Exhibit
10.1




 





 


$215,680,289.01


 


CREDIT AGREEMENT



among



GRAMERCY WAREHOUSE FUNDING I LLC,

GKK TRADING WAREHOUSE I LLC,

as Borrowers,


 


GRAMERCY CAPITAL
CORP.,

GKK CAPITAL LP,

GRAMERCY INVESTMENT TRUST,

GKK TRADING CORP.,

as Guarantors,


 


THE LENDERS PARTY HERETO,


 


and


 


WACHOVIA BANK,
NATIONAL ASSOCIATION,

as Administrative Agent


 


Dated as of July 22,
2008


 


WACHOVIA CAPITAL
MARKETS, LLC,

as Sole Lead Arranger and Sole Bookrunner




 





 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  
	
   

  	
   

  	
   

  
	
  DEFINITIONS

  
	
   

  	
   

  	
   

  
	
  Section 1.1

  	
  Defined Terms

  	
  1

  
	
  Section 1.2

  	
  Other Definitional Provisions

  	
  34

  
	
  Section 1.3

  	
  Accounting Terms

  	
  34

  
	
  Section 1.4

  	
  Time References

  	
  35

  
	
  Section 1.5

  	
  Execution of Documents

  	
  35

  
	
  Section 1.6

  	
  UCC Terms

  	
  35

  
	
  Section 1.7

  	
  References to Discretion

  	
  35

  
	
  Section 1.8

  	
  References to Payment

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  
	
   

  	
   

  	
   

  
	
  THE LOANS; AMOUNT AND TERMS

  
	
   

  	
   

  	
   

  
	
  Section 2.1

  	
  Revolving Loans

  	
  35

  
	
  Section 2.2

  	
  Term Loan

  	
  39

  
	
  Section 2.3

  	
  Letters of Credit

  	
  40

  
	
  Section 2.4

  	
  Extension of Maturity Date

  	
  44

  
	
  Section 2.5

  	
  Fees

  	
  44

  
	
  Section 2.6

  	
  Commitment Reductions

  	
  45

  
	
  Section 2.7

  	
  Prepayments

  	
  45

  
	
  Section 2.8

  	
  Default Rate and Payment Dates

  	
  47

  
	
  Section 2.9

  	
  Computation of Interest and Fees;
  Usury

  	
  47

  
	
  Section 2.10

  	
  Pro Rata Treatment and Payments

  	
  48

  
	
  Section 2.11

  	
  Non-Receipt of Funds by the
  Administrative Agent

  	
  51

  
	
  Section 2.12

  	
  Inability to Determine Interest
  Rate

  	
  52

  
	
  Section 2.13

  	
  Indemnity; Eurocurrency Liabilities

  	
  53

  
	
  Section 2.14

  	
  Taxes

  	
  53

  
	
  Section 2.15

  	
  Illegality

  	
  56

  
	
  Section 2.16

  	
  Obligations Absolute

  	
  56

  
	
  Section 2.17

  	
  Requirements of Law

  	
  57

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  
	
   

  	
   

  	
   

  
	
  REPRESENTATIONS AND WARRANTIES

  
	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  Financial Condition

  	
  58

  
	
  Section 3.2

  	
  No Material Adverse Effect;
  Internal Control Event

  	
  59

  
	
  Section 3.3

  	
  Corporate Existence; Compliance
  with Law

  	
  59

  
	
  Section 3.4

  	
  Corporate Power; Authorization;
  Enforceable Obligations

  	
  59

  
	
  Section 3.5

  	
  No Legal Bar; No Default

  	
  59

  
	
  Section 3.6

  	
  No Material Litigation

  	
  60

  



 


i

















 


	
  Section 3.7

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

  	
  60

  
	
  Section 3.8

  	
  Margin Regulations

  	
  60

  
	
  Section 3.9

  	
  ERISA

  	
  60

  
	
  Section 3.10

  	
  Environmental Matters

  	
  61

  
	
  Section 3.11

  	
  Use of Proceeds

  	
  62

  
	
  Section 3.12

  	
  Subsidiaries; Joint Ventures;
  Partnerships

  	
  62

  
	
  Section 3.13

  	
  Ownership

  	
  62

  
	
  Section 3.14

  	
  Indebtedness

  	
  62

  
	
  Section 3.15

  	
  Taxes

  	
  62

  
	
  Section 3.16

  	
  Solvency

  	
  62

  
	
  Section 3.17

  	
  Investments

  	
  63

  
	
  Section 3.18

  	
  Location

  	
  63

  
	
  Section 3.19

  	
  No Burdensome Restrictions

  	
  63

  
	
  Section 3.20

  	
  Brokers’ Fees

  	
  63

  
	
  Section 3.21

  	
  Labor Matters

  	
  63

  
	
  Section 3.22

  	
  Accuracy and Completeness of Information

  	
  64

  
	
  Section 3.23

  	
  Material Contracts

  	
  64

  
	
  Section 3.24

  	
  Insurance

  	
  64

  
	
  Section 3.25

  	
  Security Documents

  	
  64

  
	
  Section 3.26

  	
  Anti-Terrorism Laws

  	
  64

  
	
  Section 3.27

  	
  Compliance with OFAC Rules and
  Regulations

  	
  65

  
	
  Section 3.28

  	
  Compliance with FCPA

  	
  65

  
	
  Section 3.29

  	
  Consent; Authorizations; Conflicts

  	
  65

  
	
  Section 3.30

  	
  Bulk Sales

  	
  66

  
	
  Section 3.31

  	
  Income

  	
  66

  
	
  Section 3.32

  	
  Full Payment

  	
  66

  
	
  Section 3.33

  	
  Compliance with Covenants

  	
  66

  
	
  Section 3.34

  	
  Collateral Agreements

  	
  66

  
	
  Section 3.35

  	
  No Reliance

  	
  66

  
	
  Section 3.36

  	
  Collateral

  	
  66

  
	
  Section 3.37

  	
  REIT Status

  	
  67

  
	
  Section 3.38

  	
  Insider

  	
  67

  
	
  Section 3.39

  	
  No Defenses

  	
  68

  
	
  Section 3.40

  	
  Interest Rate Protection Agreements

  	
  68

  
	
  Section 3.41

  	
  Selection Procedures

  	
  68

  
	
  Section 3.42

  	
  Value Given

  	
  68

  
	
  Section 3.43

  	
  Qualified Transferees

  	
  68

  
	
  Section 3.44

  	
  Eligibility of Mortgage Assets

  	
  69

  
	
  Section 3.45

  	
  Ability to Perform

  	
  69

  
	
  Section 3.46

  	
  Certain Tax Matters

  	
  69

  
	
  Section 3.47

  	
  Set-Off, etc

  	
  69

  
	
  Section 3.48

  	
  Acting as Principal

  	
  69

  
	
  Section 3.49

  	
  Fiscal Year

  	
  69

  
	
  Section 3.50

  	
  Representations and Warranties

  	
  70

  
	
  Section 3.51

  	
  Purchase Agreement

  	
  70

  



 


ii

















 


	
  ARTICLE IV

  
	
   

  	
   

  	
   

  
	
  CONDITIONS PRECEDENT

  
	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  Conditions to Closing Date

  	
  70

  
	
  Section 4.2

  	
  Conditions to All Extensions of
  Credit

  	
  73

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  
	
   

  	
   

  	
   

  
	
  AFFIRMATIVE COVENANTS

  
	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Financial Statements

  	
  77

  
	
  Section 5.2

  	
  Certificates; Other Information

  	
  79

  
	
  Section 5.3

  	
  Payment of Taxes and Other
  Obligations

  	
  81

  
	
  Section 5.4

  	
  Conduct of Business and Maintenance
  of Existence

  	
  81

  
	
  Section 5.5

  	
  Maintenance of Property; Insurance

  	
  81

  
	
  Section 5.6

  	
  Inspection of Property; Books and
  Records; Discussions

  	
  81

  
	
  Section 5.7

  	
  Notices

  	
  82

  
	
  Section 5.8

  	
  Environmental Laws

  	
  83

  
	
  Section 5.9

  	
  Financial Covenants

  	
  84

  
	
  Section 5.10

  	
  Additional Credit Parties

  	
  84

  
	
  Section 5.11

  	
  Compliance with Law

  	
  85

  
	
  Section 5.12

  	
  Pledged Assets

  	
  85

  
	
  Section 5.13

  	
  Interest Rate Protection Agreements

  	
  86

  
	
  Section 5.14

  	
  Custodial and Control Agreements

  	
  86

  
	
  Section 5.15

  	
  Further Assurances

  	
  86

  
	
  Section 5.16

  	
  Performance and Compliance with
  Collateral

  	
  86

  
	
  Section 5.17

  	
  Delivery of Income

  	
  87

  
	
  Section 5.18

  	
  Exceptions

  	
  87

  
	
  Section 5.19

  	
  Distributions in Respect of
  Collateral

  	
  87

  
	
  Section 5.20

  	
  REIT Status

  	
  87

  
	
  Section 5.21

  	
  Remittance of Prepayments

  	
  87

  
	
  Section 5.22

  	
  Escrow Imbalance

  	
  88

  
	
  Section 5.23

  	
  Separateness

  	
  88

  
	
  Section 5.24

  	
  Registration of Securities

  	
  89

  
	
  Section 5.25

  	
  Termination of Securities Account

  	
  89

  
	
  Section 5.26

  	
  Independence of Covenants

  	
  89

  
	
  Section 5.27

  	
  ERISA

  	
  89

  
	
  Section 5.28

  	
  Mortgage Assets

  	
  90

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  
	
   

  	
   

  	
   

  
	
  NEGATIVE COVENANTS

  
	
   

  	
   

  	
   

  
	
  Section 6.1

  	
  Indebtedness

  	
  90

  
	
  Section 6.2

  	
  Liens

  	
  90

  
	
  Section 6.3

  	
  Nature of Business

  	
  91

  
	
  Section 6.4

  	
  Consolidation, Merger, Sale or
  Purchase of Assets, etc

  	
  91

  
	
  Section 6.5

  	
  Advances, Investments and Loans

  	
  91

  
	
  Section 6.6

  	
  Transactions with Affiliates

  	
  91

  



 


iii

















 


	
  Section 6.7

  	
  Ownership of Subsidiaries;
  Restrictions

  	
  91

  
	
  Section 6.8

  	
  Corporate Changes; Material
  Contracts

  	
  91

  
	
  Section 6.9

  	
  Limitation on Restricted Actions

  	
  92

  
	
  Section 6.10

  	
  Restricted Payments

  	
  92

  
	
  Section 6.11

  	
  Sub-Limits

  	
  92

  
	
  Section 6.12

  	
  No Further Negative Pledges

  	
  92

  
	
  Section 6.13

  	
  Collateral Not to be Evidenced by
  Instruments

  	
  93

  
	
  Section 6.14

  	
  Deposits

  	
  93

  
	
  Section 6.15

  	
  Servicing Agreements

  	
  93

  
	
  Section 6.16

  	
  Extension or Amendment of
  Collateral

  	
  93

  
	
  Section 6.17

  	
  Stock Repurchase

  	
  93

  
	
  Section 6.18

  	
  Margin Regulations

  	
  93

  
	
  Section 6.19

  	
  Senior Interests

  	
  94

  
	
  Section 6.20

  	
  Portfolio Assets

  	
  94

  
	
  Section 6.21

  	
  Inconsistent Agreements

  	
  94

  
	
  Section 6.22

  	
  Internalization of Management

  	
  94

  
	
  Section 6.23

  	
  Payment of Third Party Management
  Fees

  	
  94

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  
	
   

  	
   

  	
   

  
	
  EVENTS OF DEFAULT

  
	
   

  	
   

  	
   

  
	
  Section 7.1

  	
  Events of Default

  	
  94

  
	
  Section 7.2

  	
  Acceleration; Remedies

  	
  98

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  
	
   

  	
   

  	
   

  
	
  THE ADMINISTRATIVE AGENT

  
	
   

  	
   

  	
   

  
	
  Section 8.1

  	
  Appointment and Authority; Nature
  of Duties

  	
  101

  
	
  Section 8.2

  	
  Exculpatory Provisions

  	
  102

  
	
  Section 8.3

  	
  Reliance by Administrative Agent

  	
  103

  
	
  Section 8.4

  	
  Notice of Default

  	
  104

  
	
  Section 8.5

  	
  Non-Reliance on Administrative
  Agent and Other Lenders

  	
  104

  
	
  Section 8.6

  	
  Indemnification

  	
  104

  
	
  Section 8.7

  	
  Administrative Agent in Its
  Individual Capacity

  	
  105

  
	
  Section 8.8

  	
  Successor Administrative Agent

  	
  105

  
	
  Section 8.9

  	
  Collateral and Guaranty Matters

  	
  106

  
	
  Section 8.10

  	
  Duties in the Case of Enforcement

  	
  106

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  
	
   

  	
   

  	
   

  
	
  ADMINISTRATION AND SERVICING

  
	
   

  	
   

  	
   

  
	
  Section 9.1

  	
  Servicing

  	
  107

  
	
  Section 9.2

  	
  Borrowers as Servicer

  	
  107

  
	
  Section 9.3

  	
  Third Party Servicer

  	
  107

  
	
  Section 9.4

  	
  Duties of the Borrowers

  	
  108

  
	
  Section 9.5

  	
  Authorization of the Borrowers

  	
  108

  
	
  Section 9.6

  	
  Event of Default

  	
  109

  



 


iv

















 


	
  Section 9.7

  	
  Modification

  	
  109

  
	
  Section 9.8

  	
  Inspection

  	
  110

  
	
  Section 9.9

  	
  Payment of Certain Expenses by
  Servicer

  	
  110

  
	
  Section 9.10

  	
  Pooling and Servicing Agreements

  	
  110

  
	
  Section 9.11

  	
  Servicer Default

  	
  110

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  
	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  
	
   

  	
   

  	
   

  
	
  Section 10.1

  	
  Amendments, Waivers and Release of
  Collateral

  	
  111

  
	
  Section 10.2

  	
  Notices

  	
  113

  
	
  Section 10.3

  	
  No Waiver; Cumulative Remedies

  	
  114

  
	
  Section 10.4

  	
  Survival of Representations and
  Warranties

  	
  115

  
	
  Section 10.5

  	
  Payment of Expenses and Taxes;
  Indemnity

  	
  115

  
	
  Section 10.6

  	
  Successors and Assigns;
  Participations

  	
  119

  
	
  Section 10.7

  	
  Right of Set off; Sharing of
  Payments

  	
  121

  
	
  Section 10.8

  	
  Table of Contents and
  Section Headings

  	
  123

  
	
  Section 10.9

  	
  Counterparts; Integration;
  Effectiveness; Electronic Execution

  	
  123

  
	
  Section 10.10

  	
  Severability

  	
  123

  
	
  Section 10.11

  	
  Governing Law

  	
  123

  
	
  Section 10.12

  	
  Consent to Jurisdiction; Service of
  Process and Venue

  	
  123

  
	
  Section 10.13

  	
  [Reserved]

  	
  124

  
	
  Section 10.14

  	
  Acknowledgments

  	
  124

  
	
  Section 10.15

  	
  Waivers of Jury Trial

  	
  125

  
	
  Section 10.16

  	
  Patriot Act Notice

  	
  125

  
	
  Section 10.17

  	
  Resolution of Drafting Ambiguities

  	
  125

  
	
  Section 10.18

  	
  Continuing Agreement

  	
  125

  
	
  Section 10.19

  	
  Lender Consent

  	
  126

  
	
  Section 10.20

  	
  Appointment of the Administrative
  Borrower

  	
  126

  
	
  Section 10.21

  	
  Counterclaims

  	
  126

  
	
  Section 10.22

  	
  Legal Matters

  	
  126

  
	
  Section 10.23

  	
  Recourse Against Certain Parties

  	
  126

  
	
  Section 10.24

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

  	
  127

  
	
  Section 10.25

  	
  Credit Parties’ Waiver of Setoff

  	
  128

  
	
  Section 10.26

  	
  Periodic Due Diligence Review

  	
  128

  
	
  Section 10.27

  	
  Character of Loans for Income Tax
  Purposes

  	
  129

  
	
  Section 10.28

  	
  Joint and Several Liability; Full
  Recourse Obligations

  	
  129

  
	
  Section 10.29

  	
  Administrative Agent’s Appointment
  as Attorney-in-Fact

  	
  131

  
	
  Section 10.30

  	
  Treatment of Certain Information

  	
  133

  
	
  Section 10.31

  	
  Third Party Beneficiaries

  	
  133

  



 


v

















 


	
  Schedules

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1.1(a)

  	
  Investments

  	
   

  
	
  Schedule 1.1(b)

  	
  Collection Account

  	
   

  
	
  Schedule 1.1(c)

  	
  Asset Representations

  	
   

  
	
  Schedule 1.1(d)

  	
  Securities Account

  	
   

  
	
  Schedule 2.3(a)

  	
  Letters of Credit

  	
   

  
	
  Schedule 2.3(b)

  	
  Cash Collateralized
  Letters of Credit

  	
   

  
	
  Schedule 2.3(c)

  	
  Non-Cash Collateralized
  Letters of Credit

  	
   

  
	
  Schedule 3.3

  	
  Jurisdictions of
  Organization and Qualification

  	
   

  
	
  Schedule 3.6

  	
  Material Litigation

  	
   

  
	
  Schedule 3.12

  	
  Organizational Chart

  	
   

  
	
  Schedule 3.18

  	
  Location

  	
   

  
	
  Schedule 5.23

  	
  List of Participated
  Assets

  	
   

  
	
  Schedule 9.3

  	
  Servicers

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibits

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit 1.1(a)

  	
  Form of Account
  Designation Notice

  	
   

  
	
  Exhibit 1.1(b)

  	
  Form of Assignment
  and Assumption

  	
   

  
	
  Exhibit 1.1(c)

  	
  Form of Account
  Control Agreement

  	
   

  
	
  Exhibit 1.1(d)(i)

  	
  Form of Borrower
  Joinder Agreement

  	
   

  
	
  Exhibit 1.1(d)(ii)

  	
  Form of Guarantor
  Joinder Agreement

  	
   

  
	
  Exhibit 1.1(e)

  	
  Form of Notice of
  Borrowing

  	
   

  
	
  Exhibit 1.1(f)

  	
  Form of Assignment

  	
   

  
	
  Exhibit 1.1(g)

  	
  Form of Compliance
  Certificate

  	
   

  
	
  Exhibit 1.1(h)

  	
  Form of Servicer
  Redirection Notice

  	
   

  
	
  Exhibit 2.1(b)

  	
  Form of
  Confirmation

  	
   

  
	
  Exhibit 2.1(e)

  	
  Form of Revolving
  Note

  	
   

  
	
  Exhibit 2.2(d)

  	
  Form of Term Loan
  Note

  	
   

  
	
  Exhibit 2.14

  	
  Form of
  Section 2.14 Exhibit

  	
   

  
	
  Exhibit 4.1(a)

  	
  Form of Lender Consent

  	
   

  
	
  Exhibit 4.1(n)

  	
  Form of Closing
  Officer’s Certificate

  	
   

  
	
  Exhibit 4.1(o)

  	
  Form of Patriot
  Act Certificate

  	
   

  
	
  Exhibit 4.1(q)(i)

  	
  Form of Power of
  Attorney – Borrower

  	
   

  
	
  Exhibit 4.1(q)(ii)

  	
  Form of Power of
  Attorney – Pledgor

  	
   

  
	
  Exhibit 5.2(j)

  	
  Form of Mortgage
  Asset Data Summary

  	
   

  



 


vi
















 


CREDIT
AGREEMENT, dated as of July 22, 2008, 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, the “Borrowers”), as a borrower, GRAMERCY CAPITAL CORP., a
Maryland corporation (“Gramercy Capital”), as a guarantor, GKK CAPITAL
LP, a Delaware limited partnership (“GKK Capital”), as a guarantor,
GRAMERCY INVESTMENT TRUST, a Maryland real estate investment trust (“Gramercy
REIT”), as a guarantor, GKK TRADING CORP., a Delaware corporation
(individually, “GTC” and collectively with Gramercy Capital, GKK Capital
and Gramercy REIT, the “Guarantors”), as a guarantor, the other entities
from time to time party hereto pursuant to Section 5.10, the several banks
and other financial institutions as are, or may from time to time become
parties to this Agreement (each, together with its successors and assigns, a “Lender”
and, collectively, the “Lenders”), and WACHOVIA BANK, NATIONAL
ASSOCIATION, a national banking association, as administrative agent for the
Lenders hereunder (in such capacity, the “Administrative Agent”).


 


W  I  T  N  E
S  S  E  T  H:


 


WHEREAS,
the Credit Parties (as hereinafter defined) have requested that the Lenders
make loans and other financial accommodations to the Credit Parties in an
aggregate principal amount of up to $215,680,289.01, as more particularly
described herein; and


 


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


 


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


 


ARTICLE
I



DEFINITIONS


 


Section 1.1                                   Defined
Terms.


 


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


 


“1199
F Street” shall mean that certain Sub-Participation A Interest (in the
original amount of $28,460,955.31 as described in that certain
Sub-Participation Agreement, dated as of May 29, 2008, by and between
Gramercy Warehouse Funding I LLC as Participant A and Participant B) in that
certain Funded Participation Interest in the original amount of $39,700,000 as
described in that certain Participation and Servicing Agreement, dated as of May 29,
2008, by and between Gramercy Warehouse Funding I LLC as Advance Participant
and Funded Participant.


 


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


 


“ABR Default Rate”
shall have the meaning set forth in Section 2.8.


 

















 


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


 


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


 


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


 


“Act of Insolvency”
shall mean with respect to any Person, (i) the filing of a petition,
commencing, or authorizing the commencement of any case or proceeding under any
bankruptcy, insolvency, reorganization, liquidation, dissolution or similar law
relating to the protection of creditors, or suffering any such petition or
proceeding to be commenced by another which is consented to, not timely
contested or results in entry of an order for relief; (ii) the seeking or
consenting to the appointment of a receiver, trustee, custodian or similar
official for such Person or any substantial part of the property of such
Person; (iii) the appointment of a receiver, conservator, or manager for
such Person by any governmental agency or authority having the jurisdiction to
do so; (iv) the making of a general assignment for the benefit of
creditors; (v) the admission by such Person of its inability to pay its
debts or discharge its obligations as they become due or mature; or (vi) that
any governmental authority or agency or any person, agency or entity acting or
purporting to act under governmental authority shall have taken any action to
condemn, seize or appropriate, or to assume custody or control of, all or any
substantial part of the property of such Person, or shall have taken any action
to displace the management of such Person or to curtail its authority in the
conduct of the business of such Person.


 


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


 


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


 


“Administrative Borrower”
shall mean GWF-I.


 


2

















 


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


 


“Affiliate” shall mean
any (A) entity that directly or indirectly owns, controls, or holds with
power to vote, 20 percent or more of the outstanding voting securities of the
debtor, other than an entity that holds such securities (i) in a fiduciary
or agency capacity without sole discretionary power to vote such securities; or
(ii) solely to secure a debt, if such entity has not in fact exercised
such power to vote; (B) corporation 20 percent or more of whose
outstanding voting securities are directly or indirectly owned, controlled, or
held with power to vote, by the debtor, or by an entity that directly or
indirectly owns, controls, or holds with power to vote, 20 percent or more of
the outstanding voting securities of the debtor, other than an entity that
holds such securities (i) in a fiduciary or agency capacity without sole
discretionary power to vote such securities; or (ii) solely to secure a
debt, if such entity has not in fact exercised such power to vote; (C) person
whose business is operated under a lease or operating agreement by a debtor, or
person substantially all of whose property is operated under an operating
agreement with the debtor; or (D) entity that operates the business or
substantially all of the property of the debtor under a lease or operating
agreement.


 


“Affiliated
Hedge Counterparty” shall mean Wachovia Bank, National Association, or any
Affiliate thereof, in its capacity as a party to any Interest Rate Protection
Agreement with the Borrowers, any Guarantor or any Subsidiary or Affiliate of
the Borrowers.


 


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


 


“Allocated
Revolving Loan Amount” shall mean, for each item of Revolving Loan
Collateral, the outstanding principal amount of the Revolving Loans allocated
by the Administrative Agent to the related Revolving Loan Collateral, which
Allocated Revolving Loan Amount shall be set forth in the related Confirmation,
as such Allocated Revolving Loan Amount may be reduced (based on the
application by the Administrative Agent of principal payments under this
Agreement in accordance with Section 2.7) from time to time.  The Administrative Agent shall maintain a
schedule of all reductions in the Allocated Revolving Loan Amount for all
Revolving Loan Collateral and such schedules shall be conclusive and binding
absent manifest error.


 


“Allocated Term Loan Amount”
shall mean, for each item of Term Loan Collateral, the outstanding principal
amount of the Term Loan allocated by the Administrative Agent to the related
Term Loan Collateral, which Allocated Term Loan Amount shall be set forth in
the related Confirmation, as such Allocated Term Loan Amount may be reduced
(based on the application by the Administrative Agent of principal payments
under this Agreement in accordance with Section 2.7) from time to
time.  The Administrative Agent shall
maintain a schedule of all reductions in the Allocated Term Loan Amount for all
Term Loan Collateral and such schedules shall be conclusive and binding absent
manifest error.


 


“Allocated Underlying Debt”
shall mean, with respect to an Underlying Mortgaged Property, any senior or pari passu
Indebtedness secured directly or indirectly by such Underlying Mortgaged
Property, including, without limitation, any preferred equity interest or mezzanine
debt that is senior to, or pari passu with, the related Mortgage Asset in right of
payment or priority.


 


“ALTA”
shall mean the American Land Title Association.


 


“Alternate
Base Rate” shall mean, for any day, a rate per annum equal to the greater
of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%.  If for any reason the Administrative Agent
shall have determined (which determination 


 


3

















 


shall be conclusive in the absence of manifest error)
that it is unable to ascertain the Federal Funds Effective Rate, for any
reason, including the inability or failure of the Administrative Agent to
obtain sufficient quotations in accordance with the terms above, the Alternate
Base Rate shall be determined without regard to clause (b) of the first
sentence of this definition, as appropriate, until the circumstances giving
rise to such inability no longer exist. 
Any change in the Alternate Base Rate due to a change in the Prime Rate
or the Federal Funds Effective Rate shall be effective on the opening of
business on the date of such change.


 


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


 


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


 


“Approved Bank” shall
mean any bank, savings and loan association, savings institution, trust company
or national banking association subject to state and/or federal supervision
with a rating of at least an “A” (or its equivalent) from at least two (2) of
the Rating Agencies.


 


“Approved Fund” shall
mean any Fund that is administered, managed or underwritten by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate
of an entity that administers or manages a Lender with a rating of at least an “A”
(or its equivalent) from at least two (2) of the Rating Agencies.


 


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


 


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


 


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


 


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


 


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


 


“Assignment
of Leases” shall mean, with respect to any Mortgage, an assignment of
leases thereunder, notice of transfer or equivalent instrument in recordable
form, sufficient under the laws of the jurisdiction wherein the Underlying
Mortgaged Property is located to reflect the assignment of leases.


 


“Assignment
of Mortgage” shall mean, with respect to any Mortgage, an assignment of the
Mortgage, notice of transfer or equivalent instrument in recordable form,
sufficient under the laws of 


 


4

















 


the jurisdiction wherein the related Underlying
Mortgaged Property is located to reflect the assignment of the Mortgage to the
Administrative Agent for the benefit of the Lenders.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


5

















 


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


 


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


 


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


 


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


 


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


 


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


 


“Capital Stock” shall
mean any and all shares, interests, participations or other equivalents
(however designated) of capital stock of a corporation, any and all equivalent
equity ownership interests in a Person which is not a corporation, including,
without limitation, any and all member or other equivalent interests in any
limited liability company, and any and all warrants or options to purchase any
of the foregoing.


 


“Cash Collateral” shall
mean the cash or payments received by the Administrative Agent pursuant to Section 2.7
of this Agreement or as Income on any Collateral, or with respect to any Letter
of Credit, cash or deposit account balances deposited in a cash collateral
account opened by the Administrative Agent to secure repayment of such Letters
of Credit.


 


“Cash
Collateralize” shall mean to pledge and deposit with or deliver to the
Administrative Agent Cash Collateral as collateral for the Obligations pursuant
to documentation reasonably satisfactory to the Administrative Agent.


 


“Cash
Collateralized Letters of Credit” shall have the meaning set forth in Section 2.3(a)(ii).


 


“Cash Equivalents”
shall mean (i) direct obligations of the United States Government,
including, without limitation, treasury bills, notes and bonds, (ii) interest
bearing or discounted obligations of Federal agencies and Government sponsored
entities or pools of such instruments offered by Approved Banks and dealers,
including without limitation, Federal Home Loan Mortgage Corporation
participation sale certificates, Government National Mortgage Association
modified pass-through certificates, Federal National Mortgage Association bonds
and notes, and Federal Farm Credit System securities, (iii) time deposits,
Domestic and LIBOR certificates of deposit, bankers’ acceptances, commercial
paper rated at least A-1 by S&P and P-1 by Moody’s and/or guaranteed by a
Person with an Aa1 rating by Moody’s, an AA rating by S&P or better rated
credit, floating rate notes, other money market instruments and letters of
credit each issued by Approved Banks (provided that the same shall cease
to be a “Cash or Cash Equivalent” if at any time any such bank shall cease to
be an Approved 


 


6

















 


Bank), (iv) obligations of domestic corporations,
including, without limitation, commercial paper, bonds, debentures and loan
participations, each of which is rated at least AA by S&P and/or Aa1 by
Moody’s and/or guaranteed by a Person with an Aa1 rating by Moody’s and/or an
AA rating by S&P or better rated credit, (v) obligations issued by
states and local governments or their agencies, rated at least MIG-1 by Moody’s
and/or SP-l by S&P and/or guaranteed by an irrevocable letter of credit of
an Approved Bank (provided that the same shall cease to be a “Cash or
Cash Equivalent” if at any time any such bank shall cease to be an Approved
Bank), (vi) repurchase agreements with major banks and primary government
security dealers fully secured by the U.S. Government or agency collateral
equal to or exceeding the principal amount on a daily basis and held in
safekeeping, and (vii) real estate loan pool participations, guaranteed by
a Person with an AA rating given by S&P or Aa1 rating given by Moody’s or
better rated credit.


 


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


 


“Change of Control”
shall mean the occurrence of any of the following events: (a) prior to an
internalization of management by Parent, if GKK Manager LLC is no longer the
manager of Parent, (b) after such time as Parent is internally managed,
any “person” or “group” (within the meaning of Section 13(d) or 14(d) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) shall
become, or obtain rights (whether by means of warrants, options or otherwise)
to become, the “beneficial owner” (as defined in Rules 13d-3 and 13d-5
under the Exchange Act), directly or indirectly, of a percentage of the total
voting power of all classes of Capital Stock of the Parent entitled to vote
generally in the election of directors of 20% or more; or (c) the Parent
shall cease to own and control, of record and beneficially, directly 100% of
each class of outstanding Capital Stock of each Borrower.  Notwithstanding the foregoing, none of the
Administrative Agent, any Lender nor any other Person shall be deemed to
approve or to have approved any internalization of management as a result of
this definition or any other provision herein.


 


“Class” shall mean,
with respect to a Mortgage Asset, such Mortgage Asset’s classification as one
of the following: (a) Senior Mortgage Loan, (b) Junior Interest, (c) Mezzanine
Loan, (d) Preferred Equity or (e) GKK CRE CDO Security.


 


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


 


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


 


“CMBS”
shall mean pass-through certificates representing beneficial ownership
interests in one or more first lien mortgage loans secured by commercial and/or
multifamily properties.


 


“Code” shall mean the
Internal Revenue Code of 1986, as amended from time to time, and the
regulations promulgated and rulings issued thereunder.


 


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


 


7

















 


“Collateral Default”
shall mean any Mortgage Asset included or proposed to be included in the
Collateral (a) that is thirty (30) or more days delinquent under the terms
of the related Mortgage Loan Documents (including, without limitation, any
Preferred Equity which has not been current pay during such period), (b) for
which there is a non-monetary default under the terms of the related Mortgage
Loan Documents, (c) for which there is any breach of a representation or
warranty under Schedule 1.1(c) or (d) with respect to
which the related Obligor is the subject of an Insolvency Proceeding or Act of
Insolvency.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Consolidated Adjusted EBITDA”
shall mean, for any period, determined with respect to any Person(s) on a
consolidated basis, an amount equal to the sum of (a) net income (or loss)
of such Person(s) for such period determined on a consolidated basis
(prior to any impact from minority interests and before deduction of Preferred
Dividends on preferred stock, if any, of such Person(s)), in accordance with
GAAP, plus the following (but only to the extent actually included in
determination of such net income (or loss)): (i) depreciation and
amortization expense, (ii) interest expense, (iii) income tax expense
and (iv) extraordinary or non-recurring gains and losses; plus (b) each
such Person’s pro rata share of Consolidated Adjusted EBITDA of its
Unconsolidated Affiliates.  Consolidated
Adjusted EBITDA will be adjusted to remove all impact of FIN 46 and FAS 140 to
the extent of related transfers to special purpose entities in connection with
bona fide securitizations of Mortgage Assets and related extensions of credit
in connection with bona fide lendings made by such Person as lender.


 


8

















 


“Consolidated Interest Expense”
shall mean, for any period, determined without duplication with respect to any
Person(s) on a consolidated basis, the amount of total interest expense
incurred (in accordance with GAAP), including capitalized or accruing interest
(but excluding interest funded under a construction loan), plus each
such Person’s pro rata share of Interest Expense from Joint Venture investments
and Unconsolidated Affiliates.


 


“Consolidated Total Assets”
shall mean, at any time, an amount equal to the aggregate book value of (a) all
assets owned by any Person(s) (on a consolidated basis) and (b) the
proportionate share of assets owned by non-consolidated subsidiaries of such
Person(s), less (i) amounts owing to such Person(s) from any
Affiliates thereof (other than “arm’s length” loans to SLG), 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 Mortgage Assets) and (iii) prepaid Taxes and/or expenses.


 


“Consolidated Total Indebtedness”
shall mean, at any time, without duplication, all amounts of Indebtedness and
Contingent Liabilities of any Person(s) and all Subsidiaries thereof
determined on a consolidated basis, plus the pro rata share of
Indebtedness and Contingent Liabilities of Unconsolidated Affiliates of such
Person(s).


 


“Contingent Liabilities”
shall mean with respect to any Person(s) and all Subsidiaries thereof
(without duplication): (i) liabilities and obligations (including any
Guarantee Obligations) of such Persons in respect of “off-balance sheet
arrangements” (as defined in the SEC Off-Balance Sheet Rules) which would be
required to be, or customarily would be, disclosed in the “Management’s
Discussion and Analysis of Financial Condition and Results of Operations”
section of a Form 10-Q or Form 10-K (or their equivalents) which any
such Person (or any Affiliate thereof) is required to file with the Securities
and Exchange Commission (or any Governmental Authority substituted therefore)
other than extensions of credit in connection with bona fide lendings made by
such Person as lender and bona fide securitization transactions which fall into
this category solely as a result of the application of FAS 140 or FIN 46, (ii) any
obligation (including, without limitation, any Guarantee Obligation) whether or
not required to be disclosed in the footnotes to any such Person’s financial
statements, guaranteeing partially or in whole any Non-Recourse Indebtedness,
lease, dividend or other obligation, exclusive of contractual indemnities
(including, without limitation, any indemnity or price-adjustment provision
relating to the purchase or sale of securities or other assets) and guarantees
of non-monetary obligations (other than guarantees of completion, environmental
indemnities and guarantees of customary carve-out matters made in connection
with Non-Recourse Indebtedness, such as fraud, misappropriation, bankruptcy and
misapplication) which have not yet been called on or quantified, of such Person
or of any other Person, and (iii) any forward commitment or obligation to
fund or provide proceeds with respect to any loan or other financing which is
obligatory and non-discretionary on the part of the lender.  The amount of any Contingent Liabilities
described in clause (ii) shall be deemed to be (a) with respect to a
guarantee of interest or interest and principal, or operating income guarantee,
the sum of all payments required to be made thereunder (which in the case of an
operating income guarantee shall be deemed to be equal to the debt service for
the note secured thereby, through (x) in the case of an interest or
interest and principal guarantee, the stated date of maturity of the obligation
(and commencing on the date interest could first be payable thereunder), or (y) in
the case of an operating income guarantee, the date through which such
guarantee will remain in effect, and (b) with respect to all guarantees
not covered by the preceding clause (a), an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
guarantee is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder) as recorded on the balance sheet and on the footnotes to
the most recent financial statements of such Person.  As used in this definition, the term “SEC
Off-Balance Sheet Rules” means the Disclosure in Management’s Discussion and
Analysis 


 


9

















 


About Off Balance Sheet Arrangements, Securities Act
Release No. 33-8182, 68 Fed. Reg. 5982 (Feb. 5, 2003) (codified at 17
CFR pts. 228, 229 and 249).


 


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


 


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


 


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


 


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


 


“Credit Party–Related Obligations”
shall mean any obligations, liabilities and/or Indebtedness of the Credit
Parties under each Credit Document and under any other arrangement between any
Credit Party or any Affiliate or Subsidiary of any Credit Party, on the one
hand, and the Administrative Agent, any Affiliate or Subsidiary of the
Administrative Agent and/or any commercial paper conduit for which Wachovia or
an Affiliate or Subsidiary of Wachovia acts as a liquidity provider,
administrator or agent, on the other hand, including, without limitation, any
obligations, liabilities and/or Indebtedness under any Interest Rate Protection
Agreement entered into with any Affiliated Hedge Counterparty.


 


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


 


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


 


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


 


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


 


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


 


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


 


10

















 


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


 


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


 


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


 


“Derivatives
Guarantee Agreement” shall mean the Derivatives Guarantee Agreement made as
of the date hereof in favor of the Affiliated Hedge Counterparty by the
Guarantors, as the same may be amended, restated, supplemented or otherwise
modified and in effect from time to time.


 


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


 


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


 


“DSCR” shall mean, with
respect to any Mortgage Asset, as of any date of determination, each of (a) the
In Place DSCR and (b) the Stabilized DSCR of such Mortgage Asset at such
time.


 


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


 


“Due Diligence Review”
shall mean the performance by the Administrative Agent of any or all of the
reviews permitted under Section 10.26 with respect to any or all of the
Collateral, as desired by the Administrative Agent from time to time.


 


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


 


11
















 


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


 


(a)                                  in
the case of a GKK CRE CDO Security, is rated BBB-/Baa3 or higher by at least
two (2) of the Rating Agencies;


 


(b)                                 is
not in a Collateral Default;


 


(c)                                  except
for with respect to 1199 F Street, is not a construction loan or a construction
note of any sort (which shall not, in and of itself, preclude Mortgage Assets
that include renovation, rehabilitation or expansion components which will be
completed within twelve (12) months of the related Borrowing Date);


 


(d)                                 has
been approved by the Administrative Agent in its sole discretion;


 


(e)                                  has,
to the extent applicable, an LTV not in excess of the Maximum LTV;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(m)                               in
the case of a Senior Mortgage Loan, is evidenced by an original Mortgage Note
or a senior participation certificate, as applicable;


 


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


 


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


 


(p)                                 does
not involve an equity or similar interest by any Credit Party that would result
in (i) a conflict of interest or a potential conflict of interest or (ii) an
affiliation with an Obligor under the terms of the Mortgage Loan Documents
which results or could reasonably be expected to result in the loss or
impairment of any material rights of the holder of the Mortgage Asset; provided,
however, the Borrowers must disclose to the Administrative Agent prior
to the 


 


12

















 


related Borrowing Date
all equity or similar interests held or to be held by any Credit Party
regardless of whether it satisfies any of the foregoing clauses (i) or
(ii);


 


provided,
that (i) “Eligible Asset”
shall not include any Mortgage Asset consisting of Preferred Equity or a first
loss debt instrument which represents less than 5.0% of the total debt
capitalization of the related Underlying Mortgaged Property, (ii) notwithstanding
the foregoing and any Mortgage Asset’s failure to conform to any of the
criteria set forth above, the Agent may, in its sole discretion, designate in
writing any such non-compliant Mortgage Asset an Eligible Asset, (iii) in
the case of Mortgage Assets consisting of Preferred Equity, the Agent reserves
the right to require that such Mortgage Assets be held in separate special
purpose entities with respect to each such Mortgage Asset of a particular Class in
order to be included as Eligible Assets and (iv) Eligible Assets (other
than GKK CRE CDO Securities) that are pari passu investments with third parties must provide that (a) any
Borrower or the Parent retains the majority ownership or joint control with
respect to customary major decisions for the particular type of Eligible Asset
and retains notice and cure rights with respect to all material issues related
thereto, (b) the Lenders meet any applicable financial and other criteria
required by the applicable documentation for a holder of such Eligible Asset
and (c) any other participant or co-investor must meet customary “qualified
institutional lender” criteria on the related transfer date.


 


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


 


“Environmental Laws”
shall mean any federal, state, foreign or local statute, law, rule, regulation,
ordinance, code, guideline, written policy and rule of common law now or
hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to the environment, employee health
and safety or Hazardous Materials, including, without limitation, CERCLA; RCRA;
the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.;
the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.;
the Clean Air Act, 42 U.S.C. § 7401 et seq.; the
Safe Drinking Water Act, 42 U.S.C. § 3803 et seq.; the
Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq.; the
Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C. §
11001 et seq.; the Hazardous Material
Transportation Act, 49 U.S.C. § 1801 et seq. and the
Occupational Safety and Health Act, 29 U.S.C. § 651 et seq.;
and any state and local or foreign counterparts or equivalents, in each case as
amended from time to time.


 


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


 


“ERISA” shall mean the
Employee Retirement Income Security Act of 1974, as amended from time to time,
and the regulations promulgated and rulings issued thereunder.  Section references to ERISA are to
ERISA, as in effect at the date of this Agreement, and to any subsequent
provisions of ERISA, amendatory thereof, supplemental thereto or substituted
therefor.


 


“Event of Default”
shall mean any of the events specified in Section 7.1.


 


13

















 


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


 


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


 


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


 


“Excluded Taxes” shall
have the meaning set forth in Section 2.14.


 


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


 


“Federal
Funds Effective Rate” shall mean, for any day, the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published on the next succeeding Business Day, the average of
the quotations for the day of such transactions received by the Administrative
Agent from three federal funds brokers of recognized standing selected by it.


 


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


 


“Financial Covenants”
shall mean the covenants set forth in Section 5.9 of this Agreement and in
Section 12 of the Guarantee Agreement.


 


“Fitch” shall mean
Fitch Ratings, Inc.


 


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


 


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


 


“Funds From Operation”
or “FFO” shall
mean, for a given period, (a) Net Income of the 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.


 


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


 


“GKK
CRE CDO Security” shall mean a commercial real estate collateralized debt
obligation (a) managed by a Borrower or Guarantor and (b) in which
Borrowers, Guarantors and/or their Affiliates are holders of 100% of all
classes of equity and holders of certain subordinated notes and mezzanine notes
issued by the CDO issuer.


 


14

















 


“Governmental Authority”
shall mean any government (or any political subdivision or jurisdiction
thereof), court, bureau, agency or other governmental authority having
jurisdiction over any Borrower or Lender, as applicable, or any of their
respective businesses, operations or properties.


 


“Gramercy
Finance Contracts” shall mean such contracts and agreements of the Credit
Parties related to the financing, ownership and acquisition of commercial
mortgage debt instruments and CMBS investments.


 


“Gramercy
Realty Contracts” shall mean such contracts and agreements of the Credit
Parties related to the ownership and management of real estate assets.


 


“Ground Lease” shall
mean a ground lease containing the following terms and conditions: (a) a
remaining term (exclusive of any unexercised extension options) of twenty (20)
years or more from the Borrowing Date of the Mortgage Asset; (b) the right
of the lessee to mortgage and encumber its interest in the leased property
without the consent of the lessor or with such consent given; (c) the
obligation of the lessor to give the holder of any mortgage lien on such leased
property written notice of any defaults on the part of the lessee and agreement
of such lessor that such lease will not be terminated until such holder has had
a reasonable opportunity to cure or complete foreclosures, and fails to do so; (d) reasonable
transferability of the lessee’s interest under such lease, including ability to
sublease; and (e) such other rights customarily required by mortgagees
making a loan secured by the interest of the holder of the leasehold estate
demised pursuant to a ground lease.


 


“Guarantee Agreement”
shall mean the Guarantee Agreement made as of the date hereof in favor of the
Lenders by the Guarantors, as the same may be amended, restated, supplemented
or otherwise modified and in effect from time to time.


 


“Guarantee Obligation”
shall mean, as to any Person (the “guaranteeing person”), without duplication,
any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to induce
the creation of an obligation for which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or
other obligations (the “primary obligations”) of any other third Person (the “primary
obligor”) in any manner, whether directly or indirectly, including, without
limitation, any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any
such primary obligation against loss in respect thereof; provided, however,
that the term Guarantee Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business.  The terms “Guarantee” and “Guaranteed” used
as a verb shall have a correlative meaning.


 


“Guarantor” shall mean
Gramercy Capital Corp., GKK Capital LP, Gramercy Investment Trust, GKK Trading
Corp. and any other entity that becomes party to this Agreement pursuant to Section 5.10
from time to time, in each case together with their successors and permitted assigns.


 


“Guarantor Joinder Agreement”
shall mean a Guarantor Joinder Agreement in substantially the form of Exhibit 1.1(d)(ii),
executed and delivered by an Additional Credit Party in 


 


15

















 


accordance
with the provisions of Section 5.10, as amended, restated, supplemented or
modified from time to time.


 


“In Place DSCR” shall
mean, with respect to any Mortgage Asset, as of any date of determination, the
ratio of (x) (i) Net Cash Flow plus (ii) debt service
reserves actually held back or funded into Borrower controlled accounts subject
to a Borrower’s exclusive dominion and control, plus (iii) at the
Administrative Agent’s sole discretion, third party credit enhancements,
including acceptable sponsor guarantees, to (y) the debt service on the
Mortgage Asset calculated using the required amortization for the first 12
months of the remaining term of the Mortgage Asset and either (i) an
interest rate equal to the actual interest rate (in the case of a fixed
interest rate Eligible Asset) or (ii) the highest applicable strike price
of any LIBOR cap contract for such 12-month period (plus the spread) (in
the case of a variable interest rate Eligible Asset).


 


“Income” shall mean
with respect to the Collateral and to the extent of a Borrower’s or the holder’s
interest therein, at any time, all of the following:  all payments, collections, prepayments,
recoveries, proceeds (including, without limitation, insurance and condemnation
proceeds) and all other payments or amounts of any kind or nature whatsoever
paid, received, collected, recovered or distributed on, in connection with or
in respect of the Collateral or any other collateral for the Obligations,
including, without limitation, principal payments, interest payments, principal
and interest payments, prepayment fees, extension fees, exit fees, defeasance
fees, transfer fees, late charges, late fees and all other fees or charges of
any kind or nature, premiums, yield maintenance charges, penalties, default
interest, dividends, gains, receipts, allocations, rents, interests, profits,
payments in kind, returns or repayment of contributions and all other
distributions, payments and other amounts of any kind or nature whatsoever
payable thereon, in connection therewith, or with respect thereto, together
with amounts received from any Interest Rate Protection Agreement; provided,
however, Income shall not include (a) any Obligor Reserve Payments
unless a Borrower, a Servicer or a PSA Servicer has exercised rights with
respect to such payments under the terms of the related Mortgage Loan
Documents, the Servicing Agreements or the Pooling and Servicing Agreements, as
applicable, or (b) prior to a Default or Event of Default, any servicing
fees charges by a Servicer.


 


“Indebtedness” shall
mean, with respect to any Person, including such Person’s Consolidated
Subsidiaries determined on a consolidated basis, at the time of computation
thereof, all indebtedness of any kind including, without limitation (without
duplication):  (a) all obligations
of such Person in respect of money borrowed (including, without limitation,
principal, interest, assumption fees, prepayment fees, yield maintenance
charges, penalties, exit fees, contingent interest and other monetary
obligations whether choate or inchoate and whether by loan, the issuance and
sale of debt securities or the sale of Property or assets to another Person
subject to an understanding or agreement, contingent or otherwise, to
repurchase such Property or assets, or otherwise); (b) all obligations of
such Person, whether or not for money borrowed (i) represented by notes
payable, letters of credit or drafts accepted, in each case representing
extensions of credit, (ii) evidenced by bonds, debentures, notes or
similar instruments, (iii) constituting purchase money indebtedness,
conditional sales contracts, title retention debt instruments or other similar
instruments, upon which interest charges are customarily paid or that are
issued or assumed as full or partial payment for property or services rendered,
or (iv) in connection with the issuance of preferred equity or trust
preferred securities; (c) Capital Lease Obligations of such Person; (d) all
reimbursement obligations of such Person under any letters of credit or
acceptances (whether or not the same have been presented for payment); (e) all
Off—Balance Sheet Obligations of such Person; (f) all obligations of such
Person to purchase, redeem, retire, defease or otherwise make any payment in
respect of any Mandatory Redeemable Stock issued by such Person or any other
Person (inclusive of forward equity contracts), valued at the greater of its
voluntary or involuntary liquidation preference plus accrued and unpaid
dividends; (g) all obligations of such Person in respect of any keep well
arrangements, credit enhancements, contingent or future funding obligations
under any Mortgage Asset or any obligation 


 


16

















 


senior
to the Mortgage Asset, unfunded interest reserve amount under any Mortgage
Asset or any obligation that is senior to the Mortgage Asset, purchase
obligation, repurchase obligation, sale/buy–back agreement, takeout commitment
or forward equity commitment, in each case evidenced by a binding agreement
(excluding any such obligation to the extent the obligation can be satisfied by
the issuance of Equity Interests (other than Mandatory Redeemable Stock)); (h) net
obligations under any Derivatives Contract not entered into as a hedge against
existing indebtedness, in an amount equal to the Derivatives Termination Value
thereof; (i) all Non–Recourse Indebtedness, recourse indebtedness and all
indebtedness of other Persons which such Person has guaranteed or is otherwise
recourse to such Person; (j) all indebtedness of another Person secured by
(or for which the holder of such indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien on Property or assets owned by such
Person, even though such Person has not assumed or become liable for the
payment of such indebtedness or other payment obligation; (k) all
Contingent Liabilities; (l) all obligations of such Person incurred in
connection with the acquisition or carrying of fixed assets by such Person or
obligations of such Person to pay the deferred purchase or acquisition price of
Property or assets, including contracts for the deferred purchase price of
Property or assets that include the procurement of services; (m) indebtedness
of general partnerships of which such Person is liable as a general partner
(whether secondarily or contingently liable or otherwise); (n) obligations
of such Person to fund capital commitments under any Authority Document,
subscription agreement or otherwise; and (o) such Person’s pro rata share
of the Indebtedness of any Unconsolidated Affiliate of such Person.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Interest
Period” shall mean,


 


(a)                                  initially,
the period commencing on the Borrowing Date and ending one month thereafter;
and


 


(b)                                 thereafter,
each period commencing on the last day of the immediately preceding Interest
Period and ending one month thereafter; provided that the foregoing
provisions are subject to the following:


 


(i)                                     if
any Interest Period would otherwise end on a day that is not a Business Day,
such Interest Period shall be extended to the next succeeding Business Day
unless 


 


17

















 


the result of such
extension would be to carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately preceding
Business Day;


 


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


 


(iii)                               no
Interest Period in respect of any Loan shall extend beyond the applicable
Maturity Date and, further with regard to the Term Loan, no Interest Period
shall extend beyond any principal amortization payment date with respect to
such Term Loan.


 


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


 


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


 


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


 


“Issuing
Lender” shall mean Wachovia Bank, National Association or such other Lender
reasonably acceptable to the Administrative Agent and the Borrowers and
designated by the Administrative Agent.


 


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


 


“Joint Venture” shall
mean any corporation, partnership or limited liability company in which any
Guarantor owns individually or together with one or more other Guarantor, directly
or indirectly, an economic interest but that is not a wholly-owned subsidiary
of a Guarantor.


 


18

















 


“Junior Interest” shall
mean (a) a junior participation interest in a performing commercial real
estate loan, (b) a junior participation interest in a Mezzanine Loan or (c) a
“B-note” in an “A/B structure” in a performing commercial real estate loan, for
which the combined DSCR is not less than that set forth in the related
Confirmation, taking into account, in the calculation of the LTV and the DSCR
of such Junior Interest, any senior or pari passu Indebtedness secured directly or indirectly by
the applicable Underlying Mortgaged Property (including, if applicable, any
Preferred Equity).


 


“Junior Interest Note”
shall mean the original executed promissory note, certificate (whether
participation or otherwise) or other tangible evidence of a Junior Interest.


 


“L/C
Obligations” shall mean, at any time, an amount equal to the sum of (a) the
aggregate then undrawn and unexpired amount of the then outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit
which have not then been reimbursed pursuant to Section 2.3.


 


“L/C
Participants” shall mean all Term Loan Lenders other than the Issuing
Lender.


 


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


 


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


 


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


 


“Letter
of Credit” shall mean any letter of credit issued pursuant to Section 2.3
hereof.


 


“LIBOR”
shall mean, for any LIBOR Rate Loan for any Interest Period therefor, the rate
per annum appearing on Reuters Screen LIBOR01 Page (or any successor page)
as the London interbank offered rate for deposits in Dollars at approximately
11:00 A.M. (London time) two (2) Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period.  If for any reason such rate is not available,
then “LIBOR” shall mean the rate per annum at which, as determined by the
Administrative Agent in accordance with its customary practices, Dollars in an
amount comparable to the Loans then requested are being offered to leading
banks at approximately 11:00 A.M. London time, two (2) Business Days
prior to the commencement of the applicable Interest Period for settlement in
immediately available funds by leading banks in the London interbank market for
a period equal to the Interest Period selected.


 


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


 


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


 


19

















 


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


 


“Lien” shall mean any
mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance,
lien (statutory or other), charge or other security interest or any preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, any conditional sale or other
title retention agreement, any financing or similar statement or notice filed
under the UCC or any other similar recording or notice statute, and any lease
having substantially the same effect as any of the foregoing).


 


“Loan” shall mean the
Revolving Loan and/or the Term Loan and/or Letters of Credit, as appropriate.


 


“LTV” shall mean with
respect to any Mortgage Asset, at the time of determination, the ratio of (a) the
outstanding principal amount of such Mortgage Asset at such time plus
the amount of any Allocated Underlying Debt for such Mortgage Asset at such
time to (b) the Asset Value of the related Underlying Mortgaged Property
at such time, as determined by the Administrative Agent in its discretion, as
such LTV may be adjusted by the Administrative Agent as the Administrative
Agent determines in its discretion; provided, however, that all
such calculations shall be made taking into account any senior or pari passu debt or other obligations including debt or other
obligations secured directly or indirectly by the applicable Underlying
Mortgaged Property.


 


“Management Contract”
shall mean that certain Amended and Restated Management Contract, dated as of April 19,
2006, between Parent and GKK Manager LLC, as amended by that certain First
Amendment to Amended and Restated Management Agreement dated as of September 18,
2007, as the same may be amended, restated, supplemented or otherwise modified
and in effect from time to time.


 


“Manager” shall have
the meaning assigned thereto in the Management Contract.


 


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


 


“Margin Stock” shall
have the meaning provided in Regulations U and X of the Board of Governors of
the Federal Reserve System.


 


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


 


20

















 


under
the Credit Documents or under a material portion of the Mortgage Loan Documents
or (f) any material portion of the Collateral (in the aggregate), or the
Asset Value (other than with respect to GKK CRE CDO Securities, excluding
changes in value of any Pledged Mortgage Asset solely due to the interest rate
spread or general interest rate fluctuations) or rating (if applicable) of a
material portion of the Collateral (in the aggregate).


 


“Material Contract”
shall mean (a) any contract or other agreement listed in Form 8-K
filed with the SEC, (b) any contract or other agreement, written or oral,
of the Credit Parties or any of their Subsidiaries involving monetary liability
of or to any such Person in an amount in excess of (x) for Gramercy Realty
Contracts, $10,000,000 per annum and (y) for Gramercy Finance Contracts,
$3,000,000 per annum, (c) any contract or other agreement, written or
oral, of the Credit Parties or any of their Subsidiaries representing (x) for
Gramercy Realty Contracts, at least $10,000,000 of the total Consolidated
revenues of the Credit Parties and their Subsidiaries for any fiscal year and (y) for
Gramercy Finance Contracts, at least $3,000,000 of the total Consolidated
revenues of the Credit Parties and their Subsidiaries for any fiscal year and (d) any
other contract, agreement, permit or license, written or oral, of the Credit
Parties or any of their Subsidiaries as to which the breach, nonperformance,
cancellation or failure to renew by any party thereto, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.


 


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


 


“Maturity
Date” shall mean the date that is two (2) years following the Closing
Date, as may be extended pursuant to Section 2.4.


 


“Maximum LTV” shall
mean with respect to any Mortgage Asset, at any time, the Maximum LTV for the
related Underlying Mortgaged Property (a) in the case of Term Loan
Collateral for the Term Loans, a percentage determined by the Administrative
Agent in its discretion between 40% and 90% and (b) in the case of
Revolving Loan Collateral for the Revolving Loans, the Maximum LTV determined
by the Administrative Agent in its discretion and set forth in the related
Confirmation; provided, however, that all such calculations shall
be made taking into account any senior or pari passu debt
or other obligations, including debt or other obligations secured directly or
indirectly by the applicable Underlying Mortgaged Property.


 


“Mezzanine Loan” shall
mean a performing mezzanine loan or a senior or pari passu
participation interest in a mezzanine loan secured directly or indirectly by
pledges of all the Capital Stock of a Mortgagor or that portion of the Capital
Stock that includes the general partnership, managing member or other
controlling interest (including, without limitation, the right to take title to
and sell the related Underlying Mortgaged Property) that owns income producing
commercial real estate which is a Property Type of Mortgaged Property and for
which the combined DSCR is not less than that set forth in the related Confirmation,
taking into account, in the calculation of the LTV and the DSCR of such
Mezzanine Loan, any senior or pari passu Indebtedness secured directly or indirectly by
the applicable Underlying Mortgaged Property, including, without limitation,
any preferred equity interest or mezzanine debt that is senior to, or pari passu with,
the related Mortgage Asset in right of payment or priority.


 


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


 


21

















 


“Minimum DSCR” shall
mean with respect to any Mortgage Asset, at any time, the Minimum DSCR for the
related Underlying Mortgaged Property (a) in the case of Term Loan
Collateral for the Term Loans, 1.0 and (b) in the case of Revolving Loan
Collateral for the Revolving Loans, the Minimum DSCR determined by the
Administrative Agent in its discretion and set forth in the related
Confirmation; provided, however, that all such calculations shall
be made taking into account any senior or pari passu debt or other
obligations, including debt or other obligations secured directly or indirectly
by the applicable Underlying Mortgaged Property.


 


“Moody’s” shall mean
Moody’s Investors Service, Inc. or, if Moody’s Investors Service, Inc.
is no longer issuing ratings, another nationally recognized rating agency
reasonably acceptable to the Administrative Agent.


 


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


 


“Mortgage Asset” shall
mean any (a) Senior Mortgage Loan, (b) Junior Interest, (c) Mezzanine
Loan, (d) Preferred Equity or (e) GKK CRE CDO Security (i) the
Underlying Mortgaged Property for which is included in the categories for
Property Types of Mortgaged Property, and (ii) which a Borrower has
delivered to the Administrative Agent, on behalf of the Lenders, or its
designee (including the Custodian) in connection with any Transaction
hereunder.  In no event shall “Mortgage
Asset” include any equity class issued by a CDO or CLO vehicle except for GKK
CRE CDO Securities.


 


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


 


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


 


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


 


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


 


“Mortgage Note” shall
mean the original executed promissory note or other evidence of the
Indebtedness of a Mortgagor with respect to a commercial mortgage loan.


 


“Mortgaged Property”
shall mean the real property (including all improvements, buildings, fixtures,
building equipment and personal property thereon and all additions, alterations
and replacements made at any time with respect to the foregoing) and all other
collateral securing repayment of the debt evidenced by a Mezzanine Note, a
Junior Interest Note or a Mortgage Note or, in the case of Preferred Equity,
all such real property owned, and all other collateral pledged in favor of the
holder of such Preferred Equity, by the issuer of such Preferred Equity.


 


“Multiemployer Plan”
shall mean a multiemployer plan defined as such in Section 3(37) of ERISA
to which contributions have been or are required to be made by a Borrower or any
ERISA Affiliate and that is covered by Title IV of ERISA.


 


“Net Cash Flow” shall
mean, with respect to any Underlying Mortgaged Property, for any period, the
underwritten net cash flow calculated in accordance with the Agent’s customary
criteria for commercial mortgage properties.


 


22
















 


“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.


 


“Non-Cash
Collateralized Letters of Credit” shall mean the Letters of Credit set
forth on Schedule 2.3(c).


 


“Non-Consolidation Opinion”
shall mean a “non-consolidation” opinion of outside counsel to each Lender in
form and substance satisfactory to the Administrative Agent.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


23

















 


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


 


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


 


“Off-Balance Sheet Obligations”
shall mean, with respect to any Person and its Consolidated Subsidiaries, as of
any date of determination thereof, without duplication and to the extent not
included as a liability on the consolidated balance sheet of such Person and
its Consolidated Subsidiaries in accordance with GAAP:  (a) the monetary obligations under any
financing lease or so-called “synthetic”, tax retention or off-balance sheet
lease transaction which, upon the application of any Insolvency Laws to such
Person or any of its Consolidated Subsidiaries, would be characterized as
indebtedness; (b) the monetary obligations under any sale and leaseback
transaction which does not create a liability on the consolidated balance sheet
of such Person and its Consolidated Subsidiaries; or (c) any other
monetary obligation arising with respect to any other transaction which (i) is
characterized as indebtedness for tax purposes but not for accounting purposes
in accordance with GAAP or (ii) is the functional equivalent of or takes
the place of borrowing but which does not constitute a liability on the
consolidated balance sheet of such Person and its Consolidated Subsidiaries (for
purposes of this clause (c), any transaction structured to provide tax
deductibility as interest expense of any dividend, coupon or other periodic
payment will be deemed to be the functional equivalent of a borrowing).  Notwithstanding the foregoing, nothing in the
definition of Off-Balance Sheet Obligations shall include any of the items set
forth in clause (i) of Contingent Liabilities.


 


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


 


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


 


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


 


“Other Taxes” shall
have the meaning set forth in Section 2.14.


 


“Parent” shall mean
Gramercy Capital Corp., a Maryland corporation.


 


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


 


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


 


“Paying Borrower” shall
have the meaning set forth in Section 10.28(b).


 


“Payment Date” shall
mean (a) the last Business Day of each calendar month and (b) as to
any Loan which is the subject of a mandatory prepayment required pursuant to Section 2.7(b),
the date on which such mandatory prepayment is due.


 


24

















 


“PBGC” shall mean the
Pension Benefit Guaranty Corporation established pursuant to Section 4002
of ERISA, or any successor thereto.


 


“Permitted Indebtedness” shall mean
Indebtedness permitted under Section 6.1


 


“Permitted
Investments” shall mean:


 


(a)                                  cash
and Cash Equivalents;


 


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


 


(c)                                  Derivatives
Contracts to the extent permitted hereunder; and


 


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


 


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


 


“Person” shall mean any
individual, limited liability company, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.


 


“Plan” shall mean, as
of any date of determination, any pension plan as defined in Section 3(2) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) any Borrower or a Subsidiary of the Borrower or an
ERISA Affiliate, and each such plan for the five year period immediately
following the latest date on which the Borrower, or a Subsidiary of the
Borrower or an ERISA Affiliate maintained, contributed to or had an obligation
to contribute to such plan.


 


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


 


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


 


“Pledgor” shall mean
Gramercy Capital Corp., GKK Capital LP, Gramercy Investment Trust and GKK
Trading Corp., together with their successors and permitted assigns.


 


25

















 


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


 


“Post-Term
Loan Maturity LOC” shall have the meaning set forth in Section 2.3(a)(iv).


 


“Preferred Dividends”
shall mean for any period and without duplication, all Restricted Payments paid
or accrued during such period on Preferred Securities issued by any Borrower or
any Subsidiary thereof.  Preferred
Dividends shall not include dividends or distributions paid or payable (a) solely
in Equity Interests (other than Mandatory Redeemable Stock) payable to holders
of such class of Equity Interests; (b) to any Borrower or any Subsidiary
thereof; or (c) constituting or resulting in the redemption of Preferred
Securities, other than scheduled redemptions not constituting balloon, bullet
or similar redemptions in full.


 


“Preferred Equity”
shall mean a performing current pay preferred equity position (with a put or
synthetic maturity date structure replicating a debt instrument) evidenced by a
stock share certificate or other similar ownership certificate representing the
entire equity ownership interest in entities that own income producing
commercial real estate for which the underwritten DSCR is not less than that
set forth in the related Confirmation, taking into account, in the calculation
of the LTV and the DSCR of such Preferred Equity, any senior or pari passu
Indebtedness secured directly or indirectly by the applicable Underlying
Mortgaged Property, including, without limitation, any preferred equity
interest or mezzanine debt that is senior to, or pari passu with, the related
Mortgage Asset in right of payment or priority.


 


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


 


“Prime
Rate” shall mean, at any time, the rate of interest per annum publicly
announced or otherwise identified from time to time by Wachovia at its
principal office in Charlotte, North Carolina as its prime rate.  Each change in the Prime Rate shall be
effective as of the opening of business on the day such change in the Prime
Rate occurs.  The parties hereto
acknowledge that the rate announced publicly by Wachovia as its Prime Rate is
an index or base rate and shall not necessarily be its lowest or best rate
charged to its customers or other banks.


 


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


 


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


 


“Property Type” shall
mean, with respect to a Mortgage Asset, such Mortgaged Property’s
classification as one of the following: (a) multifamily, (b) retail, (c) office,
(d) industrial, (e) hotel, (f) student housing, (g) medical
office product or (h) self-storage.


 


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


 


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


 


26

















 


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


 


“Rating Agencies” shall
mean each of Fitch, Moody’s or S&P, or their successors in interest, and such
nationally recognized statistical rating agencies as may be designated by a
Borrower to the Administrative Agent, on behalf of the Lenders, from time to
time.


 


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


 


“Regulations T, U and X”
shall mean Regulations T, U and X of the Board of Governors of the Federal
Reserve System (or any successor), as the same may be modified and supplemented
and in effect from time to time.


 


“Reimbursement
Obligation” shall mean the obligation of the Borrowers to reimburse the
Issuing Lender or the Administrative Agent, as the case may be, pursuant to Section 2.3
for amounts drawn under Letters of Credit.


 


“REIT” shall mean a “real
estate investment trust” as defined in Section 856 of the Code.


 


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


 


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


 


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


 


“REMIC”
shall mean a real estate mortgage investment conduit, within the meaning of Section 860D(a) of
the Code.


 


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


 


“Reportable Event”
shall mean any of the events set forth in Section 4043(c) of ERISA,
other than those events as to which the thirty day notice period is waived
under Sections .21, .22, .23, .26, .27 or .28 of PBGC Reg. § 4043.


 


“Repurchase Facility”
shall mean that certain facility evidenced by, among other agreements, the
Third Amended and Restated Master Repurchase Agreement, dated as of October 13,
2006, by and among Gramercy Warehouse Funding I LLC, GKK Trading Warehouse I
LLC and GKK 450 LEX LLC, as the sellers, Wachovia Bank, National Association,
as the agent, and Wachovia Capital 


 


27

















 


Markets,
LLC, as sole lead arranger, as such agreements are amended, modified, restated,
replaced, waived, substituted, supplemented or extended from time to time.


 


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


 


“Requirement of Law”
shall mean, as to any Person, the certificate of incorporation and by-laws or
other organizational or governing documents of such Person, and any law,
treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority (including, without limitation, those relating to
environmental standards and controls), in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject.


 


“Responsible Officer”
shall mean, as to any Person, the chief executive officer, the chief financial
officer, the chief accounting officer, the treasurer or the chief operating
officer of such Person.


 


“Restricted Payment”
shall mean (a) any dividend or other distribution, direct or indirect, on
account of any Equity Interest of any Borrower or any Subsidiary thereof now or
hereafter outstanding, except a dividend payable solely in Equity Interests of
identical class to the holders of that class; (b) any redemption,
conversion, exchange, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any Equity Interest of any
Borrower or any Subsidiary thereof now or hereafter outstanding; and (c) any
payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire any Equity Interests of any
Borrower or any Subsidiary thereof now or hereafter outstanding.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


28

















 


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


 


“S&P” shall mean
Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. or, if Standard & Poor’s Ratings Services is no
longer issuing ratings, another nationally recognized rating agency reasonably
acceptable to the Administrative Agent.


 


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


 


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


 


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


 


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


 


“Secured Parties” shall
mean the Administrative Agent, the Lenders, the issuers of each Letter of
Credit and any Affiliated Hedge Counterparty.


 


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


 


“Securities Account”
shall mean the securities account set forth on Schedule 1.1(d) established
in the name of the Borrowers into which all GKK CRE CDO Securities that are
Pledged Mortgage Assets and other Collateral related thereto shall be deposited
(except those GKK CRE CDO Securities that are certificated securities within
the meaning of Article 8 of the UCC), which Securities Account shall be
subject to the Account Control Agreement. 
Any Income on deposit or credited to the Securities Account shall be
transferred by the Administrative Agent from the Securities Account to the Collection
Account on or prior to each Payment Date.


 


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


 


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


 


“Security Documents”
shall mean the Security Agreement, the Account Control Agreement, the Custodial
Agreement, all Assignments, the Pledge Agreements and all other agreements, 


 


29

















 


documents
and instruments relating to, arising out of, or in any way connected with any
of the foregoing documents or granting to the Administrative Agent Liens or
security interests to secure, inter alia, the Obligations, whether now or
hereafter executed and/or filed, executed and delivered in connection with the
granting, attachment and perfection of the Administrative Agent’s security
interests and Liens arising thereunder, including, without limitation, UCC
financing statements, as such agreements or instruments are amended, restated,
modified or supplemented from time to time.


 


“Senior
Mortgage Loan” shall mean (a) a performing senior commercial or
multifamily fixed or floating rate mortgage loan, (b) an “A-Note” or (c) a
senior participation interest in the mortgage loans described in (a) and
(b), in each case secured by first priority liens on multifamily or commercial
properties for which the underwritten DSCR is not less than that set forth in
the related Confirmation as determined by the Administrative Agent after taking
into account any reserves and any other adjustments which Senior Mortgage Loan
includes, without limitation, (i) a Mortgage Note and related Mortgage,
and (ii) all right, title and interest of a Borrower in and to the
Mortgaged Property covered by such Mortgage. 
The Senior Mortgage Loan LTV and DSCR must take into account any senior
or pari passu
Indebtedness secured directly or indirectly by the applicable Underlying
Mortgaged Property, including, without limitation, any preferred equity
interest or mezzanine debt that is senior to, or pari passu with, the related
Mortgage Asset in right of payment or priority.


 


“Serviced
Assets” shall have the meaning set forth in Section 9.3.


 


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


 


“Servicer Default”
shall have the meaning set forth in Section 9.11.


 


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


 


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


 


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


 


“SLG” shall mean SL
Green Realty Corp., a Maryland corporation.


 


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


 


30

















 


“Stabilized DSCR” shall
mean, with respect to any Mortgage Asset, as of any date of determination, the
ratio of (x) Net Cash Flow (calculated using the projected Net Cash Flow
at the maturity of the Mortgage Asset, annualized) to (y) debt service due
using the applicable refinance constant for the related Underlying Mortgaged
Property then being used by the Lenders and their Affiliates and the projected
outstanding balance of such Mortgage Asset.


 


“Stock Exchange” shall
mean the New York Stock Exchange, NASDAQ or any other nationally recognized
stock exchanges.


 


“Sub-Limit”
shall mean the composition of GKK CRE CDO Securities pledged to Lenders in
connection with the Revolving Loans shall at all times meet the following
sublimit caps, and no Asset Value shall be ascribed to such GKK CRE CDO
Securities:


 


(a)                                  if
at any time when all such GKK CRE CDO Securities are rated AAA/Aaa by each of
S&P, Fitch and Moody’s, to the extent that the Asset Value ascribed to all
such GKK CRE CDO Securities would exceed, in the aggregate, $20,000,000; or


 


(b)                                 if
at any time when all such GKK CRE CDO Securities are not rated AAA/Aaa by each
of S&P, Fitch and Moody’s, (i) to the extent that the Asset Value
ascribed to all such GKK CRE CDO Securities would exceed, in the aggregate,
$17,500,000 and (ii) to the extent that the Asset Value ascribed to all
such GKK CRE CDO Securities rated below AA-/Aa3 by one or more Rating Agencies,
would exceed, in the aggregate, $10,000,000.


 


“Subsidiary” shall
mean, with respect to any Person, any corporation, partnership, limited
liability company or other entity (heretofore, now or hereafter established) of
which at least a majority of the securities or other ownership interests having
by the terms thereof ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions of such corporation,
partnership, limited liability company or other entity (without regard to the
occurrence of any contingency) is at the time directly or indirectly owned or
controlled by such Person or one or more Subsidiaries of such Person or by such
Person and one or more Subsidiaries of such Person, and shall include all
Persons the accounts of which are consolidated with those of such Person
pursuant to GAAP.


 


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


 


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


 


“Tax
Based Accounting Principles” shall mean, with respect to any Person, those
generally accepted tax accounting principles and practices which are recognized
as such in the United States for the purposes of complying with filing and
reporting obligations under the Code, and which are consistently applied for
all periods, after the date hereof, so as to properly and fairly reflect the
financial position of such Person.


 


“Taxes” shall have the
meaning assigned to such term in Section 2.14.


 


31

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Tranche” shall mean
the collective reference to LIBOR Rate Loans whose Interest Periods begin and
end on the same day.


 


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


 


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


 


“True Sale Opinion”
shall mean an Opinion of Counsel to the Borrowers opining that the subject
transaction constitutes a “true sale” in form and substance satisfactory to the
Administrative Agent.


 


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


 


32

















 


“UCC” shall mean the
Uniform Commercial Code as in effect on the date hereof in the State of New
York; provided that if by reason of mandatory provisions of law, the
perfection, the effect of perfection or nonperfection, or the priority of the
security interest in any Purchased Items is governed by the Uniform Commercial
Code as in effect in a jurisdiction other than New York, “Uniform Commercial
Code” shall mean the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such perfection,
effect of perfection or nonperfection, or priority.


 


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


 


“Underlying Mortgage Loan” shall mean, with
respect to any Junior Interest, Mezzanine Loan, Preferred Equity or GKK CRE CDO
Security, a mortgage loan secured by the related Underlying Mortgaged Property.


 


“Underlying
Mortgaged Property” shall mean, in the case of any:


 


(a)                                  Senior
Mortgage Loan, the Mortgaged Property securing such Senior Mortgage Loan;


 


(b)                                 Junior
Interest, the Mortgaged Property securing such Junior Interest (if the Junior
Interest is of the type described in clause (a) of the definition
thereof), or the Mortgaged Property securing the Mortgage Loan in which such
Junior Interest represents a junior participation (if the Junior Interest is of
the type described in clause (b) or (c) of the definition thereof);


 


(c)                                  Mezzanine
Loan, the Mortgaged Property that is owned directly or indirectly by the Person
the Capital Stock of which is pledged as collateral security for such Mezzanine
Loan;


 


(d)                                 Preferred
Equity, the income producing commercial real estate owned by the entity whose
equity ownership interest is represented by such Preferred Equity; and


 


(e)                                  GKK
CRE CDO Security, the Mortgaged Property securing the mortgage loans related to
such security.


 


“Underwriting
Package” shall mean, an internal document or credit committee
memorandum (redacted to protect confidential information) setting forth all
material information relating to a Mortgage Asset which is known by a Borrower,
prepared by a Borrower for its evaluation of such Mortgage Asset, to include at
a minimum the data required in the relevant Confirmation.  In addition,


 


(a)                                  with
respect to each Mortgage Asset which does not consist of GKK CRE CDO
Securities, the Underwriting Package shall include, to the extent applicable, (i) a
copy of the appraisal, (ii) the current occupancy report (including tenant
stack and rent roll), (iii) a minimum of two (2) years of property
level financial statements to the extent available, (iv) current financial
statement of the obligor, if any, on the commercial mortgage loan, if
available, (vi) the Mortgage Asset File, (vii) all third party
reports and agreed upon procedures, any letters and reports (whether drafts or
final forms), site inspection reports, market studies and any other diligence
conducted by a Borrower relating to such Mortgage Asset, (viii) aging of
all accounts receivable and accounts payable, (ix) copies of all
transaction documentation and (x) such further documents or information as
the Administrative Agent may request; and


 


33
















 


(b)                                 with
respect to each Mortgage Asset which consists of GKK CRE CDO Securities, the
Underwriting Package shall include, to the extent applicable, (i) the
related prospectus, (ii) all distribution date statements issued in
respect thereof during the immediately preceding 12 months (or, if less, since
the date such GKK CRE CDO Security was issued) and (iii) any other
information delivered to certificate holders in respect of such GKK CRE CDO
Security during the immediately preceding 6 months.


 


“Unreimbursed
Amount” shall have the meaning set forth in Section 2.3(c)(i).


 


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


 


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


 


Section 1.2                                   Other
Definitional Provisions.


 


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


 


Section 1.3                                   Accounting
Terms.


 


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


 


The
Borrowers shall deliver to the Administrative Agent and each Lender at the same
time as the delivery of any annual or quarterly financial statements given in
accordance with the provisions of Section 5.1, (a) a description in
reasonable detail of any material change in the application 


 


34

















 


of accounting principles employed in the preparation
of such financial statements from those applied in the most recently preceding
quarterly or annual financial statements as to which no objection shall have
been made in accordance with the provisions above and (b) a reasonable
estimate of the effect on the financial statements on account of such changes
in application.


 


Section 1.4                                   Time
References.


 


Unless
otherwise specified, all references herein to times of day shall be references
to Eastern time (daylight or standard, as applicable).  Reference to day or days without further
qualification means calendar days. 
Unless otherwise stated in this Agreement, in the computation of a
period of time from a specified date to a later specified date, the word “from”
means “from and including” and the words “to” and “until” each mean “to but
excluding”.


 


Section 1.5                                   Execution of
Documents.


 


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


 


Section 1.6                                   UCC Terms.


 


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


 


Section 1.7                                   References
to Discretion.


 


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


 


Section 1.8                                   References
to Payment.


 


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


ARTICLE
II



THE LOANS; AMOUNT AND TERMS


 


Section 2.1                                   Revolving
Loans.


 


35

















 


(a)                                  Revolving
Commitment.  During the Revolver
Commitment Period, subject to the terms and conditions hereof, each Revolving
Lender severally, but not jointly, agrees to make revolving credit loans in
Dollars (“Revolving Loans”)
to the Borrowers from time to time in an aggregate principal amount of up to ONE HUNDRED MILLION DOLLARS ($100,000,000) (as such
aggregate maximum amount may be reduced from time to time as provided in Section 2.6,
the “Revolving Committed Amount”)
for the purposes hereinafter set forth; provided, however, that (i) with
regard to each Revolving Lender individually, the sum of such Revolving Lender’s
Revolving Commitment Percentage of the aggregate principal amount of
outstanding Revolving Loans shall not exceed such Revolving Lender’s Revolving
Commitment and (ii) with regard to the Revolving Lenders collectively, the
sum of the aggregate principal amount of outstanding Revolving Loans shall not
exceed the Revolving Committed Amount then in effect.  No Revolving Loan shall be made by any
Revolving Lender if (i) such Revolving Loan and the Revolving Loan
Collateral therefor are not approved by the Administrative Agent in its
discretion, (ii) before or after giving effect to such Revolving Loan, the
Availability is or would be negative and/or (iii) the conditions to
Extensions of Credit in Section 4.2 are not satisfied.  Revolving Loans may be repaid and reborrowed
in accordance with the provisions hereof and will consist only of LIBOR Rate
Loans; provided, however, that if the LIBOR Rate is not
available, all LIBOR Rate Loans shall accrue interest at the Alternate Base
Rate until such time as the LIBOR Rate is available.  LIBOR Rate Loans shall be made by each
Revolving Lender at its LIBOR Lending Office.


 


(b)                                 Revolving
Loan Borrowings.


 


(i)                                     Notice
of Borrowing.


 


(1)                                  The
Borrowers may request Revolving Loans for the purpose of financing Eligible
Assets approved by the Administrative Agent in its discretion and for no other
purpose.  The Borrowers shall request a
Revolving Loan borrowing by delivering a written Notice of Borrowing (or
telephone notice promptly confirmed in writing by delivery of a written Notice
of Borrowing, which delivery may be by Electronic Transmission) to the
Administrative Agent along with a Compliance Certificate, Borrower Asset
Schedule and Underwriting Package for the related Eligible Asset(s) to be
financed not later than (A) twelve (12) Business Days for Non-Wachovia
Assets and (B) seven (7) Business Days for Wachovia Assets from the
delivery of the applicable Notice of Borrowing. 
Each such Notice of Borrowing shall be irrevocable and shall specify (A) that
a Revolving Loan is requested, (B) the date of the requested borrowing
(which shall be a Business Day), (C) the aggregate principal amount to be
borrowed, (D) the applicable Borrower and the Eligible Asset to be
financed and (E) a calculation of the Availability.


 


(2)                                  The
Administrative Agent shall notify the applicable Borrower in writing of the
Administrative Agent’s tentative approval (and the proposed Allocated Revolving
Loan Amount for each Eligible Asset) or final disapproval of each proposed
Eligible Asset within, (i) in the case of Non–Wachovia Assets, ten (10) Business
Days (or such greater time as the Administrative Agent determines in its
discretion for multiple assets or assets with multiple Mortgaged Properties)
and, (ii) in the case of Wachovia Assets, five (5) Business Days (or
such greater time as the Administrative Agent determines in its discretion for
multiple assets or assets with multiple Mortgaged Properties) after its receipt
of the Notice of Borrowing, the Borrower Asset Schedule, the Compliance
Certificate, the complete Underwriting Package and any supplemental requests
(requested orally or in writing) relating to such proposed Eligible Asset.  Unless the Administrative Agent notifies the
Borrowers in writing of the Administrative Agent’s approval of such proposed
Eligible Asset within the applicable period, the Administrative Agent shall be 


 


36

















 


deemed not to have
approved such proposed Eligible Asset. 
The Administrative Agent in its discretion may waive, shorten or
increase any of the applicable time periods for the review of proposed Eligible
Assets or the delivery of documents.


 


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


 


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


 


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


 


(6)                                  Pursuant to the Custodial Agreement, the
Custodian shall deliver to the Administrative Agent and the applicable Borrower
by 11:00 a.m. on the Borrowing Date 


 


37

















 


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


 


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


 


(ii)                                  [Reserved].


 


(iii)                               Advances.  Each Revolving Lender will make its Revolving
Commitment Percentage of each Revolving Loan borrowing available to the
Administrative Agent for the account of the applicable Borrower at the office
of the Administrative Agent specified in Section 10.2, or at such other
office as the Administrative Agent may designate in writing, by 1:00 p.m.
on the Borrowing Date, in Dollars and in funds immediately available to the
Administrative Agent.  Such borrowing
will then be made available to the applicable Borrower by 4:00 p.m. on the
Borrowing Date by the Administrative Agent by crediting the account of the
applicable Borrower on the books of such office (or such other account that the
Borrowers may designate in writing to the Administrative Agent) with the
aggregate of the amounts made available to the Administrative Agent by the
Revolving Lenders and in like funds as received by the Administrative Agent.


 


(c)                                  Repayment.  Subject to the terms of this Agreement,
Revolving Loans may be borrowed, repaid and reborrowed during the Revolver
Commitment Period.  All outstanding
amounts under the Revolving Loans shall be due and payable in full and all
related Interest Rate Protection Agreements shall be terminated and all amounts
due thereunder shall be paid in full on the Maturity Date, 


 


38

















 


unless accelerated
sooner pursuant to Section 7.2.  The
Borrowers shall have the right to repay Revolving Loans in whole or in part
from time to time in accordance with the terms and restrictions set forth in Section 2.7;
provided, however; that any related Interest Rate Protection
Agreements shall be terminated in whole or in part, as applicable, and any
amounts due thereunder paid in full. 
Such repayment will be applied to the outstanding Revolving Loans and
Revolving Loan Collateral in accordance with Section 2.10(a)(ii); provided,
however, that a repayment in full of a specific Revolving Loan will be
applied to the Revolving Loan Collateral securing such Loan.


 


(d)                                 Interest.  Subject to the provisions of Section 2.8,
Revolving Loans shall bear interest at a per annum rate equal to the sum of the
LIBOR Rate plus the Applicable Percentage.  Interest on Revolving Loans shall be payable
in arrears on each Payment Date.


 


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


 


(f)                                    Confirmations.  Notwithstanding anything to the contrary in
this Section 2.1 and notwithstanding any oral or verbal approval of an
Extension of Credit by the Administrative Agent, no Extension of Credit shall
be deemed approved until a Confirmation or revised Confirmation, as applicable,
has been executed by the Administrative Agent. 
Each pledge of a Mortgage Asset, regardless of whether a Loan is made to
the Borrowers in connection therewith, shall be evidenced by a Confirmation.


 


Section 2.2                                   Term Loan.


 


(a)                                  Term
Loan.  Subject to the terms and
conditions hereof (including, without limitation, Sections 4.1 and 4.2 of this
Agreement) and in reliance upon the representations and warranties set forth
herein, each Term Loan Lender severally, but not jointly, agrees to make
available to the Borrowers (through the Administrative Agent) (i) on the
Closing Date such Term Loan Lender’s Term Loan Commitment Percentage of a term
loan in Dollars (the “Initial Term
Loan”) in the aggregate principal amount of SEVENTY-EIGHT MILLION NINE HUNDRED ELEVEN THOUSAND ONE HUNDRED
SEVENTY-NINE DOLLARS AND NINETY-ONE CENTS ($78,911,179.91) and (ii) from
time to time following the Closing Date such Term Loan Lender’s Term Loan
Commitment Percentage of a term loan in Dollars (each such term loan, a “Delayed
Draw Term Loan”, and collectively, the “Delayed Draw Term Loans”),
in the case of each such term loan in an amount equal to the amount drawn on
any Non-Cash Collateralized Letter of Credit pursuant to Section 2.3(c)(iii);
provided that, the aggregate amount of the Initial Term Loan and the
initial amounts of all Delayed Draw Term Loans (the Delayed Draw Term Loan and
the Initial Term Loan, the “Term Loan”), shall not exceed an amount
equal to ONE HUNDRED FIFTEEN MILLION SIX HUNDRED EIGHTY
THOUSAND TWO HUNDRED EIGHTY-NINE DOLLARS AND ONE CENT ($115,680,289.01)
(the “Term Loan Committed Amount”).  The Term Loan Collateral and the Allocated
Term Loan Amount for each item of Term Loan Collateral shall be evidenced by
Confirmations executed by the applicable Borrower and the Administrative
Agent.  Upon receipt by the
Administrative Agent of the proceeds of the Term Loan, such proceeds will then
be made available to the Borrowers by the Administrative Agent by crediting the
account of the Borrowers on the books of the office of the Administrative Agent
specified in Section 10.2, or at such other office as the Borrowers may
designate in writing, with the aggregate of such proceeds made available to the
Administrative Agent by the Term Loan Lenders and in like funds as received by
the Administrative Agent (or by crediting such other account(s) as
directed by the Borrowers).  Term Loans
must be repaid in accordance with the provisions hereof and will consist only
of 


 


39

















 


LIBOR Rate Loans; provided,
however, that if the LIBOR Rate is not available, all LIBOR Rate Loans
shall accrue interest at the Alternate Base Rate until such time as the LIBOR
Rate is available.  LIBOR Rate Loans
shall be made by each Term Loan Lender at its LIBOR Lending Office.


 


(b)                                 Repayment
of Term Loan.  All outstanding
amounts under the Term Loan shall be due and payable in full and all related
Interest Rate Protection Agreements shall be terminated and all amounts due
thereunder shall be paid in full on the Maturity Date unless accelerated sooner
pursuant to Section 7.2.  The
Borrowers shall have the right to repay Term Loans in whole or in part from
time to time in accordance with the terms and restrictions set forth in Section 2.7;
provided, however, that any related Interest Rate Protection
Agreements shall be terminated in whole or in part, as applicable, and any
amounts due thereunder paid in full. 
Such repayment will be applied to the outstanding Term Loans and Term
Loan Collateral in accordance with Section 2.10(a)(ii); provided, however,
that a repayment in full of a specific Term Loan will be applied to the Term
Loan Collateral securing such Loan. 
Amounts repaid or prepaid on the Term Loan may not be reborrowed.  Any repayment hereunder will be applied to
the outstanding Term Loans in accordance with Section 2.7(b)(v)(1)(A) until
the outstanding principal amount of the Term Loans has been paid in full.


 


(c)                                  Interest
on the Term Loan.  Subject to the
provisions of Section 2.8, the Term Loan shall bear interest at a per
annum rate equal to the sum of the LIBOR Rate plus the Applicable
Percentage.  Interest on the Term Loan
shall be payable in arrears on each Payment Date.


 


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


 


(e)                                  Confirmations.  Notwithstanding anything to the contrary in
this Section 2.2 and notwithstanding any oral or verbal approval of an
Extension of Credit by the Administrative Agent, no Extension of Credit shall
be deemed approved until a Confirmation or revised Confirmation, as applicable,
has been executed by the Administrative Agent.  
Each pledge of a Mortgage Asset, regardless of whether a Loan is made to
the Borrowers in connection therewith, shall be evidenced by a
Confirmation.  Each Confirmation,
together with this Agreement, shall constitute conclusive evidence of the terms
agreed between the Administrative Agent and the applicable Borrower with
respect to the Term Loan to which the Confirmation relates, and the applicable
Borrower’s acceptance of the related proceeds shall constitute the applicable
Borrower’s agreement to the terms of such Confirmation.  It is the intention of the parties that each
Confirmation shall not be separate from this Agreement but shall be made a part
of this Agreement.  To the extent of a
conflict between this Agreement and the related Confirmation, the Confirmation
shall control.


 


Section 2.3                                   Letters of
Credit.


 


(a)                                  L/C
Commitment.


 


(i)                                     Each
Letter of Credit set forth on Schedule 2.3(a) issued for the
account of the Borrowers prior to the Closing Date shall be deemed to be a
Letter of Credit issued under this Agreement. 
The issuers of such Letters of Credit shall be deemed to be “Issuing
Lenders” under this Agreement.


 


(ii)                                  Each
Letter of Credit shall expire no later than the Maturity Date; provided
that, any Letter of Credit may expire after the Maturity Date then in effect if
such Letters of Credit 


 


40

















 


either (A) have
been Cash Collateralized prior to the Closing Date and are on Schedule
2.3(b), which schedule shall include a description of the scheduled
amortization, if any, of each Letter of Credit described therein and
collectively, as of the Closing Date, have an aggregate face value of
$52,959,719.47 (such Letters of Credit set forth on Schedule 2.3(b), “Cash
Collateralized Letters of Credit”) or (B) are Cash Collateralized
prior to the Maturity Date in an amount equal to the undrawn face amount of
such Letter of Credit (any Letter of Credit which has been Cash Collateralized,
pursuant to this Section 2.3(a)(ii)(B) following the Closing Date shall be
considered a “Cash Collateralized Letter of Credit” and shall be added to Schedule
2.3(b) as such).


 


(iii)                               A
true, correct and complete list of all Non-Cash Collateralized Letters of
Credit issued prior to the Closing Date, including a description of the
scheduled amortization of each such Non-Cash Collateralized Letter of Credit,
is set forth on Schedule 2.3(c). 
As of the Closing Date, the aggregate face amount of all such Non-Cash
Collateralized Letters of Credit is $36,769,109.10.


 


(iv)                              The
obligations of the L/C Participants to purchase participations in the
obligations of the Issuing Lenders under outstanding Letters of Credit pursuant
to Section 2.3(b)(i) shall survive the Maturity Date with respect to
Letters of Credit which have been Cash Collateralized pursuant to Section 2.3(a)(ii) until
the earliest of (i) the expiration date for such Letters of Credit and (ii) the
date the entire amount available under such Letters of Credit are drawn and
such drawings are repaid; provided that, notwithstanding any other
provision of this Section 2.3(a)(iii), with respect to any Letter of Credit
having an expiration date following the Maturity Date (such a Letter of Credit,
a “Post-Term Loan Maturity LOC”), in no event shall the obligations of
the L/C Participants to purchase participations in the obligations of the
Issuing Lender under a Post-Term Loan Maturity LOC pursuant to Section 2.3(b)(i) expire
or terminate prior to the Business Day following the expiration, cancellation
or termination of the last remaining outstanding Post-Term Loan Maturity LOC.


 


(v)                                 Each
Letter of Credit shall be subject to the International Standby Practices
International Chamber of Commerce Publication No. 590 or Uniform Customs
and Practice for Documentary Credits No. 600, as applicable, and to the
extent not inconsistent with ISP 98 or UCP 600, the Laws of the State of New
York.


 


(vi)                              The
Issuing Lender shall not at any time be obligated to issue any Letter of Credit
hereunder if such issuance would conflict with, or cause the Issuing Lender or
any L/C Participant to exceed any limits imposed by, any applicable Requirement
of Law.


 


(b)                                 L/C
Participations.


 


(i)                                     The
Issuing Lender irrevocably agrees to grant and hereby grants to each L/C
Participant, and, to induce the Issuing Lender to issue Letters of Credit
hereunder, each L/C Participant irrevocably agrees to accept and purchase and
hereby accepts and purchases from the Issuing Lender, on the terms and
conditions hereinafter stated, for such L/C Participant’s own account and risk,
an undivided interest in the Issuing Lender’s obligations and rights under each
Letter of Credit outstanding hereunder and the amounts paid by the Issuing
Lender thereunder equal to such L/C Participant’s Term Loan Commitment
Percentage.  Each L/C Participant
unconditionally and irrevocably agrees with the Issuing Lender that, if an
amount is paid under any Letter of Credit for which the Issuing Lender is not
reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Issuing Lender upon demand at
the Issuing Lender’s address for notices specified herein an amount equal to
such 


 


41

















 


L/C Participant’s
Term Loan Commitment Percentage of the amount of such draft, or any part
thereof, which is not so reimbursed.


 


(ii)                                  Each
L/C Participant’s obligation to accept and purchase for such L/C Participant’s
own account and risk, an undivided interest in the Issuing Lender’s obligations
and rights under each Letter of Credit issued or provided by such Issuing
Lender and the amounts paid by such Issuing Lender thereunder equal to such L/C
Participant’s Term Loan Commitment Percentage shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any set-off, counterclaim, recoupment, defense or other
right which such L/C Participant may have against the Issuing Lender, the
Borrowers, or any other Person for any reason whatsoever, (ii) the
occurrence or continuance of an Event of Default, (iii) any adverse change
in the condition (financial or otherwise) of any Credit Party, (iv) any
breach of this Agreement by any Credit Party or any other Lender or (v) any
other circumstance, happening or event whatsoever, whether or not similar to
any of the foregoing.


 


(iii)                               If
any amount required to be paid by any L/C Participant to the Issuing Lender
pursuant to Section 2.3(b)(i) in respect of any unreimbursed portion
of any payment made by the Issuing Lender under any Letter of Credit is paid to
the Issuing Lender within three Business Days after the date such payment is
due (provided that such demand for payment is received prior to 2:00 p.m.,
New York City time), such L/C Participant shall pay to the Issuing Lender on
demand an amount equal to the product of (1) such amount, times, (2) the
daily average Federal Funds Effective Rate, as quoted by the Issuing Lender,
during the period from and including the date such payment is required to the
date on which such payment is immediately available to the Issuing Lender,
times, (3) a fraction the numerator of which is the number of days that
elapse during such period and the denominator of which is 360.  If any such amount required to be paid by any
L/C Participant pursuant to Section 2.3(b)(i) is not in fact made
available to the Issuing Lender by such L/C Participant within three Business
Days after the date such payment is due, the Issuing Lender shall be entitled
to recover from such L/C Participant, on demand, such amount with interest
thereon calculated from such due date at the rate per annum equal to the ABR
Default Rate.  A certificate of the
Issuing Lender submitted to any L/C Participant with respect to any amounts
owing under this Section shall be conclusive in the absence of manifest
error.


 


(iv)                              Whenever,
at any time after the Issuing Lender has made payment under any Letter of
Credit and has received from any L/C Participant its pro rata share of such
payment in accordance with Section 2.3(b)(i), the Issuing Lender receives
any payment related to such Letter of Credit (whether directly from the
Borrower or otherwise, including proceeds of Collateral applied thereto by the
Issuing Lender), or any payment of interest on account thereof, the Issuing
Lender will distribute to such L/C Participant its pro rata share thereof; provided,
however, that in the event that any such payment received by the Issuing
Lender shall be required to be returned by the Issuing Lender, such L/C
Participant shall return to the Issuing Lender the portion thereof previously
distributed by the Issuing Lender to it.


 


(c)                                  Reimbursement
Obligations of the Borrower.


 


(i)                                     Upon
receipt from the beneficiary of any Letter of Credit of any notice of a drawing
or demand for payment under such Letter of Credit the Issuing Lender shall
promptly notify the Administrative Agent and the Borrowers of the date and
amount thereof.  The responsibility of
the Issuing Lender to the Borrowers in connection with any draft presented for
payment under any Letter of Credit shall, in addition to any payment obligation
expressly provided for in such Letter of Credit, be limited to determining that
the documents (including 


 


42

















 


each draft)
delivered under such Letter of Credit in connection with such presentment are
in conformity with such Letter of Credit. 
Each Lender and the Borrowers agree that the responsibility of the
Issuing Lender to the Borrowers in connection with any amount presented for
payment under any Letter of Credit issued on behalf of the Borrowers shall, in
addition to any payment obligation expressly provided for in such Letter of
Credit, be limited to determining that the documents (including each draft)
delivered by or on behalf of the beneficiary under such Letter of Credit in
connection with such presentment are in conformity with such Letter of
Credit.  In addition, each Lender and the
Borrowers agree that, in paying any drawing or demand for payment under any
Letter of Credit, the Issuing Lender shall not have any responsibility to
inquire as to the validity or accuracy of any document presented in connection
with such drawing or demand for payment or the authority of the Person
executing or delivering the same. The Borrowers agree to reimburse the Issuing
Lender through the Administrative Agent on the third Business Day following the
receipt of such notice for the amount of (1) such amount so paid and (2) any
Taxes and any reasonable fees, charges or other costs or expenses incurred by
the Issuing Lender in connection therewith at the Administrative Agent’s
address for notices specified herein in Dollars and in immediately available
funds (such amount that has not been reimbursed by the Borrowers being, the “Unreimbursed
Amount”); provided that, for any Cash Collateralized Letter of
Credit, the Borrowers may request such reimbursement to be made with the Cash
Collateral posted with respect to such Cash Collateralized Letter of Credit.


 


(ii)                                  Interest
shall be payable on any and all Unreimbursed Amounts from the date such amounts
become payable (whether at stated maturity, by acceleration or otherwise) until
payment in full (either in cash or upon the making of a Term Loan) at the rate
per annum equal to the ABR Default Rate.


 


(iii)                               Each
drawing under any Letter of Credit that is not timely reimbursed by the
Borrowers pursuant to Section 2.3(d)(i) shall (unless an event of the
type described in Section 7.1(g) shall have occurred and be
continuing with respect to the Borrowers, in which case the procedures
specified in Section 2.3(b) for funding by L/C Participants shall
apply) constitute a request by the Borrowers to the Administrative Agent for a
borrowing pursuant to Section 2.2 of a Term Loan in the amount equal to
the Unreimbursed Amount of such Letter of Credit.  The Borrowing Date with respect to such
borrowing shall be the date of such drawing.


 


(d)                                 Obligations
Absolute.


 


(i)                                     The
Borrowers’ obligations under this Section 2.3 shall be absolute and
unconditional under any and all circumstances and irrespective of any set-off,
counterclaim or defense to payment which the Borrowers may have or have had
against the Issuing Lender, the Administrative Agent, any beneficiary of a
Letter of Credit or any other Person.


 


(ii)                                  The
Borrowers also agree with the Issuing Lender that the Issuing Lender shall not
be responsible for, and the Borrowers’ Reimbursement Obligations under Section 2.3(c)(i) shall
not be affected by, among other things, (i) the validity or genuineness of
documents or of any endorsements thereon, even though such documents shall in
fact prove to be invalid, insufficient, fraudulent or forged, (ii) any
dispute between or among the Borrowers and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred, (iii) any
claims whatsoever of the Borrowers against any beneficiary of such Letter of Credit
or any such transferee, (iv) any change in the time, manner and place of
payment of, or in any other term of all or any of the Obligations of the
Borrowers in respect of any Letter of Credit or any amendment or waiver or any
consent to departure from the terms of any Letter of Credit or any document
executed or delivered in connection with the issuance or payment thereof, or (v) 


 


43

















 


any payment by the
Issuing Lender of any Letter of Credit against presentation of any document or
certificate that does not strictly comply with the terms of such Letter of
Credit, or any payment made by the Issuing Lender under any Letter of Credit to
any Person purporting to be a trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, liquidator, receiver or other
representative of or successor to any beneficiary or any transferee of any
Letter of Credit, including arising in connection with any proceeding of the
type described in Section 7.1(g).


 


(iii)                               The
Issuing Lender shall not be liable for (i) any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit; (ii) any
error in translation or interpretation of technical terms; (iii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iv) the failure of any beneficiary
or any transferee of any Letter of Credit to comply fully with conditions
required in order to draw upon any Letter of Credit; or (v) any other
consequences arising from causes beyond the Issuing Lender’s or the Issuing
Lender’s correspondents’ control.


 


(iv)                              The
Borrowers agree that any action taken or omitted by the Issuing Lender under or
in connection with any Letter of Credit or the related drafts or documents, if
done in the absence of gross negligence or willful misconduct and in accordance
with the standards of care specified in the UCC, shall be binding on the
Borrowers and shall not result in any liability of the Issuing Lender to the
Borrowers.


 


(e)                                  Letter
of Credit Payments.  If any draft
shall be presented for payment under any Letter of Credit, the Issuing Lender
shall promptly notify the Borrowers of the date and amount thereof.  The responsibility of the Issuing Lender to
the Borrowers in connection with any draft presented for payment under any
Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are in conformity with such Letter of Credit.


 


(f)                                    Neither
the Lenders nor the Administrative Agent shall have any liability, obligation,
or responsibility whatsoever with respect to a Borrower’s use of the proceeds of
the Letters of Credit.


 


Section 2.4                                   Extension of
Maturity Date.


 


Not
less than sixty (60) days, but not more than ninety (90) days, prior to the
Maturity Date, the Borrowers may request in writing that the Lenders extend the
Maturity Date for an additional year (and the Administrative Agent shall
promptly give the Lenders notice of any such request).  Such request to extend the Maturity Date
shall be granted so long as (i) no Default or Event of Default has
occurred and is continuing, (ii) the Borrowers and the Guarantors are in
compliance with all financial covenants contained in the Credit Documents, (iii) no
Collateral is in a Collateral Default, (iv) the weighted daily Average
Advance Rate for the Term Loan and the Revolving Loan during the time period
from the Closing Date until the date of the determination thereof is not
greater than 60%, (v) no Deficit exists and (vi) the Borrowers pay
any extension fees due under the Fee and Pricing Letter.


 


Section 2.5                                   Fees.


 


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


 


44

















 


Section 2.6                                   Commitment
Reductions.


 


(a)                                  Voluntary
Reductions.  The Borrowers shall have
the right to terminate or permanently reduce the unused portion of the
Revolving Committed Amount at any time or from time to time upon not less than
thirty (30) Business Days’ prior written notice to the Administrative Agent
(which shall notify the Lenders thereof as soon as practicable) of each such
termination or reduction, which notice shall specify the effective date thereof
and the amount of any such reduction which shall be in a minimum amount of
$10,000,000 or a whole multiple of $1,000,000 in excess thereof and shall be
irrevocable and effective upon receipt by the Administrative Agent; provided
that no such reduction or termination shall be permitted if after giving effect
thereto, and to any prepayments of the Revolving Loans made on the effective
date thereof, (i) the sum of the aggregate principal amount of outstanding
Revolving Loans would exceed the applicable Revolving Committed Amount then in
effect or (ii) the applicable Availability would be negative.  In the event that the aggregate outstanding
principal balance of all Loans hereunder is, or is at any time requested by the
Borrowers to be, less than $100,000,000, the outstanding principal balance of
the Loans may be reduced to $0 at the election of the Administrative Agent upon
five (5) days advance written notice to the Borrowers, whereupon the Maturity
Date shall be deemed to have occurred and all amounts outstanding under the
this Agreement and the other Credit Documents shall be then due and payable.


 


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


 


Section 2.7                                   Prepayments.


 


(a)                                  Optional
Prepayments.  The Borrowers shall
have the right to prepay the Term Loans and the Revolving Loans in whole or in
part from time to time; provided, however, that any related
Interest Rate Protection Agreements shall be terminated in whole or in part, as
applicable, and any amounts due thereunder paid in full.  The Borrowers shall give three Business Days’
irrevocable notice of prepayment to the Administrative Agent (which shall
notify the Lenders and each Affiliated Hedge Counterparty thereof as soon as
practicable).  To the extent that the
Borrowers elect to prepay the Term Loans, amounts prepaid under this Section
shall be applied in accordance with Section 2.10(a)(ii).  To the extent the Borrowers elect to prepay
the Revolving Loans, amounts prepaid under this Section shall be applied in
accordance with Section 2.10(a)(ii). 
Within the foregoing parameters, prepayments under this Section shall be
applied to LIBOR Rate Loans in direct order of Interest Period maturities.  All prepayments under this Section shall be
subject to Section 2.13, but otherwise without premium or penalty.  Interest on the principal amount prepaid
shall be payable on the next occurring Payment Date that would have occurred
had such loan not been prepaid or, at the request of the Administrative Agent,
interest on the principal amount prepaid shall be payable on any date that a
prepayment is made hereunder through the date of prepayment.


 


(b)                                 Mandatory
Prepayments.


 


(i)                                     Availability
and Revolving Committed Amount.


 


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


 


45
















 


(B)                                Revolving
Loan Committed Amount.  If at any
time after the Closing Date, the sum of the aggregate principal amount of
outstanding Revolving Loans shall exceed the Revolving Committed Amount, the
Borrowers shall immediately upon notice from the Administrative Agent and, in
any event, within one (1) Business Day upon notice from the Administrative
Agent, prepay the Revolving Loans in an amount sufficient to eliminate such
excess; provided, that any related Interest Rate Protection Agreements
shall be terminated in whole or in part, as applicable, and any amounts due
thereunder paid in full.


 


(ii)                                  Reduction
of Asset Value Prepayment.   The
terms and provisions governing mandatory prepayments in connection with
reductions in the Asset Value of the Collateral are set forth in the Fee and
Pricing Letter and are hereby incorporated by reference.


 


(iii)                               Defaulted Collateral
Prepayment.  To the extent any (A) Term
Loan Collateral is in a Collateral Default, the Borrowers shall prepay the Term
Loans, within one (1) Business Day of such Collateral Default, in an
amount equal to Allocated Term Loan Amount for such item of defaulted
Collateral which shall be applied to such defaulted Collateral and (B) Revolving
Loan Collateral is in a Collateral Default, the Borrowers shall prepay the
outstanding Revolving Loans, within one (1) Business Day of such
Collateral Default, in an amount equal to Allocated Revolving Loan Amount for
such item of defaulted Collateral which shall be applied to such defaulted
Collateral; provided, further, that any related Interest Rate
Protection Agreements shall be terminated in whole or in part, as applicable,
and any amounts due thereunder paid in full.


 


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


 


(v)                                 Application
of Mandatory Prepayments.


 


(1)                                  Unless
otherwise set forth in this Section 2.7, all amounts required to be paid
pursuant to this Section shall be applied as follows: (A) first, to
the outstanding Term Loans and Term Loan Collateral, as the Administrative
Agent may elect in its discretion, in each case until the outstanding principal
amount of the Term Loans has been paid and full and (B) second, to the
outstanding Revolving Loans and Revolving Loan Collateral in such manner as the
Administrative Agent may elect in its discretion until the outstanding
principal amount of the Revolving Loans has been paid in full; provided
that in either case, any related Interest Rate Protection Agreement shall be
terminated in whole or in part, as applicable, and any amounts due thereunder paid
in full.  Within the parameters of the
applications set forth above, prepayments shall be applied to LIBOR Rate Loans
in direct order of Interest Period maturities.


 


(2)                                  All
amounts required to be paid pursuant to this Section 2.7 shall be
deposited in the Collection Account and shall be accompanied by any applicable
costs incurred pursuant to Section 2.13 (if any) and any interest on the
principal amount through the date of prepayment.


 


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


 


46

















 


the Borrowers or
the related Obligors, (i) the Asset Value of the related junior–most
Eligible Asset(s) shall be reduced to zero (0) and (ii) the
Administrative Agent shall not release its Lien on such Eligible Asset(s) (including
any Income related thereto) that are senior in priority to the related junior–most
Eligible Asset(s) that the Administrative Agent continues to have a Lien
on (regardless of whether the outstanding Allocated Revolving Loan Amount or
Allocated Term Loan Amount, as applicable, and related amounts due have been
paid in full) until the related junior–most Eligible Asset(s) is repaid or
prepaid and the outstanding Allocated Revolving Loan Amount or Allocated Term
Loan Amount, as applicable, for such junior-most Eligible Asset plus any
accrued and unpaid interest and any related breakage costs under Section 2.13
are paid in full; provided, however, if (A) the Loans with
respect to the senior position are repaid due to repayments or prepayments by
the related Obligor in accordance with the Underlying Mortgage Loan, (B) the
Administrative Agent has reevaluated the remaining related junior–most Eligible
Asset(s), including, without limitation, a reassessment and possible
redetermination of the Asset Value of such Eligible Asset, and, based on the
reevaluation, the Administrative Agent is satisfied in its discretion with
continuing to hold such junior–most Eligible Asset(s) as Collateral as is
or upon certain specified conditions, including, without limitation, assigning
a new Asset Value to such Eligible Asset, which approval shall be in writing to
be effective, and (C) there are no Events of Default or Defaults
outstanding (each to be evidenced by an Officer’s Certificate), then the
Administrative Agent will consent in writing to and effect the release of the
senior Eligible Asset from the Collateral and not reduce the Asset Value of the
related junior-most Eligible Asset to zero (0).


 


(d)                                 Hedging
Obligations Unaffected.  Subject to
the payment of any amounts due and payable, including any termination payments
owing in connection with any prepayment under this Section 2.7, any
repayment or prepayment made pursuant to this Section shall not affect the
Borrowers’ obligation to continue to make payments under any Interest Rate
Protection Agreement, which shall each remain in full force and effect
notwithstanding such repayment or prepayment, subject to the terms of such
Interest Rate Protection Agreements.


 


Section 2.8                                   Default Rate
and Payment Dates.


 


(a)                                  (i) If
all or a portion of the principal amount of any LIBOR Rate Loan shall not be
paid when due, such overdue amount shall bear interest at a rate per annum which
is equal to the Alternate Base Rate plus the sum of the Applicable
Percentage and 5.0% (the “ABR
Default Rate”) or (ii) if any interest payable on the
principal amount of any Loan or any fee or other amount payable hereunder shall
not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum which
is equal to the ABR Default Rate, in each case from the date of such
non-payment until such amount is paid in full (after as well as before
judgment).  Upon the occurrence, and
during the continuance, of any other Event of Default hereunder, at the option
of the Required Lenders, the principal of and, to the extent permitted by
Requirements of Law, interest on the Loans and any other amounts owing
hereunder or under the other Credit Documents shall bear interest, payable on
demand, at a per annum rate which is (A) in the case of principal, the
rate that would otherwise be applicable thereto plus 5.0% or (B) in
the case of interest, fees or other amounts, the ABR Default Rate (after as
well as before judgment).


 


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


 


Section 2.9                                   Computation
of Interest and Fees; Usury.


 


(a)                                  All
fees, interest and all other amounts payable hereunder shall be calculated on
the basis of a 360-day year for the actual days elapsed.  The Administrative Agent shall as soon as


 


47

















 


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


 


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


 


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


 


Section 2.10                            Pro Rata
Treatment and Payments.


 


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


 


(i)                                     Each
borrowing of Revolving Loans and any reduction of the Revolving Commitments
shall be made pro rata according to the respective Revolving Commitment
Percentages of the Revolving Lenders. 
Each payment on account of any fees pursuant to Section 2.5 shall
be made pro rata in accordance with the respective amounts due and owing.  Each payment (other than prepayments) by the
Borrowers on account of principal of and interest on the Revolving Loans and on
the Term Loan, as applicable, shall be applied to such Loans, as applicable, on
a pro rata basis in accordance with the terms of Section 2.7(a) hereof.  Each optional prepayment on account of
principal of the Loans shall be applied in accordance with 


 


48

















 


Section 2.7(a).  Each mandatory prepayment on account of
principal of the Loans shall be applied in accordance with Section 2.7(b).  Unless this Agreement otherwise expressly
provides for or requires a different manner for application of payments, all
payments are shared pari
passu and pro rata (based on the amounts of such Loans) between
Revolving Loans and Term Loans. All payments (including prepayments) to be made
by the Borrowers on account of principal, interest and fees shall be made without
defense, set-off or counterclaim and shall be made to the Administrative Agent
for the account of the Lenders at the Administrative Agent’s office specified
on Section 10.2 in Dollars and in immediately available funds not later
than 1:00 p.m. on the date when due. 
The Administrative Agent shall distribute such payments to the Lenders
entitled thereto promptly upon receipt in like funds as received.  If any payment on a Loan becomes due and
payable on a day other than a Business Day, such payment date shall be extended
to the next succeeding Business Day unless the result of such extension would
be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day.


 


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


 


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


 


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


 


THIRD, pari passu and pro rata (based on the
amounts owed to such Persons under this clause) to the Lenders for the payment
of accrued and unpaid interest on the Loans outstanding and any amounts (other
than breakage costs and termination payment amounts) then due and payable to an
Affiliated Hedge Counterparty under any Interest Rate Protection Agreement;


 


FOURTH,
without limiting
the Borrowers’ obligations to make mandatory prepayments under Section 2.7(b) in
a timely manner as provided in this Article II, pari passu and pro rata
(based on the amounts owed to such Persons under this clause) for the payment
of the amounts and Loans provided for in Section 2.7(b);


 


FIFTH,
pari passu and pro rata (based on the amounts owed to
such Persons under this clause) to the extent any Income or Cash Collateral
includes payments or prepayments of principal on or from any Collateral
(including, without limitation, 


 


49

















 


insurance or condemnation proceeds or recoveries from
any foreclosures not otherwise applied under Section 2.7(b) or clause
FOURTH above), such payments shall be
applied to reduce the Allocated Term Loan Amount and/or Allocated Revolving
Loan Amount for the related Term Loan Collateral or Revolving Loan Collateral,
as applicable, and, solely with respect to any Interest Rate Protection
Agreement with an Affiliated Hedge Counterparty, to any accrued and unpaid
breakage costs and termination payment amounts then due and payable to an
Affiliated Hedge Counterparty under such Interest Rate Protection Agreement;


 


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


 


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


 


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


 


provided,
however, that if a Default or Event of Default has occurred and is
continuing or a mandatory prepayment under Section 2.7 is due but the
applicable time period for payment of such amount has not expired, such amounts
under clause “EIGHTH” shall not be transferred
to the Borrowers but shall be applied (i) in the case of a mandatory
prepayment under Section 2.7, in reduction of such mandatory prepayments
when due and payable, with the balance being remitted to the Borrowers and (ii) in
the case of a Default or Event of Default, in reduction of the Obligations in
accordance with Section 2.10(b).


 


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


 


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


 


(b)                                 Allocation
of Payments After Exercise of Remedies. 
Notwithstanding any other provisions of this Agreement to the contrary,
after the exercise of remedies (other than the invocation of default interest
pursuant to Section 2.8) by the Administrative Agent or the Lenders
pursuant to Section 7.2 (or after the Commitments shall automatically
terminate and the Loans (with accrued interest thereon) and all other amounts
under the Credit Documents shall automatically become due and payable in
accordance with the terms of such Section), all amounts collected or received
by the Administrative Agent or any Lender on account of the Obligations or any
other amounts outstanding under any of the Credit Documents or in respect of
the Collateral and all amounts on deposit in the Collection Account and the
Securities Account shall be paid over or delivered to the Administrative Agent
and applied as follows (irrespective of whether the following costs, expenses,
fees, interest, premiums, scheduled periodic payments or Obligations are
allowed, permitted or recognized as a claim in any proceeding resulting from
the occurrence of a Bankruptcy Event):


 


50

















 


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


 


SECOND, pari passu and pro rata
(based on the amounts owed to such Persons under this clause) to the payment of
any fees owed to the Administrative Agent and any amounts due and payable to an
Affiliated Hedge Counterparty under any Interest Rate Protection Agreement;


 


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


 


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


 


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


 


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


 


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


 


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


 


Section 2.11                            Non-Receipt
of Funds by the Administrative Agent.


 


(a)                                  Funding
by Lenders; Presumption by Administrative Agent.  Unless the Administrative Agent shall have
received written notice from a Lender prior to the proposed date of any
Extension of Credit that such Lender will not make available to the
Administrative Agent such Lender’s share of such Extension of Credit, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with this Agreement and may, in reliance upon such
assumption, make available to the Borrowers a corresponding amount.  In such event, if a Lender has not in fact
made its share of the applicable Extension of Credit available to the Administrative
Agent, then the Administrative Agent shall forthwith advance such unpaid share
on behalf of the underlying Lender in question and, until such amount is paid
to the Administrative Agent by such Lender, be entitled to receive interest
from such Lender on such corresponding amount, for each day from and including
the date such amount is made available to the Borrowers to but excluding the
date of payment of such amount to the


 


51

















 


Administrative
Agent, at the greater of the Federal Funds Effective Rate and a rate determined
by the Administrative Agent in accordance with banking industry rules on
interbank compensation.  If such Lender
pays its share of the applicable Extension of Credit to the Administrative
Agent, then the amount so paid shall constitute such Lender’s Loan included in
such Extension of Credit.  Any payment by
the Borrowers shall be without prejudice to any claim the Borrowers may have
against a Lender that shall have failed to make such payment to the Administrative
Agent.


 


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


 


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


 


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


 


(d)                                 Obligations
of Lenders Several.  The obligations
of the Lenders hereunder to make Term Loans and Revolving Loans, and to make
payments pursuant to Section 10.5(c) are several and not joint.  The failure of any Lender to make any Loan,
to fund any such participation or to make any such payment under Sections 8.6
and 10.5(c) on any date required hereunder shall not relieve any other
Lender of its corresponding obligation to do so on such date, and no Lender
shall be responsible for the failure of any other Lender to so make its Loan,
to purchase its participation or to make its payment under Sections 8.6 and
10.5(c).


 


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


 


Section 2.12                            Inability to
Determine Interest Rate.


 


Notwithstanding
any other provision of this Agreement, if (a) the Administrative Agent
shall reasonably determine (which determination shall be conclusive and binding
absent manifest error) that, by reason of circumstances affecting the relevant
market, reasonable and adequate means do not exist for ascertaining the LIBOR
Rate for such Interest Period, or (b) the Required Lenders shall
reasonably determine (which determination shall be conclusive and binding
absent manifest error) that the LIBOR Rate does not adequately and fairly
reflect the cost to such Lenders of funding LIBOR Rate Loans, the
Administrative Agent shall promptly give telephone notice of such
determination, confirmed in writing, to the Borrowers and the Lenders.  Unless the Borrowers shall have notified the


 


52

















 


Administrative Agent upon receipt of such telephone
notice that it wishes to rescind or modify its request regarding such Loans,
any Loans that were requested to be made and all further Loans shall accrue
interest at the Alternate Base Rate until any such notice has been withdrawn by
the Administrative Agent.


 


Section 2.13                            Indemnity;
Eurocurrency Liabilities.


 


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


 


(b)                                 The
Borrowers shall pay to each Lender, as long as such Lender shall be required to
maintain reserves under Regulation D with respect to “Eurocurrency liabilities” within the meaning of
Regulation D, or under any similar or successor regulation with respect to
Eurocurrency liabilities or Eurocurrency funding, additional interest on the
unpaid principal amount of each LIBOR Loan equal to the actual costs of such
reserves allocated to such LIBOR Loan by such Lender (as determined by such
Lender in good faith, which determination shall be conclusive), which shall be
due and payable on each date on which interest is payable on such LIBOR Loan
or, if later demanded by the Administrative Agent, promptly on demand.


 


Section 2.14                            Taxes.


 


(a)                                  Any
and all payments by a Credit Party under or in respect of this Agreement or any
other Credit Documents to which a Credit Party is a party shall be made free
and clear of, and without deduction or withholding for or on account of, any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities (including penalties, interest and additions
to tax) with respect thereto, whether now or hereafter imposed, levied,
collected, withheld or assessed by any taxation authority or other Governmental
Authority (collectively, “Taxes”), unless required by law.  If a Credit Party shall be required under any
applicable Requirement of Law to deduct or withhold any Taxes from or in
respect of any sum payable under or in respect of this Agreement or any of the
other Credit Documents to the Lenders (including for purposes of Section 2.14
and this Section 2.17, any assignee, successor or participant), (i) Credit
Party shall make all such deductions and withholdings in respect of Taxes, (ii) Credit
Party shall pay the full amount deducted or withheld in respect of Taxes to the
relevant taxation authority or other Governmental Authority in accordance with
any applicable Requirement of Law, and (iii) the sum payable by Credit
Party shall be increased as may be necessary so that after the Credit Party has
made all required deductions and withholdings (including deductions and
withholdings applicable to additional amounts payable under this Section 2.14)
such Lenders receive an amount equal to the sum they would have received had no
such deductions or withholdings been made in respect of Non-Excluded
Taxes.  For purposes of this Agreement
the term “Non-Excluded Taxes” are Taxes other than, in the case of
Lenders, Taxes that are imposed on their overall net income (and franchise
taxes imposed in lieu thereof) by the jurisdiction under the laws of which such
Lenders are organized or of their applicable lending office, or any political
subdivision thereof, unless such Taxes are imposed as a result


 


53

















 


of such Lenders
having executed, delivered or performed their obligations or received payments
under, or enforced, this Agreement or any of the other Credit Documents (in
which case such Taxes will be treated as Non-Excluded Taxes).


 


(b)                                 In
addition, the Credit Party hereby agrees to pay any present or future stamp,
recording, documentary, excise, property or value-added taxes, or similar
taxes, charges or levies that arise from any payment made under or in respect
of this Agreement or any other Credit Document or from the execution, delivery
or registration of, any performance under, or otherwise with respect to, this
Agreement or any other Credit Document (collectively, “Other Taxes”).


 


(c)                                  The
Credit Party hereby agrees to indemnify Lenders for, and to hold them harmless
against, the full amount of Non-Excluded Taxes and Other Taxes, and the full
amount of Taxes of any kind imposed by any jurisdiction on amounts payable
under this Section 2.14 imposed on or paid by such Lenders and any
liability (including penalties, additions to tax, interest and expenses)
arising therefrom or with respect thereto. 
The indemnity by the Credit Party provided for in this Section 2.14(c) shall
apply and be made whether or not the Non-Excluded Taxes or Other Taxes for
which indemnification hereunder is sought have been correctly or legally
asserted.  Amounts payable by the Credit
Party under the indemnity set forth in this Section 2.14(c) shall be
paid within ten (10) days from the date on which Lenders make written
demand therefor.


 


(d)                                 Within
thirty (30) days after the date of any payment of Taxes, the Credit Party (or
any Person making such payment on behalf of the Credit Party) shall furnish to
Lenders for their own account a certified copy of the original official receipt
evidencing payment thereof.


 


(e)                                  For
purposes of this Section 2.14(e), the terms “United States” and “United
States person” shall have the meanings specified in Section 7701 of
the Internal Revenue Code.  Each Lender
(including for avoidance of doubt any assignee, successor or participant) that
either (i) is not incorporated under the laws of the United States, any
State thereof, or the District of Columbia or (ii) whose name does not
include “Incorporated,” “Inc.,” “Corporation,” “Corp.,” “P.C.,” “N.A.,” “National
Association,” “insurance company,” or “assurance company” (a “Non-Exempt
Lenders”) shall deliver or cause to be delivered to Credit Party the
following properly completed and duly executed documents:


 


(i)                                     in
the case of a Non-Exempt Lender that is not a United States person or is a
foreign disregarded entity for U.S. federal income tax purposes that is
entitled to provide such form, a complete and executed (x) U.S. Internal
Revenue Form W-8BEN with Part II completed in which the Lender claims
the benefits of a tax treaty with the United States providing for a zero or reduced
rate of withholding (or any successor forms thereto), including all appropriate
attachments or (y) a U.S. Internal Revenue Service Form W-8ECI (or
any successor forms thereto); or


 


(ii)                                  (ii) in
the case of a Non-Exempt Lender that is an individual, (x) a complete and
executed U.S. Internal Revenue Service Form W-8BEN (or any successor forms
thereto) and a certificate substantially in the form of Exhibit 2.15 (a “Section 2.14
Certificate”) or (y) a complete and executed U.S. Internal Revenue
Service Form W-9 (or any successor forms thereto); or


 


(iii)                               in the case of a
Non-Exempt Lender that is organized under the laws of the United States, any
State thereof, or the District of Columbia, a complete and executed U.S.
Internal Revenue Service Form W-9 (or any successor forms thereto); or


 


54
















 


(iv)             in
the case of a Non-Exempt Lender that (x) is not organized under the laws
of the United States, any State thereof, or the District of Columbia and (y) is
treated as a corporation for U.S. federal income tax purposes, a complete and
executed U.S. Internal Revenue Service Form W-8BEN (or any successor forms
thereto) and a Section 2.14 Certificate; or


 


(v)                in
the case of a Non-Exempt Lender that (A) is treated as a partnership or
other non-corporate entity, and (B) is not organized under the laws of the
United States, any State thereof, or the District of Columbia, (x)(i) a
complete and executed U.S. Internal Revenue Service Form W-8IMY (or any
successor forms thereto) (including all required documents and attachments) and
(ii) a Section 2.14 Certificate, and (y) without duplication,
with respect to each of its beneficial owners and the beneficial owners of such
beneficial owners looking through chains of owners to individuals or entities
that are treated as corporations for U.S. federal income tax purposes (all such
owners, “beneficial owners”), the documents that would be provided by
each such beneficial owner pursuant to this Section 2.14(e) if each
such beneficial owner were a Lender, provided, however, that no
such documents will be required with respect to a beneficial owner to the
extent that the actual Lender is determined to be in compliance with the
requirements for certification on behalf of its beneficial owner as may be
provided in applicable U.S. Treasury regulations, or the requirements of this
clause (v) are otherwise determined to be unnecessary, as determined by a
Credit Party in their sole discretion; provided, however, that
Lenders shall be provided an opportunity to establish such compliance as
reasonable; or


 


(vi)             in
the case of a Non-Exempt Lender that is disregarded for U.S. federal income tax
purposes, the document that would be provided by its beneficial owner pursuant
to this Section 2.14(e) if such beneficial owner were the Lender; or


 


(vii)          in the case of a Non-Exempt Lender that (A) is
not a United States person and (B) is acting in the capacity as an “intermediary”
(as defined in U.S. Treasury Regulations), (x)(i) a U.S. Internal Revenue
Service Form W-8IMY (or any successor form thereto) (including all
required documents and attachments) and (ii) a Section 2.14
Certificate, and (y) if the intermediary is a “non-qualified intermediary”
(as defined in U.S. Treasury Regulations), from each person upon whose behalf
the “non-qualified intermediary” is acting the documents that would be provided
by each such person pursuant to this Section 2.14(e) if each such
person were a Lender.


 


If the
Lender provides a form pursuant to clause (i)(x) and the form provided by
the Lender at the time such Lender first becomes a party to this Agreement or,
with respect to a grant of a participation, the effective date thereof,
indicate a United States interest withholding tax rate in excess of zero,
withholding tax at such rate shall be treated as Taxes other than “Non-Excluded
Taxes” (“Excluded Taxes”) and shall not qualify as Non-Excluded Taxes
unless and until such Lender provides the appropriate form certifying that a
lesser rate applies, whereupon withholding tax at such lesser rate shall be
considered Excluded Taxes solely for the periods governed by such form.  If, however, on the date a Person becomes an
assignee, successor or participant to this Agreement, the Lender transferor was
entitled to indemnification or additional amounts under this Section 2.14,
then the Lender assignee, successor or participant shall be entitled to
indemnification or additional amounts to the extent (and only to the extent),
that the Lender transferor was entitled to such indemnification or additional
amounts for Non-Excluded Taxes, and the Lender assignee, successor or
participant shall be entitled to additional indemnification or additional
amounts for any other or additional Non-Excluded Taxes.


 


(f)                                    For
any period with respect to which Lenders have failed to provide the Credit
Party with the appropriate form, certificate or other document described in Section 2.14(e),
if required, (other than (i) if such failure is due to a change in any
Requirement of Law, or in the interpretation or 


 


55

















 


application
thereof, occurring after the date on which a form, certificate or other
document originally was required to be provided by such Lenders or (ii) if
it is legally inadvisable or otherwise commercially disadvantageous for such
Lenders to deliver such form, certificate or other document), such Lenders
shall not be entitled to indemnification or additional amounts under Section 2.14(a) or
(c) with respect to Non-Excluded Taxes imposed by the United States by
reason of such failure; provided, however, that should Lenders
become subject to Non-Excluded Taxes because of their failure to deliver a
form, certificate or other document required hereunder, Credit Party shall take
such steps as such Lenders shall reasonably request, to assist such Lenders in
recovering such Non-Excluded Taxes.


 


Without
prejudice to the survival of any other agreement of the Credit Party hereunder,
the agreements and obligations of the Credit Party contained in this Section 2.14
shall survive the termination of this Agreement and the other Credit documents.  Nothing contained in Section 2.17 or
this Section 2.14 shall require the Lenders to make available any of their
tax returns or any other information that they deem to be confidential or
proprietary.


 


Section 2.15                            Illegality.


 


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


 


Section 2.16                            Obligations
Absolute.


 


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


 


56

















 


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


 


Section 2.17                            Requirements
of Law.


 


(a)                                  If
any Requirement of Law or any change in the interpretation or application
thereof or compliance by the Lenders with any request or directive (whether or
not having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:


 


(i)                                     shall
subject the Lenders to any Tax or increased Tax of any kind whatsoever with
respect to this Agreement, the Loans or the Letters of Credit or change the
basis of taxation of payments to the Lenders in respect thereof;


 


(ii)                                  shall
impose, modify or hold applicable any reserve, special deposit, compulsory loan
or similar requirement against assets held by, deposits or other liabilities in
or for the account of, advances, or other extensions of credit by, or any other
acquisition of funds by, any office of the Lenders; or


 


(iii)                               shall impose on the
Lenders any other condition;


 


and
the result of any of the foregoing is to increase the cost to the Lenders, by
an amount which the Lenders deems to be material, of entering, continuing or
maintaining any Loan or Letters of Credit or to reduce any amount due or owing
hereunder in respect thereof, then, in any such case, the Borrowers shall
promptly pay the Lenders such additional amount or amounts as calculated by the
Lenders in good faith as will compensate the Lenders for such increased cost or
reduced amount receivable.


 


(b)                                 If
the Lenders shall have determined (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto) that the
adoption of or any change in any Requirement of Law regarding capital adequacy
or in the interpretation or application thereof or compliance by the Lenders or
any corporation controlling the Lenders with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on the Lenders’ or such corporation’s capital as a
consequence of its obligations hereunder to a level below that which the
Lenders or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration the Lenders’ or such corporation’s
policies with respect to capital adequacy) by an amount deemed by the Lenders
to be material, then from time to time, the Borrowers shall promptly pay to the
Lenders such additional amount or amounts as will compensate the Lenders for
such reduction.


 


(c)                                  If
the Lenders become entitled to claim any additional amounts pursuant to this
Section, they shall promptly notify the Borrowers of the event by reason of
which they have become so entitled; provided, however, that any
failure or delay on the part of any Lender to demand compensation pursuant to
this Section shall not constitute a waiver of such Lender’s right to
demand such compensation 


 


57

















 


at any future
time.  A certificate as to any additional
amounts payable pursuant to this Section submitted by the Lenders to the
Borrowers shall be conclusive in the absence of manifest error.  The Borrowers shall pay the Lenders the
amount shown as due on any such certificate promptly and in any event within
ten (10) days after receipt thereof.


 


The
provisions of this Section 2.17 shall survive the termination of this
Agreement and the payment in full of the Obligations.


 


ARTICLE III


 


REPRESENTATIONS AND WARRANTIES


 


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


 


Section 3.1                                   Financial
Condition.


 


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


 


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


 


58

















 


to provide
information in its projections if the disclosure of such information would
violate any Requirement of Law relating to insider trading.


 


Section 3.2                                   No Material
Adverse Effect; Internal Control Event.


 


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


 


Section 3.3                                   Corporate
Existence; Compliance with Law.


 


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


 


Section 3.4                                   Corporate
Power; Authorization; Enforceable Obligations.


 


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


 


Section 3.5                                   No Legal Bar;
No Default.


 


The
execution, delivery and performance by each Credit Party of the Credit
Documents to which such Credit Party is a party, the borrowing of Loans
hereunder, the pledge of Collateral under the Credit Documents and the use of
the proceeds of the Loans (a) will not violate any Requirement of Law, (b) will
not conflict with, result in a breach of or constitute a default under the
Authority Documents of the Credit Parties or any Contractual Obligation,
Indebtedness or Guarantee Obligations of any Credit Party (except those as to
which waivers or consents were obtained) or any material approval or material
consent from any Governmental Authority relating to such Credit Party, and (c) will
not result in, or 


 


59

















 


require, the creation or imposition of any Lien on any
Credit Party’s Properties or revenues pursuant to any Requirement of Law,
Contractual Obligations, Indebtedness or Guarantee Obligations other than the
Permitted Liens.  No Credit Party is in
default under or with respect to any of its Contractual Obligation,
Indebtedness or Guarantee Obligations in any material respect.  No Default or Event of Default has occurred
and is continuing.


 


Section 3.6                                   No Material
Litigation.


 


Except
as disclosed on Schedule 3.6, no litigation, investigation, claim,
criminal prosecution, civil investigative demand, imposition of criminal or
civil fines and penalties, or any other proceeding of or before any arbitrator
or Governmental Authority is pending or, to the best knowledge of the Credit
Parties, threatened by or against any Credit Party or any of its Subsidiaries
or Affiliates or against any of its or their respective Properties or revenues (a) with
respect to the Credit Documents, any Extension of Credit, any Collateral or any
of the transactions contemplated hereby, or (b) which could reasonably be
expected to have a Material Adverse Effect. 
No permanent injunction, temporary restraining order or similar decree
has been issued against any Credit Party or any of its Subsidiaries or
Affiliates which could reasonably be expected to have a Material Adverse
Effect.


 


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


 


No
Credit Party is an “investment company”, or a company “controlled” by an “investment
company”, within the meaning of the 40 Act. 
No Credit Party is a “holding company” or a “subsidiary company” of a “holding
company” or an “affiliate” of either a “holding company” or a “subsidiary
company” within the meaning of the Public Utility Holding Company Act of 1935,
as amended.  No Credit Party is subject
to regulation under the Federal Power Act, the Interstate Commerce Act, or any
federal or state statute or regulation limiting its ability to incur the
Obligations.


 


Section 3.8                                   Margin
Regulations.


 


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


 


Section 3.9                                   ERISA.


 


No
Credit Party is an “employee benefit plan,” as defined in Section 3(3) of
ERISA, subject to Title I of ERISA, and none of the assets of any Borrower or
Guarantor constitutes or will constitute “plan assets” of one or more such
plans within the meaning of 29 C.F.R. Section 2510.3-101.  In addition, (a) no Credit Party is a “governmental
plan” within the meaning of Section 3(32) of ERISA and (b) transactions
by or with any Credit Party are not subject to state statutes regulating
investment of, and fiduciary obligations with respect to, governmental plans
similar to the provisions of Section 406 of 


 


60

















 


ERISA or Section 4975 of the Internal Revenue
Code currently in effect, which prohibit or otherwise restrict the transactions
contemplated by this Agreement.


 


Section 3.10                            Environmental
Matters.


 


Except
as could not reasonably be expected to have a Material Adverse Effect:


 


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


 


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


 


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


 


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


 


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


 


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


 


(g)                                 To
the best knowledge each Credit Party, each of the representations and
warranties set forth in the preceding clauses (a) through (f) is true
and correct with respect to each parcel of real property owned or operated by
such Credit Party.


 


61

















 


Section 3.11                            Use of
Proceeds.


 


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


 


Section 3.12                            Subsidiaries;
Joint Ventures; Partnerships.


 


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


 


Section 3.13                            Ownership.


 


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


 


Section 3.14                            Indebtedness.


 


Except
as otherwise permitted under Section 6.1, the Credit Parties (other than
the Guarantors and the Pledgors) and their Subsidiaries have no Indebtedness or
Guarantee Obligations.  To each such
party’s knowledge, no material defaults or events of default exist under the
Indebtedness and Guarantee Obligations permitted under Section 6.1.


 


Section 3.15                            Taxes.


 


Each
of the Credit Parties and its Subsidiaries has filed all required federal
income tax returns and all other material tax returns, domestic and foreign,
required to be filed by it and has paid all Taxes due (including, but not
limited to, mortgage recording Taxes) prior to the time that such Taxes could
give rise to a Lien, except for any such Taxes as are being contested in good
faith by appropriate proceedings and appropriate reserves therefor have been
established in accordance with GAAP. 
Each of the Credit Parties and its Subsidiaries has paid, or has
provided adequate reserves (in the good faith judgment of the management of the
applicable Credit Party) for the payment of, all federal, state and foreign
income Taxes applicable for all prior fiscal years and for the current fiscal
year to date.  There is no material
action, suit, proceeding, investigation, audit or claim now pending or, to the
knowledge of each Credit Party, threatened by any authority regarding any Taxes
relating to each of the Credit Parties and its Subsidiaries which is material
or not being contested in good faith.  No
Credit Party or Subsidiary thereof has entered into any agreement or waiver or
been requested to enter into any agreement or waiver extending any statute of
limitations relating to the payment or collection of Taxes, or is aware of any
circumstances that would cause the taxable years or other taxable periods of
such Credit Party or Subsidiary thereof not to be subject to the normally
applicable statute of limitations.


 


Section 3.16                            Solvency.


 


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


 


62

















 


Credit Parties have received or will receive
reasonably equivalent value for the Credit Documents and each Extension of
Credit.  As of the Closing Date, no
Credit Party is insolvent within the meaning of 11 U.S.C. Section 101(32)
or any successor provision thereof and the Loans entered into hereto (i) will
not cause the liabilities of any Credit Party to exceed the assets of such
Credit Party, (ii) will not result in any Credit Party having unreasonably
small capital, and (iii) will not result in debts that would be beyond any
Credit Party’s ability to pay as the same mature.  Each Borrower received reasonably equivalent
value in exchange for the Loans under this Agreement.  No petition in bankruptcy has been filed
against any Credit Party in the last ten (10) years, and no Credit Party
has in the last ten (10) years made an assignment for the benefit of
creditors or taken advantage of any Debtors Relief Laws.


 


Section 3.17                            Investments.


 


All
Investments of each of the Borrowers are Permitted Investments.


 


Section 3.18                            Location.


 


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


 


Section 3.19                            No
Burdensome Restrictions.


 


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


 


Section 3.20                            Brokers’
Fees.


 


None
of the Credit Parties or their Subsidiaries or Affiliates (i) has engaged
the services of, or otherwise dealt with, any broker, investment banker, or
other person, except for the Administrative Agent (or an Affiliate of the
Administrative Agent) in connection with this Agreement or any Credit Document
or any transaction related thereto and (ii) has any obligation to any
Person in respect of any finder’s, broker’s, investment banking or other
similar fee in connection with any of the transactions contemplated under the
Credit Documents other than the closing and other fees payable pursuant to this
Agreement and as set forth in the Fee and Pricing Letter.


 


Section 3.21                            Labor
Matters.


 


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


 


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Section 3.22                            Accuracy and
Completeness of Information.


 


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


 


Section 3.23                            Material
Contracts.


 


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


 


Section 3.24                            Insurance.


 


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


 


Section 3.25                            Security
Documents.


 


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


 


Section 3.26                            Anti-Terrorism
Laws.


 


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


 


64

















 


amended) or any enabling legislation or executive
order relating thereto or (c) the Patriot Act.  None of the Credit Parties nor any Subsidiary
or Affiliate of any Credit Party is a person (i) whose property or
interest in property is blocked pursuant to Section 1 of Executive Order
13224 of September 23, 2001 Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg.
49079 (2001)), (ii) who engages in any dealings or transactions prohibited
by Section 2 of such executive order or is otherwise associated with any
such person in any manner violative of Section 2 of such executive order
or (iii) on the current list of Specially Designated Nationals and Blocked
Persons or subject to the limitations or prohibitions under any other U.S.
Department of Treasury’s Office of Foreign Assets Control regulation or
executive order.


 


Section 3.27                            Compliance
with OFAC Rules and Regulations.


 


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


 


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


 


Section 3.28                            Compliance
with FCPA.


 


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


 


Section 3.29                            Consent;
Authorizations; Conflicts.


 


No
order, consent, approval, license, authorization or validation of, or filing,
recording or registration with, or exemption by, any Governmental Authority or
third party is required to authorize, or is required in connection with, (i) the
execution, delivery and performance of any Credit Document to which a Credit
Party is or will be a party, (ii) the legality, validity, binding effect
or enforceability of any such Credit Document against any Credit Party or (iii) the
consummation of the transactions contemplated by this Agreement (other than the
filing of certain financing statements in respect of certain security
interests).  Neither the execution and
delivery of this Agreement and the other Credit Documents by any Credit Party,
nor the consummation of any of the transactions by it herein or therein
contemplated, nor compliance with the terms and provisions hereof or with the
terms and provisions thereof, will contravene or conflict with any provision of
law, statute, or regulation to which any Credit Party is subject or any
material judgment, license, order, or permit applicable to any Credit Party or
contravene or conflict with or result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of the property or assets of
any Credit Party pursuant to the terms of any indenture, mortgage, deed of
trust, or 


 


65

















 


other agreement or instrument to which any Credit
Party is a party or by which any Credit Party may be bound, or to which Credit
Party may be subject, other than Liens created pursuant to the Credit
Documents.


 


Section 3.30                            Bulk Sales.


 


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


 


Section 3.31                            Income.


 


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


 


Section 3.32                            Full Payment.


 


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


 


Section 3.33                            Compliance
with Covenants.


 


The
Guarantors and their Consolidated Subsidiaries and the Borrowers are in full
compliance with the Financial Covenants and all Credit Parties are in full
compliance with all other applicable covenants, duties and agreements contained
in the Credit Documents.  No Credit Party
agrees, nor has cause to believe, that it cannot perform each and every
covenant contained in the Credit Documents to which it is a party.


 


Section 3.34                            Collateral
Agreements.


 


The
Credit Parties have delivered to the Administrative Agent or the Custodian all
documents and agreements related to, governing or affecting the Collateral,
including, without limitation, the Mortgage Loan Documents, the Servicing
Agreements and the Pooling and Servicing Agreements, and, to the best of the
Borrowers’ knowledge, each such Collateral Agreement is in full force and
effect in accordance with its terms and no material default or event of default
exists thereunder.


 


Section 3.35                            No Reliance.


 


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


 


Section 3.36                            Collateral.


 


(a)                                  There
are no outstanding rights, options, warrants or agreements for the purchase,
sale or issuance of the Collateral created by, through, or as a result of any
Credit Party’s actions or 


 


66

















 


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


 


(b)                                 As
of the date hereof, no Borrower has assigned, pledged, or otherwise conveyed or
encumbered any Mortgage Asset (or any interest therein) to any other Person,
and immediately prior to the pledge of such Mortgage Asset to the Lenders,
Borrower was the sole owner of such Mortgage Asset and had good and marketable
title thereto, free and clear of all Liens, in each case except for Liens to be
released simultaneously with the pledge to the Lenders hereunder.


 


(c)                                  The
provisions of the Security Agreement and the related Confirmation are effective
to create in favor of the Administrative Agent for the ratable benefit of the
Lenders a legal, valid and enforceable security interest in all right, title
and interest of Borrowers in, to and under the Collateral.


 


(d)                                 Upon
receipt by the Custodian of each Mezzanine Note or Junior Interest Note,
endorsed in blank by a duly authorized officer of Borrower, the Administrative
Agent shall have for the ratable benefit of the Lenders a valid and fully
perfected first priority security interest in all right, title and interest of
the Borrowers in the Collateral described therein.


 


(e)                                  Each
of the representations and warranties made in respect of the Mortgage Assets
pursuant to Schedule 1(c), as applicable, are true, complete and
correct.


 


(f)                                    Upon
the filing of financing statements on Form UCC-1 naming the Administrative
Agent, as agent for the Lenders, as “Secured Party”, each Borrower as “Debtor”
and describing the Collateral, in the jurisdictions and recording offices
listed on Schedule 3.18 attached hereto, the security interests granted
under the Security Agreement in that portion of the Collateral which can be
perfected by filing under the Uniform Commercial Code will constitute fully
perfected security interests under the Uniform Commercial Code in all right,
title and interest of Borrower in, to and under such Collateral.


 


(g)                                 Upon
execution and delivery of the Account Control Agreement, the Administrative
Agent shall have, for the ratable benefit of the Lenders, a valid and fully
perfected first priority security interest in, the “investment property” and
all “deposit accounts” (each as defined in the Uniform Commercial Code)
comprising Collateral.


 


Section 3.37                            REIT Status.


 


Parent
has not engaged in any material “prohibited transactions” as defined in Section 857(b)(6)(B)(iii) and
(C) of the Code.  Parent for its
current “tax year” (as defined in the Code) is entitled to a dividends paid
deduction under the requirements of Section 857 of the Code with respect
to any dividends paid by it with respect to each such year for which it claims
a deduction in its Form 1120-REIT filed with the United States Internal
Revenue Service for such year.”


 


Section 3.38                            Insider.


 


No
Credit Party is an “executive officer”, “director”, or “person who directly or
indirectly or acting through or in concert with one or more persons owns,
controls, or has the power to vote more than 10% of any class of voting
securities” (as those terms are defined in 12 U.S.C. § 375(b) or in 


 


67

















 


regulations promulgated pursuant thereto) of any
Lender, of a bank holding company of which the Administrative Agent or any
Lender is a Subsidiary, or of any Subsidiary, of a bank holding company of
which the Administrative Agent or any Lender is a Subsidiary, of any bank at
which the Administrative Agent or any Lender maintains a correspondent account
or of any Lender which maintains a correspondent account with the
Administrative Agent or any Lender.


 


Section 3.39                            No Defenses.


 


The
Credit Parties have no, and the Credit Parties hereby waive all, defenses,
rights of setoff, counterclaims, abatements, rights of rescission or other
claims, legal or equitable, available to any Credit Party against the
Administrative Agent and any applicable Lender with respect to this Agreement,
the Credit Documents, the Collateral or any other instrument, document and/or
agreement described herein or in the other Credit Documents, or with respect to
the obligation of the Credit Parties to repay the Obligations or any other
obligation under the Credit Documents.


 


Section 3.40                            Interest
Rate Protection Agreements.


 


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


 


Section 3.41                            Selection
Procedures.


 


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


 


Section 3.42                            Value Given.


 


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


 


Section 3.43                            Qualified
Transferees.


 


With
respect to each Mortgage Asset, each Borrower and the Administrative Agent are “qualified
transferees”, “qualified institutional lenders” or “qualified lenders” (however
such terms are phrased or denominated) under the terms of the applicable
Mortgage Loan Documents with respect to each party’s ability to hold and/or to
be a pledgee and/or transferee of each such Mortgage Asset.  The Assignments and the pledge of the
Mortgage Assets to the Administrative Agent, on behalf of the Lenders, do not
violate any provisions of the underlying Mortgage Loan Documents.


 


68
















 


Section 3.44                            Eligibility
of Mortgage Assets.


 


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


 


Section 3.45                            Ability to
Perform.


 


None
of the Credit Parties believes, or has any reason or cause to believe, that it
cannot perform each and every agreement, duty, obligation and covenant
contained in the Credit Documents applicable to it and to which it is a
party.  None of the Credit Parties is
subject to any restriction which would unduly burden its ability to timely and
fully perform each and every applicable covenant, duty, obligation and
agreement contained in the Credit Documents and/or Mortgage Loan
Documents.  None of the Credit Parties is
in default in any material respect in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement or instrument to which it is a party or by which such Credit Party is
bound.  No Credit Party has any material
financial obligation under any agreement or instrument to which such Credit
Party is a party or by which such party is otherwise bound, other than (a) obligations
incurred in the ordinary course of such Credit Party’s business and (b) obligations
under the Credit Documents.


 


Section 3.46                            Certain Tax
Matters.


 


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


 


Section 3.47                            Set-Off,
etc.


 


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


 


Section 3.48                            Acting as
Principal.


 


The
Borrowers will engage in such transactions as principals (or, if agreed in
writing in advance of any transaction by the Administrative Agent or a Lender
hereto, as agent for a disclosed principal).


 


Section 3.49                            Fiscal Year.


 


69

















 


The
fiscal year of each Credit Party is the calendar year.


 


Section 3.50                            Representations
and Warranties.


 


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


 


Section 3.51                            Purchase
Agreement.


 


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


 


ARTICLE IV



CONDITIONS PRECEDENT


 


Section 4.1                                   Conditions
to Closing Date.


 


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


 


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


 


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


 


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


 


70

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(vi)                              the
Account Control Agreement; and


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(n)                                 Closing
Officer’s Certificate.  The
Administrative Agent shall have received a Closing Officer’s Certificate
executed by a Responsible Officer of each of the Credit Parties as of the
Closing Date, substantially in the form of Exhibit 4.1(n) stating,
among other things, that (i) there does not exist any pending or ongoing,
action, suit, investigation, litigation or proceeding in any court or before
any other Governmental Authority (A) affecting this Agreement or the other
Credit Documents, that has not been settled, dismissed, vacated, discharged or
terminated prior to the Closing Date or (B) that purports to affect any
Credit Party or any of its Subsidiaries or Affiliates, or any transaction
contemplated by the Credit Documents, which action, suit, investigation,
litigation or proceeding could reasonably be expected to have a Material
Adverse Effect, that has not been settled, dismissed, vacated, discharged or
terminated prior to the Closing Date, (ii) immediately after giving effect
to this Agreement, the other Credit Documents, and all the Transactions
contemplated to occur on such date, (A) no Default or Event of Default
exists, (B) all representations and warranties contained herein and in the
other Credit


 


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Documents and in
any other document, agreement, statement, affirmation, certificate, notice,
report or financial or other statement delivered in connection therewith are
true and correct, and (C) the Guarantors and the Borrowers are in
compliance with each of the Financial Covenants, (iii) each of the other
conditions precedent in Section 4.1 and 4.2 have been satisfied, except to
the extent the satisfaction of any such condition is subject to the judgment or
discretion of the Administrative Agent or any Lender and (iv) each of the
Borrowers is Solvent before and after giving effect to the initial borrowings
under the Credit Documents.


 


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


 


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


 


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


 


(r)                                    Fees
and Expenses.  The Administrative
Agent, the Lenders and the Administrative Agent’s counsel shall have received
all fees and expenses, if any, owing pursuant to the Fee and Pricing Letter and
Section 2.5.


 


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


 


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


 


(u)                                 Interest
Rate Protection Agreements.  All
Interest Rate Protection Agreements required pursuant to Section 5.13 have
been duly executed and delivered by each of the parties thereto.


 


Section 4.2                                   Conditions
to All Extensions of Credit.


 


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


 


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


 


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immediately prior
to the requested Extension of Credit and also after giving effect thereto and
to the intended use thereof.


 


(b)                                 No
Default or Event of Default.  No
Default or Event of Default shall have occurred and be continuing on such date
or after giving effect to the Extension of Credit to be made on such date and
no event shall have occurred which has, or would reasonably be expected to
have, a Material Adverse Effect.


 


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


 


(d)                                 Additional
Conditions.  All requirements and
conditions set forth in Sections 2.1, 2.2 and 2.3 or other applicable Sections
of this Agreement shall have been satisfied.


 


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


 


(f)                                    Confirmation.  The Borrowers shall have delivered a
Confirmation, via Electronic Transmission, in accordance with the procedures
set forth in Sections 2.1 and 2.2, and the Administrative Agent shall have
determined that the Mortgage Asset described in such Confirmation is an
Eligible Asset, shall have approved in writing in its discretion the pledge of
the related Eligible Asset and the related Loan, if applicable (which approvals
shall be evidenced by the Administrative Agent’s execution of the related
Confirmation) and shall have obtained all necessary internal credit and other
approvals for such Extension of Credit.


 


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


 


(h)                                 Due
Diligence.  Subject to the
Administrative Agent’s right to perform one or more Due Diligence Reviews
pursuant to Section 10.26, the Administrative Agent shall have completed
its due diligence review of the Mortgage Asset File and the Underwriting
Package for each Mortgage Asset and such other documents, records, agreements,
instruments, mortgaged properties or information relating to such Mortgage
Asset as the Administrative Agent in its discretion deems appropriate to review
and such review shall be satisfactory to the Administrative Agent in its
discretion.


 


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


 


(j)                                     Fees
and Expenses.  The Administrative
Agent shall have received all fees and expenses of the Administrative Agent,
the Lenders and counsel to the Administrative Agent due


 


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hereunder and
under the Fee and Pricing Letter and the Administrative Agent shall have
received the actual costs and expenses incurred by them in connection with the
entering into of any Extension of Credit hereunder, including, without
limitation, costs associated with due diligence, recording or other
administrative expenses necessary or incidental to the execution of any
transaction hereunder, which amounts, at the Administrative Agent’s option, may
be withheld from the sale proceeds of any Extension of Credit hereunder.


 


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


 


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


 


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


 


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


 


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


 


(p)                                 Control
Agreements.  With respect to any
Mortgage Asset or collateral for a Mortgage Asset that is an uncertificated
security (as defined in the UCC), security entitlements (as defined in the UCC)
or is held in a securities account (as defined in the UCC), the Borrower shall
provide to the Administrative Agent a control agreement, which shall be
acceptable to the Administrative Agent in its discretion and shall be delivered
to the Custodian under the Custodial Agreement, executed by the issuer of the
Mortgage Asset or the collateral for the Mortgage Asset or the related
securities intermediary


 


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


 


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


 


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


 


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


 


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


 


(u)                                 Interest
Rate Protection Agreements.  The
Borrowers shall have assigned to the Administrative Agent, for the benefit of
the Lenders, all of the Borrowers’ rights under each Interest Rate Protection
Agreement in respect of a Mortgage Asset and no “termination event”, “default”,
“event of default” or “potential event of default” (however denominated) shall
have occurred and be continuing under any such Interest Rate Protection
Agreement.


 


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


 


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


 


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


 


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


 


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


 


ARTICLE V



AFFIRMATIVE COVENANTS


 


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


 


Section 5.1                                   Financial
Statements.


 


Furnish
to the Administrative Agent and each of the Lenders:


 


(a)                                  As
soon as available and in any event within thirty (30) days after the end of
each fiscal quarter of the Parent, the unaudited consolidated balance sheets of
the Parent 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
the Parent 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 the 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 the Parent and
its consolidated Subsidiaries (and, to the


 


77

















 


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);


 


(b)                                 As
soon as available and in any event within ninety (90) days after the end of
each fiscal year of the Parent, the audited consolidated balance sheets of the
Parent 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 the Parent 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 the Parent 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 necessary for their
opinion, they obtained no knowledge, except as specifically stated, of any
Default or Event of Default;


 


(c)                                  (i) With
respect to each Mortgage Asset (not including GKK CRE CDO Securities)
originated or master serviced by an Affiliate of a Borrower, the Administrative
Agent or any Lender, as soon as available, but in any event not later than
sixty (60) days after the end of each fiscal quarter of each Borrowers, the
rent roll, operating statement and aging of accounts receivable and accounts
payable for each Underlying Mortgaged Property and (ii) with respect to
each Mortgage Asset not originated or master serviced by an Affiliate of a
Borrower, the Administrative Agent or any Lender, each Borrower shall use its
good faith efforts to deliver as soon as practicable, the rent roll, operating
statement and aging of accounts receivable and accounts payable for each
Underlying Mortgaged Property;


 


(d)                                 With
respect to each Mortgage Asset (not including GKK CRE CDO Securities), as soon
as available, but in any event not later than sixty (60) days after the end of
each fiscal quarter of each Borrower, a report detailing projections of such
Borrower with respect to such Mortgage Asset for the following six (6) month
period, which shall include, in any event, a description of Borrower’s internal
risk rating, tenant ratings, tenant KMV ratings (if applicable) and/or
surveillance of such Mortgage Asset;


 


(e)                                  With
respect to each Mortgage Asset to the extent received by any Borrower from the
obligor under any Mortgage Asset, as soon as available, but in any event not
later than thirty (30) days after receipt thereof, the annual balance sheet
with respect to such obligor;


 


(f)                                    With
respect to each Mortgage Asset that is a GKK CRE CDO Security or a Junior
Interest, as soon as available but in any event not later than thirty (30) days
after receipt thereof, (i) the related monthly securitization report, if
any, and (ii) within thirty (30) days after the end of each month, a copy
of the standard monthly exception report, prepared by the applicable Borrower
in the ordinary course of its business in respect of the related Mortgage Asset
or Underlying Mortgaged Property;


 


(g)                                 From
time to time such other information regarding the financial condition,
operations, or business of each Borrower as the Administrative Agent may
reasonably request; and


 


(h)                                 As
soon as reasonably possible, and in any event within thirty (30) days after a
Responsible Officer of a Borrower knows, or with respect to any Plan to which
such Borrower or any Subsidiary thereof makes direct contributions, has reason
to believe, that any of the events or conditions specified below with respect
to any Plan has occurred or exists, a statement signed by a senior financial


 


78

















 


officer of such
Borrower setting forth details respecting such event or condition and the
action, if any, that such Borrower or its ERISA Affiliate proposes to take with
respect thereto (and a copy of any report or notice required to be filed with
or given to PBGC by such Borrower or an ERISA Affiliate with respect to such
event or condition):


 


(i)                                     any
Reportable Event, or and any request for a waiver under Section 412(d) of
the Code or any successor provision thereof for any Plan;


 


(ii)                                  the
distribution under Section 4041(c) of ERISA or any successor
provision thereof of a notice of intent to terminate any Plan or any action
taken by such Borrower or an ERISA Affiliate to terminate any Plan;


 


(iii)                               the institution by PBGC
of proceedings under Section 4042 of ERISA or any successor provision
thereof for the termination of, or the appointment of a trustee to administer,
any Plan; and


 


(iv)                              the
adoption of an amendment to any Plan that would result in the loss of tax
exempt status of the trust of which such Plan is a part if such Borrower or an
ERISA Affiliate fails to provide timely security to such Plan in accordance
with the provisions of Section 401(a)(29) of the Code or Section 307
of ERISA or any successor provision thereof.


 


Section 5.2                                   Certificates;
Other Information.


 


The
Borrowers and the Guarantors shall furnish to the Administrative Agent, each of
the Lenders and each Affiliated Hedge Counterparty:


 


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


 


(b)                                 Compliance
Certificate.  Concurrently with the
delivery of the financial statements referred to in Sections 5.1(a) and (b) and
in connection with the delivery of each Notice of Borrowing and each Extension
of Credit, a Compliance Certificate from a Responsible Officer of each Credit
Party, which Compliance Certificate shall, among other things, (i) state
that, to the best of Responsible Officer’s knowledge, Credit Party during such
period has observed or performed all of its covenants and other agreements in
all material respects, and satisfied every material condition, contained in
this Agreement and the related documents to be observed, performed or satisfied
by it, and that such Responsible Officer has obtained no knowledge of any
Default or Event of Default except as specified in such certificate, (ii) showing
in detail the calculations supporting such Responsible Officer’s certification
of Credit Party’s compliance with respect to the requirements of each of the
Financial Covenants, (iii) showing in detail the calculations projected
with respect to the requirements of Section 5.9(a) through (c) for
the upcoming period of four (4) fiscal quarters, (iv) confirming that
all of the Capital Stock and other equity interests of Borrower’s Subsidiaries
has been pledged to the Administrative Agent for the ratable benefit of the
Lenders and Borrower has taken all such further actions as the Administrative
Agent has requested in order to effect and perfect such pledge and (v) showing
the calculations which demonstrate compliance with the Sub-Limits.


 


(c)                                  Updated
Schedules.  Concurrently with or
prior to the delivery of the financial statements referred to in Sections 5.1(a) and
5.1(b) above, an updated copy of Schedule 3.3 and Schedule 


 


79

















 


3.12
(depicting and delineating all of such Credit Party’s Consolidated and
non-consolidated Subsidiaries).


 


(d)                                 Calculations.  At such time as the Administrative Agent
shall request and, in any event, within five (5) Business Days of the end
of each calendar month, a Compliance Certificate regarding compliance with the
Availability and the calculations thereof and/or any update that the
Administrative Agent may request with respect to the Compliance Certificate.


 


(e)                                  Projections.  As soon as available, but in any event not
later than ninety (90) days after the end of each fiscal year of each Borrower,
a copy of the projections of Borrowers and the Parent of the operating budget
and cash flow budget of the Borrowers and the Parent for the succeeding fiscal
year, such projections to be accompanied by a certificate of a Responsible
Officer certifying that such projections have been prepared in good faith based
upon reasonable assumptions.


 


(f)                                    Accounting
Reports.  Promptly upon receipt
thereof, copies of all reports submitted to Credit Party by independent
certified public accountants in connection with each annual, interim or special
audit of the books and records of Credit Party made by such accountants,
including, without limitation, any management letter commenting on Credit Party’s
internal controls submitted by such accountants to management in connection
with their annual audit.


 


(g)                                 Mortgaged
Property.  Within thirty (30) days of
the end of each calendar quarter, a quarterly report, which report shall
include, among other items, (1) a summary of Credit Party’s delinquency
and loss experience with respect to Mortgaged Property serviced by any
Borrower, any Servicer or any designee of either, and (2) operating
statements and the occupancy status of such Mortgaged Property and other
property level information, plus any such additional reports as the
Administrative Agent may reasonably request with respect to any Credit Party’s
or any Servicer’s servicing portfolio or pending originations of Mortgage
Assets.


 


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


 


(i)                                     Financial
Statements and Reports.  Within
fifteen (15) days after the same are sent, copies of all financial statements
and reports which Credit Party sends to its stockholders, and within fifteen
(15) days after the same are filed, copies of all financial statements and
reports which Credit Party may make to, or file with, the Securities and
Exchange Commission or any successor or analogous Governmental Authority.


 


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


 


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


 


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


 


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(m)                               Reports;
SEC Filings; Regulatory Reports; Press Releases; Etc.  Promptly upon their becoming available, to
the extent not readily available to the public, (i) copies of all reports
(other than those provided pursuant to Section 5.1 and those which are of
a promotional nature) and other financial information which any Credit Party or
any Subsidiary or Affiliate sends to its shareholders, (ii) all material
regulatory reports, (iii) all Forms 8-K filed with the SEC, press releases
and other statements made available by any of the Credit Parties or any
Subsidiary or Affiliate to the public concerning material developments in the
business of any of the Credit Parties and (iv) any non-routine
correspondence or official notices received by any Credit Party or any
Subsidiary or Affiliate of a Credit Party from any Governmental Authority which
regulates the operations of any Credit Party or any Subsidiary or Affiliate of
a Credit Party which is reasonably likely to have a Material Adverse Effect.


 


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


 


Section 5.3                                   Payment of
Taxes and Other Obligations.


 


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


 


Section 5.4                                   Conduct of
Business and Maintenance of Existence.


 


Continue
to engage in business of the same general type as now conducted by it or as
otherwise approved by the Administrative Agent prior to the date hereof and
preserve, renew and keep in full force and effect its legal existence and good
standing, take all action to maintain all rights, privileges, licenses and
franchises necessary, required or desirable in the normal conduct of its
business (including, without limitation, preservation of all lending licenses
held by the Borrowers and each Borrower’s status as a “qualified transferee”
(however denominated) under all documents that govern the Pledged Mortgage
Assets) and to maintain its goodwill and comply with all Contractual
Obligations and Requirements of Law.


 


Section 5.5                                   Maintenance
of Property; Insurance.


 


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


 


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


 


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


 


Keep
proper books, records and accounts in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in


 


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relation to its businesses and activities; and permit,
during regular business hours and upon reasonable notice by the Administrative
Agent or any Lender, representatives of the Administrative Agent or any Lender
to visit and inspect any of its properties and examine, copy (at the expense of
the Borrowers) and make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be desired, and to discuss the
business, operations, properties, financial conditions and other conditions of
the Credit Parties and their Subsidiaries and Affiliates with officers and
employees of the Credit Parties and their Subsidiaries and Affiliates and with
its independent certified public accountants.


 


Section 5.7                                   Notices.


 


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


 


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


 


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


 


(c)                                  promptly,
but in any event within ten (10) Business Days after service of process,
all litigation, actions, proceedings, suits, arbitrations, investigations
(including, without limitation, any of the foregoing which are pending or
threatened in writing) or other legal or arbitrable proceedings affecting any
Credit Party or any Subsidiary thereof or affecting any of the Property of any
of them before any Governmental Authority (i) questioning, challenging the
validity or enforceability or affecting any of the Credit Documents, any
security interest or Lien created under any Security Document, any Collateral
or any action to be taken in connection with the transactions contemplated
hereby, (ii) which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect or involve a monetary claim in
excess of $1,000,000 or involving injunctions or requesting injunctive relief
by or against any Credit Party or any Subsidiary of any Credit Party, (iii) involving
an environmental claim or potential liability under Environmental Laws which
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, or (iv) by any Governmental Authority relating to
the Credit Parties or any Subsidiary thereof and alleging fraud, deception or
willful misconduct by such Person;


 


(d)                                 with
respect to any Collateral, promptly upon receipt by a Borrower of any principal
prepayment (in full or partial) of such Collateral;


 


(e)                                  of
any attachment, judgment, levy or order exceeding $1,000,000 that may be assessed
against or threatened against any Credit Party, or of any Lien or claim
asserted against any Collateral, other than Permitted Liens or any material
default related to any Collateral;


 


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


 


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Multiemployer
Plan, with respect to the withdrawal from, or the terminating, Reorganization
or Insolvency of, any Plan;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Section 5.8                                   Environmental
Laws.


 


(a)                                  Except
as could not reasonably be expected to have a Material Adverse Effect, comply
with, and ensure compliance in all material respects by all tenants and
subtenants, if any, with, all


 


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applicable
Environmental Laws and obtain and comply with and maintain, and ensure that all
tenants and subtenants obtain and comply with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws;


 


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


 


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


 


Section 5.9                                   Financial
Covenants.


 


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


 


(a)                                  Interest
Coverage.  No Credit Party shall
permit, during any Test Period, the ratio of (i) the sum of Consolidated
Adjusted EBITDA of all Borrowers at any time such Test Period to (ii) Consolidated
Interest Expense of all Borrowers at any time such Test Period to be less than
1.50 to 1.00.


 


(b)                                 Maintenance
of Ratio of Consolidated Total Indebtedness to Consolidated Total Assets.  No Credit Party shall permit the ratio of
Consolidated Total Indebtedness of all Borrowers to Consolidated Total Assets
of all Borrowers at any time to be greater than 0.85 to 1.00.


 


(c)                                  Positive
Net Income.  Each Borrower’s Net
Income shall be positive at all times.


 


Section 5.10                            Additional
Credit Parties.


 


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


 


(b)                                 Additional
Borrower Subsidiaries.  Subject to
the terms and conditions of this Agreement and the other Credit Documents,
including without limitation the separateness provisions set forth in Section 5.23
of this Agreement, any Borrower may from time to time form or acquire
additional Subsidiaries.  In the event
that any Borrower at any time forms or acquires any such Subsidiary, such
Borrower shall, within ten (10) days after such formation or acquisition, (i) notify
the Administrative Agent in writing of such formation or acquisition, (ii) pledge
in favor of the Administrative Agent for the


 


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ratable benefit of
the Lenders of all of the Capital Stock and other equity and ownership
interests held by the Borrower in each such Subsidiary and shall take all such
further action as the Administrative Agent shall deem reasonably necessary or
advisable (including, without limitation, the execution of financing statements
on form UCC-1 and any additional security agreements or amendments thereto) in
order to effect and perfect such pledge, (iii) in the event that such
Subsidiary was formed or acquired for the purpose of acquiring or holding
assets in contemplation of the entering into of Loans hereunder, such
Subsidiary shall deliver to the Administrative Agent a properly completed and
duly executed Borrower Joinder Agreement substantially in the form of Exhibit 1.1(d)
hereto, pursuant to which such additional Subsidiary shall become a Borrower
under this Agreement and (iv) the addition of such Subsidiary shall be
indicated on the first organizational chart delivered to the Administrative
Agent pursuant to Section 3.12 after such formation or acquisition.


 


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


 


(d)                                 Replacement
Guarantors.  If at any time (i) the
obligations of any Guarantor under the Guarantee Agreement or the Derivatives
Guarantee Agreement shall cease to be in effect, (ii) any Act of
Insolvency shall have occurred with respect to any Guarantor or (iii) there
shall occur any violation of any provision set forth in Sections 12(c) through
12(j) of the Guarantee Agreement (any of the foregoing events, a “Guarantee Default”),
then, within sixty (60) days after the occurrence of any such Guarantee
Default, the related Borrower shall have a replacement performance guarantor
acceptable to the applicable Lender (a “Performance Guarantor”) assume in writing such
obligations under the Guarantee Agreement and the Derivatives Guarantee
Agreement as the Administrative Agent deems necessary to correct such Guarantee
Default.


 


Section 5.11                            Compliance
with Law.


 


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


 


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


 


Section 5.12                            Pledged
Assets.


 


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


 


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take such actions
as the Administrative Agent shall require to obtain a first priority perfected
security interest in such Collateral.


 


(b)                                 The
Credit Parties shall cause each Servicer to provide to the Administrative Agent
and to the Custodian via Electronic Transmission, a remittance report on a
monthly basis by no later than the 15th day of each month (the “Reporting Date”)
containing servicing information, including without limitation those fields
reasonably requested by the Administrative Agent from time to time, on a
loan-by-loan basis and in the aggregate, with respect to the Mortgaged Assets
serviced hereunder by any Credit Party or any Servicer for the month (or any
portion thereof) prior to the Reporting Date (such remittance report, an “Asset Tape”).  To the extent it has control, no Credit Party
shall cause or permit any Mortgage Assets to be serviced by any servicer other
than a Qualified Servicer.


 


Section 5.13                            Interest
Rate Protection Agreements.


 


Each
Credit Party shall enter into Interest Rate Protection Agreement(s) selected
by such Credit Party and acceptable to the Administrative Agent with respect to
all Mortgaged Assets which have a fixed rate of interest or yield and each
Credit Party shall enter into such other Interest Rate Protection Agreement(s) with
respect to any or all of the Mortgaged Assets as the Administrative Agent may
from time to time request.  Each Credit
Party shall take all such steps as the Administrative Agent deems necessary to
perfect the security interest granted in each Interest Rate Protection
Agreement pursuant to Section 4.2(u) of this Agreement.  Each Credit Party shall perform its duties
and obligations under and shall otherwise maintain any existing Interest Rate
Protection Agreements to which it is a party.


 


Section 5.14                            Custodial
and Control Agreements.


 


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


 


Section 5.15                            Further
Assurances.


 


(a)                                  Public/Private
Designation.  The Credit Parties will
cooperate with the Administrative Agent in connection with the publication of
certain materials and/or information provided by or on behalf of the Credit
Parties to the Administrative Agent and Lenders (collectively, “Information Materials”)
pursuant to this Article V or the other Credit Documents and will
designate Information Materials (i) that are available to the public as “Public Information”
and (ii) that are not Public Information as “Private Information”.


 


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


 


Section 5.16                            Performance
and Compliance with Collateral.


 


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


 


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Section 5.17                            Delivery of
Income.


 


The
Credit Parties shall deposit, and shall cause the other Credit Parties, each of
their Subsidiaries and all other Persons to deposit, all Income and other
amounts payable to the Borrowers or the other Credit Parties in respect of the
Collateral within two (2) Business Days of such Person’s receipt
thereof.  The Borrowers and the Credit
Parties shall deposit, or cause to be deposited, into the Collection Account,
on or before the date required by the Credit Documents, all other amounts
required by the terms of the Credit Documents. 
All distributions from the Collection Account and the Securities Account
shall be made solely in accordance with the terms, provisions and conditions of
this Agreement and the Account Control Agreement.


 


Section 5.18                            Exceptions.


 


The
Borrowers shall promptly correct any and all Exceptions set forth on any Asset
Schedule and Exception Report unless waived by the Administrative Agent.


 


Section 5.19                            Distributions
in Respect of Collateral.


 


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


 


Section 5.20                            REIT Status.


 


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


 


Section 5.21                            Remittance
of Prepayments.


 


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


 


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Section 5.22                            Escrow
Imbalance.


 


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


 


Section 5.23                            Separateness.


 


Each
Borrower shall (a) except for the assets listed on Schedule 5.23 as
amended and updated from time to time, which consist of assets where a Borrower
holds bare legal title and has previously sold participation interests in 100%
of the value of the listed assets to third parties, own no assets, and will not
engage in any business, other than the assets and transactions specifically
contemplated by this Agreement, which assets and transactions specifically
contemplated by this Agreement shall include, without limitation, the
origination, acquisition, ownership, management, servicing, administration,
operation, collection, enforcement, development, improvement, leasing,
exchange, participation, securitization, sale, transfer and other disposition
of all or any portion of the Mortgaged Assets (including the Underlying
Mortgaged Property and any business interests related thereto), personal
property necessary for and used or to be used in connection with its ownership
or operation of the Mortgaged Assets (including the Underlying Mortgaged
Property and any business interests related thereto) or any portion thereof,
cash, its interest under any associated Interest Rate Protection Agreement,
this Agreement, and any and all agreements, documents, insurance policies,
reports and other instruments in any way relating to the Mortgaged Assets
(including the Underlying Mortgaged Property and any business interests related
thereto) or any portion thereof; (b) not incur any indebtedness or
obligation, secured or unsecured, direct or indirect, absolute or contingent
(including guaranteeing any obligation), other than (i) pursuant to this
Agreement, and under the agreements, documents, insurance policies, reports and
other instruments evidencing, securing or in any other way related to the
Mortgaged Assets (including the Underlying Mortgaged Property and any business
interests related thereto), (ii) in connection with customary
representations, warranties, indemnities and agreements in connection with the
origination, acquisition, ownership, management, servicing, administration,
operation, collection, enforcement, financing, development, improvement,
leasing, exchange, participation, securitization, sale, transfer or other
disposition of the Mortgaged Assets (including the Underlying Mortgaged
Property and any business interests related thereto), and (iii) under
zoning and other governmental regulations, rules, prohibitions and ordinances
and existing and proposed covenants, easements and other matters of public
record governing, burdening, benefiting or otherwise affecting any real
property constituting or underlying any of the Mortgaged Assets (including the
Underlying Mortgaged Property and any business interests related thereto); (c) not
make any loans or advances to any third party, and shall not acquire
obligations or securities of its affiliates; (d) pay its debts and
liabilities (including, as applicable, shared personnel and overhead expenses)
only from its own assets; (e) comply with the provisions of its
organizational documents; (f) do all things necessary to observe
organizational formalities and to preserve its existence, and will not amend,
modify or otherwise change its organizational documents, or suffer same to be
amended, modified or otherwise changed, without the prior written consent of
the Agent, not to unreasonably withheld; (g) maintain all of its books,
records, financial statements and bank accounts separate from those of its
Affiliates (except that such financial statements may be consolidated to the
extent consolidation is required under GAAP consistently applied as in effect
from time to time or as a matter of law) and file its own tax returns (except
to the extent that either consolidation is required or permitted under
applicable law or it is a tax disregarded entity not required to file tax
returns under applicable law); (h) be, and at all times will hold itself
out to the public as, a legal entity separate and distinct from any other
entity (including any Affiliate), shall correct any


 


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known misunderstanding regarding its status as a
separate entity, shall conduct business in its own name, shall not identify
itself or any of its Affiliates as a division or part of the other and shall
maintain and utilize separate invoices and checks; (i) maintain adequate
capital for the normal obligations reasonably foreseeable in a business of its
size and character and in light of its contemplated business operations; (j) not
engage in or suffer any change of ownership, dissolution, winding up,
liquidation, consolidation or merger in whole or in part, except as otherwise
permitted in accordance herewith; (k) not commingle its funds or other
assets with those of any Affiliate or any other Person; (l) maintain its
assets in such a manner that it will not be costly or difficult to segregate,
ascertain or identify its individual assets from those of any Affiliate or any
other Person; (m) not and will not hold itself out to be responsible for
the debts or obligations of any other Person; and (n) shall not, without
the vote of 100% of the Board of Directors or Board of Managers of such
Borrower, (i) file or consent to the filing of any bankruptcy, insolvency
or reorganization case or proceeding with respect to such Borrower; institute
any proceedings under any applicable insolvency law or otherwise seek any
relief under any laws relating to the relief from debts or the protection of
debtors generally with respect to such Borrower; (ii) seek or consent to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator,
custodian or any similar official for Borrower or a substantial portion of its
properties; or (iii) make any assignment for the benefit of Borrower’s
creditors.


 


Section 5.24                            Registration
of Securities.


 


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


 


Section 5.25                            Termination
of Securities Account.


 


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


 


Section 5.26                            Independence
of Covenants.


 


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


 


Section 5.27                            ERISA.


 


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


 


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Section 5.28                            Mortgage
Assets.


 


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


 


ARTICLE VI



NEGATIVE COVENANTS


 


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


 


Section 6.1                                   Indebtedness.


 


The
Borrowers shall not create, incur, assume or suffer to exist any Indebtedness
(including, but not limited to, any credit or repurchase facility), Guarantee
Obligation or Contractual Obligation of the Borrowers, except Indebtedness,
Guarantee Obligations and Contractual Obligations of the Borrowers permitted
under this Agreement.


 


Section 6.2                                   Liens.


 


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


 


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Section 6.3                                   Nature of
Business.


 


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


 


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


 


No
Credit Party shall enter into any transaction of merger or consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation, winding up or dissolution) or sell all or substantially all of its
assets.


 


Section 6.5                                   Advances,
Investments and Loans.


 


The
Borrowers shall not create, incur, assume or suffer to exist any Indebtedness,
Guarantees or Contingent Liabilities, except Indebtedness of the Borrowers to
the Administrative Agent or any Lender (or an Affiliate of the Administrative
Agent or any Lender).


 


Section 6.6                                   Transactions
with Affiliates.


 


The
Credit Parties may enter into any transaction with an Affiliate; provided
that such transaction is disclosed in writing in advance to the Administrative
Agent and each Lender and such transaction is upon fair and reasonable terms no
less favorable to the applicable Credit Party than it would obtain in a
comparable arm’s length transaction with a Person which is not an Affiliate; provided,
further, that in no event shall a Credit Party transfer to the
Administrative Agent hereunder any Mortgage Asset acquired by a Credit Party
from an Affiliate of Credit Party unless a Non-Consolidation Opinion and a True
Sale Opinion have been delivered to the Administrative Agent prior to such sale
if requested by the Administrative Agent in its sole discretion.


 


Section 6.7                                   Ownership of
Subsidiaries; Restrictions.


 


Except
in connection with a Permitted Investment or Permitted Indebtedness, the Credit
Parties other than the Borrowers shall not create or own Subsidiaries other
than in the ordinary course of business. 
The Borrowers shall not create or own Subsidiaries.  Except in connection with a Permitted
Investment or Permitted Indebtedness, the Credit Parties will not sell,
transfer, pledge or otherwise dispose of any Equity Interest or other equity interests
in any of their Subsidiaries, nor will they permit any of their Subsidiaries to
issue, sell, transfer, pledge or otherwise dispose of any of their Equity
Interest or other equity interests.


 


Section 6.8                                   Corporate
Changes; Material Contracts.


 


No
Credit Party will, nor will it permit any of its Subsidiaries to, (a) change
its fiscal year, (b) amend, modify or change its Authority Documents in
any respect without the prior written consent of the Administrative Agent; provided
that no Credit Party shall (i) except to the extent permitted under this
Agreement, alter its legal existence, identity or corporate structure or, in
one transaction or a series of transactions, merge into or consolidate with any
other entity, or sell all or substantially all of its assets, (ii) change
its state of incorporation or organization, (iii) change its registered
legal name or (iv) change its organizational identification number,
without providing thirty (30) days prior written notice to 


 


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the Administrative Agent and without having first
taken all action required by the Administrative Agent for the purpose of
perfecting or protecting the liens and security interests of the Administrative
Agent and the Lenders established hereunder, (c) amend, modify, cancel or
terminate other than on its terms or fail to renew or extend at the Credit
Party’s or the Subsidiary’s option or permit the amendment, modification,
cancellation or termination other than on its terms of any of the Material
Contracts in any respect materially adverse to the interests of the Lenders
without first providing at least three (3) Business Days prior written
notice thereof, together with a reasonably detailed written summary of the
substance thereof and a signed and properly completed Compliance Certificate, (d) change
its state of incorporation, organization or formation without the consent of
the Administrative Agent or have more than one state of incorporation,
organization or formation or (e) change its accounting method (except in
accordance with GAAP) in any manner adverse to the interests of the Lenders
without the prior written consent of the Required Lenders.


 


Section 6.9                                   Limitation
on Restricted Actions.


 


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


 


Section 6.10                            Restricted
Payments.


 


No
Credit Party shall declare or make any payment on account of, or set apart
assets for, a sinking or other analogous fund for the purchase, redemption,
defeasance, retirement or other acquisition of any equity or partnership
interest of any Credit Party, whether now or hereafter outstanding, or make any
other distribution in respect thereof, either directly or indirectly, whether
in cash or property or in obligations of any Credit Party, except, so long as
no Default, Event of Default or Deficit shall have occurred and be continuing,
a Credit Party may (i) make such payments solely to the extent necessary to
preserve the status of the Parent as a REIT and (ii) make dividend
distributions in an amount up to 100% of FFO.


 


Section 6.11                            Sub-Limits.


 


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


 


Section 6.12                            No Further
Negative Pledges.


 


None
of the Credit Parties or any of their Subsidiaries shall grant, allow or enter
into any agreement or arrangement with any Person that prohibits or restricts,
or purports to prohibit or restrict, the granting of any Lien or other
encumbrance on any of the assets or Properties of the Credit Parties or their
Subsidiaries; provided, however, that the foregoing shall not
apply to (i) the negative pledge contained in 


 


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Section 6.2, (ii) Indebtedness identified on
Schedule 6.1(b) or (iii) any other negative pledge or grant of
any Lien or other encumbrance approved by the Administrative Agent in its
discretion.


 


Section 6.13                            Collateral
Not to be Evidenced by Instruments.


 


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


 


Section 6.14                            Deposits.


 


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


 


Section 6.15                            Servicing
Agreements.


 


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


 


Section 6.16                            Extension or
Amendment of Collateral.


 


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


 


Section 6.17                            Stock
Repurchase.


 


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


 


Section 6.18                            Margin
Regulations.


 


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


 


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Section 6.19                            Senior
Interests.


 


Unless
otherwise agreed to by the Administrative Agent in its sole and absolute
discretion, no Credit Party shall acquire or maintain any right or interest in
any Mortgage Asset (or, directly or indirectly, the Underlying Mortgaged
Property with respect thereto) that is senior to the rights and interests of
the Administrative Agent or the Lenders therein under this Agreement and the
Credit Documents.


 


Section 6.20                            Portfolio
Assets.


 


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


 


Section 6.21                            Inconsistent
Agreements.


 


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


 


Section 6.22                            Internalization
of Management.


 


The
Borrowers shall not permit the Parent to internalize the management of the
Parent without the prior written consent of the Administrative Agent, which
shall not be unreasonably withheld by the Administrative Agent.


 


Section 6.23                            Payment of
Third Party Management Fees.


 


The
percentage used to calculate the fees paid under the Management Contract (or
any replacement or substitution thereof) shall at no time exceed the percentage
used to calculate the fees under the Management Contract as of the Closing
Date.  It is hereby acknowledged that the
Credit Parties shall be entitled to calculated any related management fees
based on the foregoing percentage and the sum of the common equity, any
preferred equity and trust preferred securities of the related company.


 


ARTICLE
VII



EVENTS OF DEFAULT


 


Section 7.1                                   Events of
Default.


 


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


 


(a)                                  Payment.  (i) The Borrowers shall fail to pay any
principal or interest on any Loan or Note when due (whether at maturity, by
reason of mandatory or optional prepayment, by reason of acceleration or
otherwise) in accordance with the terms hereof or thereof; or (ii) the
Borrowers shall fail to pay any fee or other amount payable hereunder or under
the Credit Documents when due (whether at maturity, by reason of mandatory or
optional prepayment, by reason of acceleration or otherwise) in 


 


94

















 


accordance with
the terms hereof or thereof; or (iii) or the Guarantors shall fail to pay
on the Guarantee Agreement or the Derivatives Guarantee Agreement in respect of
any of the foregoing or in respect of any other Obligations under the Credit
Documents; or (iv) any other Credit Party shall fail to pay any amounts
owed by it under the Credit Documents to which it is a party; or


 


(b)                                 Misrepresentation.  Any representation, warranty or certification
made or deemed made herein, in the Security Documents or in any of the other
Credit Documents or which is contained in any certificate, document or
financial or other statement furnished at any time under or in connection with
this Agreement or the Credit Documents or any material information with respect
to the Mortgage Assets furnished in writing by or on behalf of any Credit Party
shall prove to have been incorrect, false or misleading as of the earlier of (i) the
date made or deemed made to the Administrative Agent or (ii) the date on
which the Credit Parties become aware thereof; or


 


(c)                                  Covenant
Default.  Any Credit Party shall fail
to comply with any covenant contained in this Agreement or the other Credit
Documents or any other agreement, document or instrument among any Credit
Party, the Administrative Agent and the Lenders or executed by any Credit Party
in favor of the Administrative Agent or the Lenders, other than those set forth
in Section 7.1 of this Credit Agreement, if such failure to comply shall
continue unremedied for a period of ten (10) Business Days after actual
knowledge by any Credit Party or receipt of written notice thereof from the
Administrative Agent; or


 


(d)                                 Internalization
of Management Default.  A breach of
the covenant set forth in Section 6.22; or


 


(e)                                  Borrower
Indebtedness Cross-Default.  Any
Borrower shall be in default under (i) any Indebtedness of the Borrower
which default (A) involves the failure to pay a matured obligation, or (B) permits
the acceleration of the maturity of obligations by any other party to or
beneficiary with respect to such Indebtedness, if the underlying default
results in a Material Adverse Effect, or (ii) any other material contract
to which the Borrower is a party which default (A) involves the failure to
pay a matured obligation, or (B) permits the acceleration of the maturity
of obligations by any other party to or beneficiary of such contract if the
underlying default results in a Material Adverse Effect; or


 


(f)                                    Guarantor
and Pledgor Indebtedness Cross-Default. 
Any Guarantor or Pledgor shall have defaulted or failed to perform
(beyond all applicable notice and cure periods) under any note, indenture, loan
agreement, guaranty, swap agreement or any other contract, agreement or
transaction to which it is a party, and which default or failure to perform (A) involves
the failure to pay a matured obligation equal to or in excess of $10,000,000,
or (B) involves an obligation of at least $10,000,000, is a monetary
default or a material non-monetary default and results in acceleration or
permits the acceleration of the obligation by any other party to or beneficiary
of such note, indenture, loan agreement, guaranty, swap agreement or other
contract, agreement or transaction; or


 


(g)                                 Bankruptcy
Default.  An Act of Insolvency shall
have occurred with respect to any Credit Party or any Affiliate thereof; or


 


(h)                                 Judgment
Default.  A final judgment or
judgments for the payment of money in excess of $1,000,000 in the aggregate
shall be rendered against any Credit Party or any of its Subsidiaries or
Affiliates by one or more courts, administrative tribunals or other bodies
having jurisdiction and the same shall not be satisfied, discharged (or
provision shall not be made for such discharge) or bonded, or a stay of
execution thereof shall not be procured, within fifteen (15) days from the date
of entry thereof; or


 


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(i)                                     ERISA
Default.  (i) Any Credit Party
or an ERISA Affiliate shall engage in any non-exempt “prohibited transaction”
(as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any material “accumulated funding deficiency” (as
defined in Section 302 of ERISA), whether or not waived, shall exist with
respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise on
the assets of any Credit Party or any ERISA Affiliate, (iii) a Reportable
Event shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Administrative
Agent, likely to result in the termination of such Plan for purposes of Title
IV of ERISA, (iv) any Plan shall terminate for purposes of Title IV of
ERISA, (v) any Credit Party or any ERISA Affiliate shall, or in the reasonable
opinion of the Administrative Agent is likely to, incur any liability in
connection with a withdrawal from, or the insolvency or reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through (vi) above,
such event or condition, together with all other such events or conditions, if
any, could reasonably be expected to have a Material Adverse Effect; or


 


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


 


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


 


(l)                                     Uninsured
Loss.  Any uninsured damage to or
loss, theft or destruction of any Property or assets of the Credit Parties or
any of their Subsidiaries shall occur that is in excess of (A) $250,000
with respect to any Borrower or (B) $5,000,000 with respect to any Credit
Party other than a Borrower; or


 


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


 


(n)                                 Material
Adverse Effect.  There shall exist
any event or occurrence that has caused a Material Adverse Effect which, if it
relates to any Credit Party other than a Borrower, shall remain uncured for a
period of at least ten (10) Business Days; or


 


(o)                                 IRS
Lien.  The Internal Revenue Service
shall file notice of a Lien pursuant to Section 6323 of the Code with
regard to any assets or Property of any Credit Party; or


 


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


 


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


 


(r)                                    REIT.  Parent fails (i) to qualify as a REIT (without
giving any effect to any cure or corrective periods or allowances), or (ii) to
continue to be entitled to a dividend paid deduction under Section 857 of
the Code with respect to dividends paid by it with respect to each taxable year
for which it claims a deduction on its Form 1120- REIT filed with the
United States Internal Revenue Service for such year, or the entering into by
Parent of “prohibited transactions” as defined in Sections 857(b)(6)(B)(iii) of
the Code (taking into account Sections 857(b)(6)(C), 857(b)(6)(D) and
857(b)(6)(E) of the Code) or (iii) to satisfy any of the income or
asset tests required to be satisfied by a REIT; or


 


(s)                                  Downgrade.  Parent is subject to a ratings downgrade by
any Rating Agency or ceases to be a publicly traded company listed, quoted or
traded on or in good standing in respect of any Stock Exchange; or


 


(t)                                    Commitment.  The aggregate principal amount of all
Revolving Loans outstanding on any day exceeds the Revolving Commitment; or


 


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


 


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


 


(w)                               Consent.  Any Credit Party engages in any conduct or
action where the Administrative Agent’s and/or any Lender’s prior written
consent is required by the terms of this Agreement or the other Credit
Documents and any Credit Party fails to obtain such consent, if such failure to
comply shall continue unremedied for a period of ten (10) Business Days
after actual knowledge by any Credit Party or receipt of written notice thereof
from the Administrative Agent; or


 


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


 


(y)                                 Liens.  Any Credit Party shall grant, or suffer to
exist, any Lien on any Mortgage Asset (except any Lien in favor of the
Administrative Agent for the benefit of the Lenders); or the Mortgage Assets
shall not have been pledged to the Administrative Agent for the benefit of the
Lenders, or the Liens contemplated hereby shall cease or fail to be first
priority perfected Liens on any Mortgage Asset in favor of the Administrative
Agent for the benefit of the Lenders (other than by result of any action or
inaction by the Administrative Agent) or shall be Liens in favor of any Person
other than the Administrative Agent for the benefit of the Lenders; or


 


(z)                                   Valid
Security Interest.  Any Pledge and
Security Agreement shall cease to create a valid and perfected security
interest in favor of the Administrative Agent for the benefit of the Lenders in
the Equity Interests of the respective Credit Party, or any Credit Party shall
so assert; or


 


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(aa)                            Amendment
of Management Contract.  The
Management Contract shall be amended to increase the percentage used to
calculate the fees paid under the Management Contract such that the percentage
exceeds the percentage used to calculate the fees under the Management Contract
as of the Closing Date, or the Management Contract shall be otherwise
materially amended to the detriment of Parent, or the Manager shall be
terminated, in any case without the prior written consent of the Administrative
Agent; or


 


(bb)                          Interest
Rate Protection Agreement.  Any
default, potential event of default, event of default or termination event
(however denominated) shall have occurred with respect to a Credit Party (or
its Affiliate, as applicable) under any Interest Rate Protection Agreement with
an Affiliated Hedge Counterparty; or


 


(cc)                            Letter
of Credit.  A Credit Party shall fail
to make any required payment under any Letter of Credit issued under Section 2.3
hereof or there shall otherwise be a default under any such Letter of Credit;
or


 


(dd)                          Other
Defaults.  Any event or occurrence
under this Agreement or any of the other Credit Documents that, by the express
terms of this Agreement or the other Credit Documents, is deemed to constitute
an Event of Default, if such failure to comply shall continue unremedied for a
period of ten (10) Business Days after actual knowledge by any Credit
Party or receipt of written notice thereof from the Administrative Agent; or


 


(ee)                            Instructions;
Notices.  Any Credit Party shall have
failed to give instructions or any notice to the Administrative Agent or any
Lender as required by this Agreement or the other Credit Documents, or to
deliver any required reports hereunder, on or before the date such instruction,
notice or report is required to be made or given, as the case may be, under the
terms of this Agreement or the other Credit Documents, if such failure to
comply shall continue unremedied for a period of ten (10) Business Days
after actual knowledge by any Credit Party or receipt of written notice thereof
from the Administrative Agent.


 


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


 


Section 7.2                                   Acceleration;
Remedies.


 


(a)                                  If
an Event of Default shall have occurred and be continuing, the following rights
and remedies are available to the Administrative Agent.


 


(i)                                     At
the option of the Administrative Agent, exercised by written notice to the
Credit Parties (which option shall be deemed to have been exercised, even if no
notice is given, immediately upon the occurrence of an Act of Insolvency of any
Credit Party), the Loans (with accrued interest thereon), and all Obligations
and other amounts under the Credit Documents shall immediately become due and payable.  The Administrative 


 


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Agent shall (except upon
the occurrence of an Act of Insolvency of any Credit Party) give notice to the
Credit Parties of the exercise of such option as promptly as practicable.


 


(ii)                                  With
respect to all Letters of Credit not previously Cash Collateralized with
respect to which presentment for honor shall not have occurred at the time of
an acceleration pursuant to the preceding paragraph, the Borrowers shall at
such time deposit in a cash collateral account opened by the Administrative
Agent an amount equal to the aggregate then undrawn and unexpired face amount
of such Letters of Credit.  The Borrowers
hereby grant to the Administrative Agent, for the benefit of the Issuing Lender
and the L/C Participants, a security interest in such cash collateral to secure
all obligations of the Borrowers under this Agreement and the other Credit
Documents.  Amounts held in such cash
collateral account shall be applied by the Administrative Agent to the payment
of drafts drawn under such Letters of Credit, and the unused portion thereof
after all such Letters of Credit shall have expired or been fully drawn upon,
if any, shall be applied to repay other obligations of the Borrowers hereunder and
under the other Credit Documents.  After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations
of the Borrowers hereunder and under the other Credit Documents shall have been
paid in full, the balance, if any, in such cash collateral account shall be
returned to the Borrowers (or such other Person as may be lawfully entitled
thereto).  The Borrowers shall execute and
deliver to the Administrative Agent, for the account of the Issuing Lender and
the L/C Participants, such further documents and instruments as the
Administrative Agent may request to evidence the creation and perfection of the
within security interest in such cash collateral account.


 


(iii)                               If
the Administrative Agent exercises or is deemed to have exercised the option
referred to in Section 7.2(a)(i),


 


(A)                             (i) all
of the Credit Parties’ obligations in respect of such Loans shall thereupon
become immediately due and payable, (ii) all Income paid after such
exercise or deemed exercise shall be retained by the Administrative Agent, for
the account of the Lenders and each Affiliated Hedge Counterparty, and applied
to the aggregate outstanding principal balance of the Loans and any other
amounts owed to the Administrative Agent and Lenders hereunder and each
Affiliated Hedge Counterparty or under any other Credit Document and (iii) all
other Obligations shall be immediately due and payable;


 


(B)                               from
and after the exercise or deemed exercise of such option, to the extent
permitted by applicable law, the Loan balance with respect to each such Loan
shall be determined by daily application of, on a 360 day per year basis for
the actual number of days during the period from and including the date of the
exercise or deemed exercise of such option to but excluding the date of payment
of the Loan balance, (x) the ABR Default Rate to (y) the Loan balance
for such Loan as of the Maturity Date (decreased as of any day by (i) any
amounts actually in the possession of the Administrative Agent pursuant to
clause (C) of this subsection, (ii) any proceeds from the sale of
Mortgaged Assets applied to the outstanding principal balance of the Loans
pursuant to Section 7.2(a)(v), and (iii) any amounts applied to the
outstanding principal balance of the Loans pursuant to Section 7.2(a); and


 


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(C)                                all
Income actually received by the Administrative Agent for the account of the
Lenders and Affiliated Hedge Counterparties shall be payable pursuant to Section 2.10.


 


(iv)                              Upon
the occurrence and during the continuance of one or more Events of Default, the
Administrative Agent shall have the right to obtain physical possession of the
Servicing Records (subject to the provisions of the Custodial Agreement) and
all other files of the Credit Parties relating to the Mortgaged Assets and all
documents relating to the Mortgaged Assets which are then or may thereafter
come into the possession of the Credit Parties or any third party acting for
the Credit Parties and the Credit Parties shall deliver to the Administrative
Agent such assignments as the Administrative Agent shall request and the
Administrative Agent shall have the right to appoint any Person to act as
Servicer for the Mortgaged Assets.  The
Administrative Agent shall be entitled to specific performance of all
agreements of the Credit Parties contained in the Credit Documents.


 


(v)                                 At
any time on the Business Day following written notice to the Credit Parties
(which notice may be the written notice given under Section 7.2(a)(i)), in
the event the Credit Parties have not repaid all its Obligations under the
Credit Documents, the Administrative Agent may (A) immediately sell,
without demand or further notice of any kind, at a public or private sale and
at such price or prices as the Administrative Agent may deem satisfactory any
or all Mortgaged Assets subject to such Loans hereunder and apply the proceeds
thereof to the aggregate unpaid principal balance of the Loans and any other amounts
owing by the Credit Parties hereunder or (B) in its sole discretion elect,
in lieu of selling all or a portion of such Mortgaged Assets, to give the
Credit Parties credit for such Mortgaged Assets in an amount equal to the Asset
Value of the Mortgaged Assets against the aggregate unpaid principal balance of
the Loans and any other amounts owing by the Credit Parties hereunder.  The proceeds of any disposition of Mortgaged
Assets shall be applied in accordance with Section 2.10(b).


 


(vi)                              Each
Credit Party agrees that the Administrative Agent may seek to obtain an
injunction or an order of specific performance to compel the Credit Party to
fulfill any of its obligations as set forth in Article IX, if the Credit
Party fails or refuses to perform its obligations as set forth therein.


 


(vii)                           Each
Credit Party shall be liable to the Administrative Agent, payable as and when
incurred by the Administrative Agent, for (A) the amount of all expenses,
including legal or other expenses incurred by the Administrative Agent in
connection with or as a consequence of any Event of Default, and (B) all
costs incurred in connection with hedging or covering transactions.


 


(viii)                        The
Administrative Agent shall have, in addition to its rights hereunder, any
rights otherwise available to it under any other agreement or applicable law.


 


(b)                                 The
Administrative Agent may exercise one or more of the remedies available to the
Administrative Agent immediately upon and during the continuance of an Event of
Default and, except to the extent provided in Sections 7.2(a)(i) and
7.2(a)(v), at any time thereafter without notice to any Credit Party.  All rights and remedies arising under this
Agreement as amended from time to time hereunder are cumulative and not
exclusive of any other rights or remedies which the Administrative Agent may
have.


 


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(c)                                  The
Administrative Agent may enforce its rights and remedies hereunder without
prior judicial process or hearing, and each Credit Party hereby expressly
waives any defenses the Credit Party might otherwise have to require the
Administrative Agent to enforce its rights by judicial process.  Each Credit Party also waives any defense
(other than a defense of payment or performance) the Credit Party might
otherwise have arising from the use of nonjudicial process, enforcement and
sale of all or any portion of the Mortgage Assets, or from any other election
of remedies.  Each Credit Party
recognizes that nonjudicial remedies are consistent with the usages of the
trade, are responsive to commercial necessity and are the result of a bargain
at arm’s-length.


 


(d)                                 To
the extent permitted by applicable law each Credit Party shall be liable to the
Administrative Agent for interest on any amounts owing by the Credit Party
hereunder, from the date the Credit Party becomes liable for such amounts
hereunder until such amounts are (i) paid in full or (ii) satisfied
in full by the exercise of the Administrative Agent’s rights hereunder.  Interest on any sum payable by any Credit
Party to the Administrative Agent under this Section 7.2(d) shall be
at a rate equal to the ABR Default Rate.


 


ARTICLE
VIII



THE ADMINISTRATIVE AGENT


 


Section 8.1                                   Appointment
and Authority; Nature of Duties.


 


Each
Lender hereby irrevocably designates and appoints Wachovia to act on its behalf
as the Administrative Agent under this Agreement and the other Credit
Documents, and each Lender hereby irrevocably authorizes the Administrative
Agent, in such capacity, to take such action on its behalf under the provisions
of this Agreement and the other Credit Documents and to exercise such powers
and perform such duties as are expressly delegated to or conferred upon the
Administrative Agent by the terms of this Agreement, the other Credit Documents
and any other instruments and agreements referred to herein or therein,
together with such other powers as are reasonably incidental thereto.  The Administrative Agent agrees to act as
such upon the express conditions contained in this Article VIII.  Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Administrative Agent shall not have any duties
or responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Credit Document or otherwise exist against the
Administrative Agent.  The provisions of
this Article VIII are solely for the benefit of the Administrative Agent
and the Lenders, and neither the Manager nor any Credit Party shall have any
rights as a third party beneficiary of any of the provisions hereof.


 


The
Administrative Agent shall be responsible for administering the Loans on a
day-to-day basis.  In the exercise of
such administrative duties, the Administrative Agent shall use the same
diligence and standard of care that is customarily used by the Administrative
Agent with respect to similar loans entered into by the Administrative Agent
solely for its own account.


 


Each
Lender delegates to the Administrative Agent the full right and authority on
its behalf to take the following specific actions in connection with its
administration of the Loans:


 


(a)                                  to
enter into and fund Loans on behalf of the Lenders in accordance with the
provisions of the Credit Documents;


 


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(b)                                 to
receive all amounts paid by, or on behalf of, the Credit Parties and, except
for fees to which the Administrative Agent is entitled pursuant to the Credit
Documents or otherwise, to distribute all such funds to the respective Lenders
as provided for hereunder;


 


(c)                                  to
keep and maintain complete and accurate files and records of all material
matters pertaining to the Loans, and make such files and records available for
inspection and copying by each Lender and its respective employees and agents
during normal business hours upon reasonable prior notice to the Administrative
Agent; and


 


(d)                                 to
do or omit doing all such other actions as may be reasonably necessary or
incident to the implementation and administration of the Loans and the rights
and duties delegated hereinabove.


 


The
Administrative Agent may execute any of its duties under this Agreement and the
other Credit Documents by or through its agents or attorneys-in-fact and shall
be entitled to the advice of counsel concerning all matters pertaining to its
rights and duties hereunder and under the other Credit Documents.  The Administrative Agent shall not be
responsible for the negligence or willful misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.


 


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


 


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


 


Section 8.2                                   Exculpatory
Provisions.


 


The
Administrative Agent and any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates shall not have any duties or obligations except
those expressly set forth herein and in the other Credit Documents.  Without limiting the generality of the
foregoing, the Administrative Agent and any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates:


 


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


 


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


 


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take any action that,
in its opinion or the opinion of its counsel, may expose the Administrative
Agent to liability or that is contrary to any Credit Document or Requirements
of Law; and


 


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


 


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


 


The
Administrative Agent and any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates shall not be responsible for or have any duty
to ascertain or inquire into (i) any recital, statement, warranty or
representation made in or in connection with this Agreement or any other Credit
Document, (ii) the contents of any certificate, report, statement or other
document delivered hereunder or thereunder or in connection herewith or
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein or therein or the
occurrence of any Default or Event of Default, (iv) the value, validity,
enforceability, effectiveness, genuineness or sufficiency of this Agreement,
any other Credit Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein,
other than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.  The Administrative
Agent shall not be responsible for the negligence or willful misconduct of any
agents or attorneys-in-fact selected by it with reasonable care.


 


Section 8.3                                   Reliance by
Administrative Agent.


 


The
Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any note, resolution, notice, request, certificate,
consent, statement, affidavit, order, instrument, document or other writing
(including any letter, cablegram, telegram, telecopy, telex, teletype message
or electronic message, internet or intranet website posting or other
distribution) believed by it to be genuine and correct and to have been signed,
sent, made or otherwise authenticated by the proper Person or Persons.  The Administrative Agent also may rely upon
any statement made to it orally or by telephone and believed by it to have been
made by the proper Person, and shall not incur any liability for relying
thereon.  In determining compliance with
any condition hereunder to the making of a Loan, that by its terms must be
fulfilled to the satisfaction of a Lender, the Administrative Agent may presume
that such condition is satisfactory to such Lender unless the Administrative
Agent shall have received notice to the contrary from such Lender prior to the
making of such Loan.  The Administrative
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Credit Document unless it shall first receive such
advice or concurrence of the Required Lenders as the Administrative Agent deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking, continuing or failing to take any such action.  The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this
Agreement and the other Credit Documents in accordance with a request of the
Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon each Lender.  The Administrative Agent may consult with
legal counsel (who may be counsel for the Borrowers), independent accountants
and other experts selected by it, and shall not be liable for any action taken
or not taken by it in accordance with the advice of any such counsel,
accountants or experts.


 


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Section 8.4                                   Notice of
Default.


 


The
Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received written notice from a Lender or one of the
Borrowers referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default”.  In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give prompt notice
thereof to the Lenders.  The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders; provided,
however, that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests of
the Lenders (except to the extent that this Agreement expressly requires that
such action be taken, or not taken, only with the consent or upon the
authorization of the Required Lenders, or all of the Lenders, as the case may
be) and the Administrative Agent shall not incur liability to any Person by
reason of so acting or refraining from acting. 
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against the Administrative Agent as a result of the Administrative
Agent acting or refraining from acting hereunder or under any other Credit
Document in accordance with the instructions of the Required Lenders.


 


Section 8.5                                   Non-Reliance
on Administrative Agent and Other Lenders.


 


Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or affiliates has
made any representation or warranty to it and that no act by the Administrative
Agent hereinafter taken, including any review of the affairs of any Credit
Party, shall be deemed to constitute any representation or warranty by the Administrative
Agent to any Lender.  Each Lender
represents to the Administrative Agent that it has, independently and without
reliance upon the Administrative Agent or any other Lender or any of their
Related Parties and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of
each Credit Party and made its own credit analysis and decision to enter into
this Agreement and each Loan hereunder. 
Each Lender also represents that it will, independently and without
reliance upon the Administrative Agent or any other Lender or any of their
Related Parties and based on such documents and information as it deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under or based upon this Agreement, any other
Credit Document or any related agreement or any document furnished hereunder or
thereunder and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of each Credit Party. 
Except for notices, reports and other documents expressly required to be
furnished by a Credit Party to the Administrative Agent hereunder or under the
other Credit Documents, which the Administrative Agent must distribute promptly
to each Lender, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Credit Party which may come
into the possession of the Administrative Agent or any of its officers,
directors, employees, attorneys-in-fact or Affiliates.


 


Section 8.6                                   Indemnification.


 


The
Lenders agree to indemnify the Administrative Agent in its capacity hereunder
and its Affiliates and its respective officers, directors, agents and employees
(to the extent not reimbursed by the Borrowers within five (5) Business
Days after the delivery of a written request by the Administrative Agent to the
Borrowers for such reimbursement or indemnification or, if earlier, upon
receipt by the Administrative Agent of a refusal from the Borrowers to comply
with any such request and without 


 


104

















 


limiting the obligation of the Borrowers to do so),
ratably according to their respective Commitment Percentages in effect on the
date on which indemnification is sought under this Section, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever which
may at any time (including, without limitation, at any time following the
payment of the Obligations) be imposed on, incurred by or asserted against any
such indemnitee in any way relating to or arising out of any Credit Document or
any documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or omitted by
any such indemnitee under or in connection with any of the foregoing; provided,
however, that no Lender shall be liable for the payment of any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements to the extent resulting from
such indemnitee’s gross negligence or willful misconduct, as determined by a
court of competent jurisdiction.  The
provisions of this Section shall survive the termination of this Agreement
and the payment in full of the Obligations.


 


Section 8.7                                   Administrative
Agent in Its Individual Capacity.


 


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


 


Section 8.8                                   Successor Administrative
Agent.


 


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


 


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taken or omitted to be taken by any of them while the
retiring Administrative Agent was acting as Administrative Agent.


 


Section 8.9                                   Collateral
and Guaranty Matters.


 


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


 


(i)                                     to
release any Lien on any Collateral granted to or held by the Administrative
Agent under any Credit Document (A) upon termination of the Revolving
Commitments and payment in full of all Obligations (other than contingent
indemnification obligations for which no claim has been made or cannot be
reasonably identified by an Indemnitee based on the then-known facts and
circumstances), or (B) subject to Section 10.1, if approved,
authorized or ratified in writing by the Required Lenders or (C) subject
to Sections 2.7(c) and 6.21 and other restrictions on releases, upon a
prepayment in full of all amounts owed hereunder with respect to a Pledged
Mortgage Asset by the Borrowers pursuant to Section 2.7(b)(iv), provided
there is no Default, no Event of Default and no mandatory prepayment is due or
will become due upon such release or upon the expiration of the applicable time
period under Section 2.7.


 


(ii)                                  to
subordinate any Lien on any Collateral granted to or held by the Administrative
Agent under any Credit Document to the holder of any Lien on such Collateral
that is permitted by Section 6.2; and


 


(iii)                               to
release the Guarantors from their obligations under the applicable Guarantee
Agreement if any such Person ceases to be a Guarantor as a result of a
transaction permitted hereunder.


 


(b)                                 In
connection with a termination or release pursuant to this Section, the
Administrative Agent shall promptly execute and deliver to the applicable
Credit Party, at the Borrowers’ expense, all documents that the applicable
Credit Party shall reasonably request to evidence such termination or
release.  Upon request by the
Administrative Agent at any time, the Required Lenders will confirm in writing
the Administrative Agent’s authority to release or subordinate its interest in
particular types or items of Collateral, or to release the Guarantors from
their obligations under the Guarantee Agreement pursuant to this Section.


 


Section 8.10                            Duties in
the Case of Enforcement.


 


In
case one or more Events of Default have occurred and shall be continuing, and
whether or not acceleration of the Credit Parties’ obligations under the Credit
Documents shall have occurred, the Administrative Agent shall, at the request,
or may, upon the consent, of the Required Lenders, and provided that the
Lenders have given to the Administrative Agent such additional indemnities and
assurances against expenses and liabilities as the Administrative Agent may
reasonably request, proceed to enforce the provisions of this Agreement and the
other Credit Documents respecting the sale or other disposition of all or any
of the Mortgage Assets and the exercise of any other legal or equitable rights
or remedies as it may have hereunder or under any other Credit Document or
otherwise by virtue of applicable law, or to refrain from so acting if
similarly requested by the Required Lenders. 
The Administrative Agent shall be fully protected in so acting or
refraining from acting upon the instruction of the Required Lenders, and such
instruction shall be binding upon all the Lenders.  The Required Lenders may direct the
Administrative Agent in writing as to the method and the extent of any such
foreclosure, sale or other disposition or the exercise of any other right or
remedy, the Lenders hereby agreeing to indemnify and hold the Administrative
Agent harmless from all costs and liabilities incurred in respect of all
actions taken or omitted in accordance with such direction, provided that the 


 


106

















 


Administrative Agent need not comply with any such
direction to the extent that the Administrative Agent reasonably believes the
Administrative Agent’s compliance with such direction to be unlawful or
commercially unreasonable in any applicable jurisdiction.  The Administrative Agent may, in its
discretion but without obligation, in the absence of direction from the
Required Lenders, take such interim actions as it believes necessary to
preserve the rights of the Lenders hereunder and in and to any Mortgage Assets,
including but not limited to petitioning a court for injunctive relief,
appointment of a receiver or preservation of the proceeds of any Mortgage
Asset.  Each of the Lenders acknowledges
and agrees that no individual Lender may separately enforce or exercise any of
the provisions of any of the Credit Documents, other than through the
Administrative Agent.


 


ARTICLE
IX



ADMINISTRATION AND SERVICING


 


Section 9.1                                   Servicing.


 


(a)                                  The
Administrative Agent hereby appoints each of the Borrowers as its agent to
service the Collateral and enforce its rights in and under such
Collateral.  The Borrowers hereby accept
such appointment and agree to perform the duties and obligations with respect
thereto as set forth herein.


 


(b)                                 The
Borrowers covenant to maintain or cause the servicing of the Collateral (other
than Junior Interests and GKK CRE CDO Securities) to be maintained in
conformity with Accepted Servicing Practices and in a manner at least equal in
quality to the servicing Borrowers provide for Mortgage Assets that it
owns.  In the event that the preceding
language is interpreted as constituting one or more servicing contracts, each
such servicing contract shall terminate automatically upon the earliest of (i) an
Event of Default, (ii) the date on which this Agreement terminates or the
Administrative Agent releases its Lien with respect to the related item of
Collateral or (iii) the transfer of servicing approved in writing by the
Administrative Agent.


 


Section 9.2                                   Borrowers as
Servicer.


 


With
respect to Mortgage Assets other than Junior Interests and GKK CRE CDO
Securities, if the Collateral is serviced by an Affiliate of the Borrowers,
each Borrower agrees that, until the item of Collateral is released from the
Administrative Agent’s Lien, the Administrative Agent has a security interest
in all servicing records for the period that the Administrative Agent has a
Lien on the Collateral, including, but not limited to, any and all servicing
agreements, files, documents, records, data bases, computer tapes, copies of
computer tapes, computer programs, proof of insurance coverage, insurance
policies, appraisals, other closing documentation, payment history records, and
any other records relating to or evidencing the servicing of such Collateral
(the “Servicing Records”).  Each Borrower covenants to safeguard such
Servicing Records and to deliver them promptly to the Administrative Agent or
its designee (including the Custodian) at the Administrative Agent’s request.


 


Section 9.3                                   Third Party
Servicer.


 


With
respect to Mortgage Assets other than Junior Interests and GKK CRE CDO Securities
(the “Serviced Assets”), if any Serviced Assets are serviced by a person
other than an Affiliate of the Borrowers (such third party, the “Servicer”),
(i) the Borrowers shall, in accordance with Section 4.2, provide to
the Administrative Agent a copy of the servicing agreement, which shall be in
form and substance acceptable to the Administrative Agent (the “Servicing
Agreement”) and a Servicer Redirection Notice, fully executed by the
Borrowers and the related Servicer and the Borrowers shall require each
Servicing Agreement to contain provisions relating to the delivery of
information and reports as will 


 


107

















 


enable each Borrower to comply with its obligations
under this Agreement as and when required hereunder, and (ii) each
Borrower hereby irrevocably assigns to the Administrative Agent, and the
Administrative Agent’s successors and assigns, for the benefit of the Lenders,
all of the Borrower’s right, title and interest in, to and under, and the benefits
of, each Servicing Agreement.  The
Borrowers shall not cause the Serviced Assets to be serviced by a third party
other than pursuant to the Servicing Agreements or, if not serviced thereunder,
by any Servicer other than a Servicer expressly approved in writing by the
Administrative Agent in its discretion, which approval shall be deemed granted
by the Administrative Agent with respect to each Servicer listed on Schedule
9.3 attached hereto, as such schedule may be amended or supplemented from
time to time, after the execution of this Agreement.  Notwithstanding the fact that the Borrowers
have contracted with the Servicers to service the Serviced Assets, the
Borrowers shall remain liable to the Administrative Agent for the acts of the
Servicers and for the performance of the duties and obligations set forth
herein.  Each Borrower agrees that no
Person shall assume the servicing obligations with respect to any Serviced
Assets as successor to the Servicer unless such successor is a Qualified
Servicer and unless such successor is approved in writing by the Administrative
Agent prior to such assumption of servicing obligations.  The Administrative Agent hereby agrees that
upon the repayment of any Loan, the Administrative Agent shall assign back to
the Borrower all of its right, title and interest in, to and under, and the
benefits of, any Servicing Agreement pertaining to the related Serviced Assets.


 


Section 9.4                                   Duties of
the Borrowers.


 


(a)                                  Duties.  The Borrowers shall take or cause to be taken
all such actions as may be necessary or advisable to collect all Income and
other amounts due or recoverable with respect to the Collateral from time to
time, all in accordance with Applicable Laws, with reasonable care and
diligence, and in accordance with the standard set forth in Section 9.1(b).


 


(b)                                 Administrative
Agent’s Rights.  Notwithstanding
anything to the contrary contained herein, the exercise by the Administrative
Agent of its rights hereunder shall not release the Borrowers from any of its
duties or responsibilities with respect to the Collateral.  The Administrative Agent shall not have any
obligation or liability with respect to any Collateral, nor shall any of them
be obligated to perform any of the obligations of the Borrowers hereunder.


 


(c)                                  Servicing
Programs.  In the event that the
Borrowers or the Servicers use any software program in servicing the Collateral
that is licensed from a third party, at the request of the Administrative
Agent, the Borrowers shall use their reasonable efforts to obtain, either
before the Closing Date or as soon as possible thereafter, whatever licenses or
approvals are necessary to allow the Administrative Agent to use such programs.


 


Section 9.5                                   Authorization
of the Borrowers.


 


(a)                                  The
Administrative Agent hereby authorizes the Borrowers (including any successor
thereto) to take any and all reasonable steps in its name and on its behalf
necessary or desirable and not inconsistent with the pledge of the Collateral
to the Administrative Agent to collect all amounts due under any and all
Collateral, including, without limitation, endorsing any checks and other
instruments representing Income, executing and delivering any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Collateral
and, after the delinquency of any Collateral and to the extent permitted under
and in compliance with Requirements of Law, to commence proceedings with
respect to enforcing payment thereof, to the same extent as the Borrowers could
have done if it had continued to own such Collateral free of the Lien of the
Administrative Agent.  The Administrative
Agent shall furnish the Borrowers (and any successors thereto) with any powers
of attorney and other documents necessary or appropriate to 


 


108

















 


enable the
Borrowers to carry out their servicing and administrative duties hereunder and
shall cooperate with the Borrowers to the fullest extent in order to ensure the
collectibility of the Collateral.  In no
event shall the Borrowers be entitled to make the Administrative Agent a party
to any litigation without the Administrative Agent’s express prior written
consent.


 


(b)                                 Subject
to all other rights of the Administrative Agent contained herein, after an
Event of Default has occurred and is continuing, at the direction of the
Administrative Agent, the Borrowers shall take such action as the
Administrative Agent may deem necessary or advisable to enforce collection of
the Collateral; provided, however, subject to all other rights of
the Administrative Agent contained herein, the Administrative Agent may, at any
time that an Event of Default or Default has occurred and is continuing, notify
any Obligor with respect to any Collateral of the assignment of such Collateral
to the Administrative Agent and direct that payments of all amounts due or to
become due be made directly to the Administrative Agent or any servicer,
collection agent or lock–box or other account designated by the Administrative
Agent and, upon such notification and at the expense of the Borrowers, the
Administrative Agent may enforce collection of any such Collateral and adjust,
settle or compromise the amount or payment thereof.


 


Section 9.6                                   Event of Default.


 


With
respect to Mortgage Assets other than Junior Interests and GKK CRE CDO
Securities, if the servicer of the Collateral is any Borrower or an Affiliate
of any Borrower, upon the occurrence and during the continuance of an Event of
Default, the Administrative Agent shall have the right to terminate the
Borrower or Affiliate of Borrower as the servicer of the Collateral and
transfer servicing to its designee, at no cost or expense to the Administrative
Agent, at any time thereafter.  If the
servicer of the Collateral is not any of the Borrowers, the Administrative
Agent shall have the right, as contemplated in the applicable Servicer
Redirection Notice, upon the occurrence of an Event of Default, to terminate
any Servicer and any applicable Servicing Agreement and any PSA Servicer and
any applicable Pooling and Servicing Agreement to the extent a PSA Servicer
signed a Servicer Redirection Notice and, in each case, to transfer servicing
to its designee, at no cost or expense to the Administrative Agent, it being
agreed that the Borrowers will pay any and all fees required to terminate each
such Servicer, PSA Servicer, Servicing Agreement and Pooling and Servicing
Agreement and to terminate such Servicing Agreement and effectuate the transfer
of servicing to the designee of the Administrative Agent.  The Borrowers shall cooperate fully and shall
cause all Servicers and applicable PSA Servicers to cooperate fully with the
Administrative Agent in transferring the servicing of the Collateral to the
Administrative Agent’s designee.


 


Section 9.7                                   Modification.


 


Unless
otherwise agreed to by the Administrative Agent in its discretion until the
Administrative Agent releases its Lien on any item of Collateral, neither the
Borrowers, the Servicers, PSA Servicer (unless otherwise provided in a Pooling
and Servicing Agreement) nor any other Person acting on behalf of the foregoing
shall have any right without the Administrative Agent’s prior written consent
in its discretion to (i) waive, amend, modify or alter the material terms
of any item of Collateral (including, without limitation, the related Mortgage
Loan Documents), the Servicing Agreements or the Pooling and Servicing
Agreements or (ii) exercise any material rights of a holder of any item of
Collateral under any document or agreement governing or relating to such
Collateral, in each case except as provided in the Custodial Agreement.  The Administrative Agent agrees to promptly
consider any request for consent under this Section 9.7.


 


109

















 


Section 9.8                                   Inspection.


 


In the
event the Borrowers or their Affiliates are servicing the Collateral, the
Borrowers or Affiliates shall permit the Administrative Agent to inspect the
Borrowers’ and any of their Affiliates’ servicing facilities, books and records
and related documents and information, as the case may be, for the purpose of
satisfying the Administrative Agent that that Borrowers or their Affiliates, as
the case may be, have the ability to service and are servicing the Collateral
as provided in this Agreement.  If a
Servicer or PSA Servicer is servicing any Collateral, the Borrowers shall
cooperate with the Administrative Agent in causing each Servicer and PSA
Servicer to permit the Administrative Agent to inspect the Servicer’s and PSA
Servicer’s facilities, books and records and related documents and information
relating to the Collateral.


 


Section 9.9                                   Payment of
Certain Expenses by Servicer.


 


The
Borrowers and any Servicer will be required to pay all expenses incurred by
them in connection with their activities under this Agreement and the other
Credit Documents, including fees and disbursements of independent accountants,
Taxes imposed on the Borrowers or the Servicers, expenses incurred in
connection with payments and reports pursuant to this Agreement and the other
Credit Documents, and all other fees and expenses under this Agreement and the
other Credit Documents for the account of the Borrowers.  The Borrowers shall be required to pay all
fees and expenses owing to any bank or trust company in connection with the
maintenance of the Collection Account and all other collection, reserve or lock–box
accounts related to the Collateral.  The
Borrowers shall be required to pay such expenses for their own account and shall
not be entitled to any payment therefor.


 


Section 9.10                            Pooling and
Servicing Agreements.


 


Notwithstanding
the provisions of this Article IX, to the extent the Collateral (or
portions thereof) are serviced by a PSA Servicer (other than the Borrowers or
any Servicer) under a Pooling and Servicing Agreement, (a) the standards
for servicing such items of Collateral shall be those set forth in the
applicable Pooling and Servicing Agreement, to the extent of the items covered
therein, and otherwise as provided in this Agreement, (b) the Borrowers
shall enforce its rights and interests under such agreements for and on behalf
of the Administrative Agent, (c) the Borrowers shall instruct the
applicable PSA Servicer to deposit all Income received in respect of the Collateral
into the Collection Account in accordance with Section 5.17 of this
Agreement, (d) the Borrowers shall not take any action or fail to take any
action or consent to any action or inaction under any Pooling and Servicing
Agreement where the effect of such action or inaction would prejudice or
adversely affect the interests of the Administrative Agent, (e) the
Administrative Agent shall be entitled to exercise any and all rights of the
Borrowers or the holder of any such item of Collateral under such Pooling and
Servicing Agreements as such rights relate to the Collateral, and (f) the
Borrowers shall not consent to any amendment or modification to any Pooling and
Servicing Agreement without the prior written consent of the Administrative
Agent in its discretion.  The
Administrative Agent agrees to promptly consider any request for consent under
this Section 9.10.


 


Section 9.11                            Servicer
Default.


 


Any
material breach by the Borrowers, any of their Servicers or any of the PSA
Servicers of the obligations contained in this Article IX or in Sections
2.11(a) and 5.17 shall constitute a “Servicer Default”.


 


110
















 


ARTICLE X 


 


MISCELLANEOUS


 


Section 10.1                            Amendments,
Waivers and Release of Collateral.


 


Neither
this Agreement nor any of the other Credit Documents, nor any terms hereof or
thereof may be amended, modified, waived, extended, restated, replaced, or
supplemented (by amendment, waiver, consent or otherwise) except in accordance
with the provisions of this Section nor may Collateral be released except
as specifically provided herein or in the Security Documents or in accordance
with the provisions of this Section.  The
Required Lenders may, with the consent of each Affiliated Hedge Counterparty,
or the Administrative Agent may, with the written consent of the Required
Lenders and each Affiliated Hedge Counterparty, from time to time, (a) enter
into with the Borrowers written amendments, supplements or modifications hereto
and to the other Credit Documents for the purpose of adding any provisions to
this Agreement or the other Credit Documents or changing in any manner the
rights of the Lenders or of the Borrowers hereunder or thereunder or (b) waive
or consent to the departure from, on such terms and conditions as the Required
Lenders may specify in such instrument, any of the requirements of this
Agreement or the other Credit Documents or any Default or Event of Default and
its consequences; provided, however, that no such amendment,
supplement, modification, release, waiver or consent shall:


 


(i)                                     reduce
the amount or extend the scheduled date of maturity of any Loan or Note or any
installment thereon (except in accordance with Section 2.4), or reduce the
stated rate of any interest or fee payable hereunder (except in connection with
a waiver of interest at the increased post-default rate set forth in Section 2.8
which shall be determined by a vote of the Required Lenders) or extend the
scheduled date of any payment thereof or increase the amount or extend the
expiration date of any Lender’s Commitment, in each case without the written
consent of each Lender directly affected thereby; provided that, it is
understood and agreed that (A) no waiver, reduction or deferral of a
mandatory prepayment required pursuant to Section 2.7(b), nor any
amendment of Section 2.7(b) or the definition of Asset Value shall
constitute a reduction of the amount of, or an extension of the scheduled date
of, the scheduled date of maturity of, or any installment of, any Loan or Note,
(B) any reduction in the stated rate of interest on Revolving Loans shall
only require the written consent of each Lender holding a Revolving Commitment
and (C) any reduction in the stated rate of interest on the Term Loan
shall only require the written consent of each Lender holding a portion of the
outstanding Term Loan; or


 


(ii)                                  amend,
modify or waive any provision of this Section or reduce the percentage specified
in the definition of Required Lenders, without the written consent of all the
Lenders; or


 


(iii)                               release any Borrower or
Guarantor from obligations under the Guarantee Agreement, without the written
consent of all of the Lenders; or


 


(iv)                             release
any Borrower or Guarantor from obligations under the Derivatives Guarantee
Agreement, without the written consent of each Affiliated Hedge Counterparty;
or


 


(v)                                 release
all or substantially all of the Collateral without the written consent of all
of the Lenders; or


 


(vi)                              subordinate
the Loans to any other Indebtedness without the written consent of all of the
Lenders; or


 


111

















 


(vii)                           permit any Borrower to
assign or transfer any of its rights or obligations under this Agreement or
other Credit Documents without the written consent of all of the Lenders; or


 


(viii)                        amend, modify or waive any
provision of the Credit Documents requiring consent, approval or request of the
Required Lenders or all Lenders without the written consent of the Required
Lenders or all the Lenders as appropriate; or


 


(ix)                                without
the consent of Revolving Lenders holding in the aggregate more than 50% of the
outstanding Revolving Commitments (or if the Revolving Commitments have been
terminated, the aggregate principal amount of outstanding Revolving Loans),
amend, modify or waive any provision in Section 4.2 or waive any Default
or Event of Default (or amend any Credit Document to effectively waive any
Default or Event of Default) if the effect of such amendment, modification or
waiver is that the Revolving Lenders shall be required to fund Revolving Loans
when such Lenders would otherwise not be required to do so; or


 


(x)                                   amend,
modify or waive the order in which Obligations are paid or in a manner that
would alter the pro rata sharing of payments by and among the Lenders in Section 2.10
without the written consent of each Lender and directly affected thereby; or


 


(xi)                                amend,
modify or waive any provision of Article VIII without the written consent
of the then Administrative Agent; or


 


(xii)                             amend or modify the
definition of Obligations to delete or exclude any obligation or liability
described therein without the written consent of each Lender directly affected
thereby;


 


provided,
further, that no amendment, waiver or consent affecting the rights or
duties of the Administrative Agent under any Credit Document shall in any event
be effective, unless in writing and signed by the Administrative Agent, in
addition to the Lenders and each Affiliated Hedge Counterparty required
hereinabove to take such action.  Unless
otherwise expressly provided herein, waivers shall be effective only in the
specific instance and for the specific purpose for which given.


 


Any
such waiver, any such amendment, supplement or modification and any such
release shall apply equally to each of the Lenders and shall be binding upon
the Borrowers, the other Credit Parties, the Lenders, the Administrative Agent,
each Affiliated Hedge Counterparty and all future holders of the Notes.  In the case of any waiver, the Borrowers, the
other Credit Parties, the Lenders, the Administrative Agent and each Affiliated
Hedge Counterparty shall be restored to their former position and rights
hereunder and under the outstanding Loans and Notes and other Credit Documents,
and any Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.


 


Notwithstanding
any of the foregoing to the contrary, the consent of the Borrowers and the
other Credit Parties shall not be required for any amendment, modification or
waiver of the provisions of Article VIII (other than the provisions of Section 8.8).


 


Notwithstanding
the fact that the consent of all the Lenders is required in certain
circumstances as set forth above, (a) each Lender is entitled to vote as
such Lender sees fit on any bankruptcy reorganization plan that affects the
Loans, and each Lender acknowledges that the provisions of Section 1126(c) of
the Bankruptcy Code supersedes the unanimous consent provisions set forth
herein and (b) the Required Lenders may consent to allow a Credit Party to
use cash collateral in the context of a bankruptcy or insolvency proceeding.


 


112

















 


For
the avoidance of doubt and notwithstanding any provision to the contrary
contained in this Section 10.1, this Agreement may be amended (or amended
and restated) with the written consent of the Credit Parties and the Required
Lenders (i) to increase the aggregate Commitments of the Lenders (provided
that no Lender shall be required to increase its commitment without its
consent), (ii) to add one or more additional borrowing Tranches to this
Agreement and to provide for the ratable sharing of the benefits of this
Agreement and the other Credit Documents with the other then outstanding
Obligations in respect of the extensions of credit from time to time
outstanding under such additional borrowing Tranche(s) and the accrued
interest and fees in respect thereof and (iii) to include appropriately
the lenders under such additional borrowing Tranches in any determination of
the Required Lenders and/or to provide consent rights to such lenders under
subsections (x) and/or (xi) of Section 10.1 corresponding to the
consent rights of the other Lenders thereunder.


 


Section 10.2                            Notices.


 


(a)                                  Notices
Generally.  Except as otherwise
expressly permitted in this Agreement (and except as provided in paragraph (b) below),
all notices and other communications provided for herein and under the
Custodial Agreement (including without limitation any modifications of, or
waivers, requests or consents under, this Agreement) shall be given or made in
writing (including without limitation by email, 
telex or telecopy) and shall be delivered to the intended recipient as
follows:


 


(i)                                    if
to the Borrowers or any other Credit Party:


 


	
  Gramery Warehouse Funding I LLC

  
	
  420 Lexington Avenue

  
	
  New York, NY 10170

  
	
  Attention:

  	
  Bob Foley

  
	
  Fax:

  	
  (212) 297-1090

  



 


	
  GKK Trading Warehouse I LLC

  420 Lexington Avenue

  New York, NY 10170

  
	
  Attention:

  	
  Bob Foley

  
	
  Fax:

  	
  (212) 297-1090

  



 


(ii)                                 if
to the Administrative Agent:


 


	
  Wachovia Bank, National Association

  One Wachovia Center, NC0166

  301 South College Street

  Charlotte, North Carolina 28288

  
	
  Attention:

  	
  Lee Goins

  
	
  Phone No.:

  	
  (704) 715–7655

  
	
  Facsimile No.:

  	
  (704) 715–0066

  



 


113

















 


with copies to:


 


	
  Wachovia Bank, National Association

  One Wachovia Center, NC0166

  301 South College Street

  Charlotte, North Carolina 28288

  
	
  Attention:

  	
  Marianne Hickman

  
	
  Phone No.:

  	
  (704) 715–7818

  
	
  Facsimile No.:

  	
  (704) 715–0066

  



 


and


 


	
  Cadwalader Wickersham & Taft LLP

  
	
  227 West Trade Street

  
	
  Charlotte, North Carolina 28202

  
	
  Attention:

  	
  Stuart N. Goldstein, Esq.

  
	
  Phone No.:

  	
  (704) 348-5258

  
	
  Facsimile No.:

  	
  (704) 348-5200

  



 


(iii)                               if to a Lender, to it at
its address (or telecopier number) set forth in its Administrative
Questionnaire; and


 


(iv)                              if
to an Affiliated Hedge Counterparty, to it at its address (or telecopier
number) set forth in its related Interest Rate Protection Agreement.


 


Except
as otherwise provided in this Agreement and except for notices given under Article IV
(which shall be effective only on receipt), all communications shall be deemed
to have been duly given when transmitted by Electronic Transmission or telecopy
(upon receipt of confirmation) or personally delivered or, in the case of a
mailed notice, upon receipt.


 


(b)                                 Change
of Address, Etc.  Any party hereto may
change its address or telecopier number for notices and other communications
hereunder by notice to the other parties hereto.


 


Section 10.3                            No Waiver;
Cumulative Remedies.


 


No
failure or delay on the part of the Administrative Agent or any Lender in exercising
any right, remedy, power or privilege hereunder or under any other Credit
Document and no course of dealing with respect to any right, power or privilege
hereunder or under any other Credit Document shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or
privilege hereunder or thereunder.  The
rights, powers and remedies herein or in any other Credit Document expressly
provided are cumulative and not exclusive of any rights, powers or remedies
which the Agent or any Lender would otherwise have.  No notice to or demand on any Borrower in any
case shall entitle any Borrower to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or any Lender to any other or further action in any
circumstances without notice or demand. 
An Event of Default shall be deemed to be continuing unless expressly
waived by the Administrative Agent in writing.


 


114

















 


Section 10.4                            Survival of
Representations and Warranties.


 


All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement and the Notes and the making of
the Loans; provided that all such representations and warranties shall
terminate on the date upon which the Commitments have been terminated and all
Obligations owing under any Notes or the other Credit Documents have been paid
in full.


 


Section 10.5                            Payment of
Expenses and Taxes; Indemnity.


 


(a)                                  Costs
and Expenses.  The Borrowers shall
pay (i) all expenses incurred by the Administrative Agent and its
Affiliates (including the fees, charges and disbursements of counsel for the
Administrative Agent), in connection with the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Credit Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all expenses incurred by the Administrative Agent and
its Affiliates (including the fees, charges and disbursements of counsel for
the Administrative Agent), in connection with the syndication of the credit
facilities provided for herein, (iii) all expenses incurred by the
Administrative Agent or any Lender, (including the fees, charges and
disbursements of any counsel for the Administrative Agent or any Lender), in
connection with the enforcement or protection of its rights (A) in
connection with this Agreement and the other Credit Documents, including its
rights under this Section, or (B) in connection with the Loans made,
including all such expenses incurred during any workout, restructuring or
negotiations in respect of such Loans, (iv) the Borrowers shall pay on
demand any and all stamp, sales, excise and other Taxes and fees payable or
determined to be payable in connection with the execution, delivery, filing and
recording of this Agreement, the Credit Documents or the other documents to be
delivered hereunder or thereunder or the funding or maintenance of Loans
hereunder and (v) in connection with the Administrative Agent’s diligence
with respect to the Collateral or proposed Collateral, the Borrowers shall pay
the asset management fees described in paragraph (f) of the Fee and
Pricing Letter, the Administrative Agent’s legal fees and expenses provided for
in paragraph (e) of the Fee and Pricing Letter and any amounts required by
Section 10.26.  The provisions of
this Section shall survive the termination of this Agreement and the
payment in full of the Obligations.


 


(b)                                 Indemnification
by the Borrowers.


 


(i)                                     Each
Borrower, jointly and severally, shall indemnify the Administrative Agent (and
any sub-agent thereof), each Lender, and each present and former Related Party
of any of the foregoing Persons (each such Person being called an “Indemnitee”) against,
and hold each Indemnitee harmless from and against, any and all claims,
penalties, fines, losses, damages, liabilities, costs, and expenses (including,
without limitation, attorneys’ fees and disbursements), in each case incurred
by any Indemnitee or asserted against any Indemnitee by any third party or by
the Borrowers or any other Credit Party (collectively, the “Indemnified Amounts”)
arising out of, in connection with, or as a result of (A) this Agreement,
the Credit Documents, any Loan, any Collateral, the Mortgage Loan Documents,
any transaction or Extension of Credit contemplated hereby or thereby, or any
amendment, supplement, extension or modification of, or any waiver or consent
under or in respect of this Agreement, the Credit Documents, any Loan, any
Collateral, the Mortgage Loan Documents or any transaction or Extension of
Credit contemplated hereby or thereby, (B) any Mortgage Asset or any other
Collateral under the Credit Documents, (C) any violation or alleged
violation of, non–compliance with or liability under any Requirement of Law
(including, without limitation, violation of Securities Laws and Environmental
Laws), (D) ownership of, Liens on, security interests in or the exercise
of rights and/or remedies under the Credit Documents, the Mortgage Loan
Documents, the Collateral, any other collateral under the 


 


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Credit Documents,
the Underlying Mortgaged Property, any other related Property or collateral or
any part thereof or any interest therein or receipt of any Income or rents, (E) any
accident, injury to or death of any person or loss of or damage to Property
occurring in, on or about any Underlying Mortgaged Property, any other related
Property or collateral or any part thereof, the related Collateral or on the
adjoining sidewalks, curbs, parking areas, streets or ways, (F) any use,
nonuse or condition in, on or about, or possession, alteration, repair,
operation, maintenance or management of, any Underlying Mortgaged Property, any
other related Property or collateral or any part thereof or on the adjoining
sidewalks, curbs, parking areas, streets or ways, (G) any failure on the
part of the Credit Parties to perform or comply with any of the terms of the
Mortgage Loan Documents, the Credit Documents, the Collateral or any other
collateral under the Credit Documents, (H) performance of any labor or
services or the furnishing of any materials or other Property in respect of the
Underlying Mortgaged Property, any other related Property or collateral, the
Collateral or any part thereof, (I) any claim by brokers, finders or
similar Persons claiming to be entitled to a commission in connection with any
lease or other transaction involving any Underlying Mortgaged Property, any
other related Property or collateral, the Collateral or any part thereof or the
Credit Documents, (J) any Taxes including, without limitation, any Taxes
attributable to the execution, delivery, filing or recording of any Credit
Document, any Mortgage Loan Document or any memorandum of any of the foregoing,
(K) any Lien or claim arising on or against the Underlying Mortgaged
Property, any other related Property or collateral, the Collateral or any part
thereof under any Requirement of Law or any liability asserted against the
Administrative Agent or any Lender with respect thereto, (L) the claims of
any lessee or any Person acting through or under any lessee or otherwise arising
under or as a consequence of any leases with respect to any Underlying
Mortgaged Property, related Property or collateral, or any claims of an
Obligor, (M) any civil penalty or fine assessed by OFAC against, and all
costs and expenses (including counsel fees and disbursements) incurred in
connection with the defense thereof, by any Indemnitee as a result of conduct
of any Credit Party that violates any sanction enforced by OFAC, (N) any
and all Indemnified Amounts arising out of, attributable or relating to,
accruing out of, or resulting from (1) a past, present or future violation
or alleged violation of any Environmental Laws in connection with any Property
or Underlying Mortgaged Property by any Person or other source, whether related
or unrelated to any other Credit Party or any Obligor, (2) any presence of
any Materials of Environmental Concern in, on, within, above, under, near,
affecting or emanating from any Property or Underlying Mortgaged Property, (3) the
failure to timely perform any Remedial Work, (4) any past, present or
future activity by any Person or other source, whether related or unrelated to
any Credit Party or any Obligor in connection with any actual, proposed or
threatened use, treatment, storage, holding, existence, disposition or other
release, generation, production, manufacturing, processing, refining, control,
management, abatement, removal, handling, transfer or transportation to or from
any Property or Underlying Mortgaged Property of any Materials of Environmental
Concern at any time located in, under, on, above or affecting any Property or
Underlying Mortgaged Property, (5) any past, present or future actual
Release (whether intentional or unintentional, direct or indirect, foreseeable
or unforeseeable) to, from, on, within, in, under, near or affecting any
Property or Underlying Mortgaged Property by any Person or other source,
whether related or unrelated to any Credit Party or any Obligor, (6) the
imposition, recording or filing or the threatened imposition, recording or
filing of any Lien on any Property or Underlying Mortgaged Property with regard
to, or as a result of, any Materials of Environmental Concern or pursuant to
any Environmental Law, or (7) any misrepresentation or inaccuracy in any
representation or warranty in any material respect or material breach or
failure to perform any covenants or other obligations pursuant to this
Agreement, the other Credit Documents or any of the Mortgage Loan Documents or
relating to environmental matters in any way including, without limitation,
under any of the Mortgage Loan Documents or (O) any Credit Party’s
conduct, activities, actions and/or inactions in connection with, relating to
or arising out of any of 


 


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the foregoing
clauses of this Section that, in each case, results from anything other
than any Indemnitee’s gross negligence or willful misconduct.  In any suit, proceeding or action brought by
an Indemnitee in connection with any Collateral or any other collateral under
the Credit Documents for any sum owing thereunder, or to enforce any provisions
of any Collateral or any other collateral under the Credit Documents, the
Credit Parties shall save, indemnify and hold such Indemnitee harmless from and
against all expense, loss or damage suffered by reason of any defense, set–off,
counterclaim, recoupment or reduction of liability whatsoever of the account
debtor, obligor or Obligor thereunder arising out of a breach by any Credit
Party of any obligation thereunder or arising out of any other agreement,
indebtedness or liability at any time owing to or in favor of such account
debtor, obligor or Obligor or its successors from any Credit Party.  Each of the Credit Parties also agrees to
reimburse an Indemnitee as and when billed by such Indemnitee for all such
Indemnitee’s costs, expenses and fees incurred in connection with the
enforcement or the preservation of such Indemnitee’s rights under this
Agreement, the Credit Documents, the Mortgage Loan Documents and any transaction
or Extension of Credit contemplated hereby or thereby, including, without
limitation, the fees and disbursements of its counsel.  In the case of an investigation, litigation
or other proceeding to which the indemnity in this Section applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by any Credit Party and/or any of their officers,
directors, shareholders, employees or creditors, an Indemnitee or any other
Person or any Indemnitee is otherwise a party thereto and whether or not any
transaction contemplated hereby is consummated.


 


(ii)                                  Each
Borrower shall, whether or not any transaction contemplated hereby is
consummated: (i) pay as when billed by the Administrative Agent, and in
any event within three (3) days after demand from the Administrative
Agent, all costs and expenses (including, without limitation, all fees and
disbursements of outside legal counsel, accounting, consulting, brokerage or
other similar professional fees or expenses, and any fees and expenses
associated with travel or other costs relating to any appraisals or
examinations conducted in connection with any Loans or any proposed Collateral,
and the amount of such costs and expenses shall, until paid, bear interest at
the greater of (x) 5.25% per annum in excess of the Prime Rate in effect
from time to time or (y) 0.50% per annum in excess of the Alternate Base
Rate in effect from time to time (or at such greater rate plus 6.00%, at any
time the ABR Default Rate is applicable to any Loan)) (A) of the
Administrative Agent in connection with the development, preparation, execution
and delivery of, and any amendment, supplement or modification to, this
Agreement, any other Credit Document or any other documents prepared in
connection herewith or therewith and the documents and instruments referred to
herein and therein (including, without limitation, all fees, disbursements and
expenses of Cadwalader, Wickersham & Taft LLP and/or other counsel
incurred as of the date of this Agreement) and (B) of the Administrative
Agent in connection with the enforcement of this Agreement and the other Credit
Documents and any amendment, waiver or consent relating hereto or thereto and
the documents and instruments referred to herein and therein; (ii) pay and
hold each Indemnitee harmless from and against any and all present and future
stamp, documentary, issue, sales and use, value added, property and other
similar Taxes (other than Taxes imposed on net income) with respect to the
matters described in foregoing clause (i) and hold each Indemnitee
harmless from and against any and all liabilities with respect to or resulting
from any delay or omission to pay such Taxes; and (iii) indemnify each
Indemnitee from and hold each of them harmless against any and all Indemnified
Amounts incurred by any of them as a result of, or arising out of, or in any
way related to, or by reason of, the entering into and/or performance of this
Agreement or any other Credit Document or the use of the proceeds of any Loan hereunder
or the consummation of any transactions contemplated herein or in any other
Credit Document, including, without limitation, (A) the out-of-pocket due
diligence, inspection, appraisals, testing and review costs and expenses
incurred by the Administrative Agent with respect to Collateral submitted by
any Borrower under this Agreement, including, but not limited 


 


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to, those costs
and expenses incurred by the Administrative Agent pursuant to Article IX
and Section 10.26, (B) the fees and disbursements of counsel incurred
in connection therewith and (C) any environmental liabilities with respect
to any real estate or other assets held by any Borrower or any of its
Affiliates (but excluding any such Indemnified Amounts to the extent incurred
by reason of the gross negligence or willful misconduct of the Person to be
indemnified).


 


(iii)                               For the avoidance of
doubt, an Indemnitee may seek payment of any Indemnified Amount at any time and
regardless of whether a Default or an Event of Default then exists or is
continuing.


 


(iv)                              If
for any reason the indemnification provided in this Section is unavailable
to the Indemnitee or is insufficient to hold an Indemnitee harmless, then the
Credit Parties shall contribute to the amount paid or payable by such
Indemnitee as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect not only the relative benefits received
by such Indemnitee on the one hand and the Credit Parties on the other hand but
also the relative fault of such Indemnitee as well as any other relevant
equitable considerations.


 


(v)                                 Without
prejudice to the survival of any other agreement of any Borrower hereunder, the
obligations of the Credit Parties under this Article X are joint and
several and shall survive the termination of this Agreement.


 


(vi)                              Indemnification
under this Section shall be in an amount necessary to make the Indemnitee
whole after taking into account any tax consequences to the Indemnitee of the
receipt of the indemnity provided hereunder, including the effect of such tax
or refund on the amount of tax measured by net income or profits that is or was
payable by the Indemnitee.


 


(c)                                  Reimbursement
by Lenders.  To the extent that the
Borrowers for any reason fail to indefeasibly pay any amount required under
paragraph (a) or (b) of this Section to be paid by it to the
Administrative Agent (or any sub-agent thereof), or any Related Party of any of
the foregoing, each Lender severally agrees to pay to the Administrative Agent
(or any such sub-agent), or such Related Party, as the case may be, such Lender’s
Commitment Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided
that the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) in its capacity as such, or
against any Related Party of any of the foregoing acting for the Administrative
Agent (or any such sub-agent) in connection with such capacity.


 


(d)                                 Waiver
of Consequential Damages, Etc.  To
the fullest extent permitted by Requirements of Law, the Credit Parties shall
not assert, and hereby waive, any claim against any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as
a result of, this Agreement, any other Credit Document or any agreement or
instrument contemplated hereby, the transactions contemplated hereby or
thereby, any Loan or the use of the proceeds thereof.  No Indemnitee referred to in paragraph (b) above
shall be liable for any damages arising from the use by unintended recipients
of any information or other materials distributed by it through
telecommunications, electronic or other information transmission systems in
connection with this Agreement or the other Credit Documents or the transactions
contemplated hereby or thereby.  The
provisions of this Section shall survive the termination of this Agreement
and the payment in full of the Obligations.


 


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Section 10.6                            Successors
and Assigns; Participations.


 


(a)                                  Successors
and Assigns Generally.  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted
hereby, except that neither the Borrowers nor any other Credit Party may assign
or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of the Administrative Agent and any attempt by any Credit
Party to assign any of its rights or obligations under this Agreement without
the prior written consent of the Administrative Agent shall be null and void.


 


(b)                                 Assignments
by Lenders.  Any Lender may at any
time assign to any Person which is an Eligible Transferee (each such Person, an
“Assignee”) all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans at the
time owing to it) and the other Credit Documents; provided that any such
assignment shall be subject to the following conditions:


 


(i)                                     Minimum
Amounts.


 


(A)                              in
the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no
minimum amount need be assigned; and


 


(B)                                in
any case not described in paragraph (b)(i)(A) of this Section, the
aggregate principal amount of the Commitment (which for this purpose includes
Loans outstanding thereunder) or, if the applicable Commitment is not then in effect,
the principal outstanding balance of the Loans of the assigning Lender subject
to each such assignment (determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Administrative
Agent or, if “Trade Date”
is specified in the Assignment and Assumption, as of the Trade Date) shall not
be less than $1,000,000, in the case of any assignment in respect of a
revolving facility, or $1,000,000, in the case of any assignment in respect of
a term facility (provided, however, that simultaneous assignments
shall be aggregated in respect of a Lender and its Approved Funds), unless the
Administrative Agent consents.


 


(ii)                                  Proportionate
Amounts.  Each partial assignment
shall be made as an assignment of a proportionate part of all the assigning
Lender’s rights and obligations under this Agreement with respect to the Loan
or the Commitment assigned, except that this clause (ii) shall not
prohibit any Lender from assigning all or a portion of its rights and
obligations among separate Tranches on a non-pro rata basis.


 


(iii)                               Required Consents.  No consent shall be required for any
assignment except to the extent required by paragraph (b)(i)(B) of this Section and,
in addition:


 


(A)                            the
consent of the Borrowers (such consent not to be unreasonably withheld,
conditioned or delayed) shall be required unless (x) an Event of Default
has occurred and is continuing at the time of such assignment, or (y) such
assignment is to an existing Lender, an Affiliate of an existing Lender or an
Approved Fund; and


 


(B)                              the
consent of the Administrative Agent (such consent not to be unreasonably
withheld, conditioned or delayed) shall be required for assignments in respect
of (i) a Revolving Commitment if such assignment is to a Person that is
not a 


 


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Lender with a
Commitment in respect of such facility, an Affiliate of such Lender or an
Approved Fund with respect to such Lender or (ii) a Term Loan Commitment
to a Person who is not a Lender, an Affiliate of a Lender or an Approved Fund.


 


(iv)                              Assignment
and Assumption.  The parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment
and Assumption, together with a processing and recordation fee of $3,500 and the
assignee, if it is not a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire.


 


(v)                                 No
Assignment to Credit Parties.  No
such assignment shall be made to any Credit Party or any of the Credit Parties’
Affiliates or Subsidiaries of a Credit Party.


 


(vi)                              No
Assignment to Natural Persons.  No
such assignment shall be made to a natural person.


 


Subject
to acceptance and recording thereof by the Administrative Agent pursuant to
paragraph (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto) but shall continue to be entitled to
the benefits of Sections 2.18 and 10.5 with respect to facts and circumstances
occurring prior to the effective date of such assignment.  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (d) of this Section.


 


(c)                                  Register.  The Administrative Agent, acting solely for
this purpose as an agent of the Borrowers, shall maintain a register within the
meaning of U.S. Treasury Regulation Section 5f.103 1(c) (the “Register”)
on which it will record the Loans made hereunder, and each assignment and
acceptance and participation.  The
Register shall include the names and addresses of Lenders (including all
assignees, successors and Participants), and the principal amount of the Loans
owing to such Lender.  Failure to make
any such recordation, or any error in such recordation shall not affect the
Borrowers’ obligations in respect of such Loans.  If a Lender sells a participation in any
Loan, it shall provide Borrowers, or maintain as agent of Borrowers, the
information described in this paragraph and permit Borrowers to review such
information as reasonably needed for Borrowers to comply with their obligations
under this Agreement or under any applicable law or governmental regulation or
procedure.


 


(d)                                 Participations.  Any Lender may at any time, upon notice to
the Borrowers, sell participations to any Person (other than a natural person
or the Credit Parties or any of the Credit Parties’ Affiliates or Subsidiaries
of a Credit Party) which is an Eligible Transferee (each such Person, a “Participant”) in all
or a portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans owing to it); provided
that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the
Borrowers, the Administrative Agent and the Lenders, shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights
and obligations under this Agreement and the other Credit Documents.


 


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Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver that affects such
Participant.  Subject to paragraph (e) of
this Section, the Borrowers agree that each Participant shall be entitled to
the benefits of Sections 2.15 and 2.18 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section.  To the extent permitted by
Requirements of Law, each Participant also shall be entitled to the benefits of
Section 10.7 as though it were a Lender, provided such Participant agrees
to be subject to Section 2.10 as though it were a Lender.


 


(e)                                  Limitations
upon Participant Rights.  A
Participant shall not be entitled to receive any greater payment under Sections
2.14 and 2.17 than the applicable Lender would have been entitled to receive
with respect to the participation sold to such Participant, unless the sale of
the participation to such Participant is made with the Borrowers’ prior written
consent.  A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.14
unless the Borrowers are notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrowers, to comply with Section 2.14
as though it were a Lender.


 


(f)                                    Disclosures.  Each Borrower authorizes each Lender to
disclose to any Assignee or Participant (including any prospective Assignee or
Participant) any and all of the information in the possession of such Lender
relating to the Borrower and its Affiliates or to any aspect of the Loans that
has been delivered to such Lender by or on behalf of the Borrower or any of its
Affiliates pursuant to this Agreement or in connection with the credit
evaluation of the Lenders and their Affiliates prior to becoming a party to
this Agreement; provided, that such Assignee or Participant shall have
agreed to be bound by the provisions of Section 10.13 hereof.  Each Borrower agrees to cooperate with the
applicable Lender in connection with any such sale of participating interests
or assignments and to enter into such restatements of, and amendments,
supplements and other modifications to, this Agreement to give effect to any
such sale or transfer; provided, that the Borrower’s further consent
shall be required with respect to any such restatement, amendment, supplement
or other modification which adversely changes any economic or other material
term of this Agreement.


 


(g)                                 Certain
Pledges.   The parties to this
Agreement acknowledge that nothing in this Agreement shall limit or otherwise
restrict the right of any Lender to grant security interests in its rights
hereunder, including, without limitation, (i) any security interest in all
or any portion of any Lender’s rights under this Agreement to any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal
Reserve Bank, and (ii) any pledge or assignment for the benefit of the
assignor’s trustee and/or its investors or financing parties to secure its
obligations under any indenture, credit facility or Authority Documents to
which it is a party; provided, that no such pledge or assignment of a
security interest shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.


 


Section 10.7                            Right of Set
off; Sharing of Payments.


 


(a)                                  In
addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of such rights, each Borrower hereby
grants to the Administrative Agent and each Lender a right of offset, to secure
repayment of all amounts owing to the Administrative Agent or any Lender by the
Borrowers under the Credit Documents, upon any and all monies, securities,
collateral or other property of the Borrower and the proceeds therefrom, now or
hereafter held or received by the Administrative Agent or any Lender or any
entity under the control of the Administrative Agent or 


 


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any Lender and
their respective successors and assigns (including, without limitation,
branches and agencies of the Administrative Agent, wherever located), for the
account of the Borrower, whether for safekeeping, custody, pledge,
transmission, collection, or otherwise, and also upon any and all deposits
(general or specified) and credits of the Borrower at any time existing.  Each of the Administrative Agent, the Lenders
and their respective Affiliates is hereby authorized at any time and from time
to time upon the occurrence and during the continuance of an Event of Default,
without notice to any Borrower, to offset, appropriate, apply and enforce such
right of offset against any and all items hereinabove referred to against any
amounts owing to any of the Lenders or the Administrative Agent by the
Borrowers under the Credit Documents, irrespective of whether any of the
Lenders or the Administrative Agent shall have made any demand hereunder and
although such amounts, or any of them, shall be contingent or unmatured and
regardless of any other collateral securing such amounts.  Each Borrower shall be deemed directly
indebted to the Administrative Agent and the Lenders in the full amount of all
amounts owing to the Lenders and the Administrative Agent by the Borrowers
under the Credit Documents, and the Lenders and the Administrative Agent shall
be entitled to exercise the rights of offset provided for above.  ANY AND ALL RIGHTS TO REQUIRE ANY OF THE
LENDERS OR THE ADMINISTRATIVE AGENT TO EXERCISE ITS RIGHTS OR REMEDIES WITH
RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE AMOUNTS OWING TO ANY OF THE
LENDERS OR THE ADMINISTRATIVE AGENT BY THE BORROWERS UNDER THE CREDIT
DOCUMENTS, PRIOR TO EXERCISING ITS RIGHT OF OFFSET WITH RESPECT TO SUCH MONIES,
SECURITIES, COLLATERAL, DEPOSITS, CREDITS OR OTHER PROPERTY OF ANY BORROWER,
ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED BY EACH BORROWER.


 


(b)                                 If
any Lender shall, by exercising any right of setoff or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans or other obligations hereunder resulting in such Lender’s receiving
payment of a proportion of the aggregate principal amount of its Loans and
accrued interest thereon or other such obligations greater than its pro  rata
share thereof as provided herein, then the Lender receiving such greater
proportion shall (i) notify the Administrative Agent of such fact, and (ii) purchase
(for cash at face value) participations in the Loans and such other obligations
of the other Lenders, or make such other adjustments as shall be equitable, so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and other amounts owing them, provided that:


 


(i)                                     if
any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and
the purchase price restored to the extent of such recovery, without interest;
and


 


(ii)                                  the
provisions of this paragraph shall not be construed to apply to (A) any
payment made by the Borrowers pursuant to and in accordance with the express
terms of this Agreement or (B) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans to any assignee or participant, other than to the Credit Parties or any
Subsidiary or Affiliate thereof (as to which the provisions of this paragraph
shall apply).


 


(c)                                  Each
Credit Party consents to the foregoing and agrees, to the extent it may
effectively do so under Requirements of Law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against each
Credit Party rights of setoff and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of each Credit
Party in the amount of such participation.


 


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Section 10.8                            Table of
Contents and Section Headings.


 


The
table of contents and the Section and subsection headings herein are
intended for convenience only and shall be ignored in construing this
Agreement.


 


Section 10.9                            Counterparts;
Integration; Effectiveness; Electronic Execution.


 


(a)                                  Counterparts;
Integration; Effectiveness.  This
Agreement may be executed in counterparts (and by different parties hereto in
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract.  This Agreement and the other Credit
Documents, and any separate letter agreements with respect to fees payable to
the Administrative Agent, constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof.  Except as provided in Section 4.1,
this Agreement shall become effective when it shall have been executed by the Administrative
Agent and when the Administrative Agent shall have received counterparts hereof
that, when taken together, bear the signatures of each of the other parties
hereto.  Delivery of an executed
counterpart of a signature page of this Agreement by telecopy or email
shall be effective as delivery of a manually executed counterpart of this
Agreement.


 


(b)                                 Electronic
Execution of Assignments.  The words “execution,”
“signed,” “signature,” and words of like import in any Assignment and
Assumption shall be deemed to include electronic signatures or the keeping of
records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any Requirement of Law, including the Federal Electronic
Signatures in Global and National Commerce Act, the New York State Electronic
Signatures and Records Act, or any other similar state laws based on the
Uniform Electronic Transactions Act.


 


Section 10.10                     Severability.


 


Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.


 


Section 10.11                     Governing
Law.


 


This
Agreement and the other Credit Documents and the rights and obligations of the
parties hereunder and thereunder shall be governed by, and construed in
accordance with, the law of the State of New York.


 


Section 10.12                     Consent to
Jurisdiction; Service of Process and Venue.


 


(a)                                  Any
legal action or proceeding against any Credit Party with respect to this
Agreement or any other Credit Document to which such Credit Party is a party
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
Agreement, the Credit Party hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts.  Each Credit Party irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid to the Credit Party at its address as
designated in Section 10.2 of this Agreement, such service to become 


 


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effective ten (10) days
after such mailing.  Nothing herein shall
affect the right of Administrative Agent or any Lender to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against any Credit Party in any other jurisdiction.


 


(b)                                 Each
Credit Party 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 Agreement or any other
Credit Document brought in the courts referred to in clause (a) 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.


 


(c)                                  Except
as prohibited by law, each Credit Party hereby waives any right it may have to
claim or recover in any litigation any special, exemplary, punitive or
consequential damages or any damages other than, or in addition to, actual
damages.  Each Credit Party certifies
that no representative, agent or attorney of the Administrative Agent or any Lender
has represented, expressly or otherwise, that the Administrative Agent or any
Lender 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.


 


(d)                                 Each
party hereto acknowledges that this waiver is a material inducement to enter
into a business relationship, that each has already relied on this waiver in
entering into this agreement, and that each will continue to rely on this
waiver in their related future dealings. 
Each party hereto further warrants and represents that it has reviewed
this waiver with its legal counsel and that knowingly and voluntarily waives
its jury trial rights following consultation with legal counsel.


 


(e)                                  This
waiver is irrevocable, meaning that it may not be modified either orally or in
writing, and this waiver shall apply to any subsequent amendments, renewals,
supplements or modifications to this Agreement or any of the other Credit
Documents or to any other documents or agreements relating to any transaction
entered into hereunder.  In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.


 


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


 


Section 10.13                     [Reserved].


 


Section 10.14                     Acknowledgments.


 


The
Borrowers and the other Credit Parties each hereby acknowledge that:


 


(a)                                  it
has been advised by counsel in the negotiation, execution and delivery of each
Credit Document;


 


(b)                                 neither
the Administrative Agent nor any Lender has any fiduciary relationship with or
duty to the Borrowers or any other Credit Party arising out of or in connection
with this Agreement and the relationship between the Administrative Agent and
the Lenders, on one hand, and the Borrowers and the other Credit Parties, on
the other hand, in connection herewith is solely that of debtor and creditor;
and


 


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(c)                                  no
joint venture exists among the Lenders or among the Borrowers or the other
Credit Parties, the Lenders and the Administrative Agent.


 


Section 10.15                     Waivers of
Jury Trial.


 


EACH
OF THE PARTIES TO THIS AGREEMENT HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS OR ANY DEALINGS, COURSE OF
DEALINGS, COURSE OF CONDUCT BETWEEN THEM, OR ANY STATEMENTS (WHETHER ORAL OR
WRITTEN) OR OTHER ACTIONS OF ANY PARTY, RELATING TO THE SUBJECT MATTER OF THIS
AGREEMENT OR THE RELATIONSHIP THAT IS BEING ESTABLISHED HEREBY, INCLUDING,
WITHOUT LIMITATION, ANY ACTION OF THE ADMINISTRATIVE AGENT OR ANY LENDER
RELATING TO THE ADMINISTRATION OF THE LOANS OR THE ENFORCEMENT OF THE CREDIT
DOCUMENTS, AND NONE OF THE PARTIES HERETO WILL SEEK TO CONSOLIDATE ANY SUCH
ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN
WAIVED.


 


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


 


Section 10.16                     Patriot Act
Notice.


 


Each
Lender and the Administrative Agent (for itself and not on behalf of any other
party) hereby notifies the Borrowers that, pursuant to the requirements of the
Patriot Act, it is required to obtain, verify and record information that
identifies the Borrowers and the other Credit Parties, which information
includes the name and address of the Borrowers and the other Credit Parties and
other information that will allow such Lender or the Administrative Agent, as
applicable, to identify the Borrowers and the other Credit Parties in
accordance with the Patriot Act.


 


Section 10.17                     Resolution
of Drafting Ambiguities.


 


Each
Credit Party acknowledges and agrees that it was represented by counsel in
connection with the execution and delivery of this Agreement and the other
Credit Documents to which it is a party, that it and its counsel reviewed and
participated in the preparation and negotiation hereof and thereof and that any
rule of construction to the effect that ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation hereof
or thereof.


 


Section 10.18                     Continuing
Agreement.


 


This
Credit Agreement shall be a continuing agreement and shall remain in full force
and effect until all Loans, interest, fees and other Obligations (other than
those obligations that expressly survive the termination of this Credit
Agreement) have been paid in full and all Commitments have been
terminated.  Upon termination, the Credit
Parties shall have no further obligations (other than those obligations that
expressly survive the termination of this Credit Agreement) under the Credit
Documents and the Administrative Agent shall, at the request and expense of the
Borrowers, deliver all the Collateral in its possession to the Borrowers and
release all Liens on the Collateral; provided that should any payment,
in whole or in part, of the Obligations be rescinded or otherwise required to
be restored or returned by the Administrative Agent or any Lender, whether as a
result of any proceedings in bankruptcy or reorganization or otherwise, then
the Credit Documents shall automatically be reinstated and all Liens of the
Administrative Agent shall reattach to the Collateral and all amounts required
to be restored or 


 


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returned and all costs and expenses incurred by the
Administrative Agent or any Lender in connection therewith shall be deemed
included as part of the Obligations.


 


Section 10.19                     Lender
Consent.


 


Each
Person signing a Lender Consent (a) approves of this Agreement and the
other Credit Documents, (b) authorizes and appoints the Administrative
Agent as its agent in accordance with the terms of Article VIII, (c) authorizes
the Administrative Agent to execute and deliver this Agreement on its behalf,
and (d) is a Lender hereunder and therefore shall have all the rights and
obligations of a Lender under this Agreement as if such Person had directly
executed and delivered a signature page to this Agreement.


 


Section 10.20                     Appointment
of the Administrative Borrower.


 


Each of
the Borrowers hereby appoint the Administrative Borrower to act as its agent
for all purposes under this Agreement (including, without limitation, with
respect to all matters related to the borrowing and repayment of Loans) and
agree that (a) the Administrative Borrower may execute such documents on
behalf of such Borrower as the Administrative Borrower deems appropriate in its
sole discretion and each Borrower shall be obligated by all of the terms of any
such document executed on its behalf, (b) any notice or communication
delivered by the Administrative Agent or the Lender to the Administrative
Borrower shall be deemed delivered to each Borrower and (c) the
Administrative Agent or the Lenders may accept, and be permitted to rely on,
any document, instrument or agreement executed by the Administrative Borrower
on behalf of each Borrower.


 


Section 10.21                     Counterclaims.


 


The
Credit Parties each hereby knowingly, voluntarily and intentionally waives any
right to assert a counterclaim, other than a compulsory counterclaim, in any
action or proceeding brought against it by the Administrative Agent, the
Lenders or any of the Affiliates or agents of the foregoing.  The provisions of this Section shall
survive the termination of this Agreement and the payment in full of the
Obligations.


 


Section 10.22                     Legal
Matters.


 


In the
event of any conflict between the terms of this Agreement, any other Credit
Document or any Confirmation with respect to any Collateral, the documents
shall control in the following order of priority:  first, the terms of the related Confirmation
shall prevail, then the terms of this Agreement shall prevail, and then the
terms of the other Credit Documents shall prevail.


 


Section 10.23                     Recourse
Against Certain Parties.


 


No
recourse under or with respect to any obligation, covenant or agreement
(including, without limitation, the payment of any fees or any other
obligations) of the Administrative Agent, the Lenders, or the Credit Parties,
as contained in this Agreement, the Credit Documents or any other agreement,
instrument or document entered into by the Administrative Agent, the Lenders,
the Credit Parties or any such party pursuant hereto or thereto or in
connection herewith or therewith shall be had against any administrator of the
Administrative Agent, the Lenders, or the Credit Parties or any incorporator,
Affiliate (direct or indirect), owner, member, partner, stockholder, officer,
director, employee, agent or attorney of the Administrative Agent, the Lenders,
or the Credit Parties or of any such administrator, as such, by the enforcement
of any assessment or by any legal or equitable proceeding, by virtue of any
statute or otherwise; it being expressly agreed and understood that the
agreements of the 


 


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Administrative Agent, the Lenders or the Credit
Parties contained in this Agreement, the Credit Documents and all of the other
agreements, instruments and documents entered into by it pursuant hereto or
thereto or in connection herewith or therewith are, in each case, solely the
corporate obligations of the Administrative Agent, the Lenders or the Credit
Parties and that no personal liability whatsoever shall attach to or be
incurred by any administrator of the Administrative Agent, the Lenders or the
Credit Parties or any incorporator, owner, member, partner, stockholder,
Affiliate (direct or indirect), officer, director, employee, agent or attorney
of the Administrative Agent, the Lenders or the Credit Parties or of any such
administrator, as such, or any other of them, under or by reason of any of the
obligations, covenants or agreements of the Administrative Agent, the Lenders
or the Credit Parties contained in this Agreement, the Credit Documents or in
any other such instruments, documents or agreements, or that are implied
therefrom, and that any and all personal liability of every such administrator
of the Administrative Agent, the Lenders or the Credit Parties and each
incorporator, owner, member, partner, stockholder, Affiliate (direct or
indirect), officer, director, employee, agent or attorney of the Administrative
Agent, the Lenders, the Credit Parties or of any such administrator, or any of
them, for breaches by the Administrative Agent, the Lenders, or the Credit
Parties of any such obligations, covenants or agreements, which liability may
arise either at common law or at equity, by statute or constitution, or
otherwise, is hereby expressly waived as a condition of and in consideration
for the execution of this Agreement.  The
provisions of this Section shall survive the termination of this Agreement
and the payment in full of the Obligations.


 


Section 10.24                     Protection
of Right, Title and Interest in the Collateral; Further Action Evidencing Loans.


 


(a)                                  The
Credit Parties shall cause all financing statements and continuation statements
and any other necessary documents covering the right, title and interest of the
Administrative Agent to the Collateral to be promptly recorded, registered and
filed, and at all times to be kept recorded, registered and filed, all in such
manner and in such places as may be required by Requirements of Law fully to
preserve and protect the right, title and interest of the Administrative Agent
(on behalf of the Lenders) hereunder to all Property comprising the
Collateral.  The Credit Parties shall
deliver to the Administrative Agent file-stamped copies of, or filing receipts
for, any document recorded, registered or filed as provided above, as soon as
available following such recording, registration or filing.  The Credit Parties shall execute any and all
documents reasonably required to fulfill the intent of this Section.


 


(b)                                 The
Credit Parties agree that from time to time, at their expense, they will
promptly execute and deliver all instruments and documents, and take all
actions, that the Administrative Agent or any Lender may reasonably request in
order to perfect, protect or more fully evidence the Loans hereunder and the
security interest granted in the Collateral, or to enable the Administrative
Agent to exercise and enforce their rights and remedies hereunder or under any
Credit Document.


 


(c)                                  If
the Credit Parties fail to perform any of their obligations hereunder, the
Administrative Agent may (but shall not be required to) perform, or cause
performance of, such obligation; and the Administrative Agent’s costs and
expenses incurred in connection therewith shall be payable by the
Borrowers.  The Credit Parties
irrevocably appoint the Administrative Agent as their attorney-in-fact and
authorize the Administrative Agent to act on behalf of the Credit Parties to
file financing statements necessary or desirable in the Administrative Agent’s
discretion to perfect and to maintain the perfection and priority of the
interest in the Collateral.


 


(d)                                 Without
limiting the generality of the foregoing, the Credit Parties will not earlier
than six (6) months and not later than three (3) months prior to the
fifth anniversary of the date of filing of the financing statement referred to
in Section 4.1(d) or any other financing statement filed pursuant to this 


 


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Agreement, the
Credit Documents or in connection with any Loan hereunder, unless this
Agreement has terminated in accordance with the provisions hereof:


 


(i)                                     deliver
and file or cause to be filed an appropriate continuation statement with
respect to such financing statement; and


 


(ii)                                  deliver
or cause to be delivered to the Administrative Agent an Opinion of Counsel for
the Credit Parties, confirming and updating the opinion delivered pursuant to Section 4.1(c) with
respect to perfection and otherwise to the effect that the security interest
hereunder continues to be an enforceable and perfected security interest,
subject to no other Liens of record except as provided herein or otherwise
permitted hereunder, which opinion may contain usual and customary assumptions,
limitations and exceptions.


 


Section 10.25                     Credit
Parties’ Waiver of Setoff.


 


Each
Credit Party hereby waives any right of setoff it may have or to which it may
be entitled under this Agreement, the other Credit Documents or otherwise from
time to time against the Administrative Agent, any Lender, or any Property or
assets, or any of the foregoing.


 


Section 10.26                     Periodic Due
Diligence Review.


 


Each
Credit Party acknowledges that the Administrative Agent and each Lender has the
right to perform continuing due diligence reviews with respect to the
Collateral and the Credit Parties and Consolidated Subsidiaries of the
foregoing for purposes of verifying compliance with the representations,
warranties and specifications made hereunder, or otherwise, and each Credit
Party agrees that upon reasonable (but no less than one (1) Business Day’s)
prior notice unless an Event of Default shall have occurred, in which case no
notice is required, to the Credit Parties, as applicable, the Administrative
Agent, the Lenders or their authorized representatives shall be permitted
during normal business hours to examine, inspect, and make copies and extracts
of, the Mortgage Asset Files and any and all documents, records, agreements,
instruments or information relating to such Collateral, the Credit Parties and
the Consolidated Subsidiaries of the foregoing in the possession or under the
control of any Credit Party or the Custodian. 
Each Credit Party also shall make available to the Administrative Agent
a knowledgeable financial or accounting officer for the purpose of answering
questions respecting the Collateral, the Credit Parties and the Consolidated
Subsidiaries of the foregoing.  Each
Credit Party shall also make available to the Administrative Agent and the
Lenders any accountants or auditors of any Credit Party to answer any questions
or provide any documents as the Administrative Agent or the Lenders may
require.  The Administrative Agent has
the right to request appraisals for the Collateral and proposed Collateral and
the Borrowers shall pay all costs related to any appraisals required by the
Administrative Agent in connection with the Collateral or proposed Collateral.  The Credit Parties acknowledge that the
Administrative Agent has the right at any time to review all aspects of the
Collateral and the Asset Value thereof, which review shall occur no less than
quarterly and such reviews may result in mandatory prepayments under Section 2.7.  The Credit Parties shall pay all
out-of-pocket costs and expenses (including fees and expenses of counsel, if
any) incurred by the Administrative Agent in connection with the Administrative
Agent’s activities pursuant to this Section 10.26 (“Due Diligence Costs”);
provided that, in the event that a Default or an Event of Default shall
have occurred, the Credit Parties shall reimburse the Administrative Agent for
all Due Diligence Costs for any and all out-of-pocket costs and expenses incurred
by the Administrative Agent in connection with any due diligence review
conducted by the Administrative Agent pursuant to this Section 10.26
following the occurrence and during the continuation of such Default or Event
of Default.


 


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Section 10.27                     Character of
Loans for Income Tax Purposes.


 


The
Lenders and the Credit Parties shall treat all Loans hereunder as indebtedness
of the Borrowers for United States federal income tax purposes.


 


Section 10.28                     Joint and
Several Liability; Full Recourse Obligations.


 


(a)                                  At
all times during which there is more than one (1) Borrower under this
Agreement, each Borrower hereby acknowledges and agrees that (i) such
Borrower shall be jointly and severally liable to the Administrative Agent and
the Lenders to the maximum extent permitted by the Requirements of Law for all
representations, warranties, covenants, obligations, duties and indemnities of
the Borrowers, arising under this Agreement and the other Credit Documents, as
applicable, and the Obligations, (ii) such Borrower has consented to the
Administrative Borrower delivering all Notices of Borrowing on behalf of all
Borrowers and any such Notice of Borrowing delivered by the Administrative
Borrower on behalf of the Borrowers is binding upon and enforceable against
each Borrower, (iii) the liability of each Borrower (A) shall be
absolute and unconditional and shall remain in full force and effect (or be
reinstated) until all the Obligations shall have been paid in full and the
expiration of any applicable preference or similar period pursuant to any
bankruptcy, insolvency, reorganization, moratorium or similar law, or at law or
in equity, without any claim having been made before the expiration of such
period asserting an interest in all or any part of any payment(s) received
by the Administrative Agent, and (B) until such payment has been made,
shall not be discharged, affected, modified or impaired on the happening from
time to time of any event, including, without limitation, any of the following,
whether or not with notice to or the consent of the Credit Parties or any other
Person, (1) the waiver, compromise, settlement, release, termination or
amendment (including, without limitation, any extension or postponement of the
time for payment or performance or renewal or refinancing) of any or all of the
obligations or agreements of any Credit Party under this Agreement or any
Credit Document, (2) the failure to give notice to the Credit Parties of
the occurrence of an Event of Default under any of the Credit Documents, (3) the
release, substitution or exchange by the Administrative Agent of any or all of
the Collateral (whether with or without consideration) or the acceptance by the
Administrative Agent of any additional collateral or the availability or
claimed availability of any other collateral or source of repayment or any
nonperfection or other impairment of collateral, (4) the release of any
Person primarily or secondarily liable for all or any part of the Obligations,
whether by the Administrative Agent or in connection with any voluntary or
involuntary liquidation, dissolution, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors or similar event or proceeding
affecting any or all of the Credit Parties or any other Person who, or any of
whose Property, shall at the time in question be obligated in respect of the
Obligations or any part thereof, or (5) to the extent permitted by
Requirements of Law, any other event, occurrence, action or circumstance that
would, in the absence of this Section, result in the release or discharge of
any or all of the Borrowers from the performance or observance of any
obligation, covenant or agreement contained in this Agreement or the Credit
Documents, (iv) the Administrative Agent shall not be required first to
initiate any suit or to exhaust its remedies against the Credit Parties or any
other Person to become liable, or against any of the Collateral, in order to
enforce this Agreement or the Credit Documents and the Credit Parties expressly
agree that, notwithstanding the occurrence of any of the foregoing, each
Borrower shall be and remain directly and primarily liable for all sums due
under this Agreement or any of the other Credit Documents, (v) when making
any demand hereunder against any Borrower, the Administrative Agent or the
Lenders may, but shall be under no obligation to, make a similar demand on the
other Borrowers, and any failure by the Administrative Agent or Lenders to make
any such demand or to collect any payments from the other Borrowers, or any
release of such other Borrowers, shall not relieve any Borrower in respect of
which a demand or collection is not made or the Borrowers not so released of
their obligations or liabilities hereunder, and shall not impair or affect the
rights and remedies, express or implied, or as a matter of law, of the
Administrative Agent or the Lenders against the Borrowers and (vi) on
disposition by the Administrative Agent of any Property 


 


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encumbered by any
Collateral, each Borrower shall be and shall remain jointly and severally
liable for any deficiency.


 


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


 


(c)                                  Each
Borrower shall remain obligated under this Section 10.28 notwithstanding
that, without any reservation of rights against the Borrower and without notice
to or further assent by the Borrower, any demand by the Administrative Agent
for payment of any amounts owing to the Administrative Agent or any Borrower by
any other Borrower under the Credit Documents may be rescinded by the
Administrative Agent and any the payment of any such amounts may be continued, and
the liability of any other party upon or for any part thereof, or any
collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Administrative Agent, and this Agreement and the other Credit Documents and
any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the
Administrative Agent may deem advisable from time to time, and any collateral
security, guarantee or right of offset at any time held by the Administrative
Agent for the payment of amounts owing to the Administrative Agent or any Lender
by the Borrowers under the Credit Documents may be sold, exchanged, waived,
surrendered or released.  The
Administrative Agent shall not have any obligation to protect, secure, perfect
or insure any Lien at any time held by it as security for amounts owing to the
Administrative Agent or any Lender by the Borrowers under the Credit Documents,
or any property subject thereto.  When
making any demand hereunder against any Borrower, the Administrative Agent may,
but shall be under no obligation to, make a similar demand on any other
Borrower, and any failure by the Administrative Agent to make any such demand
or to collect any payments from any other Borrower, or any release of such
other Borrower shall not relieve any Borrower in respect of which a demand or collection
is not made or the Borrowers not so released of their obligations or
liabilities hereunder, and shall not impair or affect the rights and remedies,
express or implied, or as a matter of law, 


 


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of the
Administrative Agent or the Lenders against the Borrowers.  For the purposes hereof “demand” shall
include the commencement and continuance of any legal proceedings.


 


(d)                                 Each
Borrower waives any and all notice of the creation, renewal, extension or accrual
of any amounts at any time owing to the Administrative Agent or any Lender by
any other Borrower under the Credit Documents and notice of or proof of
reliance by the Administrative Agent or the Lenders upon the Borrower or
acceptance of the obligations of the Borrower under this Section 10.28,
and all such amounts, and any of them, shall conclusively be deemed to have
been created, contracted or incurred, or renewed, extended, amended or waived,
in reliance upon the obligations of the Borrowers under this Section 10.28;
and all dealings between the Borrowers, on the one hand, and the Administrative
Agent and the Lenders, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon the obligations of
the Borrowers under this Section 10.28. 
Each Borrower waives diligence, presentment, protest, demand for payment
and notice of default or nonpayment to or upon the Borrower with respect to any
amounts at any time owing to the Administrative Agent or the Lenders by the
Borrower under the Credit Documents, other than such notices as are expressly
required to be given under this Agreement or any of the other Credit
Documents.  Each Borrower understands and
agrees that it shall continue to be liable under this Section 10.28
without regard to (a) the validity, regularity or enforceability of any
other provision of this Agreement or any other Credit Document, any amounts at
any time owing to the Administrative Agent or the Lenders by the Borrowers
under the Credit Documents, or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by the Administrative Agent or any Lender, (b) any defense,
set-off or counterclaim (other than a defense of payment or performance) which
may at any time be available to or be asserted by any Borrower against the
Administrative Agent or any Lender, or (c) any other circumstance
whatsoever (with or without notice to or knowledge of the Borrowers) which
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Borrowers for any amounts owing to the Administrative Agent or
the Lenders by the Borrowers under the Credit Documents, or of the Borrowers
under this Agreement, in bankruptcy or in any other instance.  When pursuing its rights and remedies
hereunder against any Borrower, the Administrative Agent and any Lender may,
but shall be under no obligation to, pursue such rights and remedies as it may
have against the Borrower or any other Person or against any collateral
security or guarantee related thereto or any right of offset with respect
thereto, and any failure by the Administrative Agent or any Lender to pursue
such other rights or remedies or to collect any payments from the Borrower or
any such other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the
Borrower or any such other Person or any such collateral security, guarantee or
right of offset, shall not relieve Borrower of any liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Administrative Agent or any Lender against
Borrower.


 


(e)                                  Anything
herein or in any other Credit Document to the contrary notwithstanding, the
maximum liability of any Borrower hereunder in respect of the liabilities of
the other Borrowers under this Agreement and the other Credit Documents shall
in no event exceed the amount which can be guaranteed by the Borrower under
applicable federal and state laws relating to the insolvency of debtors.


 


(f)                                    The
obligations of the Borrowers and the Guarantors under the Credit Documents are
full recourse obligations to each Borrower and Guarantor and the Borrowers and
the Guarantors hereby forever waive, demise, acquit and discharge any and all
defenses, and shall at no time assert or allege any defense, to the contrary.


 


Section 10.29                     Administrative
Agent’s Appointment as Attorney-in-Fact.


 


131

















 


(a)                                  Following
the occurrence and during the continuance of an Event of Default, each Borrower
hereby irrevocably constitutes and appoints the Administrative Agent and any
officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact (coupled with an interest) with full irrevocable power
and authority in the place and stead of the Borrower and in the name of the
Borrower or in its own name, from time to time in the Administrative Agent’s
discretion, for the purpose of carrying out the terms of this Agreement, to
take any and all appropriate action and to execute any and all documents and
instruments which may be reasonably necessary or desirable to accomplish the
purposes of this Agreement, and, without limiting the generality of the
foregoing, each Borrower hereby gives the Administrative Agent the power and
right, on behalf of the Borrower, without assent by, but with written notice
to, the Borrower, to do the following:


 


(i)                                     in
the name of the Borrower, or in its own name, or otherwise, to take possession
of and endorse and collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due under any mortgage insurance or with
respect to any other Collateral and to file any claim or to take any other
action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Administrative Agent for the purpose of collecting any and
all such moneys due under any such mortgage insurance or with respect to any
other Collateral whenever payable;


 


(ii)                                  to
pay or discharge Taxes and Liens levied or placed on or threatened against the
Collateral;


 


(iii)                               (A) to
direct any party liable for any payment under any Collateral to make payment of
any and all moneys due or to become due thereunder directly to the
Administrative Agent or as the Administrative Agent shall direct; (B) to
ask or demand for, collect, receive payment of and receipt for, any and all
moneys, claims and other amounts due or to become due at any time in respect of
or arising out of any Collateral; (C) to sign and endorse any invoices,
assignments, verifications, notices and other documents in connection with any
Collateral; (D) to commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any proceeds thereof and to enforce any other right
in respect of any Collateral; (E) to defend any suit, action or proceeding
brought against the Borrower with respect to any Collateral; (F) to
settle, compromise or adjust without the Borrower’s consent any suit, action or
proceeding described in clause (E) above and, in connection therewith, to
give such discharges or releases as the Administrative Agent may deem appropriate;
and (G) generally, to sell, transfer, pledge and make any agreement with
respect to or otherwise deal with any Collateral as fully and completely as
though the Administrative Agent were the absolute owner thereof for all
purposes, and to do, at the Administrative Agent’s option and the Borrower’s
expense, at any time, and from time to time, all acts and things which the
Administrative Agent deems necessary to protect, preserve or realize upon the
Collateral and the Administrative Agent’s Liens thereon and to effect the
intent of this Agreement, all as fully and effectively as the Borrower might
do;


 


(iv)                              to
direct the actions of the Custodian with respect to the Collateral under the
Custodial Agreement; and


 


(v)                                 to
execute, from time to time, in connection with any sale provided for in Section 7.2,
any endorsements, assignments or other instruments of conveyance or transfer
with respect to the Purchased Items.


 


Each
Borrower hereby ratifies all that said attorneys shall lawfully do or cause to
be done by the express terms hereof. 
This power of attorney is a power coupled with an interest and shall be
irrevocable.


 


132

















 


(b)                                 The
powers conferred on the Administrative Agent hereunder are solely to protect the
interests of the Administrative Agent and the Lenders in the Collateral and
Mortgage Assets and shall not impose any duty upon it to exercise any such
powers.  The Administrative Agent shall
be accountable only for amounts that it actually receives as a result of the
exercise of such powers, and neither it nor any of its officers, directors,
employees or agents shall be responsible to any Borrower for any act or failure
to act hereunder, except for its or their own gross negligence or willful
misconduct.


 


Section 10.30                     Treatment of
Certain Information.


 


Notwithstanding
anything to the contrary contained herein or in any related document, all
Persons may disclose to any and all Persons, without limitation of any kind,
the federal income tax treatment of any of the transactions contemplated by
this Agreement or any other related document, any fact relevant to
understanding the federal tax treatment of such transactions and all materials
of any kind (including opinions or other tax analyses) relating to such federal
income tax treatment.


 


Section 10.31                     Third Party
Beneficiaries.


 


Each
Lender and Affiliated Hedge Counterparty is a third party beneficiary of each
of the terms and provisions of this Agreement.


 


[Signature Pages Follow]


 


133

















 


IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by its proper and duly authorized officers as of the day
and year first above written.


 


 


	
  BORROWERS:

  	
   

  	
  GRAMERCY
  WAREHOUSE FUNDING I LLC, a 

  Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Gramercy
  Investment Trust, a Maryland real estate investment trust, its sole member
  and manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Robert R. Foley

  
	
   

  	
   

  	
   

  	
  Name:

  	
   Robert R. Foley

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GKK
  TRADING WAREHOUSE I LLC, a

  
	
   

  	
   

  	
  Delaware limited
  liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  GKK Trading
  Corp., its sole member and manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Robert R. Foley

  
	
   

  	
   

  	
   

  	
  Name:

  	
   Robert R. Foley

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  
							



 

















 


	
  GUARANTORS:

  	
  GRAMERCY
  CAPITAL CORP., a Maryland 

  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert R.
  Foley

  
	
   

  	
  Name:

  	
  Robert R. Foley

  
	
   

  	
  Title:

  	
  Chief Financial
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GKK CAPITAL LP,
  a Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Gramercy Capital
  Corp., a Maryland corporation, 

  its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert R.
  Foley

  
	
   

  	
  Name:

  	
  Robert R. Foley

  
	
   

  	
  Title:

  	
  Chief Financial
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GRAMERCY
  INVESTMENT TRUST, a Maryland 

  real estate investment trust

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Robert R.
  Foley

  
	
   

  	
   

  	
  Name:

  	
  Robert R. Foley

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GKK TRADING CORP.,
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Gramercy Capital
  Corp., a Maryland corporation,

  its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Robert R.
  Foley

  
	
   

  	
   

  	
  Name:

  	
  Robert R. Foley

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial
  Officer

  
											



 


2

















 


	
  ADMINISTRATIVE AGENT:

  	
  WACHOVIA
  BANK, NATIONAL ASSOCIATION,

  as Administrative Agent on behalf of the Lenders

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marianne
  Hickman

  
	
   

  	
  Name:

  	
  Marianne Hickman

  
	
   

  	
  Title:

  	
  Managing
  Director

  
					



 


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