Exhibit 10.2


 


GUARANTEE AGREEMENT


 


THIS GUARANTEE AGREEMENT (as
amended, modified, waived, supplemented, extended, restated or replaced from
time to time, this “Guarantee”),
is made as of the 22nd day of July, 2008, by GRAMERCY
CAPITAL CORP., a Maryland corporation (together with its successors
and permitted assigns, “Parent”),
as a guarantor, GKK CAPITAL LP, a Delaware limited
partnership (together with its successors and permitted assigns, “GKK Capital”), as a
guarantor, GRAMERCY INVESTMENT TRUST, a Maryland
real estate investment trust (together with its successors and permitted
assigns, “Gramercy REIT”),
as a guarantor, GKK TRADING CORP., a Delaware
corporation (together with its successors and permitted assigns, “GTC”, and, together
with Parent, GKK Capital, Gramercy REIT and any other Person that becomes a
guarantor under this Guarantee, the “Guarantors”), as a guarantor, for the benefit of
the several banks and other financial institutions as are, or may from time to
time become parties to the Credit Agreement (as defined below) (each, together
with its successors and assigns, a “Lender” and, collectively, the “Lenders”), and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking
association, as administrative agent for the Lenders hereunder (in such capacity,
together with its successors and assigns, the “Administrative Agent”).  Capitalized terms used but not defined herein
shall have the meanings given to such terms in the Credit Agreement (defined
below).


 


RECITALS:


 


WHEREAS, under and subject to the
terms of the Credit Agreement, dated as of July 18, 2008 (as amended,
modified, restated, replaced, waived, substituted, supplemented or extended
from time to time, the “Credit
Agreement”), by and among Gramercy Warehouse Funding I LLC, a
Delaware limited liability company (together with its successors and permitted
assigns, “GWF-I”),
as a borrower, GKK Trading Warehouse I LLC, a Delaware limited liability
company (together with its successors and permitted assigns, “GKK Trading” and
together with GWF-I and any other Person that becomes a borrower under the
Credit Documents, the “Borrowers”),
as a borrower, the Guarantors, the Lenders and the Administrative Agent, the
Borrowers and the Lenders have agreed that the Lenders may make certain loans
to the Borrowers subject to the terms and conditions of the Credit Agreement;


 


WHEREAS, Parent is the sole
general partner and the 99% owner of the Class A limited partnership
interests of GKK Capital, and the holder of 100% of the direct or indirect
common equity interests in each of GTC and Gramercy REIT;


 


WHEREAS, the Guarantors will
benefit directly or indirectly from the transactions contemplated under the
Credit Agreement; and


 


WHEREAS, it is a condition
precedent to the effectiveness of the Credit Agreement that each Guarantor
shall have executed and delivered this Guarantee in connection with each of the
representations, warranties, covenants, indemnities (including but not limited
to any indemnification for environmental conditions) and Obligations of the Borrowers
with respect to the Administrative Agent and the Lenders under each of the
Credit Documents (collectively, the “Guarantee Obligations”).


 

















 


NOW, THEREFORE, based upon the
foregoing Recitals and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, each Guarantor, intending to be legally bound,
hereby agrees as follows:


 


1.                                      Defined Terms.


 


Unless otherwise defined herein, terms which are
defined in the Credit Agreement and used herein are so used as so defined.


 


(a)                                  “Adjusted
Total Assets” shall mean the sum of Total Assets plus Off-Balance
Sheet Assets.


 


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


 


(c)                                  “Capital
Expenditures” shall mean, for any period, the product of (a) $0.15 and
(b) the average number of square feet, during the period in question, in
improvements constituting part of Real Property Assets owned by Parent and/or
its Consolidated Subsidiaries with respect to which Parent and/or its
Consolidated Subsidiaries has financial responsibility for recurring
expenditures which are capitalized on the balance sheet of Parent in conformity
with GAAP, but expressly excluding portions of improvements which are leased to
Persons which are not Consolidated Subsidiaries who have responsibility for
repair, maintenance and/or replacement in accordance with the applicable lease
or otherwise.


 


(d)                                 “Consolidated
Subsidiaries” shall mean any Subsidiary of Parent, or any other entity,
which is consolidated with Parent in accordance with GAAP or which is required
under GAAP to be consolidated with Parent.


 


(e)                                  “Debt
Service” shall mean, for any period, the sum of (a) Interest Expense
for any Person determined on a consolidated basis for such period, and (b) all
regularly scheduled principal payments made with respect to Indebtedness of
Parent and its Subsidiaries during such period, other than any balloon, bullet,
margin or similar principal payment which repays such Indebtedness in
full.  Debt Service shall include a
proportionate share of items (a) and (b) of all Unconsolidated
Affiliates.


 


(f)                                    “FAS
140” shall mean Statement No. 140 of the Financial Accounting
Standards Board.


 


(g)                                 “Fixed
Charge Coverage Ratio” shall mean, for any Person during any period, the
Consolidated Adjusted EBITDA for such period (after adding back all applicable
Incentive Fees), divided by the Fixed Charges for the same period.


 


(h)                                 “Fixed
Charges” shall mean, for any Person during any period, the sum of (a) Debt
Service, (b) all Preferred Dividends, (c) Capital Lease Obligations
paid or accrued during such period, (d) Capital Expenditures (if any), and
(e) any amounts payable under any Ground Lease.  Fixed 


 


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Charges shall include a
proportionate share of items (a), (b), (c), (d) and (e) of all
Unconsolidated Affiliates.


 


(i)                                     “Funds
From Operation” or “FFO” shall mean, for a given period, (a) Net
Income of Parent and its Subsidiaries for such period (before extraordinary and
non-recurring items), minus (or plus) (b) gains (or losses) from debt
restructuring and sales of property during such period, plus (c) depreciation
and amortization of real and personal property assets for such period, plus (d) without
duplication, income from unconsolidated partnerships and joint ventures,
determined in each case in accordance with GAAP.


 


(j)                                     “Incentive
Fees” shall mean the payments due to the Holders of Class B Units
pursuant to the terms of the version of Section 5.01C of the Agreement of
Limited Partnership of GKK Capital LP dated August 2, 2004 that is in
effect on June 28, 2007.


 


(k)                                  “Interest
Expense” consists of any Person’s total interest expense incurred (in
accordance with GAAP), including capitalized or accruing interest (but
excluding interest funded under a construction loan), on a consolidated basis
plus the Person’s pro rata share of Interest Expense from Joint Venture
Investments and Unconsolidated Affiliates, without duplication for the most
recent period.


 


(l)                                     “Letter
of Credit” shall mean any letter of credit issued pursuant to Section 2.3
of the Credit Agreement.


 


(m)                               “Liquidity”
shall mean, at any time, an amount equal to (x) the cash and Cash
Equivalents of the Guarantors (on a consolidated basis) at such time and (y) so
long as no Default or Event of Default shall have occurred and then be
continuing, the Availability; provided, that the Availability shall be
included when calculating Liquidity only to the extent that all financial
covenants under this Agreement are satisfied immediately before and, on a pro
forma basis, after giving full effect to all of the transactions taken into
account hereunder pursuant to the definition of Availability.


 


(n)                                 “Net
Income” shall mean with respect to any Person for any period, the net
income of such Person for such period as determined in accordance with GAAP.


 


(o)                                 “Off-Balance
Sheet Assets” shall mean, with respect to any Person, any asset that is
subject to an off-balance sheet financing, and as a result of such transaction
such asset does not (and is not required pursuant to GAAP) to appear as an
asset on the balance sheet of such Person.


 


(p)                                 “Pledged
Collateral” shall have the meaning assigned thereto in the Pledge
Agreement.


 


(q)                                 “QSPE”
shall mean a qualified special purpose entity for purposes of FAS 140.


 


(r)                                    “Real
Property Assets” shall mean, as of any time, the real property assets
(including interests in preferred equity and participating mortgages in which
the lender’s interest therein is characterized as equity according to GAAP)
owned directly or indirectly by the Guarantors or a Consolidated Subsidiary at
such time.


 


(s)                                  “REO
Property” shall mean any real property acquired through foreclosure or by
deed in lieu of such foreclosure.


 


(t)                                    “Special
Dividend Distributions” shall mean any cash distributions, to the extent
necessary to eliminate taxes pursuant to Sections 857(b)(3) and 4981 of
the Internal Revenue Code.


 


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(u)                                 “Tangible
Net Worth” shall mean, as of a particular date and calculated on a
consolidated basis: (1) all amounts which would be included under capital
(or any like caption) on a consolidated balance sheet of any Person(s) at
such date, determined in accordance with GAAP, less (2) (i) amounts
owing to such Person(s) from any Affiliates thereof, or from officers,
employees, partners, members, directors, shareholders or other Persons
similarly affiliated with such Person(s) or their respective Affiliates, (ii) intangible
assets (other than Interest Rate Protection Agreements specifically related to
the Collateral), (iii) prepaid taxes and/or expenses and (iv) the
value of any Collateral which, after its Closing Date, becomes an REO Property.


 


(v)                                 “Total
Assets” shall mean, at any time, an amount equal to the aggregate book
value of all assets owned by any Person(s), determined on a non-consolidated
basis.


 


(w)                               “Total
Indebtedness” shall mean, at any time, without duplication, all
Indebtedness and Contingent Liabilities of any Person and all Subsidiaries
thereof,  determined on a
non-consolidated basis.


 


(x)                                   “Total
Liabilities Ratio” shall mean, as to any Person, the ratio of (a) the
Total Indebtedness of such Person to (b) the Total Assets of such Person.


 


(y)                                 “Trust
Preferred Securities” shall mean instruments that entitle the holders
thereof to receive payments that depend (except for rights or other assets
designed to assure the servicing or timely distribution of proceeds to holders
thereof) on the cash flow from the pool of trust securities issued by a
wholly-owned subsidiary of a U.S. financial institution or an insurance holding
company which uses the proceeds of such issuance to purchase a portfolio of
debt securities issued by its parent. 
They generally have the following characteristics:  (i) the trust securities are
non-amortizing preferred stock securities; (ii) the trust securities have
a 30-year maturity with a 5- or 10-year non-call period; and (iii) the
trust securities are subordinated debt.


 


2.                                      Guarantee of
Payment and Performance.


 


(a)                                  Each
Guarantor, jointly and severally, hereby unconditionally and irrevocably
guarantees to the Administrative Agent and the Lenders the prompt and complete
payment and performance by each Borrower when due (whether at the stated
maturity, by acceleration or otherwise) of the Guarantee Obligations subject to
the limitations set forth herein.


 


(b)                                 (i) Subject
to clauses (b)(ii), (c), (d), (e), (f), (g) and (h) below, the
maximum liability the Guarantors hereunder and under the Credit Documents shall
in no event exceed the greater of either (A) an amount equal to one
hundred percent of the total capitalization (including all debt and equity
capitalization) of the Borrowers or (B) the sum of (i) ten percent
(10%) of the then-current aggregate unpaid Allocated Revolving Loan Amount and
the Allocated Term Loan Amount for each item of Revolving Loan Collateral and
Term Loan Collateral that consists of GKK CRE CDO Securities rated AA/Aa2 or
higher by one or more of S&P, Fitch and Moody’s and (ii) forty percent
(40%) of the then-current unpaid balance of all of the Loans, except for those
Loans referred to in clause (B)(i) of this Section 2(b).


 


(ii)                                  With
respect to any Obligations arising under or related to any Letter of Credit,
the limitation of the maximum liability of the Guarantors pursuant to clause (i) above
shall be of no force and effect.


 


(c)                                  Notwithstanding
the foregoing, the limitation on liability as set forth in subsection (b) above
SHALL BECOME NULL AND VOID and shall be of no further force and effect 


 


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and the Obligations immediately
shall become fully recourse to the Borrowers and Guarantors, jointly and
severally, in the event of any of the following:


 


(i)                                     a
voluntary bankruptcy or insolvency proceeding is commenced by any Borrower
under the U.S. Bankruptcy Code or any similar federal or state law;


 


(ii)                                  an
involuntary bankruptcy or insolvency proceeding is commenced against any
Borrower or any Guarantor in connection with which any Borrower or any
Guarantor (or any Affiliate of any of the foregoing) has or have colluded in
any way with the creditors commencing or filing such proceeding;


 


(iii)                               fraud or intentional
misrepresentation by any Borrower, any Guarantor or any Affiliate of any
Borrower or any Guarantor in connection with the execution and the delivery of
this Guarantee, the Credit Agreement, or any of the other Credit Documents, or
any certificate, report, financial statement or other instrument or document
furnished to the Administrative Agent or any Lender at the time of the closing
of the Credit Agreement or during the term of the Credit Agreement;


 


(iv)                              any
material breach of the material separateness covenants contained in Section 5.23
of the Credit Agreement;


 


(v)                                 [reserved];


 


(vi)                              Parent
at any time fails to maintain its status as a REIT; or


 


(vii)                           any breach of the covenants
contained in Section 6.4 of the Credit Agreement or Section 12(p) of
this Guarantee.


 


(d)                                 In
addition to the foregoing and notwithstanding the limitation on liability set
forth in subsection (b), Guarantors shall be jointly and severally liable for
any actual losses, costs, claims, expenses or other liabilities incurred by the
Administrative Agent or any Lender arising out of or attributable to any
material breach of any other representations, warranties or covenants contained
in any Credit Document including but not limited to any representations,
warranties or covenants relating to Environmental Matters, or any indemnity for
costs incurred in connection with the violation of any Environmental Law, the
correction of any environmental condition, or the removal of any Materials of
Environmental Concern, in each case in any way affecting any Borrower’s or any
of its Affiliates’ properties or any of the Collateral.


 


(e)                                  Nothing
herein shall be deemed to be a waiver of any right which the Administrative
Agent or any Lender may have under Section 506(a), 506(b), 1111(b) or
any other provision of the U.S. Bankruptcy Code to file a claim for the full
amount of the Indebtedness secured by the Credit Agreement or to require that
all Collateral shall continue to secure all of the Indebtedness owing to the
Lenders and the Administrative Agent in accordance with the Credit Agreement or
any other Credit Documents.


 


(f)                                    Each
Guarantor further agrees to pay any and all reasonable expenses (including,
without limitation, all reasonable fees and disbursements of counsel) which may
be paid or incurred by the Administrative Agent and any Lender in enforcing, or
obtaining advice of counsel in respect of, any rights with respect to, or
collecting, any or all of the Guarantee Obligations and/or enforcing any rights
with respect to, or collecting against, any Guarantor under this
Guarantee.  This Guarantee shall remain
in 


 


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full force and effect until the
Obligations are paid in full, notwithstanding that from time to time prior
thereto the Borrowers may be free from any Obligations.


 


(g)                                 No
payment or payments made by any Borrower or any other Person or received or
collected by the Administrative Agent or any Lender from any Borrower or any
other Person by virtue of any action or proceeding or any set-off or
appropriation or application, at any time or from time to time, in reduction of
or in payment of the Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of the Guarantors hereunder which shall,
notwithstanding any such payment or payments, remain liable for the amount of
the Obligations until the Obligations are paid in full.


 


(h)                                 Each
Guarantor agrees that whenever, at any time, or from time to time, any
Guarantor shall make any payment to the Administrative Agent for the ratable benefit
of the Lenders on account of such Guarantor’s liability hereunder, such
Guarantor will notify the Administrative Agent in writing that such payment is
made under this Guarantee for such purpose.


 


3.                                      Release of
Collateral, Parties Liable, etc.


 


Each Guarantor agrees that (a) any or all of the
Collateral, the Pledged Collateral and other collateral, security and Property
now or hereafter held for the Guarantee or the Guarantee Obligations may be
exchanged, released, terminated, modified, sold, assigned, participated,
pledged, compromised, surrendered or otherwise transferred or disposed of from
time to time; (b) except as expressly set forth in the Credit Documents,
the Administrative Agent and the Lenders shall have no obligation to protect,
perfect, secure or insure any Collateral, the Pledged Collateral or any
collateral, security, Property, Liens, interests or encumbrances now or
hereafter held for the Guarantee or the Guarantee Obligations or the Properties
subject thereto; (c) the time, place, manner or terms of payment of the
Guarantee Obligations may be changed or extended, in whole or in part, to a
time certain or otherwise, and may be renewed or accelerated, in whole or in
part; (d) the Borrowers, the Pledgors, the other Credit Parties and other
Persons may be granted indulgences generally; (e) any of the provisions of
the Credit Agreement and the other Credit Documents and the Guarantee
Obligations may be modified, amended, waived, supplemented, replaced or
restated from time to time; (f) any party liable for the payment of the
Guarantee Obligations, including, without limitation, other guarantors, may be
granted indulgences or released; and (g) any deposit balance for the
credit of the Borrowers or any other Person liable for the payment of the Guarantee
Obligations, including, without limitation, other guarantors, or liable upon
any security therefor, may be released, in whole or in part, at, before and/or
after the stated, extended or accelerated maturity of the Guarantee
Obligations, all of the foregoing in clauses (a) through (g) without
notice to or further assent by such Guarantor, who shall remain bound thereon,
notwithstanding any such exchange, compromise, surrender, extension, renewal,
acceleration, modification, indulgence, release or other act.


 


4.                                      Waiver of
Rights.


 


Each Guarantor expressly waives:  (a) notice of acceptance of this
Guarantee by the Administrative Agent, the Lenders or any other Guarantor and
of all extensions of credit, loans or advances to or purchases from the Borrowers
by the Administrative Agent or the Lenders; (b) presentment and demand for
payment of any of the Guarantee Obligations; (c) protest and notice of
dishonor or of default to such Guarantor or to any other Person with respect to
the Guarantee Obligations or with respect to any collateral, security or
Property therefor; (d) notice of the Administrative Agent or the Lenders
obtaining, amending, substituting for, releasing, waiving, modifying,
extending, replacing or restating all or any portion of the Guarantee
Obligations, the Credit Agreement, any other Credit Document, other guarantees
or any Lien now or hereafter securing the Guarantee Obligations or the
Guarantee, or the Administrative Agent or the Lenders subordinating,
compromising, discharging, 


 


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terminating or releasing such Liens; (e) notice
of the execution and delivery by the Borrowers, the Administrative Agent, the
Lenders or any other Person of any other loan, purchase, credit or security
agreement or document or of the Borrowers’ or such other Person’s execution and
delivery of any promissory notes or other documents arising under or in
connection with the Credit Documents or in connection with any purchase of the
Borrowers’ or such other Person’s Property or assets; (f) notice of any
kind concerning the assets, liabilities, financial condition, creditworthiness,
businesses, prospects or other affairs of the Borrowers or any other Person; (g) notice
of the occurrence of any breach by the Borrowers, the Pledgors, any other
Credit Party or any other Person or of any Event of Default; (h) notice of
the Administrative Agent’s or the Lenders’ transfer, disposition, assignment,
sale, pledge or participation of the Guarantee Obligations, the Collateral, the
Pledged Collateral, the Credit Documents, the Mortgage Loan Documents, or any
collateral, security or Property for the Guarantee or the Guarantee Obligations
or any portion of the foregoing; (i) notice of the sale or foreclosure (or
posting or advertising for sale or foreclosure) of all or any portion of any
Collateral, the Pledged Collateral or any collateral, security or Property for
the Guarantee or the Guarantee Obligations; (j) notice of the protest,
proof of non–payment or default by the Borrowers or any other Person; (k) any
other action at any time taken or omitted by the Administrative Agent or the
Lenders, and, generally, all demands and notices of every kind in connection
with this Guarantee, the Credit Documents, the Guarantee Obligations, the
Collateral, the Pledged Collateral, any collateral, security or Property for
the Guarantee or the Guarantee Obligations, the Mortgage Loan Documents, any
documents or agreements evidencing, securing or relating to any of the
Guarantee or the Guarantee Obligations and the obligations hereby guaranteed; (l) all
other notices to which the Guarantor might otherwise be entitled; (m) demand
for payment under this Guarantee; and (n) any right to assert against the
Administrative Agent or the Lenders, as a defense, counterclaim, set–off or
cross–claim, any defense (legal or equitable), set–off, counterclaim or claim
of any kind or nature whatsoever that the Guarantor may now or hereafter have
against the Administrative Agent or the Lenders (other than payment in full of
the Guarantee Obligations), the Borrowers or any other Person.  It shall not be necessary for the
Administrative Agent or the Lenders (and each Guarantor hereby waives any
rights which such Guarantor may have to require the Administrative Agent or the
Lenders), in order to enforce the obligations of each Guarantor hereunder, to (i) institute
suit, enforce its rights or exhaust its remedies against the Borrowers, the
Pledgors, any other Credit Party, others liable on the Guarantee Obligations,
the Obligors or any other Person, (ii) enforce the Administrative Agent’s
or the Lenders’ rights or exhaust its remedies under or with respect to the
Mortgage Loan Documents and the collateral and Property secured thereby, the
Collateral, the Pledged Collateral or any collateral, security or Property
which shall ever have been given to secure the Guarantee or the Guarantee
Obligations, (iii) enforce the Administrative Agent’s or the Lenders’
rights against any other guarantors of the Guarantee Obligations, (iv) join
the Borrowers, others liable on the Guarantee Obligations or any other Person
in any action seeking to enforce this Guarantee, (v) mitigate damages or
take any other action to reduce, collect or enforce the Guarantee Obligations
or (vi) resort to any other means of obtaining payment of the Guarantee
Obligations.


 


5.                                      Guarantee
Absolute and Unconditional.


 


The obligations of each Guarantor under this Guarantee
are absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of the obligations of the Borrowers
under the Credit Agreement and, to the fullest extent permitted by applicable
law, irrespective of any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section 5 that the obligations of each
Guarantor hereunder shall be absolute and unconditional under any and all
circumstances, and a separate action or actions may be brought and prosecuted
against each Guarantor to enforce this Guarantee, irrespective of whether any
action is brought against the Borrowers, the Pledgors, any other Guarantors or
any other Credit Party or whether the Borrowers, the Pledgors, the other
Guarantors or any other Credit Party are joined in any such action or
actions.  The validity of this Guarantee,
the obligations of each Guarantor 


 


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hereunder and the Administrative Agent’s and the
Lenders’ rights and remedies for the enforcement of the foregoing shall in no
way be terminated, abated, reduced, released, modified, changed, discharged,
diminished, affected, limited or impaired in any manner whatsoever by the
happening from time to time of any event or condition of any kind whatsoever,
including, without limitation, any of the following (and each Guarantor hereby
waives any common law, equitable, statutory, constitutional, regulatory or
other rights (including rights to notice) which such Guarantor might have as a
result of or in connection with any of the following):  (a) the assertion or non–assertion by
the Administrative Agent or the Lenders of any of the rights or remedies
available to the Administrative Agent or the Lenders pursuant to the provisions
of the Credit Documents, the Mortgage Loan Documents or pursuant to any
Requirement of Law; (b) the waiver by the Administrative Agent or the
Lenders of, or the failure of the Administrative Agent or the Lenders to
enforce, or the lack of diligence by the Administrative Agent or the Lenders in
connection with, the enforcement of any of its rights or remedies under the
Credit Documents, the Mortgage Loan Documents, the Collateral, the Pledged
Collateral or any collateral, security or Property for the Guarantee or the
Guarantee Obligations; (c) the granting by the Administrative Agent or the
Lenders of (or failure by the Administrative Agent or the Lenders to grant) any
indulgence, forbearance, adjustment, compromise, consent, approval, waiver or
extension of time; (d) the occurrence of any Default or Event of Default
under the Credit Agreement, or the occurrence of any similar event (howsoever
described) under any agreement or instrument referred to therein; (e) any
delay, failure or inability of any Borrower, Pledgor, Guarantor or any other
Credit Party in respect of any of the Guarantee Obligations to perform, willful
or otherwise, any provision of the Credit Agreement beyond any applicable cure
periods; (f) any action or failure to act by the Administrative Agent or
the Lenders that adversely affects any Guarantor’s right of subrogation arising
by reason of any performance by such Guarantor of this Guarantee; (g) any
suit or other action brought by, or any judgment in favor of, any beneficiaries
or creditors of, any Borrower, Pledgor, Guarantor, other Credit Party or any
other Person for any reason whatsoever, including any suit or action in any way
disaffirming, repudiating, rejecting or otherwise calling into question any
issue, matter or thing in respect of the Credit Agreement; (h) any lack or
limitation of status or of power, incapacity or disability of any Borrower, the
Pledgor, Guarantor or any other Credit Party in respect of any of the Guarantee
Obligations; (i) the exercise by the Administrative Agent or the Lenders
of or failure to exercise any so–called self–help remedies; (j) any act,
omission or condition that might in any manner or to any extent vary, alter,
increase, extend or continue the risk to such Guarantor or might otherwise
operate as a discharge or release of such Guarantor under Requirements of Law; (k) any
full or partial release or discharge of or accord and satisfaction with respect
to liability for the Guarantee Obligations, or any part thereof, of the
Borrowers, the Guarantors, the Pledgors, any other Credit Party, any co–guarantors
or any other Person now or hereafter liable, whether directly or indirectly,
jointly, severally, or jointly and severally, to pay, perform, guarantee or
assure the payment of the Guarantee Obligations, or any part thereof; (l) the
impairment, modification, change, release, discharge or limitation of the
liability of the Borrowers, the Guarantors, the Pledgors, any other Credit
Party, any Obligor or any Person liable for or obligated on the Guarantee
Obligations, or any of their estates in bankruptcy, resulting from or pursuant
to the bankruptcy or insolvency of any of the foregoing or the application of
the Insolvency Laws or of or any decision of any court of the United States or
any state thereof; (m) any present or future Requirements of Law or order
of any Governmental Authority (de jure or de facto) purporting to reduce, amend or otherwise
affect the Guarantee Obligations or to vary any terms of payment, satisfaction
or discharge thereof; (n) the waiver, compromise, settlement, release,
extension, acceleration, amendment, change, modification, substitution,
replacement, reduction, increase, alteration, rearrangement, renewal or
termination of the terms of the Guarantee Obligations, the Credit Documents,
the Collateral, the Pledged Collateral, any collateral, security or Property
for the Guarantee or the Guarantee Obligations, the Mortgage Loan Documents,
any or all of the obligations, covenants or agreements of the Borrowers, the
Pledgors, the other Credit Parties, the Obligors or any other Person under the
Credit Documents or Mortgage Loan Documents (except by satisfaction in full of
all Guarantee Obligations) or of the Guarantors under this Guarantee and/or any
failure of the Administrative Agent or the Lenders to notify the Guarantor of
any of the foregoing; (o) the 


 


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extension of the time for satisfaction, discharge or
payment of the Guarantee Obligations or any part thereof owing or payable by
the Borrowers or any other Person under the Credit Documents or of the time for
performance of any other obligations, covenants or agreements under or arising
out of this Guarantee or the extension or renewal of any thereof; (p) any
existing or future offset, claim or defense (other than payment in full of the
Guarantee Obligations) of the Borrowers or any other Person against the
Administrative Agent or the Lenders or against payment of the Guarantee
Obligations, whether such offset, claim or defense arises in connection with
the Guarantee Obligations (or the transactions creating same) or otherwise; (q) the
taking or acceptance or the existence of any other guarantee of or collateral,
security or Property for the Guarantee Obligations in favor of the
Administrative Agent, the Lenders or any other Person specified in the Credit
Documents or the enforcement or attempted enforcement of such other guarantee,
collateral, security or Property; (r) any sale, lease, sublease or
transfer of or Lien on all or a portion of the assets or Property of the
Borrowers, the Pledgors, the Guarantor or any other Credit Party, or any
changes in the shareholders, partners or members of the Borrowers, the
Pledgors, the Guarantors or any other Credit Party, or any reorganization,
consolidation or merger of the Borrowers, the Pledgors, the Guarantors or any
other Credit Party; (s) any consolidation or amalgamation of the
Borrowers, the Pledgors, the Guarantors or any other Credit Party with, any
merger of the Borrowers, the Pledgors, the Guarantors or any other Credit Party
with or into, or any transfer by the Borrowers, the Pledgors, the Guarantors or
any other Credit Party of all or substantially all their assets to, another
Person, any change in the legal or beneficial ownership of ownership interests
issued by the Borrowers, the Pledgors, the Guarantors or any other Credit
Party, or any other change whatsoever in the objects, capital structure,
constitution or business of the Borrowers, the Pledgors, the Guarantors or any
other Credit Party; (t) the invalidity, illegality or unenforceability of
all or any part of the Guarantee Obligations, the Credit Documents, the
Collateral, the Pledged Collateral, any collateral, security or Property for
the Guarantee or the Guarantee Obligations, the Mortgage Loan Documents or any
document or agreement executed in connection with the foregoing, for any reason
whatsoever, including, without limitation, the fact that (1) the Guarantee
Obligations, or any part thereof, exceeds the amount permitted by Requirements
of Law or violates usury laws, (2) the act of creating the Guarantee
Obligations, the Mortgage Assets, the Collateral, the Pledged Collateral, any
collateral, security or Property for the Guarantee or the Guarantee Obligations
or any part of the foregoing is ultra  vires, (3) the officers or
representatives executing the Mortgage Loan Documents or Credit Documents or
otherwise creating the Guarantee Obligations, the Mortgage Assets, the
Collateral, the Pledged Collateral or any collateral, security or Property for
the Guarantee or the Guarantee Obligations acted in excess of their authority, (4) the
Borrowers, the Pledgors, any other Credit Party, any Obligor or any other
Person has valid defenses, claims or offsets (whether at law, in equity or by
agreement) which render the Guarantee Obligations wholly or partially
uncollectible, (5) the creation, performance or repayment of the Guarantee
Obligations, the Mortgage Assets, the Collateral, the Pledged Collateral or any
collateral, security or Property for the Guarantee or the Guarantee Obligations
(or the execution, delivery and performance of any Credit Document, Mortgage
Loan Document or document or instrument representing part of the Guarantee
Obligations, the Mortgage Assets, the Collateral, the Pledged Collateral, any
collateral, security or Property for the Guarantee or the Guarantee Obligations
or executed in connection with the Guarantee Obligations, the Mortgage Assets,
the Collateral, the Pledged Collateral or any collateral, security or Property
for the Guarantee or the Guarantee Obligations, or given to secure the
repayment of the Guarantee Obligations, the Mortgage Assets or the other
Collateral) is illegal, uncollectible or unenforceable or (6) any Mortgage
Loan Document, any Credit Document or any other document, agreement or
instrument has been forged or otherwise is irregular or not genuine or
authentic; (u) any release, termination, sale, pledge, participation,
transfer, surrender, exchange, subordination, deterioration, waste, loss or
impairment (including, without limitation, negligent, willful, unreasonable or
unjustifiable impairment) of the Collateral, the Pledged Collateral or any
collateral, security or Property at any time existing in connection with, or
assuring or securing payment of, all or any part of the Guarantee or the
Guarantee Obligations; (v) the failure of the Administrative Agent, the
Lenders or any other Person to exercise diligence or reasonable care in the
preservation, protection, enforcement, sale or other handling or treatment of
all or any part of the Collateral, the Pledged Collateral 


 


9

















 


or  any  other  collateral,  security  or  Property  for  the  Guarantee  or  the  Guarantee  Obligations,  including,  but  not  limited  to,  any  neglect,  delay,  omission,  failure  or  refusal  of  the  Administrative  Agent  or  the  Lenders  (1)  to  take  or  prosecute  any  action  for  the  collection  of  any  of  the  Guarantee  Obligations,  the  Pledged  Collateral,  any  Collateral  or  any  collateral,  security  or  Property  for  the  Guarantee  or  the  Guarantee  Obligations,  (2)  to  foreclose,  or  initiate  any  action  to  foreclose,  or,  once  commenced,  prosecute  to  completion  any  action  to  foreclose,  upon  any  Collateral,  the  Pledged  Collateral  or  any  security,  collateral  or  Property  for  the  Guarantee  or  Guarantee  Obligations,  or  (3)  to  take  or  prosecute  any  action  in  connection  with  any  instrument  or  agreement  evidencing  or  securing  all  or  any  part  of  the  Guarantee  Obligations;  (w)  the  fact  that  the  Collateral,  the  Pledged  Collateral  or  any  collateral,  security,  Property  or  Lien  contemplated  or  intended  to  be  given,  created  or  granted  as  security  for  the  repayment  of  the  Guarantee  or  the  Guarantee  Obligations,  or  any  part  thereof,  shall  not  be  properly  perfected  or  created,  or  shall  prove  to  be  unenforceable  or  subordinate  to  any  other  Lien;  (x)  any  payment  by  the  Borrowers  or  any  other  Person  to  the  Administrative  Agent  or  the  Lenders  is  held  to  constitute  a  preference  under  Insolvency  Laws,  or  for  any  reason  the  Administrative  Agent  or  the  Lenders  are  required  to  refund  such  payment  or  pay  such  amount  to  any  such  Borrower  or  other  Person;  or  (y)  any  event  or  action  that  would,  in  the  absence  of  this  Section  5,  result  in  the  full  or  partial  release,  discharge  or  relief  of  such  Guarantor  from  the  performance  or  observance  of  any  obligation,  covenant  or  agreement  contained  in  this  Guarantee  or  any  other  agreement,  whether  or  not  such  event  or  action  increases  the  likelihood  that  such  Guarantor  will  be  required  to  pay  the  Guarantee  Obligations  pursuant  to  the  terms  hereof  or  thereof  and  whether  or  not  such  event  or  action  prejudices  such  Guarantor,  it  being  the  unambiguous  and  unequivocal  intention  of  each  Guarantor  that  such  Guarantor  shall  be  obligated  to  pay  the  Guarantee  Obligations  when  due,  notwithstanding  any  occurrence,  circumstance,  event,  action  or  omission  whatsoever,  whether  contemplated  or  uncontemplated,  and  whether  or  not  otherwise  or  particularly  or  expressly  described  herein,  which  obligation  shall  be  deemed  satisfied  only  upon  the  full  and  final  indefeasible  payment  and  satisfaction  of  the  Guarantee  Obligations.


 


6.                                      Primary
Liability of the Guarantor.


 


Without  limiting  the  foregoing  provisions,  each  Guarantor  agrees  that  this  Guarantee  may  be  enforced  by  the  Administrative  Agent  and  the  Lenders  without  the  necessity  at  any  time  of  resorting  to  or  exhausting  any  other  security  or  collateral  and  without  the  necessity  at  any  time  of  having  recourse  to  any  of  the  Credit  Documents,  the  Collateral,  the  Pledged  Collateral  or  any  collateral,  security  or  Property  now  or  hereafter  securing  the  Guarantee  or  the  Guarantee  Obligations  or  otherwise,  and  each  Guarantor  hereby  waives  the  right  to  require  the  Administrative  Agent  or  the  Lenders  to  proceed  against  the  Borrowers,  the  Pledgors,  any  other  Credit  Party,  any  Obligor  or  any  other  Person  (including  a  co–guarantor)  or  to  require  the  Administrative  Agent  or  the  Lenders  to  pursue  any  other  remedy  or  enforce  any  other  right.  Each  Guarantor  further  agrees  that  such  Guarantor  shall  have  no  right  of  subrogation,  reimbursement  or  indemnity  whatsoever  against  any  Person,  or  any  right  of  recourse  to  the  Collateral,  the  Pledged  Collateral  or  any  collateral,  security  or  Property  for  the  Guarantee  or  the  Guarantee  Obligations,  so  long  as  any  such  Guarantee  Obligations  remain  outstanding.  Each  Guarantor  further  agrees  that  nothing  contained  herein  shall  prevent  the  Administrative  Agent  or  the  Lenders  from  suing  on  the  Credit  Agreement  or  any  of  the  other  Credit  Documents  or  foreclosing  its  security  interest  in  or  Lien  on  any  Collateral,  the  Pledged  Collateral  or  any  collateral,  security  or  Property  now  or  hereafter  securing  the  Guarantee  or  the  Guarantee  Obligations  or  from  exercising  any  other  rights  available  to  it  under  the  Credit  Agreement  or  any  of  the  other  Credit  Documents  or  any  other  instrument  of  security  if  none  of  the  Borrowers,  the  Pledgors,  the  Guarantors  or  any  other  Credit  Party  timely  perform  the  obligations  of  the  Borrowers,  the  Pledgors,  all  other  Credit  Parties  or  other  Persons  thereunder,  and  the  exercise  of  any  of  the  aforesaid  rights  and  the  completion  of  any  foreclosure  proceedings  shall  not  constitute  a  discharge  of  such  Guarantor’s  obligations  hereunder;  it  being  the  purpose  and  intent  of  each  Guarantor  that  such  Guarantor’s  obligations  hereunder  shall  be  absolute,  independent  and  unconditional  under  any  and  all  circumstances.  Each  Guarantor  recognizes,  acknowledges  and  agrees  that  such  Guarantor  may  be  


 


10

















 


required  to  pay  the  Guarantee  Obligations  in  full  (subject  to  the  limit  set  forth  in  Section  2)  without  assistance  or  support  of  any  other  Person,  and  such  Guarantor  has  not  been  induced  to  enter  into  this  Guarantee  on  the  basis  of  a  contemplation,  belief,  understanding  or  agreement  that  other  parties  will  be  liable  to  pay  or  perform  the  Guarantee  Obligations,  or  that  the  Administrative  Agent  or  the  Lenders  will  look  to  other  parties  to  pay  or  perform  the  Guarantee  Obligations.  Each  Guarantor  recognizes,  acknowledges  and  agrees  that  it  is  not  entering  into  this  Guarantee  in  reliance  on,  or  in  contemplation  of  the  benefits  of,  the  validity,  enforceability,  collectability  or  value  of  the  Collateral,  the  Pledged  Collateral  or  any  of  the  collateral,  security  or  Property  for  the  Guarantee  or  the  Guarantee  Obligations  or  of  the  validity,  enforceability  or  collectability  of  this  Guarantee  against  any  other  Guarantor.


 


7.                                      Payments.


 


Each Guarantor hereby agrees that the Guarantee
Obligations will be paid to the Administrative Agent for the ratable benefit of
the Lenders without set-off or counterclaim in U.S. Dollars at the address
specified in writing by the Administrative Agent.


 


8.                                      Attorneys’
Fees and Costs of Collection.


 


Each Guarantor hereby agrees to pay all costs, fees
and expenses (including attorneys’ fees) incurred by the Administrative Agent
or the Lenders to pursue collection, to preserve or enforce its rights under
this Guarantee, or to intervene, to sue for enforcement of the terms of this
Guarantee or to file a petition, complaint, answer, motion or other pleading in
any suit or proceeding relating to this Guarantee, and, in such event, all of
the attorneys’ fees, costs and expenses relating thereto and all other amounts
(if any) owed by the Guarantor under this Guarantee (other than the Guarantee Obligations)
shall be an additional liability of the Guarantor to the Administrative Agent
and the Lenders (over and above any limitation set forth in Section 2,
if any), payable on demand.  The
obligations contained in this Section 8 shall survive the termination
of this Guarantee.


 


9.                                      Security
Interests and Setoff.


 


Each Guarantor agrees that in the event any Guarantor
fails to pay its obligations hereunder when due and payable under this
Guarantee, the Administrative Agent and the Lenders shall be entitled to (a) any
and all remedies available to it including, without limitation, all rights of
setoff and (b) the benefit of all Liens heretofore, now and at any time or
times hereafter granted by such Guarantor or any Borrower to the Administrative
Agent and the Lenders, if any, to secure such Guarantor’s obligations
hereunder.


 


10.                               Term of Guarantee.


 


This Guarantee shall continue in full force and effect
until the Guarantee Obligations are fully and indefeasibly paid, performed and
discharged and the Credit Documents are terminated.  This Guarantee covers the Guarantee
Obligations whether presently outstanding or arising subsequent to the date
hereof, including all amounts advanced by the Administrative Agent or the Lenders
in stages or installments.  Notwithstanding
the foregoing, this Guarantee shall continue to be effective, or be reinstated,
as the case may be, and any payment of the Guarantee Obligations hereunder
shall be reinstated, if at any time payment, or any part thereof, of any of the
Guarantee Obligations is rescinded or must otherwise be restored or returned by
the Administrative Agent or the Lenders as a preference, fraudulent conveyance
or otherwise upon or in connection with an Insolvency, Act of Insolvency,
Insolvency Proceeding, bankruptcy, dissolution, liquidation or reorganization
with respect to the Borrowers or any other Person obligated on or for the
Guarantee Obligations, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, any of the 


 


11

















 


Borrowers or such other Person or any substantial part
of such Borrowers’ or such other Person’s Property or assets, or otherwise, all
as though such payments had not been made; provided that in the event
payment of all or any part of the Guarantee Obligations is rescinded or must be
restored or returned, all costs and expenses (including, without limitation,
any legal fees and disbursements) incurred by the Administrative Agent or the Lenders
in defending and enforcing such reinstatement shall be deemed to be included as
a part of the Guarantee Obligations.


 


11.                               Representations and
Warranties.


 


(a)                                  Each
Guarantor represents and warrants to, and covenants with, the Administrative
Agent and the Lenders, as of the date of this Guarantee, and shall be deemed to
restate as of each Borrowing Date, that:


 


(i)                                     it
is duly organized, validly existing and in good standing as a corporation,
limited partnership, limited liability company or real estate investment trust
under the laws of the jurisdiction of its organization or formation, and is
duly qualified to do business and is in good standing in all jurisdictions in
which the character of its Property or assets, the nature of its business or
the performance of its obligations under any agreement to which it is a party
or is bound makes such qualification necessary, except for any failure to
qualify outside of the jurisdiction of organization or formation that would not
have a Material Adverse Effect;


 


(ii)                                  its
execution and delivery of, performance under and compliance with this Guarantee
will not violate its Authority Documents or constitute a default (or an event
that, with notice or lapse of time, or both, would constitute a default) under,
or result in a material breach of, any material Contractual Obligation,
Indebtedness or Guarantee Obligation to which it is a party or by which it is
bound;


 


(iii)                               its execution and
delivery of, performance under and compliance with this Guarantee will not violate
any law, treaty, rule or regulation or determination of an arbitrator, a
court or other governmental authority, applicable to or binding upon the
Guarantor or any of its property or to which the Guarantor or any of its
property is subject (“Requirement
of Law”), or any provision of any security issued by the
Guarantor or of any agreement, instrument or other undertaking to which the
Guarantor is a party or by which it or any of its property is bound (“Contractual Obligation”),
and will not result in or require the creation or imposition of any Lien on any
of the properties or revenues of the Guarantor pursuant to any Requirement of
Law or Contractual Obligation of the Guarantor;


 


(iv)                              the
Guarantor has the legal capacity and the legal right to execute and deliver
this Guarantee and to perform the Guarantor’s obligations hereunder;


 


(v)                                 it
has the full power and authority to enter into and consummate all transactions
contemplated by this Guarantee, has duly authorized the execution, delivery and
performance of this Guarantee, and has duly executed and delivered this
Guarantee;


 


(vi)                              this
Guarantee constitutes a valid, legal and binding obligation of such Guarantor,
enforceable against it in accordance with the terms hereof, subject to (A) Insolvency
Laws affecting the enforcement of creditors’ rights generally, and (B) general
principles of equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law;


 


(vii)                           it is not in violation of,
and its execution and delivery of, performance under and compliance with this
Guarantee shall not constitute a violation of, its Authority Documents, any 


 


12

















 


Requirement of Law, any order or decree of any court or arbiter, or any
order, regulation or demand of any Governmental Authority;


 


(viii)                        no consent, approval, order or
authorization of, filing with, or other act by or in respect of, any arbitrator
or Governmental Authority and no consent of any other Person (including,
without limitation, any creditor of the Guarantor) is required in connection
with the execution, delivery, performance, validity or enforceability of this
Guarantee;


 


(ix)                                except
as set forth in Schedule 3.6, no litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Guarantor, threatened by or against the Guarantor or against
any of the Guarantor’s properties or revenues with respect to this Guarantee or
any of the transactions contemplated hereby;


 


(x)                                   none
of the Guarantor, the Borrowers, the Pledgors, any other Credit Party or any
principal, director, partner, manager or owner of the foregoing (other than
unaffiliated minority owners of publicly traded common stock) has ever been
convicted of a crime or is the subject of any currently pending or threatened
criminal proceeding that could have a Material Adverse Effect;


 


(xi)                                except
as disclosed in writing to the Administrative Agent prior to the date hereof,
the Guarantor has filed or caused to be filed all tax returns which, to the
knowledge of the Guarantor, are required to be filed and has paid all taxes
shown to be due and payable on said returns or on any assessments made against
the Guarantor or any of the Guarantor’s Property and all other taxes, fees or
other charges imposed on the Guarantor or any of the Guarantor’s Property by
any Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings); no tax
lien has been filed, and, to the knowledge of the Guarantor, no claim is being
asserted, with respect to any such tax, fee or other charge;


 


(xii)                            the
Guarantor is not the subject of any Insolvency Proceeding;


 


(xiii)                         the
recitals to this Guarantee are true and correct; and


 


(xiv)                         the Guarantor has received
valuable consideration, fair value, fair consideration or reasonable equivalent
value for the Guarantee Obligations, and the Guarantee Obligations (A) will
not render the Guarantor not Solvent, (B) will not leave the Guarantor
with an unreasonably small amount of capital to conduct its business, and (C) will
not cause the Guarantor to have incurred debts (or to have intended to have
incurred debts) beyond its ability to pay such debts as they mature.


 


(b)                                  The
Guarantor further represents and warrants to the Administrative Agent and the
Lenders that it is familiar with and has independent knowledge of, and has
reviewed the books and records regarding, the Borrowers’ financial condition
and affairs and the value of the Collateral and represents and agrees that it
will keep so informed while this Guarantee is in force; provided, however,
the Guarantor acknowledges and agrees that it is not relying on such financial
condition or collateral as an inducement to enter into this Guarantee.  The Guarantor agrees that the Administrative
Agent and the Lenders shall have no obligation to investigate the financial
condition or affairs of the Borrowers for the benefit of the Guarantor or to
advise the Guarantor of any matter relating to or arising under the Credit
Agreement or any of the other Credit Documents or any fact respecting, or any
change in, the financial condition or affairs of the Borrowers that might come
to the knowledge of the Administrative Agent or the Lenders at any time,
whether or not the Administrative Agent or the Lenders know or believe or have 


 


13

















 


reason to know or believe that
any such fact or change is unknown to the Guarantor or might (or does)
materially increase the risk of the Guarantor as guarantor or might (or would)
affect the willingness of the Guarantor to continue as guarantor with respect
to the Guarantee Obligations.


 


(c)                                  The
Guarantor further represents and warrants to the Administrative Agent and the
Lenders that the financial statements (if any) and other financial information
(if any) of the Guarantor delivered to the Administrative Agent prior to the
Closing Date are true and correct and fairly represent in all material respects
the financial condition of the Guarantor on the date of the delivery of such
information and that there has been no Material Adverse Effect since such date.


 


(d)                                 The
representations and warranties of the Guarantor set forth in this Section 11
shall survive the execution and delivery of this Guarantee and shall inure to
the benefit of the Persons for whose benefit they were made for so long as this
Guarantee is in effect.  Upon discovery
by any party hereto of a breach of any such representations and warranties, the
party discovering such breach shall give prompt written notice thereof to each
other party.


 


(e)                                  Each
Guarantor agrees that the foregoing representations and warranties shall be
deemed to have been made by such Guarantor on the date of each Loan under the
Credit Agreement, on and as of such date of the Transaction, as though made
hereunder on and as of such date.


 


12.                               Covenants.


 


(a)                                  Financial
Statements.  (i) As soon as
available and in any event within forty-five (45) days after the end of each
fiscal quarter of each Guarantor, each Guarantor shall deliver to the
Administrative Agent and each Lender the unaudited consolidated balance sheets
of such Guarantor and its consolidated Subsidiaries (and, to the extent
available, for each Borrower) as at the end of such period and the related
unaudited consolidated statements of income and retained earnings and of cash
flows for such Guarantor and its consolidated Subsidiaries (and, to the extent
available, for each Borrower) for such period and the portion of the fiscal year
through the end of such period, accompanied by a schedule of all contingent
funding obligations and hedging positions of Parent and its Consolidated
Subsidiaries (and, to the extent available, for each Borrower) and a
certificate of a Responsible Officer, which certificate shall state that said
consolidated financial statements fairly present in all material respects the
consolidated financial condition and results of operations of Parent and its
Consolidated Subsidiaries (and, to the extent applicable, for each Borrower) in
accordance with GAAP, consistently applied, as at the end of, and for, such
period (subject to normal year-end adjustments); provided, that the
Administrative Agent and any Lender may disclose such financial statements, if
required, to its regulators, or as otherwise required by law.


 


(ii)                                  As
soon as available and in any event within ninety (90) days after the end of
each fiscal year of each Guarantor, each Guarantor shall deliver to the
Administrative Agent and each Lender the audited consolidated balance sheets of
such Guarantor and its consolidated Subsidiaries (and, to the extent available,
for each Borrower) as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and of cash flows for
such Guarantor and its consolidated Subsidiaries (and, to the extent available,
for each Borrower) for such year, setting forth in each case in comparative
form the figures for the previous year, accompanied by an opinion thereon of
independent certified public accountants of recognized national standing, which
opinion shall not be qualified as to scope of audit or going concern and shall
state that said consolidated financial statements fairly present the
consolidated financial condition and results of operations of each Guarantor
and its consolidated Subsidiaries (and, to the extent applicable, for each
Borrower) as at the end of, and for, such fiscal year in accordance with GAAP,
and a certificate of such accountants stating that, in making the examination 


 


14

















 


necessary for their opinion, they obtained no knowledge, except as
specifically stated, of any Default or Event of Default.


 


(iii)                               Each Guarantor covenants
and agrees that such Guarantor will not change its legal name or primary place
of business without having provided to the Administrative Agent thirty (30) day’s
prior written notice of any such change.


 


(iv)                              Each
Guarantor covenants and agrees that it shall deliver to the Administrative
Agent and each Lender, within forty-five (45) days of after the end of each
fiscal quarter, a statement of compliance accompanied by a certificate of a
responsible officer, in the form attached hereto as Exhibit A, (A) stating
that each of the representations, warranties and covenants contained herein
have been complied with and (B) attaching a current copy of such Guarantor’s
organizational chart (depicting and delineating all of such Guarantor’s
consolidated and non-consolidated Subsidiaries).


 


(b)                                 Limitation
on Distributions.  Parent shall not
declare or make any payment on account of, or set apart assets for, a sinking
or other analogous fund for the purchase, redemption, defeasance, retirement or
other acquisition of any equity or partnership interest of Parent, whether now
or hereafter outstanding, or make any other distribution in respect thereof,
either directly or indirectly, whether in cash or property or in obligations of
Parent, except, so long as no Default, Event of Default or Deficit shall have
occurred and be continuing, Parent may make (i) such payments solely to
the extent necessary to preserve its status as a REIT, (ii) quarterly
dividend distributions in an amount up to 100% of its FFO for the immediately
preceding fiscal quarter, (iii) an annual dividend distribution, so long
as the total amount thereof, when combined with the previous four (4) quarterly
dividend distributions described herein does not exceed an amount equal to one
hundred percent (100%) of Parent’s consolidated FFO for the immediately
preceding four (4) fiscal quarters and (iv) Special Dividend
Distributions and Parent may, also so long as no Default, Event of Default or
Deficit shall have occurred and be continuing, make cash distributions to its
shareholders to the extent necessary to (A) avoid the payment by Parent of
taxes imposed under Sections 857(b)(1) and 4981 of the Code and (B) allow
its shareholders to pay any taxes imposed on them under Sections 857(b)(3),
(4), (5), (6) or (7) of the Code. 
Notwithstanding the foregoing restrictions, nothing in this Section 9(b) shall
limit the ability of any Guarantor to effect a buy back of its Capital Stock
pursuant to Section 9(k).


 


(c)                                  Minimum
Interest Coverage Ratio.  At no time
shall the ratio of (i) the sum of Consolidated Adjusted EBITDA of the
Guarantors (calculated on an aggregate basis after adding back all applicable
Incentive Fees) to (ii) Consolidated Interest Expense of the Guarantors
(calculated on an aggregate basis) be less than 1.35 to 1.00.


 


(d)                                 Maintenance
of Ratio of Consolidated Total Indebtedness to Consolidated Total Assets.  At no time shall the ratio of the
Consolidated Total Indebtedness of the Guarantors (calculated on an aggregate
basis after including each Guarantor’s pro-rata share of the Indebtedness and
Contingent Liabilities of any off balance sheet securitization vehicles in
which each such Guarantor or any of their respective Subsidiaries, Affiliates
or Unconsolidated Affiliates own equity, other than any Unconsolidated
Affiliates that are securitization vehicles which qualify as QSPEs, after
excluding the first $90,000,000 in customary and standard unpaid trade payables
incurred in the ordinary course of business) to the Consolidated Total Assets
of the Guarantors (calculated on an aggregate basis after including each
Guarantor’s pro-rata share of the then-current fair market value of each
Guarantor’s interests in any of the assets of any off balance sheet
securitization vehicles in which each such Guarantor or any of their respective
Subsidiaries, Affiliates or Unconsolidated Affiliates own equity, other than
any Unconsolidated Affiliates that are securitization vehicles which qualify as
QSPEs) be greater than (A) .90 


 


15

















 


to 1.00 at all times prior to
the extension of the Maturity Date in accordance with the conditions set forth
in Section 2.4 of the Credit Agreement, and (B) .875 to 1.00 at all
times thereafter.


 


(e)                                  Positive
Net Income.  The consolidated Net
Income of the Guarantors (calculated on an aggregate basis) shall at all times
be equal to a positive amount.


 


(f)                                    Maximum
Total Liabilities Ratio.  At no time
shall the Total Liabilities Ratio of the Guarantors (calculated on an aggregate
basis after deducting the total amount of all Trust Preferred Securities and
the first $90,000,000 in customary and standard unpaid trade payables incurred
in the ordinary course of business from the Total Indebtedness of the
Guarantors) be greater than (A) .85 to 1.00 at all times prior to the
extension of the Maturity Date in accordance with the conditions set forth in Section 2.4
of the Credit Agreement, and (B) .825 to 1.00 at all times thereafter.


 


(g)                                 Minimum
Liquidity Requirement.  The Liquidity
of the Guarantors (calculated on an aggregate basis) shall at no time be less
than $15,000,000.


 


(h)                                 Fixed
Charge Coverage Ratio.  At no time
shall the consolidated Fixed Charge Coverage Ratio of the Guarantors
(calculated on an aggregate basis) be less than 1.25 to 1.00.


 


(i)                                     Minimum
Tangible Net Worth.  At no time shall
the Tangible Net Worth of the Guarantors (calculated on an aggregate basis) be
less than the sum of (x) $650,000,000, and (y) seventy-five percent
(75%) of the net proceeds from the issuance by any Guarantor or any Subsidiary
thereof of any of any Capital Stock of any class (whether in a public offering
or a private placement) subsequent to the date of this Guarantee.


 


(j)                                     Maximum
Indebtedness to Adjusted Total Assets. 
At no time shall the ratio of (A) the aggregate consolidated
Indebtedness of the Guarantors (excluding all Non-Recourse Indebtedness) to (B) the
consolidated Adjusted Total Assets of the Guarantors exceed (A) .30 to
1.00 at all times prior to the extension of the Maturity Date in accordance
with the conditions set forth in Section 2.4 of the Credit Agreement, and (B) .25
to 1.00 at all times thereafter.


 


(k)                                  Prohibition
on Trade Payables.  At no time shall
the aggregate amount of all outstanding trade payables of the Guarantors exceed
$90,000,000.


 


(l)                                     Buy
Back of Capital Stock.  No Guarantor
shall be permitted to buy back any of its Capital Stock while this Guarantee
remains in effect unless (1) no Deficit, Default or Event of Default
exists under the Credit Agreement and (2) the Borrowers and each Guarantor
shall continuously (and immediately thereafter) meet all covenants, conditions,
representations and warranties, whether financial or otherwise, as set forth in
any of the Credit Documents.


 


(m)                               REIT
Status.  Parent shall at all times
continue to be (i) qualified as a real estate investment trust as defined
in Section 856 of the Code, (ii) entitled to a dividends paid
deduction under Section 857 of the code with respect to dividends paid by
it with respect to each taxable year for which it claims a deduction on its FORM 1120-REIT
filed with the United States Internal Revenue Service for such year.


 


(n)                                 Publicly
Traded Company.  Parent shall at all
times be a publicly traded company listed, quoted or traded on the New York
Stock Exchange, NASDAQ or any such other nationally recognized stock exchange.


 


16
















 


(o)                                 Interest
Rate Protection Agreements.  Each
Guarantor which is from time to time party to any Interest Rate Protection
Agreement related to any Collateral shall make, or cause to be made, all
payments from time to time due and payable by such Guarantor under such
Interest Rate Protection Agreement directly into the Collection Account as
contemplated under Section 2.10 of the Credit Agreement.


 


(p)                                 Internalization
of Management.  Parent shall not
internalize the management of Parent without the prior written consent of the
Administrative Agent, which shall not be unreasonably withheld by the
Administrative Agent.


 


(q)                                 Limitation
on Conveyances.  No Guarantor shall
sell, assign, transfer or otherwise convey, in a single transaction or in a
series of transactions, any material asset or portion of a material asset which
would (A) result in a Material Adverse Effect or (B) violate the
Credit Documents.


 


(r)                                    Borrowers’
Performance under the Credit Documents. 
Each Guarantor shall cause the Borrowers to comply with each and every
agreement, obligation, duty and covenant under the Credit Documents and, to the
extent the Borrowers do not fulfill their agreements, obligations, duties and
covenants under the Credit Documents, the Guarantor shall fulfill the same.


 


(s)                                  Guarantors’
Performance under the Credit Documents. 
Each Guarantor shall perform each and every agreement, obligation, duty
and covenant that it has agreed to perform under any Credit Document.


 


(t)                                    Maintenance
of Security Interest.  Each Guarantor
shall take all actions reasonably required by the Administrative Agent to
maintain the Administrative Agent’s first priority perfected security interest
in the Collateral, the Pledged Collateral and any collateral, security or
Property for the Guarantee and/or the Guarantee Obligations.


 


(u)                                 The
covenants of each Guarantor set forth in this Section 12 shall
survive the execution and delivery of this Guarantee and shall inure to the
benefit of the Persons for whose benefit they were made for so long as this
Guarantee is in effect.  Upon discovery
by any party hereto of a breach of any such covenants, the party discovering
such breach shall give prompt written notice thereof to each other party.


 


13.                               Additional
Liability of Guarantor.


 


If any
Guarantor is or becomes liable for any Indebtedness owing by the Borrowers to
the Administrative Agent or the Lenders by endorsement or otherwise than under
this Guarantee, such liability shall not be in any manner impaired or reduced
hereby but shall have all and the same force and effect it would have had if
this Guarantee had not existed and such Guarantor’s liability hereunder shall
not be in any manner impaired or reduced thereby.


 


14.                               Cumulative
Rights.


 


All
rights of the Administrative Agent and the Lenders hereunder or otherwise
arising under the Credit Documents or any documents executed in connection with
or as security for the Guarantee Obligations or under Requirements of Law are
separate and cumulative and may be pursued separately, successively or
concurrently, or not pursued, without affecting, limiting or impairing any
other right of the Administrative Agent and the Lenders and without limiting,
affecting or impairing the liability of the Guarantor.


 


17

















 


15.                               Assignments.


 


(a)                                  Assignments
by the Administrative Agent or the Lenders. 
This Guarantee is intended for and shall inure to the benefit of the
Administrative Agent, the Lenders and each and every Person who shall from time
to time be or become the owner or holder of any of the Guarantee Obligations,
and each and every reference herein to the Administrative Agent and the Lenders
shall include and refer to each and every successor, assignee, pledgee and
participant of the Administrative Agent and the Lenders and the successors,
assignees and participants of the foregoing at any time holding or owning any
part of or interest in any part of the Guarantee Obligations.  This Guarantee shall be transferable and
negotiable by the Administrative Agent and the Lenders with the same force and
effect, and to the same extent, that the Guarantee Obligations are transferable
and negotiable, it being understood and stipulated that, upon assignment or any
such transfer by the Administrative Agent or the Lenders of any of the Guarantee
Obligations, the legal holder or owner of said Guarantee Obligations (or a part
thereof or interest therein thus transferred or assigned) shall (except as
otherwise stipulated by the Administrative Agent or the Lenders in its
assignment) have and may exercise all of the rights granted to the
Administrative Agent and the Lenders under this Guarantee to the extent of that
part of or interest in the Guarantee Obligations thus assigned or so
transferred to said Person.  Each
Guarantor expressly waives notice of any such transfer or assignment of the
Guarantee Obligations, or any part thereof, or of the rights of the
Administrative Agent and the Lenders hereunder. 
Each Guarantor acknowledges and agrees that any action taken hereunder
shall not release or discharge this Guarantee or any obligations of such
Guarantor hereunder.


 


(b)                                 Assignments
by Guarantor.  This Guarantee may not
be assigned, and the Guarantor’s agreements, duties, obligations and covenants
hereunder may not be delegated, in whole or in part by the Guarantor.  All agreements, duties, obligations and
covenants of the Guarantor hereunder shall bind and shall be enforceable
against the Guarantor’s successors and assigns.


 


16.                               Application
of Payments.


 


The
Administrative Agent and the Lenders may apply any payments received by them
from any source against such portion of the Guarantee Obligations and in such
priority and fashion as they may deem appropriate in their sole and absolute
discretion.


 


17.                               Counterclaims;
Setoff.


 


Each
Guarantor waives all rights to interpose any claims, deduction or counterclaims
of any kind, nature or description in any action or proceeding instituted by
the Administrative Agent or the Lenders with respect to this Guarantee, the
Guarantee Obligations, the Collateral, the Pledged Collateral, the collateral,
security or Property for the Guarantee or the Guarantee Obligations or any
matter arising from or relating to any of the foregoing, except compulsory
counterclaims.  Each Guarantor hereby
waives any right of setoff it may have or to which it may be entitled under
this Guarantee, the Credit Documents or Requirements of Law from time to time
against the Administrative Agent or the Lenders or their assets or
Property.  Notwithstanding anything to
the contrary contained in this Guarantee, until the Guarantee Obligations have
been indefeasibly paid in full, each Guarantor hereby unconditionally and
irrevocably waives, releases and abrogates any and all rights it may now or
hereafter have under any agreement, at law or in equity (including, without
limitation, any law subrogating such Guarantor to the rights of the
Administrative Agent or the Lenders), to assert any claim against or seek
contribution, indemnification or any other form of reimbursement from the
Borrowers, the Pledgors, any other Credit Party or any other Person liable for
payment of any or all of the Guarantee Obligations for any payment made by such
Guarantor under or in connection with this Guarantee or otherwise.


 


18

















 


18.                               Bankruptcy
Code Waiver.


 


In the
event that a Borrower becomes a debtor in any proceeding under the Bankruptcy
Code, no Guarantor shall be deemed to be a “creditor” (as defined in Section 101
of the Bankruptcy Code) of such Borrower, by reason of the existence of this
Guarantee, and in connection herewith, each Guarantor hereby waives any such
right as a “creditor” under the Bankruptcy Code.  This waiver is given to induce the
Administrative Agent and the Lenders to enter into the transactions contemplated
by the Credit Documents.  After the
Guarantee Obligations are paid in full and there shall be no obligations or
liabilities under this Guarantee outstanding, this waiver shall be deemed to be
terminated.


 


19.                               The
Borrowers’ and Pledgor’s Actions.


 


No
encumbrance, assignment, leasing, subletting, sale or other transfer by a
Borrower or a Pledgor of any of the Borrowers’ or the Pledgors’ assets or
Property shall operate to extinguish or diminish the liability of any Guarantor
under this Guarantee.


 


20.                               Subordination.


 


(a)                                  As
used in this Guarantee, the term “Guarantor
Claims” shall mean all debts, liabilities and other
Indebtedness of the Borrowers, the Pledgors, any Guarantor, any other Credit
Party or any other Person obligated to the Administrative Agent, the Lenders or
any other Person specified under any Credit Document to a Guarantor, whether
such debts, liabilities and other Indebtedness now exist or are hereafter
incurred or arise, or whether the obligations of such Borrower, Pledgor, Guarantor,
other Credit Party or such other Person thereon be direct, contingent, primary,
secondary, several, joint and several, or otherwise, and irrespective of
whether such debts, liabilities or other Indebtedness be evidenced by note,
contract, open account or otherwise, and irrespective of the Person or Persons
in whose favor such debts, liabilities or other Indebtedness may, at their
inception, have been, or may hereafter be created, or the manner in which they
have been or may hereafter be acquired by a Guarantor.  The Guarantor Claims shall include, without
limitation, all rights and claims of a Guarantor against the Borrowers, the
Pledgors, any other Guarantor, other Credit Parties or other Persons (arising
as a result of subrogation or otherwise) as a result of a Guarantor’s payment
of all or a portion of the Guarantee Obligations.  All Guarantor Claims are and shall be
subordinate to the Guarantee Obligations.


 


(b)                                 In
the event of any Insolvency Proceedings involving any Guarantor as debtor, the
Administrative Agent and the Lenders shall have the right to prove its claim in
any such proceeding so as to establish its rights hereunder and receive
directly from the receiver, trustee or other court custodian dividends and any
payments which would otherwise be payable upon Guarantor Claims to the extent
of any sums owed by the Guarantors hereunder. 
Each Guarantor hereby assigns such dividends and payments to the
Administrative Agent as agent for the Lenders. 
Should the Administrative Agent as agent for the Lenders receive, for
application upon the Guarantee Obligations, any such dividend or payment which
is otherwise payable to a Guarantor, and which, as between the Borrowers, the
Pledgors, any other Guarantor or any other Person described in clause (a) above
on the one hand and the applicable Guarantor on the other, shall constitute a
credit upon the Guarantor Claims, then upon payment to the Administrative Agent
as agent for the Lenders in full of the Guarantee Obligations, such Guarantor
shall become subrogated to the rights of the Administrative Agent and the
Lenders to the extent that such payments to the Administrative Agent as agent
for the Lenders on the Guarantor Claims have contributed toward the liquidation
of the Guarantee Obligations, and such subrogation shall be with respect to
that proportion of the Guarantee Obligations which would have been unpaid if
the Administrative Agent as agent for the Lenders had not received dividends or
payments upon the Guarantor Claims.


 


19

















 


(c)                                  In
the event that, notwithstanding anything to the contrary in this Guarantee, any
Guarantor should receive any funds, payment, claim or distribution which is
prohibited by this Guarantee, such Guarantor agrees to hold in trust for the
Administrative Agent as agent for the Lenders an amount equal to the amount of
all funds, payments, claims or distributions so received, and agrees that it
shall have absolutely no dominion over the amount of such funds, payments,
claims or distributions so received except to pay them promptly to the
Administrative Agent as agent for the Lenders, and the Guarantor covenants
promptly to pay the same to the Administrative Agent as agent for the Lenders.


 


(d)                                 Each
Guarantor agrees that any claims, charges or Liens against the Borrowers, the
Pledgors, any other Guarantor, other Credit Parties or any other Persons
described under clause (a) above and/or such Borrower’s, such
Pledgor’s, any other Guarantor’s, any other Credit Party’s or such other Person’s
assets and Property with respect to the Guarantor Claims shall be and remain
inferior and subordinate to any claims, charges or Liens of the Administrative
Agent or the Lenders against the Borrowers, the Pledgors, any Guarantor, any
other Credit Party or any such other Person and/or such Borrower’s, such
Pledgor’s, any Guarantor’s, any such other Credit Party’s or such other Person’s
assets and Property, regardless of whether such claims, charges or Liens in
favor of such Guarantor, the Administrative Agent or the Lenders presently
exist or are hereafter created or attach. 
Without the prior written consent of the Administrative Agent and the
Lenders, no Guarantor shall (i) exercise or enforce any creditor’s right
it may have against the Borrowers, the Pledgors, any other Guarantor, any other
Credit Party or any other Person described under clause (a) above,
or (ii) foreclose, repossess, sequester or otherwise take steps or
institute any action or proceedings (judicial or otherwise, including, without
limitation, the commencement of, or joinder in, any Insolvency Proceeding) to
enforce any claims, charges, Liens, mortgage, deeds of trust, security
interests, collateral rights, judgments or other encumbrances against the
Borrowers, the Pledgors, any other Guarantor, any other Credit Party or such
other Person or the assets or Property of the Borrowers, the Pledgors, any
other Guarantor, any other Credit Party or such other Person held by the
applicable Guarantor.


 


21.                               Commercial
Transaction.


 


To
induce the Administrative Agent and the Lenders to enter into this Guarantee
and the Transactions evidenced by and secured by the Credit Documents, each
Guarantor agrees that said Transactions are commercial and not consumer
transactions.


 


22.                               Books
and Records.


 


In
addition to any additional rights under the Credit Agreement and the other
Credit Documents, the Administrative Agent and the Lenders shall have the right
at the applicable Guarantor’s cost, and each Guarantor shall permit and shall
cooperate with the Administrative Agent and the Lenders in arranging for, at
any reasonable time from time to time, the Administrative Agent, the Lenders
and/or their representatives, to review and audit all books, records and
financial statements (including all supporting data and other records) of such
Guarantor, and each Guarantor shall make all such books of account and records
available for such examination, at the office where the same are regularly
maintained.  The Administrative Agent and
the Lenders shall have a right to copy, duplicate and make abstracts from such
books and records as the Administrative Agent and/or the Lenders may require.


 


23.                               Notices,
Etc.


 


All
notices and other communications provided for hereunder shall, unless otherwise
stated herein, be in writing (including telex communication and communication
by facsimile copy) and shall be governed by Section 10.2 of the
Credit Agreement.  The failure of the
Administrative Agent or the Lenders to give any notice required hereunder (if
any) shall not affect the liability or obligations of the 


 


20

















 


Guarantors hereunder. 
Unless otherwise expressly provided in this Guarantee, reference to any
notice, request, approval, consent or determination provided for, permitted or
required under the terms of this Guarantee with respect to the Borrowers, the
Guarantors, the Administrative Agent or the Lenders means, in order for such
notice, request, approval, consent or determination to be effective hereunder,
such notice, request, approval or consent must be in writing.


 


24.                               No
Waiver.


 


The
Administrative Agent shall not by any act (except by a written instrument
pursuant to Section 25 hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any default or event of default or in any breach of any of the
terms and conditions hereof.  No failure
to exercise, nor any delay in exercising, on the part of the Administrative
Agent, any right, power or privilege hereunder shall operate as a waiver
thereof.  No single or partial exercise
of any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.  A waiver by the Administrative Agent of any
right or remedy hereunder on any one occasion shall not be construed as a bar
to any right or remedy which the Administrative Agent would otherwise have on
any future occasion.


 


25.                               Amendments
and Waivers.


 


No
amendment, waiver or other modification of any provision of this Guarantee
shall be effective unless amended in accordance with the requirements of Section 10.1
of the Credit Agreement.  Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.


 


26.                               Severability;
Integration.


 


Each
provision of this Guarantee shall be valid, binding and enforceable to the
fullest extent permitted by Requirements of Law.  In case any provision in or obligation under
this Guarantee shall be invalid, illegal or unenforceable in any jurisdiction
(either in its entirety or as applied to any Person, fact, circumstance, action
or inaction), the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction or as applied to any other Person, fact, circumstance, action or
inaction, shall not in any way be affected or impaired thereby.  This Guarantee contains the final and
complete integration of all prior expressions by each Guarantor hereto with
respect to the subject matter hereof and shall constitute the entire agreement
of each Guarantor hereto with respect to the subject matter hereof, superseding
all prior oral or written understandings and there are no promises or
representations by the Administrative Agent or any Lender relative to the
subject matter hereof not reflected herein.


 


27.                               Heading
and Exhibits.


 


The
headings herein are for purposes of references only and shall not otherwise
affect the meaning or interpretation of any provision hereof.  The schedules, exhibits and annexes (if any)
attached hereto and referred to herein shall constitute a part of this
Guarantee and are incorporated into this Guarantee for all purposes.


 


28.                               Governing
Law.


 


THIS
GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.


 


21

















 


29.                               Waivers.


 


(a)                                  EACH
GUARANTOR KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO ASSERT A
COUNTERCLAIM, OTHER THAN A COMPULSORY COUNTERCLAIM, IN ANY ACTION OR PROCEEDING
BROUGHT AGAINST IT BY THE ADMINISTRATIVE AGENT, THE LENDERS OR ANY OF THEIR
AFFILIATES OR AGENTS.


 


(b)                                 TO
THE EXTENT PERMITTED BY REQUIREMENTS OF LAW, EACH GUARANTOR KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY HEREBY WAIVES ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE, BETWEEN THE PARTIES HERETO ARISING OUT OF, CONNECTED WITH, RELATED
TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN ANY OF THEM IN CONNECTION WITH
THIS GUARANTEE, THE CREDIT DOCUMENTS, THE TRANSACTIONS CONTEMPLATED HEREBY OR
ANY DEALINGS, COURSE OF DEALINGS, COURSE OF CONDUCT AMONG THEM OR ANY
STATEMENTS (WRITTEN OR ORAL) OR OTHER ACTIONS OF ANY PARTY, AND NONE OF THE
GUARANTORS WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN
WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.  INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT
WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.


 


(c)                                  ANY
LEGAL ACTION OR PROCEEDING AGAINST ANY GUARANTOR HERETO WITH RESPECT TO THIS
GUARANTEE OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND, BY EXECUTION AND DELIVERY OF THIS GUARANTEE, EACH GUARANTOR HEREBY
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY AND ASSETS,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF A PARTY
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST A PARTY IN ANY OTHER
JURISDICTION.


 


(d)                                 EACH
GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS
ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTEE OR ANY OTHER CREDIT
DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (c) ABOVE AND
HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH
COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.


 


(e)                                  EACH
GUARANTOR AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE
EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY
SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE GUARANTOR AT
THE GUARANTOR’S ADDRESS SET FORTH UNDER THE GUARANTOR’S SIGNATURE BELOW OR AT
SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT AND LENDERS SHALL HAVE
BEEN NOTIFIED.


 


(f)                                    EACH
GUARANTOR AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE
OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE
IN ANY OTHER JURISDICTION.


 


22

















 


(g)                                 EXCEPT
AS PROHIBITED BY LAW, EACH GUARANTOR HEREBY WAIVES ANY RIGHT IT MAY HAVE
TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE,
INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND OR NATURE WHATSOEVER
OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES.  EACH GUARANTOR CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE ADMINISTRATIVE AGENT OR THE LENDERS
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE ADMINISTRATIVE AGENT OR THE
LENDERS WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER.  THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL—ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED
IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.


 


(h)                                 EACH
GUARANTOR HERETO ACKNOWLEDGES THAT THE WAIVERS SET FORTH IN THIS SECTION 29
CONSTITUTE A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
THE ADMINISTRATIVE AGENT, THE LENDERS AND EACH PARTY HAS ALREADY RELIED ON
THESE WAIVERS IN ENTERING INTO OR ACCEPTING THE BENEFITS OF THIS GUARANTEE, AND
THAT EACH WILL CONTINUE TO RELY ON THESE WAIVERS IN THEIR RELATED FUTURE
DEALINGS.  EACH GUARANTOR HERETO FURTHER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THESE WAIVERS WITH ITS LEGAL
COUNSEL AND KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL.


 


(i)                                     THE
WAIVERS SET FORTH IN THIS SECTION 29 ARE IRREVOCABLE, MEANING THAT
THEY MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THESE WAIVERS
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS GUARANTEE OR ANY OF THE OTHER CREDIT DOCUMENTS OR TO ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING TO ANY TRANSACTION ENTERED INTO
HEREUNDER OR THEREUNDER.  IN THE EVENT OF
LITIGATION, THIS GUARANTEE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY
THE COURT.


 


30.                               Taxes.


 


The
provisions of Section 2.14 of the Credit Agreement shall be equally
applicable to each Guarantor and any payments made under this Guarantee.


 


31.                               Recitals.


 


The
recital and introductory paragraphs hereof are a part hereof, form a basis for
this Guarantee and shall be considered prima  facie evidence of the facts and
documents referred to therein.


 


32.                               Counterparts.


 


This
Guarantee may be executed in any number of counterparts and by different
parties hereto in separate counterparts (including by facsimile), each of which
when so executed shall be deemed to be an original and all of which when taken
together shall constitute one and the same agreement.


 


23

















 


33.                               Discretion.


 


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


 


34.                               Recourse
Against Certain Parties.


 


No
recourse under or with respect to any obligation, covenant or agreement
(including, without limitation, the payment of any fees or any other
obligations) of the Administrative Agent or the Lenders as contained in this
Guarantee, the Credit Documents or any other agreement, instrument or document
entered into by the Administrative Agent, the Lenders, or any such party
pursuant hereto or thereto or in connection herewith or therewith shall be had
against any administrator of the Administrative Agent, the Lenders or any
incorporator, Affiliate (direct or indirect), owner, member, partner,
stockholder, officer, director, employee, agent or attorney of the
Administrative Agent, the Lenders or of any such administrator, as such, by the
enforcement of any assessment or by any legal or equitable proceeding, by
virtue of any statute or otherwise; it being expressly agreed and understood
that the agreements of the Administrative Agent and the Lenders contained in
this Guarantee, the Credit Documents and all of the other agreements,
instruments and documents entered into by it pursuant hereto or thereto or in
connection herewith or therewith are, in each case, solely the corporate
obligations of the Administrative Agent and the Lenders and that no personal
liability whatsoever shall attach to or be incurred by any administrator of the
Administrative Agent, the Lenders or any incorporator, owner, member, partner,
stockholder, Affiliate (direct or indirect), officer, director, employee, agent
or attorney of the Administrative Agent, the Lenders or of any such
administrator, as such, or any other of them, under or by reason of any of the
obligations, covenants or agreements of the Administrative Agent or the Lenders
contained in this Guarantee, the Credit Documents or in any other such
instruments, documents or agreements, or that are implied therefrom, and that
any and all personal liability of every such administrator of the
Administrative Agent or the Lenders and each incorporator, owner, member,
partner, stockholder, affiliate, officer, director, employee, agent or attorney
of the Administrative Agent or the Lenders, or of any such administrator, or
any of them, for breaches by the Administrative Agent or the Lenders of any
such obligations, covenants or agreements, which liability may arise either at
common law or at equity, by statute or constitution, or otherwise, is hereby
expressly waived as a condition of and in consideration for the execution of
this Guarantee.  The provisions of this Section 34
shall survive the termination of this Guarantee.


 


35.                               Set–offs.


 


In
addition to any rights and remedies of the Administrative Agent and the Lenders
provided by this Guarantee, the Credit Documents and by Requirements of Law,
the Administrative Agent and the Lenders shall have the right, without prior
notice to the Borrowers, the Guarantors, the Pledgors or any other Credit
Party, any such notice being expressly waived by the Guarantors to the extent
permitted by Requirements of Law, and regardless of the existence of any other
collateral, upon any amount becoming due and payable by the Guarantors to the
Administrative Agent and the Lenders hereunder, under the Credit Documents or
otherwise (whether at the stated maturity, by acceleration or 


 


24

















 


otherwise) to set–off and appropriate and apply
against such amount any and all monies and other Property and assets of the
Guarantors, any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any and all other credits,
Indebtedness, claims, securities, collateral, Property, assets or proceeds of
any of the foregoing in, as applicable, any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, and in each
case at any time held or owing by the Administrative Agent, the Lenders, any of
their Affiliates, any Person under the control of the Administrative Agent, the
Lenders and any successor or assign of the foregoing to or for the credit or
the account of the Guarantors, whether for safekeeping, custody, pledge, transmission,
collection or otherwise.  The
Administrative Agent agrees promptly to notify the Guarantors after any such
set–off and application made by the Administrative Agent or the Lenders, provided
that the failure to give such notice shall not affect the validity of such set–off
and application.  ANY AND ALL RIGHTS TO
REQUIRE THE ADMINISTRATIVE AGENT AND THE LENDERS TO EXERCISE THEIR RIGHTS OR
REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE AMOUNTS OWING
TO THE ADMINISTRATIVE AGENT AND THE LENDERS BY THE BORROWERS, THE GUARANTORS,
THE PLEDGORS OR ANY OTHER CREDIT PARTY UNDER THE CREDIT DOCUMENTS, PRIOR TO
EXERCISING ITS RIGHT OF SET–OFF WITH RESPECT TO SUCH MONIES, SECURITIES,
COLLATERAL, DEPOSITS, CREDITS OR OTHER PROPERTY OR ASSETS OF THE GUARANTORS,
ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED BY EACH GUARANTOR.


 


36.                               Acknowledgments.


 


Each
Guarantor hereby acknowledges that:


 


(a)                                  the
Guarantor has been advised by counsel in the negotiation, execution and
delivery of this Guarantee and the related documents;


 


(b)                                 neither
the Administrative Agent nor any Lender has any fiduciary relationship to the
Guarantor, and the relationship between the Administrative Agent and the
Lenders and the Guarantor is solely that of surety and creditor; and


 


(c)                                  no
joint venture exists between or among any of the Administrative Agent, the
Lenders, the Guarantors and the Borrowers.


 


37.                               Joint
and Several Obligations.


 


(a)                                  At
all times during which there is more than one (1) Guarantor under this
Agreement, the liability of each Guarantor shall be joint and several and the
joint and several obligations of each Guarantor under this Guarantee and the
other Credit Documents (a) (i) shall be absolute and unconditional
and shall remain in full force and effect (or be reinstated) until all the
Guarantee Obligations shall have been satisfied and the expiration of any
applicable preference or similar period pursuant to any bankruptcy, insolvency,
reorganization, moratorium or similar law, or at law or in equity, without any
claim having been made before the expiration of such period asserting an
interest in all or any part of any payment(s) received by the
Administrative Agent or the Lenders, and (ii) until such payment has been
made and such obligations satisfied, shall not be discharged, affected,
modified or impaired on the happening from time to time of any event,
including, without limitation, any of the following, whether or not with notice
to or the consent of the Borrowers, the Guarantors, the Pledgors or any other
Credit Party, (A) the waiver, compromise, settlement, release, termination
or amendment (including, without limitation, any extension or postponement of
the time for payment or performance or renewal or refinancing) of any or all of
the obligations or agreements of any Borrower, Guarantor, Pledgor or any other
Credit Party under the Credit Agreement or any Credit Document, (B) the
failure to give notice to 


 


25

















 


the Borrowers, the Guarantors, the Pledgors
or any other Credit Party of the occurrence of an Event of Default under any of
the Credit Documents, (C) the release, substitution or exchange by the
Administrative Agent or the Lenders of any or all of the Collateral, Pledged
Collateral or any collateral, Property or security for the Guarantee or the
Guarantee Obligations (in each case, whether with or without consideration) or
the acceptance by the Administrative Agent or the Lenders of any additional
collateral or the availability or claimed availability of any other collateral
or source of repayment or any nonperfection or other impairment of collateral, (D) the
release of any Person primarily or secondarily liable for all or any part of
the Obligations or the Guarantee Obligations, whether by the Administrative
Agent, the Lenders or in connection with any voluntary or involuntary
liquidation, dissolution, receivership, insolvency, bankruptcy, assignment for
the benefit of creditors or similar event or proceeding affecting any or all of
the Borrowers, the Guarantors, the Pledgors, any other Credit Party or any
other Person who, or any of whose Property or assets, shall at the time in
question be obligated in respect of the Obligations or the Guarantee
Obligations or any part thereof, or (E) to the extent permitted by
Requirements of Law, any other event, occurrence, action or circumstance that
would, in the absence of this Section 37, result in the release or
discharge of any or all of the Guarantors from the performance or observance of
any obligation, covenant or agreement contained in the Credit Agreement or the
Credit Documents; (b) each Guarantor expressly agrees that the
Administrative Agent and the Lenders shall not be required first to initiate
any suit or to exhaust its remedies against the Borrowers, the Guarantors, the
Pledgors, any other Credit Party or any other Person to become liable, or
against any of the Collateral, the Pledged Collateral or any collateral,
security or Property for this Guarantee or the Guarantee Obligations, in order
to enforce this Guarantee or the Credit Documents and each Guarantor expressly
agrees that, notwithstanding the occurrence of any of the foregoing, each
Guarantor shall be and remain directly and primarily liable for all sums due
under this Guarantee or any of the Credit Documents; and, (c) on
disposition by the Administrative Agent or the Lenders of any Property
encumbered by any Collateral, the Pledged Collateral or any collateral,
Property or security for this Guarantee or the Guarantee Obligations, each Guarantor
shall be and shall remain jointly and severally liable for any deficiency.


 


(b)                                 Each
Guarantor hereby agrees that, to the extent another Guarantor shall have paid
more than its proportionate share of any payment made hereunder, such Guarantor
shall be entitled to seek and receive contribution from and against any other
Guarantor which has not paid its proportionate share of such payment; provided,
however, that the provisions of this Subsection 37(b) shall
in no respect limit the obligations and liabilities of each Guarantor to the
Administrative Agent and the Lenders, and, notwithstanding any payment or
payments made by a Guarantor (the “paying Guarantor”) hereunder or any set-off or
application of funds of the paying Guarantor by the Administrative Agent or the
Lenders, the paying Guarantor shall not be entitled to be subrogated to any of
the rights of the Administrative Agent and the Lenders against any other
Guarantor or any collateral security or guarantee or right of offset held by
the Administrative Agent or the Lenders, nor shall the paying Guarantor seek or
be entitled to seek any contribution or reimbursement from the other Guarantors
in respect of payments made by the paying Guarantor hereunder, until all
amounts owing to the Administrative Agent or the Lenders by the Guarantors
under this Guarantee and the other Credit Documents are paid in full.  If any amount shall be paid to the paying
Guarantor on account of such subrogation rights at any time when all such
amounts shall not have been paid in full, such amount shall be held by the
paying Guarantor in trust for the Administrative Agent and the Lenders,
segregated from other funds of the paying Guarantor, and shall, forthwith upon
receipt by the paying Guarantor, be turned over to the Administrative Agent as
agent for the Lenders, in the exact form received by the paying Guarantor (duly
indorsed by the paying Guarantor to the Administrative Agent as agent for the
Lenders, if required), to be applied against amounts owing to the Administrative
Agent and the Lenders by the Guarantors under this Guarantee and the other
Credit Documents, whether matured or unmatured, in such order as the
Administrative Agent and the Lenders may determine in their discretion.


 


26

















 


38.                               Third
Party Beneficiary.


 


The
Lenders shall be third–party beneficiaries of each of the terms and provisions
of this Guarantee.  All rights of the
Administrative Agent hereunder, if not exercised by the Administrative Agent,
may be exercised by the Required Lenders.


 


[Remainder of Page Intentionally
Left Blank.]


 


27

















 


IN
WITNESS WHEREOF, the undersigned has caused this Guarantee to be duly executed
as of the date first written above.


 


 


	
   

  	
  GRAMERCY CAPITAL CORP., a
  Maryland

  corporation, as a Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Robert R. Foley

  
	
   

  	
  Name:

  	
  Robert R. Foley

  
	
   

  	
  Title: 

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  420 Lexington Avenue

  
	
   

  	
  New York, New York
  10170

  
	
   

  	
  Telephone:

  	
  (212) 297-1002

  
	
   

  	
  Telecopy:

  	
  (212) 297-1090

  
	
   

  	
  Attention:

  	
  Bob Foley

  
							



 

















 


IN
WITNESS WHEREOF, the undersigned has caused this Guarantee to be duly executed
as of the date first written above.


 


 


	
   

  	
  GKK CAPITAL LP, a Delaware
  limited partnership, as

  a Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GRAMERCY CAPITAL CORP., a Maryland 

  corporation, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  

  	
  /s/ Robert R. Foley

  
	
   

  	
   

  	
  Name: 

  	
  Robert R. Foley

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  420 Lexington Avenue

  
	
   

  	
  New York, New York
  10170

  
	
   

  	
  Telephone:

  	
  (212) 297-1002

  
	
   

  	
  Telecopy:

  	
  (212) 297-1090

  
	
   

  	
  Attention:

  	
  Bob Foley

  
						



 

















 


IN
WITNESS WHEREOF, the undersigned has caused this Guarantee to be duly executed
as of the date first written above.


 


 


	
   

  	
  GRAMERCY INVESTMENT TRUST, a
  Maryland

  real estate investment trust, as a Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert R. Foley

  
	
   

  	
  Name:

  	
  Robert R. Foley

  
	
   

  	
  Title:

  	
   Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  420 Lexington Avenue

  
	
   

  	
  New York, New York
  10170

  
	
   

  	
  Telephone:

  	
  (212) 297-1002

  
	
   

  	
  Telecopy:

  	
  (212) 297-1090

  
	
   

  	
  Attention:

  	
  Bob Foley

  
						



 

















 


IN
WITNESS WHEREOF, the undersigned has caused this Guarantee to be duly executed
as of the date first written above.


 


 


	
   

  	
  GKK TRADING CORP., a Delaware
  corporation, as a

  Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GRAMERCY CAPITAL CORP., a Maryland

  corporation, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Robert R. Foley

  
	
   

  	
   

  	
  Name:

  	
  Robert R. Foley

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  420 Lexington Avenue

  
	
   

  	
  New York, New York
  10170

  
	
   

  	
  Telephone:

  	
  (212) 297-1002

  
	
   

  	
  Telecopy:

  	
  (212) 297-1090

  
	
   

  	
  Attention:

  	
  Bob Foley