THE AFFECTED
PARTIES OR INDEMNIFIED PARTIES, EACH FOR THE PAYMENT THEREOF;
(xii)
TWELFTH, to the Servicer, in an amount equal to (A) if the
Servicer is Gladstone Advisers, Inc. or any of its Affiliates, its accrued and
unpaid Servicing Fees to the end of the preceding Settlement Period not
otherwise paid pursuant to priority FIFTH above; and
(XIII)
THIRTEENTH, ALL REMAINING AMOUNTS TO THE BORROWER.
Annex II
Section 5.2
Hedging Agreement.
(A)
THE BORROWER SHALL, ON OR BEFORE THE INITIAL ADVANCE HEREUNDER,
ENTER INTO A HEDGE TRANSACTION WITH A HEDGE COUNTERPARTY, WHICH SHALL: (I) BE IN
THE FORM OF INTEREST RATE CAPS OR SWAPS HAVING A NOTIONAL AMOUNT EQUAL TO (A) ON
THE CLOSING DATE, THE REQUIRED NOTIONAL AMOUNT AND (B) THEREAFTER, AN AMOUNT
REFLECTING AMORTIZATION AT A RATE TO BE DETERMINED BY THE MANAGING AGENTS UPON
CONSULTATION WITH THE BORROWER AND (II) SHALL PROVIDE FOR PAYMENTS TO THE
BORROWER TO THE EXTENT THAT THE LIBO RATE SHALL EXCEED A RATE AGREED UPON
BETWEEN THE MANAGING AGENTS AND THE BORROWER.
FROM AND AFTER MAY 27, 2005,
PRIOR TO ACQUIRING A FIXED-RATE LOAN, THE BORROWER WILL CONSULT WITH THE
MANAGING AGENTS TO DETERMINE WHETHER AN ADDITIONAL CAP OR SWAP WILL BE REQUIRED
IN RESPECT OF SUCH LOAN TO MAINTAIN COMPLIANCE WITH THE REQUIREMENTS SET FORTH
IN THE PRECEDING SENTENCE.
(B)
AS ADDITIONAL SECURITY HEREUNDER, THE BORROWER HEREBY ASSIGNS TO
THE ADMINISTRATIVE AGENT, AS AGENT FOR THE SECURED PARTIES, ALL RIGHT, TITLE AND
INTEREST OF THE BORROWER IN EACH HEDGING AGREEMENT, EACH HEDGE TRANSACTION, AND
ALL PRESENT AND FUTURE AMOUNTS PAYABLE BY A HEDGE COUNTERPARTY TO THE BORROWER
UNDER OR IN CONNECTION WITH THE RESPECTIVE HEDGING AGREEMENT AND HEDGE
TRANSACTION(S) WITH THAT HEDGE COUNTERPARTY ("HEDGE COLLATERAL"), AND GRANTS A
SECURITY INTEREST TO THE ADMINISTRATIVE AGENT, AS AGENT FOR THE SECURED PARTIES,
IN THE HEDGE COLLATERAL.
THE BORROWER ACKNOWLEDGES THAT, AS A RESULT OF THAT
ASSIGNMENT, THE BORROWER MAY NOT, WITHOUT THE PRIOR WRITTEN CONSENT OF THE
ADMINISTRATIVE AGENT, EXERCISE ANY RIGHTS UNDER ANY HEDGING AGREEMENT OR HEDGE
TRANSACTION, EXCEPT FOR THE BORROWER'S RIGHT UNDER ANY HEDGING AGREEMENT TO
ENTER INTO HEDGE TRANSACTIONS IN ORDER TO MEET THE BORROWER'S OBLIGATIONS UNDER
SECTION 5.2(A) HEREOF.
NOTHING HEREIN SHALL HAVE THE EFFECT OF RELEASING THE
BORROWER FROM ANY OF ITS OBLIGATIONS UNDER ANY HEDGING AGREEMENT OR ANY HEDGE
TRANSACTION, NOR BE CONSTRUED AS REQUIRING THE CONSENT OF THE ADMINISTRATIVE
AGENT OR ANY SECURED PARTY FOR THE PERFORMANCE BY THE BORROWER OF ANY SUCH
OBLIGATIONS.
Exhibit A
Form of Monthly Report
Please see attached.
Exhibit B
Credit and Collection Policy
On file with Agent.