Exhibit 10.2

 

EXECUTION VERSION

 

GUARANTY

 

This GUARANTY (this “Guaranty”) is made and entered into by TREMONT MORTGAGE
TRUST, a Maryland real estate investment trust, whose address is Two Newton
Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458
(“Guarantor”), for the benefit of CITIBANK, N.A., a national banking association
whose address is 388 Greenwich Street, New York, New York 10013 (“Buyer”) on
this February 9, 2018 (the “Effective Date”).  This Guaranty is made with
reference to the following facts (with some capitalized terms being defined
below):

 

A.                                    TRMT CB Lender LLC, a Delaware limited
liability company, as seller (as further described herein, the “Seller”), and
Buyer have entered into that certain Master Repurchase Agreement, dated as of
the date hereof (as amended, modified and/or restated, the “Repurchase
Agreement”), pursuant to which Buyer may, from time to time, purchase certain
Eligible Assets from Seller with a simultaneous agreement from Seller to
repurchase such Eligible Assets at a date certain or on demand (the
“Transactions”);

 

B.                                    Buyer has requested, as a condition of
entering into the Repurchase Agreement and the other Transaction Documents, that
Guarantor deliver to Buyer this Guaranty;

 

C.                                    Guarantor directly owns 100% of Seller;

 

D.                                    Guarantor expects to benefit if Buyer
enters into the Repurchase Agreement and the other Transaction Documents with
Seller, and desires that Buyer enter into the Repurchase Agreement and the other
Transaction Documents with Seller; and

 

E.                                     Buyer would not enter into the
Transaction Documents with Seller unless Guarantor executed this Guaranty.  This
Guaranty is therefore delivered to Buyer to induce Buyer to enter into the
Repurchase Agreement and the other Transaction Documents.

 

NOW, THEREFORE, in exchange for good, adequate, and valuable consideration, the
receipt of which Guarantor acknowledges, and to induce Buyer to enter into the
Repurchase Agreement, Guarantor agrees as follows:

 

1.                                      Definitions.  For purposes of this
Guaranty, the following terms shall be defined as set forth below.  In addition,
any capitalized term defined in the Repurchase Agreement but not defined in this
Guaranty shall have the same meaning in this Guaranty as in the Repurchase
Agreement.

 

(a)                                 “Buyer Entity” means, as designated by Buyer
from time to time, Buyer or Buyer’s assignee, designee, nominee, servicer, or
wholly owned subsidiary as permitted in accordance with the terms of the
Repurchase Agreement.

 

(b)                                 “Cash” means coin or currency of the United
States of America or immediately available federal funds, including such funds
delivered by wire transfer.

 

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(c)                                  “Cash Equivalents” means any of the
following, to the extent owned by Guarantor or any of its Consolidated
Subsidiaries free and clear of all Liens and having a maturity of not greater
than 90 days from the date of issuance thereof: (a) readily marketable direct
obligations of the government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
faith and credit of the government of the United States, (b) certificates of
deposit of or time deposits with Buyer or a member of the Federal Reserve System
that issues (or the parent of which issues) commercial paper rated as described
in clause (c) below, is organized under the laws of the United States or any
state thereof and has combined capital and surplus of at least $1,000,000,000 or
(c) commercial paper in an aggregate amount of not more than $50,000,000 per
issuer outstanding at any time, issued by any corporation organized under the
laws of any state of the United States and rated at least “Prime-1” (or the then
equivalent grade) by Moody’s or “A-1” (or the then equivalent grade) by S&P.

 

(d)                                 “Cash Liquidity” means, at any date of
determination, the amount of Cash (other than Restricted Cash) and unencumbered
unrestricted Cash Equivalents held by Guarantor and its Consolidated
Subsidiaries.

 

(e)                                  “Consolidated Subsidiaries” means, as of
any date and any Person, any and all Subsidiaries or other entities that are
consolidated with such Person in accordance with GAAP.

 

(f)                                   “Guaranteed Obligations” means,
cumulatively, Seller’s obligations to fully and promptly pay (a) the Purchase
Price of the Purchased Assets owed to Buyer under the Repurchase Agreement and
the Transaction Documents, (b) the aggregate accrued but unpaid Purchase Price
Differential thereon owed to Buyer under the Repurchase Agreement and the other
Transaction Documents, (c) any costs or fees (including any such costs or fees
arising from and after the filing of an Insolvency Proceeding against Seller)
owed to Buyer under the Repurchase Agreement and the other Transaction
Documents, (d) all other sums expended by Buyer or Buyer’s designee or nominee
acting on Buyer’s behalf in exercising Buyer’s rights and remedies under the
Transaction Documents, including Buyer’s Legal Costs relating to the enforcement
of remedies pursuant to the Transaction Documents, and (e) Seller’s
indemnification obligations under the Repurchase Agreement with regard to which
claims have been made by Buyer.

 

(g)                                  “Guarantor Litigation” means any
litigation, arbitration, investigation, or administrative proceeding of or
before any court, arbitrator, or Governmental Authority, bureau or agency that
relates to or affects this Guaranty or any asset(s) or property(ies) of
Guarantor.

 

(h)                                 “Indebtedness” means, with respect to any
Person on any date, all of the following on such date, whether or not included
as indebtedness or liabilities in accordance with GAAP determined without
duplication:

 

(i)                                           obligations in respect of money
borrowed (including principal, interest, assumption fees, prepayment fees, yield
maintenance charges, penalties, exit fees, contingent interest and other
monetary obligations whether choate or inchoate and whether

 

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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);

 

(ii)                                        obligations, whether or not for
money borrowed (A) represented by notes payable, letters of credit or drafts
accepted, in each case representing extensions of credit, (B) evidenced by
bonds, debentures, notes or similar instruments, (C) 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 (D) in connection with the issuance of preferred equity or trust
preferred securities;

 

(iii)                                     Capitalized Lease Obligations;

 

(iv)                                    reimbursement obligations under any
letters of credit or acceptances (whether or not the same have been presented
for payment);

 

(v)                                       Off-Balance Sheet Obligations;

 

(vi)                                    obligations 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;

 

(vii)                                 as applicable, all obligations of such
Person (but not the obligation of others) in respect of any keep well
arrangements, credit enhancements, committed future funding obligations which
are not fully offset by a corresponding asset, purchase obligations, repurchase
obligations, sale/buy-back agreements, takeout commitments or forward equity
commitments which are not fully offset by a corresponding asset, 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));

 

(viii)                              all Non-Recourse Indebtedness, recourse
indebtedness and all indebtedness of other Persons which such Person has
guaranteed or is otherwise recourse to such Person (other than pursuant to any
guarantee of customary non-recourse exceptions, but only to the extent they are
contingent);

 

(ix)                                    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 Liens permitted
hereunder) 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 that, 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;

 

(x)                                       all Contingent Liabilities;

 

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(xi)                                    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;

 

(xii)                                 indebtedness of general partnerships for
which such Person is liable as a general partner (whether secondarily or
contingently liable or otherwise); and

 

(xiii)                              obligations to fund capital commitments
under any articles or certificate of incorporation or formation, by-laws,
partnership, limited liability company, operating or trust agreement and/or
other organizational, charter or governing documents, subscription agreement or
otherwise.

 

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person.

 

(i)                                     “Insolvency Proceeding” means any case
under Title 11 of the United States Code or any successor statute or any other
insolvency, bankruptcy, reorganization, liquidation, or like proceeding, or
other statute or body of law relating to creditors’ rights, whether brought
under state, federal, or foreign law.

 

(j)                                    “Interest Coverage Ratio” means, with
respect to Guarantor and its Consolidated Subsidiaries, the Interest Income
divided by the Interest Expense.

 

(k)                                 “Interest Expense” means, for any period
with respect to Guarantor and its Consolidated Subsidiaries, the amount of total
interest expense incurred by such Person, excluding previously paid capitalized
or accruing interest and excluding interest funded under a construction loan,
all determined in accordance with GAAP.

 

(l)                                     “Interest Income” means, for any period
with respect to Guarantor and its Subsidiaries, the amount of total interest
income earned by such Person, including capitalized or accruing interest, all
determined in accordance with GAAP.

 

(m)                             “Legal Costs” means all costs and actual
out-of-pocket expenses reasonably incurred by Buyer in any Proceeding, any
Guarantor Litigation, or any default by Seller under the Transaction Documents
or by any Guarantor under this Guaranty, including reasonable attorneys’ fees,
disbursements, and other reasonable, charges incurred by Buyer’s attorneys,
court costs and expenses, and reasonable, charges for the services of
paralegals, law clerks, and all other personnel whose services are charged to
Buyer in connection with Buyer’s receipt of legal services incurred in
connection with the enforcement of this Guaranty.

 

(n)                                 “Other Financing Agreement” means any credit
facility or loan agreement relating to the financing of, or similar repurchase
facility for, multiple commercial real estate loans entered into by Guarantor
and/or its direct or indirect Subsidiaries.

 

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(o)                                 “Proceeding” means any action, suit,
arbitration, or other proceeding arising out of, or relating to the
interpretation or enforcement of, this Guaranty or the Transaction Documents,
including (a) an Insolvency Proceeding; and (b) any proceeding in which Buyer
endeavors to realize upon any Security or to enforce any Transaction
Document(s) (including this Guaranty) against Seller or Guarantor.

 

(p)                                 “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.

 

(q)                                 “Restricted Cash” means, for any Person, any
amount of Cash of such Person that is contractually required to be set aside,
segregated or otherwise reserved.

 

(r)                                    “Security” means any security or
collateral held by or for Buyer for the Transactions or the Guaranteed
Obligations, whether real or personal property, including any mortgage, deed of
trust, financing statement, security agreement, and other security document or
instrument of any kind securing the Transactions in whole or in part. 
“Security” shall include all assets and property of any kind whatsoever pledged
to Buyer pursuant to the Transaction Documents.

 

(s)                                   “Seller” means: (a) TRMT CB Lender LLC, a
Delaware limited liability company, acting on its own behalf; (b) any estate
created by the commencement of an Insolvency Proceeding affecting TRMT CB Lender
LLC; (c) any trustee, liquidator, sequestrator, or receiver of TRMT CB Lender
LLC or TRMT CB Lender LLC’s property; and (d) any similar Person duly appointed
pursuant to any law governing any Insolvency Proceeding.

 

(t)                                    “Subrogation Deferral” has the meaning
set forth in Section 13(b).

 

(u)                                 “Subsidiary” means 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
a contingency) to elect a majority of the board of directors or other managers
of such corporation, partnership, limited liability company 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.

 

(v)                                 “Tangible Net Worth” means with respect to
any Person and as of a particular date all amounts which would be included under
capital of such Person and its Consolidated Subsidiaries, if any, on a balance
sheet of such Person and its Consolidated Subsidiaries at such date, determined
in accordance with GAAP, minus (i) amounts owing to such Person from any
Affiliate thereof, or from officers, employees, partners, members, directors,
shareholders or other Persons similarly affiliated with such Person or any
Affiliate thereof, (ii) intangible assets and (iii) prepaid taxes and/or
expenses, all on or as of such date.

 

(w)                               “Total Indebtedness” means, for any period,
the aggregate Indebtedness of a Person and its Consolidated Subsidiaries during
such period (including, without limitation, off-balance sheet indebtedness),
less the amount of any nonspecific balance sheet reserves maintained in
accordance with GAAP.

 

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(x)                                 “Total Recourse Indebtedness” means, for any
period with respect to any Person, without duplication, the Total Indebtedness
of such Person during such period for which such Person (or any of its
Consolidated Subsidiaries) is directly responsible or liable as obligor or
guarantor (excluding (i) convertible debt notes and other Indebtedness not
subject to margin calls, (ii) recourse Indebtedness (x) arising by reason of
customary recourse carve-outs under a non-recourse instrument, including, but
not limited to, fraud, misappropriation and misapplication, and environmental
indemnities, or (y) the maturity date for which (without giving effect to any
extensions) matures more than one (1) year from the last day of such period, and
(iii) any recourse obligations (including guarantee obligations) of such Person
(or any of its Consolidated Subsidiaries) in connection with the issuance of,
and obligations under, the securities or related instruments or certificates in
a collateralized debt obligation), less the amount of any nonspecific balance
sheet reserves maintained in accordance with GAAP.

 

(y)                                 “Waiver Disclosure” has the meaning set
forth in Section 14.

 

2.                                      Guaranty of All Guaranteed Obligations. 
(a)  Guarantor hereby unconditionally and irrevocably guarantees to Buyer the
prompt and complete payment and performance by Seller when due (whether at the
stated maturity, by acceleration or otherwise) of the Guaranteed Obligations. 
All assets and property of Guarantor shall be subject to recourse if Guarantor
fails to pay and perform any Guaranteed Obligation(s) when and as required to be
paid and performed pursuant to the Transaction Documents.

 

(b)  Nothing herein shall be deemed to be a waiver of any right which Buyer may
have in any Insolvency Proceeding involving Seller as debtor under
Section 506(a), 506(b), 1111(b) or any other provision of the Bankruptcy Code or
any other bankruptcy law to file a claim against Seller for the full amount of
the indebtedness secured by the Repurchase Agreement or to require that all
collateral shall continue to secure all of the indebtedness owing to Buyer in
accordance with the Repurchase Agreement or any other Transaction Documents.

 

(c)  Guarantor further agrees to pay any and all out-of-pocket expenses
(including, without limitation, all out-of-pocket fees and disbursements of
counsel) which may be paid or actually incurred by Buyer in enforcing, or
obtaining advice of counsel in respect of, any rights with respect to, or
collecting, any or all of the Guaranteed Obligations, and/or enforcing any
rights with respect to, or collecting against, Guarantor under this Guaranty. 
This Guaranty shall remain in full force and effect until the Guaranteed
Obligations are paid in full, notwithstanding that from time to time prior
thereto Seller may be free from any Guaranteed Obligations.

 

(d)  Notwithstanding any payment or payments made by Seller or any other Person
nor any set-off or appropriation or application, at any time or from time to
time, in reduction of or in payment of the Guaranteed Obligations, Guarantor
shall remain liable for the amount of the Guaranteed Obligations, until the
Guaranteed Obligations are paid in full.

 

(e)  Guarantor agrees that whenever, at any time, or from time to time,
Guarantor shall make any payment to Buyer on account of Guarantor’s liability
hereunder, Guarantor will notify Buyer in writing that such payment is made
under this Guaranty for such purpose.

 

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3.                                      Nature and Scope of Liability. 
Guarantor’s liability under this Guaranty is primary and not secondary.

 

4.                                      Changes in Transaction Documents. 
Without notice to, or consent by, Guarantor, and in Buyer’s sole and absolute
discretion and without prejudice to Buyer or in any way limiting or reducing
Guarantor’s liability under this Guaranty, Buyer may: (a) grant extensions of
time, renewals or other indulgences or modifications to Seller or any other
party under any of the Transaction Document(s), (b) change, amend or modify any
Transaction Document(s), (c) authorize the sale, exchange, release or
subordination of any Security, (d) accept or reject additional Security,
(e) discharge or release any party or parties liable under the Transaction
Documents, (f) foreclose or otherwise realize on any Security, or attempt to
foreclose or otherwise realize on any Security, whether such attempt is
successful or unsuccessful, (g) accept or make compositions or other
arrangements or file or refrain from filing a claim in any Insolvency
Proceeding, (h) enter into other Transactions with Seller in such amount(s) and
at such time(s) as Buyer may determine, (i) credit payments in such manner and
order of priority to Repurchase Prices or other obligations as Buyer may
determine in its sole and absolute discretion, and (j) otherwise deal with
Seller and any other party related to the Transactions or any Security as Buyer
may determine in its sole and absolute discretion.  Without limiting the
generality of the foregoing, Guarantor’s liability under this Guaranty shall
continue even if Buyer alters any obligations under the Transaction Documents in
any respect or Buyer’s or Guarantor’s remedies or rights against Seller are in
any way impaired or suspended without Guarantor’s consent.  If Buyer performs
any of the actions described in this paragraph, then Guarantor’s liability shall
continue in full force and effect even if Buyer’s actions impair, diminish or
eliminate Guarantor’s subrogation, contribution, or reimbursement rights (if
any) against Seller or otherwise adversely affect Guarantor or expand
Guarantor’s liability hereunder.

 

5.                                      Certain Financial Covenants.  Guarantor
shall maintain the following covenants, with respect to itself (and its
Consolidated Subsidiaries taken as a whole with Guarantor), at all times, on a
consolidated basis in conformity with GAAP:

 

(i)                                     Minimum Tangible Net Worth.  Tangible
Net Worth equal to or in excess of the sum of (i) $45,687,000, and
(ii) seventy-five percent (75%) of the net cash proceeds of any equity issuance
by Guarantor that occurs after the Effective Date.

 

(ii)                                  Minimum Cash Liquidity.  Cash Liquidity in
excess of, (i) from the Effective Date to, but excluding, the first anniversary
of the Effective Date, three percent (3%) of Total Recourse Indebtedness, and
(ii) as of the first anniversary of the Effective Date and thereafter, five
percent (5%) of Total Recourse Indebtedness.

 

(iii)                               Total Indebtedness to Tangible Net Worth
Ratio.  The ratio of Total Indebtedness to Tangible Net Worth shall not exceed
3.00 to 1.00.

 

(iv)                              Minimum Interest Coverage.  The Interest
Coverage Ratio shall not fall below 1.50 to 1.00.

 

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(v)                                 REIT Status.  Guarantor shall operate in a
manner that will allow Guarantor to (i) qualify as a real estate investment
trust for federal income tax purposes and (ii) be entitled to a dividend paid
deduction under Section 857 of the Internal Revenue Code.

 

(vi)                              Other Financing Agreement.  If Guarantor or
any Subsidiary thereof has entered into or shall enter into any Other Financing
Agreement or amendment or modification thereof, promptly after the closing of
such Other Financing Agreement or amendment or modification thereof, Guarantor
shall deliver written notice to Buyer thereof which notice shall include the
name of the lender or repurchase buyer thereunder, the maximum facility amount,
interest rate payable thereunder by Guarantor or its Subsidiaries, advance rates
and other material terms of such Other Financing Agreement or amendment or
modification thereof.  If such Other Financing Agreement or amendment or
modification thereof contains a financial covenant that is comparable to any of
the financial covenants set forth in this Guaranty and such comparable financial
covenant is more restrictive to Guarantor or otherwise more favorable to the
related lender or buyer thereunder than any financial covenant hereunder, then
such comparable financial covenant shall, with no further action required on the
part of either Guarantor or Buyer, automatically become a part hereof and be
incorporated herein, and Guarantor hereby covenants to maintain compliance with
such comparable financial covenant at all times throughout the terms of this
Guaranty.  Guarantor further agrees, at Buyer’s request, to execute and deliver
any related amendments to this Guaranty, provided that the execution of such
amendment shall not be a precondition to the effectiveness of such amendment,
but shall merely be for the convenience of Buyer and Guarantor.

 

6.                                      Nature of Guaranty.  Guarantor’s
liability under this Guaranty is a guaranty of payment of the Guaranteed
Obligations, and is not a guaranty of collection or collectability.  Guarantor’s
liability under this Guaranty is not conditioned or contingent upon the
genuineness, validity, regularity or enforceability of any of the Transaction
Documents.  Guarantor’s liability under this Guaranty is a continuing, absolute,
and unconditional obligation under any and all circumstances whatsoever (except
as expressly stated, if at all, in this Guaranty), without regard to the
validity, regularity or enforceability of any of the Guaranteed Obligations. 
Guarantor acknowledges that Guarantor is fully obligated under this Guaranty
even if Seller had no liability at the time of execution of the Transaction
Documents or later ceases to be liable under any Transaction Document, whether
pursuant to Insolvency Proceedings or otherwise.  Guarantor shall not be
entitled to claim, and irrevocably covenants not to raise or assert, any
defenses against the Guaranteed Obligations that would or might be available to
Seller, other than actual payment and performance of all Guaranteed Obligations
in full in accordance with their terms.  Guarantor waives any right to compel
Buyer to proceed first against Seller or any Security before proceeding against
Guarantor.  Guarantor agrees that if any of the Guaranteed Obligations are or
become void or unenforceable (because of inadequate consideration, lack of
capacity, Insolvency Proceedings, or for any other reason), then Guarantor’s
liability under this Guaranty shall continue in full force with respect to all
Guaranteed Obligations as if they were and continued to be legally enforceable,
all in accordance with their terms  and, in the case of Insolvency Proceedings,
before giving effect to the Insolvency Proceedings. Guarantor also recognizes
and acknowledges that its liability under this Guaranty may be more extensive in
amount and more burdensome than that of Seller.  Guarantor waives any defense
that might otherwise be available to Guarantor based on the proposition that a
guarantor’s liability cannot exceed the liability of the principal.  Guarantor
intends to be fully

 

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liable under the Guaranteed Obligations, regardless of the scope of Seller’s
liability thereunder.  Without limiting the generality of the foregoing, if the
Guaranteed Obligations are “nonrecourse” as to Seller or Seller’s liability for
the Guaranteed Obligations is otherwise limited in some way, Guarantor
nevertheless intends to be fully liable to the full extent of all of Guarantor’s
assets, with respect to all the Guaranteed Obligations, even though Seller’s
liability for the Guaranteed Obligations may be less limited in scope or less
burdensome.  Guarantor waives any defenses to this Guaranty arising or
purportedly arising from the manner in which Buyer conducts the Transactions
with Seller or otherwise, or any waiver of the terms of any Transaction Document
by Buyer or other failure of Buyer to require full compliance with the
Transaction Documents.  Guarantor’s liability under this Guaranty shall continue
until all sums due under the Transaction Documents have been paid in full (other
than indemnification obligations which expressly survive beyond the termination
of the Repurchase Agreement and the other Transaction Documents) and all other
performance required under the Transaction Documents has been rendered in full,
except as expressly provided otherwise in this Guaranty.  Guarantor’s liability
under this Guaranty shall not be limited or affected in any way by any
impairment or any diminution or loss of value of any Security whether caused by
(a) hazardous substances, (b) Buyer’s failure to perfect a security interest in
any Security, (c) any disability or other defense(s) of Seller, or (d) any
breach by Seller of any representation or warranty contained in any Transaction
Document.

 

7.                                      Waivers of Rights and Defenses. 
Guarantor waives any right to require Buyer to (a) proceed against Seller,
(b) proceed against or exhaust any Security, or (c) pursue any other right or
remedy for Guarantor’s benefit.  Guarantor agrees that Buyer may proceed against
Guarantor with respect to the Guaranteed Obligations without taking any actions
against Seller and without proceeding against or exhausting any Security. 
Guarantor agrees that Buyer may unqualifiedly exercise in its sole discretion
(or may waive or release, intentionally or unintentionally) any or all rights
and remedies available to it against Seller without impairing Buyer’s rights and
remedies in enforcing this Guaranty, under which Guarantor’s liabilities shall
remain independent and unconditional.  Guarantor agrees and acknowledges that
Buyer’s exercise (or waiver or release) of certain of such rights or remedies
may affect or eliminate Guarantor’s right of subrogation or recovery against
Seller (if any) and that Guarantor may incur a partially or totally
nonreimbursable liability in performing under this Guaranty.  Guarantor has
assumed the risk of any such loss of subrogation rights, even if caused by
Buyer’s acts or omissions.  If Buyer’s enforcement of rights and remedies, or
the manner thereof, limits or precludes Guarantor from exercising any right of
subrogation that might otherwise exist, then the foregoing shall not in any way
limit Buyer’s rights to enforce this Guaranty.  Without limiting the generality
of any other waivers in this Guaranty, Guarantor expressly waives any statutory
or other right (except as set forth herein) that Guarantor might otherwise have
to: (i) limit Guarantor’s liability after a nonjudicial foreclosure sale to the
difference between the Guaranteed Obligations and the fair market value of the
property or interests sold at such nonjudicial foreclosure sale or to any other
extent, (ii) otherwise limit Buyer’s right to recover a deficiency judgment
after any foreclosure sale, or (iii) require Buyer to exhaust its Security
before Buyer may obtain a personal judgment for any deficiency.  Any proceeds of
a foreclosure or similar sale may be applied first to any obligations of Seller
that do not also constitute Guaranteed Obligations within the meaning of this
Guaranty.  Guarantor acknowledges and agrees that any nonrecourse or exculpation
provided for in any Transaction Document, or any other provision of a
Transaction Document limiting Buyer’s recourse to specific Security or limiting
Buyer’s right

 

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to enforce a deficiency judgment against Seller or any other Person, shall have
absolutely no application to Guarantor’s liability under this Guaranty.

 

8.                                      Additional Waivers.  Guarantor waives
diligence and all demands, protests, presentments and notices of every kind or
nature, including notices of protest, dishonor, nonpayment, acceptance of this
Guaranty and the creation, renewal, extension, modification or accrual of any of
the Guaranteed Obligations.  Guarantor further waives the right to plead any and
all statutes of limitations as a defense to Guarantor’s liability under this
Guaranty or the enforcement of this Guaranty.  No failure or delay on Buyer’s
part in exercising any power, right or privilege under this Guaranty shall
impair or waive any such power, right or privilege.

 

9.                                      Other Actions Taken or Omitted. 
Notwithstanding any other action taken or omitted to be taken with respect to
the Transaction Documents, the Guaranteed Obligations, or the Security, whether
or not such action or omission prejudices Guarantor or increases the likelihood
that Guarantor will be required to pay the Guaranteed Obligations, pursuant to
the terms hereof, it is the unambiguous and unequivocal intention of Guarantor
that Guarantor shall be obligated to pay the Guaranteed Obligations, when due,
notwithstanding any occurrence, circumstance, event, action, or omission
whatsoever, whether contemplated or uncontemplated, and whether or not otherwise
or particularly described herein, which obligation shall be deemed satisfied as
to any Guaranteed Obligation only upon the full and final payment and
satisfaction of such Guaranteed Obligations.

 

10.                               No Duty to Prove Loss.  To the extent that
Guarantor at any time incurs any liability under this Guaranty, Guarantor shall
immediately pay Buyer (to be applied on account of the Guaranteed Obligations)
the amount provided for in this Guaranty, without any requirement that Buyer
demonstrate that the Security is inadequate for the Transactions; that Buyer has
currently suffered any loss; or that Buyer has otherwise exercised (to any
degree) or exhausted any of Buyer’s rights or remedies with respect to Seller or
any Security.

 

11.                               Full Knowledge.  Guarantor acknowledges,
represents, and warrants that Guarantor has had a full and adequate opportunity
to review the Transaction Documents, the transactions contemplated by the
Transaction Documents, and all underlying facts relating to such transactions. 
Guarantor represents and warrants that Guarantor fully understands: (a) the
remedies Buyer may pursue against Seller and/or Guarantor in the event of a
default under the Transaction Documents, (b) the value (if any) and character of
any Security, and (c) Seller’s financial condition and ability to perform under
the Transaction Documents.  Guarantor agrees to keep itself fully informed
regarding all aspects of the foregoing and the performance of Seller’s
obligations to Buyer.  Buyer has no duty, whether now or in the future, to
disclose to Guarantor any information pertaining to Seller, the Transactions or
any Security.  At any time provided for in the Transaction Documents, Guarantor
agrees and acknowledges that an Insolvency Proceeding affecting Guarantor, or
other actions or events relating to Guarantor (including Guarantor’s failure to
comply with the financial covenants in Section 5 of this Guaranty), in each
case, as set forth in the Transaction Documents, may be event(s) of default
under the Transaction Documents.

 

12.                               Representations and Warranties.  Guarantor
acknowledges, represents and warrants as of the date hereof and as of each
Purchase Date as follows, and acknowledges that

 

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Buyer is relying upon the following acknowledgments, representations, and
warranties by Guarantor in entering into the Transactions:

 

(a)                                 Due Execution; Enforceability.  This
Guaranty has been duly authorized, executed, and delivered, and is fully valid,
binding, and enforceable against Guarantor in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors’ rights
generally and by general principles of equity (whether enforcement is sought in
proceedings in equity or at law).

 

(b)                                 No Conflict.  The execution, delivery, and
performance of this Guaranty will not conflict with or result in a breach of any
of the terms, conditions or provisions of (i) the organizational documents of
Guarantor, (ii) any contractual obligation to which Guarantor is now a party or
by which it is otherwise bound or to which the assets of Guarantor are subject
or constitute a default thereunder, or result in the creation or imposition of
any Lien upon any of the assets of Guarantor thereunder, other than pursuant to
this Guaranty, (iii) any judgment or order, writ, injunction, decree or demand
of any court applicable to Guarantor, or (iv) any applicable requirement of law,
in each case under the foregoing clauses (ii), (iii) and (iv), to the extent
that such conflict or breach would have a material adverse effect upon
Guarantor’s ability to perform its obligations hereunder.  Guarantor has all
necessary licenses, permits and other consents from Governmental Authorities
necessary for the performance of its obligations under this Guaranty.

 

(c)                                  No Third Party Consent Required.  No
consent of any Person (including creditors or partners, members, stockholders,
or other owners of Guarantor), other than those consents obtained as of the date
hereof, is required in connection with Guarantor’s execution of this Guaranty or
performance of Guarantor’s obligations under this Guaranty.  Guarantor’s
execution of, and obligations under, this Guaranty are not contingent upon any
consent, license, permit, approval, or authorization of, exemption by, notice or
report to, or registration, filing, or declaration with, any governmental
authority, bureau, or agency, whether local, state, federal, or foreign.

 

(d)                                 Authority and Execution.  Guarantor has full
power, authority, and legal right to execute, deliver and perform its
obligations under this Guaranty.  Guarantor has taken all necessary corporate
and legal action to authorize this Guaranty.

 

(e)                                  No Representations by Buyer.  Guarantor
delivers this Guaranty based solely upon Guarantor’s own independent
investigation and based in no part upon any representation or statement by
Buyer, except for those set forth in the other Transaction Documents.

 

(f)                                   Organization.  Guarantor is duly formed,
registered, validly existing and in good standing under the laws and regulations
of the jurisdiction of Guarantor’s formation and is duly licensed, qualified,
and in good standing in every state where such licensing or qualification is
necessary for the transaction of Guarantor’s business except where failure to do
so could not be reasonably likely to result in a Material Adverse Effect. 
Guarantor has the power to own and hold the assets it purports to own and hold,
and to carry on its business

 

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as now being conducted and proposed to be conducted, and has the power to
execute, deliver, and perform its obligations under this Guaranty and the other
Transaction Documents.

 

(g)                                  Litigation; Requirements of Law.  Except as
disclosed in writing to Buyer, there is no action, suit, proceeding,
investigation, or arbitration pending or to Guarantor’s Knowledge threatened in
writing against Guarantor or any of its assets that (i) is in an amount greater
than the Guarantor Threshold or (ii) if adversely determined is reasonably
likely to result in any Material Adverse Effect.  Guarantor is in compliance in
all material respects with all Requirements of Law, including ERISA.  Guarantor
is not in default in any material respect with respect to any judgment, order,
writ, injunction, decree, rule or regulation of any arbitrator or Governmental
Authority that is reasonably likely to result in a Material Adverse Effect or is
reasonably likely to constitute a Default or an Event of Default or that would
adversely affect the legality, validity or enforceability of any Transaction
Document.

 

(h)                                 Financial Information.  All financial data
concerning Guarantor that has been delivered by or on behalf of Guarantor to
Buyer is true, complete and correct in all material respects as of the
applicable fiscal quarter or fiscal year end or other applicable date and has
been prepared in accordance with GAAP.  Since the delivery of such data, except
as otherwise disclosed in writing to Buyer, there has been no change in the
business condition (financial or otherwise) or the results of operations (or
prospects) of Guarantor or in the results of operations of Guarantor which
change could result in a Material Adverse Effect.

 

(i)                                     Adequate Capitalization.  Guarantor and
its Subsidiaries have not become, or are presently, financially insolvent nor
will Guarantor and its Subsidiaries be made insolvent by virtue of Guarantor’s
execution of or performance under this Guaranty or any of the Transaction
Documents within the meaning of the bankruptcy laws or the insolvency laws of
any jurisdiction.

 

(j)                                    No Misstatements.  No information,
exhibit, report or certificate delivered by Guarantor to Buyer in connection
with the Transactions or any Transaction Document contains any material
misstatement of fact or has omitted to state a material fact or any fact
necessary to make the statements contained therein not materially misleading.

 

(k)                                 REIT Status.  Guarantor is a REIT. Guarantor
is entitled to a dividends paid deduction under the requirements of Section 857
of the Internal Revenue Code with respect to any 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. Seller is,
and always has been, a disregarded entity for U.S. federal income tax purposes.

 

(l)                                     Prohibited Person.  (i) None of the
funds or other assets of  Guarantor constitute property of, or are, to
Guarantor’s knowledge, beneficially owned,  directly or indirectly, by a
Prohibited Person (as defined in the Repurchase Agreement) with  the result that
the investment in Guarantor (whether directly or indirectly), is prohibited by
law or the entering into the Repurchase Agreement or acceptance of this Guaranty
by Buyer is in violation of law; (ii) to Guarantor’s knowledge, no Prohibited
Person has any interest of any nature whatsoever in Guarantor with the result
that the investment in Guarantor (whether directly or indirectly), is prohibited
by law or the entering into this Guaranty is in violation of  law; (iii) to

 

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Guarantor’s knowledge, none of the funds of Guarantor have been derived from any
unlawful activity with the result that the investment in Guarantor (whether
directly or indirectly), is prohibited by law or the entering into this Guaranty
is in violation of law; (iv) to Guarantor’s knowledge, Guarantor has not
conducted and will not conduct any business and has not engaged and will not
engage in any transaction dealing with any Prohibited Person; and (v) Guarantor
is not a Prohibited Person and has not been convicted of a felony or a crime
which if prosecuted under the laws of the United States of America would be a
felony.

 

(m)                             Investment Company Act.  Guarantor is not
required to register as an “investment company” under the Investment Company Act
of 1940, as amended.

 

13.                               Reimbursement and Subrogation Rights.  Except
to the extent that Buyer notifies Guarantor to the contrary in writing from time
to time:

 

(a)                                 General Deferral of Reimbursement. 
Guarantor waives any right to be reimbursed by Seller for any payment(s) made by
Guarantor on account of the Guaranteed Obligations, unless and until all
Guaranteed Obligations have been paid in full and all periods within which such
payments may be set aside or invalidated have expired.  Guarantor acknowledges
that Guarantor has received adequate consideration for execution of this
Guaranty by virtue of Buyer’s entering into the Transactions (which benefits
Guarantor, as an owner or principal of Seller) and Guarantor does not require or
expect, and is not entitled to, any other right of reimbursement against Seller
as consideration for this Guaranty.

 

(b)                                 Deferral of Subrogation and Contribution. 
Guarantor agrees it shall have no right of subrogation against Seller or Buyer
and no right of subrogation against any Security unless and until: (a) such
right of subrogation does not violate (or otherwise produce any result adverse
to Buyer under) any applicable law, including any bankruptcy or insolvency law;
(b) all amounts due under the Transaction Documents have been paid in full and
all other performance required under the Transaction Documents has been rendered
in full to Buyer (other than indemnification obligations which expressly survive
beyond the termination of the Repurchase Agreement and the other Transaction
Documents); and (c) all periods within which such payment may be set aside or
invalidated have expired (such deferral of Guarantor’s subrogation and
contribution rights, the “Subrogation Deferral”).

 

(c)                                  Effect of Invalidation.  To the extent that
a court of competent jurisdiction determines that Guarantor’s Subrogation
Deferral is void or voidable for any reason, Guarantor agrees, notwithstanding
any acts or omissions by Buyer that Guarantor’s rights of subrogation against
Seller or Buyer and Guarantor’s right of subrogation against any Security shall
at all times be junior and subordinate to Buyer’s rights against Seller and to
Buyer’s right, title, and interest in such Security.

 

(d)                                 Claims in Insolvency Proceeding.  Guarantor
shall not file any claim in any Insolvency Proceeding affecting Seller unless
Guarantor simultaneously assigns and transfers such claim to Buyer, without
consideration, pursuant to documentation fully satisfactory to Buyer.  Guarantor
shall automatically be deemed to have assigned and transferred such claim to
Buyer whether or not Guarantor executes documentation to such effect, and by
executing this Guaranty hereby authorizes Buyer (and grants Buyer a power of
attorney coupled

 

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with an interest, and hence irrevocable) to execute and file such assignment and
transfer documentation on Guarantor’s behalf.  Buyer shall have the sole right
to vote, receive distributions, and exercise all other rights with respect to
any such claim, provided, however, that if and when the Guaranteed Obligations
have been paid in full Buyer shall release to Guarantor any further payments
received on account of any such claim.

 

14.                               Waiver Disclosure.  Guarantor acknowledges
that pursuant to this Guaranty, Guarantor has waived a substantial number of
defenses that Guarantor might otherwise under some circumstance(s) be able to
assert against Guarantor’s liability to Buyer.  Guarantor acknowledges and
confirms that Guarantor has substantial experience as a sophisticated
participant in substantial commercial real estate transactions and is fully
familiar with the legal consequences of signing this or any other guaranty.  In
addition, Guarantor is represented by competent counsel.  Guarantor has obtained
from such counsel, and understood, a full explanation of the nature, scope, and
effect of the waivers contained in this Guaranty (a “Waiver Disclosure”).  In
the alternative, Guarantor has, with advice from such counsel, knowingly and
intentionally waived obtaining a Waiver Disclosure.  Accordingly Guarantor does
not require or expect Buyer to provide a Waiver Disclosure.  It is not necessary
for Buyer or this Guaranty to provide or set forth any Waiver Disclosure,
notwithstanding any principles of law to the contrary.  Nevertheless, Guarantor
specifically acknowledges that Guarantor is fully aware of the nature, scope,
and effect of all waivers contained in this Guaranty, all of which have been
fully disclosed to Guarantor.  Guarantor acknowledges that as a result of the
waivers contained in this Guaranty:

 

(a)                                 Actions by Buyer.  Buyer will be able to
take a wide range of actions relating to Seller, the Transactions, and the
Transaction Documents, all without Guarantor’s consent or notice to Guarantor. 
Guarantor’s full and unconditional liability under this Guaranty will continue
whether or not Guarantor has consented to such actions.  Guarantor may disagree
with or disapprove such actions, and Guarantor may believe that such actions
should terminate or limit Guarantor’s obligations under this Guaranty, but such
disagreement, disapproval, or belief on the part of Guarantor will in no way
limit Guarantor’s obligations under this Guaranty.

 

(b)                                 Interaction with Seller Liability. 
Guarantor shall be fully liable for all Guaranteed Obligations, even if Seller
has no liability whatsoever under the Transaction Documents or the Transaction
Documents are otherwise invalid, unenforceable, or subject to defenses available
to Seller.  Guarantor acknowledges that Guarantor’s full and unconditional
liability under this Guaranty (with respect to the Guaranteed Obligations as if
they were fully enforceable against Seller) will continue notwithstanding any
such limitations on or impairment of Seller’s liability.

 

(c)                                  Timing of Enforcement.  Buyer will be able
to enforce this Guaranty against Guarantor even though Buyer might also have
available other rights and remedies that Buyer could conceivably enforce against
the Security or against other parties.  As a result, Buyer may require Guarantor
to pay the Guaranteed Obligations earlier than Guarantor would prefer to pay
such Guaranteed Obligations, including immediately upon the occurrence of a
default by Seller.  Guarantor will not be able to assert against Buyer various
defenses, theories, excuses, or procedural requirements that might otherwise
force Buyer to delay or defer the

 

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enforcement of this Guaranty against Guarantor. Guarantor acknowledges that
Guarantor intends to allow Buyer to enforce the Guaranty against Guarantor in
such manner.  All of Guarantor’s assets will be available to satisfy Buyer’s
claims against Guarantor under this Guaranty.

 

(d)                                 Continuation of Liability.  Guarantor’s
liability for the Guaranteed Obligations shall continue at all times until the
Guaranteed Obligations have actually been paid in full, even if other
circumstances have changed such that in Guarantor’s view Guarantor’s liability
under this Guaranty should terminate, except to the extent that any express
conditions to the termination of this Guaranty, as set forth in this Guaranty,
have been satisfied.

 

15.                               Buyer’s Disgorgement of Payments.  Upon
payment of all or any portion of the Guaranteed Obligations, Guarantor’s
obligations under this Guaranty shall continue and remain in full force and
effect if all or any part of such payment is, pursuant to any Insolvency
Proceeding or otherwise, avoided or recovered directly or indirectly from Buyer
as a preference, fraudulent transfer, or otherwise, irrespective of (a) any
notice of revocation given by Guarantor prior to such avoidance or recovery, or
(b) payment in full of the Transactions (other than indemnification obligations
which expressly survive beyond the termination of the Repurchase Agreement and
the other Transaction Documents).  Guarantor’s liability under this Guaranty
shall continue until all periods have expired within which Buyer could (on
account of any Insolvency Proceedings, whether or not then pending, affecting
Seller or any other Person) be required to return, repay, or disgorge any amount
paid at any time on account of the Guaranteed Obligations.

 

16.                               Financial Information.  Guarantor shall
deliver to Buyer: (a) within forty-five (45) days after the last day of each of
the first three fiscal quarters in any fiscal year, Guarantor’s unaudited
consolidated balance sheets as of the end of such quarter, in each case
certified as being true and correct by an officer’s certificate; (b) within
ninety (90) days after the end of each calendar year or other fiscal year of
Guarantor, consolidated statements of income and statements of changes in cash
flow for such year and balance sheets as of the end of such year, in each case
presented fairly in accordance with GAAP, and accompanied by an unqualified
report of a nationally recognized independent certified public accounting firm,
Ernst & Young or any other accounting firm consented to by Buyer in its
reasonable discretion; (c) within two (2) Business Days after Guarantor’s
knowledge thereof, notify Buyer of the loss of Guarantor’s status as a REIT; and
(d) such other financial information relating to Guarantor and in Guarantor’s
possession as Buyer may reasonably request.

 

17.                               Notice of Default and Litigation.  Guarantor
shall promptly, and in any event (a) within three (3) Business Days after
Guarantor’s knowledge thereof, notify Buyer of any default on the part of
Guarantor under any indebtedness which could give rise to an Event of Default,
and (b) within three (3) Business Days after receipt of service of process,
notify Buyer of the commencement, or threat in writing of, any action, suit,
proceeding, investigation or arbitration involving Guarantor or any of its
Affiliates or assets or any judgment in any action, suit, proceeding,
investigation or arbitration involving Guarantor or any of its Affiliates or
assets, which in any of the foregoing cases (i) relates to any Purchased Asset,
(ii) questions or challenges the validity or enforceability of any Transaction
or Transaction Document, (iii) makes a claim or claims against Guarantor in an
aggregate amount in excess of $1,000,000 or (iv) that,

 

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individually or in the aggregate, if adversely determined, could be reasonably
likely to have a Material Adverse Effect as reasonably determined by Guarantor.

 

18.                               Right to Set Off.  Notwithstanding anything to
the contrary contained herein, no provision of this Guaranty shall be deemed to
limit, decrease or in any way diminish any rights of set-off Buyer and its
Affiliates may have with respect to any cash, cash equivalents, certificates of
deposit or the like which may now or hereafter be put on deposit with Buyer by
Seller or by Guarantor.  Upon the occurrence and during the continuance of any
Event of Default, Buyer is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by Buyer to or for the credit or
the account of Guarantor against any and all of the obligations of Guarantor now
or hereafter existing under this Guaranty.  Buyer agrees promptly to notify
Guarantor after any set-off and application, provided that the failure to give
such notice shall not affect the validity of such set-off and application or
this Guaranty.  The rights of Buyer under this Section 18 are in addition to
other rights and remedies (including, without limitation, other rights to
set-off) which Buyer may have.

 

19.                               Consent to Jurisdiction.  Guarantor agrees
that any Proceeding to enforce this Guaranty may be brought in any state or
federal court located in the state of New York, as Buyer may select.  By
executing this Guaranty, Guarantor irrevocably accepts and submits to the
exclusive personal jurisdiction of each of the aforesaid courts, generally and
unconditionally with respect to any such Proceeding.  Guarantor agrees not to
assert any basis for transferring jurisdiction of any such proceeding to another
court.  Guarantor further agrees that a final non-appealable judgment against
Guarantor in any Proceeding shall be conclusive evidence of Guarantor’s
liability for the full amount of such judgment.

 

20.                               Merger; No Conditions; Amendments.  This
Guaranty and documents referred to herein contain the entire agreement among the
parties with respect to the matters set forth in this Guaranty.  This Guaranty
supersedes all prior agreements among the parties with respect to the matters
set forth in this Guaranty.  No course of prior dealings among the parties, no
usage of trade, and no extrinsic evidence of any nature shall be used to
supplement, modify, or vary any terms of this Guaranty.  This Guaranty is
unconditional.  There are no unsatisfied conditions to the full effectiveness of
this Guaranty.  No terms or provisions of this Guaranty may be changed, waived,
revoked, or amended without Buyer’s written agreement.  If any provision of this
Guaranty is determined to be unenforceable, then all other provisions of this
Guaranty shall remain fully effective.

 

21.                               Enforcement.  Guarantor acknowledges that this
Guaranty is an “instrument for the payment of money only,” within the meaning of
New York Civil Practice Law and Rules Section 3213.  In the event of any
Proceeding between Seller or Guarantor and Buyer, including any Proceeding in
which Buyer enforces or attempts to enforce this Guaranty or the Transactions
against Seller or Guarantor, or in the event of any Guarantor Litigation,
Guarantor shall reimburse Buyer for all Legal Costs of such Proceeding.

 

22.                               Fundamental Changes.  Guarantor shall not wind
up, liquidate, or dissolve its affairs or enter into any transaction of merger
or consolidation, or sell, lease, or otherwise

 

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dispose of (or agree to do any of the foregoing) all or substantially all of its
property or assets, without Buyer’s prior written consent.

 

23.                               Prohibited Person.  Guarantor shall not,
without prior written consent of Buyer, conduct any business, nor engage in any
transaction or dealing, with any Prohibited Person (as defined in the Repurchase
Agreement), including, but not limited to, the making or receiving of any
contribution of funds, goods, or services, to or for the benefit of a Prohibited
Person; or engage in or conspire to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate, any
of the prohibitions set forth in Executive Order 13224 issued on September 24,
2001. Guarantor further covenants and agrees to deliver (from time to time) to
Buyer any such certification or other evidence as may be requested by Buyer in
its sole and absolute discretion, confirming that Guarantor has not, to its
knowledge, engaged in any business, transaction or dealings with a Prohibited
Person, including, but not limited to, the making or receiving of any
contribution of funds, goods, or services, to or for the benefit of a Prohibited
Person.

 

24.                               Further Assurances.  Guarantor shall execute
and deliver such further documents, and perform such further acts, as Buyer may
reasonably request to achieve the intent of the parties as expressed in this
Guaranty, provided in each case that any such documentation is consistent with
this Guaranty and with the Transaction Documents.

 

25.                               Certain Entities.  If Seller or Guarantor is a
partnership, limited liability company, or other unincorporated association,
then: (a) Guarantor’s liability shall not be impaired by changes in the name or
composition of Seller or Guarantor; and (b) the withdrawal or removal of any
partner(s) or member(s) of Seller or Guarantor shall not diminish Guarantor’s
liability or (if Guarantor is a partnership) the liability of any withdrawing
general partners of Guarantor.

 

26.                               Counterparts.  This Guaranty may be executed
in counterparts each of which so executed shall be deemed to be an original, but
all of such counterparts shall together constitute but one and the same
instrument.  Delivery by telecopier or other electronic transmission (including
a .pdf e-mail transmission) of an executed counterpart of a signature page to
this Guaranty shall be effective as delivery of an original executed counterpart
of this Guaranty.

 

27.                               WAIVER OF TRIAL BY JURY.  GUARANTOR WAIVES
TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING FROM OR RELATING TO THIS
GUARANTY OR THE TRANSACTION DOCUMENTS OR ANY OBLIGATION(S) OF GUARANTOR
HEREUNDER OR UNDER THE TRANSACTION DOCUMENTS.

 

28.                               Miscellaneous.

 

(a)                                 Assignability.  Buyer may assign this
Guaranty (in whole or in part) together with any one or more of the Transaction
Documents, in accordance with and subject to the terms of the Transaction
Documents without in any way affecting Guarantor’s or Seller’s liability.  Upon
request in connection with any such assignment Guarantor shall deliver such
documentation acknowledging such assignment as Buyer shall reasonably request. 
Buyer

 

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may from time to time designate any Buyer Entity to hold and exercise any or all
of Buyer’s rights and remedies under this Guaranty.  This Guaranty shall benefit
Buyer and its successors and assigns (including any Buyer Entity) and shall bind
Guarantor and its successors, and assigns.  Guarantor may not assign this
Guaranty in whole or in part without the prior written consent of Buyer.

 

(b)                                 Notices.  All notices, requests and demands
to be made under this Guaranty shall be given in writing at the address set
forth in the opening paragraph of this Guaranty and shall be effective for all
purposes if hand delivered or sent by: (i) hand delivery, with proof of
delivery, (ii) certified or registered United States mail, postage prepaid,
(iii) expedited prepaid delivery service, either commercial or United States
Postal Service, with proof of delivery, or (iv) e-mail with proof of delivery to
the address set forth in the opening paragraph of this Guaranty or at such other
address and person as shall be designated from time to time by any party hereto,
as the case may be, in a written notice to the other parties hereto in the
manner provided for in this Section 28(b).  Any notice, request or demand shall
be deemed to have been given: (i) in the case of hand delivery, at the time of
delivery, (ii) in the case of registered or certified mail, when first delivered
or the first attempted delivery on a business day, (iii) in the case of
expedited prepaid delivery, upon the first attempted delivery on a business day,
or (iv) in the case of e-mail, upon receipt of confirmation of delivery.

 

(c)                                  Interpretation.  This Guaranty shall be
enforced and interpreted according to the laws of the state of New York,
disregarding its rules on conflicts of laws.  The word “include” and its
variants shall be interpreted in each case as if followed by the words “without
limitation.”

 

29.                               Business Purposes.  Guarantor acknowledges
that this Guaranty is executed and delivered for business and commercial
purposes, and not for personal, family, household, consumer, or agricultural
purposes.  Guarantor acknowledges that Guarantor is not entitled to, and does
not require the benefits of, any rights, protections, or disclosures that would
or may be required if this Guaranty were given for personal, family, household,
consumer, or agricultural purposes.  Guarantor acknowledges that none of
Guarantor’s obligation(s) under this Guaranty constitute(s) a “debt” within the
meaning of the United States Fair Debt Collection Practices Act, 15 U.S.C.
§ 1692a(5), and accordingly compliance with the requirements of such Act is not
required if Buyer (directly or acting through its counsel) makes any demand or
commences any action to enforce this Guaranty.

 

30.                               No Third-Party Beneficiaries.  This Guaranty
is executed and delivered for the benefit of Buyer and its successors, and
assigns, and is not intended to benefit any third party.

 

31.                               CERTAIN ACKNOWLEDGMENTS BY GUARANTOR. 
GUARANTOR ACKNOWLEDGES THAT BEFORE EXECUTING THIS GUARANTY: (A) GUARANTOR HAS
HAD THE OPPORTUNITY TO REVIEW IT WITH AN ATTORNEY OF GUARANTOR’S CHOICE;
(B) BUYER HAS RECOMMENDED TO GUARANTOR THAT GUARANTOR OBTAIN SEPARATE
COUNSEL, INDEPENDENT OF SELLER’S COUNSEL, REGARDING THIS GUARANTY; AND
(C) GUARANTOR HAS CAREFULLY READ THIS GUARANTY AND UNDERSTOOD

 

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THE MEANING AND EFFECT OF ITS TERMS, INCLUDING ALL WAIVERS AND ACKNOWLEDGMENTS
CONTAINED IN THIS GUARANTY AND THE FULL EFFECT OF SUCH WAIVERS AND THE SCOPE OF
GUARANTOR’S OBLIGATIONS UNDER THIS GUARANTY.

 

32.                               Safe Harbor.  The parties hereto intend
(a) for this Guaranty and each Transaction to qualify for the safe harbor
treatment provided by the Bankruptcy Code and for Buyer to be entitled to all of
the rights, benefits and protections afforded to Persons under the Bankruptcy
Code with respect to a “securities contract” as defined in Section 741(7) of the
Bankruptcy Code and that payments under the Repurchase Documents are deemed
“margin payments,” “settlement payments” or a “transfer” as defined in
Section 101 of the Bankruptcy Code, (b) for the grant of a security interest set
forth in Section 6 of the Repurchase Agreement to also be a “securities
contract” as defined in Section 741(7)(A)(xi) of the Bankruptcy Code, and
(c) that Buyer (for so long as Buyer is a “financial institution,” “financial
participant” or other entity listed in Section 555, 559 or 362(b)(6) of the
Bankruptcy Code) shall be entitled to the “safe harbor” benefits and protections
afforded under the Bankruptcy Code with respect to a “securities contract,”
including (x) the rights, set forth in Sections 13 and 21 of the Repurchase
Agreement and in Section 555, 559 and 561 of the Bankruptcy Code, to liquidate
the Purchased Assets and terminate the Repurchase Agreement and this Guaranty,
and (y) the right to offset or net out as set forth in the Repurchase Agreement,
in Section 18 hereof and in Section 362(b)(6) of the Bankruptcy Code.

 

[Signature Page Follows]

 

19

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IN WITNESS WHEREOF, Guarantor has duly executed this Guaranty as of the date
first written above.

 

 

GUARANTOR:

 

 

 

TREMONT MORTGAGE TRUST,

 

a Maryland real estate investment trust

 

 

 

 

 

By:

/s/ David M. Blackman

 

Name:

David M. Blackman

 

Title:

Chief Executive Officer

 

Guaranty

 

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