REVOLVING LOAN AGREEMENT

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$40,000,000

REVOLVING LOAN AGREEMENT

by and among

CAPITAL LEASE FUNDING, INC.,

AND

PREFCO II LIMITED PARTNERSHIP,

as Borrower,

and

WACHOVIA BANK NATIONAL ASSOCIATION,

in its respective capacities

as Initial Lender and as Administrative Agent

Dated as of July 17, 2007

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ARTICLE I DEFINITIONAL PROVISIONS 1

Section 1.01 Definitions 1

Section 1.02 Other Definitional Provisions 8

Section 1.03 Accounting Terms 8

Section 1.04 Computation of Time Periods 9

ARTICLE II THE LOANS; AMOUNT AND TERMS 9

Section 2.01 Loans 9

Section 2.02 Payments to Collection Account 10

Section 2.03 Prepayments 10

Section 2.04 Default Rate and Payment Dates 10

Section 2.05 Computation of Interest and Fees 11

Section 2.06 Pro Rata Treatment and Payments 11

Section 2.07 Non-Receipt of Funds by the Administrative Agent 12

Section 2.08 Inability to Determine Interest Rate 12

Section 2.09 Illegality 12

Section 2.10 Requirements of Law 13

Section 2.11 Indemnity 13

Section 2.12 Taxes 13

ARTICLE III CONDITIONS PRECEDENT 14

Section 3.01 Conditions 14

Section 3.02 Conditions to All Extensions of Credit 16

ARTICLE IV REPRESENTATIONS AND WARRANTIES 17

Section 4.01 Representations and Warranties 17

ARTICLE V COVENANTS 19

Section 5.01 Intentionally Omitted 19

Section 5.02 Mortgaged Assets 19

Section 5.03 Financial Covenants 19

Section 5.04 Certificates; Other Information 19

Section 5.05 No Negative Pledge 20

Section 5.06 Intentionally omitted 20

Section 5.07 Intentionally Omitted 20

Section 5.08 Compliance with Laws 20

Section 5.09 Taxes 20

Section 5.10 Books and Records 20

Section 5.11 Preservation of Existence 20

Section 5.12 Maintenance of Collateral 20

Section 5.13 Intentionally Omitted 21

Section 5.14 Further Assurances 21

Section 5.15 Ownership 21

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Section 5.16 Appraisals 21

Section 5.17 Indebtedness 21

Section 5.18 Liens 21

Section 5.19 Liquidations, Mergers, Consolidations, Acquisitions 21

Section 5.20 Changes in Organizational Documents; Name 21

Section 5.21 Enforceability of Loan Documents 21

Section 5.22 Reporting Requirements 21

Section 5.23 Future Disclosure 22

Section 5.24 Ground Lease 22

ARTICLE VI EVENTS OF DEFAULT 23

Section 6.01 Events of Default 23

Section 6.02 Acceleration; Remedies 24

Section 6.03 Notice of Default 24

Section 6.04 Non-Reliance on Administrative Agent and Other Lenders 24

Section 6.05 Indemnification 24

Section 6.06 The Administrative Agent in Its Individual Capacity 24

Section 6.07 Successor Administrative Agent 24

Section 6.08 Other Agents 26

ARTICLE VII THE ADMINISTRATIVE AGENT 26

Section 7.01 Appointment 26

Section 7.02 Delegation of Duties 26

Section 7.03 Exculpatory Provisions 26

Section 7.04 Reliance by Administrative Agent 26

ARTICLE VIII RECOURSE 27

Section 8.01 Full Recourse Obligations 27

ARTICLE IX MISCELLANEOUS 27

Section 9.01 Amendments, Waivers and Release of Collateral 27

Section 9.02 Survival of Representations and Warranties 28

Section 9.03 Successors and Assigns; Participations; Purchasing Lenders 28

Section 9.04 Adjustments 30

Section 9.05 Indemnification and Expenses 30

Section 9.06 Notices and Other Communications 30

Section 9.07 Entire Agreement; Severability 31

Section 9.08 GOVERNING LAW 31

Section 9.09 SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL 31

Section 9.10 Periodic Due Diligence Review 32

Section 9.11 Intentionally Omitted 32

Section 9.12 Legal Matters 32

Section 9.13 Confidentiality 32

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Section 9.14 Right of Set-off 33

Section 9.15 Treatment of Certain Information 33

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SCHEDULES

Schedule 1.01(B) Lenders and Commitments

Schedule 3.01(h) Organizational Chart of the Borrower

EXHIBITS

Exhibit A Form of Revolving Note

Exhibit B Form of Commitment Transfer Supplement

Exhibit C Intentionally Omitted

Exhibit D Form of Mortgage and Security Agreement

Exhibit E Form of Closing Certificate

Exhibit F Form of Deposit Account Control Agreement

Exhibit G Form of Solvency Certificate

Exhibit H Form of Compliance Certificate

Exhibit I Intentionally Omitted

Exhibit J Form of Notice of Borrowing

Exhibit K Form of 2.12 Certificate

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REVOLVING LOAN AGREEMENT

THIS REVOLVING LOAN AGREEMENT, dated as of July 17, 2007 (this

"Agreement"), between CAPITAL LEASE FUNDING, INC., a Maryland corporation

("Caplease"), PREFCO II LIMITED PARTNERSHIP, a Connecticut limited partnership

("Owner" and, together with Caplease, "Borrower") and WACHOVIA BANK NATIONAL

ASSOCIATION, in its capacity as the initial Lender ("Initial Lender") and as

administrative agent for the financial institutions and banks ("Lenders") party

hereto from time to time (in such capacity, the "Administrative Agent" or the

"Agent").

WITNESSETH:

WHEREAS, the Borrower has requested, and the Initial Lender has agreed, to

extend certain credit facilities to the Borrower on the terms and conditions set

forth 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

DEFINITIONAL PROVISIONS

Section 1.01 Definitions.

(a) As used herein, the following terms shall have the following meanings

(all terms defined in this Section 1.01 or in other provisions of this Agreement

in the singular shall have the same meanings when used in the plural and vice

versa).

"Adjustment Event": With respect to the Eligible Asset, the occurrence of

any of the following (each of which shall be deemed to adjust the Fair Market

Value of the Eligible Asset by such amount as may be determined by Agent

exercising reasonable discretion): (a) any theft, loss, physical destruction or

damage, taking, condemnation or similar event; (b) the Fair Market Value of the

Eligible Asset is not supported or validated pursuant to a FIRREA standard

appraisal, as determined by the Agent in its sole discretion exercised in good

faith; (c) any violation or noncompliance, or claim or allegation of violation

of or noncompliance with, any Environmental Laws, including, without limitation,

by any Person or Governmental Authority; (d) any default in or nonperformance of

any material obligations by Borrower as landlord, or by any tenant leasing a

material portion of the Eligible Asset or the termination of any such tenant's

lease; or (e) any default in or nonperformance of material obligations by any

Person arising out of or in connection with any construction, capital

improvement or similar projects or undertakings, including, without limitation,

material cost overruns (solely to the extent included by the Agent and/or the

Initial Lender in evaluating the initial Purchase Price of such Eligible Asset

and extending credit upon the terms and conditions set forth in this Agreement).

Agent and Lenders shall only be entitled to obtain an appraisal of the Eligible

Asset for purposes of clause (b) above following the occurrence of an event

which such Agent or Lenders reasonably believe will have a material adverse

effect on the Fair Market Value of the Eligible Asset.

"Advance Rate": 70%.

"Affiliate": As to any Person, an "Affiliate" of such Person, as such term

is defined in the Bankruptcy Code.

"Agreement": This Agreement, as amended, restated, amended and restated

and supplemented from time to time.

"ALTA": The American Land Title Association.

"Alternate Base Rate": The per annum rate of interest equal to the greater

of (a) the prime rate or (b) the federal funds rate plus one half of one percent

(0.5%). Any change in the Alternate Base Rate resulting from a change in the

prime rate or the federal funds rate shall become effective as of 12:01 a.m. on

the Business Day on which each such change occurs. The Alternate Base Rate is a

reference rate used by the Agent in determining interest rates on certain loans

and is not intended to be the lowest rate of interest charged by the Agent or

any other Lender on any extension of credit to Borrower.

"Alternate Base Rate Loans": Loans the rate of interest applicable to

which is based on the Alternate Base Rate.

"Anti-Money Laundering Laws": The meaning specified in Section 4.01(r).

"Applicable Premium": 125 basis points (1.25%).

"Approved Fund": With respect to any Lender that is a fund that invests in

bank loans, any other fund that invests in bank loans and is managed by the same

investment advisor as such Lender or by an affiliate of such investment advisor.

"Bankruptcy Code": The United States Bankruptcy Code of 1978, as amended

from time to time.

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"Borrower": As defined in the Recitals.

"Borrowing Date": In respect of any Loan, the date such Loan is made.

"Business Day": Any day other than a (i) Saturday or Sunday or (ii) day on

which banks in the State of North Carolina, the State of New York, the District

of Columbia, or the state in which any of the Agent or the Borrower is located

is authorized or obligated by law or executive order to be closed.

"Caplease": As defined in the Recitals.

"Cash and Cash Equivalents": (i) cash, (ii) direct obligations of the

United States Government, including without limitation, treasury bills, notes

and bonds, (iii) interest bearing or discounted obligations of Federal agencies

and government sponsored entities or pools of such instruments offered by

approved banks and dealers, including without limitation, Federal Home Loan

Mortgage Corporation participation sale certificates, Government National

Mortgage Association modified pass through certificates, Federal National

Mortgage Association bonds and notes, and Federal Farm Credit System securities,

(iv) time deposits, domestic and Eurodollar certificates of deposit, bankers'

acceptances, commercial paper rated at least A-1 by S&P and P-1 by Moody's

and/or guaranteed by a Person with an Aa1 rating by Moody's, an AA- rating by

S&P or better rated credit, floating rate notes, other money market instruments

and letters of credit each issued by approved banks (provided that the same

shall cease to be a "Cash or Cash Equivalent" if at any time any such bank shall

cease to be an approved bank), (v) obligations of domestic corporations,

including, without limitation, commercial paper, bonds, debentures and loan

participations, each of which is rated at least AA- by S&P and/or Aa1 by Moody's

and/or guaranteed by a Person with an Aa1 rating by Moody's and/or a AA- rating

by S&P or better rated credit, (vi) obligations issued by states and local

governments or their agencies, rated at least MIG-1 by Moody's and/or SP-1 by

S&P and/or guaranteed by an irrevocable letter of credit of an approved bank

(provided that the same shall cease to be a "Cash or Cash Equivalent" if at any

time any such bank shall cease to be an approved bank), (vii) repurchase

agreements with major banks and primary government security dealers fully

secured by the U.S. government or agency collateral equal to or exceeding the

principal amount on a daily basis and held in safekeeping, and (viii) real

estate loan pool participations, guaranteed by a Person with an AA- rating given

by S&P or Aa1 rating given by Moody's or better rated credit.

"Change of Control": (a) any 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 the Borrower (or other

securities convertible into such Voting Interests) representing more than 50% of

the combined voting power of all Voting Interests of Borrower, (b) Continuing

Directors shall cease for any reason to constitute a majority of the members of

the board of directors of the Borrower 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 the Borrower and its Subsidiaries taken as a

whole to any "person" (as such term is used in Sections 13(d) and 14(d) of the

Securities Act of 1934) or (d) the adoption by the equity holders of the

Borrower of a plan or proposal for the liquidation or dissolution of the

Borrower. As used herein, "beneficial ownership" shall have the meaning provided

in Rule 13d-3 of the Securities and Exchange Commission under the Securities Act

of 1934.

"Closing Certificate": A Closing Certificate, substantially in the form

attached hereto as Exhibit E, including all attachments and exhibits thereto,

which shall include a copy of: (a) a recorded copy of all deeds evidencing title

to and ownership of the Eligible Asset in recordable form; (b) any HUD-1 (or

equivalent) settlement statements in respect of such Eligible Asset acquisition;

and (c) such other documentation as the Administrative Agent may reasonably

request.

"Closing Date": The date of this Agreement.

"Code": The Internal Revenue Code of 1986, as amended from time to time.

"Collateral": A collective reference to the collateral which is identified

in, and at any time covered by, the Security Documents or such other collateral

in which a security interest may be granted in favor of the Agent to secure the

Loans.

"Collection Account": The meaning given to such term in Section 2.02.

"Commitment Fee": The meaning given to such term in Section 2.13.

"Commitment Period": The period of time commencing on the date hereof and

ending on the Business Day preceding the Termination Date.

"Commitment Transfer Supplement": A Commitment Transfer Supplement, in

substantially the form of Exhibit B.

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"Compliance Certificate": A Compliance Certificate, in substantially the

form of Exhibit H, demonstrating compliance by the Borrower and its Subsidiaries

as of the date of delivery thereof with the financial covenants contained in

Section 5.03 hereof and such other matters as are set forth therein, in each

case for the periods specified therein.

"Consolidated Tangible Net Worth" At any time, Consolidated Total Assets

less Consolidated Total Liabilities.

"Consolidated Total Assets": At any time, all amounts which would be

included as assets on a consolidated balance sheet of the Borrower other than

(i) amounts owing to Borrower from Affiliates, or from officers, employees,

partners, members, directors, shareholders or other Persons similarly affiliated

with Borrower or its Affiliates, (ii) intangible assets (including, without

limitation, synthetic or derivative products and/or positions) other than

intangible assets arising from the allocation of the purchase price on real

property acquisitions, (iii) prepaid taxes and/or expenses (which shall not

include, for the avoidance of doubt, purchase price, mortgage loan and other

deposits and escrows), and (iv) assets which have not yet been acquired but are

consolidated under FIN 46. For the avoidance of doubt, "Consolidated Total

Assets" shall not be reduced by "accumulated depreciation and amortization" on

real estate investments.

"Consolidated Total Liabilities": At any time, without duplication, all

amounts which would be included as liabilities on a consolidated balance sheet

of the Borrower, plus all Contingent Liabilities less any liabilities under

which the Borrower or any Subsidiary are not obligated but are consolidated

under FIN 46.

"Contingent Liabilities": Without duplication, all items that would

constitute "Contingent Obligations" as such term is defined under GAAP or

pursuant to the reporting requirements of Sections 13 and 15 of the Securities

Exchange Act of 1934, as amended.

"Continuing Director": Means (i) an individual who is a member of the

Borrower's Board of Directors on the date hereof or (ii) any new director whose

appointment was approved by a majority of the persons who were already

Continuing Directors at the time of such appointment, election or approval.

"Costs": Any and all claims, damages, losses, liabilities, costs and

expenses (including, without limitation, attorneys' fees and disbursements).

"Default": Any of the events specified in Section 7.01, whether or not any

requirement for the giving of notice, the lapse of time, or both, or any other

condition, has been satisfied.

"Default Rate": The meaning given to such term in Section 2.04.

"Deposit Account Control Agreement": The Deposit Account Control

Agreement, in substantially the form - attached hereto as Exhibit F.

"Dollars" and "$": Lawful money of the United States of America.

"Due Diligence Review": The performance by the Agent of any or all of the

reviews permitted under Section 9.10 with respect to the Eligible Asset, as

reasonably desired by the Agent from time to time.

"Eligible Asset": The leasehold interest in real estate asset located at

1301 Atwood Avenue, Johnston, Rhode Island (also referred to herein as the "FM

Global Building") pursuant to the terms of the Ground Lease, together with any

other real estate asset that is accepted by the Agent in its sole and absolute

discretion hereunder.

"Eligible Asset Disposition": A (i) bona fide sale, transfer or other

disposition of the Eligible Asset to a Person who is not an Affiliate of

Borrower, or (ii) refinancing or encumbering of the Eligible Asset.

"Eligible Asset File": All documents, records, files, data, information

and correspondence in respect of the subject Eligible Asset as maintained by the

Borrower or its Subsidiaries.

"Environmental Indemnity Agreement": The Environmental Indemnity

Agreement, executed on the date hereof by the Borrower in favor of the Agent.

"Environmental Laws": Any and all foreign, Federal, state, local or

municipal laws, rules, orders, regulations, statutes, ordinances, codes,

decrees, requirements of any Governmental Authority or 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 hereafter be in effect.

"Equity Interest": With respect to any Person, any share of capital stock

of (or other ownership or profit interests in) such Person, any warrant, option

or other right for the purchase or other acquisition from such Person of any

share of capital stock of (or other ownership or profit interests in) such

Person, any security convertible into or exchangeable for any share of capital

stock of (or other ownership or profit interests in) such Person or warrant,

right or option for the purchase or other acquisition from such Person of such

shares (or such other interests) and any other ownership or profit interest in

such Person (including, without limitation, partnership, member or trust

interests therein), whether voting or nonvoting, and whether or not such share,

warrant, option, right or other interest is authorized or otherwise existing on

any date of determination.

"ERISA": The Employee Retirement Income Security Act of 1974, as amended

from time to time.

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"ERISA Affiliate": Any corporation or trade or business that is a member

of any group of organizations (i) described in Section 414(b) or (c) of the Code

of which Borrower is a member and (ii) solely for purposes of potential

liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code

and the lien created under Section 302(f) of ERISA and Section 412(n) of the

Code, described in Section 414(m) or (o) of the Code of which Seller is a

member.

"Eurodollar Reserve Percentage": For any day, the percentage (expressed as

a decimal and rounded upwards, if necessary, to the next higher 1/100th of 1%)

which is in effect for such day as prescribed by the Federal Reserve Board (or

any successor) for determining the maximum reserve requirement (including

without limitation any basic, supplemental or emergency reserves) in respect of

Eurocurrency liabilities, as defined in Regulation D of such Board as in effect

from time to time, or any similar category of liabilities for a member bank of

the Federal Reserve System in New York City.

"Event of Default": The meaning specified in Section 7.01.

"Extension of Credit": As to any Lender, the making of a Loan by such

Lender.

"Fair Market Value": 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; (b) with respect to any other

property, including realty, other than Eligible Asset, the price which 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 and (c) Eligible Asset, the price which

could be negotiated in an arm's-length free market transaction, for cash for

such Eligible Asset, between a willing seller and a willing buyer, neither of

which is under pressure or compulsion to complete the transaction, in each case,

as determined by Agent in its sole discretion exercised in good faith.

"Federal Funds Effective Rate": The meaning set forth in the definition of

"Alternate Base Rate".

"Federal Funds Rate": For any day, the rate per annum (rounded upwards, if

necessary, to the nearest 1/1000 of 1%) equal to the weighted average of the

rates on overnight Federal Funds transactions with members of the Federal

Reserve System arranged by Federal funds brokers on such day, as published by

the Federal Reserve Bank of New York on such day; provided that (a) if such day

is not a Business Day, the Federal Funds Rate for such day shall be such rate on

such transactions on the next preceding Business Day as so published on the next

succeeding Business Day, and (b) if no such rate is so published on such

Business Day, the Federal Funds Rate for such day shall be the average of the

quotations for such day for such transactions received by the Agent from three

Federal funds brokers of recognized standing and reputation reasonably selected

by the Agent.

"Fee Letter": That certain Fee Letter, dated as of the date hereof, among

the Borrower and the Agent, as the same may be amended, supplemented or

otherwise modified from time to time.

"GAAP": 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

5.03 to the provisions of Section 1.03.

"Governmental Authority": Any nation or government, any state or other

political subdivision thereof and any entity exercising executive, legislative,

judicial, regulatory or administrative functions of or pertaining to government.

"Ground Lease": That certain Ground Lease dated as of July 2, 1984 between

Factory Mutual Insurance Company (formerly known as Allendale Mutual Insurance

Company), as lessor, and PREFCO II Limited Partnership (as successor to Johnston

Associates), as lessee.

"Guarantee": As to any Person, any obligation of such Person directly or

indirectly guaranteeing any indebtedness of any other Person or in any manner

providing for the payment of any indebtedness of any other Person or otherwise

protecting the holder of such indebtedness against loss (whether by virtue of

partnership arrangements, by agreement to keep-well another Person, to purchase

assets, goods, securities or services, or to agree to take-or-pay arrangement or

otherwise). The amount of any Guarantee of a Person shall be deemed to be 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 as determined by

such Person in good faith. The terms "Guarantee" and "Guaranteed" used as verbs

shall have correlative meanings.

"Indebtedness": Without duplication, all items that would constitute

"Indebtedness" as such term is defined under GAAP or pursuant to the reporting

requirements of Sections 13 and 15 of the Securities Exchange Act of 1934, as

amended, but including in any event (i) any mandatory redeemable Equity

Interests, any trust preferred Equity Interests (to the extent owned directly or

beneficially by the Borrower or any of its Subsidiaries) and any Contingent

Liabilities and (ii) without duplication, any and all of the Borrower's or any

of its Affiliates' obligations under or in connection with Interest Rate

Protection Agreements.

"Indemnified Party": The meaning set forth in Section 9.05.

"Initial Lender": As defined in the Recitals.

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"Interest Payment Date": The eleventh (11th) day of each calendar month,

provided that if such day is not a Business Day, the Interest Payment Date shall

occur on the immediately succeeding Business Day.

"Interest Period": With respect to any LIBOR Rate Loan, initially, the

period commencing on the applicable Borrowing Date and ending as of the next

succeeding Interest Payment Date; and thereafter, each period commencing on the

last day of the immediately preceding Interest Period applicable to such LIBOR

Rate Loan and ending on the earlier to occur of (x) the next occurring Interest

Payment Date or (y) the Termination Date.

"Interest Rate Protection Agreement": Any futures contract, options

related contract, short sale of US treasury securities or any interest rate

swap, cap, floor or collar agreement or any other similar arrangement providing

for protection against fluctuations in interest rates or the exchange of nominal

interest obligations, either generally or under specific contingencies and

acceptable to the Agent.

"Lender": The meaning given to such term in the preamble to this

Agreement.

"Leverage Ratio": The ratio of Consolidated Total Liabilities to

Consolidated Total Assets.

"LIBOR": For any LIBOR Rate Loan for any Interest Period therefor, the

rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)

appearing on Telerate Page 3750 (or any successor page) as the London interbank

offered rate for deposits in Dollars at approximately 11:00 A.M. (London time)

two Business Days prior to the first day of such Interest Period for a term

comparable to such Interest Period. If for any reason such rate is not

available, the term "LIBOR" shall mean, for any LIBOR Rate Loan for any Interest

Period therefor, the rate per annum (rounded upwards, if necessary, to the

nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London

interbank offered rate for deposits in Dollars at approximately 11:00 A.M.

(London time) two Business Days prior to the first day of such Interest Period

for a term comparable to such Interest Period; provided, however, if more than

one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be

the arithmetic mean of all such rates (rounded upwards, if necessary, to the

nearest 1/100 of 1%). If, for any reason, neither of such rates is available,

then "LIBOR" shall mean the rate per annum at which, as determined by the

Administrative Agent, 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": Initially, the office of each Lender designated in

writing as such Lender's LIBOR Lending Office and thereafter, such other office

of such Lender as such Lender may from time to time specify to the

Administrative Agent and the Borrower as the office of such Lender at which the

LIBOR Rate Loans of such Lender are to be made.

"LIBOR Rate": A rate per annum (rounded upwards, if necessary, to the next

higher 1/100th of 1%) determined by the Administrative Agent pursuant to the

following formula:

LIBOR

LIBOR

Rate = --------------------------------

1.00 - Eurodollar Reserve

Percentage

"LIBOR Rate Loan": Loans the rate of interest applicable to which is based

on the LIBOR Rate.

"Lien": Any mortgage, lien, pledge, charge, security interest or similar

encumbrance.

"Loan": The meaning set forth in Section 2.01(a).

"Loan Documents": This Agreement, each Revolving Note, the Security

Documents, the Environmental Indemnity Agreement, the Deposit Account Control

Agreement and all other agreements, documents, certificates and instruments

delivered to the Administrative Agent or any Lender by Borrower or its

Subsidiaries in connection herewith (other than any agreement, document,

certificate or instrument related to any Interest Rate Protection Agreement).

"Material Adverse Effect": A material adverse effect on (a) the

properties, business, operations, financial condition or prospects of the

Borrower, (b) the ability of the Borrower to perform its obligations under any

of the Loan Documents to which it is a party, (c) the validity or enforceability

of any of the Loan Documents, (d) the rights and remedies of the Agent under any

of the Loan Documents, (e) the timely payment of any amounts payable under the

Loan Documents and (f) the Fair Market Value of the Eligible Asset.

"Material Contracts": (a) any contract or other agreement, written or

oral, of the Borrower or any of its Subsidiaries involving in the aggregate a

monetary liability of or to any such Person in excess of $5,000,000 (or, solely

with respect to the Borrower and not in respect of its Subsidiaries, in an

amount in excess of $2,000,000) and (b) any other contract, agreement, written

or oral, of the Borrower or any of its Subsidiaries the failure to comply with

which could reasonably be expected to have a Material Adverse Effect.

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"Moody's": Moody's Investors Service, Inc.

"Mortgage and Security Agreement": The Mortgage and Security Agreement,

made by Owner in favor of the Initial Lender, in the form of Exhibit D attached

hereto, as amended, restated, supplemented or, otherwise modified and in effect

from time to time.

"Multiemployer Plan": A multiemployer plan defined as such in Section

3(37) of ERISA to which contributions have been or are required to be made by

the Borrower or any ERISA Affiliate and that is covered by Title IV of ERISA.

"Net Proceeds": With respect to any Equity Issuance or Debt Issuance by a

Person, the aggregate amount of all cash and the Fair Market Value of all other

property received by such Person in respect of such Equity Issuance or Debt

Issuance net of investment banking fees, legal fees, accountants' fees,

underwriting discounts and commissions and other customary fees and expenses

actually incurred by such Person in connection with such Equity Issuance.

"Non-Recourse Indebtedness": With respect to a 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 liability) is contractually limited to

specific assets of such Person encumbered by a Lien securing such Indebtedness.

"Notice of Borrowing": A request for a Loan borrowing pursuant to Section

2.01(b)(i).

"Obligations": Without duplication, (i) all of the obligations (including

principal, interest, fees, reimbursements, indemnification obligations and other

amounts) of the Borrower to the Lenders (including the Initial Lender) and the

Administrative Agent, whenever arising, under this Agreement, the Notes or any

of the other Loan Documents (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 Borrower or its Subsidiaries, regardless of

whether such interest is an allowed claim under the Bankruptcy Code), (ii) all

liabilities and obligations, whenever arising, owing from Borrower or its

Subsidiaries arising under any Interest Rate Protection Agreement, and (iii) all

liabilities and obligations, whenever arising, owing from Borrower or its

Subsidiaries to the Lenders (including the Initial Lender), the Agent or any of

their Affiliates.

"Owner": As defined in the Recitals.

"Participant": The meaning set forth in Section 9.03(b).

"PBGC": The Pension Benefit Guaranty Corporation or any entity succeeding

to any or all of its functions under ERISA.

"Permitted Exception": Those exceptions to title with respect to the

Eligible Asset approved by Agent in its sole discretion.

"Person": Any individual, corporation, company, voluntary association,

partnership, joint venture, limited liability company, trust, unincorporated

association or government (or any agency, instrumentality or political

subdivision thereof).

"Plan": An employee benefit or other plan established or maintained by any

Seller or any ERISA Affiliate and covered by Title N of ERISA, other than a

Multiemployer Plan,

"Preferred Securities": With respect to any Person, Equity Interests in

such Person that are entitled to preference or priority over any other Equity

Interest in such Person or the Indebtedness in respect of any payments on such

preferred Equity Interests, including but not limited to, the payment (or

accrual) of dividends or distribution of assets upon liquidation, or both.

"Property": Any right or interest in or to property of any kind

whatsoever, whether real, personal or mixed and whether tangible or intangible.

"Purchase Price": The Fair Market Value of aggregate consideration given,

whether in the form of cash, property or other assets, by Borrower, to acquire

the Eligible Asset.

"Recovery Event": Receipt by the Borrower of any cash insurance proceeds

or condemnation award payable by reason of theft, loss, physical destruction or

damage, taking or similar event with respect to the Eligible Asset, other than

obsolete property or assets no longer used or useful in the business of the

Borrower.

"Regulations T, U and X": Regulations T, U and X of the Board of Governors

of the Federal Reserve System (or any successor), as the same may be modified

and supplemented and in effect from time to time.

"REIT": A "real estate investment trust" within the meaning of the Code.

"Reportable Event": 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 Sections .21, -22, .23, .26, .27 or .28 of PBGC Reg. 3-4043.

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"Repurchase Agreement": The Master Repurchase Agreement, dated as of

September 22, 2004, as amended, among Initial Lender, as buyer, Caplease, LP and

certain special purpose entity subsidiaries of Caplease, LP as Sellers, and

Borrower as guarantor.

"Requirement of Law": As to any Person, the certificate of incorporation

and bylaws or other organizational or governing documents of such Person, and

any law, treaty, rule or regulation or determination of an arbitrator or a court

or other Governmental Authority, in each case applicable to or binding upon such

Person or any of its property or to which such Person or any of its property is

subject.

"Requisite Lenders": As of any date, Lenders holding Revolving Commitment

Percentages totaling at least 66-2/3%, provided, that any Lender that is in

default hereunder shall not be included in calculating such Revolving Commitment

Percentages.

"Responsible Officer": As to any Person, the chief executive officer, the

president, the chief financial officer, the chief investment officer or the

general counsel of such Person.

"Revolving Commitment": With respect to each Lender, the commitment of

such Lender to make Loans in an aggregate principal amount at any time

outstanding up to such Lender's Revolving Commitment as specified in Schedule

1.01(B), as such amount may be reduced from time to time in accordance with the

provisions hereof.

"Revolving Commitment Percentage": For each Lender, the percentage

identified as its Revolving Commitment Percentage on Schedule 1.01(B), as such

percentage may be modified in connection with any assignment made in accordance

with the provisions of Section 9.03(c).

"Revolving Commitment Amount": The meaning set forth in Section 2.01(a).

"Revolving Note": That Revolving Note, in substantially the form attached

hereto as Exhibit A.

"S&P": Standard & Poor's Ratings Services, a division of The McGraw Hill

Companies, Inc.

"SEC": The Securities and Exchange Commission, or any successor thereto.

"Security Documents": The Mortgage and Security Agreement, the Deposit

Account Control Agreement, and such other documents 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.

"Subsidiary": With respect to any Person, any corporation, partnership,

limited liability company or other entity of which at least a majority of the

securities or other ownership interests having by the terms thereof ordinary

voting power to elect a majority of the board of directors or other persons

performing similar functions of such corporation, partnership, limited liability

company or other entity (irrespective of whether or not at the time securities

or other ownership interests of any other class or classes of such corporation,

partnership or other entity shall have or might have voting power by reason of

the happening of any contingency) is at the time directly or indirectly owned or

controlled by such Person or one or more Subsidiaries of such Person or by such

Person and one or more Subsidiaries of such Person.

"Tax Laws": The meaning given to such term in Section 2.12.

"Taxes": The meaning given to such term in Section 2.12.

"Termination Date": The third (3rd) anniversary of the Closing Date,

subject to earlier termination upon any breach by the Borrower hereunder.

"Transfer Effective Date": The meaning set forth in each Commitment

Transfer Supplement.

"Trust Preferred Indebtedness": All Indebtedness issued pursuant to the

Junior Subordinated Indenture between Caplease, LP and JPMorgan Chase Bank,

National Association, as trustee, dated December 13, 2005, and the Parent

Guarantee Agreement between Capital Lease Funding, Inc. and JPMorgan Chase Bank,

National Association, as guarantee trustee, dated December 13, 2005.

"2.12 Certificate": The meaning set forth in Section 2.12.

"UCC Financing Statement": A financing statement on Form UCC-1 or the

proper national UCC form, naming Initial Lender as "Secured Party" and Borrower

as "Debtor" and describing the Collateral.

"Uniform Commercial Code" or "UCC": The Uniform Commercial Code as in

effect on the date hereof in the State of New York; provided that if by reason

of mandatory provisions of law, the perfection, the effect of perfection or

nonperfection, or the priority of the security interest in any Collateral is

governed by the Uniform Commercial Code as in effect in a jurisdiction other

than New York, "Uniform Commercial Code" shall mean the Uniform Commercial Code

as in effect in such other jurisdiction for purposes of the provisions hereof

relating to such perfection, effect of perfection or nonperfection, or priority.

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"Unused Facility Fee": The meaning given to such term is Section 2.13.

"USA PATRIOT Act": The USA PATRIOT Act, Title III of Pub. L. 107-56,

signed into law October 26, 2001.

"Voting Interests": 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 Bridge": The Credit Agreement in aggregate principal amount of

$211,000,000, dated as of April 17, 2007, among Caplease, LP, as borrower, the

Borrower and certain domestic subsidiaries of the Borrower as guarantors, the

lenders party thereto, and the Initial Lender as administrative agent.

"Wachovia Indebtedness": All Indebtedness of Borrower provided by the

Initial Lender or any of its Affiliates, and shall include, without limitation,

Indebtedness arising under the Wachovia Bridge, the WBNA Facility, the WIH

Facility, the Repurchase Agreement and any Wachovia Interest Rate Protection

Agreements.

"Wachovia Interest Rate Protection Agreements": Any and all of the

Borrower's or any of its Affiliates' obligations arising under, or in connection

with, any Interest Rate Protection Agreements to which the Initial Lender or any

of its Affiliates is a counterparty thereto.

"WIH Facility": The Revolving Loan Agreement in aggregate principal amount

of $25,000,000, dated as of August 26, 2005, as amended, among the Borrower and

others and Wachovia Investment Holdings, LLC, in its respective capacities as

initial Lender and as administrative agent for lenders party thereto from time

to time and all accompanying documentation associated therewith.

"WBNA Facility": The Revolving Loan Agreement in aggregate principal

amount of $75,000,000, dated as of August 26, 2005, as amended, among the

Borrower and others and Wachovia Bank, National Association, in its respective

capacities as initial Lender and as administrative agent for lenders party

thereto from time to time and all accompanying documentation associated

therewith.

Section 1.02 Other Definitional Provisions.

(a) Unless otherwise specified therein, all terms defined in this

Agreement shall have the defined meanings when used in the Revolving Notes or

other Loan Documents or any certificate or other document made or delivered

pursuant hereto.

(b) The meanings given to terms defined herein shall be equally applicable

to both the singular and plural forms of such terms.

(c) The words "hereof," "herein" and "hereunder" and words of similar

import when used in this Agreement shall refer to this Agreement as a whole and

not to any particular provision of this Agreement, and Section, subsection,

Schedule and Exhibit references are to this Agreement unless otherwise

specified.

(d) The words "include," "includes" and "including" shall be deemed to be

followed by "without limitation" whether or not they are in fact followed by

such words or words of like import.

(e) The words "writing," "written" and comparable terms shall refer to

printing, typing, computer disk, e-mail and other means of reproducing words in

a visible form.

(f) References to any agreement or contract are to such agreement or

contract as amended, restated, supplemented or otherwise modified from time to

time in accordance with the terms hereof and thereof. References to any Person

include the successors and permitted assigns of such Person.

Section 1.03 Accounting Terms.

(a) 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 Borrower delivered to the Lenders.

(b) Borrower shall deliver to the Administrative Agent and each Lender at

the same time as the delivery of any periodic financial statements, to the

extent not disclosed in such periodic financial statements, (i) 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 periodic financial statements and (ii) a

reasonable estimate of the effect on the financial statements on account of such

changes in application.

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Section 1.04 Computation of Time Periods. All time references in this

Agreement and the other Loan Documents shall be to Charlotte, North Carolina

time unless otherwise indicated. For purposes of computation of periods of time

hereunder, the word "from" means "from and including" and the words "to" and

"until" each mean "to but excluding."

ARTICLE II

THE LOANS; AMOUNT AND TERMS

Section 2.01 Loans.

(a) Revolving Commitment. During the Commitment Period, subject to the

terms and conditions hereof, the Initial Lender agrees initially and, upon an

assignment of any portion of the Revolving Commitment to one or more Lenders,

all Lenders, including, without limitation, the Initial Lender, severally, agree

to make revolving credit loans (each a "Loan" and collectively the "Loans") to

the Borrower from time to time for the purposes hereinafter set forth; provided,

however, that (i) in the event of an assignment of any portion of the Revolving

Commitment Amount to one or more Lenders, with regard to each Lender

individually, the sum of such Lender's share of outstanding Loans shall not

exceed such Lender's Revolving Commitment Percentage of the aggregate Revolving

Commitment Amount, and (ii) with regard to the Lenders collectively, the sum of

the aggregate amount of outstanding Loans shall not exceed the aggregate

Revolving Commitment Amount then in effect. For purposes hereof, the aggregate

amount available hereunder shall be FORTY MILLION DOLLARS ($40,000,000) (the

"Revolving Commitment Amount"). Loans shall consist of LIBOR Rate Loans and may

be repaid and reborrowed in accordance with the provisions hereof. LIBOR Rate

Loans shall be made by each Lender at its LIBOR Lending Office. The Revolving

Commitment Amount may be increased above $40,000,000 in the event Borrower

proposes, and Agent accepts, in its sole and absolute discretion, additional

real estate collateral as security for the Loans. Agent may condition the

acceptance of any such additional collateral on such terms and conditions as

Agent, in its sole discretion determines.

(b) Revolving Loan Borrowings.

(i) The Borrower shall request a Loan borrowing by written notice

(or telephonic notice promptly confirmed in writing which confirmation may

be by fax) to the Agent in the form of the Notice of Borrowing attached as

Exhibit J not later than 11:00 a.m. on or before one (1) Business Day

prior to the date of the requested borrowing (unless a shorter notice

period is approved by the Agent). Each such request for borrowing shall be

irrevocable and shall specify (A) that a Loan is requested, (B) the date

of the requested borrowing (which shall be a Business Day) and (C) the

aggregate principal amount to be borrowed. The Administrative Agent shall

give notice to each Lender promptly upon receipt of each Notice of

Borrowing, the contents thereof and each such Lender's share thereof.

Subject to satisfaction of the applicable conditions set forth in Article

III for the applicable Loan, the Agent will make commercially reasonable

efforts to initiate the wire of the proceeds of the requested borrowing to

the Borrower no later than 2:00 p.m. on the date and to the account

specified by the Borrower in such Notice of Borrowing.

(ii) Intentionally Omitted.

(iii) Minimum Amounts. Each Loan shall be in a minimum aggregate

amount of $2,000,000 (or the remaining amount of the - Revolving

Commitment Amount, if less).

(iv) Advances. Each Lender will make its Revolving Commitment

Percentage of each approved Loan borrowing available to the Administrative

Agent for the account of the Borrower at the office of the Administrative

Agent identified in the signature page to this Agreement, or at such other

office as the Administrative Agent may designate in writing, upon

reasonable advance notice by 1:00 P.M. on the date specified in the

applicable Notice of Borrowing, in Dollars and in funds immediately

available to the Administrative Agent. Such borrowing will then be made

available to the Borrower by the Administrative Agent by crediting the

account of the Borrower on the books of such office with the aggregate of

the amounts made available to the Administrative Agent by the Lenders and

in like funds as received by the Administrative Agent.

(c) Use and Repayment of Loan Proceeds. The proceeds of all Loans may be

used for any general corporate purpose, including to fund investments or to

repay other indebtedness; provided, however, that Loan proceeds with respect to

an Eligible Asset may not exceed the product of the (x) the lesser of (i) the

Fair Market Value of such Eligible Asset or (ii) the Purchase Price of such

Eligible Asset times (y) the Advance Rate for such Eligible Asset. Lender agrees

that, unless and until an Adjustment Event has occurred, Borrower shall be

entitled to borrow the Full Revolving Commitment Amount hereunder. Amounts

repaid hereunder may be reborrowed in accordance with the terms hereof.

(d) Intentionally Omitted.

(e) Interest. Subject to the provisions of Section 2.04, Loans shall be

comprised of LIBOR Rate Loans and each such LIBOR Rate Loan shall bear interest

at a per annum rate equal to the sum of the LIBOR Rate plus the Applicable

Premium. Interest on Loans shall be payable in arrears on each Interest Payment

Date.

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(f) Revolving Notes. The Borrower's obligation to pay each Lender's Loans

shall be evidenced by a Revolving Note made payable to such Lender in

substantially the form of Exhibit A, if requested by such Lender.

Section 2.02 Payments to Collection Account. Upon the delivery of one (1)

Business Day's written notice from the Administrative Agent, Borrower shall pay

all amounts received from the Eligible Asset on or after receipt of the notice

into the collection account established pursuant to the terms of the Deposit

Account Control Agreement (the "Collection Account"). Any failure to make such a

mandatory payment into the Collection Account within one (1) Business Day as set

forth above, shall be an Event of Default pursuant to Section 6.01(a).

Notwithstanding the foregoing mandatory payment obligation, all other payment

obligations arising under the Loan Documents may, at the option of the Borrower,

also be deposited into the Collection Account.

Section 2.03 Prepayments.

(a) Optional Prepayments. Borrower shall have the right to make optional

prepayments hereunder from time to time upon the delivery of two (2) Business

Days' irrevocable notice; provided, however, that each optional prepayment of

Loans shall be in a minimum principal amount of $2,000,000. Amounts prepaid

under this Section 2.03(a) shall be applied to the repayment of amounts

outstanding under this Agreement (pro rata with respect to advances under this

Agreement); provided, that each Lender shall receive its pro rata share of any

such prepayment based on its Revolving Commitment Percentage. All prepayments

under this Section 2.03(a) shall be subject to Section 2.11. All prepayments

under this facility shall be accompanied by any breakage costs incurred by

Lenders as result of such prepayment. Interest on the principal amount prepaid

shall be due and payable on any date that a prepayment is made hereunder through

the date of prepayment. Amounts prepaid on the Loans may be reborrowed in

accordance with the terms hereof.

(b) Mandatory Prepayments.

(i) Revolving Commitment Amount. If at any time after the Closing

Date, the sum of the aggregate principal amount of outstanding Loans shall

exceed the aggregate Revolving Commitment Amount then in effect, the

Borrower immediately shall prepay the Loans in an amount sufficient to

eliminate such excess.

(ii) Eligible Asset Dispositions. Contemporaneously with any

Eligible Asset Disposition, the Borrower shall prepay the Loans in an

aggregate amount equal to 100% of the net proceeds derived from such

Eligible Asset Disposition.

(iii) Intentionally Omitted.

(iv) Recovery Event. Promptly upon receipt, the Borrower shall

prepay the Loans in an aggregate amount equal to 100% of the net proceeds

received in connection with a Recovery Event.

(v) Adjustment Event. Immediately upon the occurrence and

continuation of an Adjustment Event, the Borrower shall repay to Agent an

amount sufficient to reduce borrowings outstanding hereunder to an amount

equal to the product of the (a) adjusted Fair Market Value for the

Eligible Asset resulting therefrom and (b) the Advance Rate.

Application of Mandatory Prepayments. All amounts required to be paid

pursuant to Section 2.03(b) shall be applied pro rata to the then-outstanding

Loans. All amounts (A) required to be paid pursuant to Section 2.03(b) and (B)

in excess of amounts used to repay Loans as provided in the immediately

preceding sentence and all other amounts due hereunder or under the other Loan

Documents, if any, shall be applied to whoever may be lawfully entitled to

receive such surplus.

All prepayments under Section 2.03(b) shall be subject to Section 2.11 and

be accompanied by interest on the principal amount prepaid through the date of

prepayment.

Section 2.04 Default Rate and Payment Dates.

(a) (i) If all or a portion of the principal amount of any 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 2.5%

(the "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 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 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, the principal of and, to the fullest extent permitted by

law, interest on the Loans and any other amounts owing hereunder or under the

other Loan 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 2.5% or (B) in the case of interest, fees or other

amounts, the Default Rate (after as well as before judgment). The Requisite

Lenders shall have the right to revoke the imposition of any default interest

imposed under this Section 2.04(a).

(b) Interest on each Loan shall be payable in arrears on each Interest

Payment Date; provided that interest accruing pursuant to paragraph (a) of this

Section 2.04 shall be payable from time to time on demand.

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Section 2.05 Computation of Interest and Fees.

(a) All fees, interest and all other amounts payable hereunder shall be

calculated on the basis of a 360 day year for the actual days elapsed. The

Administrative Agent shall as soon as practicable notify the Borrower and the

Lenders of each determination of a LIBOR Rate on the Business Day of the

determination thereof.

(b) Each determination of an interest rate by the Administrative Agent

pursuant to any provision of this Agreement shall be conclusive and binding on

the Borrower and the Lenders in the absence of manifest error. The

Administrative Agent shall, at the request of the Borrower, deliver to the

Borrower a statement showing the computations used by the Administrative Agent

in determining any interest rate.

(c) It is the intent of the Lenders and the Borrower 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 Borrower are hereby limited

by the provisions of this paragraph 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 Revolving Notes or otherwise, exceed the maximum

nonusurious amount permissible under applicable law. If, from any possible

construction of any of the Loan Documents or any other document, interest would

otherwise be payable in excess of the maximum nonusurious amount, any such

construction shall be subject to the provisions of this paragraph and such

interest shall be automatically reduced to the maximum nonusurious amount

permitted under applicable law, without the necessity of execution of any

amendment or new document. If any Lender shall ever receive anything of value

which is characterized as interest on the Loans under applicable law and which

would, apart from this provision, be in excess of the maximum nonusurious

amount, an amount equal to the amount which would have been excessive interest

shall, without penalty, be applied to the reduction of the principal amount

owing on the Loans and not to the payment of interest, or refunded to the

Borrower or the other payor thereof if and to the extent such amount which would

have been excessive exceeds such unpaid principal amount of the Loans. The right

to demand payment of the Loans or any other Indebtedness evidenced by any of the

Loan Documents does not include the right to receive any interest which has not

otherwise accrued on the date of such demand, and the Lenders do not intend to

charge or receive any unearned interest in the event of such demand. All

interest paid or agreed to be paid to the Lenders with respect to the Loans

shall, to the extent permitted by applicable law, be amortized, prorated,

allocated, and spread throughout the full stated term (including any renewal or

extension) of the Loans so that the amount of interest on account of such

indebtedness does not exceed the maximum nonusurious amount permitted by

applicable law.

Section 2.06 Pro Rata Treatment and Payments.

(a) Allocation of Payments Before Event of Default. Each borrowing of

Loans shall be made pro rata by the Lenders according to the respective

Revolving Commitment Percentages of the Lenders. Each payment under this

Agreement or any Revolving Note shall be applied, first, to any fees then due

and owing by the Borrower under this Agreement, second, to interest then due and

owing hereunder and under the Revolving Notes and, third, to principal then due

and owing hereunder and under the Revolving Notes. Each payment on account of

any fees shall be made pro rata in accordance with the respective amounts due

and owing. Each payment (other than prepayments) by the Borrower on account of

principal of and interest on the Loans shall be applied to such Loans in

accordance with the terms of Section 2.06(b) hereof. Except to the extent

provided in Section 2.03, each mandatory prepayment on account of principal of

the Loans shall be applied in accordance with Section 2.06(b). All payments

(including prepayments) to be made by the Borrower on account of principal,

interest and fees shall be made without defense, set-off or counterclaim (except

as provided in Section 2.12(b)) and shall be made to the Administrative Agent

for the account of the Lenders at the Administrative Agent's office specified on

signature page hereto 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 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.

(b) Allocation of Payments After Exercise of Remedies. Notwithstanding any

other provisions of this Agreement to the contrary, after the Revolving

Commitments shall have been terminated, and the Loans and all other amounts

under the Loan Documents shall have become due and payable in accordance with

the terms of Section 6.02 hereof, all amounts collected or received by the

Administrative Agent or any Lender on account of the Borrower's obligations

under the Loan Documents or any other amounts outstanding under any of the Loan

Documents or in respect of the Collateral shall be paid over or delivered as

follows:

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 Loan

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 payment of any fees owed to the Administrative Agent;

THIRD, to the payment of all reasonable out-of-pocket costs and expenses

(including without limitation, reasonable attorneys' and consultants' fees) of

each of the Lenders in connection with enforcing its rights under the Loan

Documents or otherwise with respect to the obligations of the Borrower owing to

such Lender;

FOURTH, to the payment of all of the obligations of the Borrower under the

Loan Documents consisting of accrued interest;

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FIFTH, to the payment of the outstanding principal amount of the

obligations of the Borrower under the Loan Documents;

SIXTH, to all other obligations of the Borrower which shall have become

due and payable under the Loan Documents or otherwise and not repaid pursuant to

clauses "FIRST" through "FIFTH" above;

SEVENTH, to the payment of any Obligations of the Borrower then

outstanding in the priorities, if any, set forth in this Agreement until fully

paid and discharged; and

EIGHTH, to the payment of the surplus, if any, to whoever may be lawfully

entitled to receive such surplus.

In carrying out the foregoing, (i) amounts received shall be applied in

the numerical order provided until exhausted prior to application to the next

succeeding category and (ii) each of the Lenders shall receive an amount equal

to its pro rata share (based on its Revolving Commitment Percentage) of amounts

available to be applied pursuant to clauses "THIRD," "FOURTH," "FIFTH" and

"SIXTH" above.

Section 2.07 Non-Receipt of Funds by the Administrative Agent.

(a) Unless the Administrative Agent shall have been notified in writing by

a Lender prior to the date a Loan is to be made by such Lender (which notice

shall be effective upon receipt) that such Lender does not intend to make the

proceeds of such Loan available to the Administrative Agent, the Administrative

Agent may assume that such Lender has made such proceeds available to the

Administrative Agent on such date, and the Administrative Agent may in reliance

upon such assumption (but shall not be required to) make available to the

Borrower a corresponding amount. If such corresponding amount is not in fact

made available to the Administrative Agent, the Administrative Agent shall be

able to recover such corresponding amount from such Lender. If such Lender does

not pay such corresponding amount forthwith upon the Administrative Agent's

demand therefor, the Administrative Agent will promptly notify the Borrower, and

the Borrower shall immediately pay such corresponding amount to the

Administrative Agent. The Administrative Agent shall also be entitled to recover

from the Lender or the Borrower, as the case may be, interest on such

corresponding amount in respect of each day from the date such corresponding

amount was made available by the Administrative Agent to the Borrower to the

date such corresponding amount is recovered by the Administrative Agent at a per

annum rate equal to (i) from the Borrower at the applicable rate for the

applicable borrowing pursuant to the Notice of Borrowing and (ii) from a Lender

at the Federal Funds Effective Rate.

(b) Unless the Administrative Agent shall have been notified in writing by

the Borrower, prior to the date on which any payment is due from it hereunder

(which notice shall be effective upon receipt) that the Borrower does not intend

to make such payment, the Administrative Agent may assume that Borrower has made

such payment when due, and the Administrative Agent may in reliance upon such

assumption (but shall not be required to) make available to each Lender on such

payment date an amount equal to the portion of such assumed payment to which

such Lender is entitled hereunder, and if the Borrower has not in fact made such

payment to the Administrative Agent, such Lender shall, on demand, repay to the

Administrative Agent the amount made available to such Lender. If such amount is

repaid to the Administrative Agent on a date after the date such amount was made

available to such Lender, such Lender shall pay to the Administrative Agent on

demand interest on such amount in respect of each day from the date such amount

was made available by the Administrative Agent to such Lender to the date such

amount is recovered by the Administrative Agent at a per annum rate equal to the

Federal Funds Effective Rate.

(c) A certificate of the Administrative Agent submitted to the Borrower or

any Lender with respect to any amount owing under this Section 2.07 shall be

conclusive in the absence of manifest error.

Section 2.08 Inability to Determine Interest Rate. Notwithstanding any

other provision of this Agreement, if (i) the Administrative Agent shall

reasonably determine on an institutional basis for all LIBOR based loans

(including the Loans) made by such Requisite Lenders (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 LIBOR for such Interest Period, or (ii) the Requisite

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 all such LIBOR based loans

(including the Loans), the Administrative Agent shall forthwith give telephone

notice of such determination, confirmed in writing, to the Borrower and the

Lenders at least two Business Days prior to the first day of such Interest

Period. Unless the Borrower shall have notified the Administrative Agent upon

receipt of such telephone notice that it wishes to rescind or modify its request

regarding such Loans, any Loans that were requested to be made as LIBOR Rate

Loans shall be made as Alternate Base Rate Loans. Until any such notice has been

withdrawn by the Administrative Agent, no further Loans shall be made as or

continued as LIBOR Rate Loans for the Interest Periods so affected.

Section 2.09 Illegality. Notwithstanding any other provision of this

Agreement, if the adoption of or any change in any Requirement of Law or in the

interpretation or application thereof by the relevant Governmental Authority to

any Lender shall make it unlawful for such Lender or its LIBOR Lending Office to

make or maintain LIBOR Rate Loans as contemplated by this 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 Borrower 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 law as Alternate Base Rate Loans. The

Borrower hereby agrees promptly to 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 order to make or maintain its LIBOR Rate Loans hereunder. A certificate as to

any additional amounts payable pursuant to this Section (which certificate must

be delivered to the Administrative Agent within 10 Business Days of the change

in law) submitted by such Lender, through the Administrative Agent, to the

Borrower 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.

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Section 2.10 Requirements of Law.

(a) If the adoption of or any change in any Requirement of Law or in the

interpretation or application thereof or compliance by any Lender with any

request or directive (whether or not having the force of law) from any central

bank or other Governmental Authority made subsequent to the date hereof:

(i) shall subject such Lender to any tax of any kind whatsoever with

respect to any LIBOR Rate Loan made by it, or change the basis of taxation

of payments to such Lender in respect thereof (except for changes in the

rate of tax on the overall net income of such Lender);

(ii) shall impose, modify or hold applicable any reserve, special

deposit, compulsory loan or similar requirement against assets held by,

deposits or other liabilities in or for the account of, advances, loans or

other extensions of credit by, or any other acquisition of funds by, any

office of such Lender which is not otherwise included in the determination

of the LIBOR Rate hereunder; or

(iii) shall impose on such Lender any other condition;

and the result of any of the foregoing is to increase the cost to

such Lender of making or maintaining LIBOR Rate Loans or to reduce any

amount receivable hereunder or under any Revolving Note, then, in any such

case, the Borrower shall promptly pay such Lender, upon its demand, any

additional amounts necessary to compensate such Lender for such additional

cost or reduced amount receivable which such Lender reasonably deems to be

material as determined by such Lender with respect to its LIBOR Rate

Loans. A certificate as to any additional amounts payable pursuant to this

Section (which certificate must be delivered to the Administrative Agent

within 10 Business Days of the change in law) submitted by such Lender,

through the Administrative Agent, to the Borrower 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 might otherwise be payable

pursuant to this paragraph of 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 to be material.

(b) If any Lender shall have reasonably determined that the adoption of or

any change in any Requirement of Law regarding capital adequacy or in the

interpretation or application thereof or compliance by such Lender or any person

controlling such Lender with any request or directive regarding capital adequacy

(whether or not having the force of law) from any central bank or Governmental

Authority made subsequent to the date hereof does or shall have the effect of

reducing the rate of return on such Lender's or such person's capital as a

consequence of its obligations hereunder to a level below that which such Lender

or such corporation could have achieved but for such adoption, change or

compliance (taking into consideration such Lender's or such person's policies

with respect to capital adequacy) by an amount reasonably deemed by such Lender

to be material, then from time to time, within fifteen (15) days after demand by

such Lender, the Borrower shall pay to such Lender such additional amount as

shall be certified by such Lender as being required to compensate it for such

reduction. Such a certificate as to any additional amounts payable under this

Section submitted by a Lender (which certificate shall include a description of

the basis for the computation), through the Administrative Agent, to the

Borrower shall be conclusive absent manifest error.

Section 2.11 Indemnity. The Borrower hereby agrees to indemnify each

Lender and to hold such Lender harmless from any funding loss or expense which

such Lender may sustain or incur as a consequence of (a) the failure by the

Borrower to pay the principal amount of or interest on any Loan by such Lender

in accordance with the terms hereof, (b) the failure of the Borrower to accept a

borrowing after the Borrower has given a notice in accordance with the terms

hereof (unless revoked in accordance with Section 2.01(b)(i)) and/or (c) the

failure of the Borrower to make any prepayment after the Borrower has given a

notice in accordance with the terms hereof, in each case including, but not

limited to, any such loss or expense arising from interest or fees payable by

such Lender to lenders of funds obtained by it in order to maintain its Loans

hereunder. A certificate as to any additional amounts payable pursuant to this

Section 2.11 submitted by any Lender, through the Administrative Agent, to the

Borrower (which certificate must be delivered to the Administrative Agent within

thirty (30) days following such default, prepayment or conversion) shall be

conclusive in the absence of manifest error. The agreements in this Section 2.11

shall survive termination of this Agreement and payment of the Revolving Notes

and all other amounts payable hereunder.

Section 2.12 Taxes.

(a) All payments made by the Borrower hereunder or under any Revolving

Note will be, except as provided in Section 2.12(b), made free and clear of, and

without deduction or withholding for, any present or future taxes, levies,

imposts, duties, fees, assessments or other charges of whatever nature now or

hereafter imposed pursuant to any law, rule, regulation or other promulgation by

any Governmental Authority or by any political subdivision or taxing authority

thereof (collectively, "Tax Laws") or therein with respect to such payments (but

excluding any tax imposed on or measured by the net income or profits of a

Lender pursuant to the laws of the jurisdiction in which it is organized or the

jurisdiction in which the principal office or applicable lending office of such

Lender is located or any subdivision thereof or therein) and all interest,

penalties or similar liabilities with respect thereto (all such non-excluded

taxes, levies, imposts, duties, fees, assessments or other charges being

referred to collectively as "Taxes"). If any Taxes are so levied or imposed, the

Borrower agrees to pay the full amount of such Taxes, and such additional

amounts as may be necessary so that every payment of all amounts due under this

Agreement or under any Revolving Note, after withholding or deduction for or on

account of any Taxes, will not be less than the amount provided for herein or in

such Revolving Note. The Borrower will furnish to the Administrative Agent as

soon as practicable after the date the payment of any Taxes is due pursuant to

applicable law certified copies (to the extent reasonably available and required

by law) of tax receipts evidencing such payment by the Borrower. The Borrower

agrees to indemnify and hold harmless each Lender, and reimburse such Lender

upon its written requ