowed money of the Credit Parties and their
      Subsidiaries (other than Indebtedness permitted to exist pursuant to
      Section 6.1) shall be repaid in full and all security interests related
      thereto shall be terminated on or prior to the Closing Date, including, without
      limitation, the Repurchase Facility and the Revolving Loan
      Facility.

    

    (l) Financial
      Statements.
      The
      Administrative Agent and the Lenders shall have received copies of the financial
      statements referred to in Section 3.1, each in form and substance
      satisfactory to it.

    

    (m) No
      Material Adverse Change.
      No
      Material Adverse Effect shall have occurred.

    

    (n) Closing
      Officer’s Certificate.
      The
      Administrative Agent shall have received a Closing Officer’s Certificate
      executed by a Responsible Officer of each of the Credit Parties as of the
      Closing Date, substantially in the form of Exhibit 4.1(n)
      stating,
      among other things, that (i) there does not exist any pending or ongoing,
      action, suit, investigation, litigation or proceeding in any court or before
      any
      other Governmental Authority (A) affecting this Agreement or the other
      Credit Documents, that has not been settled, dismissed, vacated, discharged
      or
      terminated prior to the Closing Date or (B) that purports to affect any
      Credit Party or any of its Subsidiaries or Affiliates, or any transaction
      contemplated by the Credit Documents, which action, suit, investigation,
      litigation or proceeding could reasonably be expected to have a Material Adverse
      Effect, that has not been settled, dismissed, vacated, discharged or terminated
      prior to the Closing Date, (ii) immediately after giving effect to this
      Agreement, the other Credit Documents, and all the Transactions contemplated
      to
      occur on such date, (A) no
      Default or Event of Default exists, (B) all representations and warranties
      contained herein and in the other Credit Documents and in any other document,
      agreement, statement, affirmation, certificate, notice, report or financial
      or
      other statement delivered in connection therewith are true and correct, and
      (C)
      the Guarantor and the Borrowers are in compliance with each of the Financial
      Covenants set forth in Section 5.9, (iii) each of the other conditions
      precedent in Section 4.1 and 4.2 have been satisfied, except to the extent
      the satisfaction of any such condition is subject to the judgment or discretion
      of the Administrative Agent or any Lender and (iv) each of the Borrowers is
      Solvent before and after
      giving effect to the initial borrowings under the Credit Documents.

    

    (o) Patriot
      Act Certificate.
      At
      least five (5) Business Days prior to the Closing Date, the
      Administrative Agent shall have received a certificate satisfactory thereto,
      substantially in the form of Exhibit 4.1(o),
      for
      benefit of itself and the Lenders, provided by the Credit Parties that sets
      forth information required by the Patriot Act including, without limitation,
      the
      identity of the Credit Parties, the name and address of the Credit Parties
      and
      other information that will allow the Administrative Agent or any Lender, as
      applicable, to identify the Credit Parties in accordance with the Patriot
      Act.

    

    (p) Material
      Contracts.
      To the
      extent requested by the Administrative Agent, the Administrative Agent shall
      have received true and complete copies, certified, in the Closing Officer’s
      Certificate, as true and complete, of all requested Material Contracts, together
      with all exhibits and schedules. 

    

    (q) Power
      of Attorney.
      The
      Administrative Agent shall have received duly executed powers of attorney in
      the
      form attached as Exhibit 4.1(q)(i)
      and
Exhibit
      4.1(q)(ii),
      as
      applicable, from each Borrower and each Pledgor under a Pledge
      Agreement.

    

    (r) Fees
      and Expenses.
      The
      Administrative Agent, the Lenders and the Administrative Agent’s counsel shall
      have received all fees and expenses, if any, owing pursuant to the Fee Letter
      and Section 2.3. 

    

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

    

    (t) Term
      Loan Collateral Advance Rate.
      The
      Term Loan Average Advance
      Rate (assuming the Term Loans were made on the Closing Date) for the proposed
      Term Loan Collateral shall not exceed 79%.

    

    (u) Conditions
      contained in the Fee Letter.
      All
      conditions precedent to the closing of the facility evidenced by the Credit
      Documents that are set forth in the Fee Letter, which conditions are
      incorporated herein by reference, have been satisfied.

    

    (v) Wachovia
      Swap Documents.
      With
      respect to all Derivatives Contracts with Wachovia, the Borrowers and the
      Guarantor (i) shall amend such Derivatives Contracts to conform to the
      International Swaps and Derivatives Association Master Agreement, Schedule
      and
      Credit Support Annex, to provide for cash collateral thereunder and to otherwise
      be acceptable to Wachovia and (ii) post cash collateral required thereunder
      for
      margin and other obligations.

    

    Section
      4.2 Conditions
      to All Extensions of Credit.

    

    The
      obligation of each Lender to make any Extension of Credit hereunder, including
      the obligation of each Lender to make the Term Loan on the Closing Date and
      the
      pledge by any Borrower of any Collateral is subject to the following
      conditions:

    

    (a) Representations
      and Warranties.
      The
      representations and warranties made by the Credit Parties herein, in the Credit
      Documents, in any schedule to the Credit Documents and which are contained
      in
      any certificate, document, report or notice furnished at any time under or
      in
      connection herewith or the other Credit Documents shall (i) with respect to
      representations and warranties that contain a materiality qualification, be
      true
      and correct and (ii) with respect to representations and warranties that do
      not

    
      
        
        

      

      
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    contain
      a
      materiality qualification, be true and correct in all material respects, in
      each
      case on and as of the date of such Extension of Credit as if made on and as
      of
      such date.

    

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

    

    (c) Compliance
      with Commitments.
      Before
      and immediately after giving effect to the making of any such Extension of
      Credit (and the application of the proceeds thereof), (i) the sum of the
      aggregate principal amount of outstanding Revolving Loans shall not
      exceed the
      Revolving Committed Amount then in effect and (ii) the Availability shall not
      be
      negative.

    

    (d) Additional
      Conditions.
      All
      requirements and conditions set forth in Sections 2.1, 2.2 or other
      applicable Sections of this Agreement shall have been satisfied.

    

    (e)
       Requirement
      of Law.
      No
      Requirement of Law shall prohibit or render it unlawful, and no order, judgment
      or decree of Governmental Authority shall prohibit, enjoin or render it
      unlawful, to enter into such Extension of Credit in accordance with the
      provisions hereof or any other transaction contemplated herein.

    

    (f) Confirmation.
      The
      Borrowers shall have delivered a Confirmation, via Electronic Transmission,
      in
      accordance with the procedures set forth in Sections 2.1 and 2.2, and the
      Administrative Agent shall have determined that the Mortgage Asset described
      in
      such Confirmation is an Eligible Asset, shall have approved in writing in its
      discretion the pledge of the related Eligible Asset and the related Loan, if
      applicable (which approvals shall be evidenced by the Administrative Agent’s
      execution of the related Confirmation) and shall have obtained all necessary
      internal credit and other approvals for such Extension of Credit. With respect
      to requirements for additional Revolving Loans on existing Revolving Loan
      Collateral under Section 2.1(b)(iv), all requirements and conditions of such
      Section are satisfied.

    

    (g) Compliance
      Certificate.
      The
      Administrative Agent shall have received a Compliance Certificate in the form
      of
Exhibit
      1.1(i)
      from a
      Responsible Officer of the Credit Parties.

    

    (h) Due
      Diligence.
      Subject
      to the Administrative Agent’s right to perform one or more Due Diligence Reviews
      pursuant to Section 10.27, the Administrative Agent shall have completed its
      due
      diligence review of the Mortgage Asset File and the Underwriting Package for
      each Mortgage Asset and such other documents, records, agreements, instruments,
      mortgaged properties or information relating to such Mortgage Asset as the
      Administrative Agent in its discretion deems appropriate to review and such
      review shall be satisfactory to the Administrative Agent in its
      discretion.

    

    (i) Servicing
      Agreements.
      With
      respect to any Eligible Asset to be pledged hereunder on the related Borrowing
      Date that is not serviced by a Borrower, the applicable Borrower shall have
      provided to the Administrative Agent copies of the related Servicing Agreements
      and the Pooling and Servicing Agreements, certified as true, correct and
      complete copies of the originals, together with Servicer Redirection Notices
      fully executed by the applicable Borrower and the Servicer or PSA Servicer,
      as
      applicable, or such other evidence satisfactory to the Administrative Agent
      in
      its discretion that the applicable Servicer or PSA Servicer has been instructed
      to deliver all Income with respect to the Collateral to the Collection Account,
      which instructions may not be modified without the Administrative Agent’s prior
      written consent.

    

    (j) Fees
      and Expenses.
      The
      Administrative Agent shall have received all fees and expenses of the
      Administrative Agent, the Lenders and counsel to the Administrative Agent due
      hereunder and under the Fee Letter and, to the extent the Borrowers are required
      hereunder to reimburse the Administrative Agent for such amounts, the
      Administrative Agent shall have received the reasonable costs and expenses
      incurred by them in connection with the entering into of any Extension of Credit
      hereunder, including, without limitation, costs associated with due diligence
      recording or other administrative expenses necessary or incidental to the
      execution of any transaction hereunder, which amounts, at the Administrative
      Agent’s option, may be withheld from the sale proceeds of any Extension of
      Credit hereunder.

    

    (k) Material
      Adverse Change.
      There
      shall not have occurred a material adverse change in the financial condition
      of
      the Administrative Agent or any Lender that affects (or can reasonably be
      expected to affect) materially and adversely the ability of the Administrative
      Agent or any Lender to fund its obligations under this Agreement, and no
      Material Adverse Effect shall have occurred.

    

    (l) Trust
      Receipt. 
      For each
      Non-Table Funded Mortgage Asset, the Administrative Agent shall have received
      from the Custodian on or before each Borrowing Date a Trust Receipt (along
      with
      a completed Mortgage Asset File Checklist attached thereto) and an Asset
      Schedule and Exception Report with respect to the Basic Mortgage Asset Documents
      for each Eligible Asset, in each case dated the Borrowing Date, duly completed
      and, in the case of the Asset Schedule and Exception Report, with exceptions
      acceptable to the Administrative Agent in its discretion in respect of Eligible
      Assets to be pledged hereunder on such Business Day. In the case of a Table
      Funded Mortgage Asset, the Administrative Agent shall have received on the
      related Borrowing Date the Table Funded Trust Receipt and all other items
      described in the second (2nd) sentence of Section 2.1(b)(i)(6), each in
      form and substance satisfactory to the Administrative Agent in its discretion,
      provided that the Administrative Agent subsequently receives the items described
      in Sections 2.1(b)(i)(4) and (6) and the other delivery requirements under
      the
      Custodial Agreement on or before the date and time specified herein and therein,
      which items shall be in form and substance satisfactory to the Administrative
      Agent in its discretion. In the case of Term Loans, the Custodian shall have
      possession of all Mortgage Loan Documents for the Term Loan Collateral and
      the
      Administrative Agent shall be in receipt of Trust Receipts for the Term Loan
      Collateral and all other conditions under the Custodial Agreement are satisfied
      with respect to such Term Loan Collateral.

    
      
        
        

      

      
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    (m)
       Release
      Letters.
      The
      Administrative Agent shall have received from the applicable Borrower a
      Warehouse Lender’s Release Letter (or such other form acceptable to the
      Administrative Agent), if applicable, or a Borrower’s Release Letter (or such
      other form acceptable to the Administrative Agent) covering each Eligible Asset
      to be pledged to the Administrative Agent.

    

    (n) Covenants
      and Agreements.
      On and
      as of such day, the Credit Parties and the Custodian shall have performed all
      of
      the covenants and agreements and satisfied all other conditions contained in
      the
      Credit Documents to be performed or satisfied by such Person on or prior to
      such
      day.

    

    (o) Irrevocable
      Instruction.
      The
      Administrative Agent shall have received evidence satisfactory to the
      Administrative Agent that, in connection with any Required Payment, the payor
      thereof has been instructed to deliver the Net Cash Proceeds to the Collection
      Account, which instructions may not be modified without the prior written
      consent of the Administrative Agent, and the Borrowers shall have delivered
      all
      notices and instructions and obtained all certifications, acknowledgements,
      agreements and registrations required to perfect any CMBS Security.

    

    (p) Certificates
      of Good Standing.
      If
      applicable and to the extent required for the Administrative Agent or any Lender
      to assert its rights with respect to an Eligible Asset, a certification of
      good
      standing for the Borrowers in each jurisdiction where the Underlying Mortgaged
      Property is located.

    

    (q) Power
      of Attorney.
      To the
      extent there are additional Borrowers other than the initial Borrowers, the
      additional Borrowers shall each deliver to the Administrative Agent a duly
      executed power of attorney in the form attached as Exhibit 4.1(q)(i),
      a
      Joinder Agreement in form and substance satisfactory to the Administrative
      Agent
      in its discretion and all other agreements, documents, certifications, UCC
      financing statements and Opinions of Counsel required of the Borrowers hereunder
      at the Closing Date or under the Joinder Agreement.

    

    (r) Control
      Agreements.
      With
      respect to any Mortgage Asset or collateral for a Mortgage Asset that is an
      uncertificated security (as defined in the UCC), securities entitlement (as
      defined in the UCC) or is held in a securities account (as defined in the UCC),
      the Borrower shall provide to the Administrative Agent a control agreement,
      which shall be acceptable to the Administrative Agent in its discretion and
      shall be delivered to the Custodian under the Custodial Agreement, executed
      by
      the issuer of the Mortgage Asset or the collateral for the Mortgage Asset or
      the
      related securities intermediary (as defined in the UCC), as applicable, granting
      control (as defined in the UCC) of such Mortgage Asset or collateral for such
      Mortgage Asset to the Administrative Agent and providing that, after an Event
      of
      Default, the Administrative agent shall be entitled to notify the issuer or
      securities intermediary, as applicable, that such issuer or securities
      intermediary shall comply exclusively with the instructions or entitlement
      orders (as defined in the UCC), as applicable, of the Administrative Agent
      without the consent of the Borrower or any other Person and no longer follow
      the
      instructions or entitlement orders, as applicable, of the Borrower or any other
      Person (other than the Administrative Agent). All of the Borrowers’ right, title
      and interest in the Mortgage Assets that constitute CMBS Securities shall be
      pledged to the Administrative Agent on the applicable Borrowing Date. The
      Borrowers shall deliver to the Custodian on behalf of the Administrative Agent
      as agent for the Lenders a complete set of all transfer documents to be
      completed by the Administrative Agent as agent for the Lenders and executed
      copies of any transfer documents to be completed by the applicable Borrower,
      in
      either case in blank, but in form sufficient to allow transfer and registration
      of such Mortgage Assets to the Administrative Agent as agent for the Lenders
      no
      later than the proposed Borrowing Date for the relevant Mortgage Asset, and
      such
      CMBS Securities shall be medallion guaranteed. All transfers of certificated
      securities from the Borrowers to the Administrative Agent as agent for the
      Lenders shall be effected by physical delivery to the Custodian of the Mortgage
      Assets (duly endorsed by the applicable Borrower, in blank), together with
      a
      stock power executed by the applicable Borrower, in blank. With respect to
      Mortgage Assets that shall be delivered through the DTC or the National Book
      Entry System of the Federal Reserve or any similar firm or agency, as
      applicable, in book-entry form and credited to or otherwise held in an account,
      the Borrowers shall take such actions necessary to provide instruction to the
      relevant financial institution, clearing corporation, securities intermediary
      or
      other entity to effect and perfect a legally valid delivery of the relevant
      interest granted herein to the Administrative Agent as agent for the Lenders
      hereunder to be held in the Securities Account. Mortgage Assets delivered in
      book-entry form shall be under the custody of and held in the name of the
      Administrative Agent as agent for the Lenders in the Securities Account.

    

    (s) Consents.
      Any and
      all consents, approvals and waivers applicable to the Collateral shall have
      been
      obtained.

    

    (t) Custodial
      Agreement Insurance.
      The
      Administrative Agent shall be in receipt of the evidence of insurance (if any)
      required by Section 9.1 of the Custodial Agreement.

    

    (u) Pledge
      Provisions.
      To the
      extent the Mortgage Loan Documents for the related Eligible Asset contain
      notice, cure and other provisions in favor of a pledgee of the Eligible Asset
      under a repurchase or warehouse facility, the applicable Borrower shall provide
      evidence to the Administrative Agent that the applicable Borrower has given
      notice to the applicable Persons of the Administrative Agent’s interest in such
      Eligible Asset and otherwise satisfied any other applicable requirements under
      such pledgee provisions so that the Administrative Agent is entitled to receive
      the benefits and exercise the rights of a pledgee under the terms of such
      pledgee provisions contained in the related Mortgage Loan
      Documents.

    

    (v) Sub-Limits.
      The
      pledge of any Eligible Asset will not violate any applicable
      Sub-Limit.

    

    (w) Additional
      Conditions for Direct CTL Transactions.
      If the
      Mortgage Asset to be pledged by the Borrowers is a Direct CTL Transaction,
      then
      the following additional conditions shall be satisfied:

    

    (i) The
      Mortgage Asset subject to such Direct CTL Transaction shall have been originated
      and documented by a Borrower as a Whole Loan, an A-1
      Note or
      B Note pursuant to customary credit-tenant lease mortgage loan documentation
      used by the Borrowers, in accordance with the Borrowers’ program standards and
      otherwise

    
      
        
        

      

      
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    satisfactory
      to the Administrative Agent in its discretion (including a note, lease,
      mortgage, pledge, title policy and Authority Documents);

    

    (ii) With
      respect to Direct CTL Transactions involving Whole Loans, the Obligor under
      such
      Mortgage Asset shall be an SPE Subsidiary;

    

    (iii) With
      respect to Direct CTL Transactions involving Whole Loans, the SPE Subsidiary
      shall satisfy the separateness covenants in Section 5.24 of this Agreement,
      the
      SPE Subsidiary’s Authority Documents, corporate structure and all legal matters
      related to the SPE Subsidiary shall be acceptable to the Administrative Agent
      in
      its discretion and, if required by the Administrative Agent in its discretion,
      such SPE Subsidiary shall have an Independent Director; and

    

    (iv) With
      respect to all types of Direct CTL Transactions if required by the
      Administrative Agent in its discretion, the Administrative Agent shall have
      received a “non-consolidation” Opinion of Counsel to the Borrower and the
      Obligor under the Direct CTL Transaction in form and substance satisfactory
      to
      the Administrative Agent in its discretion.

    

    (x) Notice
      of Borrowing.
      The
      Administrative Agent shall have received a Notice of Borrowing with respect
      to
      the Loans to be made on each Borrowing Date, together with all other documents,
      agreements or instruments required by this Section.

    

    (y) Purchase
      Agreements.
      Prior
      to the purchase of any Eligible Asset acquired (by purchase or otherwise)
      by a Borrower from any Affiliate of a Borrower,
      the Administrative Agent shall have received certified copies of the
      applicable Purchase Agreements (if any) and, if requested by
      the Administrative Agent in its discretion, a True Sale
      Opinion.

    

    (z) Documents,
      Reports, Certifications, Etc.
      The
      Administrative Agent shall have received all such other and further documents,
      reports, certifications, approvals and opinions of Counsel as the Administrative
      Agent in its discretion shall reasonably require.

    

    The
      failure of any Credit Party, as applicable, to satisfy any of the foregoing
      conditions precedent in respect of any Extension of Credit shall, unless such
      failure was expressly waived in writing by the Administrative Agent on or prior
      to the related Borrowing Date, give rise to a right of the Administrative Agent,
      which right may be exercised at any time on the demand of the Administrative
      Agent, to rescind the related Extension of Credit and direct the Borrowers
      to
      pay to the Administrative Agent as agent for the Lenders an amount equal to
      the
      outstanding principal amount of such Extension of Credit, accrued interest
      and
      other amounts due in connection therewith during any such time that any of
      the
      foregoing conditions precedent were not satisfied.

    

    Each
      request for an Extension of Credit and each acceptance by the Borrowers of
      any
      such Extension of Credit shall be deemed to constitute representations and
      warranties by the Credit Parties as of the date of the request and as of the
      date of such Extension of Credit that the conditions set forth in Sections
      4.1
      and 4.2 have been satisfied.

     

    ARTICLE
      V

    

    AFFIRMATIVE
      COVENANTS

    

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

    

    Section
      5.1 Financial
      Statements.

    

    Furnish
      to the Administrative Agent and each of the Lenders:

    

    (a) Annual
      Financial Statements.
      As soon
      as available, and in any event within ninety (90) days after the end of
      each fiscal year of the Guarantor and the Borrowers, the audited consolidated
      balance sheets of the Guarantor, the Borrowers and the Guarantor’s and the
      Borrowers’ Consolidated Subsidiaries as at the end of such fiscal year and the
      related consolidated statements of income, of changes in stockholders’ equity
      and of cash flows for the Guarantor, the Borrowers and the Guarantor’s and the
      Borrowers’ Consolidated Subsidiaries for such year, setting forth in each case
      in comparative form the figures for the previous year, accompanied by an opinion
      thereon of independent certified public accountants of recognized national
      standing, which opinion shall not be qualified as to scope of audit or going
      concern and shall state that said consolidated financial statements fairly
      present the consolidated financial condition and results of operations of the
      Guarantor, the Borrowers and the Guarantor’s and the Borrowers’ Consolidated
      Subsidiaries as at the end of, and for, such fiscal year in accordance with
      GAAP;

    

    (b) Quarterly
      Financial Statements.
      As soon
      as available, and in any event within forty-five (45) calendar days after
      the end of each of the first three fiscal quarters of the Guarantor and the
      Borrowers, the unaudited consolidated balance sheets of the Guarantor, the
      Borrowers and the Guarantor’s and the Borrower’s Consolidated Subsidiaries as at
      the end of such period and the related unaudited consolidated statements of
      income, of changes in stockholders’ equity and of cash flows for the Guarantor,
      the Borrowers and the Guarantor’s and the Borrower’s Consolidated Subsidiaries
      for such period and the portion of the fiscal year through the end of such
      period, accompanied by a certificate of a Responsible Officer of the Guarantor
      and the Borrowers, which certificate shall state that said consolidated
      financial statements fairly present in all material respects the consolidated
      financial condition and results of operations of the Guarantor, the Borrowers
      and the Guarantor’s and the Borrowers’ Consolidated Subsidiaries in accordance
      with GAAP, consistently applied, as at the end of, and for, such period (subject
      to normal year-end adjustments);

    
      
        
        

      

      
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    (c) Annual
      Operating Budget and Cash Flow.
      As soon
      as available, but in any event not later than ninety (90) days after the
      end of each fiscal year of the Credit Parties, and provided that the disclosure
      does not violate any Requirement of Law relating to insider trading, a copy
      of
      the projections of the Credit Parties of the operating budget and cash flow
      budget of the Credit Parties, for the succeeding fiscal year, such projections
      to be accompanied by a certificate of a Responsible Officer certifying that
      such
      projections have been prepared in good faith based upon reasonable
      assumptions;

    

    (d) Obligor
      Operating Statement and Rent Rolls.
      With
      respect to each Mortgage Asset, as soon as available, but in any event not
      later
      than thirty (30) days after the end of each fiscal quarter of the Borrowers,
      the
      operating statement and rent roll for each Underlying Mortgaged Property, and
      a
      summary of any delinquent or defaulted Collateral or loss experience for any
      Collateral; provided,
      however,
      the
      Administrative Agent reserves the right in its discretion to request such
      information on a monthly basis (to be provided no later than thirty (30)
      days after the end of each month);

    

    (e) Obligor
      Balance Sheet.
      With
      respect to each Mortgage Asset, as soon as available, but in any event not
      later
      than thirty (30) days after receipt thereof, the annual balance sheet with
      respect to such Obligor; and

    

    (f)  Securitization
      Report.
      With
      respect to each Mortgage Asset, as soon as available but in any event not later
      than thirty (30) days after receipt thereof, (A) the related monthly
      securitization report, if any, and any other reports delivered under any
      Servicing Agreement or Pooling and Servicing Agreements to any Credit Party,
      if
      any, and, (B) within thirty (30) days after the end of each quarter, a copy
      of the standard monthly exception report prepared by any Credit Party in the
      ordinary course of its business in respect of the related Mortgage Asset or
      Underlying Mortgaged Property;

    

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

    

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

    

    Section
      5.2 Certificates;
      Other Information.

    

    The
      Borrowers and the Guarantor shall furnish to the Administrative Agent and each
      of the Lenders:

    

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

    

    (b)  Compliance
      Certificate.
      Concurrently with the delivery of the financial statements referred to in
      Sections 5.1(a) and (b) and in connection with the delivery of each Notice
      of Borrowing and each Extension of Credit, a Compliance Certificate from a
      Responsible Officer of each Credit Party, which Compliance Certificate shall,
      among other things, on a quarterly basis describe in detail the calculations
      supporting the Responsible Officer’s certification of the Guarantor’s and the
      Borrowers’ compliance with the Financial Covenants.

    

    (c) Updated
      Schedules.
      Concurrently with or prior to the delivery of the financial statements referred
      to in Sections 5.1(a) and 5.1(b) above, an updated copy of Schedule 3.3
      and
Schedule 3.12
      if the
      Borrowers or any of their Subsidiaries have formed or acquired a new Subsidiary
      since the Closing Date or since such Schedule was last updated, as
      applicable.

    

    (d) Calculations.
      (i)
      Within ninety (90) days after the end of each fiscal year of the Credit Parties,
      a certificate containing information including the amount of all dividends
      paid, all Investments, Debt Issuances, Equity Issuances and
      Securitizations that
      were
      made or engaged in during the prior fiscal year and amounts received in
      connection with any Extraordinary Receipt during the prior fiscal year, (ii)
      at
      such time as the Administrative Agent shall request and, in any event, within
      five (5) Business Days of the end of each calendar month, a Compliance
      Certificate regarding
      compliance with the Availability and the calculation thereof and/or any update
      that the Administrative Agent may request with respect to the Compliance
      Certificate, and (iii) promptly upon entering into an engagement letter or
      commitment or otherwise documenting any proposed Debt Issuance, Equity Issuance
      or Securitization, a notice containing information regarding any proposed Debt
      Issuance, Equity Issuance or Securitization, including, without limitation,
      the
      parties involved, the expected closing date, the amount to be received in
      connection therewith and such other information as the Administrative Agent
      may
      request in its discretion.

    

    (e) [Reserved].
      

    

    (f) Collateral.
      With
      respect to the Collateral, any future Collateral and the Required Payments,
      any
      and all documents, certificates, agreements, instruments, reports or notices
      received by or available to any Credit Party or any Subsidiary or Affiliate
      within three (3) Business Days of the receipt or availability thereof.

    

    (g) [Reserved].

    
      
        
        

      

      
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    (h) Mortgage
      Asset Data Summary.
      No
      later than the fifteenth (15th) day of each month, with respect to each
      Mortgage Asset, a Mortgage Asset Data Summary, substantially in the form of
      Exhibit
      5.2(h)
      (“Mortgage
      Asset Data Summary”),
      shall
      be properly completed by the Borrowers and delivered to the Administrative
      Agent.

    

    (i) Mortgage
      Assets.
      The
      Borrowers shall promptly deliver or cause to be delivered to the Administrative
      Agent (i) any report or material notice received by any Borrower, any
      Servicer or any PSA Servicer from any Obligor under the Collateral promptly
      following receipt thereof and (ii) any other such document or information
      relating to the Collateral as the Administrative Agent may reasonably request
      in
      writing from time to time.

    

    (j) Underwriting
      Package.
      Promptly, any modifications or additions to the items contained in the
      Underwriting Package.

    

    (k) Reports;
      SEC Filings; Regulatory Reports; Press Releases; Etc.
      Promptly
      upon their becoming available, (i) copies
      of all reports (other than those provided pursuant to Section 5.1 and those
      which are of a promotional nature) and other financial information which any
      Credit Party or any Subsidiary or Affiliate sends to its shareholders,
      (ii) all
      material regulatory reports, (iii) all
      Forms 8-K
      filed
      with the SEC, press releases and other statements made available by any of
      the
      Credit Parties or any Subsidiary or Affiliate to the public concerning material
      developments in the business of any of the Credit Parties and (iv)
      any
      non-routine correspondence or official notices received by any Credit Party
      or
      any Subsidiary or Affiliate of a Credit Party from any Governmental Authority
      which regulates the operations of any Credit Party or any Subsidiary or
      Affiliate of a Credit Party which is reasonably likely to have a Material
      Adverse Effect.

    

    (l) Management
      Letters; Etc.
      Promptly
      upon receipt thereof, a copy or summary of any “management letter” or similar
      report submitted by independent accountants to any Credit Party or
      any of
      their Subsidiaries
      in
      connection with any annual, interim or special audit of the books of such
      Person.

    

    (m) Pledged
      Mortgage Asset Certificate.
      Within
      ten (10) days of the end of each calendar month, the Borrowers shall provide
      the
      Administrative Agent with a monthly report, which report shall include, among
      other items, all proposed repayments, prepayments and sales of the Pledged
      Mortgage Assets, which schedule shall be acceptable to the Administrative Agent
      in its discretion.

    

    (n) General
      Information.
      Promptly, such additional financial and other information as the Administrative
      Agent or any Lender may from time to time reasonably request.

    

    Section
      5.3 Payment
      of Taxes and Other Obligations.

    

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

    

    Section
      5.4 Conduct
      of Business and Maintenance of Existence.

    

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

    

    Section
      5.5 Maintenance
      of Property; Insurance.

    

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

    

    (b) Maintain
      with financially sound and reputable insurance companies liability, casualty,
      property and business interruption in at least such amounts and against at
      least
      such risks as are usually insured against in the same general area by companies
      engaged in the same or a similar business; and furnish to the Administrative
      Agent, upon the request of the Administrative Agent, full information as to
      the
      insurance carried. 

    

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

    

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

    
      
        
        

      

      
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    Section
      5.7 Notices.

    

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

    

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

    

    (b) promptly,
      (i) any default or event of default under any Contractual Obligation,
      Indebtedness or Guarantee Obligation of any Credit Party or any of its
      Subsidiaries which, individually or in the aggregate, could reasonably be
      expected to have a Material Adverse Effect or involve a monetary claim in excess
      of $1,000,000, (ii) any material default or event of default (beyond any
      applicable notice and cure period) related to any Collateral or Required Payment
      or (iii) any default or event of default under any Credit Party-Related
      Obligations.

    

    (c) promptly,
      any litigation, or any investigation or proceeding known or threatened to any
      Credit Party (i) affecting any Credit Party or any of its Subsidiaries
      which, individually or in the aggregate, could reasonably be expected to have
      a
      Material Adverse Effect or involve a monetary claim in excess of $750,000 or
      involving injunctions or requesting injunctive relief by or against any Credit
      Party or any Subsidiary of any Credit Party, (ii) affecting or with respect
      to this Agreement, any other Credit Document, any security interest or Lien
      created under any Security Document, any Collateral or any Required Payment,
      (iii) involving an environmental claim or potential liability under
      Environmental Laws which could reasonably be expected to have, individually
      or
      in the aggregate, a Material Adverse Effect, or (iv) by any Governmental
      Authority relating to the Credit Parties or any Subsidiary thereof and alleging
      fraud, deception or willful misconduct by such Person;

    

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

    

    (e) of
      any
      attachment, judgment, levy or order exceeding $750,000 that may be assessed
      against or threatened against any Credit Party, or of any Lien or claim asserted
      against any Collateral, other than Permitted Liens;

    

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

    

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

    

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

    

    (i) promptly
      upon notice or knowledge thereof, notice of any change in Caplease Inc.’s status
      as a REIT or Caplease Inc.’s membership or good standing on any recognized
      securities exchange; 

    

    (j) promptly
      upon notice or knowledge thereof, notice of the conveyance, sale, lease (other
      than minor lease amendments that do not impact economic terms including
      maturity), assignment, transfer or other disposition (any such transaction,
      or
      related series of transactions, a “Sale”)
      of any
      Property, business or assets of any
      Credit Party
      or any
      Subsidiary whether now owned or hereafter acquired, with the exception of
      (A) this Agreement and (B) any Sale of Property by any
      Credit Party or any Subsidiary
      that is
      not material to the conduct of its business and is effected in the ordinary
      course of business;

    

    (k) promptly
      upon notice or knowledge thereof, notice of the establishment of a rating
      assigned to the long-term unsecured debt issued by any
      Credit Party
      by
      Moody’s or S&P (or other rating agency acceptable to the Administrative
      Agent) and of any downgrade in such rating once established; 

    

    (l) with
      respect to any Collateral hereunder, promptly upon receipt of notice or
      knowledge that the Underlying Mortgaged Property has been damaged by waste,
      fire, earthquake or earth movement, flood, tornado or other casualty, or
      otherwise damaged so as to affect adversely the Asset Value of such Collateral;
      

    

    (m) promptly
      upon notice or knowledge thereof, provide written notice to the Administrative
      Agent of any loss, expected loss or material change in the value of any
      Collateral, any Required Payment, any Property or asset of any Credit Party
      or a
      Subsidiary (to the extent that such loss with respect to any such Property
      or
      asset could reasonably be expected to have a Material Adverse Effect), or any
      other event or change in circumstances or expected event or change in
      circumstances that could reasonably be expected to result (A) in a default
      with
      respect to any Mortgage Asset included in the Collateral, or (B) in a material
      decline in value or cash flow of any Collateral, any Underlying Mortgaged
      Property for any Collateral, any Required Payment or any Property or asset
      of a
      Credit Party or a Subsidiary (to the extent that such event or change with
      respect to any such Property or asset could reasonably be expected to have
      a
      Material Adverse Effect); 

    

    (n) the
      Borrowers shall provide written notice to the Administrative Agent at least
      ten (10) days prior to any Credit Party or any Affiliate or Subsidiary
      thereof acquiring any interest that would be senior in priority to any existing
      Mortgage Asset that is included in the Collateral; 

    
      
        
        

      

      
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    (o) promptly
      upon notice or knowledge thereof, notice of the termination of any Servicer
      under any Servicing Agreement relating to any Collateral or of any PSA Servicer
      under any Pooling and Servicing Agreement;

    

    (p) promptly
      upon notice of knowledge thereof notice that any representation or warranty
      set
      forth in Schedule 1.1(c) to this Agreement is or was not satisfied in any
      material respect at any time; and

    

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

    

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

    

    Section
      5.8 Environmental
      Laws.

    

    (a) Except
      as
      could not reasonably be expected, either individually or in the aggregate,
      to
      have a Material Adverse Effect, comply with, and ensure compliance in all
      material respects by all tenants and subtenants, if any, with, all applicable
      Environmental Laws and obtain and comply with and maintain, and ensure that
      all
      tenants and subtenants obtain and comply with and maintain, any and all
      licenses, approvals, notifications, registrations or permits required by
      applicable Environmental Laws;

    

    (b) Except
      as
      could not reasonably be expected, either individually or in the aggregate,
      to
      have a Material Adverse Effect, conduct and complete all investigations,
      studies, sampling and testing, and all remedial, removal and other actions
      required under Environmental Laws and promptly comply with all lawful orders
      and
      directives of all Governmental Authorities regarding Environmental Laws except
      to the extent that the same are being contested in good faith by appropriate
      proceedings; and

    

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

    

    Section
      5.9 Financial
      Covenants.

    

    The
      Borrowers and the Guarantor, as applicable, shall comply with the following
      Financial Covenants:

    

    (a) Maintenance
      of Liquidity.
      The
      Borrowers and the Guarantor (collectively) shall not permit, for any calendar
      quarter, Liquidity for such Test Period to be less than $8,000,000, at least
      $6,000,000 of
      which
      shall consist of cash or Cash Equivalents; and

    

    (b) Maintenance
      of Consolidated Tangible Net Worth.
      The
      Guarantor shall not permit, for any Test Period, Consolidated Tangible Net
      Worth
      at any time to be less than the sum of (i) $180,000,000 plus
      (ii) an amount equal to 75% of the aggregate proceeds received by the
      Guarantor in connection with the offering or issuance of any Equity Interests
      of
      the Guarantor or any Borrower or the receipt of any capital contributions,
      in
      each case net of any reasonable and customary brokerage commissions,
      underwriting fees and discounts, legal fees, finder’s fees and other similar
      fees, costs and commissions that, in each case, are actually paid in connection
      therewith in cash to a Person that is not a Subsidiary or Affiliate of Guarantor
      or any of their Subsidiaries or Affiliates after September 22,
      2004.

    

    Section
      5.10 Additional
      Credit Parties.

    

    (a)
       Additional
      Borrowers.
      To the
      extent any new Borrower is approved by the Administrative Agent, in its
      discretion, the Credit Parties shall deliver to the Administrative Agent, with
      respect to each new Borrower to the extent applicable, substantially the same
      documentation required pursuant to Sections 4.1 and 5.12 and such other
      documents or agreements as the Administrative Agent may reasonably request,
      including without limitation a Borrower Joinder Agreement.

    

    (b) Additional
      Guarantors.
      To the
      extent any new Guarantor is approved by the Administrative Agent, in its
      discretion, the Credit Parties shall deliver to the Administrative Agent, with
      respect to each new Guarantor to the extent applicable, substantially the same
      documentation required pursuant to Sections 4.1 and 5.12 and such other
      documents or agreements as the Administrative Agent may reasonably request,
      including without limitation a Guarantor Joinder Agreement.

    

    Section
      5.11 Compliance
      with Law.

    

    (a) Comply
      with all Requirements of Law (including Environmental Laws and Securities Laws)
      and all applicable restrictions imposed by all Governmental Authorities,
      applicable to it and the Collateral.

    
      
        
        

      

      
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        (b)
          Comply
          in
          all material respects with all Contractual Obligations, all Indebtedness
          and all
          Guarantee Obligations.

      

    

    

    Section
      5.12 Pledged
      Assets.

    

    With
      respect to the Collateral, the Credit Parties shall (a)
      take
      all action necessary to perfect, protect and more fully evidence the
      Administrative Agent’s first priority perfected security interest in the
      Collateral, including, without limitation, (i) filing
      and maintaining effective financing statements against the Borrowers and other
      Credit Parties, as applicable in all necessary or appropriate filing offices,
      and filing continuation statements, amendments or assignments with respect
      thereto in such filing offices, (ii) executing
      or causing to be executed such other instruments, notices or control agreements
      as may be necessary or appropriate, and (iii) to
      the extent that anyone other than Wachovia is the Administrative Agent, entering
      into a new Account Control Agreement and Securities Account Control Agreement,
      and (b) taking
      all additional action that the Administrative Agent may reasonably request
      to
      perfect, protect and more fully evidence the respective interests of the parties
      to this Agreement and the Credit Documents in such Collateral. To the extent
      any
      Collateral is created or comes into existence after the Closing Date, the Credit
      Parties shall take such actions as the Administrative Agent shall require to
      obtain a first priority perfected security interest in such
      Collateral.

    

    Section
      5.13 Interest
      Rate Protection Agreements.

    

    Each
      Credit Party shall perform its duties and obligations under and shall otherwise
      maintain any existing Interest Rate Protection Agreements to which it is a
      party. 

    

     Section
      5.14 Control
      Agreements.

    

    The
      Borrowers shall maintain the Account Control Agreement and the Securities
      Account Control Agreement in full force and effect and shall not amend or modify
      the Account Control Agreement or the Securities Account Control Agreement or
      waive compliance with any provisions thereunder without the prior written
      consent of the Administrative Agent.

    

    Section
      5.15 Further
      Assurances.

    

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

    

    (b) Additional
      Information.
      The
      Credit Parties shall provide such information regarding the operations, business
      affairs and financial condition of the Credit Parties or any of their
      Subsidiaries or Affiliates as the Administrative Agent or any Lender may
      reasonably request.

    

    (c) Visits
      and Inspections.
      The
      Credit Parties shall permit representatives of the Administrative Agent or
      any
      Lender, from time to time upon prior reasonable notice and at such times during
      normal business hours, to visit and inspect its Properties; inspect, audit
      and
      make extracts from its books, records and files, including, but not limited
      to,
      management letters prepared by independent accountants; and discuss with its
      principal officers, and its independent accountants, its business, assets,
      liabilities, financial condition, results of operations and business prospects.
      Upon the occurrence and during the continuance of an Event of Default, the
      Administrative Agent or any Lender may do any of the foregoing at any time
      without advance notice. 

    

    (d) Lender
      Intercreditor Agreement.
      The
      Credit Parties shall acknowledge and agree to the Lender Intercreditor Agreement
      to the extent the Administrative Agent deems that such Lender Intercreditor
      Agreement is necessary. 

    

    Section
      5.16 Performance
      and Compliance with Collateral. 

    

    The
      Credit Parties shall, at their expense, timely and fully perform and comply
      (and
      shall cause their Consolidated Subsidiaries, the Transferors, the Servicers
      and
      the PSA Servicers to timely and fully perform and comply) with all provisions,
      covenants and other promises required to be observed by them under the
      Collateral and all other agreements related to such Collateral.

    

    Section
      5.17 Delivery
      of Income and Required Payments. 

    

    The
      Credit Parties shall deposit, and shall cause the other Credit Parties, each
      of
      their Subsidiaries and all other Persons to deposit, all Income, Required
      Payments and other amounts payable to the Borrowers or the other Credit Parties
      in respect of the Collateral or payable to any Credit Party or Subsidiary or
      Affiliate in respect of any Required Payment into the Collection Account within
      two (2) Business Days of such Person’s receipt thereof. The Borrowers and
      the Credit Parties shall deposit, or cause to be deposited, into the Collection
      Account, on or before the date required by the Credit Documents, all other
      amounts required by the terms of the Credit Documents. The Credit Parties shall
      provide the Administrative Agent with fully executed copies of all Irrevocable
      Instructions required by this Agreement. The Credit Parties shall take steps
      necessary to enforce such Irrevocable Instructions and shall immediately inform
      the Administrative Agent of, and rectify any default, breach, failure or
      unwillingness to perform thereunder, any dispute or controversy in connection
      therewith or any other matter that may, could or will result in payments not
      being made as contemplated under the terms of such Irrevocable Instructions.
      The
      Credit Parties shall not, and shall not permit any Credit Party or any
      Subsidiary or Affiliate to, modify or revoke or permit any modifications or
      revocations of the Irrevocable Instructions without the Administrative Agent’s
      prior written consent in its discretion. The Borrowers and the Credit Parties
      shall deliver such other Irrevocable Instructions as the Administrative Agent
      may require in its discretion. All distributions from the Collection Account
      and
      the

    
      
        
        

      

      
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    Securities
      Account shall be made solely in accordance with the terms, provisions and
      conditions of this Agreement, the Account Control Agreement and the Securities
      Account Control Agreement.

    

    Section
      5.18 Exceptions. 

    

    The
      Borrowers shall promptly correct any and all Exceptions set
      forth
      on any Asset
      Schedule and Exception Report.

    

    Section
      5.19 Distributions
      in Respect of Collateral. 

    

    If
      the
      Credit Parties or any Subsidiary or Affiliate shall receive any rights, whether
      in addition to, in substitution of, as a conversion of, or in exchange for
      any
      Collateral, or otherwise in respect thereof, the Credit Parties shall accept
      the
      same as the Administrative Agent’s agent, hold the same in trust for the
      Administrative Agent and deliver the same forthwith to the Administrative Agent
      (or its designee) in the exact form received, together with duly executed
      instruments of transfer, assignments in blank, executed and undated stock powers
      in blank and such other documentation as the Administrative Agent shall
      reasonably request. If any sums of money or property are paid or distributed
      in
      respect of the Collateral (other than the Obligor Reserve Payments) and received
      by any Credit Party or any Subsidiary or Affiliate, the Credit Parties shall
      promptly pay or deliver, or caused to be paid or delivered, such money or
      property to the Administrative Agent and, until such money or property is so
      paid or delivered to the Administrative Agent, hold such money or property
      in
      trust for the Administrative Agent, segregated from other funds of the Credit
      Parties, their Subsidiaries and Affiliates and other Persons.

    

    Section
      5.20 REIT
      Status. 

    

    Caplease
      Inc. shall at all times continue to be (i)
      qualified as a REIT as defined in Section 856 of the Code without giving
      any effect to any cure or corrective periods or allowances, (ii)
      entitled to a dividends paid deduction under Section 857 of the Code with
      respect to dividends paid by it with respect to each taxable year for which
      it
      claims a deduction on its Form 1120-REIT filed with the United States Internal
      Revenue Service for such year, or the entering into by it of any material
“prohibited transactions” as defined in Sections 857(b) and 856(c) of the
      Code, and (iii) a
      publicly traded company listed, quoted or traded on and in good standing in
      respect of any Stock Exchange.  

    

    Section
      5.21 Issuances. 

    

    Subject
      to Section 2.5(b), with respect to each Debt Issuance, Equity Issuance or
      Securitization engaged in by any Credit Party or any Subsidiary or Affiliate
      of
      a Credit Party, the Credit Parties and their Subsidiaries and Affiliates shall
      (a)
      not
      transfer or grant any Lien or encumbrance on its rights to the Net Cash Proceeds
      therof (other than Permitted Liens), (b)
      execute
      and comply and cause all other Persons to execute and comply with Irrevocable
      Instructions to require the Net Cash Proceeds to be paid directly to the
      Collection Account and not to any Credit Party, any Subsidiary or Affiliate
      of a
      Credit Party or any other Person, (c)
      enforce
      its rights to the Net Cash Proceeds and (d)
      immediately notify the Administrative Agent in writing of any provision of
      this
      covenant is not satisfied or is breached in any respect. Subject to Section
      2.5(b), with respect to any Debt Issuance, Equity Issuance or Securitization
      engaged in by a Subsidiary of a Credit Party, the Credit Parties shall
      (a)
      not
      transfer or grant any Lien or encumbrance on any rights to the dividends,
      distributions and payments from the Subsidiary (other than Permitted Liens),
      (b)
      execute
      and comply and cause the Subsidiary to execute and comply with Irrevocable
      Instructions to cause the dividends, distributions and other payments from
      such
      Subsidiary to be paid directly to the Collection Account and not to the Credit
      Parties or any other Person, (c)
      provide
      the Administrative Agent with all documents related to such Debt Issuance,
      Equity Issuance or Securitization, (d)
      enforce
      its rights to dividends, distributions and other payments from the Subsidiary,
      (e)
      not
      amend the Authority Documents for such Subsidiary without the Administrative
      Agent’s consent in its discretion and (f)
      immediately notify the Administrative Agent in writing if any provision of
      this
      covenant is not satisfied or is breached in any respect.

    

    Section
      5.22 Remittance
      of Prepayments. 

    

    The
      Borrowers shall remit or cause to be remitted to the Administrative Agent,
      with
      sufficient detail, via Electronic Transmission, to enable the Administrative
      Agent to appropriately identify the Collateral to which any amount remitted
      applies, all full or partial principal prepayments (regardless of the source
      of
      repayment) on any Collateral that a Borrower, a Servicer or a PSA Servicer
      has
      received or that have been deposited into the Collection Account no later than
      two (2) Business Days following the date such prepayment was received or
      deposited.

    

    Section
      5.23 Escrow
      Imbalance. 

    

    The
      Borrowers shall (to the extent it is acting as a servicer) or shall cause the
      Servicer to, no later than five (5) Business Days after learning (from any
      source) of any material imbalance in any reserve or escrow account related
      to
      any Collateral, fully and completely correct and eliminate such imbalance,
      including, without limitation, depositing its own funds into such account to
      eliminate any overdraw or deficit, to the extent required by the applicable
      Servicing Agreement (in the case of a Servicer). 

    

    Section
      5.24 Separateness. 

    

    Notwithstanding
      any term contained in this Agreement or the other Credit Documents to the
      contrary, each SPE Subsidiary shall (a)
      own no
      assets other than Commercial Real Estate and assets ancillary to the ownership
      thereof that is pledged as security for the Direct CTL Transaction involving
      a
      Whole Loan, which Whole Loan is pledged
      to the Administrative Agent as Collateral, and shall not engage in any business,
      other than the operation of such assets; (b)
      not
      incur any Indebtedness or obligation, secured or unsecured, direct or indirect,
      absolute or contingent (including guaranteeing any obligation), other than
      (i)
      Mortgage Loan Documents for the Whole Loan that is pledged to the Administrative
      Agent as Collateral, (ii)
      customary representations, warranties, indemnities and other agreements under
      the Mortgage Loan Documents for the Whole Loan that is pledged to the
      Administrative Agent as Collateral, and (iii)
      obligations under zoning and other governmental regulations, rules, prohibitions
      and ordinances and proposed restrictions, covenants, conditions, limitations,
      easements, rights-of-way and other matters existing of public record or proposed
      to be recorded or filed in the future governing or affecting mortgaged real
      Property or that may otherwise require the consent of or joinder by a mortgagee;
      (c)
      not
      make any loans or advances to any Affiliate and shall not
      acquire

    
      
        
        

      

      
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    obligations
      or securities of its Affiliates; (iv) pay its debts and liabilities
      (including, as applicable, shared personnel and overhead expenses) only from
      its
      own assets; (d)
      comply
      with the provisions of its Authority Documents; (vi) do all things
      necessary to observe organizational formalities and to preserve its existence,
      and will not amend, modify or otherwise change its Authority Documents without
      the consent of the Administrative Agent; (e)
      maintain all of its books, records, financial statements and bank accounts
      separate from those of its Affiliates (except that such financial statements
      may
      be consolidated to the extent consolidation is required under the GAAP
      consistently applied or as a matter of the Requirements of Law) and file its
      own
      tax returns (except to the extent consolidation is required or permitted under
      Requirements of Law); (f)
      be, and
      at all times will hold itself out to the public as, a legal entity separate
      and
      distinct from any other entity (including any Affiliate), shall correct any
      known misunderstanding regarding its status as a separate entity, shall conduct
      business in its own name, and shall not identify itself or any of its Affiliates
      as a division of the other; (g)
      maintain adequate capital for the normal obligations reasonably foreseeable
      in a
      business of its size and character and in light of its contemplated business
      operations; (h)
      not
      engage in or suffer any change of ownership, dissolution, winding up,
      liquidation, consolidation or merger in whole or in part; (i)
      not
      commingle its funds or other assets with those of any Affiliate or any other
      Person; (j)
      maintain its accounts separate from those of any Affiliate or any other Person;
      (k)
      shall
      not hold itself out to be responsible for the debts or obligations of any other
      Person; (l)
      shall
      not, except in accordance with its organizational documents and without the
      vote
      of its Independent Director (to the extent an Independent Director is required
      by the Administrative Agent in its discretion at the time the related Whole
      Loan
      is pledged to the Administrative Agent as Collateral), (i)
      file or
      consent to the filing of any Insolvency Proceeding with respect to itself,
      institute any proceedings under any applicable Insolvency Law or otherwise
      seek
      any relief under any Requirements of Law relating to the relief from debts
      or
      the protection of debtors generally with respect to itself, (ii)
      seek or
      consent to the appointment of a receiver, liquidator, assignee, trustee,
      sequestrator, custodian or any similar official for itself or a substantial
      portion of its properties, or (iii)
      make
      any assignment for the benefit of it’s creditors; (m)
      to the
      extent required by the Administrative Agent in its discretion at the time the
      related Whole Loan is pledged to the Administrative Agent as Collateral, shall
      have at all times at least one (1) Independent Director (or such greater
      number as required by the Administrative Agent or the Rating Agencies);
      (n)
      shall
      maintain an arm’s length relationship with its Affiliates; (o)
      maintain a sufficient number of employees in light of contemplated business
      operations; (p)
      use
      separate stationary, invoices and checks; and (q)
      allocate fairly and reasonably any overhead for shared office space.

    

    Section
      5.25 Registration
      of Securities. 

    

    In
      the
      case of any Pledged Mortgage Asset not physically delivered to the
      Administrative Agent as agent for the Lenders (or the Custodian on its behalf)
      unless otherwise consented to by the Administrative Agent, the Borrowers shall
      maintain, or cause to be maintained, each of the Securities (as defined in
      the
      UCC) with either DTC or with the National Book Entry System of the Federal
      Reserve, DTC or any similar firm or agency, as applicable, in the name of the
      Administrative Agent as agent for the Lenders.

    

    Section
      5.26 Termination
      of Securities Account. 

    

    Upon
      the
      Borrowers’ receipt of notice from any securities intermediary (as defined in the
      UCC) of its intent to terminate any securities account (as defined in the UCC)
      of the Borrowers held by such securities intermediary and relating to a Pledged
      Mortgage Asset or collateral for a Pledged Mortgage Asset, prior to the
      termination of such securities account the collateral in such account
      (a)
      shall
      be transferred to a new securities account, upon the request of the
      Administrative Agent, which shall be subject to an executed control agreement
      as
      provided in Section 5.12 of this Agreement or (b)
      transferred to an account held by the Administrative Agent as agent for the
      Lenders in which such collateral will be held until a new securities account
      is
      established with an executed control agreement acceptable to the Administrative
      Agent in its discretion.

    

    Section
      5.27 Independence
      of Covenants. 

    

    All
      covenants contained in this Agreement shall be given independent effect so
      that
      if a particular action or condition is not permitted by any of such covenants,
      the fact that it would be permitted by an exception to, or be otherwise within
      the limitations of, another covenant shall not avoid the occurrence of an
      Default or Event of Default if such action is taken or condition
      exists.

    

    Section
      5.28 ERISA.

    

    Each
      Borrower and the Guarantor shall, and each shall cause each of its Subsidiaries
      to, comply in all material respects with all requirements of ERISA applicable
      with respect to each Plan. 

    

    Section
      5.29 Mortgage
      Assets. 

    

    The Borrowers
      shall (i) acquire the Mortgage Assets pursuant to and in accordance with
      the terms of the Purchase Agreements (if applicable), (ii) take all action
      necessary to perfect, protect and more fully evidence the Borrowers'
      ownership of such Mortgage Assets under the Purchase Agreements (if any) free
      and clear of any Lien other than Permitted Liens, including, without limitation,
      (A) filing and maintaining effective financing statements against the
      Transferors in all necessary or appropriate filing offices, and filing
      continuation statements, amendments or assignments with respect thereto in
      such
      filing offices, and (B) executing or causing to be executed such other
      instruments or notices as may be necessary or appropriate, and (iii) take
      all additional action that the Administrative Agent may reasonably request
      to perfect, protect and more fully evidence the respective interests of the
      parties to this Agreement in the Collateral.

     

    ARTICLE
      VI

    

    NEGATIVE
      COVENANTS

    

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

    
      
        
        

      

      
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    Section
      6.1 Indebtedness.

    

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

    

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

    

    (b) Indebtedness
      of the Credit Parties and their Subsidiaries existing as of the Closing Date
      as
      referenced in the financial statements referenced in Section 3.1 (and set
      out more specifically in Schedule 6.1(b)
      hereto)
      and any renewals, refinancings or extensions thereof in a principal amount
      not
      in excess of that outstanding as of the date of such renewal, refinancing or
      extension; 

    

    (c) Indebtedness
      of the Credit Parties and their Subsidiaries incurred after the Closing Date
      to
      acquire Mortgage Assets or provide funding thereunder;

    

    (d) Indebtedness
      and obligations owing under Interest Rate Protection Agreements entered into
      in
      order to manage existing or anticipated interest rate, exchange rate or
      commodity price risks related to the Mortgage Assets and not for speculative
      purposes; and

    

    (e) Indebtedness
      arising out of the acquisition or financing of real estate or real
      estate-related
      assets after the Closing Date. 

    

    Section
      6.2 Liens.

    

    The
      Credit Parties and the Subsidiaries and Affiliates shall not sell, pledge,
      assign or transfer to any other Person, or grant, create, incur, assume, suffer
      or permit to exist any Lien on all or any portion of the Collateral or the
      Required Payments, other than Permitted Liens, whether now existing or hereafter
      transferred hereunder, or any interest therein, and the Credit Parties and
      the
      Subsidiaries and Affiliates shall not sell, pledge, assign or suffer to exist
      any Lien, or any circumstance which, if adversely determined, would be
      reasonably likely to give rise to a Lien, on its interest, if any, hereunder
      or
      under the other Credit Documents. Immediately upon notice to any Credit Party
      of
      a Lien or any circumstance which, if adversely determined would be reasonably
      likely to give rise to a Lien (other than in favor of the Administrative Agent
      or created by or through the Administrative Agent), on all or any portion of
      the
      Collateral or the Required Payments, the Borrowers shall notify the
      Administrative Agent and the Borrowers shall further defend the Collateral
      and
      the Required Payments against, and will take such other action as is necessary
      to remove, any Lien or claim on or to the Collateral or the Required Payments
      (other than any Permitted Liens created under this Agreement and the Credit
      Documents), and the Borrowers shall defend the right, title and interest of
      the
      Credit Parties and their Subsidiaries and Affiliates in and to any of the
      Collateral and the Required Payments against the claims and demands of all
      Persons whomsoever. Notwithstanding the foregoing, if a Credit Party or any
      Subsidiary or Affiliate shall grant a Lien on any of the Collateral or Required
      Payments in violation of this Section, then it shall be deemed to have
      simultaneously granted an equal and ratable Lien on any such Collateral or
      Required Payments in favor of the Administrative Agent for the ratable benefit
      of the Lenders to the extent such Lien has not already been granted to the
      Administrative Agent.

    

    Section
      6.3 Nature
      of Business.

    

    No
      Credit
      Party will, nor will it permit any Subsidiary to, alter the character of its
      business in any material respect from that conducted as of the Closing Date.
      The
      Borrowers shall not engage in any activity other than activities specifically
      permitted by this Agreement, including, but not limited to, investment in
      mortgage loans, mezzanine loans, participations and other real estate related
      assets and the purchasing, financing and holding of commercial mortgage-backed
      securities, collateralized debt obligation securities and activities incident
      thereto.

    

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

    

    No
      Credit
      Party shall enter into any transaction of merger or consolidation or
      amalgamation, or liquidate, wind up or dissolve itself (or suffer any
      liquidation, winding up or dissolution) or sell all or substantially all of
      its
      assets; provided,
      however,
      that
      any Credit Party may merge or consolidate with (i) any wholly owned
      Subsidiary of such Credit Party, or (ii) any other Person if a Credit Party
      is the surviving entity; and provided,
      further,
      that,
      if after giving effect thereto, no Default or Event of Default would exist
      hereunder.

    

    Section
      6.5 Advances,
      Investments and Loans.

    

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

    

    Section
      6.6 Transactions
      with Affiliates.

    

    Unless
      otherwise approved in writing by the Administrative Agent in its discretion,
      the
      Credit Parties will not, nor will they permit any Subsidiary to, enter into
      any
      transaction or series of transactions, whether or not in the ordinary course
      of
      business, with any officer, director, shareholder or Affiliate other than on
      terms and conditions substantially as favorable as would be obtainable in a
      comparable arm’s-length transaction with a Person that is not an officer,
      director, shareholder or Affiliate; provided,
      however,
      that in
      no event shall the Borrowers pledge to the Administrative Agent
      hereunder any Eligible Asset acquired by the Borrowers from an Affiliate of
      the Borrowers unless the Borrowers shall have delivered to
      the Administrative Agent prior to the Borrowing Date a certified
      copy of the related Purchase Agreement and, if requested by
      the Administrative Agent in its discretion, a True Sale
      Opinion.

    
      
        
        

      

      
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    Section
      6.7 Ownership
      of Subsidiaries; Restrictions.

    

    Except
      in
      connection with a Permitted Investment or Permitted Indebtedness, the Credit
      Parties shall not create or own Subsidiaries without the Administrative Agent’s
      consent in its discretion. Except in connection with a Permitted Investment
      (other than Direct CTL Transactions involving Whole Loans) or Permitted
      Indebtedness (other than Direct CTL Transactions involving Whole Loans), the
      Credit Parties will not sell, transfer, pledge or otherwise dispose of any
      Equity Interest or other equity interests in any of their Subsidiaries, nor
      will
      they permit any of their Subsidiaries to issue, sell, transfer, pledge or
      otherwise dispose of any of their Equity Interest or other equity interests,
      except in a transaction permitted by Section 6.4. 

    Section
      6.8 Corporate
      Changes; Material Contracts.

    

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

    

    Section
      6.9 Limitation
      on Restricted Actions.

    

    The
      Credit Parties will not, nor, in connection with clauses (a) through (d) below
      will they permit any Subsidiary to, directly or indirectly, create or otherwise
      cause or suffer to exist or become effective any Lien or restriction on the
      ability of any such Person to
      (a) other than dividends to the Guarantor by direct or indirect
      Subsidiaries of the Guarantor, pay
      dividends or make any other distributions to any Credit Party on its Equity
      Interest or with respect to any other interest or participation in, or measured
      by, its profits,
      (b) other than in connection with Direct CTL Transactions that are pledged
      to the Administrative Agent under this Agreement, pay
      any
      Indebtedness or other obligation owed to any Credit Party,
      (c) other than in connection with Permitted Investments or Permitted
      Indebtedness,
      make
      loans or advances to any Credit Party,
      (d) sell,
      lease or transfer any of its Properties to any Credit Party, or
      (e) act
      as a
      Borrower or Guarantor, to obtain loans or to pledge its assets pursuant to
      the
      Credit Documents or any renewals, refinancings, exchanges, refundings or
      extension thereof, except (in respect of any of the matters referred to in
      clauses (a)-(d) above) for such Liens or restrictions existing under or by
      reason of (i) this Agreement and the other Credit Documents or
      (ii) Requirements of Law.

    

    Section
      6.10 Restricted
      Payments.

    

    Except
      as
      otherwise required or permitted by the Credit Documents, no Credit Party shall
      declare or make any payment on account of, or set apart assets for, a sinking
      or
      other analogous fund for the purchase, redemption, defeasance, retirement or
      other acquisition of any Equity Interest of any Credit Party whether now or
      hereafter outstanding, or make any other distribution in respect thereof, either
      directly or indirectly, whether in cash or Property or in obligations of
any
      Credit Party,
      except
      that a Credit Party may (a)
      declare
      and pay dividends in an amount necessary to maintain its status as a REIT and
      (b)
      declare
      and pay dividends in accordance with its Authority Documents and redeem Equity
      Interests of Caplease in June 2008, provided (i)
      there
      is no Default or Event of Default, (ii)
      no
      mandatory prepayments obligation is outstanding and (iii)
      the
      distribution will not violate any Financial Covenant. 

    

    Section
      6.11 Sub-Limits.

    

    The
      Borrowers shall not pledge to the Administrative Agent any Eligible Assets
      if,
      after such pledge a Sub-Limit would be exceeded, unless waived in writing by
      the
      Administrative Agent in its discretion.

    

    Section
      6.12 No
      Further Negative Pledges.

    

    None
      of
      the Credit Parties or any of their Subsidiaries shall grant, allow or enter
      into
      any agreement or arrangement with any Person that prohibits or restricts, or
      purports to prohibit or restrict, the granting of any Lien or other encumbrance
      on any of the assets or Properties of the Credit Parties or their Subsidiaries;
      provided,
      however,
      that
      the foregoing shall not apply to (i) the negative pledge contained in
      Section 6.18, (ii) Indebtedness identified on Schedule
      6.1(b) or
      (iii) any other negative pledge or grant of any Lien or other encumbrance
      approved by the Administrative Agent in its discretion.

    

    Section
      6.13 Collateral
      Not to be Evidenced by Instruments. 

    

    No
      Credit
      Party shall take any action to cause all or any portion of the Collateral that
      is not, as of the applicable Borrowing Date, evidenced by an
      Instrument to
      be so
      evidenced except, with the Administrative Agent’s consent, in connection with
      the enforcement or collection of such Collateral.

    

    Section
      6.14 Deposits.

    
      
        
        

      

      
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    The
      Credit Parties will not deposit or otherwise credit, or cause or permit to
      be so
      deposited or credited, to the Collection Account or Securities Account cash
      or
      cash proceeds other than (i) in the case of the Collection Account, Income
      in
      respect of Collateral,
      Cash Collateral and other payments required to be deposited therein under the
      Credit Documents, and (ii) in the case of the Securities Account, the CMBS
      Securities that are Mortgage Assets and other Collateral related thereto (except
      those CMBS Securities that are certificated securities within the meaning of
      Article 8 of the UCC).

    

    Section
      6.15 Servicing
      Agreements. 

    

    The
      Credit Parties will not materially amend, modify, waive or terminate any
      provision of any Purchase Agreement, Servicing Agreement or Pooling and
      Servicing Agreement without the prior written consent of the Administrative
      Agent. Notwithstanding the foregoing, but subject to the Administrative Agent’s
      rights under Article IX,
      the
      Borrowers shall have the right to terminate any of the foregoing upon the
      occurrence of a material default (beyond any applicable notice and cure period)
      of the other party thereto.

    

    Section
      6.16 Extension
      or Amendment of Collateral. 

    

    Except
      as
      provided in Section 9.7 or unless otherwise agreed to by the Administrative
      Agent in its discretion, the Credit Parties will not extend, amend, waive or
      otherwise modify, or permit any Servicer or PSA Servicer (except as provided
      in
      a Pooling and Servicing Agreement) to extend, amend, waive or otherwise modify
      the material terms of any Collateral or the Mortgage Loan Documents related
      thereto or to exercise the material rights of a holder of said Collateral.
      Unless otherwise agreed to by the Administrative Agent in its discretion, the
      Credit Parties, the Servicers and the PSA Servicers (except as provided in
      a
      Pooling and Servicing Agreement) shall have no right to waive, amend, modify
      or
      alter the material terms of any Collateral or the related Mortgage Loan
      Documents thereto or otherwise exercise any material right of the holder of
      any
      Collateral. The Administrative Agent agrees to promptly consider any request
      for
      consent under this Section 6.16.

    

    Section
      6.17 Stock
      Repurchase. 

    

    Except
      as
      permitted under Section 6.10, no Credit Party shall repurchase any outstanding
      common stock or operating partnership units of any Credit Party prior to the
      later of (a)
      the
      Maturity Date and (b)
      the
      payment in full of the Obligations.

    

    Section
      6.18 No
      Future Liens. 

    

    No
      Credit
      Party shall grant or permit, or suffer to be granted or permitted, any Lien
      on,
      or any encumbrances upon, any Collateral and/or any Required Payment in favor
      of
      any Person, other than Liens in favor of the Administrative Agent as agent
      for
      the Secured Parties. The Credit Parties shall not sell, pledge, assign or
      transfer to any Person, or grant, create, incur, assume, suffer or permit to
      exist any Lien on, the Equity Interests of an SPE Subsidiary under any Direct
      CTL Transaction that involves a Whole Loan, including, without limitation,
      the
      Equity Interests of the SPE Subsidiaries that own the Commercial Real Estate
      leased to the Kroger Company, Quest Corporation and Factory Mutual Insurance
      Company.

    

    Section
      6.19 Margin
      Regulations.

    

    No
      part
      of the proceeds of any Loan hereunder shall be used for any purpose which
      violates, or would be inconsistent with, the provisions of Regulation T, U
      or X.

    

    Section
      6.20 Senior
      and Pari
      Passu Interests. 

    

    No
      Credit
      Party shall acquire or maintain any right or interest in any Mortgage Asset
      (or,
      directly or indirectly, the Underlying Mortgaged Property with respect thereto)
      that is senior to or pari
      passu
      with the
      rights and interests of the Administrative Agent therein under this Agreement
      and the Credit Documents unless such interest is also part of the Collateral;
      provided that that foregoing negative covenant shall not apply to CMBS
      Securities.

    

    Section
      6.21 Portfolio
      Assets. 

    

    To
      the
      extent the Administrative Agent acquires a pledge of multiple Mortgage Assets
      as
      a part of a portfolio or package, the Borrowers shall not repay or obtain the
      release of any Lien on less than all such Collateral without repaying all Loans
      related to all such Collateral included in the portfolio or package, unless
      the
      Administrative Agent otherwise consents in its discretion.

    

    Section
      6.22 Inconsistent
      Agreements. 

    

    The
      Credit Parties shall not directly or indirectly, enter into any agreement
      containing any provision that would be violated or breached by any transaction,
      Loan or pledge of Collateral under the Credit Documents or by the performance
      by
      any Credit Party of its duties, covenants or obligations under any Credit
      Document.

     

    ARTICLE
      VII

    

    EVENTS
      OF DEFAULT

    

    Section
      7.1 Events
      of Default.

    

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

    
      
        
        

      

      
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    (a) Payment.
      (i)
      The
      Borrowers shall fail to pay any principal or interest on any Loan or Note when
      due (whether at maturity, by reason of mandatory or optional prepayment, by
      reason of acceleration or otherwise) in accordance with the terms hereof or
      thereof; or (ii)
      the
      Borrowers shall fail to pay any fee or other amount payable hereunder or under
      the Credit Documents when due (whether at maturity, by reason of mandatory
      or
      optional prepayment, by reason of acceleration or otherwise) in accordance
      with
      the terms hereof and such failure shall continue unremedied for two (2) days;
      or
      (iii)
      or the
      Guarantor shall fail to pay on the Guaranty in respect of any of the foregoing
      or in respect of any other Obligations under the Credit Documents; or
      (iv)
      any
      other Credit Party shall fail to pay any amounts owed by it under the Credit
      Documents to which it is a party (after giving effect to the grace period in
      clause (ii) above); or

    

    (b) Misrepresentation.
      Any
      representation or warranty made or deemed made herein, in the Security Documents
      or in any of the other Credit Documents or which is contained in any
      certificate, document or financial or other statement furnished at any time
      under or in connection with this Agreement or the Credit Documents shall prove
      to have been incorrect, false or misleading on or as of the date made or deemed
      made and continues to be unremedied for a period of twenty (20) Business
      Days after the earlier to occur of (i) the date on which written notice of
      such incorrectness requiring the same to be remedied shall have been given
      to
      the Credit Parties by the Administrative Agent, and (ii) the date on which
      the Credit Parties become aware thereof; or 

    

    (c) Covenant
      Default.
      (i) Any
      Credit Party shall fail to perform, comply with or observe any term, covenant
      or
      agreement applicable to it contained in Sections 5.9, 5.20 or 6.4; or
      (ii) any Credit Party shall fail to comply with any other covenant
      contained in this Agreement or the other Credit Documents or any other
      agreement, document or instrument among any Credit Party, the Administrative
      Agent and the Lenders or executed by any Credit Party in favor of the
      Administrative Agent or the Lenders (other than as described in
      Sections 7.1(a) or 7.1(c)(i) above), and such breach or failure to comply
      is not cured within twenty (20) Business Days of its occurrence;
      or

    

    (d) Indebtedness
      Cross-Default.
      (A) Any Credit Party shall default in any payment due in excess of $250,000
      or with respect to any material Indebtedness in excess of (1) $5,000,000 in
      the case of a Guarantor or Pledgor and (2) $1,000,000 in the case of any
      Borrower (in each case including, without limitation, recourse debt), any
      Guarantee Obligations or any material Contractual Obligation in excess of (1)
      $5,000,000 in the case of a Guarantor or Pledgor, and (2) $1,000,000 in the
      case
      of any Borrower, to which a Borrower, Guarantor or Pledgor, as applicable,
      is a
      party, or a default or an event or condition shall have occurred that would
      permit acceleration of any of the foregoing whether or not such event or
      condition has been waived, (B) any Credit Party shall be in default of any
      obligation with respect to any Credit Party-Related Obligation or (C) any Credit
      Party shall be in default with respect to any obligation under the Interest
      Rate
      Protection Agreements; or

    

    (e) [Reserved];

    

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

    

    (g) Judgment
      Default.
      One or
      more judgments or decrees shall be entered against a Credit Party or any of
      its
      Subsidiaries or Affiliates involving in the aggregate a liability (to the extent
      not covered by insurance) of $1,000,000 or more and all such judgments or
      decrees shall not have been paid and satisfied, vacated, discharged, stayed
      or
      bonded pending appeal within ten (10) Business
      Days
      from the
      entry thereof or any injunction, temporary restraining order or similar decree
      shall be issued against a Credit Party or any of its Subsidiaries or Affiliates
      that, individually or in the aggregate, could result in a Material Adverse
      Effect; or

    

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

    

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

    
      
        
        

      

      
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        (j)
          Invalidity
          of Credit Documents.
          (i)
          Any
          Credit Document, or any Lien or security interest granted thereunder, shall
          (except in accordance with its terms), in whole or in part, terminate,
          cease to
          be effective, be declared null and void, cease to be in full force and
          effect or
          cease to be the legally valid, binding and/or enforceable obligation of
          any
          Credit Party, as applicable, (ii)
          any
          Credit Party or any other Person shall, directly or indirectly, contest
          in any
          manner the effectiveness, validity, binding nature or enforceability of
          any
          Credit Document or any Lien or security interest thereunder or deny or
          disaffirm
          such Person’s obligations under any Credit Document, (iii)
          the
          Liens contemplated under the Credit Documents shall cease or fail to be
          first
          priority perfected Liens on any Collateral in favor of the Administrative
          Agent
          or shall be Liens in favor of any Person other than the Administrative
          Agent,
          (iv)
          any
          Credit
          Party shall
          grant, or permit or suffer to exist, any Lien on any Collateral except
          Permitted
          Liens, or (v)
          any
          Credit Party or any Subsidiary or Affiliate of the foregoing shall grant,
          or
          permit or suffer to exist, any Lien on any Required Payment;
          or

      

    

    

    (k) Uninsured
      Loss.
      Any
      uninsured damage to or loss, theft or destruction of any Property or assets
      of
      the Credit Parties or any of their Subsidiaries shall occur that is in excess
      of
      $1,000,000; or

    

    (l) Equity
      Ownership.
      (i)
      Caplease Inc. shall cease to own (A) at least 97.5% of the issued and
      outstanding Equity Interests of Caplease, (B) 100% of the issued and outstanding
      Equity Interests of Funding and (C) indirectly 100% of the issued and
      outstanding Equity Interests of Services, (ii)
      Caplease or Caplease Inc. shall cease to own 100% of the issued and outstanding
      Equity Interests of each SPE Subsidiary or violate the last sentence of Section
      6.18 or (iii) Prefco II GP LLC and CLF Real Estate LLC shall cease to own 100%
      of Prefco.; or

    

    (m) 40
      Act.
      Any
      Credit Party shall become required to register as an “investment company” within
      the meaning of the 40 Act or the arrangements contemplated by the Credit
      Documents shall require registration as an “investment company” within the
      meaning of the 40 Act; or

    

    (n) Material
      Adverse Effect.
      There
      shall exist any event or occurrence that has caused a Material Adverse Effect;
      or

    

    (o) IRS
      Lien.
      The
      Internal Revenue Service shall file notice of a Lien pursuant to
      Section 6323 of the Code with regard to any assets or Property of any
      Credit Party, and such Lien shall not have been released within five (5)
      Business Days; or 

    

    (p) Cooperation.
      Any
      Credit Party fails to pledge Collateral required to be pledged under this
      Agreement or the other Credit Documents or fails to cooperate with the
      Administrative Agent as required by this Agreement or the other Credit Documents
      to ensure that the Administrative Agent has or obtains a perfected first
      priority security interest in all existing and future Collateral and such
      failure shall continue unremedied for three (3) Business Days; or

    

    (q) Irrevocable
      Instructions.
      Any
      Credit Party’s failure to deliver any Irrevocable Instruction required under
      this Agreement or any Person’s attempt to disavow, revoke or act contrary to,
      the failure of any Person to abide by or perform, or any Credit Party’s failure
      to enforce, the terms of any Irrevocable Instruction; or

    

    (r) Solvency.
      Any
      Credit Party is not Solvent or shall admit its inability to, or its intentions
      not to, perform its obligations, covenants, duties or agreements under any
      Credit Document, any Obligation or any Credit Party-Related Obligation;
      or

    

    (s) REIT.
      Caplease Inc. ceases to qualify as a REIT (without giving any effect to any
      cure
      or corrective periods or allowances), is subject to a ratings downgrade by
      any
      Rating Agency or ceases to be a publicly traded company listed, quoted or traded
      on or in good standing in respect of any Stock Exchange; or 

    

    (t) Commitment.
      The
      aggregate principal amount of all Revolving Loans outstanding on any day exceeds
      the Revolving Commitment and the same continues unremedied for two (2) Business
      Days after notice from the Administrative Agent; provided,
      however,
      during
      the period of time that such event remains unremedied, no additional Revolving
      Loans will be made under this Agreement; or

    

    (u) Servicer
      Default.
      A
      Servicer Default occurs and is continuing; or

    

    (v) Income.
      Any
      Credit Party’s, any Subsidiary or Affiliate thereof, any Servicer’s or any PSA
      Servicer’s failure to deposit to the Collection Account all Income and other
      Cash Collateral as required by this Agreement or the failure of the Borrowers
      to
      deposit or credit to the Securities Account any uncertificated CMBS Security
      and
      related Collateral required to be deposited or credited to such account;
      or

    

    (w) Consent.
      Any
      Credit Party engages in any conduct or action where the Administrative Agent’s
      and/or any Lender’s prior written consent is required by the terms of this
      Agreement or the other Credit Documents and any Credit Party fails to obtain
      such consent; or

    

    (x) Merger.
      Unless
      waived by the Administrative Agent, to the extent merger or consolidation is
      permitted under the Credit Documents, any Credit Party shall merge or
      consolidate into any entity and such entity is, in the Administrative Agent’s
      determination in its discretion, materially weaker in its financial condition
      (in the aggregate) than such Person pre-merger or consolidation; or

    

    (y) Other
      Defaults.
      Any
      event or occurrence under this Agreement or any of the other Credit Documents
      that, by the express terms of this Agreement or the other Credit Documents,
      is
      deemed to constitute an Event of Default; or 

    
      
        
        

      

      
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    (z) Instructions;
      Notices.
      Any
      Credit Party shall have failed to give instructions (including, without
      limitation, Irrevocable Instructions) or any notice to the Administrative Agent
      or any Lender as required by this Agreement or the other Credit Documents,
      or to
      deliver any required reports hereunder, on or before the date such instruction,
      notice or report is required to be made or given, as the case may be, under
      the
      terms of this Agreement or the other Credit Documents and any such failure
      continues unremedied for a period of two (2) Business Days after the
      earlier to occur of (i) the date on which written notice of such failure
      requiring the same to be remedied shall have been given to any Credit Party
      by
      the Administrative Agent and (ii) the date on which any Credit Party
      becomes aware thereof; or

    

    In
      making
      a determination as to whether an Event of Default has occurred, the
      Administrative Agent and the Lenders shall be entitled to rely on reports
      published or broadcast by media sources believed by the Administrative Agent
      and/or any Lender to be generally reliable and on information provided to it
      by
      any other sources believed by it to be generally reliable, provided that the
      Administrative Agent and/or the Lender reasonably and in good faith believes
      such information to be accurate and has taken such steps as may be reasonable
      in
      the circumstances to attempt to verify such information. Notwithstanding
      anything contained in the Credit Documents to the contrary, unless waived by
      the
      Administrative Agent in its discretion, neither the Credit Parties nor any
      other
      Person shall be permitted to cure an Event of Default after the acceleration
      of
      any of the Obligations.

    

    Section
      7.2 Acceleration;
      Remedies.

    

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

     

    ARTICLE
      VIII

    

    THE
      ADMINISTRATIVE AGENT

    

    Section
      8.1 Appointment
      and Authority.

    

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

    

    Section
      8.2 Nature
      of Duties.

    

    Anything
      herein to the contrary notwithstanding, none of the bookrunners, Arrangers
      or
      other agents listed on the cover page hereof shall have any powers, duties
      or
      responsibilities under this Agreement or any of the other Credit Documents,
      except in its capacity, as applicable, as the Administrative Agent, or a Lender
      hereunder. Without limiting the foregoing, none of the Lenders or other Persons
      so identified shall have or be deemed to have any fiduciary relationship with
      any Lender. Each Lender acknowledges that it has not relied, and will not rely,
      on any of the Lenders or other Persons so identified in deciding to enter into
      this Agreement or in taking or not taking action hereunder.

    

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

    

    Section
      8.3 Exculpatory
      Provisions.

    

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

    

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

    

    (b) shall
      not
      have any duty to take any discretionary action or exercise any discretionary
      powers, except discretionary rights and powers expressly contemplated hereby
      or
      by the other Credit Documents that the Administrative Agent is required to
      exercise as directed in writing by the Required Lenders (or such other number
      or
      percentage of the Lenders as shall be

    
      
        
        

      

      
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    expressly
      provided for herein or in the other Credit Documents), provided
      that the
      Administrative Agent shall not be required to take any action that, in its
      opinion or the opinion of its counsel, may expose the Administrative Agent
      to
      liability or that is contrary to any Credit Document or Requirements of Law;
      and

    

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

    

    The
      Administrative Agent shall not be liable for any action taken or not taken
      by it
      (i) with the consent or at the request of the Required Lenders (or such
      other number or percentage of the Lenders as shall be necessary, or as the
      Administrative Agent shall believe in good faith shall be necessary, under
      the
      circumstances as provided in Sections 10.1 and 7.2) or (ii) in the
      absence of its own gross negligence or willful misconduct. 

    

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

    

    Section
      8.4 Reliance
      by Administrative Agent.

    

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

    

    Section
      8.5 Notice
      of Default.

    

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

    

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

    

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

    

    Section
      8.7 Indemnification.

    

    The
      Lenders agree to indemnify the Administrative Agent in its capacity hereunder
      and its Affiliates and its respective officers, directors, agents and employees
      (to the extent not reimbursed by the Borrowers and without limiting the
      obligation of the Borrowers to do so), ratably according to their respective
      Commitment Percentages in effect on the date on which indemnification is sought
      under this Section, from and against any and all liabilities, obligations,
      losses, damages, penalties, actions, judgments, suits, costs, expenses or
      disbursements of any kind whatsoever which may at any time (including, without
      limitation, at any time following the payment of the Obligations) be imposed
      on,
      incurred by or asserted against any such indemnitee in any way relating to
      or
      arising out of any Credit Document or any documents contemplated by
      or

    
      
        
        

      

      
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    referred
      to herein or therein or the transactions contemplated hereby or thereby or
      any
      action taken or omitted by any such indemnitee under or in connection with
      any
      of the foregoing; provided,
      however,
      that no
      Lender shall be liable for the payment of any portion of such liabilities,
      obligations, losses, damages, penalties, actions, judgments, suits, costs,
      expenses or disbursements to the extent resulting from such indemnitee’s gross
      negligence or willful misconduct, as determined by a court of competent
      jurisdiction. The provisions of this Section shall survive the termination
      of
      this Agreement and the payment in full of the Obligations.

    

    Section
      8.8 Administrative
      Agent in Its Individual Capacity.

    

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

    

    Section
      8.9 Successor
      Administrative Agent.

    

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

    

    Section
      8.10 Collateral
      and Guaranty Matters.

    

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

    

    (i) to
      release any Lien on any Collateral granted to or held by the Administrative
      Agent under any Credit Document (A) upon
      termination of the Revolving Commitments and payment in full of all Obligations
      (other than contingent indemnification obligations for which no claim has been
      made or cannot be reasonably identified by an Indemnitee based on the then-known
      facts and circumstances), or (B) subject
      to Section 10.1, if approved, authorized or ratified in writing by the Required
      Lenders or (C)
      subject
      to Sections 2.5(c), 2.17 and 6.21 and other restrictions on releases, upon
      a
      prepayment in full of all amounts owed hereunder with respect to a Pledged
      Mortgage Asset by the Borrowers pursuant to Section 2.5(b)(viii), provided
      there
      is no Default, no Event of Default and no mandatory prepayment is due or will
      become due upon such release or upon the expiration of the applicable time
      period under Section 2.5.

    

    (ii) to
      subordinate any Lien on any Collateral granted to or held by the Administrative
      Agent under any Credit Document to the holder of any Lien on such Collateral
      that is permitted by Section 6.2; and

    

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

    

    (b) In
      connection with a termination or release pursuant to this Section, the
      Administrative Agent shall promptly execute and deliver to the applicable Credit
      Party, at the Borrowers’
      expense, all documents that the applicable Credit Party shall

    
      
        
        

      

      
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    reasonably
      request to evidence such termination or release. Upon request by the
      Administrative Agent at any time, the Required Lenders will confirm in writing
      the Administrative Agent’s authority to release or subordinate its interest in
      particular types or items of Collateral, or to release the Guarantor from its
      obligations under the Guaranty pursuant to this Section.

     

    ARTICLE
      IX

    

    ADMINISTRATION
      AND SERVICING

    

    Section
      9.1 Servicing.

    

    (a) The
      Administrative Agent hereby appoints each of the Borrowers as its agent to
      service the Collateral and enforce its rights in and under such Collateral.
      The
      Borrowers hereby accept such appointment and agree to perform the duties and
      obligations with respect thereto as set forth herein. 

    

    (b) The
      Borrowers covenants to maintain or cause the servicing of the Collateral to
      be
      maintained in conformity with Accepted Servicing Practices and in a manner
      at
      least equal in quality to the servicing Borrowers provides for Mortgage Assets
      that it owns. In the event that the preceding language is interpreted as
      constituting one or more servicing contracts, each such servicing contract
      shall
      terminate automatically upon the earliest of (i) an Event of Default,
      (ii) the date on which this Agreement terminates or the Administrative
      Agent releases its Lien with respect to the related item of Collateral or
      (iii) the transfer of servicing approved in writing by the Administrative
      Agent.

    

    (c) For
      the
      purposes of this Article IX, the term Borrower shall also refer to Prefco but
      only with respect to the FM Global Pledged Mortgage Asset.

    

    Section
      9.2 Borrowers
      as Servicer.

    

    If
      the
      Collateral is serviced by the Borrowers, the Borrowers agree that, until the
      item of Collateral is released from the Administrative Agent’s Lien, the
      Administrative Agent has a security interest in all servicing records for the
      period that the Administrative Agent has a Lien on the Collateral, including,
      but not limited to, any and all servicing agreements, files, documents, records,
      data bases, computer tapes, copies of computer tapes, computer programs, proof
      of insurance coverage, insurance policies, appraisals, other closing
      documentation, payment history records, and any other records relating to or
      evidencing the servicing of such Collateral (the “Servicing
      Records”).
      The
      Borrowers covenant to safeguard such Servicing Records and to deliver them
      promptly to Administrative Agent or its designee (including the Custodian)
      at
      the Administrative Agent’s request. 

    

    Section
      9.3 Third
      Party Servicer.

    

    The
      Borrowers shall not cause the Collateral to be serviced by a third party other
      than pursuant to the Servicing Agreements or the Pooling and Servicing
      Agreements or, if not serviced thereunder, by any Servicer other than a Servicer
      expressly approved in writing by the Administrative Agent in its discretion,
      which approval shall be deemed granted by the Administrative Agent with respect
      to each Servicer listed on Schedule 9.3
      attached
      hereto, as such schedule may be amended or supplemented from time to time,
      after
      the execution of this Agreement. If the Collateral is serviced by a Servicer
      or
      a PSA Servicer pursuant to a Servicing Agreement or Pooling and Servicing
      Agreement, as applicable, the Borrowers (i) shall, in accordance with
      Section 4.2, provide to the Administrative Agent (subject to the last
      sentence of this Section) a copy of each Servicing Agreement and Pooling and
      Servicing Agreement, which agreements shall be in form and substance acceptable
      to the Administrative Agent, and a Servicer Redirection Notice, fully executed
      by the Borrowers and the related Servicer or PSA Servicer, and (ii) hereby
      irrevocably assigns to the Administrative Agent and the Administrative Agent’s
      successors and assigns all right, title and interest of the Borrowers in, to
      and
      under, and the benefits of (but not the obligations of), each Servicing
      Agreement and each Pooling and Servicing Agreement with respect to the
      Collateral. Notwithstanding the fact that the Borrowers have contracted with
      the
      Servicers or PSA Servicers to service the Collateral, the Borrowers shall remain
      liable to the Administrative Agent for the acts of the Servicers and PSA
      Servicers and for the performance of the duties and obligations set forth
      herein. The Borrowers agree that no Person shall assume the servicing
      obligations with respect to the Collateral as successor to a Servicer or PSA
      Servicer unless such successor is approved in writing by the Administrative
      Agent prior to such assumption of servicing obligations. Unless otherwise
      approved in writing by the Administrative Agent, if the Collateral is serviced
      by a Servicer or PSA Servicer, such servicing shall be performed pursuant to
      a
      written Servicing Agreement or Pooling and Servicing Agreement approved by
      the
      Administrative Agent.

    

    Section
      9.4 Duties
      of the Borrowers.

    

    (a) Duties.
      The
      Borrowers shall take or cause to be taken all such actions as may be necessary
      or advisable to collect all Income and other amounts due or recoverable with
      respect to the Collateral from time to time, all in accordance with Applicable
      Laws, with reasonable care and diligence, and in accordance with the standard
      set forth in Section 9.1(b). 

    

    (b) Administrative
      Agent’s Rights.
      Notwithstanding anything to the contrary contained herein, the exercise by
      the
      Administrative Agent of its rights hereunder shall not release the Borrowers
      from any of its duties or responsibilities with respect to the Collateral.
      The
      Administrative Agent shall not have any obligation or liability with respect
      to
      any Collateral, nor shall any of them be obligated to perform any of the
      obligations of the Borrowers hereunder.

    

    (c) Servicing
      Programs.
      In the
      event that the Borrowers or the Servicers use any software program in servicing
      the Collateral that is licensed from a third party, the Borrowers shall use
      their reasonable efforts to obtain, either before the Closing Date or as soon
      as
      possible thereafter, whatever licenses or approvals are necessary to allow
      the
      Administrative Agent to use such programs.

    
      
        
        

      

      
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    Section
      9.5 Authorization
      of the Borrowers.

    

    (a) The
      Administrative Agent hereby authorizes the Borrowers (including any successor
      thereto) to take any and all reasonable steps in its name and on its behalf
      necessary or desirable and not inconsistent with the pledge of the Collateral
      to
      the Administrative Agent to collect all amounts due under any and all
      Collateral, including, without limitation, endorsing any checks and other
      instruments representing Income, executing and delivering any and all
      instruments of satisfaction or cancellation, or of partial or full release
      or
      discharge, and all other comparable instruments, with respect to the Collateral
      and, after the delinquency of any Collateral and to the extent permitted under
      and in compliance with Requirements of Law, to commence proceedings with respect
      to enforcing payment thereof, to the same extent as the Borrowers could have
      done if it had continued to own such Collateral free of the Lien of the
      Administrative Agent. The Administrative Agent shall furnish the Borrowers
      (and
      any successors thereto) with any powers of attorney and other documents
      necessary or appropriate to enable the Borrowers to carry out their servicing
      and administrative duties hereunder and shall cooperate with the Borrowers
      to
      the fullest extent in order to ensure the collectibility of the Collateral.
      In
      no event shall the Borrowers be entitled to make the Administrative Agent a
      party to any litigation without the Administrative Agent’s express prior written
      consent.

    

    (b) Subject
      to all other rights of the Administrative Agent contained herein, after an
      Event
      of Default has occurred and is continuing, at the direction of the
      Administrative Agent, the Borrowers shall take such action as the Administrative
      Agent may deem necessary or advisable to enforce collection of the Collateral;
      provided,
      however,
      subject
      to all other rights of the Administrative Agent contained herein, the
      Administrative Agent may, at any time that an Event of Default or Default has
      occurred and is continuing, notify any Obligor with respect to any Collateral
      of
      the assignment of such Collateral to the Administrative Agent and direct that
      payments of all amounts due or to become due be made directly to the
      Administrative Agent or any servicer, collection agent or lock-box or other
      account designated by the Administrative Agent and, upon such notification
      and
      at the expense of the Borrowers, the Administrative Agent may enforce collection
      of any such Collateral and adjust, settle or compromise the amount or payment
      thereof.

    

    Section
      9.6 Event
      of Default.

    

    If
      the
      servicer of the Collateral is any Borrower, upon the occurrence of an Event
      of
      Default, the Administrative Agent shall have the right to terminate the
      Borrowers as the servicer of the Collateral and transfer servicing to its
      designee, at no cost or expense to the Administrative Agent, at any time
      thereafter. If the servicer of the Collateral is not any of the Borrowers,
      the
      Administrative Agent shall have the right, as contemplated in the applicable
      Servicer Redirection Notice, upon the occurrence of an Event of Default, to
      terminate any Servicer and any applicable Servicing Agreement and any PSA
      Servicer and any applicable Pooling and Servicing Agreement to the extent a
      PSA
      Servicer signed a Servicer Redirection Notice and, in each case, to transfer
      servicing to its designee, at no cost or expense to the Administrative Agent,
      it
      being agreed that the Borrowers will pay any and all fees required to terminate
      each such Servicer, PSA Servicer, Servicing Agreement and Pooling and Servicing
      Agreement and to effectuate the transfer of servicing to the designee of the
      Administrative Agent. The Borrowers shall cooperate fully and shall cause all
      Servicers and applicable PSA Servicers to cooperate fully with the
      Administrative Agent in transferring the servicing of the Collateral to the
      Administrative Agent’s designee.

    

    Section
      9.7 Modification.

    

    Unless
      otherwise agreed to by the Administrative Agent in its discretion until the
      Administrative Agent releases its Lien on any item of Collateral, neither the
      Borrowers, the Servicers, PSA Servicer (unless otherwise provided in a Pooling
      and Servicing Agreement) nor any other Person acting on behalf of the foregoing
      shall have any right without the Administrative Agent’s prior written consent in
      its discretion to (i) waive, amend, modify or alter the material terms of
      any item of Collateral (including, without limitation, the related Mortgage
      Loan
      Documents), the Servicing Agreements or the Pooling and Servicing Agreements
      or
      (ii) exercise any material rights of a holder of any item of Collateral
      under any document or agreement governing or relating to such Collateral. The
      Administrative Agent agrees to promptly consider any request for consent under
      this Section 9.7.

    Section
      9.8 Inspection.

    

    In
      the
      event the Borrowers or their Affiliates are servicing the Collateral, the
      Borrowers shall permit the Administrative Agent to inspect the Borrowers’ and
      any of their Affiliates’ servicing facilities, books and records and related
      documents and information, as the case may be, for the purpose of satisfying
      the
      Administrative Agent that that Borrowers or their Affiliates, as the case may
      be, have the ability to service and are servicing the Collateral as provided
      in
      this Agreement. If a Servicer or PSA Servicer is servicing any Collateral,
      the
      Borrowers shall cooperate with the Administrative Agent in causing each Servicer
      and PSA Servicer to permit inspections of the Servicer’s and PSA Servicer’s
      facilities, books and records and related documents and information relating
      to
      the Collateral.

    

    Section
      9.9 Servicing
      Compensation.

    

    As
      compensation for their servicing activities hereunder and reimbursement for
      its
      expenses, the Borrowers shall be entitled to receive a servicing fee to the
      extent of funds available therefor in the aggregate amount of 25 basis
      points per annum calculated on the outstanding principal amount of the Loans
      (the “Servicing
      Fee”),
      which, prior to an Event of Default, may be netted from the Income prior to
      the
      same being deposited into the Collection Account.

    

    Section
      9.10 Payment
      of Certain Expenses by Servicer.

    

    The
      Borrowers and any Servicer will be required to pay all expenses incurred by
      them
      in connection with their activities under this Agreement and the other Credit
      Documents, including fees and disbursements of independent accountants, Taxes
      imposed on the Borrowers or the Servicers, expenses incurred in connection
      with
      payments and reports pursuant to this Agreement and the other Credit Documents,
      and all other fees and expenses under this Agreement and the other Credit
      Documents for the account of the Borrowers. The Borrowers shall be
      required

    
      
        
        

      

      
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    to
      pay
      all reasonable fees and expenses owing to any bank or trust company in
      connection with the maintenance of the Collection Account and all other
      collection, reserve or lock-box accounts related to the Collateral. The
      Borrowers shall be required to pay such expenses for their own account and
      shall
      not be entitled to any payment therefor other than the Servicing
      Fee.

    

    Section
      9.11 Pooling
      and Servicing Agreements.

    

    Notwithstanding
      the provisions of this Article IX, to the extent the Collateral (or
      portions thereof) are serviced by a PSA Servicer (other than the Borrowers
      or
      any Servicer) under a Pooling and Servicing Agreement, (a) the standards
      for servicing such items of Collateral shall be those set forth in the
      applicable Pooling and Servicing Agreement, to the extent of the items covered
      therein, and otherwise as provided in this Agreement, (b) the Borrowers
      shall enforce its rights and interests under such agreements for and on behalf
      of the Administrative Agent, (c) the Borrowers shall instruct the
      applicable PSA Servicer to deposit all Income received in respect of the
      Collateral into the Collection Account in accordance with Section 5.17 of
      this Agreement, (d) the Borrowers shall not take any action or fail to take
      any action or consent to any action or inaction under any Pooling and Servicing
      Agreement where the effect of such action or inaction would prejudice or
      adversely affect the interests of the Administrative Agent, (e) the
      Administrative Agent shall be entitled to exercise any and all rights of the
      Borrowers or the holder of any such item of Collateral under such Pooling and
      Servicing Agreements as such rights relate to the Collateral, and (f) the
      Borrowers shall not consent to any amendment or modification to any Pooling
      and
      Servicing Agreement without the prior written consent of the Administrative
      Agent in its discretion. The Administrative Agent agrees to promptly consider
      any request for consent under this Section 9.11.

    

    Section
      9.12 Servicer
      Default.

    

    Any
      material breach by the Borrowers, any of their Servicers or any of the PSA
      Servicers of the obligations contained in this Article IX or in
      Sections 2.9(a) and 5.17 shall constitute a “Servicer
      Default”.

     

    ARTICLE
      X

    

    MISCELLANEOUS

    

    Section
      10.1 Amendments,
      Waivers and Release of Collateral.

    

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

    

    (i) reduce
      the amount or extend the scheduled date of maturity of any Loan or Note or
      any
      installment thereon (except in accordance with Section 2.1(f) or Section
      2.2(e)), or reduce the stated rate of any interest or fee payable hereunder
      (except in connection with a waiver of interest at the increased post-default
      rate set forth in Section 2.6 which shall be determined by a vote of the
      Required Lenders) or extend the scheduled date of any payment thereof or
      increase the amount or extend the expiration date of any Lender’s Commitment, in
      each case without the written consent of each Lender directly affected thereby;
      provided
      that, it
      is understood and agreed that (A) no waiver, reduction or deferral of a
      mandatory prepayment required pursuant to Section 2.5(b), nor any amendment
      of Section 2.5(b) or the definitions of Asset Value, Debt Issuance, Equity
      Issuance, Securitization or Extraordinary Receipt shall
      constitute a reduction of the amount of, or an extension of the scheduled date
      of, the scheduled date of maturity of, or any installment of, any Loan or Note,
      (B) any reduction in the stated rate of interest on Revolving Loans shall
      only require the written consent of each Lender holding a Revolving Commitment
      and (C) any reduction in the stated rate of interest on the Term Loan shall
      only require the written consent of each Lender holding a portion of the
      outstanding Term Loan; or 

    

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

    

    (iii) release
      any Borrower or the Guarantor from obligations under the Guaranty, without
      the
      written consent of all of the Lenders; or

    

    (iv) release
      all or substantially all of the Collateral without the written consent of all
      of
      the Lenders; or 

    

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

    
      
        
        

      

      
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          66 -

        
          

        

      

      
        
        

      

    

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

    

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

    

    (viii) without
      the consent of Revolving Lenders holding in the aggregate more than 50% of
      the
      outstanding Revolving Commitments (or if the Revolving Commitments have been
      terminated, the aggregate principal amount of outstanding Revolving Loans),
      amend, modify or waive any provision in Section 4.2 or waive any Default or
      Event of Default (or amend any Credit Document to effectively waive any Default
      or Event of Default) if the effect of such amendment, modification or waiver
      is
      that the Revolving Lenders shall be required to fund Revolving Loans when such
      Lenders would otherwise not be required to do so; or

    

    (ix) amend,
      modify or waive the order in which Obligations are paid or in a manner that
      would alter the pro rata sharing of payments by and among the Lenders in
      Section 2.9 without the written consent of each Lender and directly
      affected thereby; or

    

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

    

    (xi) amend,
      modify or waive any provision in Sections 3.3 through 3.6 without the written
      consent of the Custodian; or

    

    (xii) amend
      or
      modify the definition of Obligations to delete or exclude any obligation or
      liability described therein without the written consent of each Lender directly
      affected thereby;

    

    provided,
      further,
      that no
      amendment, waiver or consent affecting the rights or duties of the
      Administrative Agent under any Credit Document shall in any event be effective,
      unless in writing and signed by the Administrative Agent, in addition to the
      Lenders required hereinabove to take such action. Unless otherwise expressly
      provided herein, waivers shall be effective only in the specific instance and
      for the specific purpose for which given.

    

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

    

    Notwithstanding
      any of the foregoing to the contrary, the consent of the Borrowers and the
      other
      Credit Parties shall not be required for any amendment, modification or waiver
      of the provisions of Article VIII (other than the provisions of
      Section 8.9). 

    

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

    

    For
      the
      avoidance of doubt and notwithstanding any
      provision to the contrary contained in this
      Section 10.1, this Agreement may be amended (or amended and restated) with
      the
      written consent of the
      Credit Parties and
      the
      Required Lenders (i) to increase the aggregate Commitments of the Lenders
      (provided that no Lender shall be required to increase its commitment without
      its consent), (ii) to add one or more additional borrowing Tranches to this
      Agreement and to provide for the ratable sharing of the benefits of this
      Agreement and the other Credit Documents with the other then outstanding
      Obligations in respect of the extensions of credit from time to time outstanding
      under such additional borrowing Tranche(s) and the accrued interest and fees
      in
      respect thereof and (iii) to include appropriately the lenders under such
      additional borrowing Tranches in any determination of the Required Lenders
      and/or to provide consent rights to such lenders under subsections (ix)
      and/or (x) of Section 10.1 corresponding to the consent rights of the other
      Lenders thereunder.

    

    Section
      10.2 Notices.

    

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

    
      
        
        

      

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

    

    CapLease,
      Inc.

    1065
      Avenue of the Americas

    New
      York,
      NY 10018

    Attention: Paul
      C.
      Hughes

    Telephone: (212)
      217-6300

    Fax:  (212)
      217-6301

    

    (ii) If
      to the
      Administrative Agent:

    

    Wachovia
      Bank, National Association

    One
      Wachovia Center, NC0166

    301
      South
      College Street

    Charlotte,
      North Carolina 28288

    Attention:
       John
      Nelson

    Phone
      No.: (704)
      383-8238

    Facsimile
      No.: (704)
      715-0066

    

    with
      a
      copy to:

    

    Wachovia
      Bank, National
      Association

    One
      Wachovia Center, NC0166

    301
      South
      College Street

    Charlotte,
      North Carolina 28288

    Attention:
       Marianne
      Hickman

    Phone
      No.: (704)
      715-7818

    Facsimile
      No.: (704)
      715-0066

    

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

    

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

    

    (b) Electronic
      Communications.
      Notices
      and other communications to the Lenders hereunder may be delivered or furnished
      by electronic communication (including e-mail and internet or intranet websites)
      pursuant to procedures approved by the Administrative Agent, provided
      that the
      foregoing shall not apply to notices to any Lender pursuant to Article II if
      such Lender has notified the Administrative Agent that it is incapable of
      receiving notices under such Article by electronic communication. Subject to
      the
      subsequent paragraph, the Administrative Agent and the Credit Parties agree
      to
      accept notices and other communications to it hereunder and under the Credit
      Documents by electronic communications.

    

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

    

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

    

    Section
      10.3 No
      Waiver; Cumulative Remedies.

    

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

    
      
        
        

      

      
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    Section
      10.4 Survival
      of Representations and Warranties.

    

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

    

    Section
      10.5 Payment
      of Expenses and Taxes; Indemnity.

    

    (a) Costs
      and Expenses.
      The
      Borrowers shall pay (i) all
      reasonable out-of-pocket expenses incurred by the Administrative Agent and
      its
      Affiliates (including the reasonable fees, charges and disbursements of counsel
      for the Administrative Agent), in connection with the preparation, negotiation,
      execution, delivery and administration of this Agreement and the other Credit
      Documents or any amendments, modifications or waivers of the provisions hereof
      or thereof (whether or not the transactions contemplated hereby or thereby
      shall
      be consummated), (ii) 50%
      of all reasonable out-of-pocket expenses incurred by the Administrative Agent
      and its Affiliates (including the reasonable fees, charges and disbursements
      of
      counsel for the Administrative Agent), in connection with the syndication of
      the
      credit facilities provided for herein, (iii)
      all
      actual out-of-pocket expenses incurred by the Administrative Agent or any
      Lender, (including the fees, charges and disbursements of any counsel for the
      Administrative Agent or any Lender), in connection with the enforcement or
      protection of its rights (A) in connection with this Agreement and the
      other Credit Documents, including its rights under this Section, or (B) in
      connection with the Loans made, including all such actual out-of-pocket expenses
      incurred during any workout, restructuring or negotiations in respect of such
      Loans, (iv)
      the
      Borrowers shall pay on demand any and all stamp, sales, excise and other taxes
      and fees payable or determined to be payable in connection with the execution,
      delivery, filing and recording of this Agreement, the Credit Documents or the
      other documents to be delivered hereunder or thereunder or the funding or
      maintenance of Loans hereunder and (v)
      in
      connection with the Administrative Agent’s diligence with respect to the
      Collateral or proposed Collateral, the Borrowers shall pay the asset management
      fees described in paragraph (e) of the Fee Letter, the Administrative Agent’s
      legal fees and expenses provided for in paragraph (d) of the Fee Letter and
      any
      amounts required by Section 10.27. The provisions of this Section shall survive
      the termination of this Agreement and the payment in full of the
      Obligations.

    

    (b) Indemnification
      by the Borrowers.
      

    

    (i) The
      Borrowers shall indemnify the Administrative Agent (and any sub-agent thereof),
      each Lender, and each Related Party of any of the foregoing Persons (each such
      Person being called an “Indemnitee”)
      against, and hold each Indemnitee harmless from, any and all claims, penalties,
      fines, actual, out-of-pocket
      losses, actual, out-of-pocket
      damages, actual, out-of-pocket
      liabilities, and related actual, out-of-pocket
      expenses (including the actual fees, charges and disbursements of any counsel
      for any Indemnitee), in each case incurred by any Indemnitee or asserted against
      any Indemnitee by any third party or by the Borrowers or any other Credit Party
      (collectively, the “Indemnified
      Amounts”)
      arising out of, in connection with, or as a result of (A)
      this
      Agreement, the Credit Documents, any Loan, any Collateral, the Mortgage Loan
      Documents, any transaction or Extension of Credit contemplated hereby or
      thereby, or any amendment, supplement, extension or modification of, or any
      waiver or consent under or in respect of this Agreement, the Credit Documents,
      any Loan, any Collateral, the Mortgage Loan Documents or any transaction or
      Extension of Credit contemplated hereby or thereby, (B)
      any
      Mortgage Asset or any other Collateral under the Credit Documents, (C)
      any
      violation or alleged violation of, non-compliance with or liability under any
      Requirement of Law (including, without limitation, violation of Securities
      Laws
      and Environmental Laws), (D)
      ownership of, Liens on, security interests in or the exercise of rights and/or
      remedies under the Credit Documents, the Mortgage Loan Documents, the
      Collateral, any other collateral under the Credit Documents, the Underlying
      Mortgaged Property, any other related Property or collateral or any part thereof
      or any interest therein or receipt of any Income or rents, (E)
      any
      accident, injury to or death of any person or loss of or damage to Property
      occurring in, on or about any Underlying Mortgaged Property, any other related
      Property or collateral or any part thereof, the related Collateral or on the
      adjoining sidewalks, curbs, parking areas, streets or ways, (F)
      any
      use, nonuse or condition in, on or about, or possession, alteration, repair,
      operation, maintenance or management of, any Underlying Mortgaged Property,
      any
      other related Property or collateral or any part thereof or on the adjoining
      sidewalks, curbs, parking areas, streets or ways, (G)
      any
      failure on the part of the Credit Parties to perform or comply with any of
      the
      terms of the Mortgage Loan Documents, the Credit Documents, the Collateral
      or
      any other collateral under the Credit Documents, (H)
      performance of any labor or services or the furnishing of any materials or
      other
      Property in respect of the Underlying Mortgaged Property, any other related
      Property or collateral, the Collateral or any part thereof, (I)
      any
      claim by brokers, finders or similar Persons claiming to be entitled to a
      commission in connection with any lease or other transaction involving any
      Underlying Mortgaged Property, any other related Property or collateral, the
      Collateral or any part thereof or the Credit Documents, (J)
      any
      Taxes including, without limitation, any Taxes attributable to the execution,
      delivery, filing or recording of any Credit Document, any Mortgage Loan Document
      or any memorandum of any of the foregoing, (K)
      any
      Lien or claim arising on or against the Underlying Mortgaged Property, any
      other
      related Property or collateral, the Collateral or any part thereof under any
      Requirement of Law or any liability asserted against the Administrative Agent
      or
      any Lender with respect thereto, (L)
      the
      claims of any lessee or any Person acting through or under any lessee or
      otherwise arising under or as a consequence of any leases with respect to any
      Underlying Mortgaged Property, related Property or collateral, or any claims
      of
      an Obligor, (M)
      any
      civil penalty or fine assessed by OFAC

    
      
        
        

      

      
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    against,
      and all reasonable costs and expenses (including counsel fees and disbursements)
      incurred in connection with the defense thereof, by any Indemnitee as a result
      of conduct of any Credit Party that violates any sanction enforced by OFAC,
      (N)
      any and
      all Indemnified Amounts arising out of, attributable or relating to, accruing
      out of, or resulting from (1) a past, present or future violation or
      alleged violation of any Environmental Laws in connection with any Property
      or
      Underlying Mortgaged Property by any Person or other source, whether related
      or
      unrelated to any other Credit Party or any Obligor, (2) any presence of any
      Materials of Environmental Concern in, on, within, above, under, near, affecting
      or emanating from any Property or Underlying Mortgaged Property, (3) the
      failure to timely perform any Remedial Work, (4) any past, present or future
      activity by any Person or other source, whether related or unrelated to any
      Credit Party or any Obligor in connection with any actual, proposed or
      threatened use, treatment, storage, holding, existence, disposition or other
      release, generation, production, manufacturing, processing, refining, control,
      management, abatement, removal, handling, transfer or transportation to or
      from
      any Property or Underlying Mortgaged Property of any Materials of Environmental
      Concern at any time located in, under, on, above or affecting any Property
      or
      Underlying Mortgaged Property, (5) any past, present or future actual
      Release (whether intentional or unintentional, direct or indirect, foreseeable
      or unforeseeable) to, from, on, within, in, under, near or affecting any
      Property or Underlying Mortgaged Property by any Person or other source, whether
      related or unrelated to any Credit Party or any Obligor, (6) the
      imposition, recording or filing or the threatened imposition, recording or
      filing of any Lien on any Property or Underlying Mortgaged Property with regard
      to, or as a result of, any Materials of Environmental Concern or pursuant to
      any
      Environmental Law, or (7) any misrepresentation or inaccuracy in any
      representation or warranty in any material respect or material breach or failure
      to perform any covenants or other obligations pursuant to this Agreement, the
      other Credit Documents or any of the Mortgage Loan Documents or relating to
      environmental matters in any way including, without limitation, under any of
      the
      Mortgage Loan Documents or (O)
      any
      Credit Party’s conduct, activities, actions and/or inactions in connection with,
      relating to or arising out of any of the foregoing clauses of this Section
      that,
      in each case, results from anything other than any Indemnitee’s gross negligence
      or willful misconduct. In any suit, proceeding or action brought by an
      Indemnitee in connection with any Collateral or any other collateral under
      the
      Credit Documents for any sum owing thereunder, or to enforce any provisions
      of
      any Collateral or any other collateral under the Credit Documents, the Credit
      Parties shall save, indemnify and hold such Indemnitee harmless from and against
      all expense, loss or damage suffered by reason of any defense, set-off,
      counterclaim, recoupment or reduction of liability whatsoever of the account
      debtor, obligor or Obligor thereunder arising out of a breach by any Credit
      Party of any obligation thereunder or arising out of any other agreement,
      indebtedness or liability at any time owing to or in favor of such account
      debtor, obligor or Obligor or its successors from any Credit Party. Each of
      the
      Credit Parties also agrees to reimburse an Indemnitee as and when billed by
      such
      Indemnitee for all such Indemnitee’s actual, out-of-pocket
      costs, expenses and fees incurred in connection with the enforcement or the
      preservation of such Indemnitee’s rights under this Agreement, the Credit
      Documents, the Mortgage Loan Documents and any transaction or Extension of
      Credit contemplated hereby or thereby, including, without limitation, the
      reasonable fees and disbursements of its counsel. In the case of an
      investigation, litigation or other proceeding to which the indemnity in this
      Section applies, such indemnity shall be effective whether or not such
      investigation, litigation or proceeding is brought by any Credit Party and/or
      any of their officers, directors, shareholders, employees or creditors, an
      Indemnitee or any other Person or any Indemnitee is otherwise a party thereto
      and whether or not any transaction contemplated hereby is consummated.

    

    (ii) Any
      amounts subject to the indemnification provisions of this Section shall be
      paid
      by the Credit Parties to the Indemnitee within ten (10) Business Days
      following such Person’s demand therefor. For the avoidance of doubt, an
      Indemnitee may seek payment of any Indemnified Amount at any time and regardless
      of whether a Default or an Event of Default then exists or is
      continuing.

    

    (iii) If
      for
      any reason the indemnification provided in this Section is unavailable to the
      Indemnitee or is insufficient to hold an Indemnitee harmless, then the
Credit
      Parties shall
      contribute to the amount paid or payable by such Indemnitee as a result of
      such
      loss, claim, damage or liability in such proportion as is appropriate to reflect
      not only the relative benefits received by such Indemnitee on the one hand
      and
      the Credit Parties on the other hand but also the relative fault of such
      Indemnitee as well as any other relevant equitable considerations.

    

    (iv) The
      obligations of the Credit Parties under this Article X are joint and
      several and shall survive the termination of this Agreement.

    

    (v) Indemnification
      under this Section shall be in an amount necessary to make the Indemnitee whole
      after taking into account any tax consequences to the Indemnitee of the receipt
      of the indemnity provided hereunder, including the effect of such tax or refund
      on the amount of tax measured by net income or profits that is or was payable
      by
      the Indemnitee.

    

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

    
      
        
        

      

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

    

    Section
      10.6 Successors
      and Assigns; Participations.

    

    (a) Successors
      and Assigns Generally.
      The
      provisions of this Agreement shall be binding upon and inure to the benefit
      of
      the parties hereto and their respective successors and assigns permitted hereby,
      except that neither the Borrowers nor any other Credit Party may assign or
      otherwise transfer any of its rights or obligations hereunder without the prior
      written consent of the Administrative Agent and each Lender and no Lender may
      assign or otherwise transfer any of its rights or obligations hereunder except
      (i) to an assignee in accordance with the provisions of paragraph (b)
      of this Section, (ii) by way of participation in accordance with the
      provisions of paragraph (d) of this Section or (iii) by way of pledge
      or assignment of a security interest subject to the restrictions of
      paragraph (f) of this Section (and any other attempted assignment or
      transfer by any party hereto shall be null and void). Nothing in this Agreement,
      expressed or implied, shall be construed to confer upon any Person (other than
      the parties hereto, their respective successors and assigns permitted hereby,
      Participants to the extent provided in paragraph (d) of this Section and,
      to the extent expressly contemplated hereby, the Related Parties of each of
      the
      Administrative Agent and the Lenders) any legal or equitable right, remedy
      or
      claim under or by reason of this Agreement.

    

    (b) Assignments
      by Lenders.
      Any
      Lender may at any time assign to one or more assignees all or a portion of
      its
      rights and obligations under this Agreement (including all or a portion of
      its
      Commitment and the Loans at the time owing to it); provided
      that any
      such assignment shall be subject to the following conditions: 

    

    (i) Minimum
      Amounts.
      

    

    (A) in
      the
      case of an assignment of the entire remaining amount of the assigning Lender’s
      Commitment and the Loans at the time owing to it or in the case of an assignment
      to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount
      need be assigned; and

    

    (B) in
      any
      case not described in paragraph (b)(i)(A) of this Section, the aggregate
      principal amount of the Commitment (which for this purpose includes Loans
      outstanding thereunder) or, if the applicable Commitment is not then in effect,
      the principal outstanding balance of the Loans of the assigning Lender subject
      to each such assignment (determined as of the date the Assignment and Assumption
      with respect to such assignment is delivered to the Administrative Agent or,
      if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
      Date) shall not be less than $1,000,000, in the case of any assignment in
      respect of a revolving facility, or $1,000,000, in the case of any assignment
      in
      respect of a term facility (provided,
      however,
      that
      simultaneous assignments shall be aggregated in respect of a Lender and its
      Approved Funds), unless the Administrative Agent consents. 

    

    (ii) Proportionate
      Amounts.
      Each
      partial assignment shall be made as an assignment of a proportionate part of
      all
      the assigning Lender’s rights and obligations under this Agreement with respect
      to the Loan or the Commitment assigned, except that this clause (ii) shall
      not prohibit any Lender from assigning all or a portion of its rights and
      obligations among separate Tranches on a non-pro rata basis. 

    

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

    

    (A) the
      consent of the Borrowers (such consent not to be unreasonably withheld,
      conditioned or delayed) shall be required unless (x) an Event of Default has
      occurred and is continuing at the time of such assignment, or (y) such
      assignment is to an existing Lender, an Affiliate of an existing Lender or
      an
      Approved Fund; and

    

    (B) the
      consent of the Administrative Agent (such consent not to be unreasonably
      withheld, conditioned or delayed) shall be required for assignments in respect
      of (i) a Revolving Commitment if such assignment is to a Person that is not
      a Lender with a Commitment in respect of such facility, an Affiliate of such
      Lender or an Approved Fund with respect to such Lender or (ii) a Term Loan
      Commitment to a Person who is not a Lender, an Affiliate of a Lender or an
      Approved Fund.

    

    (iv) Assignment
      and Assumption.
      The
      parties to each assignment shall execute and deliver to the Administrative
      Agent
      an Assignment and Assumption, together with a processing and recordation fee
      of
      $3,500 and
      the
      assignee, if it is not a Lender, shall deliver to the Administrative Agent
      an
      Administrative Questionnaire.

    

    (v) No
      Assignment to Credit Parties.
      No such
      assignment shall be made to any Credit Party or any of the Credit Parties’
Affiliates or Subsidiaries of a Credit Party.

    

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

    
      
        
        

      

      
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    Subject
      to acceptance and recording thereof by the Administrative Agent pursuant to
      paragraph (c) of this Section, from and after the effective date specified
      in each Assignment and Assumption, the assignee thereunder shall be a party
      to
      this Agreement and, to the extent of the interest assigned by such Assignment
      and Assumption, have the rights and obligations of a Lender under this
      Agreement, and the assigning Lender thereunder shall, to the extent of the
      interest assigned by such Assignment and Assumption, be released from its
      obligations under this Agreement (and, in the case of an Assignment and
      Assumption covering all of the assigning Lender’s rights and obligations under
      this Agreement, such Lender shall cease to be a party hereto) but shall continue
      to be entitled to the benefits of Sections 2.12 and 10.5 with
      respect to facts and circumstances occurring prior to the effective date of
      such
      assignment. Any assignment or transfer by a Lender of rights or obligations
      under this Agreement that does not comply with this paragraph shall be treated
      for purposes of this Agreement as a sale by such Lender of a participation
      in
      such rights and obligations in accordance with paragraph (d) of this
      Section.

    

    (c) Register.
      The
      Administrative Agent, acting solely for this purpose as an agent of the
      Borrowers, shall maintain at one of its offices in Charlotte, North Carolina
      a
      copy of each Assignment and Assumption delivered to it and a register for the
      recordation of the names and addresses of the Lenders, and the Commitments
      of,
      and principal amounts of the Loans owing to, each Lender pursuant to the terms
      hereof from time to time (the “Register”).
      The
      entries in the Register shall be conclusive, and the Borrowers, the
      Administrative Agent and the Lenders may treat each Person whose name is
      recorded in the Register pursuant to the terms hereof as a Lender hereunder
      for
      all purposes of this Agreement, notwithstanding notice to the contrary. The
      Register shall be available for inspection by the Borrowers and any Lender,
      at
      any reasonable time and from time to time upon reasonable prior
      notice.

    

    (d) Participations.
      With
      the consent of the Administrative Agent, any Lender may at any time, without
      the
      consent of, or notice to, the Borrowers, sell participations to any Person
      (other than a natural person or the Credit Parties or any of the Credit Parties’
Affiliates or Subsidiaries of a Credit Party) (each, a “Participant”)
      in all
      or a portion of such Lender’s rights and/or obligations under this Agreement
      (including all or a portion of its Commitment and/or the Loans owing to it);
      provided
      that
      (i) such Lender’s obligations under this Agreement shall remain unchanged,
      (ii) such Lender shall remain solely responsible to the other parties
      hereto for the performance of such obligations and (iii) the Borrowers, the
      Administrative Agent and the Lenders, shall continue to deal solely and directly
      with such Lender in connection with such Lender’s rights and obligations under
      this Agreement. 

    

    Any
      agreement or instrument pursuant to which a Lender sells such a participation
      shall provide that such Lender shall retain the sole right to enforce this
      Agreement and to approve any amendment, modification or waiver of any provision
      of this Agreement; provided
      that
      such agreement or instrument may provide that such Lender will not, without
      the
      consent of the Participant, agree to any amendment, modification or waiver
      that
      affects such Participant. Subject to paragraph (e) of this Section, the
      Borrowers agree that each Participant shall be entitled to the benefits of
      Sections 2.12 and 2.13 to the same extent as if it were a Lender and had
      acquired its interest by assignment pursuant to paragraph (b) of this
      Section. To the extent permitted by Requirements of Law, each Participant also
      shall be entitled to the benefits of Section 10.7 as
      though
      it were a Lender, provided such Participant agrees to be subject to
      Section 2.9 as
      though
      it were a Lender.

    

    (e) Limitations
      upon Participant Rights.
      A
      Participant shall not be entitled to receive any greater payment under
      Sections 2.12 and 2.14 than the applicable Lender would have been entitled
      to receive with respect to the participation sold to such Participant, unless
      the sale of the participation to such Participant is made with the Borrowers’
prior written consent. A Participant that would be a Foreign Lender if it were
      a
      Lender shall not be entitled to the benefits of Section 2.14 unless the
      Borrowers are notified of the participation sold to such Participant and such
      Participant agrees, for the benefit of the Borrowers, to comply with
      Section 2.14 as
      though
      it were a Lender. 

    

    (f) Certain
      Pledges.
      Any
      Lender may at any time pledge or assign a security interest in all or any
      portion of its rights under this Agreement to secure obligations of such Lender,
      including any pledge or assignment to secure obligations to a Federal Reserve
      Bank; provided
      that no
      such pledge or assignment shall release such Lender from any of its obligations
      hereunder or substitute any such pledgee or assignee for such Lender as a party
      hereto. 

    

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

    

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

    

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

    
      
        
        

      

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

    

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

    

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

    

    Section
      10.8 Table
      of Contents and Section Headings.

    

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

    

    Section
      10.9 Counterparts;
      Integration; Effectiveness; Electronic Execution.

    

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

    

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

    

    Section
      10.10 Severability.

    

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

    

    Section
      10.11 Integration.

    

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

    

    Section
      10.12 Governing
      Law.

    

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

    

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

    

    (a) Consent
      to Jurisdiction.
      Each of
      the Borrowers and each other Credit Party irrevocably and unconditionally
      submits, for itself and its property, to the nonexclusive jurisdiction of the
      courts of the State of New York and
      any
      appellate court from any thereof, in any action or proceeding arising out of
      or
      relating to this Agreement or any other Credit Document, or for recognition
      or
      enforcement of any judgment, and each of the parties hereto irrevocably and
      unconditionally agrees that all claims in respect of any such action or
      proceeding may be heard and determined in such New York sitting
      State court or, to the fullest extent permitted by Requirements of Law, in
      such
      Federal court. Each of the parties hereto agrees that a final judgment in any
      such action or proceeding

    
      
        
        

      

      
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    shall
      be
      conclusive and may be enforced in other jurisdictions by suit on the judgment
      or
      in any other manner provided by Requirements of Law. Nothing in this Agreement
      or in any other Credit Document shall affect any right that the Administrative
      Agent or any Lender may otherwise have to bring any action or proceeding
      relating to this Agreement or any other Credit Document against the Borrowers
      or
      any other Credit Party or its properties in the courts of any
      jurisdiction.

    

    (b) Service
      of Process.
      Each
      party hereto irrevocably consents to service of process in the manner provided
      for notices in Section 10.2. Nothing in this Agreement will affect the right
      of
      any party hereto to serve process in any other manner permitted by Requirements
      of Law.

    

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

    

    The
      provisions of this Section shall survive the termination of this Agreement
      and
      the payment in full of the Obligations.

    

    Section
      10.14 Confidentiality.

    

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

    

    For
      purposes of this Section, “Information”
means
      all information received from the Credit Parties or any of their Subsidiaries
      relating to the Credit Parties or any of their Subsidiaries or any of their
      respective businesses, other than any such information that is available to
      the
      Administrative Agent or any Lender on a nonconfidential basis prior to
      disclosure by the Credit Parties or any of their Subsidiaries, provided
      that, in
      the case of information received from the Credit Parties or any of their
      Subsidiaries after the date hereof, such information is clearly identified
      at
      the time of delivery as confidential. Any Person required to maintain the
      confidentiality of Information as provided in this Section shall be considered
      to have complied with its obligation to do so if such Person has exercised
      the
      same degree of care to maintain the confidentiality of such Information as
      such
      Person would accord to its own confidential information.

    

    The
      provisions of this Section shall survive the termination of this Agreement
      and
      the payment in full of the Obligations.

    

    Section
      10.15 Acknowledgments.

    

    The
      Borrowers and the other Credit Parties each hereby acknowledge
      that:

    

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

    

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

    

    (c) no
      joint
      venture exists among the Lenders or among the Borrowers or the other Credit
      Parties, the Lenders and the Administrative Agent.

    
      
        
        

      

      
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    Section
      10.16 Waivers
      of Jury Trial.

    

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

    

    The
      provisions of this Section shall survive the termination of this Agreement
      and
      the payment in full of the Obligations.

    

    Section
      10.17 Patriot
      Act Notice. 

    

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

    

    Section
      10.18 Resolution
      of Drafting Ambiguities.

    

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

    

    Section
      10.19 Continuing
      Agreement.

    

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

    

    Section
      10.20 Lender
      Consent.

    

    Each
      Person signing a Lender Consent (a) approves
      of this Agreement and the other Credit Documents, (b) authorizes and
      appoints the Administrative Agent as its agent in accordance with the terms
      of
      Article VIII, (c) authorizes the Administrative Agent to execute and
      deliver this Agreement on its behalf, and (d) is a Lender hereunder and
      therefore shall have all the rights and obligations of a Lender under this
      Agreement as if such Person had directly executed and delivered a signature
      page
      to this Agreement.

    

    Section
      10.21 Appointment
      of the Administrative Borrower.

    

    Each
      of
      the Borrowers hereby appoint the Administrative Borrower to act as its agent
      for
      all purposes under this Agreement (including, without limitation, with respect
      to all matters related to the borrowing and repayment of Loans) and agree that
      (a) the Administrative Borrower may execute such documents on behalf of such
      Borrower as the Administrative Borrower deems appropriate in its sole discretion
      and each Borrower shall be obligated by all of the terms of any such document
      executed on its behalf, (b) any notice or communication delivered by the
      Administrative Agent or the Lender to the Administrative Borrower shall be
      deemed delivered to each Borrower and (c) the Administrative Agent or the
      Lenders may accept, and be permitted to rely on, any document, instrument or
      agreement executed by the Administrative Borrower on behalf of each
      Borrower.

    

    Section
      10.22 Counterclaims.

    

    The
      Credit Parties each hereby knowingly, voluntarily and intentionally waives
      any
      right to assert a counterclaim, other than a compulsory counterclaim, in any
      action or proceeding brought against it by the Administrative Agent, the Lenders
      or any of the Affiliates or agents of the foregoing. The provisions of this
      Section shall survive the termination of this Agreement and the payment in
      full
      of the Obligations.

     

    
      
        
        

      

      
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    Section
      10.23 Legal
      Matters.

     

    In
      the
      event of any conflict between the terms of this Agreement, any other Credit
      Document or any Confirmation with respect to any Collateral, the documents
      shall
      control in the following order of priority: first, the terms of the related
      Confirmation shall prevail, then the terms of this Agreement shall prevail,
      and
      then the terms of the other Credit Documents shall prevail.

    

    Section
      10.24 Recourse
      Against Certain Parties.

    

    No
      recourse under or with respect to any obligation, covenant or agreement
      (including, without limitation, the payment of any fees or any other
      obligations) of the Administrative Agent, the Lenders, or the Credit Parties,
      as
      contained in this Agreement, the Credit Documents or any other agreement,
      instrument or document entered into by the Administrative Agent, the Lenders,
      the Credit Parties or any such party pursuant hereto or thereto or in connection
      herewith or therewith shall be had against any administrator of the
      Administrative Agent, the Lenders, or the Credit Parties or any incorporator,
      Affiliate (direct or indirect), owner, member, partner, stockholder, officer,
      director, employee, agent or attorney of the Administrative Agent, the Lenders,
      or the Credit Parties or of any such administrator, as such, by the enforcement
      of any assessment or by any legal or equitable proceeding, by virtue of any
      statute or otherwise; it
      being expressly agreed and understood
      that the
      agreements of the Administrative Agent, the Lenders or the Credit Parties
      contained in this Agreement, the Credit Documents and all of the other
      agreements, instruments and documents entered into by it pursuant hereto or
      thereto or in connection herewith or therewith are, in each case, solely the
      corporate obligations of the Administrative Agent, the Lenders or the Credit
      Parties and that no personal liability whatsoever shall attach to or be incurred
      by any administrator of the Administrative Agent, the Lenders or the Credit
      Parties or any incorporator, owner, member, partner, stockholder, Affiliate
      (direct or indirect), officer, director, employee, agent or attorney of the
      Administrative Agent, the Lenders or the Credit Parties or of any such
      administrator, as such, or any other of them, under or by reason of any of
      the
      obligations, covenants or agreements of the Administrative Agent, the Lenders
      or
      the Credit Parties contained in this Agreement, the Credit Documents or in
      any
      other such instruments, documents or agreements, or that are implied therefrom,
      and that any and all personal liability of every such administrator of the
      Administrative Agent, the Lenders or the Credit Parties and each incorporator,
      owner, member, partner, stockholder, Affiliate (direct or indirect), officer,
      director, employee, agent or attorney of the Administrative Agent, the Lenders,
      the Credit Parties or of any such administrator, or any of them, for breaches
      by
      the Administrative Agent, the Lenders, or the Credit Parties of any such
      obligations, covenants or agreements, which liability may arise either at common
      law or at equity, by statute or constitution, or otherwise, is hereby expressly
      waived as a condition of and in consideration for the execution of this
      Agreement. The provisions of this Section shall survive the termination of
      this Agreement and the payment in full of the Obligations.

    

    Section
      10.25 Protection
      of Right, Title and Interest in the Collateral; Further Action Evidencing
      Loans.

    

    (a) The
      Credit Parties shall cause all financing statements and continuation statements
      and any other necessary documents covering the right, title and interest of
      the
      Administrative Agent to the Collateral to be promptly recorded, registered
      and
      filed, and at all times to be kept recorded, registered and filed, all in such
      manner and in such places as may be required by Requirements of Law fully to
      preserve and protect the right, title and interest of the Administrative Agent
      (on behalf of the Lenders) hereunder to all Property comprising the Collateral.
      The Credit Parties shall deliver to the Administrative Agent file-stamped copies
      of, or filing receipts for, any document recorded, registered or filed as
      provided above, as soon as available following such recording, registration
      or
      filing. The Credit Parties shall execute any and all documents reasonably
      required to fulfill the intent of this Section.

    

    (b) The
      Credit Parties agree that from time to time, at their expense, they will
      promptly execute and deliver all instruments and documents, and take all
      actions, that the Administrative Agent or any Lender may reasonably request
      in
      order to perfect, protect or more fully evidence the Loans hereunder and the
      security interest granted in the Collateral, or to enable the Administrative
      Agent to exercise and enforce their rights and remedies hereunder or under
      any
      Credit Document.

    

    (c) If
      the
      Credit Parties fail to perform any of their obligations hereunder, the
      Administrative Agent may (but shall not be required to) perform, or cause
      performance of, such obligation; and the Administrative Agent’s costs and
      expenses incurred in connection therewith shall be payable by the Borrowers.
      The
      Credit Parties irrevocably appoint the Administrative Agent as their
      attorney-in-fact and authorize the Administrative Agent to act on behalf of
      the
      Credit Parties (i) to execute on behalf of the Credit Parties as debtor and
      to file financing statements necessary or desirable in the Administrative
      Agent’s discretion to perfect and to maintain the perfection and priority of the
      interest in the Collateral, and (ii) to file a carbon, photographic or
      other reproduction of this Agreement or any financing statement with respect
      to
      the Collateral as a financing statement in such offices as the Administrative
      Agent in its discretion deems necessary or desirable to perfect and to maintain
      the perfection and priority of the interests in the Collateral. This appointment
      is coupled with an interest and is irrevocable. 

    

    (d) Without
      limiting the generality of the foregoing, the Credit Parties will not earlier
      than six (6) months and not later than three (3) months prior to the
      fifth anniversary of the date of filing of the financing statement referred
      to
      in Section 4.1(d) or any other financing statement filed pursuant to this
      Agreement, the Credit Documents or in connection with any Loan hereunder, unless
      this Agreement has terminated in accordance with the provisions hereof:

    

    (i) execute
      and deliver and file or cause to be filed an appropriate continuation statement
      with respect to such financing statement; and

    

    (ii) deliver
      or cause to be delivered to the Administrative Agent an Opinion of Counsel
      for
      the Credit Parties, confirming and updating the opinion delivered pursuant
      to
      Section 4.1(c) with respect to perfection and otherwise to the effect that
      the
      security interest hereunder continues to be an enforceable and perfected
      security interest, subject to no other Liens of record except as provided herein
      or otherwise permitted hereunder, which opinion may contain usual and customary
      assumptions, limitations and exceptions.

     

    
      
        
        

      

      
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    Section
      10.26 Credit
      Parties’ Waiver of Setoff.

     

    Each
      Credit Party hereby waives any right of setoff it may have or to which it may
      be
      entitled under this Agreement, the other Credit Documents or otherwise from
      time
      to time against the Administrative Agent, any Lender, or any Property or assets,
      or any of the foregoing. 

    

    Section
      10.27 Periodic
      Due Diligence Review.

    

    Each
      Credit Party acknowledges that the Administrative Agent and each Lender has
      the
      right to perform continuing due diligence reviews with respect to the Collateral
      and the Credit Parties and Consolidated Subsidiaries of the foregoing for
      purposes of verifying compliance with the representations, warranties,
      covenants, agreements and specifications made hereunder, or otherwise, and
      each
      Credit Party agrees that upon reasonable (but no less than one (1) Business
      Day) prior notice, unless an Event of Default shall have occurred, in which
      case
      no notice is required, to the Credit Parties, as applicable, the Administrative
      Agent, the Lenders or their authorized representatives shall be permitted during
      normal business hours to examine, inspect, and make copies and extracts of,
      the
      Collateral and any and all documents, records, agreements, instruments or
      information relating to such Collateral, the Credit Parties and the Consolidated
      Subsidiaries of the foregoing in the possession or under the control of any
      Credit Party. Each Credit Party also shall make available to the Administrative
      Agent a knowledgeable financial or accounting officer for the purpose of
      answering questions respecting the Collateral, the Credit Parties and the
      Consolidated Subsidiaries of the foregoing. Each Credit Party shall also make
      available to the Administrative Agent and the Lenders any accountants or
      auditors of any Credit Party to answer any questions or provide any documents
      as
      the Administrative Agent or the Lenders may require. The Administrative Agent
      has the right to request appraisals for the Collateral and proposed Collateral
      and the Borrowers shall pay all costs related to any appraisals required by
      the
      Administrative Agent in connection with the Collateral or proposed Collateral.
      The Credit Parties acknowledge that the Administrative Agent has the right
      at
      any time to review all aspects of the Collateral and the Asset Value thereof,
      which review shall occur no less than quarterly and such reviews may result
      in
      mandatory prepayments under Section 2.5.

    

    Section
      10.28 Character
      of Loans for Income Tax Purposes.

    

    The
      Lenders and the Borrowers shall treat all Loans hereunder as indebtedness of
      the
      Borrowers for United States federal income tax purposes.

    

    Section
      10.29 Joint
      and Several Liability; Full Recourse Obligations.

    

    (a) At
      all
      times during which there is more than one (1) Borrower under this
      Agreement, each Borrower hereby acknowledges and agrees that (i) such
      Borrower shall be jointly and severally liable to the Administrative Agent
      and
      the Lenders to the maximum extent permitted by the Requirements of Law for
      all
      representations, warranties, covenants, duties and indemnities of the Borrowers,
      arising under this Agreement and the other Credit Documents, as applicable,
      and
      the Obligations, (ii) such Borrower has consented to the Administrative Borrower
      delivering all Notices of Borrowing on behalf of all Borrowers and any such
      Notice of Borrowing delivered by the Administrative Borrower on behalf of the
      Borrowers is binding upon and enforceable against each Borrower, (iii) the
      liability of each Borrower (A) shall be absolute and unconditional and
      shall remain in full force and effect (or be reinstated) until all the
      Obligations shall have been paid in full and the expiration of any applicable
      preference or similar period pursuant to any bankruptcy, insolvency,
      reorganization, moratorium or similar law, or at law or in equity, without
      any
      claim having been made before the expiration of such period asserting an
      interest in all or any part of any payment(s) received by the Administrative
      Agent, and (B) until such payment has been made, shall not be discharged,
      affected, modified or impaired on the happening from time to time of any event,
      including, without limitation, any of the following, whether or not with notice
      to or the consent of the Credit Parties or any other Person, (1) the
      waiver, compromise, settlement, release, termination or amendment (including,
      without limitation, any extension or postponement of the time for payment or
      performance or renewal or refinancing) of any or all of the obligations or
      agreements of any Credit Party under this Agreement or any Credit
      Document,
      (2) the failure to give notice to the Credit Parties of the occurrence of
      an Event of Default under any of the Credit Documents, (3) the release,
      substitution or exchange by the Administrative Agent of any or all of the
      Collateral (whether with or without consideration) or the acceptance by the
      Administrative Agent of any additional collateral or the availability or claimed
      availability of any other collateral or source of repayment or any nonperfection
      or other impairment of collateral, (4) the release of any Person primarily
      or secondarily liable for all or any part of the Obligations, whether by the
      Administrative Agent or in connection with any voluntary or involuntary
      liquidation, dissolution, receivership, insolvency, bankruptcy, assignment
      for
      the benefit of creditors or similar event or proceeding affecting any or all
      of
      the Credit Parties or any other Person who, or any of whose Property, shall
      at
      the time in question be obligated in respect of the Obligations or any part
      thereof, or (5) to the extent permitted by Requirements of Law, any other
      event, occurrence, action or circumstance that would, in the absence of this
      Section, result in the release or discharge of any or all of the Borrowers
      from
      the performance or observance of any obligation, covenant or agreement contained
      in this Agreement or the Credit Documents, (iv) the Administrative Agent
      shall not be required first to initiate any suit or to exhaust its remedies
      against the Credit Parties or any other Person to become liable, or against
      any
      of the Collateral, in order to enforce this Agreement or the Credit Documents
      and the Credit Parties expressly agree that, notwithstanding the occurrence
      of
      any of the foregoing, each Borrower shall be and remain directly and primarily
      liable for all sums due under this Agreement or any of the other Credit
      Documents, (v) when making any demand hereunder against any Borrower, the
      Administrative Agent or the Lenders may, but shall be under no obligation to,
      make a similar demand on the other Borrowers, and any failure by the
      Administrative Agent or Lenders to make any such demand or to collect any
      payments from the other Borrowers, or any release of such other Borrowers,
      shall
      not relieve any Borrower in respect of which a demand or collection is not
      made
      or the Borrowers not so released of their obligations or liabilities hereunder,
      and shall not impair or affect the rights and remedies, express or implied,
      or
      as a matter of law, of the Administrative Agent or the Lenders against the
      Borrowers and (vi) on disposition by the Administrative Agent of any
      Property encumbered by any Collateral, each Borrower shall be and shall remain
      jointly and severally liable for any deficiency.

    

    (b) Each
      Borrower hereby agrees that, to the extent another Borrower shall have paid
      more
      than its proportionate share of any payment made hereunder, the Borrowers shall
      be entitled to seek and receive contribution from and against any other
      Borrowers which have not paid their proportionate share of such payment;
provided however,
      that
      the provisions of this Section shall in no respect limit the obligations and
      liabilities of each Borrower to the Administrative
      Agent and the Lenders and,
      notwithstanding any payment or payments made by a Borrower (the “paying
      Borrower”)
      hereunder or any set-off or application of funds of the paying Borrower by
      the
Administrative
      Agent or the Lenders, the
      paying Borrower shall not be entitled to be subrogated to any of the rights
      of
      the Administrative
      Agent or the Lenders against
      any other Borrowers or any collateral security or guarantee or right of offset
      held by the

    
      
        
        

      

      
        -
          77 -

        
          

        

      

      
        
        

      

    

    Administrative
      Agent or the Lenders, nor
      shall
      the paying Borrower seek or be entitled to seek any contribution or
      reimbursement from the other Borrowers in respect of payments made by the paying
      Borrower hereunder, until all amounts owing to the Administrative
      Agent and the Lenders by
      the
      Borrowers under the Credit Documents and the Obligations (but only to the extent
      that an event of default, an event that, with the notice or the lapse of time,
      would become an event of default, or any acceleration has occurred with respect
      to such other Obligations) are paid in full. If any amount shall be paid to
      the
      paying Borrower on account of such subrogation rights at any time when all
      such
      amounts shall not have been paid in full, such amount shall be held by the
      paying Borrower in trust for the Administrative
      Agent,
      segregated from other funds of the paying Borrower, and shall, forthwith upon
      receipt by the paying Borrower, be turned over to the Administrative
      Agent
      in the
      exact form received by the paying Borrower (duly indorsed by the paying Borrower
      to the Administrative
      Agent,
      if
      required), to be applied against amounts owing to the Administrative
      Agent
      and the
      Lenders by the Borrowers under the Credit Documents and the Obligations (but
      only to the extent that an event of default, an event that, with the notice
      or
      the lapse of time, would become an event of default, or any acceleration has
      occurred with respect to such other Obligations) in such order as the
Administrative
      Agent
      may
      determine in its discretion.

    

    (c) The
      obligations of the Borrowers and the Guarantor under the Credit Documents are
      full recourse obligations to each Borrower and the Guarantor and the Borrowers
      and the Guarantor hereby forever waive, demise, acquit and discharge any and
      all
      defenses, and shall at no time assert or allege any defense, to the
      contrary.

     

     

    [Signature
      Pages Follow]

     

    
      
        
        

      

      
        -
          78 -

        
          

        

      

      
        
        

      

    

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

    

    

    BORROWER:

    CAPLEASE
      DEBT FUNDING, LP,

    a
      Delaware limited partnership

     

    By: 
      CLF
      OP
      GENERAL PARTNER LLC,

    its
      General Partner

     

    By: 
      CapLease,
      Inc., the sole member

    of
      CLF OP
      GENERAL PARTNER LLC

     

    By: 
      /s/
      Robert C. Blanz 
      
        

      

    

    Name:
      Robert C. Blanz

    Title:
      Senior Vice President

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    GUARANTORS:

    CAPLEASE,
      INC.,
      a
      Maryland corporation

     

    By: 
      /s/
      Robert C. Blanz 
      
        

      

    

    Name:
      Robert C. Blanz

    Title:
      Senior Vice President

     

    CAPLEASE,
      LP,
      a
      Delaware limited partnership, for itself and on behalf of 
certain
      special-purpose
      entity subsidiaries thereof

     

    By: 
      CLF
      OP
      GENERAL PARTNER LLC, its
      General Partner

     

    By: 
      CapLease,
      Inc., the sole member

    of
      CLF OP
      GENERAL PARTNER LLC

     

    By: 
      /s/
      Robert C. Blanz 
      
        

      

    

    Name:
      Robert C. Blanz

    Title:
      Senior Vice President

     

    CAPLEASE
      SERVICES CORP.,
      a
      Delaware corporation

     

    By: 
      /s/
      Robert C. Blanz 
      
        

      

    

    Name:
      Robert C. Blanz

    Title:
      Senior Vice President

     

    PREFCO
      II LIMITED PARTNERSHIP,
a
      Connecticut limited partnership

     

    By: 
      PREFCO
      II
      GP LLC, its sole general partner

     

    By: 
      /s/
      Paul
      H. McDowell 
      
        

      

    

    Name:
      Paul H. McDowell

    Title:
      Chief Executive Officer

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    ADMINISTRATIVE
      AGENT:

    WACHOVIA
      BANK, NATIONAL ASSOCIATION,

as
      Administrative Agent on behalf of the Lenders

     

    By: 
      /s/ John Nelson 
      
        

      

    

    Name:
      John Nelson

    Title:
      Director

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00141-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00141-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00141-of-00352.parquet"}]]