Indemnification Agreement

INDEMNIFICATION AGREEMENT


THIS INDEMNIFICATION AGREEMENT (the "Agreement") is made as of _____ ___, 1998 between Capital Lease Funding, Inc., a Maryland corporation (the "Corporation") and _____________ (the "Indemnified Party").


W I T N E S S E T H:


WHEREAS, the Indemnified Party is an officer or director of the Corporation, and in such capacity is performing valuable services for the Corporation;


WHEREAS, the Articles of Amendment and Restatement of the Corporation (the "Articles") provide for the indemnification, to the extent authorized therein, of present or former directors, officers, employees and agents of the Corporation or its Predecessor Partnership (as defined in the Articles) and any individual who, while a director of the Corporation or the Predecessor Partnership and at the request of the Corporation or the Predecessor Partnership, serves or has served another corporation, partnership, joint venture, trust, employee benefit plan or any other enterprise as a director, officer, partner or trustee of such corporation, partnership, joint venture, trust, employee benefit plan or other enterprise;


WHEREAS, the General Corporation Law of the State of Maryland (the "MGCL") authorizes the Corporation to indemnify any person who is or was a director, officer, employee or agent of the Corporation as described therein; and


WHEREAS, in recognition of the Indemnified Party's need for protection against personal liability in order to provide services to the Corporation in an effective manner and in order to induce the Indemnified Party to continue to provide services to the Corporation, the Corporation desires to provide in this Agreement for the indemnification of, and the advancing of expenses to, the Indemnified Party as set forth in this Agreement and to the fullest extent permitted by law;


NOW THEREFORE, in consideration of the premises and mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:


1. DEFINITIONS.


"Litigation Costs" means costs, charges, fees and expenses (including, without limitation, bonds, expenses of investigation, fees of experts, travel, lodging and attorneys' fees and expenses) reasonably incurred or contracted for the investigation, defense or prosecution of, or other involvement with or in, any Proceeding and any appeal therefrom.


"Losses" means the total amount which the Indemnified Party becomes legally obligated to pay in connection with any Proceeding or settlement of a Proceeding (including, without limitation, judgments, penalties, fines, interest, court or investigative costs, amounts paid in settlement, amounts lost or ordered forfeited pursuant to injunctive sanctions and Litigation Costs).


"Proceeding" means any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative.


2. INDEMNITY OF INDEMNIFIED PARTY.


(a) The Corporation shall indemnify, defend and hold harmless the Indemnified Party pursuant to the terms and provisions of this Agreement.


(b) The Corporation shall indemnify, defend and hold harmless the Indemnified Party to the fullest extent permitted by applicable law against any and all Litigation Costs and Losses incurred by the Indemnified Party, except as otherwise provided in this Agreement, in connection with any Proceeding to which the Indemnified Party is, was or at any time becomes a party, by reason of the Indemnified Party's service to the Corporation.


3. LIMITATIONS ON INDEMNITY. No amounts of indemnity pursuant to Section 2 hereof shall be paid by the Corporation:


(a) except to the extent that the aggregate of Litigation Costs and Losses in any Proceeding or group of related Proceedings to be indemnified hereunder shall exceed the sum of (i) the amount of Litigation Costs and Losses for which the Indemnified Party is indemnified pursuant to either Section 2 hereof or pursuant to any insurance purchased and maintained by the Corporation, plus (ii) the amount of Litigation Costs and Losses for which the Indemnified Party is indemnified from or by any other source (provided, in the case of (i) and (ii), that the Indemnified Party actually receives such amounts);


(b) if it is established by a final order or judgment in any judicial proceeding, administrative proceeding or arbitration that (i) the act or omission on the part of the Indemnified Party was material to the matter giving rise to the Proceeding and to have been committed in bad faith, or the result of active and deliberate dishonesty; (ii) the Indemnified Party actually received an improper personal benefit in money, property or services; or (iii) in the case of any criminal Proceeding, the Indemnified Party had reasonable cause to believe that the act or omission was unlawful;


(c) if the Proceeding was one by or in the right of the Corporation, and the Indemnified Party was adjudged in such Proceeding to have been liable to the Corporation; or


(d) in respect of any Proceeding charging improper personal benefit to the Indemnified Party, whether or not involving action in the Indemnified Party's Official Capacity (as defined in Section 2-418 of the MGCL), in which the Indemnified Party was adjudged


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to be liable in a court of competent jurisdiction on the basis that personal benefit was improperly received.


4. CONTINUATION OF INDEMNITY. All agreements and obligations of the Corporation contained herein shall continue during the period the Indemnified Party is providing services to the Corporation, and shall continue thereafter so long as the Indemnified Party is subject to any possible Litigation Costs or Losses in any Proceeding by reason of the Indemnified Party's services to the Corporation.


5. NOTIFICATION AND DEFENSE OF CLAIM. Promptly after receipt by the Indemnified Party of notice of the commencement of any Proceeding, the Indemnified Party shall, if a claim in respect thereof is to be made against the Corporation under this Agreement, give detailed written notice to the Corporation of the commencement thereof, but the failure to so notify the Corporation shall not relieve the Corporation from any liability which it may have to the Indemnified Party hereunder. With respect to any such Proceeding as to which the Indemnified Party becomes involved:


(a) The Corporation shall be entitled to participate therein at its own expense.


(b) Except as otherwise provided below, to the extent that it may desire, the Corporation may, jointly with any other indemnifying party, assume the defense thereof, with counsel reasonably satisfactory ...