Document:

Exhibit
10.5

Execution Copy

FOURTH AMENDED AND RESTATED GUARANTEE
AGREEMENT

FOURTH AMENDED AND RESTATED GUARANTEE AGREEMENT, dated
as of June 28, 2007 (as amended, restated, supplemented, or otherwise modified
from time to time, this “Guarantee”), made by GRAMERCY CAPITAL CORP., a
Maryland corporation having its principal
place of business at c/o SL Green Realty Corp., 420 Lexington Avenue, New York,
New York 10170 (the “Parent”) and GKK CAPITAL LP, a Delaware limited
partnership having its principal place of
business at c/o SL Green Realty Corp., 420 Lexington Avenue, New York,
New York 10170, GRAMERCY INVESTMENT TRUST, a Maryland real estate investment
trust, and GKK TRADING CORP., a Delaware corporation (each, a “Guarantor”,
and collectively, with Parent, the “Guarantors”), jointly and severally,
in favor of the Buyers referred to below and WACHOVIA BANK, NATIONAL
ASSOCIATION (“WBNA”) and any of its parent, subsidiary or affiliated companies,
as agent for the Buyers (collectively, in such capacity, the “Agent”).

RECITALS

In connection with that certain Third Amended and
Restated Master Repurchase Agreement, dated as of October 13, 2006 (as
heretofore amended or otherwise modified, the “Existing Repurchase Agreement”),
between WBNA, as buyer, and Gramercy Warehouse Funding I LLC (“GWF-I”) and GKK Trading Warehouse I LLC (“GKK
Trading”), as sellers, the Guarantors entered into in favor of WBNA
that certain Third Amended and Restated Guarantee Agreement, dated as of even
date therewith (as heretofore amended or otherwise modified, the “Existing
Guarantee”).

The Existing Repurchase Agreement is being amended by
that certain First Amendment to Third Amended and Restated Master Repurchase
Agreement, of even date herewith (as amended, and collectively with the Existing
Repurchase Agreement, the “Repurchase Agreement”), by and among GWF-I,
GKK Trading, GKK 450 Lex LLC (“GKK 450”) and the additional sellers from
time to time parties thereto (the “Additional Sellers”, together with
GWF-I, GKK Trading and GKK 450, collectively, the “Sellers”, each, a “Seller”),
WBNA and the additional buyers from time to time parties thereto (collectively,
the “Buyers”, each, a “Buyer”) and the Agent, with Wachovia
Capital Markets, LLC, as the Sole Lead Arranger.

It is a condition precedent to the effectiveness of
the Repurchase Agreement that each Guarantor shall have executed and delivered
this Guarantee in connection with each of the representations, warranties,
covenants, indemnities (including but not limited to any indemnification for
environmental conditions) and other obligations of (i) the Sellers with respect
to the Buyer under each of the Repurchase Documents and (ii) the Seller that
requests any Letter of Credit issued in accordance with Section 3.07 of the
Repurchase Agreement with respect to the Letter of Credit Issuers
(collectively, the “Obligations”).

NOW, THEREFORE, in consideration of the foregoing
premises, to induce the Buyer to enter into the Repurchase Documents and to
enter into the transactions contemplated thereunder, the Guarantors hereby
agree with the Agent and the Buyers, as follows:

1.             Defined
Terms. Unless otherwise defined herein, terms which are defined in the Repurchase Agreement and used herein are
so used as so defined.

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

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

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

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

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

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

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

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

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(i)               “Letter
of Credit” shall mean any letter of credit issued pursuant to Section 3.07
of the Repurchase Agreement.

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

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

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

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

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

(o)              “Total
Indebtedness”: At any time, without duplication, all Indebtedness and
Contingent Liabilities of any Person and all Subsidiaries thereof, determined
on a non-consolidated basis.

(p)              “Total
Liabilities Ratio”: As to any Person, the ratio of (a) the Total
Indebtedness of such Person to (b) the Total Assets of such Person.

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

2.              Guarantee.  
(a)   Each Guarantor hereby
unconditionally and irrevocably guarantees to the Agent and the Buyers the prompt
and complete payment and performance by

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each Seller when due
(whether at the stated maturity, by acceleration or otherwise) of the
Obligations.

(a)            (i) Subject to clause (b)(ii) below, the maximum
liability the Guarantors hereunder and under the Repurchase Documents shall in
no event exceed 10% of the greater of (i) the outstanding aggregate Purchase
Price under the Repurchase Agreement and the (ii) total capitalization
(including all debt and equity capitalization) of the Sellers.

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

(c)           Notwithstanding the foregoing, the
limitation on recourse liability as set forth in subsection (b) above SHALL
BECOME NULL AND VOID and shall be of no further force and effect and the
Obligations immediately shall become fully recourse to the Sellers and Guarantors,
jointly and severally, in the event of any of the following:

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

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

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

(iv)          any material breach of the
separateness covenants contained in the Repurchase Agreement;

(v)           any material breach of any
representations and warranties contained in any Repurchase Document including
but not limited to any representations and warranties relating to Environmental Matters, or any indemnity for costs incurred
in connection with the violation of any Environmental Law, the
correction of any environmental condition, or the removal of any Materials of
Environmental Concern, in each case in any way affecting any Seller’s or any of
its Affiliates’ properties or any of the Mortgage Assets; or

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

(d)            In addition to the
foregoing and notwithstanding the limitation on recourse liability set forth in
subsection (b), Guarantors shall be jointly and severally liable for any
losses, costs, claims, expenses or other liabilities incurred by the
Agent or any Buyer arising out of or attributable to nonmaterial breaches of
the items listed in (c)(iv) and (c)(v) above.

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

(f)            Each Guarantor further agrees to pay any and all
reasonable expenses (including, without limitation, all reasonable fees and
disbursements of counsel) which may be paid or incurred by the Agent and any
Buyer in enforcing, or obtaining advice of counsel in respect of, any rights
with respect to, or collecting, any or all of the Obligations and/or enforcing
any rights with respect to, or collecting against, either Guarantor under this
Guarantee. This Guarantee shall remain in full force and effect until the
Obligations are paid in full, notwithstanding that from time to time prior
thereto the Sellers may be free from any Obligations.

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

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

3.                     Subrogation. Upon making any
payment hereunder, Guarantors shall be subrogated to the rights of the Agent
and the Buyers against Sellers and any collateral for any Obligations with respect to such payment;
provided that Guarantors shall not seek to enforce any right or receive
any payment by way of subrogation until all amounts due and payable by Sellers to the Agent or any Buyer under the Repurchase
Documents or any related documents have been paid in full; and further
provided that such subrogation rights shall be subordinate in all respects to
all amounts owing to the Buyers and the Agent under the Repurchase Documents.

4.                     Amendments, etc. with Respect to the
Obligations. Each Guarantor shall remain obligated hereunder
notwithstanding that, without any reservation of rights against such Guarantor, and without notice to or further assent
by such Guarantor, any demand for payment of any of the Obligations made
by the Agent for the benefit of the Buyers may be rescinded by the Agent on
behalf of the Buyers and any of the Obligations continued, and the Obligations,
or 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 Agent on behalf of the Buyers, and any Repurchase Document and any other
document in connection therewith may be amended, modified, supplemented or
terminated, in

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whole or in part, as the Agent may deem advisable from
time to time, and any collateral security, guarantee or right of offset
at any time held by the Agent for the benefit of the Buyers for the payment of the Obligations may be sold,
exchanged, waived, surrendered or released. The Agent shall have no
obligation to protect, secure, perfect or insure any lien at any time held by
it as security for the Obligations or for this Guarantee or any property
subject thereto. When making any demand hereunder against Guarantors, the Agent
may, but shall be under no obligation to, make a similar demand on any Seller
or any other guarantor, and any failure by the Agent to make any such demand or to collect any payments from any Seller or any
such other guarantor or any release of any Seller or such other
guarantor shall not relieve either Guarantor of its 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
Agent against either Guarantor. For the purposes hereof “demand” shall
include the commencement and continuance of any legal proceedings.

5.             Guarantee
Absolute and Unconditional. (a)   Each Guarantor hereby
agrees that its obligations under this Guarantee constitute a guarantee of
payment when due and not of collection. Guarantors waive any and all notice of
the creation, renewal, extension or accrual of any of the Obligations and
notice of or proof of reliance by the Agent or the Buyers upon this Guarantee
or acceptance of this Guarantee; the Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred in reliance
upon this Guarantee; and all dealings between any Seller or either Guarantor,
on the one hand, and the Agent or any
Buyer, on the other hand, shall likewise be conclusively presumed to have been
had or consummated in reliance upon this Guarantee. Each Guarantor
waives promptness, diligence, presentment, protest, demand for payment and
notice of default or nonpayment to or upon the Sellers or the Guarantee with
respect to the Obligations. This Guarantee shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (i) the
validity, regularity or enforceability of any Agreement, any of the Obligations
or any collateral security therefor or guarantee or right of offset with
respect thereto at any time or from time to time held by the Agent or any
Buyer, (ii) 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 Seller against the Agent or any Buyer, (iii) any requirement that the Agent
or any Buyer exhaust any right to take any action against any Seller or any
other Person prior to or contemporaneously with proceeding to exercise any
right against Guarantors under this Guarantee or (iv) any other circumstance
whatsoever (with or without notice to or knowledge of the Sellers or the
Guarantors) which constitutes, or might be construed to constitute, an
equitable or legal discharge of the Sellers for the Obligations or of the
Guarantors under this Guarantee, in bankruptcy or in any other instance. When
pursuing its rights and remedies hereunder against the Guarantor, the Agent
may, but shall be under no obligation, to pursue such rights and remedies that
the Agent or the Buyers may have against the Sellers or any other Person or
against any collateral security or guarantee for the Obligations or any right
of offset with respect thereto, and any failure by the Agent to pursue such
other rights or remedies or to collect any payments from the Sellers 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 any Seller or any
such other Person or any such collateral security, guarantee or right of
offset, shall not relieve either Guarantor
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
Agent or any Buyer against either Guarantor. This Guarantee shall remain
in full force and effect and be binding in accordance with and to the extent of
its terms upon each Guarantor and its respective successors and assigns

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thereof, and shall inure
to the benefit of the Agent and the Buyers, and their respective successors,
endorsees, transferees and assigns, until all the Obligations and the
obligations of each Guarantor under this Guarantee shall have been satisfied by
payment in full, notwithstanding that from time to time during the term of the
Repurchase Documents any Seller may be free from any Obligations.

(a)           Without
limiting the generality of the foregoing, each Guarantor hereby agrees,
acknowledges, and represents and warrants to the Agent and the Buyers as
follows:

(i)            Each Guarantor hereby waives any
defense arising by reason of, and any and
all right to assert against the Agent or any Buyer any claim or defense based
upon, an election of remedies by the Agent or any Buyer which in any
manner impairs, affects, reduces, releases,
destroys and/or extinguishes such Guarantor’s subrogation rights, rights to
proceed against the Sellers, or any other guarantor for reimbursement or
contribution, and/or any other rights of
such Guarantor to proceed against the Sellers against any other guarantor,
or against any other person or security.

(ii)           Each Guarantor is presently informed
of the financial condition of the Sellers
and of all other circumstances which diligent inquiry would reveal and which
bear upon the risk of nonpayment of the Obligations. Each Guarantor
hereby covenants that it will make its own investigation and will continue to
keep itself informed about each of the Seller’s financial condition, the status
of other guarantors, if any, of all other circumstances which bear upon the
risk of nonpayment and that it will continue to rely upon sources other than
the Agent and the Buyers for such information and will not rely upon the Agent
or any Buyer for any such information. Absent a written request for such
information by either Guarantor to the Agent, each Guarantor hereby waives the
right, if any, to require the Agent to disclose to the Guarantor any
information which the Agent may now or hereafter acquire concerning such
condition or circumstances including, but not limited to, the release of or
revocation by any other guarantor.

(iii)          Each Guarantor has independently
reviewed the Repurchase Documents and
related agreements and has made an independent determination as to the validity
and enforceability thereof, and in executing and delivering this
Guarantee to the Agent, such Guarantor is not in any manner relying upon the
validity, and/or enforceability, and/or attachment, and/or perfection of any
liens or security interests of any kind or nature granted by the Sellers or any
other guarantor to the Agent or any Buyer, now or at any time and from time to
time in the future.

6.             Reinstatement.
This Guarantee shall continue to be effective, or be reinstated, as the case
may be, if at any time payment, or any part thereof, of any of the Obligations
is rescinded or must otherwise be restored or returned by the Agent or any
Buyer upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of any Seller or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, any
of the Sellers or any substantial part of any Seller’s property, or otherwise,
all as though such payments had not been made.

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

8.                     Representations and Warranties.
Each Guarantor represents and warrants that:

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

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

(c)           this Guarantee
has been duly executed and delivered by the Guarantor and constitutes a
legal, valid and binding obligation of the Guarantor enforceable in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally and by general principles of equity
(whether enforcement is sought in proceedings in equity or at law);

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

(e)           no litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to the knowledge
of the Guarantor, threatened by or against the Guarantor or against any of the
Guarantor’s properties or revenues with respect to this Guarantee or any of the
transactions contemplated hereby; and

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

Each Guarantor agrees that the foregoing
representations and warranties shall be deemed to have been made by such
Guarantor on the date of each Transaction under the

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Repurchase
Agreement, on and as of such date of the Transaction, as though made hereunder
on and as of such date.

9.             Covenants.

(a)           Financial
Statements. (i) As soon as available and in any event within forty-five
(45) days after the end of each fiscal quarter of each Guarantor, each
Guarantor shall deliver to the Agent and each Buyer the unaudited consolidated
balance sheets of such Guarantor and its consolidated Subsidiaries (and, to the
extent available, for each Seller) as at the
end of such period and the related unaudited consolidated statements of income
and retained earnings and of cash flows for such Guarantor and its
consolidated Subsidiaries (and, to the extent available, for each Seller) 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 Seller) 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 extent
applicable, for each Seller) in accordance with GAAP, consistently applied, as
at the end of, and for, such period (subject to normal year-end adjustments); provided,
that the Agent and any Buyer may disclose
such financial statements, if required, to its regulators, or as
otherwise required by law.

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

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

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

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chart (depicting and
delineating all of such Guarantor’s consolidated and non-consolidated
Subsidiaries).

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

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

(d)                  Maintenance
of Ratio of Consolidated Total Indebtedness to Consolidated Total Assets.
At no time shall the ratio of the Consolidated Total Indebtedness of the
Guarantors (calculated on an aggregate basis after including each Guarantor’s
pro-rata share of the Indebtedness and Contingent Liabilities of any off
balance sheet securitization vehicles in which
each such Guarantor or any of their respective Subsidiaries, Affiliates or
Unconsolidated Affiliates own equity, other than any Unconsolidated
Affiliates that are securitization vehicles which qualify as QSPEs) to the
Consolidated Total Assets of the Guarantors (calculated on an aggregate basis
after including each Guarantor’s pro-rata share of the then-current fair market
value of each Guarantor’s interests in any of the assets of any off balance
sheet securitization vehicles in which each such Guarantor or any of their
respective Subsidiaries, Affiliates or Unconsolidated Affiliates own equity,
other than any Unconsolidated Affiliates that are securitization vehicles which
qualify as QSPEs) be greater than 0.90 to 1.00.

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

(f)            Maximum Total Liabilities Ratio. At no time
shall the Total Liabilities Ratio of the
Guarantors (calculated on an aggregate basis after deducting the total amount of
all

 A-10
 

Trust
Preferred Securities from the Total Indebtedness of the Guarantors) be greater
than .85 to 1.00.

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

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

(i)            Minimum
Tangible Net Worth. At no time shall the Tangible Net Worth of the Guarantors
(calculated on an aggregate basis) be less than the sum of (x) $400,000,000,
and (y) seventy-five percent (75%) of the net proceeds from the issuance by any
Guarantor or any Subsidiary thereof of any of any Capital Stock of any class
(whether in a public offering or a private placement) subsequent to the date of
this Guarantee.

(j)            Prohibition
on Additional Indebtedness. No Guarantor shall at any time incur any
Indebtedness in excess of the sum of: (i) $300,000,000 with respect to future
funding obligations under Mortgage Assets acquired by the Sellers, which future
funding obligations shall exclude (A) all amounts committed for future fundings
under either the Repurchase Agreement or the Amended and Restated Master
Repurchase Agreement (dated as of October 13,
2006) between Goldman Sachs Mortgage Company, Gramercy Warehouse Funding II LLC
and GKK Trading Warehouse II, LLC, net of any equity portions thereof which
must be funded by any Guarantor or any Affiliates or Subsidiaries of any
Guarantor, and (B) the amount of all such
future funding obligations that are then-currently and exclusively allocated or
budgeted by any Guarantor or any Affiliate or Subsidiary of any
Guarantor, either as interest reserves or for the acquisition of additional
Eligible Assets, in either case also net of any equity portions thereof which
must be funded by any Guarantor or any Affiliates or Subsidiaries of any Guarantor, (ii) such Guarantor’s obligations
under this Agreement, (iii) customary and standard trade payables incurred
by such Guarantor in the ordinary course of business, provided that (A) the aggregate amount of any such outstanding
trade payables shall at no time exceed $500,000, and (B) any such trade
payable amounts shall be paid by such Guarantor within sixty (60) days of when
they were incurred, (iv) fees payable under the Management Contract as in
effect on the date hereof, (v) similar guarantee obligations with respect to
other credit or repurchase facilities which provide financing for other
Subsidiaries or Affiliates of such Guarantor (other than Sellers under the
documents related to any of the transactions contemplated by the Repurchase Agreement), but only if such guarantee
obligations are pari passu in class and right with
the obligations to Buyer under the Repurchase Agreement, and only if Buyer
receives a Non-Consolidation Opinion with respect to such obligations and (vi)
the then-current outstanding balance of all unpaid obligations of any Guarantor
under that certain First Amended and Restated Credit Agreement dated as of June
28, 2007, among GKK Capital LP, as borrower, Keybank National Association, as
agent, the banks party thereto and Keybanc Capital
Markets, as sole lead manager and arranger, but in no event shall the total
amount of all obligations outstanding under such credit agreement exceed
an amount equal to $225,000,000.

(k)           Buy
Back of Capital Stock. No Guarantor shall be permitted to buy back any of
its Capital Stock while this Guarantee remains in effect unless (1) no Margin
Deficit,

 A-11
 

Default
or Event of Default exists under the Repurchase Agreement and (2) Sellers and
each Guarantor shall continuously (and immediately thereafter) meet all
covenants, conditions, representations and warranties, whether financial or
otherwise, as set forth in any of the Repurchase Documents.

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

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

(n)           Interest
Rate Protection Agreements. Each Guarantor which is from time to time party
to any Interest Rate Protection Agreement related to any Purchased Asset shall
make, or cause to be made, all payments from time to time due and payable by
such Guarantor under such Interest Rate Protection Agreement directly into the
Collection Account as contemplated under Section 5.01 of the
Repurchase Agreement.

(o)           Internalization
of Management. Parent shall not internalize the management of Parent
without the prior written consent of the Agent; provided, however, that such consent shall be granted by the
Agent so long as (1) no Margin Deficit, Default or Event of Default exists
under the Repurchase Agreement, (2) Sellers shall, at the time of such
internalization, and Parent shall cause Sellers to continue after such
internalization to meet all covenants, conditions, representations and
warranties, whether financial or otherwise, as set forth in any of the
Repurchase Documents, and (3) Parent shall deliver to the Agent a fairness
opinion, in form and substance acceptable to the Agent, provided by a
nationally recognized expert in the related field acceptable to the Agent.

10.                  Severability. Any provision of this
Guarantee 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.

11.                  Paragraph Headings. The paragraph
headings used in this Guarantee are for convenience of reference only and are
not to affect the construction hereof or be taken into consideration in the
interpretation hereof.

12.                  No Waiver; Cumulative Remedies. The
Agent shall not by any act (except by a
written instrument pursuant to paragraph 14 hereof), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any default or event of default or in any breach
of any of the terms and conditions hereof. No failure to exercise, nor any
delay in exercising, on the part of the Agent, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or

 A-12
 

privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Agent of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Agent would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any
rights or remedies provided by law.

13.                  Waivers and Amendments; Successors and
Assigns; Governing Law. None of the terms or provisions of this Guarantee
may be waived, amended, supplemented or otherwise modified except by a written
instrument executed by each Guarantor and the Agent, provided that, subject to
any limitations set forth in the Repurchase Agreement, any provision of this
Guarantee may be waived by the Agent in a letter or agreement executed by the
Agent or by telex or facsimile transmission from the Agent. This Guarantee
shall be binding upon the heirs, personal representatives, successors and
assigns of the Guarantors and shall inure to the benefit of the Agent and the
Buyers, and their respective successors and assigns. THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

14.                  Notices. Notices by the Agent to any
Guarantor may be given by mail, or by
telecopy transmission, addressed to such Guarantor at the address or
transmission number set forth under its signature below and shall be
effective (a) in the case of mail, five days after deposit in the postal system, first class certified mail and postage
pre-paid, (b) one Business Day following timely delivery to a nationally
recognized overnight courier service for next Business Day delivery and (c) in the case of telecopy transmissions, when sent,
transmission electronically confirmed.

15.                  SUBMISSION
TO JURISDICTION; WAIVERS. EACH
GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY:

(A)                  SUBMITS FOR THE GUARANTOR AND THE GUARANTOR’S
PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE AND THE OTHER LOAN DOCUMENTS TO WHICH
THE GUARANTOR IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;

(B)                   CONSENTS
THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND
WAIVES ANY OBJECTION THAT THE GUARANTOR MAY NOW OR HEREAFTER HAVE TO THE VENUE
OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT
AND AGREES NOT TO PLEAD OR CLAIM THE SAME;

(C)                   AGREES
THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED
BY MAILING A COPY THEREOF BY REGISTERED

 A-13
 

OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM
OF MAIL), POSTAGE PREPAID, TO THE GUARANTOR AT THE GUARANTOR’S ADDRESS SET
FORTH UNDER THE GUARANTOR’S SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH
THE BUYER SHALL HAVE BEEN NOTIFIED; AND

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

16.                  Integration. This Guarantee
represents the agreement of each Guarantor with respect to the subject matter
hereof and there are no promises or representations by the Agent or any Buyer
relative to the subject matter hereof not reflected herein.

17.                  Acknowledgments.
Each Guarantor hereby acknowledges that:

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

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

(c)                  no joint
venture exists between or among any of the Agent, the Buyers, the Guarantors
and the Sellers.

18.                  Amendment and Restatement. The
Existing Guarantee is amended, restated and superseded in its entirety by this
Guarantee. Each Guarantor confirms and agrees that it has no, and it hereby
waives all, defenses, rights of setoff, claims, counterclaims or causes of
action of any kind or description against the Agent and the Buyers arising under
or in respect of the Existing Guarantee or
any related document and each Guarantor hereby confirms, as of the date
hereof, that each of the Agent and the Buyers is in full compliance with all of
its undertakings and obligations under the Repurchase Documents.

19.                  WAIVERS
OF JURY TRIAL. EACH OF THE GUARANTORS AND THE AGENT HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS GUARANTEE OR ANY RELATED DOCUMENT AND FOR ANY
COUNTERCLAIM HEREIN OR THEREIN.

[SIGNATURES COMMENCE ON THE FOLLOWING PAGE]

 A-14

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

	
   

  	
  GRAMERCY CAPITAL CORP., a Maryland 

  Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Hugh Hall

  
	
   

  	
   

  	
  Title: Chief Operating Officer

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  420 Lexington Avenue

  
	
   

  	
  New York, New York  10170

  
	
   

  	
  Telephone:  (212) 216-1713

  
	
   

  	
  Telecopy:  

  
	
   

  	
  Attention: Bob Foley

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
  Richard Jones

  
	
   

  	
  Dechert LLP

  
	
   

  	
  4000 Bell Atlantic
  Tower, 1717 Arch Street 

  
	
   

  	
  Philadelphia,
  Pennsylvania 19103-2793 

  
	
   

  	
  Telephone: (215)
  994-4000

  
	
   

  	
  Telecopy: (215) 994-2222

  
	
   

  	
   

  
	
  THE STATE OF NEW YORK

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  COUNTY OF NASSAU

  	
  )

  	
   

  

 

Subscribed and
sworn before me, a Notary Public in and for the County and State, this          
day of June, in the year 2007.

	
  

  	
   

  	
   

  
	
   

  	
     NOTARY PUBLIC

  
	
   

  	
   

  	
   

  
				

 

	
  My Commission Expires:

  	
   

  	
   

  

 

Signature Page to
the Fourth Amended and Restated Guarantee agreement

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

	
  

  	
  GKK
  CAPITAL LP, a Delaware limited

  
	
   

  	
  partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GRAMERCY CAPITAL CORP., a 

  Maryland corporation, its general

  partner

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:  Hugh
  Hall

  	
   

  
	
   

  	
   

  	
   

  	
  Title:  Chief
  Operating Officer

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  420 Lexington Avenue

  
	
   

  	
  New York, New York  10170

  
	
   

  	
  Telephone:  (212) 216-1713

  
	
   

  	
  Telecopy:  

  
	
   

  	
  Attention: Bob Foley

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
  Richard Jones

  
	
   

  	
  Dechert LLP

  
	
   

  	
  4000 Bell Atlantic Tower, 1717 Arch Street

  
	
   

  	
  Philadelphia, Pennsylvania 19103-2793

  
	
   

  	
  Telephone: (215) 994-4000

  
	
   

  	
  Telecopy: (215) 994-2222

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE STATE OF NEW YORK

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  COUNTY OF NASSAU

  	
  )

  	
   

  
							

 

Subscribed and sworn
before me, a Notary Public in and for the County and State, this
          day of June, in the year
2007.

	
  

  	
   

  	
   

  
	
   

  	
      NOTARY PUBLIC

  
	
   

  	
   

  

 

	
  My Commission Expires:

  	
   

  	
   

  

 

Signature Page to
the Fourth Amended and Restated Guarantee agreement

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

	
  

  	
  GRAMERCY
  INVESTMENT TRUST, a 

  Maryland real estate investment trust

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GKK CAPITAL LP, a Delaware limited 

  partnership

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  GRAMERCY CAPITAL CORP., a 

  Maryland corporation, its general 

  partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:  Hugh
  Hall

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title:  Chief
  Operating Officer

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  420 Lexington Avenue

  
	
   

  	
  New York, New York  10170

  
	
   

  	
  Telephone:  (212) 216-1713

  
	
   

  	
  Telecopy:  

  
	
   

  	
  Attention: Bob Foley

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
  Richard Jones

  
	
   

  	
  Dechert LLP

  
	
   

  	
  4000 Bell Atlantic Tower, 1717 Arch Street

  
	
   

  	
  Philadelphia, Pennsylvania 19103-2793

  
	
   

  	
  Telephone: (215) 994-4000

  
	
   

  	
  Telecopy: (215) 994-2222

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE STATE OF NEW YORK

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  COUNTY OF NASSAU

  	
  )

  	
   

  
								

 

Subscribed and sworn
before me, a Notary Public in and for the County and State, this
          day of June, in the year
2007.

	
  

  	
   

  	
   

  
	
   

  	
      NOTARY PUBLIC

  
	
   

  	
   

  

 

	
  My Commission Expires:

  	
   

  	
   

  

 

Signature Page to
the Fourth Amended and Restated Guarantee agreement

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

	
  

  	
  GKK TRADING
  CORP., a Delaware

  
	
   

  	
  corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GRAMERCY CAPITAL CORP., a 

  Maryland corporation, its general partner

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:  Hugh
  Hall

  	
   

  
	
   

  	
   

  	
   

  	
  Title:  Chief
  Operating Officer

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  420 Lexington Avenue

  
	
   

  	
  New York, New York  10170

  
	
   

  	
  Telephone:  (212) 216-1713

  
	
   

  	
  Telecopy:  

  
	
   

  	
  Attention: Bob Foley

  
	
   

  	
   

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
  Richard Jones

  
	
   

  	
  Dechert LLP

  
	
   

  	
  4000 Bell Atlantic Tower, 1717 Arch Street

  
	
   

  	
  Philadelphia, Pennsylvania 19103-2793

  
	
   

  	
  Telephone: (215) 994-4000

  
	
   

  	
  Telecopy: (215) 994-2222

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE STATE OF NEW YORK

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  COUNTY OF NASSAU

  	
  )

  	
   

  
							

 

Subscribed and sworn
before me, a Notary Public in and for the County and State, this
          day of June, in the year
2007.

	
  

  	
   

  	
   

  
	
   

  	
      NOTARY PUBLIC

  
	
   

  	
   

  

 

	
  My Commission Expires:

  	
   

  	
   

  

 

Signature Page to
the Fourth Amended and Restated Guarantee agreementExhibit
10.6

FIRST
AMENDED AND RESTATED

CREDIT
AGREEMENT

Dated as of June
28, 2007

among

GKK
CAPITAL LP

as Borrower,

KEYBANK
NATIONAL ASSOCIATION,

as a Bank,

THE OTHER
BANKS WHICH MAY BECOME PARTIES TO THIS AGREEMENT,

KEYBANK
NATIONAL ASSOCIATION,

as Agent

and

KEYBANC
CAPITAL MARKETS,

as Sole Lead
Manager and Arranger

TABLE OF CONTENTS

 

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  §1.

  	
  DEFINITIONS AND RULES
  OF INTERPRETATION

  	
   

  	
  1

  
	
   

  	
  §1.1

  	
  Definitions

  	
   

  	
  1

  
	
   

  	
  §1.2

  	
  Rules of Interpretation

  	
   

  	
  23

  
	
  §2.

  	
  THE CREDIT FACILITY

  	
   

  	
  23

  
	
   

  	
  §2.1

  	
  Commitment to Lend

  	
   

  	
  23

  
	
   

  	
  §2.2

  	
  Facility Fee

  	
   

  	
  24

  
	
   

  	
  §2.3

  	
  Reduction of Commitment

  	
   

  	
  24

  
	
   

  	
  §2.4

  	
  Notes

  	
   

  	
  25

  
	
   

  	
  §2.5

  	
  Interest on Loans

  	
   

  	
  25

  
	
   

  	
  §2.6

  	
  Requests for Revolving Credit Loans

  	
   

  	
  25

  
	
   

  	
  §2.7

  	
  Funds for Loans

  	
   

  	
  26

  
	
   

  	
  §2.8

  	
  Advances Do Not Constitute a Waiver

  	
   

  	
  26

  
	
   

  	
  §2.9

  	
  Use of Proceeds

  	
   

  	
  26

  
	
   

  	
  §2.10

  	
  Increase of Commitment

  	
   

  	
  27

  
	
   

  	
  §2.11

  	
  Swing Loan Commitment

  	
   

  	
  28

  
	
   

  	
  §2.12

  	
  Letters of Credit

  	
   

  	
  30

  
	
  §3.

  	
  REPAYMENT OF THE LOANS

  	
   

  	
  32

  
	
   

  	
  §3.1

  	
  Stated Maturity

  	
   

  	
  32

  
	
   

  	
  §3.2

  	
  Mandatory Prepayments

  	
   

  	
  32

  
	
   

  	
  §3.3

  	
  Optional Prepayments

  	
   

  	
  33

  
	
   

  	
  §3.4

  	
  Partial Prepayments

  	
   

  	
  33

  
	
   

  	
  §3.5

  	
  Effect of Prepayments

  	
   

  	
  33

  
	
   

  	
  §3.6

  	
  Extension of Maturity Date

  	
   

  	
  33

  
	
  §4.

  	
  CERTAIN GENERAL PROVISIONS

  	
   

  	
  34

  
	
   

  	
  §4.1

  	
  Conversion Options

  	
   

  	
  34

  
	
   

  	
  §4.2

  	
  Closing Fee

  	
   

  	
  34

  
	
   

  	
  §4.3

  	
  Agent’s Fee

  	
   

  	
  35

  

 

 i
 

 

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
  §4.4

  	
  Funds for Payments

  	
   

  	
  35

  
	
   

  	
  §4.5

  	
  Computations

  	
   

  	
  36

  
	
   

  	
  §4.6

  	
  Suspension of LIBOR Rate Loans

  	
   

  	
  36

  
	
   

  	
  §4.7

  	
  Illegality

  	
   

  	
  37

  
	
   

  	
  §4.8

  	
  Additional Interest

  	
   

  	
  37

  
	
   

  	
  §4.9

  	
  Additional Costs, Etc

  	
   

  	
  37

  
	
   

  	
  §4.10

  	
  Capital Adequacy

  	
   

  	
  38

  
	
   

  	
  §4.11

  	
  Indemnity of Borrower

  	
   

  	
  38

  
	
   

  	
  §4.12

  	
  Interest on Overdue Amounts

  	
   

  	
  38

  
	
   

  	
  §4.13

  	
  Certificate

  	
   

  	
  39

  
	
   

  	
  §4.14

  	
  Limitation on Interest

  	
   

  	
  39

  
	
   

  	
  §4.15

  	
  Certain Provisions Relating to Increased Costs

  	
   

  	
  39

  
	
  §5.

  	
  SECURITY; GUARANTY

  	
   

  	
  40

  
	
   

  	
  §5.1

  	
  Collateral; Guaranties

  	
   

  	
  40

  
	
   

  	
  §5.2

  	
  Subsidiary Guarantors

  	
   

  	
  40

  
	
   

  	
  §5.3

  	
  Release of Certain Subsidiary Guarantors

  	
   

  	
  40

  
	
  §6.

  	
  REPRESENTATIONS AND WARRANTIES OF THE BORROWER

  	
   

  	
  40

  
	
   

  	
  §6.1

  	
  Corporate Authority, Etc

  	
   

  	
  40

  
	
   

  	
  §6.2

  	
  Governmental Approvals

  	
   

  	
  41

  
	
   

  	
  §6.3

  	
  Title to Assets; Lease

  	
   

  	
  42

  
	
   

  	
  §6.4

  	
  Financial Statements

  	
   

  	
  42

  
	
   

  	
  §6.5

  	
  No Material Changes

  	
   

  	
  42

  
	
   

  	
  §6.6

  	
  Franchises, Patents, Copyrights, Etc

  	
   

  	
  42

  
	
   

  	
  §6.7

  	
  Litigation

  	
   

  	
  42

  
	
   

  	
  §6.8

  	
  No Materially Adverse Contracts, Etc

  	
   

  	
  42

  
	
   

  	
  §6.9

  	
  Compliance with Other Instruments, Laws, Etc

  	
   

  	
  43

  

 

 ii
 

 

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
  §6.10

  	
  Tax Status

  	
   

  	
  43

  
	
   

  	
  §6.11

  	
  No Event of Default

  	
   

  	
  43

  
	
   

  	
  §6.12

  	
  Investment Company Act

  	
   

  	
  43

  
	
   

  	
  §6.13

  	
  Absence of UCC Financing Statements, Etc

  	
   

  	
  43

  
	
   

  	
  §6.14

  	
  Not a “Foreign Person

  	
   

  	
  43

  
	
   

  	
  §6.15

  	
  Certain Transactions

  	
   

  	
  43

  
	
   

  	
  §6.16

  	
  Employee Benefit Plans

  	
   

  	
  44

  
	
   

  	
  §6.17

  	
  Regulations T, U and X

  	
   

  	
  44

  
	
   

  	
  §6.18

  	
  [Intentionally Omitted.]

  	
   

  	
  44

  
	
   

  	
  §6.19

  	
  Significant Subsidiaries

  	
   

  	
  44

  
	
   

  	
  §6.20

  	
  Pledged Collateral

  	
   

  	
  44

  
	
   

  	
  §6.21

  	
  Loan Documents

  	
   

  	
  44

  
	
   

  	
  §6.22

  	
  [Intentionally Omitted.]

  	
   

  	
  45

  
	
   

  	
  §6.23

  	
  Brokers

  	
   

  	
  45

  
	
   

  	
  §6.24

  	
  Other Debt

  	
   

  	
  45

  
	
   

  	
  §6.25

  	
  Solvency

  	
   

  	
  45

  
	
   

  	
  §6.26

  	
  Bankruptcy Filing

  	
   

  	
  45

  
	
   

  	
  §6.27

  	
  No Fraudulent Intent

  	
   

  	
  45

  
	
   

  	
  §6.28

  	
  Transaction in Best Interests of Borrower;
  Consideration

  	
   

  	
  45

  
	
   

  	
  §6.29

  	
  Ownership; Management

  	
   

  	
  45

  
	
   

  	
  §6.30

  	
  Embargoed Persons

  	
   

  	
  46

  
	
   

  	
  §6.31

  	
  Contribution Agreement

  	
   

  	
  46

  
	
  §7.

  	
  AFFIRMATIVE COVENANTS OF THE BORROWER

  	
   

  	
  46

  
	
   

  	
  §7.1

  	
  Punctual Payment

  	
   

  	
  46

  
	
   

  	
  §7.2

  	
  Maintenance of Office

  	
   

  	
  46

  
	
   

  	
  §7.3

  	
  Records and Accounts

  	
   

  	
  46

  

 

 iii
 

 

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
  §7.4

  	
  Financial Statements, Certificates and Information

  	
   

  	
  46

  
	
   

  	
  §7.5

  	
  Notices

  	
   

  	
  48

  
	
   

  	
  §7.6

  	
  Existence; Maintenance of Properties

  	
   

  	
  49

  
	
   

  	
  §7.7

  	
  Insurance

  	
   

  	
  49

  
	
   

  	
  §7.8

  	
  Taxes

  	
   

  	
  49

  
	
   

  	
  §7.9

  	
  Inspection of Properties and Books

  	
   

  	
  50

  
	
   

  	
  §7.10

  	
  Compliance with Laws, Contracts, Licenses, and
  Permits

  	
   

  	
  50

  
	
   

  	
  §7.11

  	
  Further Assurances

  	
   

  	
  50

  
	
   

  	
  §7.12

  	
  Business Operations

  	
   

  	
  50

  
	
   

  	
  §7.13

  	
  [Intentionally Omitted.]

  	
   

  	
  50

  
	
   

  	
  §7.14

  	
  Management

  	
   

  	
  50

  
	
   

  	
  §7.15

  	
  Plan Assets

  	
   

  	
  51

  
	
   

  	
  §7.16

  	
  Distributions of Income to the Borrower and
  Subsidiary Guarantors

  	
   

  	
  51

  
	
   

  	
  §7.17

  	
  Unencumbered Borrowing Base Assets

  	
   

  	
  51

  
	
  §8.

  	
  CERTAIN NEGATIVE COVENANTS OF THE BORROWER

  	
   

  	
  53

  
	
   

  	
  §8.1

  	
  Restrictions on Indebtedness

  	
   

  	
  53

  
	
   

  	
  §8.2

  	
  Restrictions on Liens, Etc

  	
   

  	
  54

  
	
   

  	
  §8.3

  	
  Restrictions on Investments

  	
   

  	
  55

  
	
   

  	
  §8.4

  	
  Merger, Consolidation

  	
   

  	
  55

  
	
   

  	
  §8.5

  	
  Sale and Leaseback

  	
   

  	
  56

  
	
   

  	
  §8.6

  	
  Restrictions on Prepayment of Indebtedness

  	
   

  	
  56

  
	
   

  	
  §8.7

  	
  Distributions

  	
   

  	
  56

  
	
   

  	
  §8.8

  	
  Limiting Agreements

  	
   

  	
  57

  
	
   

  	
  §8.9

  	
  Management Agreement

  	
   

  	
  57

  
	
   

  	
  §8.10

  	
  Pledges

  	
   

  	
  57

  
	
   

  	
  §8.11

  	
  More Restrictive Agreements

  	
   

  	
  57

  

 

 iv
 

 

	
  

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  §9.

  	
  FINANCIAL COVENANTS

  	
   

  	
  57

  
	
   

  	
  §9.1

  	
  Available Amount

  	
   

  	
  58

  
	
   

  	
  §9.2

  	
  [Intentionally Omitted]

  	
   

  	
  58

  
	
   

  	
  §9.3

  	
  Fixed Charges Coverage Ratio

  	
   

  	
  58

  
	
   

  	
  §9.4

  	
  Consolidated Tangible Net Worth

  	
   

  	
  58

  
	
   

  	
  §9.5

  	
  [Intentionally Omitted]

  	
   

  	
  58

  
	
   

  	
  §9.6

  	
  Senior Leverage Ratio

  	
   

  	
  58

  
	
  §10.

  	
  CLOSING CONDITIONS

  	
   

  	
  58

  
	
   

  	
  §10.1

  	
  Loan Documents

  	
   

  	
  58

  
	
   

  	
  §10.2

  	
  Certified Copies of Organizational Documents

  	
   

  	
  58

  
	
   

  	
  §10.3

  	
  Authorizing Actions

  	
   

  	
  58

  
	
   

  	
  §10.4

  	
  Incumbency Certificate; Authorized Signers

  	
   

  	
  58

  
	
   

  	
  §10.5

  	
  Opinion of Counsel

  	
   

  	
  59

  
	
   

  	
  §10.6

  	
  Payment of Fees

  	
   

  	
  59

  
	
   

  	
  §10.7

  	
  Performance; No Default

  	
   

  	
  59

  
	
   

  	
  §10.8

  	
  Representations and Warranties

  	
   

  	
  59

  
	
   

  	
  §10.9

  	
  Proceedings and Documents

  	
   

  	
  59

  
	
   

  	
  §10.10

  	
  Compliance Certificate and Borrowing Base
  Certificate

  	
   

  	
  59

  
	
   

  	
  §10.11

  	
  Stockholder and Partner Consents

  	
   

  	
  59

  
	
   

  	
  §10.12

  	
  [Intentionally Omitted]

  	
   

  	
  59

  
	
   

  	
  §10.13

  	
  Other

  	
   

  	
  59

  
	
  §11.

  	
  CONDITIONS TO ALL BORROWINGS

  	
   

  	
  59

  
	
   

  	
  §11.1

  	
  Representations True; No Default

  	
   

  	
  60

  
	
   

  	
  §11.2

  	
  Borrowing Documents

  	
   

  	
  60

  
	
  §12.

  	
  EVENTS OF DEFAULT; ACCELERATION; ETC

  	
   

  	
  60

  
	
   

  	
  §12.1

  	
  Events of Default and Acceleration

  	
   

  	
  60

  
	
   

  	
  §12.2

  	
  Limitation of Cure Periods

  	
   

  	
  62

  

 

 v
 

 

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
  §12.3

  	
  Termination of Commitments

  	
   

  	
  62

  
	
   

  	
  §12.4

  	
  Remedies

  	
   

  	
  63

  
	
   

  	
  §12.5

  	
  Distribution of Proceeds

  	
   

  	
  63

  
	
  §13.

  	
  SETOFF

  	
   

  	
  64

  
	
  §14.

  	
  THE AGENT

  	
   

  	
  64

  
	
   

  	
  §14.1

  	
  Authorization

  	
   

  	
  64

  
	
   

  	
  §14.2

  	
  Employees and Agents

  	
   

  	
  64

  
	
   

  	
  §14.3

  	
  No Liability

  	
   

  	
  64

  
	
   

  	
  §14.4

  	
  No Representations

  	
   

  	
  65

  
	
   

  	
  §14.5

  	
  Payments

  	
   

  	
  65

  
	
   

  	
  §14.6

  	
  Holders of Notes

  	
   

  	
  66

  
	
   

  	
  §14.7

  	
  Indemnity

  	
   

  	
  66

  
	
   

  	
  §14.8

  	
  Agent as Bank

  	
   

  	
  66

  
	
   

  	
  §14.9

  	
  Resignation

  	
   

  	
  67

  
	
   

  	
  §14.10

  	
  Duties in the Case of Enforcement

  	
   

  	
  67

  
	
   

  	
  §14.11

  	
  Bankruptcy

  	
   

  	
  67

  
	
   

  	
  §14.12

  	
  Approvals

  	
   

  	
  68

  
	
   

  	
  §14.13

  	
  Borrower not Beneficiary

  	
   

  	
  68

  
	
  §15.

  	
  EXPENSES

  	
   

  	
  68

  
	
  §16.

  	
  INDEMNIFICATION

  	
   

  	
  69

  
	
  §17.

  	
  SURVIVAL OF COVENANTS, ETC

  	
   

  	
  69

  
	
  §18.

  	
  ASSIGNMENT AND PARTICIPATION

  	
   

  	
  70

  
	
   

  	
  §18.1

  	
  Conditions to Assignment by Banks

  	
   

  	
  70

  
	
   

  	
  §18.2

  	
  Register

  	
   

  	
  71

  
	
   

  	
  §18.3

  	
  New Notes

  	
   

  	
  71

  
	
   

  	
  §18.4

  	
  Participations

  	
   

  	
  71

  
	
   

  	
  §18.5

  	
  Pledge by Bank

  	
   

  	
  71

  

 

 vi
 

 

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
  §18.6

  	
  No Assignment by Borrower

  	
   

  	
  71

  
	
   

  	
  §18.7

  	
  Disclosure

  	
   

  	
  72

  
	
   

  	
  §18.8

  	
  Title Agents

  	
   

  	
  72

  
	
   

  	
  §18.9

  	
  Mandatory Assignment

  	
   

  	
  72

  
	
  §19.

  	
  NOTICES

  	
   

  	
  73

  
	
  §20.

  	
  RELATIONSHIP

  	
   

  	
  74

  
	
  §21.

  	
  GOVERNING LAW: CONSENT TO JURISDICTION AND SERVICE

  	
   

  	
  74

  
	
  §22.

  	
  HEADINGS

  	
   

  	
  75

  
	
  §23.

  	
  COUNTERPARTS

  	
   

  	
  75

  
	
  §24.

  	
  ENTIRE AGREEMENT, ETC

  	
   

  	
  75

  
	
  §25.

  	
  WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS

  	
   

  	
  75

  
	
  §26.

  	
  DEALINGS WITH THE BORROWER OR THE GUARANTORS

  	
   

  	
  75

  
	
  §27.

  	
  CONSENTS, AMENDMENTS, WAIVERS, ETC

  	
   

  	
  76

  
	
  §28.

  	
  SEVERABILITY

  	
   

  	
  76

  
	
  §29.

  	
  TIME OF THE ESSENCE

  	
   

  	
  76

  
	
  §30.

  	
  NO UNWRITTEN AGREEMENTS

  	
   

  	
  77

  
	
  §31.

  	
  REPLACEMENT OF NOTES

  	
   

  	
  77

  
	
  §32.

  	
  RIGHTS OF THIRD PARTIES

  	
   

  	
  77

  
	
  §33.

  	
  PATRIOT ACT

  	
   

  	
  77

  

 

 vii

EXHIBITS AND SCHEDULES

	
  EXHIBIT A

  	
  -

  	
  FORM OF NOTE

  
	
  EXHIBIT B

  	
  -

  	
  FORM OF REQUEST FOR LOAN

  
	
  EXHIBIT C

  	
  -

  	
  FORM OF COMPLIANCE
  CERTIFICATE

  
	
  EXHIBIT D

  	
  -

  	
  FORM OF JOINDER AGREEMENT

  
	
  EXHIBIT E

  	
  -

  	
  FORM OF ASSIGNMENT AND
  ACCEPTANCE AGREEMENT

  
	
  EXHIBIT F

  	
   

  	
  FORM OF SWING LOAN NOTE

  
	
  EXHIBIT G

  	
   

  	
  FORM OF LETTER OF CREDIT
  REQUEST

  
	
  EXHIBIT H

  	
   

  	
  FORM OF LETTER OF CREDIT
  APPLICATION

  
	
  SCHEDULE 1

  	
  -

  	
  BANKS AND COMMITMENTS

  
	
  SCHEDULE 6.7

  	
  -

  	
  LITIGATION

  
	
  SCHEDULE 6.15

  	
  -

  	
  AFFILIATE TRANSACTIONS

  
	
  SCHEDULE 6.19

  	
  -

  	
  SIGNIFICANT SUBSIDIARIES

  
	
  SCHEDULE 7.17

  	
  -

  	
  INITIAL UNENCUMBERED
  BORROWING BASE ASSETS

  

 

 ix

FIRST
AMENDED AND RESTATED CREDIT AGREEMENT

This FIRST AMENDED AND RESTATED
CREDIT AGREEMENT is made as of the 28th day of June, 2007, by and
among GKK CAPITAL LP, a Delaware limited
partnership (the “Borrower”), KEYBANK NATIONAL
ASSOCIATION, and the other lending institutions which are a party
hereto, and the other lending institutions which may become parties hereto
pursuant to §18 (the “Banks”), and KEYBANK NATIONAL
ASSOCIATION, a national banking association, as Administrative Agent
for the Banks (in such capacity, the “Agent”).

RECITALS

WHEREAS, Borrower, Agent, KeyBank and the other Banks
a party thereto entered into that certain Credit Agreement dated as of
May 24, 2006 (the “Original Credit Agreement”); and

WHEREAS, Borrower has requested that Agent and the
Banks extend the “Maturity Date” and increase the “Total Commitment” (as
defined in the Original Credit Agreement) and modify certain other provisions
of the Original Credit Agreement; and

WHEREAS, Borrower, the Banks and Agent desire to amend
and restate the Original Credit Agreement;

NOW, THEREFORE, in consideration of the recitals
herein and the mutual covenants and agreements contained herein, the parties
hereto hereby amend and restate the Original Credit Agreement in its entirety
and covenant and agree as follows:

§1.                               DEFINITIONS AND RULES OF
INTERPRETATION.

§1.1                        Definitions. 
The following terms shall have the meanings set forth in this §1 or
elsewhere in the provisions of this Agreement referred to below:

Affected Bank.  See §4.15.

Affiliate.  As to any
Person, any other Person which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person.  A Person shall be deemed to control another
Person if the controlling Person possesses, directly or indirectly, the power
to direct or cause the direction of the management and policies of the other
Person, whether through the ownership of voting securities, by contract or
otherwise.  Without limitation, any
director, executive officer or beneficial owner of ten percent (10%) or more of
the equity of a Person shall, for the purposes of this Agreement, be deemed to
control the other Person.  In no event
shall any Bank be deemed an Affiliate of the Borrower.

Agent.  KeyBank,
acting as Administrative Agent for the Banks, its successors and assigns.

Agent’s Head Office.  The Agent’s
head office located at 127 Public Square, Cleveland, Ohio 44114-1306, or at
such other location as the Agent may designate from time to time by notice to
the Borrower and the Banks.

Agent’s Special Counsel.  McKenna Long
& Aldridge LLP or such other counsel as may be approved by the Agent.

Agreement.  This First
Amended and Restated Credit Agreement, including the Schedules and Exhibits
hereto.

Agreement Regarding Fees. 
The Fee Letter dated June 5, 2007 between KeyBank, Lead Arranger
and Borrower.

Appraisal.  An MAI
appraisal of the value of a parcel of Real Estate reasonably acceptable to
Agent, determined on an “as-is” market value basis dated not more than twelve
months prior to the inclusion of the Eligible Asset to which such Appraisal
relates as an Unencumbered Borrowing Base Asset (or the Appraisal obtained
pursuant to §7.17(c)), performed by an independent appraiser who is not an
employee of the Borrower, the Guarantors or any of their Subsidiaries, the form
and substance of such appraisal and the identity of the appraiser to be in
compliance with the Financial Institutions Reform, Recovery and Enforcement Act
of 1989, as amended, the rules and regulations adopted pursuant thereto and all
other regulatory laws and policies (both regulatory and internal) applicable to
the Banks and otherwise acceptable to the Agent.

Appraised Value.  The “as is”
market value of a parcel of Real Estate determined by the Appraisal of such
parcel delivered to Agent pursuant to §7.17 or obtained by Agent pursuant to
§7.17(c); subject, however, to such changes or adjustments to the value
determined thereby as may be required by the appraisal department of the Agent
in its good faith business judgment.

Approved Fund.  Any Fund that
is administered or managed by (a) a Bank, (b) a Bank Affiliate, or
(c) an entity or a Bank Affiliate of an entity that administers or manages
a Bank.

Available Increase Amount. 
See §2.10.

Balance Sheet Date.  March 31,
2007.

Bank Affiliate.  Another
Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with a Bank, as
applicable.  For purposes of this
definition, “Control” of a Person means 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.

Banks.  KeyBank, the
other Banks a party hereto and any other Person who becomes an assignee of any
rights of a Bank pursuant to §18; and collectively, the Banks and the Swing
Loan Bank.  The Issuing Lender shall be a
Bank, as applicable.

Base Rate.  The greater
of (a) the variable per annum rate of interest announced from time to time by
Agent at Agent’s Head Office as its “prime rate” or (b) one-half of one percent
(0.5%) above the Federal Funds Effective Rate. 
The Base Rate is a reference rate and does not necessarily represent the
lowest or best rate being charged to any customer.  Any change in the rate of interest payable
hereunder resulting from a change in the Base Rate shall become effective as of
the opening of business on the day on which such change in the Base Rate becomes
effective, without notice or demand of any kind.

Base Rate Loans.  Those Loans
bearing interest calculated by reference to the Base Rate.

Borrower.  As defined in
the preamble hereto.

Borrowing Base.  The Borrowing
Base shall be the amount which is the lesser of (a) the sum of the aggregate
Unencumbered Borrowing Base Asset Values of the Unencumbered Borrowing Base
Assets and (b) the Interest Coverage Amount.

Borrowing Base Certificate. 
See §7.4(d).

 2
 

Business Day.  Any day on
which banking institutions located in Cleveland, Ohio are open for the
transaction of banking business and, in the case of LIBOR Rate Loans, which
also is a LIBOR Business Day.

Capital Replacement Reserve. 
With respect to any Real Estate, an amount per annum equal to $0.10 per
rentable square foot of the improvements thereon.

Capitalization Rate.  Seven percent
(7%) as to any Real Estate that is a Credit Tenant Property, and nine percent
(9%) for any other Real Estate.

Capitalized Lease.  A lease under
which the discounted future rental payment obligations of the lessee or the
obligor are required to be capitalized on the balance sheet of such Person in
accordance with GAAP.

CDO Indenture.  The Indenture
relating to any Eligible CDO Retained Asset.

CDO Subsidiary.  See §7.17(d).

CERCLA.  See §6.18.

Certifying Officer.  The
president, chief executive officer or chief financial officer of GKK.

Change of Control. 
A Change of Control shall exist upon the occurrence of any of the
following:

(a)                                  any Person (other than SL Green Realty
Corp.) (including a Person’s Affiliates and associates) or group (as that term
is understood under Section 13(d) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) and the rules and regulations thereunder) shall
have acquired beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) of a percentage (based on voting power, in the event different
classes of stock shall have different voting powers) of the voting stock of GKK
equal to at least thirty percent (30%);

(b)                                 as of any date a majority of the Board of
Directors or Trustees (the “Board”) of GKK consists of individuals who were not
either (i) directors or trustees of GKK as of the corresponding date of the
previous year, (ii) selected or nominated to become directors or trustees by
the Board of GKK of which a majority consisted of individuals described in
clause (b)(i) above, or (iii) selected or nominated to become directors or
trustees by the Board of GKK of which a majority consisted of individuals
described in clause (b)(i) above and individuals described in clause (b)(ii),
above (excluding, in the case of both clause (ii) and (iii) above, any
individual whose initial nomination for, or assumption of office as, a member
of the Board occurs as a result of a solicitation of proxies or consents for
the election or removal of one or more directors or trustees by any Person or
group other than a solicitation for the election of one or more directors or
trustees by or on behalf of the Board); or

(c)                                  GKK fails to own, directly, one hundred
percent (100%) of the voting interests in Borrower and at least seventy percent
(70%) of the economic and beneficial interests in Borrower; or

(d)                                 GKK shall fail to be the sole general
partner of Borrower, shall fail to own such general partnership interest in
Borrower free of any lien, encumbrance or other adverse claim, or shall fail to
control the management and policies of Borrower; or

(e)                                  Borrower fails to own directly or
indirectly, free of any lien, encumbrance or other adverse claim, at least one
hundred percent (100%) of the economic, voting and beneficial interest 

 3
 

of each Subsidiary Guarantor (other than preferred
shares issued in Gramercy Investment Trust to obtain REIT Status) or CDO
Subsidiary; or

(f)                                    Borrower shall no longer be managed and
advised by (i) Manager, which shall be directly or indirectly majority owned
and controlled by SL Green Operating Partnership, L.P., or (ii) another Person
(which may include internal management) reasonably acceptable to the Majority
Banks.

Class B Limited Partners. 
Holders of Class B limited partner interests in the Borrower.

Closing Date.  The first
date on which all of the conditions set forth in §10 and §11 have been
satisfied or waived.

CMBS.  Securities
issued pursuant to a securitization of commercial mortgage loans.

Code.  The Internal
Revenue Code of 1986, as amended.

Collateral Property.  Collectively,
the Real Estate (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 directly or indirectly securing repayment of a First Mortgage Loan,
Second Mortgage Loan or Participation Interest therein (or with respect to a
Mezzanine Loan, the equity interests and other collateral pledged to secure
repayment of such loan and the real property which is directly or indirectly
owned by the Person or Persons pledging the equity interests to secure
repayment of a Mezzanine Loan) at any time and, individually, any one such parcel
of real property or other collateral.

Commitment.  With respect
to each Bank, the amount set forth on Schedule 1 hereto as the amount of
such Bank’s Commitment to make or maintain Revolving Credit Loans to the
Borrower, to participate in Letters of Credit for the account of the Borrower
and to participate in Swing Loans to the Borrower, as the same may be changed
from time to time in accordance with the terms of this Agreement.

Commitment Percentage.  With respect
to each Bank, the percentage set forth on Schedule 1 hereto as such
Bank’s percentage of the aggregate Commitments of all of the Banks, as the same
may be changed from time to time in accordance with the terms of this
Agreement; provided that if the Commitments of the Banks have been terminated
as provided in this Agreement, then the Commitment of each Bank shall be
determined based on the Commitment Percentage of such Bank immediately prior to
such termination and after giving effect to any subsequent assignments made
pursuant to the terms hereof.

Compliance Certificate.  See §7.4(d).

Consolidated or combined. 
With reference to any term defined herein, that term as applied to the
accounts of a Person and its Subsidiaries, consolidated or combined in
accordance with GAAP.

Consolidated EBITDA.  With respect
to any period of GKK, an amount equal to the EBITDA of GKK and its Subsidiaries
on a consolidated basis.

Consolidated Interest Expense. 
For any period, without duplication, (a) total Interest Expense of GKK
and its Subsidiaries determined on a consolidated basis in accordance with GAAP
for such period, plus (b) such Persons’ pro rata share of Interest Expense of
its Unconsolidated Affiliates (excluding One Madison Fee LLC and, to the extent
approved by the Agent in its sole and absolute discretion, other Credit Tenant
Properties) for such period.

 4
 

Consolidated Tangible Net Worth. 
As of any date of determination, the amount by which Consolidated Total
Assets exceeds Consolidated Total Liabilities, and less the sum of:

(a)                                  the total book value of all assets of a
Person and its Subsidiaries properly classified as of such date of
determination as intangible assets under GAAP, including such items as
goodwill, the purchase price of acquired assets in excess of the fair market
value thereof, trademarks, trade names, service marks, brand names, copyrights,
patents and licenses, and rights with respect to the foregoing; plus

(b)                                 all amounts representing any write-up in
the book value of any assets of such Person or its Subsidiaries as of such date
of determination resulting from a revaluation thereof subsequent to the Balance
Sheet Date; plus

(c)                                  all amounts representing minority
interests as of such date of determination which are applicable to third
parties.

Consolidated Total Assets. 
As of any date of determination, all assets of GKK and its Subsidiaries
determined on a consolidated basis in accordance with GAAP.  All real estate assets shall be valued on a
gross book value basis (that is, an undepreciated cost basis).  Without duplication, Consolidated Total
Assets shall include such Person’s pro-rata share of the assets of its
Unconsolidated Affiliates.  Excluded CDO
Assets shall be excluded from the calculation of Consolidated Total
Assets.  Assets attributable to One
Madison Fee LLC and, to the extent approved by the Agent in its sole and
absolute discretion, other Credit Tenant Properties shall also be excluded from
this calculation.

Consolidated Total Liabilities. 
As of any date of determination, all liabilities of GKK and its
Subsidiaries determined on a consolidated basis in accordance with GAAP, plus
all Indebtedness of GKK and its Subsidiaries, whether or not so
classified.  Without duplication,
Consolidated Total Liabilities shall include such Persons’ pro-rata share of
the foregoing of its Unconsolidated Affiliates. 
Liabilities associated with One Madison Fee LLC and, to the extent
approved by the Agent in its sole and absolute discretion, other Credit Tenant
Properties shall be excluded from this calculation.

Consolidated Total Senior Liabilities. 
As of any date of determination, Consolidated Total Liabilities of GKK
and its Subsidiaries (other than Borrower) plus all Senior Debt of
Borrower; provided that Consolidated Total Senior Liabilities shall not include
Excluded CDO Indebtedness.

Contribution Agreement.  The First
Amended and Restated Contribution Agreement dated of even date herewith between
the Borrower, GKK and the Subsidiary Guarantors a party thereto as of the date
hereof, and each other Subsidiary Guarantor which may hereafter become a party
thereto.

Conversion Request.  A notice
given by the Borrower to the Agent of its election to convert or continue a
Loan in accordance with §4.1.

Coverage Test.  Any (a) “interest
coverage test” (as defined in a CDO Indenture), (b) “par value test” (as
defined in a CDO Indenture), or (c) other coverage test under a CDO Indenture
which in effect requires the payment, prepayment or redemption of securities
ranking senior in priority to other securities to cause compliance with such
coverage test before payments are made on junior ranking securities or equity
interests.

Credit Tenant Property.  Real Estate
as to which not less than ninety percent (90%) of the gross rental revenue
therefrom is from leases to a tenant (a) which is in possession, (b) as to
which no monetary 

 5
 

default or other material default exists under its
lease, and (c) which has a rating of its senior unsecured non credit enhanced
debt of not less than BBB by S&P or Baa by Moody’s.

Debt Offering.  The issuance
and sale by the Borrower or GKK of any debt securities of the Borrower or GKK.

Debt Service.  For any
period, the sum of all Interest Expense and mandatory principal payments due
and payable during such period (including any mandatory payments due under any
Capitalized Leases), excluding any balloon payments due upon maturity of any
Indebtedness.

Default.  See §12.1.

Delinquent Bank.  See §14.5(c).

Derivatives Contract. 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 Termination Value. 
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 Contracts have 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 Contracts, as determined based
upon one or more mid-market or other readily available quotations provided by
any recognized dealer in such Derivatives Contracts (which may include the
Agent or any Bank).

Distribution.  With respect
to any Person, the declaration or payment of any cash, cash flow, dividend or
distribution on or in respect of any shares of any class of capital stock,
partnership interest, membership interest or other beneficial interest of such
Person; the purchase, redemption, exchange or other retirement of any shares of
any class of capital stock, partnership interest, membership interest or other
beneficial interest of such Person, directly or indirectly through a Subsidiary
of such Person or otherwise; the return of capital by such Person to its
shareholders, partners, members or other owners as such; or any other
distribution on or in respect of any shares of any class of capital stock or
other beneficial interest of such Person.

Dollars or $. 
Dollars in lawful currency of the United States of America.

Domestic Lending Office.  Initially,
the office of each Bank designated as such in Schedule 1 hereto;
thereafter, such other office of such Bank, if any, located within the United
States that will be making or maintaining Base Rate Loans.

 6
 

Drawdown Date.  The date on
which any Loan is made or is to be made, and the date on which any Loan is
converted or combined in accordance with §4.1.

EBITDA.  With respect
to any Person for any period, an amount equal to the sum of the following
amounts of such Person:  (a) the Net
Income (or Deficit) for such period, plus (b) depreciation and
amortization, interest expense, and any extraordinary or non-recurring losses
deducted in calculating such Net Income, plus (c) income taxes deducted
in calculating such Net Income, plus (d) incentive distributions
paid to the Class B Limited Partners (but only to the extent such payments
represent Distributions to the Class B Limited Partners), minus (e)
any extraordinary or nonrecurring gains included in calculating such Net
Income, all as determined in accordance with GAAP.  EBITDA shall include a Person’s pro-rata
share of the foregoing of its Unconsolidated Affiliates.  EBITDA attributable to One Madison Fee LLC,
and to the extent approved by the Agent in its sole and absolute discretion,
and other Credit Tenant Properties shall be excluded from the calculation of
EBITDA.

Eligible Asset.  Any Eligible
CDO Retained Asset, Senior Mortgage Interest, Subordinate Interest or Eligible
Equity Interest.

Eligible CDO.  Any special
purpose, bankruptcy remote entity that issues classes of securities
representing rights to receive payments from assets held by such entity, the
assets of which are (a) real estate securities or real estate-related debt
obligations or (b) such other assets consistent with GKK’s current business
practices.

Eligible CDO Equity Interest. 
With respect to any Eligible CDO that is a Subsidiary of the Borrower or
a Subsidiary Guarantor, any and all shares, interests, participations or other
equivalents (however designated) of capital stock of, and any and all
equivalent ownership interests in, any Eligible CDO owned by the Borrower, any
Subsidiary Guarantor or any CDO Subsidiary, including partnership interests and
limited liability company membership interests.

Eligible CDO Retained Asset. 
Any Eligible CDO Equity Interest and/or any Eligible CDO Securities with
respect to any Eligible CDO that is a Subsidiary of the Borrower or a
Subsidiary Guarantor.

Eligible CDO Retained Asset Value. 
With respect to any Eligible CDO Retained Assets, an amount equal to the
lesser of (a) the carrying cost basis of the Borrower or a Subsidiary Guaranty,
as applicable, in such Eligible CDO Retained Assets determined in accordance
with GAAP and (b) the Net Outstanding Portfolio Balance under the CDO Indenture
to which such Eligible CDO Retained Assets relate minus the outstanding principal
amount of all notes or debt securities (including any capitalized interest
thereon) and the unreturned investment of any equity securities senior to the
Eligible CDO Retained Assets.

Eligible CDO Securities.  With respect
to any Eligible CDO, any and all performing securities issued by such Eligible
CDO and held by the Borrower, any Subsidiary Guarantor or any CDO Subsidiary.

Eligible Equity Interest. 
A limited liability, partnership, common stock or other form of
ownership approved by the Required Banks in a special purpose, bankruptcy
remote Person which owns, directly or through one or more special purpose,
bankruptcy remote Persons, Eligible Real Estate.  An Eligible Equity Interest shall not include
a Preferred Equity Investment.  Such
Eligible Real Estate and any equity interests in the Person owning such
Eligible Real Estate (other than the Eligible Equity Interest) senior to the
Eligible Equity Interest may be subject to a mortgage loan or a mezzanine loan,
provided that each such loan is performing in accordance with its payment
terms, and no event of default 

 7
 

or other event which would permit the acceleration of
such loan shall have occurred under the applicable documents.  Any direct or indirect equity interest in the
Person owning such Eligible Real Estate held by a Person other than Borrower or
a Subsidiary Guarantor shall be pari passu with the equity investment of
Borrower or such Subsidiary Guarantor. 
Notwithstanding anything in this Agreement to the contrary, an ownership
interest may not qualify as an Eligible Equity Interest if (a) the sum of the
aggregate Indebtedness encumbering the Eligible Real Estate to which such
proposed ownership interest relates or any direct or indirect Equity Interest
therein plus the unreturned investment of any Senior Equity Interests exceeds
(b) ninety percent (90%) of the Real Estate Collateral Value for a Credit
Tenant Property, or eighty percent (80%) of the Real Estate Collateral Value
for any other Eligible Real Estate.

Eligible Real Estate. 
Real Estate shall constitute Eligible Real Estate if:

(a)                                  such Real Estate is wholly-owned in fee
(or a ground lease acceptable to the Agent in its reasonable discretion);

(b)                                 such Real Estate is located within the
contiguous 48 states of the continental United States or the District of
Columbia or Hawaii;

(c)                                  such Real Estate is improved by an
income-producing multifamily, office, retail or industrial property or other
property approved by the Required Banks;

(d)                                 no interest of the Borrower or any
Guarantor therein is subject to any Lien (other than the Liens securing
mortgage and mezzanine loans permitted in the definition of Eligible Equity
Interest); and

(e)                                  such Real Estate is free of all
structural defects or major architectural deficiencies, title defects, environmental
conditions or other adverse matters except for defects, deficiencies,
conditions or other matters individually or collectively which are not material
to the profitable operation of such Real Estate.

Employee Benefit Plan.  Any employee
benefit plan within the meaning of §3.3 of ERISA maintained or contributed to
by the Borrower, GKK or any ERISA Affiliate, other than a Multiemployer Plan.

Environmental Laws.  The Resource
Conservation and Recovery Act (“RCRA”), the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended (“CERCLA”), the Superfund
Amendments and Reauthorization Act of 1986 (“SARA”), the Federal Clean Water
Act, the Federal Clean Air Act, the Toxic Substances Control Act, or any state
or local statute, regulation, ordinance, order or decree relating to the
environment.

Equity Interest Value.  With respect
to any Eligible Equity Interest, an amount equal to 0.30 times the product of
(a) the sum of (i) the Real Estate Collateral Value for the applicable Eligible
Real Estate minus (ii) any Indebtedness encumbering such Eligible Real Estate
or any Senior Equity Interest therein, minus (iii) the unreturned investment of
any Senior Equity Interests, multiplied by (b) the Borrower’s or Subsidiary
Guarantor’s, as applicable, ownership interest (expressed as a percentage) in
such Eligible Real Property.

Equity Interests.  With respect
to any Person, any share of capital stock of (or other ownership or profit
interests in) such Person, whether preferred, common or otherwise, 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 

 8
 

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.

Equity Offering.  The issuance
and sale by the Borrower or GKK of any Equity Interest of the Borrower or GKK.

ERISA.  The Employee
Retirement Income Security Act of 1974 and the rules and regulations
promulgated thereunder, as amended and in effect from time to time.

ERISA Affiliate.  Any Person
which is treated as a single employer with the Borrower or GKK under §414(b),
(c), (m) or (o) of the Code.

ERISA Reportable Event.  A reportable
event with respect to a Guaranteed Pension Plan within the meaning of §4043 of ERISA
and the regulations promulgated thereunder as to which the requirement of
notice has not been waived.

Event of Default.  See §12.1.

Exchange Act.  The
Securities and Exchange Act of 1934, and regulations promulgated thereunder.

Excluded CDO Assets.  Any
commercial mortgage-backed securities or similar securities (whether directly
or through an Eligible CDO), subject to the definition of Excluded CDO
Indebtedness.

Excluded CDO Indebtedness. 
Any Indebtedness relating to a securitization of commercial mortgage-backed
securities, provided that the assets to which such Indebtedness relates are
Excluded CDO Assets.

Excluded Taxes.  Excluded
Taxes means, with respect to the Agent or any Bank, (a) taxes imposed on or
measured by its overall net income (however denominated), and franchise taxes
imposed on it (in lieu of net income taxes), by the jurisdiction (or any
political subdivision thereof) under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Bank, in which its applicable lending office is located, and (b) any branch
profits taxes imposed by the United States of America.

Federal Funds Effective Rate. 
For any day, the rate per annum announced by the Federal Reserve Bank of
Cleveland on such day as being the weighted average of the rates on overnight
federal funds transactions arranged by federal funds brokers on the previous
trading day, as computed and announced by such Federal Reserve Bank in
substantially the same manner as such Federal Reserve Bank computes and
announces the weighted average it refers to as the “Federal Funds Effective
Rate”, or, if such rate is not so published for any day that is a Business Day,
the average of the quotations for such day on such transactions received by the
Agent from three (3) Federal funds brokers of recognized standing selected by
the Agent.

First Mortgage.  The first
mortgage, deed of trust, deed to secure debt or other similar instrument
securing a First Mortgage Note, which creates a valid first priority lien or
security title on the fee or leasehold interest in real property securing the
First Mortgage Note and the assignment of rents and leases related thereto.

 9
 

First Mortgage Loan.  A performing
first priority mortgage loan on one or more multifamily, office, retail or
industrial properties or other property approved by the Required Banks, which
is originated or purchased by the Borrower or any Subsidiary Guarantor, and
which First Mortgage Loan includes, without limitation, the indebtedness evidenced
by a First Mortgage Note and secured by a related First Mortgage.  The Real Estate to which such First Mortgage
Loan relates shall be located within the contiguous 48 states of the
continental United States or the District of Columbia or Hawaii and shall be
free of all structural defects or major architectural deficiencies, title
defects, environmental conditions or other adverse matters except for defects,
deficiencies, conditions or other matters individually or collectively which
are not material to the profitable operation of such Real Estate.

First Mortgage Note.  The original
executed promissory note or other evidence of the indebtedness of an Obligor
with respect to a First Mortgage Loan.

Fixed Charges.  With respect
to GKK and its Subsidiaries for any fiscal period, an amount equal to the sum
of the Debt Service of GKK and its Subsidiaries, plus the Preferred
Distributions of GKK and its Subsidiaries. 
Fixed Charges shall include such Persons’ pro-rata share of Fixed
Charges of its Unconsolidated Affiliates. 
The Fixed Charges associated with One Madison Fee LLC and, to the extent
approved by the Agent in its sole and absolute discretion, other Credit Tenant
Properties shall be excluded from this calculation.

Fund.  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 Operations.  With respect
to any Person for any period, an amount equal to the Net Income (or Loss) of
such Person for such period, computed in accordance with GAAP, plus real estate
depreciation and amortization, and after adjustments for unconsolidated
partnerships and joint ventures. 
Adjustments for unconsolidated partnerships and joint ventures will be
recalculated to reflect funds from operations on the same basis.

GAAP.  Principles
that are (a) consistent with the principles promulgated or adopted by the
Financial Accounting Standards Board and its predecessors, as in effect from
time to time and (b) consistently applied with past financial statements
of the Person adopting the same principles; provided that a certified
public accountant would, insofar as the use of such accounting principles is
pertinent, be in a position to deliver an unqualified opinion (other than a
qualification regarding changes in generally accepted accounting principles) as
to financial statements in which such principles have been properly applied.

GKK.  Gramercy
Capital Corp., a Maryland corporation.

Guaranteed Pension Plan.  Any employee
pension benefit plan within the meaning of §3(2) of ERISA maintained or
contributed to by the Borrower, GKK or any ERISA Affiliate the benefits of
which are guaranteed on termination in full or in part by the PBGC pursuant to
Title IV of ERISA, other than a Multiemployer Plan.

Guarantors.  Collectively,
GKK and the Subsidiary Guarantors.

Guaranty.  The First
Amended and Restated Unconditional Guaranty of Payment and Performance dated of
even date herewith made by the Guarantors in favor of the Agent and the Banks,
as the same may be modified or amended, such Guaranty to be in form and
substance satisfactory to the Agent.

 10
 

Hazardous Substances.  Any hazardous
waste, as defined by 42 U.S.C. §9601(5), any hazardous substances as defined by
42 U.S.C. §9601(14), any pollutant or contaminant as defined by 42 U.S.C.
§9601(33) or any toxic substances, oil or hazardous materials or other
chemicals or substances regulated by any Environmental Laws.

Income from Unencumbered Borrowing Base Assets. 
For any period, an amount equal to the sum of the following from
Unencumbered Borrowing Base Assets:  (a)
Distributions paid to Borrower or a Subsidiary Guarantor from Net Operating
Income from Eligible Real Estate with respect to Eligible Equity Interests and
Preferred Equity Investments included in Subordinate Interests not representing
a return of capital or a payment upon liquidation, dissolution, redemption or
transfer, plus (b) interest (excluding default interest) received by Borrower
or a Subsidiary Guarantor from Senior Mortgage Interests, Subordinate Interests
(other than Preferred Equity Investments) and Eligible CDO Securities, plus
(c) Distributions received by Borrower or a Subsidiary Guarantor from Eligible
CDO Equity Interests that do not represent a return of capital or a payment
upon liquidation, dissolution, redemption or transfer.

Increase Amount.  See §2.10.

Increase Notice.  See §2.10.

Indebtedness.  With respect
to a Person, at the time of computation thereof, all of the following (without
duplication): (a) all obligations of such Person in respect of money borrowed
(other than trade debt incurred in the ordinary course of business which is not
more than one hundred eighty (180) days past due); (b) all obligations of such
Person, whether or not for money borrowed (i) represented by notes payable, or
drafts accepted, in each case representing extensions of credit, (ii) evidenced
by bonds, debentures, notes or similar instruments, or (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; (c) all obligations of such Person as a lessee
or obligor under a Capitalized Lease; (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 in respect of any purchase
obligation, repurchase obligation, takeout commitment or forward equity
commitment, in each case evidenced by a binding agreement, (g) 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;
(h) all Indebtedness of other Persons which such Person has guaranteed or is
otherwise recourse to such Person (except for Non-Recourse Exclusions) until a
claim is made with respect thereto, and then shall be included only to the
extent of the amount of such claim), including liability of a general partner
in respect of liabilities of a partnership in which it is a general partner
which would constitute “Indebtedness” hereunder, any obligation to supply funds
to or in any manner to invest directly or indirectly in a Person, to maintain
working capital or equity capital of a Person or otherwise to maintain net worth,
solvency or other financial condition of a Person, to purchase indebtedness, or
to assure the owner of indebtedness against loss, including, without
limitation, through an agreement to purchase property, securities, goods,
supplies or services for the purpose of enabling the debtor to make payment of
the indebtedness held by such owner or otherwise; (i) 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;
(j) all obligations of such Person to purchase, redeem, retire, defease or
otherwise make an payment in respect of any mandatorily redeemable stock issued
by such Person or any other Person, valued at the greater of its voluntary or
involuntary liquidation preference plus accrued and 

 11
 

unpaid dividends; (k) obligations under repurchase
agreements; and (l) such Person’s pro-rata share of the Indebtedness of any
Unconsolidated Affiliate of such Person.

Instruction Letter.  The
instruction letter substantially in the form attached as an exhibit to the
Pledge Agreement directing the trustee or payment agent with respect to an
Eligible CDO that is a Subsidiary of the Borrower or a Subsidiary Guarantor
(including a CDO Subsidiary) which issued an Eligible CDO Retained Asset
included in the calculation of the Unencumbered Borrowing Base Assets to make
all payments with respect thereto in accordance with the terms of such
instruction letter.  Such instruction
letter shall be executed by the Borrower or the Subsidiary Guarantor which owns
such Eligible Asset (or if the Eligible Asset is owned by a CDO Subsidiary,
then also by such CDO Subsidiary) and acknowledged by such trustee or paying
agent, which shall otherwise be in form and substance satisfactory to Agent.

Interest Coverage Amount. 
The maximum principal amount of the Loans which would not cause the
ratio of (a) Income from Unencumbered Borrowing Base Assets for the preceding
calendar quarter to (b) Interest Expense for the preceding calendar quarter
solely with respect to such maximum amount of Loans, when bearing interest at
the then effective blended interest rate for the Loans as of the end of the
preceding calendar quarter, to be less than 6 to 1.

Interest Expense.  For any
period, without duplication, (a) total interest expense incurred (both expensed
and capitalized) of GKK and its Subsidiaries, including the portion of rents
payable under a Capitalized Lease allocable to interest expense in accordance
with GAAP (but excluding capitalized interest funded under a construction loan
interest reserve account), determined on a consolidated basis in accordance
with GAAP, excluding the amortization of deferred financing costs and unused
fees to the extent included in interest expense in accordance with GAAP, for
such period, plus (b) such Persons’ pro rata share of Interest Expense of its
Unconsolidated Affiliates (excluding One Madison Fee LLC and, to the extent
approved by the Agent in its sole and absolute discretion, other Credit Tenant
Properties).

Interest Payment Date.  As to each
Base Rate Loan, the first day of each calendar month during the term of such
Loan, and as to any LIBOR Rate Loan, the last day of each Interest Period
applicable to such Loan (determined in accordance with the definition of “Interest
Period”); provided, however, that if any Interest Period for a LIBOR Rate Loan
exceeds three (3) months, the respective dates that fall every three (3) months
after the commencement of such Interest Period shall also be Interest Payment
Dates.

Interest Period.  With respect
to each LIBOR Rate Loan (a) initially, the period commencing on the Drawdown
Date of such Loan and ending one, two, three or six months thereafter and (b)
thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such Loan and ending on the last day of one of the
periods set forth above, as selected by the Borrower in a Conversion Request; provided
that all of the foregoing provisions relating to Interest Periods are subject
to the following:

(i)                                     if any Interest Period with respect to a
LIBOR Rate Loan would otherwise end on a day that is not a LIBOR Business Day,
that Interest Period shall end and the next Interest Period shall commence on
the next preceding or succeeding LIBOR Business Day as determined conclusively
by the Agent in accordance with the then current bank practice in the London
Interbank Market;

(ii)                                  if the Borrower shall fail to give notice
as provided in §4.1, the Borrower shall be deemed to have requested an Interest
Period of one month for the affected LIBOR Rate Loan; and

 12
 

(iii)                               no Interest Period relating to any LIBOR
Rate Loan shall extend beyond the Maturity Date.

Investment.  With respect
to any Person, all shares of capital stock, evidences of Indebtedness and other
securities issued by any other Person and owned by such Person, all loans, advances,
or extensions of credit to, or contributions to the capital of, any other
Person, all purchases of the securities or business or integral part of the
business of any other Person and commitments and options to make such
purchases, all interests in real property, and all other investments; provided,
however, that the term “Investment” shall not include (i) equipment, inventory
and other tangible personal property acquired in the ordinary course of
business, or (ii) current trade and customer accounts receivable for services
rendered in the ordinary course of business and payable in accordance with
customary trade terms.  In determining
the aggregate amount of Investments outstanding at any particular time:  (a) there shall be included as an Investment
all interest accrued with respect to Indebtedness constituting an Investment
unless and until such interest is paid; (b) there shall be deducted in respect
of each Investment any amount received as a return of capital; (c) there shall
not be deducted in respect of any Investment any amounts received as earnings
on such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (a) may be
deducted when paid; and (d) there shall not be deducted in respect of any
Investment any decrease in the value thereof.

IRS.  The Internal
Revenue Service or any agency successor thereto.

Issuing Lender.  KeyBank, in
its capacity as the Bank issuing the Letters of Credit and any successor
thereto.

Joinder Agreement.  The Joinder
Agreement with respect to the Guaranty and the Contribution Agreement to be
executed and delivered pursuant to §5.2 by any Subsidiary Guarantor, such
Joinder Agreement to be substantially in the form of Exhibit D hereto.

Junior Subordinated Indentures. 
Collectively, that certain Junior Subordinated Indenture dated as of May
20, 2005 between Borrower and JPMorgan Chase Bank, National Association, as
Trustee (relating to Gramercy Capital Trust I), that certain Junior
Subordinated Indenture dated as of August 9, 2005 between Borrower and JPMorgan
Chase Bank, National Association, as Trustee (relating to Gramercy Capital
Trust II), that certain Junior Subordinated Indenture dated as of January 27,
2006 between Borrower and JPMorgan Chase Bank, National Association, as Trustee
(relating to Gramercy Capital Trust III), and any additional Junior
Subordinated Indentures entered into by Borrower, the terms, conditions,
covenants, remedies and other provisions of which are substantially similar in
all material respects to the foregoing Junior Subordinated Indentures.

KeyBank.  KeyBank
National Association, a national banking association, and its successors by
merger.

Lead Arranger.  KeyBanc
Capital Markets.

Letter of Credit.  Any standby
letter of credit issued at the request of the Borrower and for the account of
the Borrower in accordance with §2.12.

Letter of Credit Liabilities. 
At any time and in respect of any Letter of Credit, the sum of
(a) the amount of such Letter of Credit available to be drawn plus
(b) the aggregate unpaid principal amount of all drawings made under such
Letter of Credit which have not been repaid (including repayment by a Revolving
Credit Loan).  For purposes of this Agreement,
a Bank (other than the Bank acting as the Issuing Lender) shall be deemed to
hold a Letter of Credit Liability in an amount equal to its participation 

 13
 

interest in the related
Letter of Credit under §2.12, and the Bank acting as the Issuing Lender shall
be deemed to hold a Letter of Credit Liability in an amount equal to its
retained interest in the related Letter of Credit after giving effect to the
acquisition by the Banks other than the Bank acting as the Issuing Lender of
their participation interests under such Section.

Letter of Credit Request. 
See §2.12(a).

LIBOR Business Day.  Any day on
which commercial banks are open for international business (including dealings
in Dollar deposits) in London.

LIBOR Lending Office.  Initially,
the office of each Bank designated as such in Schedule 1 hereto;
thereafter, such other office of such Bank, if any, that shall be making or
maintaining LIBOR Rate Loans.

LIBOR Rate.  For any LIBOR
Rate Loan for any Interest Period, the average rate (rounded to the nearest
1/100th) as shown in Dow Jones Markets (formerly Telerate) (Page 3750) at which
deposits in U.S. dollars are offered by first class banks in the London
Interbank Market at approximately 11:00 a.m. (London time) on the day that is
two (2) LIBOR Business Days prior to the first day of such Interest Period with
a maturity approximately equal to such Interest Period and in an amount
approximately equal to the amount to which such Interest Period relates,
adjusted for reserves and taxes if required by future regulations.  If Dow Jones Markets no longer reports such
rate or Agent determines in good faith that the rate so reported no longer
accurately reflects the rate available to Agent in the London Interbank Market,
Agent may select a replacement index after consultation with the Borrower.  For any period during which a Reserve
Percentage shall apply, the LIBOR Rate with respect to LIBOR Rate Loans shall
be equal to the amount determined above divided by an amount equal to 1 minus
the Reserve Percentage.

LIBOR Rate Loans.  Loans bearing
interest calculated by reference to a LIBOR Rate.

Lien.  See §8.2.

Loan Documents.  This
Agreement, the Notes, the Letter of Credit Requests, the Guaranty, the Security
Documents, and all other documents, instruments or agreements now or  hereafter executed or delivered by or on
behalf of the Borrower or the Guarantors in connection with the Loans.

Loan Request.  See §2.6.

Loans.  An individual
loan or the aggregate loans (including a Revolving Credit Loan (or Loans) and a
Swing Loan (or Loans)), as the case may be, made by the Banks hereunder.  Amounts drawn under a Letter of Credit shall
also be considered Revolving Credit Loans as provided in §2.12(f).

Majority Banks.  As of any
date, any Bank or collection of Banks whose aggregate Commitment Percentage is
more than fifty percent (50%); provided that if there are only two (2)
Banks, then the Majority Banks shall be the Banks whose aggregate Commitment
Percentage is one hundred percent (100%); provided further, that, in
determining said percentage at any given time, all then existing Delinquent
Banks will be disregarded and excluded and the Commitment Percentages of the
Banks shall be redetermined for voting purposes only, to exclude the Commitment
Percentages of such Delinquent Banks.

Management Agreement.  That certain
Amended and Restated Management Agreement by and among the Borrower and
Manager, dated as of April 19, 2006, as amended in accordance with the terms of
this Agreement, or any other similar agreement approved by Agent (such approval
not to be 

 14
 

unreasonably withheld or delayed) entered into with a
substitute manager approved by the Required Banks pursuant to §8.9.

Manager.  GKK Manager
LLC, a Delaware limited liability company, or any successor manager approved
pursuant to §8.9.

Material Adverse Effect.  A material
adverse change in, or a material adverse effect upon, any of (a) the assets,
operations, business, condition (financial or otherwise), or prospects of the
Borrower taken as a whole, (b) the ability of the Borrower or a Guarantor to
perform its material obligations under this Agreement or the other Loan
Documents, (c) the validity, enforceability or priority of the Loan Documents,
or (d) any rights or remedies of the Agent and the Banks under any of the Loan
Documents.

Maturity Date.  June 28,
2010, as such date may be extended as provided in §3.6, or such earlier date on
which the Loans shall become due and payable pursuant to the terms hereof.

Mezzanine Loan.  A performing
loan which is originated or acquired by the Borrower or a Subsidiary Guarantor
that is secured by a first priority pledge of the equity interests in a special
purpose, bankruptcy remote person, which owns, directly or through one or more
special purpose, bankruptcy remote entities, one or more income producing
multifamily, office, retail or industrial properties or other property approved
by the Required Banks, which properties are subject to a loan to the property
owner secured by a first lien thereon.

Moody’s.  Moody’s
Investors Service, Inc. and any successor thereto.

Multiemployer Plan.  Any
multiemployer plan within the meaning of §3(37) of ERISA maintained or
contributed to by the Borrower, GKK or any ERISA Affiliate.

Net Income (or Deficit).  With respect
to any Person (or any asset of any Person) for any fiscal period, the net
income (or deficit) of such Person (or attributable to such asset), before
minority interests, after deduction of all expenses, taxes and other proper
charges, determined in accordance with GAAP.

Net Offering Proceeds.  The gross
cash proceeds received by GKK, the Borrower or any of their respective
Subsidiaries as a result of an Equity Offering less the customary and
reasonable costs, expenses and discounts paid by GKK, Borrower or such
Subsidiary in connection therewith and less proceeds from such Equity Offering
that are applied within thirty (30) days of issuance to retire an existing
preferred Equity Interest.

Net Operating Income.  For any Real
Estate and for a given period, an amount equal to the sum of (a) the actual
recurring property rental revenue for such Real Estate for such period received
in the ordinary course of business (including base rent, straight line rent,
expense reimbursement and other recurring rental income, but excluding pre-paid
rents and revenues and security deposits except to the extent applied in
satisfaction of tenants’ obligations for rent) minus (b) all expenses paid or
accrued and related to the ownership, operation or maintenance of such Real
Estate for such period, including, but not limited to, taxes, assessments and the
like, insurance, utilities, payroll costs, maintenance, repair and landscaping
expenses, marketing expenses, and general and administrative expenses
(including an appropriate allocation for legal, accounting, advertising,
marketing and other expenses incurred in connection with such Real Estate, but
specifically excluding general overhead expenses of the owner of such Real
Estate and any property management fees), minus (c) the Capital Replacement
Reserve for such Real Estate as of the end of such period, minus (d) the
greater of (i) actual property management expenses of such Real Estate or (ii)
an amount equal to one percent (1.0%) of the gross revenues from such Real
Estate.

 15
 

Net Outstanding
Portfolio Balance. 
Such term shall, as to the initial Eligible CDO Retained Assets
described on Schedule 7.17 that are issued pursuant to that certain
Indenture dated as of July 14, 2005 among Gramercy Real Estate CDO 2005-1,
Ltd., as Issuer, Gramercy Real Estate CDO 2005-1 LLC, as Co-Issuer, GKK
Liquidity LLC, as Liquidity Agent, and Wells Fargo Bank, National Association,
as trustee (the “2005 CDO Indenture”) and that certain Indenture dated as of
August 24, 2006 among Gramercy Real Estate CDO 2006-1, Ltd., as Issuer,
Gramercy Real Estate CDO 2006-1 LLC, as Co-Issuer, GKK Liquidity LLC, as
Advancing Agent, and Wells Fargo Bank, National Association, as trustee (the “2006
CDO Indenture; the 2005 CDO Indenture and the 2006 CDO Indenture, collectively,
the “Existing CDO Indentures”), have the meaning set forth in the Existing CDO
Indentures.  As to any other Eligible CDO
Retained Assets, such term shall have the meaning set forth in the applicable
CDO Indenture provided that Agent determines that such balance is calculated
consistently with the definition of such term set forth in the Existing CDO
Indentures.  If such term is not defined
in any subsequent CDO Indenture or Agent determines that such definition is
inconsistent with the definition set forth in the Existing CDO Indentures, such
term shall as to such Eligible CDO Retained Assets have the meaning agreed to
by Borrower and Agent, which the parties agree shall be consistent with the
definition of such term described in the Existing CDO Indentures.

Non-Consenting Bank.  See §18.9.

Non-Recourse Exclusions.  With respect
to any Non-Recourse Indebtedness of any Person, any usual and customary
exclusions from the non recourse limitations governing such Indebtedness,
including, without limitation, exclusions for claims that (i) are based on
fraud, intentional misrepresentation, misapplication of funds, gross negligence
or willful misconduct, (ii) result from intentional mismanagement of or waste
at the property securing such Non-Recourse Indebtedness, (iii) arise from
the presence of Hazardous Substances on the property securing such Non-Recourse
Indebtedness; or (iv) are the result of any unpaid real estate taxes and
assessments (whether contained in a loan agreement, promissory note, indemnity
agreement or other document).

Non-Recourse Indebtedness. 
Indebtedness of the Borrower, the Guarantors and their respective
Subsidiaries and Unconsolidated Affiliates which is secured by one or more
parcels of real estate or interests therein and which is not a general
obligation of any such Persons, the holder of such Indebtedness having recourse
solely to the parcels of real estate, or interests therein, securing such
Indebtedness, the leases thereon and the rents, profits and equity thereof
(except for recourse against the general credit of the Borrower, the Guarantors
or their respective Subsidiaries or Unconsolidated Affiliates for any
Non-Recourse Exclusions), provided that in calculating the amount of Non-Recourse
Indebtedness at any time, the amount of any Non Recourse Exclusions which are
the subject of an actual claim shall not be included in the Non-Recourse
Indebtedness but shall instead constitute Recourse Indebtedness.

Notes.  Collectively,
the Revolving Credit Notes and the Swing Loan Note.

Notice.  See §19.

Obligations.  All
indebtedness, obligations and liabilities of the Borrower and the Guarantors to
any of the Banks and the Agent, individually or collectively, under this
Agreement or any of the other Loan Documents or in respect of any of the Loans,
the Notes or the Letters of Credit, or other instruments at any time evidencing
any of the foregoing, whether existing on the date of this Agreement or arising
or incurred hereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise.

 16
 

Obligor.  Collectively,
the maker or obligor under a First Mortgage Loan or Second Mortgage Loan, any
issuer, trustee or servicer of a CMBS or an Eligible CDO and the maker or
obligor under a loan that has been securitized by such CMBS or Eligible CDO,
any maker or obligor under a Mezzanine Loan and any entity through which such
maker or obligor directly or indirectly owns the underlying Collateral Property
(including the property owner), and any Person issuing a Participation
Certificate and the maker or obligor of the loan which is the subject of such
Participation Interest.

OFAC.  Office of
Foreign Asset Control of the Department of the Treasury of the United States of
America.

Off-Balance Sheet Obligations. 
Liabilities and obligations of the Borrower, the Guarantors, any of
their respective Subsidiaries or any other Person in respect of “off-balance
sheet arrangements” (as defined in the SEC Off-Balance Sheet Rules) which GKK
would be required to disclose in the “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” section of GKK’s report on Form
10-Q or Form 10-K (or their equivalents) which GKK is required to file with the
SEC (or any Governmental Authority substituted therefore).  As used in this definition, the term “SEC
Off-Balance Sheet Rules” means the Disclosure in Management’s Discussion and
Analysis 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).

Original Credit Agreement. 
As defined in the Recitals.

Outstanding.  With respect
to the Loans, the aggregate unpaid principal thereof as of any date of
determination.  With respect to Letters
of Credit, the aggregate undrawn face amount of issued Letters of Credit.

Participation Certificate. 
The certificates, instruments or other documents which evidence a
Participation Interest.

Participation Interest.  The right of
a Person to receive the payment of principal and interest from an Obligor, by
virtue of an undivided fractional participation interest in a First Mortgage
Loan, Second Mortgage Loan or Mezzanine Loan, which participation interest is
evidenced by a customary participating and servicing agreement, and which is performing
in accordance with its terms.

Patriot Act.  The Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001, as the same may be amended from time to
time, and corresponding provisions of future laws.

PBGC.  The Pension
Benefit Guaranty Corporation created by §4002 of ERISA and any successor entity
or entities having similar responsibilities.

Permitted Liens.  Liens
permitted by §8.2.

Person.  An
individual, partnership, corporation, limited liability company, business
trust, joint stock company, trust, unincorporated association, joint venture or
governmental authority.

Pledge Agreement.  The First
Amended and Restated Cash Collateral Account and Control Agreement dated as of
the date of this Agreement in form and substance satisfactory to the Agent, as
the same may be modified or amended in accordance with its terms.

 17
 

Pledged Collateral.  The deposit
account into which all residual cash flow of the Eligible CDO Retained Assets
issued by an Eligible CDO included in the Borrowing Base and owned by the
Borrower, a Subsidiary Guarantor or a CDO Subsidiary will be paid, and the
other “Collateral” as defined in the Pledge Agreement, all as more particularly
described in the Pledge Agreement.

Preferred Distributions.  For any
period, the amount of any and all Distributions paid, declared but not yet paid
or otherwise due and payable to the holders of any form of preferred stock or
partnership interest (whether perpetual, convertible or otherwise) or other
ownership or beneficial interest in GKK, Borrower or any Subsidiary thereof
that entitles the holders thereof to preferential payment or distribution
priority with respect to dividends, distributions, assets or other payments
over the holders of any other stock, partnership interest or other ownership or
beneficial interest in such Person.

Preferred Equity Investment. 
A performing equity investment which is made or acquired by the Borrower
or a Subsidiary Guarantor that is evidenced by a senior preferred equity
interest in a special purpose, bankruptcy remote Person which owns, directly or
indirectly, through one or more special purpose bankruptcy remote entities, one
or more income producing multifamily, office, retail or industrial properties or
other property approved by the Required Banks, which equity investment provides
for regular payments of dividends or other distribution and which is generally
senior with respect to the payment of dividends and other distributions,
redemption rights and rights upon liquidation to such Person’s common
equity.  The Real Estate to which such
Preferred Equity Investment relates shall be located within the contiguous 48
states of the continental United States or the District of Columbia or Hawaii
and shall be free of all structural defects or major architectural
deficiencies, title defects, environmental conditions or other adverse matters
except for defects, deficiencies, conditions or other matters individually or
collectively which are not material to the profitable operation of such Real
Estate.

Prohibited Transaction.  Any
transaction described in section 406 of ERISA which is not exempt by reason of
section 408 of ERISA or the transitional rules set forth in section 414(c) of
ERISA and any transaction described in section 4975(c)(12) of the Code which is
not exempt by reason of section 4975(c)(2) or section 4975(d) of the Code, or
the transitional rules of section 2003(c) of ERISA.

Real Estate.  All real
properties (a) owned by the Borrower or the Guarantors, (b) any Wholly Owned
Subsidiary or Unconsolidated Affiliate of the Borrower, or (c) which is the
subject of a loan or investment made pursuant to an Eligible Asset.

Real Estate Collateral Value. 
With respect to any Real Estate, (a) the Appraised Value of such Real
Estate, or (b) if Borrower initially does not have an Appraisal of such
Real Estate acceptable to Agent, an amount equal to (1) (A) (x) the Net
Operating Income attributable to such Real Estate for the period of the two (2)
consecutive calendar quarters just ended prior to the date of determination
times (y) two (2) (which is the annualization factor) minus (B) the
Capital Replacement Reserve for such Real Estate, divided by (C) the
applicable Capitalization Rate (the “Capital Income Value”) or (2) in the event
that Agent elects to obtain an Appraisal of such Real Estate as provided in
§7.17(c), the Real Estate Collateral Value for such Real Estate under this
clause (b) shall be the lesser of (x) the Capital Income Value of such Real
Estate and (y) the Appraised Value of such Real Estate.

Record.  The grid
attached to any Note, or the continuation of such grid, or any other similar
record, including computer records, maintained by Agent with respect to any
Loan referred to in such Note.

Recourse Indebtedness.  Any
Indebtedness (whether secured or unsecured) that is recourse to any of Borrower
or the Guarantors.  Recourse Indebtedness
shall not include indebtedness with respect to Non-Recourse Exclusions except
as provided in the definition of Non-Recourse Indebtedness.

 18
 

Register.  See §18.2.

REIT Status.  With respect
to GKK, its status as a real estate investment trust as defined in §856(a) of
the Code.

Reportable Event.  Any of the
events set forth in section 4043(c) of ERISA or the regulations thereunder, a
withdrawal from a Plan described in section 4063 of ERISA, a cessation of
operations described in section 4068(f) of ERISA, an amendment to a Plan
necessitating the posting of security under section 401(a)(29) of the Code, or
a failure to make when due a payment required by section 412(m) of the Code and
section 302(e) of ERISA.

Required Banks.  As of any
date, any Bank or collection of Banks whose aggregate Commitment Percentage is
more than sixty six and 66/100 percent (66.66%); provided that if there
are only two (2) Banks, then the Required Banks shall be the Banks whose
aggregate Commitment Percentage is one hundred percent (100%); provided
further, that, in determining said percentage at any given time, all then
existing Delinquent Banks will be disregarded and excluded and the Commitment
Percentages of the Banks shall be redetermined for voting purposes only, to
exclude the Commitment Percentages of such Delinquent Banks.

Reserve Percentage.  For any day
with respect to a LIBOR Rate Loan, the maximum rate (expressed as a decimal) at
which any lender subject thereto would be required to maintain reserves
(including, without limitation, all base, supplemental, marginal and other
reserves) under Regulation D of the Board of Governors of the Federal Reserve
System (or any successor or similar regulations relating to such reserve
requirements) against “Eurocurrency Liabilities” (as that term is used in
Regulation D or any successor or similar regulation), if such liabilities were
outstanding.  The Reserve Percentage
shall be adjusted automatically on and as of the effective date of any change
in the Reserve Percentage.

Revolving Credit Loan or Loans. 
An individual Revolving Credit Loan or the aggregate Revolving Credit
Loans, as the case may be, in the maximum principal amount of $175,000,000.00
(subject to increase as provided in §2.10) to be made by the Banks hereunder as
more particularly described in §2.1. 
Amounts drawn under a Letter of Credit shall also be considered
Revolving Credit Loans as provided in §2.12(f).

Revolving Credit Notes.  See §2.4.

SEC.  The federal
Securities and Exchange Commission.

Second Mortgage.  The second
mortgage, deed of trust, deed to secure debt or other similar instrument
securing a Second Mortgage Note, which creates a valid second priority lien or
security title on the fee or leasehold interest in real property securing the
Second Mortgage Note and the assignment of rents and leases related thereto and
which is subordinate only to the Lien of a First Mortgage.

Second Mortgage Loan.  A performing
second priority mortgage loan on one or more multifamily, office, retail or
industrial properties or other property approved by the Required Banks, which
is originated or purchased by the Borrower or any Subsidiary Guarantor, and
which Second Mortgage Loan includes, without limitation, the indebtedness
evidenced by a Second Mortgage Note and secured by a related Second Mortgage.

Second Mortgage Note.  The original
executed promissory note or other evidence of the indebtedness of an Obligor
with respect to a Second Mortgage Loan.

 19
 

Security Documents.  Collectively,
the Pledge Agreement and any further collateral assignments and related UCC
financing statements to the Agent for the benefit of the Banks executed and/or
delivered or filed in connection therewith.

Senior Debt.  The principal
of and any premium on all Debt of the Borrower, whether incurred on or prior to
the date of the applicable Junior Subordinated Indenture or thereafter
incurred, unless it is provided in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, that such obligations are
not superior in right of payment to the debt securities authenticated and
delivered under the applicable Junior Subordinated Indenture; provided, that
Senior Debt shall not be deemed to include any other debt securities (and
guarantees, if any, in respect of such debt securities) issued to any trust
other than the trust to which such Junior Subordinated Indenture relates (or a
trustee of any such trust), partnership or other entity affiliated with the
Borrower that is a financing vehicle of the Borrower (a “financing entity”) in
connection with the issuance by such financing entity of equity securities or
other securities pursuant to an instrument that ranks pari passu with or junior
in right of payment to the applicable Junior Subordinated Indenture.  For purposes of this definition, “Debt”
means, with respect to any Person, whether recourse is to all or a portion of
the assets of such Person, whether currently existing or hereafter incurred and
whether or not contingent and without duplication, (i) every obligation of such
Person for money borrowed; (ii) every obligation of such Person evidenced by
bonds, debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or businesses;
(iii) every reimbursement obligation of such Person with respect to letters of
credit, bankers’ acceptances or similar facilities issued for the account of
such Person; (iv) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (but excluding trade accounts
payable or other accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; (vi) all
indebtedness of such Person, whether incurred on or prior to the date of the
applicable Junior Subordinated Indenture or thereafter incurred, for claims in
respect of derivative products, including interest rate, foreign exchange rate
and commodity forward contracts, options and swaps and similar arrangements, in
an amount equal to the Derivatives Termination Value thereof; (vii) every
obligation of the type referred to in clauses (i) through (vi) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable for, directly or indirectly,
as obligor or otherwise; and (viii) any renewals, extensions, refundings,
amendments or modifications of any obligation of the type referred to in
clauses (i) through (vii).  For the
avoidance of doubt, Indebtedness of the Borrower in respect of debt securities
authenticated and delivered under the Junior Subordinated Indentures shall not
constitute Senior Debt.

Senior Equity Interest.  As to any
Eligible Equity Interest or Preferred Equity Investment, any other Equity
Interest which is entitled in whole or in part to payment of distributions or
return of capital prior to such Eligible Equity Interest or Preferred Equity
Investment.

Senior Leverage Ratio.  The ratio,
expressed as a percentage, of the Consolidated Total Senior Liabilities of GKK
and its Subsidiaries to Consolidated Total Assets of GKK and its Subsidiaries.

Senior Mortgage Interest.  A First Mortgage Loan or a Participation
Interest in a First Mortgage Loan, provided such Participation Interest
constitutes the most senior interest in such First Mortgage Loan.  A Senior Mortgage Interest may be subject to
a Participation Interest, provided that such Senior Mortgage Interest is the
first in priority with respect to payment of principal and interest as to any
interest in such First Mortgage Loan.

Senior Mortgage Interest Value. 
With respect to any Senior Mortgage Interest, an amount equal to the
lesser of (a) the Real Estate Collateral Value relating to such Senior Mortgage
Interest multiplied by 0.75, and (b) ninety percent (90%) of the carrying basis
of the Borrower or Subsidiary Guarantor, as applicable, in such First Mortgage
Interest determined in accordance with GAAP. 
In the event that such 

 20
 

Senior Mortgage Interest does not constitute the
entire First Mortgage Loan (for example, it is subject to a Participation
Interest), the amount determined in clause (a) shall be further multiplied by
the Borrower’s or such Subsidiary Guarantor’s pro rata share (expressed as a
percentage) of the entire First Mortgage Loan (based on the ratio of the Senior
Mortgage Interest held by Borrower or a Subsidiary Guarantor to the overall
principal balance of the entire First Mortgage).

S&P.  Standard
& Poor’s Ratings Services and any successor thereto.

State.  A state of
the United States of America.

Subordinate Interest.  A Second
Mortgage Loan, a Mezzanine Loan, a Preferred Equity Investment or a Participation
Interest in a First Mortgage Loan (which Participation Interest is not the most
senior interest in such First Mortgage Loan), a Second Mortgage Loan or a
Mezzanine Loan, in each case owned by Borrower or a Subsidiary Guarantor.  The Real Estate to which such Subordinate
Interest relates shall be located within the contiguous 48 states of the
continental United States or the District of Columbia or Hawaii and shall be
free of all structural defects or major architectural deficiencies, title
defects, environmental conditions or other adverse matters except for defects,
deficiencies, conditions or other matters individually or collectively which
are not material to the profitable operation of such Real Estate.  Notwithstanding anything herein to the contrary,
no Subordinate Interest shall be eligible for inclusion in the Borrowing Base
if (a) the sum of the aggregate Indebtedness encumbering the real estate
relating thereto or any direct or indirect Equity Interest therein plus
the unreturned investment with respect to any Senior Equity Interest relating
thereto exceeds (b) eighty-five percent (85%) of the Real Estate
Collateral Value for the underlying property.

Subordinate Interest Value. 
With respect to any Subordinate Interest, an amount equal to (a) the
carrying basis of the Borrower or Subsidiary Guarantor, as applicable, in the
Subordinate Interest determined in accordance with GAAP multiplied by
(b) 0.60.

Subordination Event.  The
occurrence of (a) any event or circumstance relating to any Eligible Asset
included in the calculation of the Borrowing Base which results in the
modification of the payment “waterfall” provided for in the documentation
underlying or relating to such Eligible Asset that would otherwise be in effect
absent such event or circumstance, which modification results in such Eligible
Asset receiving reduced or modified payments, having payments withheld or
reserved or otherwise being locked out from receiving any cash flow, or (b) the
violation of or failure to satisfy any Coverage Test relating to (i) an
Eligible CDO Retained Asset, or (ii) a class or classes of securities of which
such Eligible CDO Retained Asset is a part issued pursuant to a CDO Indenture
included within or subject to such Coverage Test, or (iii) any class or classes
of securities issued pursuant to a CDO Indenture ranking senior in priority to
such Eligible CDO Retained Asset.

Subsidiary.  Any
corporation, association, partnership, trust, or other business entity of which
the designated parent shall at any time own directly or indirectly through a
Subsidiary or Subsidiaries at least a majority (by number of votes or
controlling interests) of the outstanding Voting Interests, and (b) with
respect to GKK and Borrower, any other entity the accounts of which are consolidated
with the accounts of GKK or Borrower.

Subsidiary Guarantor.  GKK Madison
Investment LLC, Gramercy Investment Trust and any Subsidiary of Borrower that
shall become a Guarantor pursuant to §5.2.

Swing Loan.  See §2.11(a).

Swing Loan Bank.  KeyBank, in
its capacity as Swing Loan Bank and any successor thereof.

 21

Swing Loan
Commitment.  The sum of $25,000,000.00, as the same may be
changed from time to time in accordance with the terms of this Agreement.

Swing Loan Note. 
See §2.11(b).

Test Period. 
See §9.3.

Titled Agents. 
The Lead Arranger and any other Bank or Affiliate of a Bank designated
by Agent as a “documentation agent”, “syndication agent” or similar title in
connection with an assignment of a Commitment by the Bank acting as the Agent.

Total Commitment. 
The sum of the Commitments of the Banks, as in effect from time to
time.  As of the date of this Agreement,
the Total Commitment is One Hundred Seventy-Five Million and No/100
Dollars ($175,000,000.00).  The Total
Commitment may increase in accordance with §2.10.

Type. 
As to any Loan, its nature as a Base Rate Loan or a LIBOR Rate Loan.

UCC. 
The Uniform Commercial Code as in effect in any jurisdiction.

Unconsolidated Affiliate. 
As to any Person, any other Person in which it owns an interest which is
not a Subsidiary.

Unencumbered Borrowing
Base Asset.  Unencumbered Borrowing Base Asset shall mean
any Eligible Asset which satisfies the conditions set forth in §7.17(a).  The initial Unencumbered Borrowing Base
Assets are described on Schedule 7.17 hereto.

Unencumbered Borrowing
Base Asset Value.  The Unencumbered Borrowing Base Asset Value
of any Unencumbered Borrowing Base Asset shall be an amount equal to the sum
of:

(a)           the Eligible CDO Retained Asset Value
multiplied by 0.45; plus

(b)           the Senior Mortgage Interest Value; plus

(c)           the Subordinate Interest Value; plus

(d)           the Equity Interest Value;

provided that the Unencumbered Borrowing Base
Asset Value of any Unencumbered Borrowing Base Asset shall be deemed to be zero
(a) in the event a Subordination Event has occurred and is continuing with
respect thereto or (b) in the event of any event of default or other event
which would permit the acceleration of indebtedness or effect a modification of
a payment waterfall (however so defined under the related underlying
documentation) with respect to such Unencumbered Borrowing Base Asset has
occurred and is continuing, including without limitation a default (i) under
any applicable CDO Indenture, (ii) as to any Eligible CDO Retained Asset or
(iii) as to any security issued pursuant to the applicable CDO Indenture
ranking senior in priority to such Eligible CDO Retained Asset.

Voting Interests. 
Stock or similar ownership interests, of any class or classes (however
designated), the holders of which are at the time entitled, as such holders,
(a) to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, partnership,
trust or other business entity involved, or (b) to control, manage, or conduct
the business of the corporation, partnership, association, trust or other
business entity involved.

 22
 

Wholly Owned Subsidiary. 
Any Subsidiary of a Person in respect of which all of the equity
securities or other ownership interests (other than, in the case of a
corporation, directors’ qualifying shares) are at the time directly or
indirectly owned by such Person.

§1.2        Rules of Interpretation.

(a)           A reference to any document or agreement
shall include such document or agreement as amended, modified or supplemented
from time to time in accordance with its terms and the terms of this Agreement.

(b)           The singular includes the plural and the
plural includes the singular.

(c)           A reference to any law includes any
amendment or modification to such law.

(d)           A reference to any Person includes its
permitted successors and permitted assigns.

(e)           Accounting terms not otherwise defined
herein have the meanings assigned to them by GAAP applied on a consistent basis
by the accounting entity to which they refer.

(f)            The words “include”, “includes” and “including”
are not limiting.

(g)           The words “approval” and “approved”, as
the context so determines, means an approval in writing given to the party
seeking approval after full and fair disclosure to the party giving approval of
all material facts necessary in order to determine whether approval should be
granted.

(h)           All terms not specifically defined herein
or by GAAP, which terms are defined in the UCC as in effect in the State of New
York, have the meanings assigned to them therein.

(i)            Reference to a particular “§”, refers to
that section of this Agreement unless otherwise indicated.

(j)            The words “herein”, “hereof”, “hereunder”
and words of like import shall refer to this Agreement as a whole and not to
any particular section or subdivision of this Agreement.

(k)           In the event of any change in GAAP after
the date hereof or any other change in accounting procedures which would affect
the computation of any financial covenant, ratio or other requirement set forth
in any Loan Document, then upon the request of Borrower or Agent, the Borrower,
the Guarantors, the Agent and the Banks shall negotiate promptly, diligently
and in good faith in order to amend the provisions of the Loan Documents such
that such financial covenant, ratio or other requirement shall continue to
provide substantially the same financial tests or restrictions of the Borrower
or Guarantors as in effect prior to such accounting change, as determined by
the Majority Banks in their good faith judgment.  Until such time as such amendment shall have
been executed and delivered by the Borrower, the Guarantors, the Agent and the
Majority Banks, such financial covenants, ratio and other requirements, and all
financial statements and other documents required to be delivered under the
Loan Documents, shall be calculated and reported as if such change had not
occurred.

§2.          THE CREDIT FACILITY.

§2.1        Commitment to Lend.  Subject to the
terms and conditions set forth in this Agreement, each of the Banks severally
agrees to lend to the Borrower, and the Borrower may borrow (and repay and

 23
 

reborrow) from
time to time between the Closing Date and the Maturity Date, upon notice by the
Borrower to the Agent given in accordance with §2.6, such sums as are requested
by the Borrower for the purposes set forth in §2.9 up to a maximum aggregate
principal amount outstanding (after giving effect to all amounts requested) at
any one time equal to such Bank’s Commitment as Revolving Credit Loans;
provided, that, in all events no Default or Event of Default shall have
occurred and be continuing or will arise as a result thereof; and provided,
further, that the sum of the Outstanding Revolving Credit Loans and Outstanding
Swing Loans (after giving effect to all amounts requested) and the aggregate
Letter of Credit Liabilities shall not at any time exceed the Total Commitment
or the Borrowing Base.  The Revolving
Credit Loans shall be made pro rata in accordance with each Bank’s Commitment
Percentage.  Each request for a Revolving
Credit Loan hereunder shall constitute a representation and warranty by the
Borrower that all of the conditions set forth in §10 and §11, in the case of
the initial Revolving Credit Loan, and §11, in the case of all other Revolving
Credit Loans, have been satisfied on the date of such request.  The Agent may assume that the conditions in
§10 and §11 have been satisfied unless it receives prior written notice from a
Bank that such conditions have not been satisfied.  No Bank shall have any obligation to make
Revolving Credit Loans to the Borrower in the maximum aggregate principal
amount outstanding of more than the principal face amount of its Revolving
Credit Note.

§2.2        Facility Fee.  The Borrower
agrees to pay to the Agent for the accounts of the Banks in accordance with
their respective Commitment Percentages a facility fee calculated at the rate
per annum set forth below on the daily amount by which the Total Commitment (as
the same may be increased pursuant to §2.10 or reduced pursuant to §2.3)
exceeds the Outstanding Revolving Credit Loans and the face amount of
Outstanding Letters of Credit during each calendar quarter or portion thereof
commencing on the date hereof and ending on the Maturity Date.  The facility fee shall be calculated for each
day based on the ratio (expressed as a percentage) of (a) the daily amount of
the Outstanding Revolving Credit Loans and the face amount of Outstanding
Letters of Credit during such calendar quarter to (b) the Total Commitment, and
shall be payable based upon the ratios set forth below:

	
  Ratio of Loans to Total Commitment

  	
   

  	
  Facility Fee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than 50%

  	
   

  	
  0.30

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Greater than or equal
  to 50%

  	
   

  	
  0.15

  	
  %

  

 

The facility fee shall be
payable quarterly in arrears on the first day of each calendar quarter for the
immediately preceding calendar quarter or portion thereof, or on any earlier
date on which the Commitments shall be reduced or shall terminate as provided
in §2.3, with a final payment on the Maturity Date.  Any payment due under this §2.2 shall be
prorated for any partial quarter.

§2.3        Reduction of Commitment.  The Borrower
shall have the right at any time and from time to time upon five Business Days’
prior written notice to the Agent to reduce by $5,000,000 or an integral
multiple of $500,000 in excess thereof or to terminate entirely the unborrowed
portion of the Commitments, whereupon the Commitments of the Banks shall be
reduced pro rata in accordance with their respective Commitment Percentages of
the amount specified in such notice or, as the case may be, terminated, any
such reduction to be without penalty (unless such reduction requires repayment
of a LIBOR Rate Loan); provided that in no event shall the Total Commitment be
reduced below an amount equal to the Outstanding Loans and the aggregate Letter
of Credit Liabilities nor may the Total Commitment be terminated if there are
outstanding Letter of Credit Liabilities. 
Promptly after receiving any notice of the Borrower delivered pursuant
to this §2.3, the Agent will notify the Banks of the substance thereof.  Upon the effective date of any such reduction
or termination, the Borrower shall pay to the Agent for the respective accounts
of the Banks the full amount of any facility fee under §2.2 then accrued on the
amount of the reduction.  No reduction or
termination of the Commitment may be

 24
 

reinstated.  Notwithstanding the foregoing, unless the
Commitments are terminated in full, in no event shall the aggregate Commitments
be reduced to less than $50,000,000.00.

§2.4        Notes.  The Revolving
Credit Loans shall be evidenced by separate promissory notes of the Borrower in
substantially the form of Exhibit A hereto (collectively, the “Revolving
Credit Notes”), dated of even date as this Agreement and completed with
appropriate insertions.  One Revolving
Credit Note shall be payable to the order of each Bank in the principal amount
equal to such Bank’s Commitment or, if less, the outstanding amount of all
Revolving Credit Loans made by such Bank, plus interest accrued thereon as set
forth below.  The Borrower irrevocably
authorizes Agent to make or cause to be made, at or about the time of the
Drawdown Date of any Revolving Credit Loan or at the time of receipt of any
payment of principal thereof, an appropriate notation on Agent’s Record
reflecting the making of such Revolving Credit Loan or (as the case may be) the
receipt of such payment.  The outstanding
amount of the Revolving Credit Loans set forth on Agent’s Record shall be prima
facie evidence of the principal amount thereof owing and unpaid to each
Bank, but the failure to record, or any error in so recording, any such amount
on Agent’s Record shall not limit or otherwise affect the obligations of the
Borrower hereunder or under any Revolving Credit Note to make payments of
principal of or interest on any Revolving Credit Note when due.  By delivery of the Revolving Credit Notes,
there shall not be deemed to have occurred, and there has not otherwise
occurred, any payment, satisfaction or novation of the Indebtedness evidenced
by the “Notes” described in the Original Credit Agreement, which Indebtedness is
instead allocated among the Banks as of the date hereof and evidenced by the
Revolving Credit Notes and their respective Commitment Percentages, and the
Banks shall as of the date hereof make such adjustments to the outstanding
Revolving Credit Loans of such Banks so that such outstanding Revolving Credit
Loans are consistent with their respective Commitment Percentages.

§2.5        Interest on Loans.

(a)           Each Base Rate Loan shall bear interest
for the period commencing with the Drawdown Date thereof and ending on the date
on which such Base Rate Loan is repaid or is converted to a LIBOR Rate Loan at
the per annum rate equal to the sum of the Base Rate plus three-tenths of one
percent (0.30%).

(b)           Each LIBOR Rate Loan shall bear interest
for the period commencing with the Drawdown Date thereof and ending on the last
day of the Interest Period with respect thereto at the rate per annum equal to
the sum of the LIBOR Rate determined for such Interest Period plus one and
65/100ths percent (1.65%).

(c)           The Borrower promises to pay interest on
each Loan to it in arrears on each Interest Payment Date with respect thereto,
or on any earlier date on which the Commitments shall terminate.

(d)           Base Rate Loans and LIBOR Rate Loans may
be converted to Loans of the other Type as provided in §4.1.

§2.6        Requests for Revolving
Credit  Loans.  The Borrower shall give to the Agent written
notice in the form of Exhibit B hereto (or telephonic notice confirmed in
writing in the form of Exhibit B hereto) of each Revolving Credit Loan requested
hereunder (a “Loan Request”) no later than 1:00 p.m. (Atlanta time) two (2)
Business Days prior to the proposed Drawdown Date if such Revolving Credit Loan
is to be a LIBOR Rate Loan or no later than 1:00 p.m. (Atlanta time) one (1)
Business Day prior to the proposed Drawdown Date if such Revolving Credit Loan
is to be a Base Rate Loan.  Each such
Loan Request shall include a calculation of the Borrowing Base.  Each such notice shall specify with respect
to the requested Revolving Credit Loan the proposed principal amount, Drawdown
Date, Interest Period (if

 25
 

applicable) and
Type.  Promptly upon receipt of any such
notice, the Agent shall notify each of the Banks thereof.  Each such Loan Request shall be irrevocable
and binding on the Borrower and shall obligate the Borrower to accept the
Revolving Credit Loan requested from the Banks on the proposed Drawdown
Date.  Each Loan Request shall be (a) for
a Base Rate Loan in the minimum aggregate amount of $1,000,000 or an integral
multiple of $100,000 in excess thereof, or (b) for a LIBOR Rate Loan in a
minimum aggregate amount of $1,000,000 or an integral multiple of $100,000 in
excess thereof; provided, however, that there shall be no more
than ten (10) LIBOR Rate Loans outstanding at any one time.

§2.7        Funds for Loans.

(a)           Not later than 1:00 p.m. (Atlanta time)
on the proposed Drawdown Date of any Revolving Credit Loans, each of the Banks
will make available to the Agent, at the Agent’s Head Office, in immediately
available funds, the amount of such Bank’s Commitment Percentage of the amount
of the requested Revolving Credit Loans which may be disbursed pursuant to
§2.1.  Upon receipt from each Bank of
such amount, and upon receipt of the documents required by §10 and §11 and the
satisfaction of the other conditions set forth therein, to the extent
applicable, the Agent will make available to the Borrower the aggregate amount
of such Revolving Credit Loans made available to the Agent by the Banks by
crediting such amount to the account of the Borrower maintained at the Agent’s
Head Office.  The failure or refusal of
any Bank to make available to the Agent at the aforesaid time and place on any
Drawdown Date the amount of its Commitment Percentage of the requested
Revolving Credit Loans shall not relieve any other Bank from its several
obligation hereunder to make available to the Agent the amount of such other
Bank’s Commitment Percentage of any requested Revolving Credit Loans, including
any additional Revolving Credit Loans that may be requested subject to the
terms and conditions hereof to provide funds to replace those not advanced by
the Bank so failing or refusing.

(b)           Unless the Agent shall have been notified
by any Bank prior to the applicable Drawdown Date that such Bank will not make
available to the Agent such Bank’s pro rata share of a proposed Loan, the Agent
may in its discretion assume that such Bank has made such share of the proposed
Loan available to Agent in accordance with the provisions of this Agreement and
the Agent may, if it chooses, in reliance upon such assumption make such Loan
available to Borrower, and such Bank shall be liable to the Agent for the
amount of such advance.  If such Bank
does not pay such corresponding amount upon the Agent’s demand therefor, the
Agent will promptly notify the Borrower, and the Borrower shall promptly pay
such corresponding amount to the Agent. 
The Agent shall also be entitled to recover from the Bank or the
Borrower, as the case may be, interest on such corresponding amount in respect
of each day from the date such corresponding amount was made available by the
Agent to the Borrower to the date such corresponding amount is recovered by the
Agent at a per annum rate equal to (i) from the Borrower at the applicable rate
for such Loan or (ii) from a Bank at the Federal Funds Effective Rate.

§2.8        Advances Do Not Constitute
a Waiver.  No Loan made by the Banks shall constitute a
waiver of any of the conditions to the Banks’ obligation to make further Loans
nor, in the event the Borrower fails to satisfy any such condition, shall any
such Loan have the effect of precluding the Banks from thereafter declaring
such failure to satisfy a condition to be an Event of Default.

§2.9        Use of Proceeds.  Subject to the
terms, covenants and conditions set forth herein, the Borrower will use the
proceeds of the Loans and the Letters of Credit to refinance existing or future
Indebtedness, to fund real estate related investments, and for general
corporate purposes.

 26
 

§2.10      Increase of Commitment.

(a)           Provided that no Default or Event of
Default shall have occurred and be continuing on the date of the Increase
Notice and on the date the Total Commitment is increased, the Borrower shall
have the option, by giving written notice to the Agent (the “Increase Notice”),
subject to the terms and conditions set forth in this Agreement, to increase
from time to time the Total Commitment by an amount up to $50,000,000.00 (the “Available
Increase Amount”), which assuming no previous reduction in the Commitments,
would result in a maximum Total Commitment of $225,000,000.00.  The amount of the requested increase (the “Increase
Amount”) shall be set forth in the Increase Notice; provided, however, the
Increase Amount shall not be less than $10,000,000.00).  The execution and delivery of the Increase
Notice by Borrower shall constitute a representation and warranty by the
Borrower that all the conditions set forth in this §2.10 shall have been
satisfied on the date of such Increase Notice.

(b)           The obligation of the Agent and the Banks
to increase the Total Commitment pursuant to this §2.10 shall be conditioned
upon satisfaction of the following conditions precedent which must be satisfied
prior to the effectiveness of any increase of the Total Commitment:

(i)            The Borrower shall pay (i) to the Agent
and Arranger such fees as set forth in the Agreement Regarding Fees, and (ii)
to the Banks acquiring the Increase Amount such fees as they may require in
connection therewith, which fees shall, when paid, be fully earned and
non-refundable under any circumstances; and

(ii)           On the date such Increase Notice is given
and on the date such increase becomes effective, both immediately before and
after the Commitment is increased, there shall exist no Default or Event of
Default; and

(iii)          The representations and warranties made
by or on behalf of the Borrower and the Guarantors in the Loan Documents or in
any other document or instrument delivered pursuant to or in connection
therewith shall have been true and correct in all material respects when made
and shall also be true and correct in all material respects on the date of such
Increase Notice and on the date the Total Commitment is increased, both
immediately before and after the Total Commitment is increased (except to the
extent of changes resulting from transactions contemplated or permitted by this
Agreement and the other Loan Documents and changes occurring in the ordinary
course of business that singly or in the aggregate are not materially adverse,
and except to the extent that such representations and warranties relate
expressly to an earlier date);

(iv)          The Borrower shall (and shall cause
Guarantors to) also execute and deliver to Agent and the Banks such additional
documents, instruments, certifications and opinions as the Agent may require in
its reasonable discretion, including, without limitation, replacement Notes, a
Compliance Certificate demonstrating compliance with all covenants set forth in
the Loan Documents after giving effect to the increase and any amendments to
the Loan Documents, as Agent may request; and

(v)           One or more Banks or potential assignees shall have
agreed to acquire the Increase Amount, provided, however, no Bank (including,
specifically, but without limitation, KeyBank) shall be obligated to acquire
such increase without the express written consent of such Bank, which consent
may be withheld in such Bank’s sole and absolute discretion.  Upon the request of Borrower, KeyBank shall
endeavor to solicit Banks to acquire the Increase Amount.  Borrower shall cooperate and actively assist
with KeyBank in connection with any such solicitation and shall reimburse
KeyBank for any reasonable out-of-pocket fees or expenses incurred in
connection with such solicitation.

 27
 

(c)           Upon satisfaction of the terms and
conditions set forth above, (i) the Increase Amount shall become a part of the
Commitment and Total Commitment and be available to be disbursed subject to the
terms of this Agreement, and, subject to the payment of any breakage costs
pursuant to §4.8, the Banks shall make such adjustments to the outstanding
Revolving Credit Loans and Commitment Percentages of such Banks, so that, after
giving effect to such increase, the outstanding Revolving Credit Loans and
Commitment Percentages are consistent with their respective Commitments; and (ii)
the Agent may unilaterally revise Schedule 1 to reflect the increased
Commitment.  The participation interests
of the Banks in Swing Loans and Letters of Credit shall be similarly adjusted.

§2.11      Swing Loan Commitment.

(a)           Subject to the terms and conditions set
forth in this Agreement, Swing Loan Bank agrees to lend to the Borrower (the “Swing
Loans”), and the Borrower may borrow (and repay and reborrow) from time to time
between the Closing Date and the date which is five (5) Business Days prior to
the Maturity Date upon notice by the Borrower to the Swing Loan Bank given in
accordance with this §2.11, such sums as are requested by the Borrower for the
purposes set forth in §2.9 in an aggregate principal amount at any one time
outstanding not exceeding the Swing Loan Commitment; provided that in
all events (i) no Default or Event of Default shall have occurred and be
continuing; (ii) no Bank shall be a Delinquent Bank (provided Swing Loan
Bank may, in its sole discretion, be entitled to waive this condition);
(iii) the outstanding principal amount of the Revolving Credit Loans and
Swing Loans (after giving effect to all amounts requested) plus Letter
of Credit Liabilities shall not at any time exceed the Total Commitment; and
(iv) the outstanding principal amount of the Revolving Credit Loans, Swing
Loans (after giving effect to all amounts requested), plus Letter of Credit
Liabilities shall not at any time exceed the lesser of (A) the Total
Commitment or (B) the Borrowing Base. 
Swing Loans shall constitute “Revolving Credit Loans” for all purposes
hereunder.  The funding of a Swing Loan
hereunder shall constitute a representation and warranty by the Borrower that
all of the conditions set forth in §10 and §11 have been satisfied on the date
of such funding.  The Swing Loan Bank may
assume that the conditions in §10 and §11 have been satisfied unless Swing Loan
Bank has received written notice from a Bank that such conditions have not been
satisfied.  Each Swing Loan shall be due
and payable within five (5) Business Days of the date such Swing Loan was
provided and Borrower hereby agree (to the extent not repaid as contemplated by
§2.11(d) below) to repay each Swing Loan on or before the date that is five (5)
Business Days from the date such Swing Loan was provided.

(b)           The Swing Loans shall be evidenced by a
separate promissory note of the Borrower in substantially the form of Exhibit F
hereto (the “Swing Loan Note”), dated the date of this Agreement and completed
with appropriate insertions.  The Swing
Loan Note shall be payable to the order of the Swing Loan Bank in the principal
face amount equal to the Swing Loan Commitment and shall be payable as set
forth below.  The Borrower irrevocably
authorizes the Swing Loan Bank to make or cause to be made, at or about the
time of the Drawdown Date of any Swing Loan or at the time of receipt of any
payment of principal thereof, an appropriate notation on the Swing Loan Bank’s
Record reflecting the making of such Swing Loan or (as the case may be) the
receipt of such payment.  The outstanding
amount of the Swing Loans set forth on the Swing Loan Bank’s Record shall be prima
facie evidence of the principal amount thereof owing and unpaid to the
Swing Loan Bank, but the failure to record, or any error in so recording, any
such amount on the Swing Loan Bank’s Record shall not limit or otherwise affect
the obligations of the Borrower hereunder or under the Swing Loan Note to make
payments of principal of or interest on any Swing Loan Note when due.

(c)           Borrower shall request a Swing Loan by
delivering to the Swing Loan Bank a Loan Request executed by an Authorized
Officer no later than 11:00 a.m. (Atlanta time) on the requested Drawdown Date
specifying the amount of the requested Swing Loan (which shall be in the
minimum amount of $1,000,000.00) and providing the wire instructions for the
delivery of the Swing Loan

 28
 

proceeds.  The Loan Request shall also contain the
statements and certifications required by §2.6. 
Notwithstanding anything herein to the contrary, a Swing Loan shall be a
Base Rate Loan and shall bear interest at the per annum rate of the Base Rate
plus three-tenths of one percent (0.3%). 
The proceeds of the Swing Loan will be disbursed by wire by the Swing
Loan Bank to the Borrower no later than 1:00 p.m. (Atlanta time) on the
requested Drawdown Date.

(d)           The Swing Loan Bank shall, within two (2)
Business Days after the Drawdown Date with respect to such Swing Loan, request
each Bank, including the Swing Loan Bank, to make a Base Rate Loan pursuant to
§2.1 in an amount equal to such Bank’s Commitment Percentage of the amount of
the Swing Loan outstanding on the date such notice is given.  Borrower hereby irrevocably authorizes and
directs the Swing Loan Bank to so act on its behalf, and agrees that any amount
advanced to the Agent for the benefit of the Swing Loan Bank pursuant to this
§2.11(d) shall be considered a Base Rate Loan pursuant to §2.1.  Unless any of the events described in
paragraph (f), (g) or (h) of §12.1 shall have occurred (in which event the procedures
of §2.11(e) shall apply), each Bank shall make the proceeds of its Base Rate
Loan available to the Swing Loan Bank for the account of the Swing Loan Bank at
the Agent’s Head Office prior to 12:00 noon (Atlanta time) in funds immediately
available no later than the third (3rd) Business Day after the date such notice
is given just as if the Banks were funding directly to the Borrower, so that
thereafter such Obligations shall be evidenced by the Revolving Credit Notes.  The proceeds of such Base Rate Loans shall be
immediately applied to repay the Swing Loans.

(e)           If for any reason a Swing Loan cannot be
refinanced by a Base Rate Loan pursuant to §2.11(d), each Bank will, on the
date such Revolving Credit Loan pursuant to §2.11(d) was to have been made,
purchase an undivided participation interest in the Swing Loan in an amount
equal to its Commitment Percentage of such Swing Loan.  Each Bank will immediately transfer to the
Swing Loan Bank in immediately available funds the amount of its participation
and upon receipt thereof the Swing Loan Bank will deliver to such Bank a Swing
Loan participation certificate dated the date of receipt of such funds and in
such amount.

(f)            Whenever at any time after the Swing Loan
Bank has received from any Bank such Bank’s participation interest in a Swing
Loan, the Swing Loan Bank receives any payment on account thereof, the Swing
Loan Bank will distribute to such Bank its participation interest in such
amount (appropriately adjusted in the case of interest payments to reflect the
period of time during which such Bank’s participating interest was outstanding
and funded); provided, however, that in the event that such
payment received by the Swing Loan Bank is required to be returned, such Bank
will return to the Swing Loan Bank any portion thereof previously distributed
by the Swing Loan Bank to it.

(g)           Each Bank’s obligation to fund a Base
Rate Loan as provided in §2.11(d) or to purchase participation interests
pursuant to §2.11(e) shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (i) any
setoff, counterclaim, recoupment, defense or other right which such Bank or the
Borrower may have against the Swing Loan Bank, the Borrower or anyone else for
any reason whatsoever; (ii) the occurrence or continuance of a Default or
an Event of Default; (iii) any adverse change in the condition (financial
or otherwise) of the Borrower, Guarantors or any of their respective
Subsidiaries; (iv) any breach of this Agreement or any of the other Loan
Documents by the Borrower, Guarantors or any Bank; or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.  Any portions of a Swing
Loan not so purchased or converted may be treated by the Agent and Swing Loan
Bank as against such Bank as a Revolving Credit Loan which was not funded by
the non-purchasing Bank as contemplated by §2.7 and §12.5, and shall have
such rights and remedies against such Bank as are set forth in §§2.7, 12.5 and
14.5.  Each Swing Loan, once so sold or
converted, shall cease to be a Swing Loan for the purposes of this Agreement,
but shall be a Revolving Credit Loan made by each Bank under its Commitment.

 29
 

§2.12      Letters of Credit.

(a)           Subject to the terms and conditions set
forth in this Agreement, at any time and from time to time from the Closing
Date through the day that is thirty (30) days prior to the Maturity Date, the
Issuing Lender shall issue such Letters of Credit as the Borrower may request
upon the delivery of a written request in the form of Exhibit G
hereto (a “Letter of Credit Request”) to the Issuing Lender, provided
that (i) no Default or Event of Default shall have occurred and be
continuing, (ii) upon issuance of such Letter of Credit, the Letter of
Credit Liabilities shall not exceed Twenty-Five Million Dollars
($25,000,000.00), (iii) in no event shall the sum of (A) the
Revolving Credit Loans Outstanding, (B) the Swing Loans Outstanding and
(C) the amount of Letter of Credit Liabilities (after giving effect to all
Letters of Credit requested) exceed the Total Commitment, (iv) in no event
shall the outstanding principal amount of the Revolving Credit Loans, Swing
Loans and Letters of Credit Liabilities (after giving effect to any requested
Letters of Credit) exceed the Total Commitment or the Borrowing Base,
(v) the conditions set forth in §§10 and 11 shall have been satisfied,
(vi) no Bank is a Delinquent Bank (provided Issuing Lender may, in its
sole discretion, be entitled to waive this condition), and (vii) in no
event shall any amount drawn under a Letter of Credit be available for
reinstatement or a subsequent drawing under such Letter of Credit.  The Issuing Lender may assume that the
conditions in §10 and §11 have been satisfied unless it receives written notice
from a Bank that such conditions have not been satisfied.  Each Letter of Credit Request shall be
executed by a Certifying Officer.  The
Issuing Lender shall be entitled to conclusively rely on such Person’s
authority to request a Letter of Credit on behalf of Borrower.  The Issuing Lender shall have no duty to
verify the authenticity of any signature appearing on a Letter of Credit
Request.  The Borrower assumes all risks
with respect to the use of the Letters of Credit.  Unless the Issuing Lender and the Majority
Banks otherwise consent, the term of any Letter of Credit shall not exceed a
period of time commencing on the issuance of the Letter of Credit and ending
one year after the date of issuance thereof, subject to extension pursuant to
an “evergreen” clause acceptable to Agent and Issuing Lender (but in any event
the term shall not extend beyond the Maturity Date).  The amount available to be drawn under any
Letter of Credit shall reduce on a dollar-for-dollar basis the amount available
to be drawn under the Total Commitment as a Revolving Credit Loan.

(b)           Each Letter of Credit Request shall be
submitted to the Issuing Lender at least five (5) Business Days (or such
shorter period as the Issuing Lender may approve) prior to the date upon which
the requested Letter of Credit is to be issued. 
Each such Letter of Credit Request shall contain (i) a statement as
to the purpose for which such Letter of Credit shall be used (which purpose
shall be in accordance with the terms of this Agreement), and (ii) a
certification by the Certifying Officer that the Borrower and Guarantors are
and will be in compliance with all covenants under the Loan Documents after
giving effect to the issuance of such Letter of Credit.   The Borrower shall further deliver to the
Issuing Lender such additional applications (which application as of the date
hereof is in the form of Exhibit H attached hereto) and documents as the
Issuing Lender may require, in conformity with the then standard practices of
its letter of credit department, in connection with the issuance of such Letter
of Credit; provided that in the event of any conflict, the terms of this
Agreement shall control.

(c)           The Issuing Lender shall, subject to the
conditions set forth in this Agreement, issue the Letter of Credit on or before
five (5) Business Days following receipt of the documents last due pursuant to
§2.12(b).  Each Letter of Credit shall be
in form and substance reasonably satisfactory to the Issuing Lender in its
reasonable discretion.

(d)           Upon the issuance of a Letter of Credit,
each Bank shall be deemed to have purchased a participation therein from
Issuing Lender in an amount equal to its respective Commitment Percentage of
the amount of such Letter of Credit.  No
Bank’s obligation to participate in a Letter of Credit shall be affected by any
other Bank’s failure to perform as required herein with respect to such Letter
of Credit or any other Letter of Credit.

 30
 

(e)           Upon the issuance of each Letter of
Credit, the Borrower shall pay to the Issuing Lender (i) for its own
account, a Letter of Credit fronting fee calculated at the rate set forth in
the Agreement Regarding Fees, and (ii) for the accounts of the Banks
(including the Issuing Lender) in accordance with their respective percentage
shares of participation in such Letter of Credit, a Letter of Credit fee
calculated at the rate per annum equal to one and 65/100ths percent (1.65%) on
the amount available to be drawn under such Letter of Credit.  Such fees shall be payable in quarterly installments
in arrears with respect to each Letter of Credit on the first day of each
calendar quarter following the date of issuance and continuing on each quarter
or portion thereof thereafter, as applicable, or on any earlier date on which
the Commitments shall terminate and on the expiration or return of any Letter
of Credit.  In addition, the Borrower
shall pay to Issuing Lender for its own account within five (5) days of demand
of Issuing Lender the standard issuance, documentation and service charges for
Letters of Credit issued from time to time by Issuing Lender.

(f)            In the event that any amount is drawn
under a Letter of Credit by the beneficiary thereof, the Borrower shall
reimburse the Issuing Lender by having such amount drawn treated as an outstanding
Revolving Credit Loan that is a Base Rate Loan under this Agreement (Borrower
being deemed to have requested a Revolving Credit Loan that is a Base Rate Loan
on such date in an amount equal to the amount of such drawing and such amount
drawn shall be treated as an outstanding Revolving Credit Loan that is a Base
Rate Loan under this Agreement) and the Agent shall promptly notify each Bank
by telex, telecopy, telegram, telephone (confirmed in writing) or other similar
means of transmission, and each Bank shall promptly and unconditionally pay to
the Agent, for the Issuing Lender’s own account, an amount equal to such Bank’s
Commitment Percentage of such Letter of Credit (to the extent of the amount
drawn).  If and to the extent any Bank
shall not make such amount available on the Business Day on which such draw is
funded, such Bank agrees to pay such amount to the Agent forthwith on demand,
together with interest thereon, for each day from the date on which such draw
was funded until the date on which such amount is paid to the Agent, at the
Federal Funds Effective Rate until three (3) days after the date on which the
Agent gives notice of such draw and at the Federal Funds Effective Rate plus
one percent (1.0%) for each day thereafter. 
Further, such Bank shall be deemed to have assigned any and all payments
made of principal and interest on its Revolving Credit Loans, amounts due with
respect to its participations in Letters of Credit and any other amounts due to
it hereunder to the Agent to fund the amount of any drawn Letter of Credit
which such Bank was required to fund pursuant to this §2.12(f) until such
amount has been funded (as a result of such assignment or otherwise).  In the event of any such failure or refusal,
the Banks not so failing or refusing shall be entitled to a priority secured
position for such amounts as provided in §12.5. 
The failure of any Bank to make funds available to the Agent in such
amount shall not relieve any other Bank of its obligation hereunder to make
funds available to the Agent pursuant to this §2.12(f).

(g)           If after the issuance of a Letter of
Credit pursuant to §2.12(c) by the Issuing Lender, but prior to the funding of
any portion thereof by a Bank, for any reason a drawing under a Letter of
Credit cannot be refinanced as a Revolving Credit Loan, each Bank will, on the
date such Revolving Credit Loan pursuant to §2.12(f) was to have been made,
purchase an undivided participation interest in the draw under such Letter of
Credit in an amount equal to its Commitment Percentage of the amount of such
Letter of Credit.  Each Bank will
immediately transfer to the Issuing Lender in immediately available funds the
amount of its participation and upon receipt thereof the Issuing Lender will
deliver to such Bank a Letter of Credit participation certificate dated the
date of receipt of such funds and in such amount.

(h)           Whenever at any time after the Issuing
Lender has received from any Bank any such Bank’s payment of funds under a
Letter of Credit and thereafter the Issuing Lender receives any payment on
account thereof, then the Issuing Lender will distribute to such Bank its
participation interest in such amount (appropriately adjusted in the case of
interest payments to reflect the period of time during

 31
 

which such Bank’s
participation interest was outstanding and funded); provided, however,
that in the event that such payment received by the Issuing Lender is required
to be returned, such Bank will return to the Issuing Lender any portion thereof
previously distributed by the Issuing Lender to it.

(i)            The issuance of any supplement,
modification, amendment, renewal or extension to or of any Letter of Credit
shall be treated in all respects the same as the issuance of a new Letter of
Credit.

(j)            Borrower assumes all risks of the acts,
omissions, or misuse of any Letter of Credit by the beneficiary thereof.  Neither Agent, Issuing Lender nor any Bank
will be responsible for (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any Letter of Credit or any document submitted
by any party in connection with the issuance of any Letter of Credit, even if
such document should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) the form, validity,
sufficiency, accuracy, genuineness or legal effect 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;
(iii) failure of any beneficiary of any Letter of Credit to comply fully
with the conditions required in order to demand payment under a Letter of
Credit; (iv) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise;
(v) errors in interpretation of technical terms; (vi) any loss or
delay in the transmission or otherwise of any document or draft required by or
from a beneficiary in order to make a disbursement under a Letter of Credit or
the proceeds thereof; (vii) for the misapplication by the beneficiary of
any Letter of Credit of the proceeds of any drawing under such Letter of
Credit; and (viii) for any consequences arising from causes beyond the
control of Agent or any Bank.  None of
the foregoing will affect, impair or prevent the vesting of any of the rights
or powers granted to Agent, Issuing Lender or the Banks hereunder.  In furtherance and extension and not in
limitation or derogation of any of the foregoing, any act taken or omitted to
be taken by Agent, Issuing Lender or the other Banks in good faith will be
binding on Borrower and will not put Agent, Issuing Lender or the other Banks
under any resulting liability to Borrower; provided nothing contained
herein shall relieve Issuing Lender for liability to Borrower arising as a
result of the gross negligence or willful misconduct of Issuing Lender as
determined by a court of competent jurisdiction after the exhaustion of all
applicable appeal periods.

§3.          REPAYMENT OF THE LOANS.

§3.1        Stated Maturity.  The Borrower
promises to pay on the Maturity Date and there shall become absolutely due and
payable on the Maturity Date all of the Loans and Letter of Credit Liabilities
outstanding on such date, together with any and all accrued and unpaid interest
thereon.

§3.2        Mandatory Prepayments.

(a)           If at any time the sum of the aggregate
of the Outstanding Loans and the Outstanding Letter of Credit Liabilities
exceeds the Total Commitment, then the Borrower shall within two (2) Business
Days pay the amount of such excess to the Agent for the respective accounts of
the Banks for application to the Loans together with any additional interest or
amounts payable pursuant to §4.8.

(b)           If at any time the aggregate of the
Outstanding Loans exceeds the Borrowing Base, then the Borrower shall within
two (2) Business Days pay the amount of such excess to the Agent for the
respective accounts of the Banks for application to the Loans together with any
additional interest or amounts payable pursuant to §4.8.

 32
 

§3.3        Optional Prepayments.  The Borrower
shall have the right, at its election, to prepay the outstanding amount of the
applicable Loans, as a whole or in part, at any time without penalty or
premium; provided, that if any full or partial prepayment of the
outstanding amount of any LIBOR Rate Loans is made other than on the last day
of the Interest Period relating thereto, such prepayment shall be accompanied
by the payment of any amounts due pursuant to §4.8, except that the amount of
any Swing Loans shall be paid solely to the Swing Loan Bank.  The Borrower shall give to the Agent, no
later than 11:00 a.m. (Atlanta time) at least one (1) Business Day’s prior
written notice of any prepayment pursuant to this §3.3, in each case specifying
the proposed date of prepayment and the principal amount to be prepaid (except
that no prior notice shall be required for the prepayment of a Swing
Loan).  Any payment which is received by
Agent later than 2 p.m. (Atlanta time), shall be deemed to have been received
on the immediately succeeding Business Day, and any applicable interest or fees
shall continue to accrue.

§3.4        Partial Prepayments.  Each partial
prepayment of the Loans under §3.3 shall be in a minimum amount of $500,000.00
or an integral multiple of $100,000.00 in excess thereof (unless the Loans are
being repaid in full), and each prepayment under §3.2 and §3.3 shall be applied
first to the principal of any Outstanding Swing Loans and then, in the absence
of instruction by the Borrower, first to the principal of Base Rate Loans and
then to the principal of LIBOR Rate Loans.

§3.5        Effect of Prepayments.  Amounts of the
Revolving Credit Loans prepaid under §3.2 or §3.3 hereunder may be reborrowed
as provided in §2.1.

§3.6        Extension of Maturity Date.

(a)           Provided that no Default or Event of
Default shall have occurred and be continuing, the Borrower shall have the
option, to be exercised by giving written notice to the Agent in the form of Exhibit
D hereto not more than ninety (90) days and not less than fifteen (15) days
prior to the initial scheduled Maturity Date (an “Extension Request”), subject
to the terms and conditions set forth in this Agreement, to extend the Maturity
Date by one (1) year to June 28, 2011. 
The request by the Borrower for extension of the Maturity Date shall
constitute a representation and warranty by the Borrower that all of the
conditions set forth in this Section shall have been satisfied on the date of
such request.

(b)           The obligations of the Agent and the Banks
to extend the Maturity Date as provided in §3.6(a) shall be subject to the
satisfaction of the following conditions precedent on the then effective
Maturity Date (without regard to such extension request):

(i)            Payment of Extension Fee.  The Borrower shall pay to the Agent on or
before the then effective Maturity Date for the pro rata account of the Banks
in accordance with their respective Commitment Percentages an extension fee
equal to .25% of the then Total Commitment, which fee shall, when paid, be
fully earned and non-refundable under any circumstances.

(ii)           No Default.  On the date the Extension Request is given
there shall exist no Event of Default, and on the Maturity Date (as determined
without regard to such extension) there shall exist no Default or Event of
Default.

(iii)          Representations and Warranties.  The representations and warranties made by
the Borrower or the Guarantors in the Loan Documents or otherwise made by or on
behalf of the Borrower, the Guarantors or their respective Subsidiaries in
connection therewith or after the date thereof shall have been true and correct
in all material respects when made and shall also be true and correct in all
material respects on the Maturity Date (as determined without regard to such
extension), except to the extent of changes resulting from transactions
contemplated or permitted by this Agreement and the other

 33
 

Loan Documents and changes occurring in the ordinary course of business
that singly or in the aggregate are not materially adverse, except to the
extent that such representations and warranties relate expressly to an earlier
date.

(iv)          Additional Documents.  The Borrower and Guarantors shall also
execute and deliver to Agent and the Banks such additional documents,
instruments and certifications as the Agent may reasonably require.

(c)           The Agent shall notify each of the Banks
in the event that the Maturity Date is extended as provided in this §3.6.

§4.          CERTAIN GENERAL PROVISIONS.

§4.1        Conversion Options.

(a)           The Borrower may elect from time to time
to convert any of its outstanding Loans to a Loan of another Type and such Loan
shall thereafter bear interest as a Base Rate Loan or a LIBOR Rate Loan, as
applicable; provided that (i) with respect to any such conversion of a LIBOR
Rate Loan to a Base Rate Loan, the Borrower shall give the Agent at least one
(1) Business Days’ prior written notice of such election, and such conversion
shall only be made on the last day of the Interest Period with respect to such
LIBOR Rate Loan unless the Borrower pays to the Agent any amounts due pursuant
to §4.8; (ii) with respect to any such conversion of a Base Rate Loan to a
LIBOR Rate Loan the Borrower shall give the Agent at least two (2) LIBOR
Business Days’ prior written notice of such election and the Interest Period
requested for such Loan, the principal amount of the Loan so converted shall be
in a minimum aggregate amount of $1,000,000 or an integral multiple of $100,000
in excess thereof and, after giving effect to the making of such Loan there
shall be no more than ten (10) LIBOR Rate Loans outstanding at any one time;
and (iii) no Loan may be converted into a LIBOR Rate Loan when any Default or
Event of Default has occurred and is continuing.  Promptly upon receipt of any Conversion
Request, the Agent shall notify each of the Banks thereof.  All or any part of the outstanding Loans of
any Type may be converted as provided herein, provided that no partial
conversion shall result in a LIBOR Rate Loan in an aggregate principal amount
of less than $1,000,000 and that the aggregate principal amount of each LIBOR
Loan shall be in an integral multiple of $100,000.  On the date on which such conversion is being
made, each Bank shall take such action as is necessary to transfer its
Commitment Percentage of such Loans to its Domestic Lending Office or its LIBOR
Lending Office, as the case may be.  Each
Conversion Request relating to the conversion of a Base Rate Loan to a LIBOR
Rate Loan shall be irrevocable by the Borrower.

(b)           Any Loan may be continued as such Type
upon the expiration of an Interest Period with respect thereto by compliance by
the Borrower with the terms of §4.1(a); provided that no LIBOR Rate Loan may be
continued as such when any Default or Event of Default has occurred and is
continuing, but shall be automatically converted to a Base Rate Loan on the
last day of the Interest Period relating thereto ending during the continuance
of any Default or Event of Default.

(c)           In the event that the Borrower does not
notify the Agent of its election hereunder with respect to any LIBOR Rate Loan
to it, such LIBOR Rate Loan shall be automatically converted to a LIBOR Rate
Loan having an Interest Period of one month at the end of the applicable
Interest Period.

§4.2        Closing Fee.  The Borrower
shall pay to KeyBank and Lead Arranger certain fees for services rendered or to
be rendered in connection with the Loan as provided pursuant to the Agreement
Regarding Fees.

 34
 

§4.3        Agent’s Fee.  The Borrower
will pay to Agent, for the Agent’s own account, an annual Agent’s Fee
calculated at the rate, and payable at such times as are, set forth in the
Agreement Regarding Fees.

§4.4        Funds for Payments.

(a)           All payments of principal, interest,
unused facility fees, Letter of Credit Fees, Agent’s fees, closing fees and any
other amounts due hereunder or under any of the other Loan Documents shall be
made to the Agent, for the respective accounts of the Banks and the Agent, as
the case may be, at the Agent’s Head Office, not later than 2:00 p.m. (Atlanta
time) on the day when due, in each case in lawful money of the United States in
immediately available funds.  The Agent
is hereby authorized to charge the accounts of the Borrower with KeyBank, if
any, on the dates when the amount thereof shall become due and payable, with
the amounts of the principal of and interest on the Loans and all fees,
charges, expenses and other amounts owing to the Agent and/or the Banks
(including the Swing Loan Bank) under the Loan Documents.

(b)           All payments by the Borrower hereunder
and under any of the other Loan Documents shall be made without setoff or
counterclaim and free and clear of and without deduction for any taxes, levies,
imposts, duties, charges, fees, deductions, withholdings, compulsory loans,
restrictions or conditions of any nature now or hereafter imposed or levied by
any jurisdiction or any political subdivision thereof or taxing or other
authority therein (other than Excluded Taxes) unless the Borrower is compelled
by law to make such deduction or withholding. 
If any such obligation is imposed upon the Borrower with respect to any
amount payable by it hereunder or under any of the other Loan Documents, the
Borrower will pay to the Agent, for the account of the Banks (including the
Swing Loan Bank) or (as the case may be) the Agent, on the date on which such
amount is due and payable hereunder or under such other Loan Document, such
additional amount in Dollars as shall be necessary to enable the Banks or the
Agent to receive the same net amount which the Banks or the Agent would have received
on such due date had no such obligation been imposed upon the Borrower.  The Borrower will deliver promptly to the
Agent certificates or other valid vouchers for all taxes or other charges
deducted from or paid with respect to payments made by the Borrower hereunder
or under such other Loan Document.

(c)           Each Bank organized under the laws of a
jurisdiction outside the United States shall provide the Agent and the Borrower
with such duly executed form(s) or statement(s) which may, from time to time,
be prescribed by law and, which, pursuant to applicable provisions of (i) an
income tax treaty between the United States and the country of residence of
such Bank, (ii) the Code, or (iii) any applicable rules or regulations in
effect under (i) or (ii) above, indicates the withholding status of such Bank;
provided that nothing herein (including without limitation the failure or
inability to provide such form or statement) shall relieve the Borrower of its
obligations under §4.4(b).  Each Bank
shall deliver photocopies of such forms or other appropriate certifications on
or before the date that any such form shall expire or become obsolete and after
the occurrence of any event requiring a change in the most recent form
delivered to the Borrower or the Agent. 
Any Bank which sells a participation in any of its Commitments shall be
required to obtain such forms from any participant, and shall be required to
withhold any amounts from such participant as required by the Code or Treasury
Regulations issued pursuant thereto.

(d)           The obligations of the Borrower to the
Banks under this Agreement (and of the Banks to make payments to the Issuing
Lender with respect to Letters of Credit and to the Swing Loan Bank with
respect to Swing Loans) shall be absolute, unconditional and irrevocable, and
shall be paid and performed strictly in accordance with the terms of this
Agreement, under all circumstances whatsoever, including, without limitation,
the following circumstances: 
(i) any lack of validity or enforceability of this Agreement, any
Letter of Credit or any of the other Loan Documents; (ii) any improper use
which

 35
 

may be made of any
Letter of Credit or any improper acts or omissions of any beneficiary or
transferee of any Letter of Credit in connection therewith; (iii) the
existence of any claim, set-off, defense or any right which the Borrower,
Guarantors or any of their Subsidiaries or Affiliates may have at any time
against any beneficiary or any transferee of any Letter of Credit (or persons
or entities for whom any such beneficiary or any such transferee may be acting)
or the Banks (other than the defense of payment to the Banks in accordance with
the terms of this Agreement) or any other person, whether in connection with
any Letter of Credit, this Agreement, any other Loan Document, or any unrelated
transaction; (iv) any draft, demand, certificate, statement or any other
documents presented under any Letter of Credit proving to be insufficient,
forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect whatsoever; (v) any breach of any
agreement between Borrower, Guarantors or any of their Subsidiaries or
Affiliates and any beneficiary or transferee of any Letter of Credit;
(vi) any irregularity in the transaction with respect to which any Letter
of Credit is issued, including any fraud by the beneficiary or any transferee
of such Letter of Credit; (vii) payment by the Issuing Lender under any
Letter of Credit against presentation of a sight draft, demand, certificate or
other document which does not comply with the terms of such Letter of Credit, provided
that such payment shall not have constituted gross negligence or willful
misconduct on the part of the Issuing Lender as determined by a court of
competent jurisdiction after the exhaustion of all applicable appeal periods;
(viii) any non-application or misapplication by the beneficiary of a
Letter of Credit of the proceeds of such Letter of Credit; (ix) the
legality, validity, form, regularity or enforceability of the Letter of Credit;
(x) the failure of any payment by Issuing Lender to conform to the terms
of a Letter of Credit (if, in Issuing Lender’s good faith judgment, such
payment is determined to be appropriate); (xi) the surrender or impairment
of any security for the performance or observance of any of the terms of any of
the Loan Documents; (xii) the occurrence of any Default or Event of
Default; and (xiii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, provided that such other
circumstances or happenings shall not have been the result of gross negligence
or willful misconduct on the part of the Issuing Lender or the Swing Loan Bank,
as applicable as determined by a court of competent jurisdiction after the exhaustion
of all applicable appeal periods.

§4.5        Computations.  All
computations of interest on the Loans and of other fees to the extent
applicable shall be based on a 360-day year (or a 365- or 366-day
year, as the case may be, in the case of Base Rate Loans) and paid for the
actual number of days elapsed.  Except as
otherwise provided in the definition of the term “Interest Period” with respect
to LIBOR Rate Loans, whenever a payment hereunder or under any of the other
Loan Documents becomes due on a day that is not a Business Day, the due date
for such payment shall be extended to the next succeeding Business Day, and
interest shall accrue during such extension. 
The outstanding amount of the Loans and Letter of Credit Liabilities as
reflected on the records of the Agent from time to time shall be considered
prima facie evidence of such amount.

§4.6        Suspension of LIBOR Rate
Loans. 
In the event that, prior to the commencement of any Interest Period
relating to any LIBOR Rate Loan, the Agent shall reasonably determine that
adequate and reasonable methods do not exist for ascertaining the LIBOR Rate
for such Interest Period, or the Agent shall reasonably determine that the
LIBOR Rate will not adequately and fairly reflect the cost to the Banks of
making or maintaining LIBOR Rate Loans for such Interest Period, the Agent
shall forthwith give notice of such determination (which shall be conclusive
and binding on the Borrower and the Banks) to the Borrower and the Banks.  In such event (a) any Loan Request with respect
to LIBOR Rate Loans shall be automatically withdrawn and shall be deemed a
request for Base Rate Loans and (b) each LIBOR Rate Loan will automatically, on
the last day of the then current Interest Period thereof, become a Base Rate
Loan, and the obligations of the Banks to make LIBOR Rate Loans shall be
suspended until the Agent determines that the circumstances giving rise to such
suspension no longer exist, whereupon the Agent shall so notify the Borrower
and the Banks.

 36
 

§4.7        Illegality.  Notwithstanding
any other provisions herein, if any present or future law, regulation, treaty
or directive or the interpretation or application thereof shall make it
unlawful, or any central bank or other governmental authority having
jurisdiction over a Bank or its LIBOR Lending Office shall assert that it is
unlawful, for any Bank to make or maintain LIBOR Rate Loans, such Bank shall
forthwith give notice of such circumstances to the Agent and the Borrower and
thereupon (a) the commitment of the Banks to make LIBOR Rate Loans or convert
Loans of another type to LIBOR Rate Loans shall forthwith be suspended and (b)
the LIBOR Rate Loans then outstanding shall be converted automatically to Base
Rate Loans on the last day of each Interest Period applicable to such LIBOR Rate
Loans or within such earlier period as may be required by law; provided that
the affected Bank agrees to designate a different LIBOR Lending Office if such
designation will permit such Bank to make or maintain LIBOR Rate Loans and will
not, in the good faith of such Bank, otherwise be materially disadvantageous to
such Bank.

§4.8        Additional Interest.  If any LIBOR
Rate Loan or any portion thereof is repaid, reapportioned as a result of an
increase in the Total Commitment as contemplated in §2.11, or is converted to a
Base Rate Loan for any reason on a date which is prior to the last day of the
Interest Period applicable to such LIBOR Rate Loan, or if repayment of the
Loans has been accelerated as provided in §12.1, the Borrower will pay to the
Agent upon demand (and if any payment is required as a result of an increase in
the Total Commitment, prior to the effectiveness of any such increase) for the
account of the Banks in accordance with their respective Commitment
Percentages, in addition to any amounts of interest otherwise payable
hereunder, any amounts required to compensate the Banks for any losses (but
excluding loss of profit), costs or expenses which may reasonably be incurred
as a result of such payment, reapportionment or conversion.

§4.9        Additional Costs, Etc. 
Notwithstanding anything herein to the contrary, if any present or
future applicable law, or any amendment, modification or phasing in of present
applicable law, which expression, as used herein, includes statutes, rules and
regulations thereunder and legally binding interpretations thereof by any
competent court or by any governmental or other regulatory body or official
with appropriate jurisdiction charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at
any time or from time to time hereafter made upon or otherwise issued to any
Bank or the Agent by any central bank or other fiscal, monetary or other
authority (whether or not having the force of law), shall:

(a)           subject any Bank or the Agent to any tax,
levy, impost, duty, charge, fee, deduction or withholding of any nature with
respect to this Agreement, the other Loan Documents, such Bank’s Commitment, a
Letter of Credit or the Loans (other than Excluded Taxes), or

(b)           materially change the basis of taxation
(except for changes in taxes on income or profits) of payments to any Bank of
the principal of or the interest on any Loans or any other amounts payable to
any Bank under this Agreement or the other Loan Documents, or

(c)           impose or increase or render applicable
any special deposit, reserve, assessment, liquidity, capital adequacy or other
similar requirements (whether or not having the force of law) against assets
held by, or deposits in or for the account of, or loans by, or commitments of
an office of any Bank, or

(d)           impose on any Bank or the Agent any other
conditions or requirements with respect to this Agreement, the other Loan
Documents, the Loans, such Bank’s Commitment, a Letter of Credit or any class
of loans or commitments of which any of the Loans or such Bank’s Commitment
forms a part; and the result of any of the foregoing is

 37
 

(i)            to increase the cost to any Bank of making, funding,
issuing, renewing, extending or maintaining any of the LIBOR Rate Loans, the
Letters of Credit or such Bank’s Commitment, or

(ii)           to reduce the amount of principal, interest or other
amount payable to such Bank or the Agent hereunder on account of such Bank’s
Commitment or any of the Loans or the Letters of Credit, or

(iii)          to require such Bank or the Agent to make any
payment or to forego any interest or other sum payable hereunder, the amount of
which payment or foregone interest or other sum is calculated by reference to
the gross amount of any sum receivable or deemed received by such Bank or the
Agent from the Borrower hereunder,

then, and in each such
case, the Borrower will within fifteen (15) days after demand made by such Bank
or (as the case may be) the Agent at any time and from time to time and as
often as the occasion therefor may arise, pay to such Bank or the Agent such
additional amounts as such Bank or the Agent shall determine in good faith to
be sufficient to compensate such Bank or the Agent for such additional cost,
reduction, payment or foregone interest or other sum.  Each Bank and the Agent in determining such
amounts may use any reasonable averaging and attribution methods, generally
applied by such Bank or the Agent.

§4.10      Capital Adequacy.  If after the
date hereof any Bank determines that (a) the adoption of or change in or
phasing in of any law, rule, regulation or guideline regarding capital
requirements for banks or bank holding companies or any change in the
interpretation or application thereof by any governmental authority charged
with the administration thereof, or (b) compliance by such Bank or its parent
bank holding company with any guideline, request or directive of any such
entity regarding capital adequacy (whether or not having the force of law), has
the effect of reducing the return on such Bank’s or such holding company’s
capital as a consequence of such Bank’s commitment to make Loans or participate
in Letters of Credit hereunder to a level below that which such Bank or holding
company could have achieved but for such adoption, change or compliance (taking
into consideration such Bank’s or such holding company’s then existing policies
with respect to capital adequacy and assuming the full utilization of such
entity’s capital) by any amount deemed by such Bank to be material, then such
Bank may notify the Borrower thereof. 
The Borrower agrees to pay to such Bank the amount of such reduction in
the return on capital as and when such reduction is determined, within 15 days
of presentation by such Bank of a statement of the amount and setting forth
such Bank’s calculation thereof.  In
determining such amount, such Bank may use any reasonable averaging and
attribution methods.

§4.11      Indemnity of Borrower.  The Borrower
agrees to indemnify each Bank and to hold each Bank harmless from and against
any loss, cost or expense that such Bank may sustain or incur as a consequence
of (a) default by the Borrower in payment of the principal amount of or any
interest on any LIBOR Rate Loans as and when due and payable, including any
such loss or expense arising from interest or fees payable by such Bank to
lenders of funds obtained by it in order to maintain its LIBOR Rate Loans, or
(b) default by the Borrower in making a borrowing or conversion after the
Borrower has given (or is deemed to have given) a Loan Request or a Conversion
Request.

§4.12      Interest on Overdue
Amounts.  Following the occurrence and during the
continuance of an Event of Default and regardless of whether or not the Agent
or the Banks shall have accelerated the maturity of the Loans, at the option of
the Required Banks all Loans shall bear interest payable on demand at a rate
per annum equal to three percent (3.0%) above the rate that would otherwise be
applicable at such time until such amount shall be paid in full (after as well
as before judgment) and the fee payable with respect to Letters of Credit shall
be increased to a rate equal to three percent (3.0%)

 38
 

above the Letter
of Credit fee that would otherwise be applicable to such time, or if such rate
shall exceed the maximum rate permitted by law, then at the maximum rate
permitted by law.

§4.13      Certificate.  A certificate
setting forth any amounts payable pursuant to §4.8, §4.9, §4.10, §4.11 or §4.12
and a brief explanation of such amounts which are due, shall be submitted by
any Bank or the Agent to the Borrower upon the written request of the Borrower,
and shall be conclusive in the absence of manifest error.

§4.14      Limitation on Interest. 
Notwithstanding anything in this Agreement to the contrary, all
agreements between the Borrower and the Banks and the Agent, whether now
existing or hereafter arising and whether written or oral, are hereby limited
so that in no contingency, whether by reason of acceleration of the maturity of
any of the Obligations or otherwise, shall the interest contracted for, charged
or received by the Banks exceed the maximum amount permissible under applicable
law.  If, from any circumstance
whatsoever, interest would otherwise be payable to the Banks in excess of the
maximum lawful amount, the interest payable to the Banks shall be reduced to
the maximum amount permitted under applicable law; and if from any circumstance
the Banks shall ever receive anything of value deemed interest by applicable
law in excess of the maximum lawful amount, an amount equal to any excessive
interest shall be applied to the reduction of the principal balance of the
Obligations of the Borrower and to the payment of interest or, if such
excessive interest exceeds the unpaid balance of principal of the Obligations
of the Borrower, such excess shall be refunded to the Borrower.  All interest paid or agreed to be paid to the
Banks shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full period until payment in full of the
principal of the Obligations of the Borrower (including the period of any
renewal or extension thereof) so that the interest thereon for such full period
shall not exceed the maximum amount permitted by applicable law.  This section shall control all agreements
between the Borrower and the Banks and the Agent.

§4.15      Certain Provisions
Relating to Increased Costs.

(a)           If no Default or Event of Default shall
have occurred and be continuing, and if any additional amounts have become
payable pursuant to §4.4(b) with respect to withholdings on amounts payable to
a Bank hereunder or any Bank has requested payment or compensation for any
losses or costs to be reimbursed pursuant to any one or more of the provisions
of §4.9 or §4.10 (each, an “Affected Bank”), then, within thirty (30) Business
Days after such notice or request for payment or compensation, Borrower shall
have the one-time right as to such Affected Bank, to be exercised by delivery
of written notice delivered to the Agent and the Affected Bank within thirty
(30) Business Days of receipt of such notice, to elect to cause the Affected
Bank to transfer its Commitment to a replacement Bank or Banks reasonably
approved by Agent unless following receipt of such notice such Bank withdraws
such request for payment or compensation (it being acknowledged that Agent may
reasonably disapprove a replacement Bank if such Bank is currently a Bank and
the assignment of some or all of the Commitment of the Affected Bank would
result, in Agent’s judgment, in such Bank holding a disproportionately high
Commitment Percentage).  Upon any such
purchase of the Commitment of the Affected Bank, the Affected Bank’s interest
in the Obligations and its rights hereunder and under the Loan Documents shall
terminate at the date of purchase (other than those rights of a Bank that
expressly survive termination of this Agreement), and the Affected Bank shall
promptly execute all documents reasonably requested to surrender and transfer
such interest.  The purchase price for
the Affected Bank’s Commitment shall equal any and all amounts outstanding and
owed by Borrower to the Affected Bank, including principal and all accrued and
unpaid interest or fees and amounts due pursuant to §4.9 and §4.10 (provided
that payment of all such amounts other than principal may be paid by the
Borrower).

(b)           Failure or delay on the part of any Bank
to demand compensation pursuant to §4.9 or §4.10 shall not constitute a waiver
of such Bank’s right to demand such compensation, provided

 39
 

that the Borrower
shall not be required to compensate a Bank pursuant to §4.9 or §4.10 for any
increased costs incurred or reductions suffered more than 180 days prior to the
date that such Bank notifies the Borrower and the Agent of the incurrence of
such increased costs or reductions.

§5.          SECURITY; GUARANTY.

§5.1        Collateral; Guaranties.  The
Obligations of the Borrower shall be secured by a perfected first priority lien
or security title to be held by the Agent for the benefit of the Banks in the
Pledged Collateral pursuant to the terms of the Pledge Agreement.  The Obligations shall be guaranteed by the
Guarantors pursuant to the Guaranty.

§5.2        Subsidiary Guarantors.  In the event
any Subsidiary of the Borrower desires to include an Eligible Asset owned by
such Subsidiary or, subject to the terms of §7.17, a CDO Subsidiary in the
calculation of the Unencumbered Borrowing Base Asset Value, such Subsidiary
(and any other direct or indirect Subsidiary owning an interest therein), but
excluding a CDO Subsidiary, shall, simultaneously with the inclusion of such
Eligible Asset in the calculation of the Unencumbered Borrowing Base Asset
Value, deliver to the Agent each of the following items, each in form and
substance satisfactory to the Agent: (i) a Joinder Agreement executed by such
Subsidiary, (ii) a Pledge Agreement (or a joinder thereto), together with an
Instruction Letter (joined in by a CDO Subsidiary, as applicable), if
applicable, and (iii) such organizational agreements, resolutions, consents,
opinions and other documents and instruments as the Agent may reasonably
require.  Additionally, in the event that
any Subsidiary of the Borrower, whether presently existing or hereafter formed
or acquired, which is not a Subsidiary Guarantor at such time, shall after the
date hereof become a guarantor under any existing or future unsecured
Indebtedness of the Borrower or any of its Subsidiaries, then the Borrower
shall cause each such Subsidiary to execute and deliver the items described in
clauses (i) and (iii) of this §5.2.

§5.3        Release of Certain Subsidiary
Guarantors.  Provided that no Default or Event of Default
has occurred and is continuing, upon the request of the Borrower or any
Subsidiary Guarantor the Agent shall release such Subsidiary Guarantor from
liability under the Guaranty; provided that (x) the Borrower shall
deliver to Agent evidence satisfactory to Agent that the Borrower will be in
compliance with all covenants of this Agreement after giving effect to such
sale and release and (y) all Unencumbered Borrowing Base Assets owned by such Subsidiary
and all CDO Subsidiaries owned by such Subsidiary shall cease to be included in
the calculation of the Unencumbered Borrowing Base Asset Value from the date of
release of such Subsidiary from the Guaranty. 
Delivery by the Borrower to the Agent of any such request for a release
shall constitute a representation by the Borrower that the matters set forth in
the preceding sentence (both as of the date of the giving of such request and
as of the date of the effectiveness of such request) are true and correct with
respect to such request.

§6.          REPRESENTATIONS AND
WARRANTIES OF THE BORROWER.

The Borrower represents
and warrants to the Agent and the Banks as follows.

§6.1        Corporate Authority, Etc.

(a)           Incorporation; Good Standing.  The Borrower is a Delaware limited
partnership duly organized pursuant to its limited partnership agreement, and a
Certificate of Limited Partnership and amendments thereto filed with the
Secretary of the State of Delaware and is validly existing and in good standing
under the laws of the State of Delaware. 
GKK is a Maryland corporation duly organized pursuant to its articles of
incorporation filed with the Secretary of the State of Maryland and is validly
existing and in good standing under the laws of the State of Maryland.  Manager is a Delaware limited liability
company duly organized pursuant to its certificate of formation filed with the
Secretary of State

 40
 

of Delaware and is
validly existing and in good standing under the laws of the State of
Delaware.  Each of the other Guarantors
is a corporation, limited partnership, limited liability company or trust duly
organized under the laws of its State of organization and is validly existing
and in good standing under the laws thereof. 
Each of the Borrower and the Guarantors (i) has all requisite power to
own its respective assets and interests and conduct its respective business as
now conducted and as presently contemplated, and (ii)  is in good standing and is duly authorized to
do business in each other jurisdiction where the conduct of its business so
requires except where a failure to be so qualified in such other jurisdiction
has not had and could not reasonably be expected to have a Material Adverse
Effect.  GKK is a real estate investment
trust in full compliance with and entitled to the benefits of §856 of the Code
and has elected to be treated as a real estate investment trust pursuant to the
Code.

(b)           Subsidiaries.  Each of the Subsidiaries of the Borrower and
GKK (i) is a corporation, limited partnership, limited liability company or
trust duly organized under the laws of its State of organization and is validly
existing and in good standing under the laws thereof, (ii) has all requisite
power to own its assets and interests and conduct its business as now conducted
and as presently contemplated and (iii) is in good standing and is duly
authorized to do business in each jurisdiction where the conduct of its
business so requires except where a failure to be so qualified has not had and
could not reasonably be expected to have a Material Adverse Effect.

(c)           Authorization.  The execution, delivery and performance of
this Agreement and the other Loan Documents to which the Borrower, the
Guarantors or the CDO Subsidiaries is or is to become a party and the
transactions contemplated hereby and thereby (i) are within the authority of
such Person, (ii) have been duly authorized by all necessary proceedings on the
part of such Person, (iii) do not and will not conflict with or result in any
breach or contravention of any provision of law, statute, rule or regulation to
which such Person is subject or any judgment, order, writ, injunction, license
or permit applicable to such Person, (iv) do not and will not conflict with or
constitute a default (whether with the passage of time or the giving of notice,
or both) under any provision of the articles of incorporation, operating
agreement, partnership agreement, declaration of trust or other charter
documents or bylaws of, or any agreement or other instrument binding upon, such
Person or any of its assets, (v) do not and will not result in or require the
imposition of any lien or other encumbrance on any of the assets or rights of
such Person (other than pursuant to the Loan Documents), and (vi) do not
require the approval or consent of any other Person other than those already
obtained and delivered to Agent.  The
exercise by Agent of its remedies under the Loan Documents and the realization
of the benefits thereof do not require the approval or consent of any Person
(excluding approvals that may need to be obtained by the Agent or the Banks
from internal credit committees or similar approvals) other than those already
obtained and delivered to Agent, nor shall the exercise of such remedies result
in or constitute a default (whether with the passage of time or the giving of
notice, or both) under any provision of the articles of incorporation, bylaws,
operating agreement, partnership agreement, declaration of trust or other
charter documents of, or any agreement or other instrument binding upon,
Borrower, the Guarantors or any of their respective Subsidiaries.

(d)           Enforceability.  The execution and delivery of this Agreement
and the other Loan Documents to which the Borrower or the Guarantors is or is
to become a party are valid and legally binding obligations of such Person
enforceable in accordance with the respective terms and provisions hereof and
thereof, except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting generally the
enforcement of creditors’ rights and except to the extent that availability of
the remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be brought.

§6.2        Governmental Approvals.  The execution,
delivery and performance of this Agreement and the other Loan Documents to
which the Borrower, the Guarantors or the CDO Subsidiaries is or is to

 41
 

become a party and
the transactions contemplated hereby and thereby do not require the approval or
consent of, or filing with, any governmental authority other than those already
obtained.

§6.3        Title to Assets; Lease.  The Borrower,
the Guarantors and their respective Subsidiaries have good and marketable title
to all of the assets reflected in the consolidated balance sheet of the
Borrower and the Guarantors as of the Balance Sheet Date or acquired since that
date (except assets sold or otherwise disposed of since that date), subject to
no rights of others, including any mortgages, leases, conditional sales
agreements, title retention agreements, liens or other encumbrances except
Permitted Liens.

§6.4        Financial Statements.  The Borrower
has delivered to each of the Banks: (a) the unaudited consolidated balance
sheet of GKK and its Subsidiaries as of March 31, 2007, (b) the audited
consolidated balance sheet for GKK and its Subsidiaries for the fiscal year
ending December 31, 2006, and (c) certain other financial information relating
to the Borrower, the Guarantors, their Subsidiaries and its assets.  Such balance sheet and statements have been
prepared in accordance with GAAP and fairly present the financial condition of
the Borrower, the Guarantors and their respective Subsidiaries or such assets
as of such dates and the results of the operations of the Borrower, the
Guarantors and their respective Subsidiaries for such period.  There are no liabilities, contingent or
otherwise, of the Borrower, the Guarantors or any of their respective
Subsidiaries involving material amounts not disclosed in said financial
statements and the related notes thereto.

§6.5        No Material Changes.  Since the
Balance Sheet Date, there has occurred no materially adverse change in the
financial condition or business of the Borrower, the Guarantors and their
respective Subsidiaries, taken as a whole, as shown on or reflected in the
consolidated balance sheet of the Borrower and the Guarantors as of the Balance
Sheet Date, or their consolidated statement of income or cash flows for the
fiscal year then ended, taken as a whole, other than changes that have not had
and could not reasonably be expected to have any Material Adverse Effect.

§6.6        Franchises, Patents,
Copyrights, Etc.  The Borrower, the Guarantors and their
respective Subsidiaries possess all franchises, patents, copyrights,
trademarks, trade names, servicemarks, licenses and permits, and rights in
respect of the foregoing, adequate for the conduct of their business
substantially as now conducted without known conflict with any rights of
others.

§6.7        Litigation.  Except as
stated on Schedule 6.7 there are no actions, suits, proceedings or
investigations of any kind pending or to the knowledge of such person
threatened against the Borrower, the Guarantors, or any of their respective
Subsidiaries or Manager before any court, tribunal, arbitrator, mediator or
administrative agency or board that, if adversely determined, either in any
case or in, the aggregate, could reasonably be expected to have a Material
Adverse Effect, or which question the validity of this Agreement or any of the
other Loan Documents, any action taken or to be taken pursuant hereto or
thereto.  Except as set forth on Schedule
6.7, as of the date of this Agreement, there are no judgments outstanding
against or affecting any of the Borrower, any Guarantor, or any of their
respective Subsidiaries or Manager.

§6.8        No Materially Adverse
Contracts, Etc.  None of the Borrower, the Guarantors nor any
of their respective Subsidiaries is subject to any charter, corporate or other
legal restriction, or any judgment, decree, order, rule or regulation that has
or is expected in the future to have a Material Adverse Effect.  None of the Borrower, the Guarantors nor any
of their respective Subsidiaries is a party to any contract or agreement that
has or is expected, in the judgment of the partners or officers of such Person,
to have any Materially Adverse Effect.

 42

§6.9        Compliance with Other
Instruments, Laws, Etc.  None of the
Borrower, the Guarantors nor any of their respective Subsidiaries is in
violation of any provision of its charter or other organizational documents,
bylaws, or any agreement or instrument to which it may be subject or by which
it or any of its assets may be bound or any decree, order, judgment, statute,
license, rule or regulation, in any of the foregoing cases in a manner that
could result in the imposition of substantial penalties or has had or could
reasonably be expected to have a Material Adverse Effect.

§6.10      Tax Status.  The Borrower,
the Guarantors and each of their respective Subsidiaries (a) has made or filed
all federal and state income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject, (b) has paid all taxes and
other governmental assessments and charges shown or determined to be due on
such returns, reports and declarations, except those being contested in good
faith and by appropriate proceedings and (c) has set aside on its books
provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations
apply.  There are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction,
and the partners, members or officers of such Person know of no basis for any
such claim.  There is no proposed tax
assessment against the Borrower, the Guarantors or any of their respective Subsidiaries
which would, if the assessment were made, have a Material Adverse Effect.  None of the Borrower, the Guarantors or any
of their respective Subsidiaries is (nor has it ever been) a party to any tax
sharing agreement.

§6.11      No Event of Default.  No Default or
Event of Default has occurred and is continuing.

§6.12      Investment Company Act.  None of the
Borrower, the Guarantors or any of their respective Subsidiaries is, or after
giving effect to any Loan will be, subject to regulation under, the Federal
Power Act or the Investment Company Act of 1940 or to any federal or state
statute or regulation limiting its ability to incur indebtedness for borrowed
money.

§6.13      Absence of UCC Financing
Statements, Etc.  Except with respect to Permitted Liens, there
is no financing statement, security agreement, chattel mortgage, real estate
mortgage or other document filed or recorded with any filing records, registry,
or other public office, that purports to cover, affect or give notice of any
present or possible future lien on, or security interest or security title in,
any asset of the Borrower, Guarantors or any CDO Subsidiaries or rights
thereunder other than precautionary filings by lessors of equipment.

§6.14      Not a “Foreign Person.  None of the
Borrower, the Guarantors nor any of their respective Subsidiaries is a “foreign
person” within the meaning of Section 1445(f)(3) of the Code.

§6.15      Certain Transactions.  Except as set
forth on Schedule 6.15, none of the officers, members, trustees,
directors, or employees of the Borrower, any Guarantor or any of their
respective Subsidiaries is a party to any transaction with any of the Borrower,
any Guarantor, any of their respective Subsidiaries or any Affiliates (other
than for services as employees, officers, members and directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or
from, or otherwise requiring payments to or from any officer, partner, member,
trustee, director or such employee or, to the knowledge of the Borrower, any
Guarantor, or any corporation, partnership, trust or other entity in which any
officer, partner, member, trustee, director, or any such employee has a
substantial interest or is an officer, director, trustee, member or partner,
which are on terms less favorable to the Borrower, such Guarantor or any of
their respective Subsidiaries than those that would be obtained in a comparable
arms-length transaction with an unaffiliated party.

 43
 

§6.16      Employee Benefit Plans.  The Borrower,
the Guarantors and each ERISA Affiliate have fulfilled their respective
obligations under the minimum funding standards of ERISA and the Code with
respect to each Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension
Plan and are in compliance in all material respects with the presently
applicable provisions of ERISA and the Code with respect to each Employee
Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan.  Neither the Borrower, any Guarantor nor any
ERISA Affiliate has (a) sought a waiver of the minimum funding standard under
Section 412 of the Code in respect of any Employee Benefit Plan, Multiemployer
Plan or Guaranteed Pension Plan, (b) failed to make any contribution or payment
to any Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan, or
made any amendment to any Employee Benefit Plan, Multiemployer Plan or
Guaranteed Pension Plan, which has resulted or could result in the imposition
of a lien or the posting of a bond or other security under ERISA or the Code,
or (c) incurred any liability under Title IV of ERISA other than a liability to
the PBGC for premiums under Section 4007 of ERISA.  None of the Unencumbered Borrowing Base
Assets or the Collateral constitutes a “plan asset” of any Employee Benefit
Plan, Multiemployer Plan or Guaranteed Pension Plan.

§6.17      Regulations T, U and X.  No portion of
any Loan is to be used for the purpose of purchasing or carrying any “margin
security” or “margin stock” as such terms are used in Regulations T, U and X of
the Board of Governors of the Federal Reserve System, 12 C.F.R.  Parts 220, 221 and 224.  Neither the Borrower nor any Guarantor is
engaged, and neither the Borrower nor any Guarantor will engage, principally or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any “margin security” or “margin stock” as
such terms are used in Regulations T, U and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R. Parts 220, 221 and 224.

§6.18      [Intentionally Omitted.]

§6.19      Significant Subsidiaries.  Attached as Schedule
6.19 is a list of all “Significant Subsidiaries” (as defined in Rule 1-02
of Regulation S-X of the SEC) of the Borrower and GKK and an organizational
chart showing GKK’s and Borrower’s ownership of the Guarantors and CDO
Subsidiaries.  The Borrower’s or GKK’s
ownership interest in each of such Guarantors and CDO Subsidiaries is set forth
in said Schedule 6.19.

§6.20      Pledged Collateral.  The Pledged
Collateral and the rights of the Agent and the Banks with respect to the
Pledged Collateral are not subject to any setoff, claims, withholdings or other
defenses.  The Borrower and the other
pledgors or assignors under the Pledge Agreement are the owners of the Pledged
Collateral free from any lien, security interest, encumbrance or other claim or
demand.

§6.21      Loan Documents.  All of the
representations and warranties made by or on behalf of the Borrower, the
Guarantors and their respective Subsidiaries in this Agreement and the other
Loan Documents or any document or instrument delivered to the Agent or the
Banks pursuant to or in connection with any of such Loan Documents are true and
correct in all material respects, and neither the Borrower nor any Guarantor
has failed to disclose such information as is necessary to make such
representations and warranties not misleading in any material respect.  There is no material fact or circumstance
that has not been disclosed to the Agent and the Banks, and the written
information, reports and other papers and data with respect to the Borrower,
the Guarantors and their respective Subsidiaries (other than projections and
estimates) furnished to the Agent or the Bank in connection with this Agreement
or the obtaining of the commitments of the Banks hereunder was, at the time so
furnished, complete and correct in all material respects, or has been
subsequently supplemented by other written information, reports or other papers
or data, to the extent necessary to give in all material respects a true and
accurate knowledge of the subject matter in all material respects; provided
that such representation shall not apply to budgets, projections and other
forward-looking speculative information prepared in good faith by Borrower
(except to the extent the related assumptions are manifestly unreasonable).

 44
 

§6.22      [Intentionally Omitted.]

§6.23      Brokers.  None of the
Borrower, the Guarantors or any of their respective Subsidiaries has engaged or
otherwise dealt with any broker, finder or similar entity in connection with
this Agreement or the Loans contemplated hereunder.

§6.24      Other Debt.  On the date
hereof, none of the Borrower, the Guarantors or any of their respective
Subsidiaries is in default of the payment of any Indebtedness or any other
agreement, mortgage, deed of trust, security agreement, financing agreement,
indenture or lease to which any of them is a party.  Neither the Borrower nor any Guarantor is a
party to or bound by any agreement, instrument or indenture that may require
the subordination in right or time or payment of any of the Obligations to any
other indebtedness or obligation of the Borrower or such Guarantor.  The Borrower has provided to the Agent a
schedule of the Indebtedness of the Borrower, the Guarantors and their
respective Subsidiaries, and upon the request of the Agent will provide copies
(to the extent not prohibited from doing so), of all agreements, mortgages,
deeds of trust, financing agreements or other material agreements binding upon the
Borrower, the Guarantors or any of their respective Subsidiaries or their
respective assets and entered into by the Borrower, the Guarantors or any of
their respective Subsidiaries with respect to any Indebtedness of the Borrower,
the Guarantors or any of their respective Subsidiaries.

§6.25      Solvency.  As of the
Closing Date and after giving effect to the transactions contemplated by this
Agreement and the other Loan Documents, including all Loans made or to be made
hereunder, and as of the date of each advance of a Loan, neither the Borrower,
any Guarantor nor any of their Subsidiaries is insolvent on a balance sheet
basis, such that the sum of such Person’s assets exceeds the sum of such Person’s
liabilities, such Person is able to pay its debts as they become due, and such
Person has sufficient capital to carry on its business.

§6.26      Bankruptcy Filing.  None of the
Borrower, the Guarantors or the CDO Subsidiaries is contemplating either the
filing of a petition by it under any state of federal bankruptcy or insolvency
laws or a liquidation of its assets, and the Borrower has no knowledge of any
Person contemplating the filing of any such petition against Borrower, any
Guarantor or any CDO Subsidiary.

§6.27      No Fraudulent Intent.  Neither the
execution and delivery of this Agreement or any of the other Loan Documents nor
the performance of any actions required hereunder or thereunder is being
undertaken by the Borrower, any Guarantor or any of their respective
Subsidiaries with or as a result of any actual intent by any of such Persons to
hinder, delay or defraud any entity to which any of such Persons is now or will
hereafter become indebted.

§6.28      Transaction in Best
Interests of Borrower; Consideration.  The transaction evidenced by this Agreement
and the other Loan Documents is in the best interests of the Borrower and the
Guarantors.  The direct and indirect
benefits to inure to the Borrower and the Guarantors pursuant to this Agreement
and the other Loan Documents constitute at least “reasonably equivalent value”
(as such term is used in Section 548 of the Bankruptcy Code) and “valuable
consideration,” “fair value,” and “fair consideration,” (as such terms are used
in any applicable state fraudulent conveyance law), in exchange for the
benefits to be provided by the Borrower and the Guarantors pursuant to this
Agreement and the other Loan Documents.

§6.29      Ownership; Management.  GKK is the
sole general partner of Borrower and owns not less than a 1% general
partnership interest, 100% of the Class A limited partnership interests and not
less than 70% of the economic interests in the Borrower free of all Liens.  Manager is the sole manager and advisor to
the Borrower.

 45
 

§6.30      Embargoed Persons.  None of the
Borrower, the Guarantors or their respective Subsidiaries, are (and none of the
Borrower, the Guarantors or their respective Subsidiaries will be) a Person
with whom any Bank is restricted from doing business under OFAC (including
those Persons named on OFAC’s Specially Designated and Blocked Persons list) or
under any statute, executive order (including the September 24, 2001 Executive
Order Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism), or other governmental action, and is
not and shall not engage in any dealings or transactions or otherwise be
associated with such persons.  In
addition, Borrower hereby agrees to provide to the Banks any additional
information that a Bank deems reasonably necessary from time to time in order
to ensure compliance with all applicable laws concerning money laundering and
similar activities.

§6.31      Contribution Agreement.  Borrower has
delivered to the Agent a true, correct and complete copy of the Contribution
Agreement.  The Contribution Agreement is
in full force and effect in accordance with its terms, there are no claims
resulting from non-performance of the terms thereof or otherwise or any basis
for a claim by any party to the Contribution Agreement, nor has there been any
waiver of any terms thereunder.

§7.          AFFIRMATIVE COVENANTS OF
THE BORROWER.

The Borrower covenants
and agrees that, so long as any Loan, Note or Letter of Credit is outstanding
or any Bank has any obligation to make any Loans or issue any Letters of
Credit:

§7.1        Punctual Payment.  The Borrower
will duly and punctually pay or cause to be paid the principal and interest on
the Loans and all interest and fees provided for in this Agreement, all in
accordance with the terms of this Agreement and the Notes as well as all other
sums owing pursuant to the Loan Documents.

§7.2        Maintenance of Office.  The Borrower
will maintain its chief executive office at 420 Lexington Avenue, New York, New
York 10170, or at such other place in the United States of America as the
Borrower shall designate upon prior written notice to the Agent and the Banks,
where notices, presentations and demands to or upon the Borrower in respect of
the Loan Documents may be given or made.

§7.3        Records and Accounts.  The Borrower
will (a) keep, and cause each of the Guarantors and their respective
Subsidiaries to keep, true and accurate records and books of account in which
full, true and correct entries will be made in accordance with GAAP and (b)
maintain adequate accounts and reserves for all taxes (including income taxes),
depreciation and amortization of its assets and the assets of its Subsidiaries,
contingencies and other reserves. 
Neither the Borrower, the Guarantors nor any of their respective
Subsidiaries shall, without the prior written consent of the Majority Banks or
as required by law, (x) make any material changes to the accounting principles
used by such Person in preparing the financial statements and other information
described in §6.4 or (y) change its fiscal year.

§7.4        Financial Statements,
Certificates and Information.  The Borrower and the Guarantors will deliver
or cause to be delivered to the Agent:

(a)           as soon as practicable, but in any event
not later than seventy-five (75) days after the end of each fiscal year of GKK,
the audited Consolidated balance sheet of GKK and its Subsidiaries at the end
of such year, and the related audited Consolidated statements of income,
changes in shareholder’s equity and cash flows for such year, each setting
forth in comparative form the figures for the previous fiscal year and all such
statements to be in reasonable detail, prepared in accordance with GAAP, and
accompanied by an auditor’s report prepared without qualification by a
nationally recognized accounting

 46
 

firm reasonably
acceptable to Agent (which may be provided by inclusion in the Form 10-K of GKK
filed with the SEC), a statement of GKK’s taxable net income for the prior
fiscal year, together with the written statement from such accountants to the
effect that they have read this Agreement, and that, in making the examination
necessary to said certification, they have obtained no knowledge of any Default
or Event of Default, or, if such accountants shall have obtained knowledge of
any Default or Event of Default they shall disclose in such statement any such
Default or Event of Default;

(b)           as soon as practicable, but in any event
not later than forty-five (45) days after the end of each calendar quarter of
GKK (including the fourth quarter), copies of the unaudited Consolidated
balance sheet of GKK and its Subsidiaries, as at the end of such quarter, and
the related unaudited Consolidated statements of income, changes in shareholder’s
equity and cash flows for the portion of GKK’s fiscal year then elapsed, all in
reasonable detail and prepared in accordance with GAAP (which may be provided
by inclusion in the Form 10-Q of GKK for such period provided pursuant to
subsection (c) below), together with a certification by a Certifying Officer of
GKK that the information contained in such financial statements fairly presents
the financial position of GKK and its Subsidiaries on the date thereof (subject
to year-end adjustments and footnotes);

(c)           as soon as practicable, but in any event
not later than forty-five (45) days after the end of each of the first three
(3) calendar quarters of GKK in each year, copies of Form 10-Q filed with the
SEC;

(d)           simultaneously with the delivery of the
financial statements referred to in subsections (a) and (b) above, a statement
(a “Compliance Certificate”) certified by a Certifying Officer of GKK in the
form of Exhibit C hereto (or in such other form as the Agent and the
Borrower may approve from time to time) setting forth in reasonable detail
computations evidencing compliance with the covenants contained in §9 and the
other covenants described therein, and (if applicable) reconciliations to
reflect changes in GAAP since the Balance Sheet Date.  The Compliance Certificate shall also be
accompanied by a certificate (a “Borrowing Base Certificate”) in the form
attached to the Compliance Certificate pursuant to which the Borrower shall
include a list of the Unencumbered Borrowing Base Assets, the outstanding
principal balance or carrying basis, as applicable, thereof and of any senior
indebtedness, the acquisition cost thereof (if acquired), the maturity date and
collateral for each such asset, any of the Unencumbered Borrowing Base Assets
that are non-performing or as to which a Subordination Event or default has
occurred, any delinquencies thereunder, the Unencumbered Borrowing Base Asset
Value for each Unencumbered Borrowing Base Asset and the aggregate Borrowing
Base, and a certification as to whether such Unencumbered Borrowing Base Assets
satisfy each and every requirement in this Agreement to qualify as an
Unencumbered Borrowing Base Asset, all certified by a Certifying Officer;

(e)           promptly following the request of Agent,
copies of all annual federal income tax returns and amendments thereto of the
Borrower and the Guarantors;

(f)            simultaneously with the delivery of the
financial statements referred to in subsections (a) and (b) above, a statement
listing the Indebtedness of the Borrower, the Guarantors and their respective
Subsidiaries and Unconsolidated Affiliates, which statement shall include,
without limitation, a statement of the original principal amount of such
Indebtedness and the current amount outstanding, the holder thereof, the
maturity date and any extension options, the interest rate, the collateral
provided for such Indebtedness and whether such Indebtedness is recourse or non-recourse,

(g)           contemporaneously with the filing
thereof, copies of all filings with the SEC or sent to the stockholders or
partners of Borrower and GKK, provided that any such material as to GKK that is
filed with the SEC and is publicly available pursuant to the SEC’s Edgar Filing
System or any

 47
 

successor thereto,
and of which the Agent has been notified by Borrower of the filing thereof,
shall be deemed to have been delivered to the Agent upon such filing;

(h)           promptly following the receipt thereof by
or the same becoming available to Borrower, any Guarantor or any CDO
Subsidiary, copies of all financial information, reporting packages, covenant
tests, trustee or collateral manager reports (including without limitation the
monthly CDO trustee reports, notes valuation reports and quarterly CDO
collateral manager reports) and other materials distributed to the collateral
manager, investors or other holders of interests with respect to any
Unencumbered Borrowing Base Asset; and

(i)            from time to time such other financial
data and information in the possession of the Borrower, the Guarantors or their
respective Subsidiaries (including without limitation auditors’ management
letters and information as to legal and regulatory changes affecting the
Borrower, the Guarantors or their respective Subsidiaries) as the Agent may
reasonably request.

Any material to be
delivered pursuant to this §7.4 may be delivered electronically directly to
Agent provided that such material is in a format reasonably acceptable to
Agent, and such material shall be deemed to have been delivered to Agent upon
Agent’s receipt thereof.  Upon the
request of Agent, Borrower and the Guarantors shall deliver paper copies
thereof to Agent.

Borrower authorizes Agent
and Lead Arranger to disseminate any such materials and information to the
Banks, participants, potential banks and participants and their attorneys and
other advisors, subject to the Agent’s customary procedures for confidentiality
and security, through the use of Intralinks, SyndTrak or any other electronic
information dissemination system, and the Borrower releases Agent and the Banks
from any liability in connection therewith.

§7.5        Notices.

(a)           Defaults.  The Borrower
will promptly notify the Agent in writing of the occurrence of any Default or
Event of Default.  If any Person shall
give any notice or take any other action in respect of a claimed default
(whether or not constituting an Event of Default) under this Agreement or under
any note, evidence of indebtedness, indenture or other obligation to which or
with respect to which the Borrower, any Guarantor or any of their respective
Subsidiaries is a party or obligor, whether as principal or surety, and such
default would permit the holder of such note or obligation or other evidence of
indebtedness to accelerate the maturity thereof or require the repurchase,
redemption, payment or prepayment thereof, which acceleration or other action
would either cause a Default or Event of Default or could reasonably be
expected to have a Material Adverse Effect on the Borrower or any Guarantor,
the Borrower shall forthwith give written notice thereof to the Agent and each
of the Banks, describing the notice or action and the nature of the claimed
default.

(b)           Notice of Litigation and Judgments. 
The Borrower will give notice to the Agent in writing within fifteen
(15) days of becoming aware of any litigation or proceedings threatened in
writing or any pending litigation and proceedings affecting the Borrower, any
Guarantor or any of their respective Subsidiaries or to which the Borrower, any
Guarantor or any of their respective Subsidiaries is or is to become a party
involving an uninsured claim against the Borrower, any Guarantor or any of
their respective Subsidiaries that could cause a Default or Event of Default or
could reasonably be expected to have a Material Adverse Effect and stating the
nature and status of such litigation or proceedings.  The Borrower will give notice to the Agent,
in writing, in form and detail satisfactory to the Agent and each of the Banks,
within ten (10) days of any judgment not covered by insurance, whether final or
otherwise, against the Borrower, any Guarantor or any of their respective
Subsidiaries in an amount in excess of $5,000,000.

 48
 

(c)           Repayment Event. 
The Borrower will promptly notify the Agent in writing of any event
requiring a mandatory prepayment of all or any portion of the Loans pursuant to
§7.17(b).

(d)           Notification of Claims Against Pledged
Collateral.  The Borrower will, immediately upon becoming
aware thereof, notify the Agent in writing of any setoff, claims (including
environmental claims), withholdings or other defenses to which any of the
Pledged Collateral, or the rights of the Agents and the Banks with respect to
the Pledged Collateral, are subject.

(e)           Subordination Event. 
The Borrower will promptly notify the Agent in writing of any
Subordination Event.

(f)            Notification of Banks. 
Promptly after receiving any notice under this §7.5, the Agent will
forward a copy thereof to each of the Banks, together with copies of any
certificates or other written information that accompanied such notice.

§7.6        Existence; Maintenance of
Properties.

(a)           The Borrower will (i) do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence as a Delaware limited partnership, (ii) will cause the Guarantors and
each of their respective Subsidiaries to do or cause to be done all things
necessary to preserve and keep in full force and effect its legal existence,
(iii) do or cause to be done all things necessary to preserve and keep in full
force all of its rights and franchises and those of Guarantors and their
respective Subsidiaries, except with respect to Subsidiaries that are not
Guarantors or CDO Subsidiaries in each case where such failure individually or
in the aggregate could not reasonably be expected to have a Material Adverse
Effect (except in each as to case clauses (ii) and (iii) for the dissolution of
Subsidiaries which no longer own any assets or as a result of mergers, reorganizations
and other matters permitted pursuant to §8.4). 
The common stock of GKK shall at all times be listed for trading and be
traded on the New York Stock Exchange or another nationally recognized stock
exchange, unless otherwise consented to by the Majority Banks.  The Borrower shall cause GKK to at all times
comply with the requirements of all applicable laws and regulations necessary
to maintain REIT Status and shall elect to be treated as a real estate investment
trust under the Code.

(b)           The Borrower (i) will cause all of its
properties and those of Guarantors and their respective Subsidiaries used or
useful in the conduct of its business to be maintained and kept in good
condition, repair and working order (ordinary wear and tear excepted) and
supplied with all necessary equipment, and (ii) will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements
thereof, in all cases in which the failure so to do could reasonably be
expected to have a Material Adverse Effect.

§7.7        Insurance.  The Borrower
will, and will cause Guarantors to, procure and maintain or cause to be
procured and maintained insurance with financially sound and reputable insurers
covering the Borrower, the Guarantors and their respective Subsidiaries in such
amounts and against such casualties and contingencies as shall be in accordance
with the general practices of businesses engaged in similar activities in
similar geographic areas.

§7.8        Taxes.  The Borrower
will, and will cause the Guarantors and their respective Subsidiaries to, duly
pay and discharge, or cause to be paid and discharged, before the same shall
become overdue, all taxes, assessments and other governmental charges imposed
upon it and their assets, their sales and activities, or any part thereof, or
upon the income or profits therefrom, as well as all claims for labor,
materials, or supplies that if unpaid might by law become a lien or charge upon
any of its assets; provided that any such tax, assessment, charge, levy
or claim need not be paid if the validity or amount

 49
 

thereof shall
currently be contested in good faith by appropriate proceedings which shall
suspend the collection thereof and if such Person shall have set aside on its
books adequate reserves with respect thereto; and provided, further
that forthwith upon the commencement of proceedings to foreclose any lien that
may have attached as security therefor, such Person either (i) will provide a
bond issued by a surety reasonably acceptable to the Agent and sufficient to stay
all such proceedings or (ii) if no such bond is provided, will pay each such
tax, assessment, charge, levy or claim. 
The Borrower shall maintain its status as a partnership for federal
income tax purposes.

§7.9        Inspection of Properties
and Books.  The Borrower shall, and shall cause the
Guarantors to, permit the Agent and the Banks, at the Borrower’s expense, to
visit and inspect any of the properties of the Borrower, the Guarantors or any
of their respective Subsidiaries, to examine the books of account of the
Borrower, the Guarantors and their respective Subsidiaries (and to make copies
thereof and extracts therefrom) and to discuss the affairs, finances and
accounts of the Borrower, the Guarantors and their respective Subsidiaries
with, and to be advised as to the same by, its partners, members or officers,
as applicable, all at such reasonable times and intervals the Agent or any Bank
may reasonably request.  The Agent and
the Banks shall use good faith efforts to coordinate such visits and inspections
so as to minimize the interference with and disruption to the Borrower’s and
Guarantors’ normal business operations.

§7.10      Compliance with Laws,
Contracts, Licenses, and Permits.  The Borrower will, and will cause the
Guarantors and each of their respective Subsidiaries to, comply with (i) all
applicable laws and regulations now or hereafter in effect wherever its
business is conducted, including all Environmental Laws, (ii) the provisions of
its corporate charter, partnership agreement, operating agreement or
declaration of trust, as the case may be, and other charter documents and
bylaws, (iii) all agreements and instruments to which it is a party or by which
it or any of its assets may be bound, (iv) all applicable decrees, orders, and
judgments, and (v) all licenses and permits required by applicable laws and
regulations for the conduct of its business or the ownership, use or operation
of its assets except to the extent in each case that non-compliance with the
foregoing could not reasonably be expected to have a Material Adverse
Effect.  If at any time while any Loan or
Note is outstanding or the Banks have any obligation to make Loans or issue
Letters of Credit hereunder, any authorization, consent, approval, permit or
license from any governmental authority shall become necessary or required in
order that the Borrower or any Guarantor may fulfill any of their respective
obligations under the Loan Documents, the Borrower or such Guarantor will
promptly take or cause to be taken all steps necessary to obtain such
authorization, consent, approval, permit or license and furnish the Agent with
evidence thereof.

§7.11      Further Assurances.  The Borrower
will, and will cause Guarantors and each of their respective Subsidiaries to
cooperate with the Agent and the Banks and execute such further instruments and
documents as the Banks or the Agent shall reasonably request to carry out to
their satisfaction the transactions contemplated by this Agreement and the
other Loan Documents.

§7.12      Business Operations.  The Borrower,
the Guarantors and their respective Subsidiaries shall operate their respective
businesses in substantially the same manner and in substantially the same
fields and lines of business as such business is now conducted and related
businesses.

§7.13      [Intentionally Omitted.]

§7.14      Management.  The Borrower
shall at all times be managed solely by Manager or any other Person reasonably
acceptable to the Required Banks.

 50
 

§7.15      Plan Assets.  The Borrower
will do, or cause to be done, all things necessary to ensure that neither the
Borrower, the Guarantors nor any of their respective Subsidiaries will be
deemed to hold “plan assets” at any time.

§7.16      Distributions of Income to
the Borrower and Subsidiary Guarantors.  The Borrower
shall cause all of its Subsidiaries to promptly distribute to the Borrower,
whether in the form of dividends, distributions or otherwise, all profits,
proceeds or other income relating to or arising from such Person’s use,
operation, financing, refinancing, sale or other disposition of its assets
after (a) the payment by such Person of its Debt Service and operating expenses
for such quarter and (b) the establishment of reasonable reserves for the
payment of operating expenses not paid on at least a quarterly basis and
capital improvements to be made to such Person’s assets approved by such Person
in the ordinary course of business consistent with its past practices.  Notwithstanding the foregoing, to the extent
any such profits, proceeds or other income are paid with respect to such assets
of such Subsidiary less frequently than each fiscal quarter of the Borrower,
the distribution required by this §7.16 may be made to the Borrower on such
less frequent basis.  Each Subsidiary
Guarantor which owns a CDO Subsidiary shall cause such CDO Subsidiary to
promptly distribute to such Subsidiary Guarantor all amounts received with
respect to any Eligible CDO Retained Asset included within the Unencumbered
Borrowing Base Assets.

§7.17      Unencumbered Borrowing
Base Assets.

(a)           Generally.  The Unencumbered
Borrowing Base Assets shall at all times satisfy, and shall be included in the
calculation of the Borrowing Base so as to ensure the satisfaction of, at all
times, all of the following conditions:

(i)            each of the Unencumbered Borrowing Base Assets included
in the calculation of the Borrowing Base shall be owned one hundred percent
(100%) by the Borrower, a Subsidiary Guarantor which is a Wholly Owned
Subsidiary of Borrower, or with respect to an Eligible CDO Retained Asset, a
CDO Subsidiary which is a Wholly Owned Subsidiary of Borrower or a Subsidiary
Guarantor;

(ii)           each Unencumbered Borrowing Base Asset shall be an
Eligible Asset which has been approved by the Required Banks;

(iii)          each Unencumbered Borrowing Base Asset shall be free
and clear of all Liens (and if Borrower, a Subsidiary Guarantor or a CDO
Subsidiary does not own the entire loan or debt security to which such
Unencumbered Borrowing Base Asset relates, such loan or debt security shall be
free and clear of all Liens);

(iv)          each Unencumbered Borrowing Base Asset shall not be
subject to a contractual obligation binding on the Borrower, the Subsidiary
Guarantor or the CDO Subsidiary that owns such Unencumbered Borrowing Base
Asset which contractual obligation contains a covenant prohibiting the sale,
transfer, pledge, assignment, hypothecation or other encumbrance of such
Unencumbered Borrowing Base Asset (provided that customary limitations in
participation agreements, pooling and servicing agreements or intercreditor
agreements with respect to Participation Interests, Second Mortgage Loans or
Mezzanine Loans, in trust indentures with respect to Eligible CDO Retained
Assets or in the organizational agreements of a CDO Subsidiary with respect to
Eligible CDO Retained Assets shall not be deemed to violate the foregoing); and

(v)           the Unencumbered Borrowing Base Asset Value
attributable to Eligible Equity Interests shall not exceed thirty percent (30%)
of the aggregate Unencumbered Borrowing Base Asset Value.

 51
 

(b)           Additions and Removals from Borrowing
Base.  Subject to the requirements of §§5.2 and
7.17(a), the Borrower may elect to add or remove one or more Unencumbered
Borrowing Base Assets from the calculation of the Borrowing Base; provided that
(x) in the event of the addition of any Unencumbered Borrowing Base Assets to
the calculation of the Borrowing Base, the Borrower or the relevant Subsidiary
Guarantor, as applicable, shall prior to such addition to the Borrowing Base
deliver to the Agent such documents (including, without limitation, any
Appraisal of Real Estate related to the proposed Unencumbered Borrowing Base
Asset), an executed Instruction Letter with respect to such Unencumbered
Borrowing Base Asset, if applicable, together with such other Loan Documents
required under §5.2 to the extent not previously executed and delivered and (y)
the Borrower may not elect to remove an Unencumbered Borrowing Base Asset from
the calculation of the Borrowing Base if at the time of such removal a Default
or Event of Default shall have occurred and be continuing or would result
therefrom.  Notwithstanding the
foregoing, in the event any Unencumbered Borrowing Base Asset fails to satisfy
the requirements of the definition thereof, the Borrower shall immediately
remove such Unencumbered Borrowing Base Asset from the calculation of the
Borrowing Base.  In the event of any such
addition or removal, the Borrower shall deliver to the Agent, simultaneously
therewith, a revised Borrowing Base Certificate giving effect to such addition
or removal and, to the extent required by §3.2, the Borrower shall make a
prepayment of the Loans.  Schedule
7.17 hereto shall be deemed amended to reflect any addition or removal of
any Unencumbered Borrowing Base Asset in accordance with this §7.17.

(c)           Appraisals.  Notwithstanding
anything herein to the contrary, the Agent may, for the purpose of determining
the current Appraised Value of any Real Estate, obtain new Appraisals but not
more often than once per calendar year or an update to existing Appraisals with
respect to such Real Estate if the Agent reasonably believes that there has
been a material adverse change with respect to such Real Estate including,
without limitation, a material change in the market in which such Real Estate
is located which may affect the value of such Real Estate.  The expense of such Appraisals and/or updates
performed pursuant to this §7.17(c) shall be borne by the Borrower and payable
to Agent within fifteen (15) days of demand.

(d)           CDO Subsidiaries. 
The organizational agreements of a Subsidiary of Borrower which owns
Eligible CDO Retained Assets may as a result of structuring requirements of the
Eligible CDO, prohibit such Subsidiary from becoming a Guarantor and joining in
the Pledge Agreement.  The Eligible CDO
Retained Assets owned by such Subsidiary may be included in the Unencumbered
Borrowing Base Assets subject to the satisfaction at all times of the following
conditions (such a Subsidiary which satisfies the conditions in this §7.17(d)
shall be a “CDO Subsidiary”):

(i)            such CDO Subsidiary shall be a Wholly Owned
Subsidiary of Borrower or a Subsidiary Guarantor;

(ii)           such CDO Subsidiary shall be a single purpose,
bankruptcy remote entity whose organizational agreements shall be reasonably
satisfactory to the Agent;

(iii)          the organizational agreements of such CDO Subsidiary
require the prompt and regular  distribution to the owning Borrower or Subsidiary
Guarantor of all payments with respect to the Eligible CDO Retained Assets;

(iv)          such CDO Subsidiary executes the Instruction Letter
in form and substance reasonably satisfactory to the Agent;

(v)           the interest of Borrower and Subsidiary Guarantor in
such CDO Subsidiary shall be free and clear of all Liens;

 52
 

(vi)          such CDO Subsidiary shall not create, incur, assume,
guarantee or be or remain liable, contingently or otherwise, with respect to
any Indebtedness except as expressly permitted in §8.1; and

(vii)         such CDO Subsidiary shall comply with the terms of
its organizational agreements in all material respects and otherwise in
accordance with the Loan Documents and shall not amend such organizational
agreements in a manner that is material and adverse to the interests of the
Banks or would cause a violation of the terms of this §7.17 or the other Loan
Documents without the prior written consent of Agent, not to be unreasonably
withheld.

In the event that the
restrictions against a CDO Subsidiary from becoming a Subsidiary Guarantor and
joining in the Pledge Agreement are no longer effective, such CDO Subsidiary
shall promptly become a Subsidiary Guarantor pursuant to §5.2.

(e)           CDO 2005-I, Ltd. and CDO 2006-I, Ltd. 
Notwithstanding anything in this Agreement to the contrary, no
Instruction Letter shall be required to be provided to the Agent with respect
to the Borrowing Base Asset described in Items 1 and 2 of Schedule 7.17,
and Gramercy Investment QRS Corp. and Gramercy Investment QRS II Corp. shall
each constitute a CDO Subsidiary despite its failure to deliver the Instruction
Letter.

§8.          CERTAIN NEGATIVE COVENANTS
OF THE BORROWER.

The Borrower covenants
and agrees that, so long as any Loan, Note or Letter of Credit is outstanding
or any of the Banks has any obligation to make any Loans or issue any Letters
of Credit:

§8.1        Restrictions on
Indebtedness.  Subject to the provisions of §9, the Borrower,
will not, and will not permit the Guarantors or any of their respective
Subsidiaries to, create, incur, assume, guarantee or be or remain liable,
contingently or otherwise, with respect to any Indebtedness other than:

(a)           Indebtedness of Borrower and Guarantors
to the Banks arising under any of the Loan Documents;

(b)           Current liabilities of the Borrower, the
Guarantors and their respective Subsidiaries incurred in the ordinary course of
business but not incurred through (i) the borrowing of money, or (ii) the
obtaining of credit except for credit on an open account basis customarily
extended and in fact extended in connection with normal purchases of goods and
services;

(c)           Indebtedness of Borrower, the Guarantors
and their respective Subsidiaries in respect of taxes, assessments,
governmental charges or levies and claims for labor, materials and supplies to
the extent that payment therefor shall not at the time be required to be made
in accordance with the provisions of §7.8;

(d)           Indebtedness of Borrower, the Guarantors
and their respective Subsidiaries (other than CDO Subsidiaries) in respect of
judgments or awards the existence of which does not create an Event of Default;

(e)           Endorsements by Borrower, the Guarantors
and their respective Subsidiaries for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the ordinary
course of business;

(f)            Indebtedness of Borrower under Junior
Subordinated Indentures;

 53
 

(g)           Subject to the provisions of §9, Recourse
Indebtedness of Borrower, GKK, Gramercy Investment Trust and the Subsidiaries
of Borrower that are not Guarantors (other than Gramercy Investment Trust) or
CDO Subsidiaries (excluding the Obligations), provided that such Indebtedness
does not in the aggregate exceed thirty percent (30%) of Consolidated Total
Assets at any time; and

(h)           Non-Recourse Indebtedness of the
Borrower, GKK, Gramercy Investment Trust or Subsidiaries of Borrower that are
not Guarantors (other than Gramercy Investment Trust) or CDO Subsidiaries.

§8.2        Restrictions on Liens,
Etc.  The Borrower will not (and will not permit
any of the Guarantors or any of their respective Subsidiaries to) (a) create or
incur or suffer to be created or incurred or to exist any lien, encumbrance,
mortgage, deed of trust, security deed, pledge, negative pledge, charge,
restriction or other security interest of any kind upon any of its property or
assets of any character whether now owned or hereafter acquired, or upon the
income or profits therefrom; (b) transfer any of its property or assets or the
income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; (c) acquire, or agree or have an option to
acquire, any property or assets upon conditional sale or other title retention
or purchase money security agreement, device or arrangement; (d) suffer to
exist for a period of more than 30 days after the same have come due any
Indebtedness or claim or demand against it that if unpaid might by law or upon
bankruptcy or insolvency, or otherwise, be given any priority whatsoever over
its general creditors; (e) pledge or otherwise encumber any accounts, contract
rights, general intangibles, chattel paper or instruments, with or without
recourse; or (f) incur or maintain any obligation to any holder of Indebtedness
of such Person which prohibits the creation or maintenance of any lien securing
the Obligations (collectively “Liens”); provided that the Borrower, the
Guarantors and their respective Subsidiaries may create or incur or suffer to
be created or incurred or to exist:

(i)            liens on properties or assets, of Borrower, the
Guarantors and their respective Subsidiaries to secure taxes, assessments and
other governmental charges or claims for labor, material or supplies in respect
of obligations not overdue or which are being contested or otherwise addressed
as permitted by §7.8;

(ii)           liens on properties or assets, other than
Unencumbered Borrowing Base Assets, of Borrower, the Guarantors and their
respective Subsidiaries in respect of judgments or awards, the Indebtedness
with respect to which is permitted by §8.1(d);

(iii)          encumbrances on properties of Borrower, the
Guarantors and their respective Subsidiaries consisting of easements, rights of
way, zoning restrictions, restrictions on the use of real property, landlord’s
or lessor’s liens under leases to which the Borrower, the Guarantors or such
Subsidiary is a party, tenant leases and other minor non-monetary liens or
encumbrances none of which interferes materially with the use of the property
affected in the ordinary conduct of the business of such Person, which
encumbrances or liens individually or in the aggregate have not had or could
not reasonably be expected to have a Material Adverse Effect;

(iv)          liens granted by Borrower, the Guarantors and their
respective Subsidiaries (other than CDO Subsidiaries) on property or assets
(other than Unencumbered Borrowing Base Assets) to secure Indebtedness permitted
pursuant to §8.1(g) or (h); and

(v)           liens granted by Borrower and the Guarantors to the
Agent for the benefit of the Banks to secure the Obligations.

 54
 

§8.3        Restrictions on
Investments.  The Borrower will not, nor will it permit the
Guarantors or any of their respective Subsidiaries to, make or permit to exist
or to remain outstanding any Investment except Investments:

(a)           in marketable direct or guaranteed
obligations of the United States of America that mature within one (1) year
from the date of purchase by the Borrower or such Subsidiary;

(b)           in marketable direct obligations of any
of the following: Federal Home Loan Mortgage Corporation, Student Loan
Marketing Association, Federal Home Loan Banks, Federal National Mortgage
Association, Government National Mortgage Association, Bank for Cooperatives,
Federal Intermediate Credit Banks, Federal Financing Banks, Export-Import Bank
of the United States, Federal Land Banks, or any other agency or
instrumentality of the United States of America;

(c)           in demand deposits, certificates of
deposit, bankers acceptances and time deposits of United States banks having
total assets in excess of $100,000,000; provided, however, that the aggregate
amount at any time so invested with any single bank having total assets of less
than $1,000,000,000 will not exceed $200,000;

(d)           in securities commonly known as “commercial
paper” issued by a corporation organized and existing under the laws of the
United States of America or any State which at the time of purchase are rated by
Moody’s Investors Service, Inc. or by Standard & Poor’s Corporation at not
less than “P 1” if then rated by Moody’s Investors Service, Inc., and not less
than “A 1”, if then rated by Standard & Poor’s Corporation;

(e)           in mortgage backed securities guaranteed
by the Government National Mortgage Association, the Federal National Mortgage
Association or the Federal Home Loan Mortgage Corporation and other mortgage
backed bonds which at the time of purchase are rated by Moody’s Investors
Service, Inc. or by Standard & Poor’s Corporation at not less than “Aa” if
then rated by Moody’s Investors Service, Inc. and not less than “AA” if then
rated by Standard & Poor’s Corporation;

(f)            in repurchase agreements having a term
not greater than ninety (90) days and fully secured by securities described in
the foregoing subsection (a), (b) or (e) with banks described in the foregoing
subsection (c) or with financial institutions or other corporations having
total assets in excess of $500,000,000;

(g)           in shares of so called “money market
funds” registered with the SEC under the Investment Company Act of 1940 which
maintain a level per share value, invest principally in investments described
in the foregoing subsections (a) through (f) and have total assets in excess of
$50,000,000;

(h)           by GKK in the Borrower;

(i)            by the Borrower in Subsidiaries of the
Borrower or in any other Person so long as after giving effect to such
Investment, such Person becomes a Subsidiary; and

(j)            by the Borrower and its Subsidiaries in
other assets consistent with the current business practices of Borrower.

§8.4        Merger, Consolidation.  Neither GKK,
the Borrower nor any of their respective Subsidiaries will become a party to
any merger, consolidation or other business combination, dissolution, liquidation,
or disposition of all or substantially all of its assets or business except (a)
the merger or

 55
 

consolidation of
one or more of the Subsidiaries of the Borrower with and into the Borrower, (b)
the merger or consolidation of two or more Subsidiaries of the Borrower, (c)
the Borrower may merge or consolidate with or into any other Person (other than
GKK) so long as (i) the Borrower is the surviving entity, (ii) such action is
not hostile, (iii) the other Persons involved in such merger or consolidation
are engaged in a line of business in which the Borrower is permitted to engage,
and (iv) after giving effect to such merger or consolidation, no Default or
Event of Default shall exist, (d) GKK may merge or consolidate with or into any
other Person (other than Borrower) so long as (i) GKK is the surviving entity,
(ii) such action is not hostile, (iii) the other Persons involved in such
merger or consolidation are engaged in a line of business in which the Borrower
is permitted to engage, and (iv) after giving effect to such merger or
consolidation, no Default or Event of Default shall exist, or (e) a
Subsidiary of GKK (other than the Borrower) may merge or consolidate with or
into any other Person (other than GKK or the Borrower) so long as (i) such Subsidiary
is the surviving entity, (ii) such action is not hostile, (iii) the other
Persons involved in such merger or consolidation are engaged in a line of
business in which the Borrower is permitted to engage, and (iv) after giving
effect to such merger or consolidation, no Default or Event of Default shall
exist.

§8.5        Sale and Leaseback.  None of the
Borrower, the Guarantors nor any of their respective Subsidiaries will enter
into any arrangement, directly or indirectly, whereby such Person shall sell or
transfer any property owned by it in order that then or thereafter such Person
shall lease back such property.

§8.6        Restrictions on Prepayment
of Indebtedness.  Neither the Borrower nor any Guarantor shall
(a) voluntarily prepay, redeem or purchase the principal amount, in whole or in
part, of any Indebtedness other than the Obligations after the occurrence of
any Event of Default; provided, however, that this §8.6(a) shall not prohibit
the prepayment of Indebtedness (x) which is financed solely from the proceeds
of a new loan which would otherwise be permitted by the terms of §8.1, (y) made
voluntarily, solely, and only in the amount necessary, to cure a default under
this Agreement or (z) solely and only in the amount necessary to make a margin
call with respect to a repurchase obligation, or (b) following an Event of
Default, modify any document evidencing any Indebtedness (other than the
Obligations) to accelerate the maturity date of such Indebtedness.  Notwithstanding the foregoing, the Borrower
shall not make any payment with respect to any of its subordinated indebtedness
(including, without limitation, under any Junior Subordinated Indentures) other
than in accordance with the terms of the documentation governing the same.

§8.7        Distributions.  Neither the
Borrower nor GKK shall make any Distributions which would cause it to violate
any of the following covenants:

(a)           Neither the Borrower nor GKK shall make
any Distribution if such Distribution is in excess of the amount which, when
added to the amount of all other Distributions paid in the same fiscal quarter
and the preceding three (3) fiscal quarters would exceed one hundred percent
(100%) of its Funds from Operations for the four (4) consecutive fiscal
quarters ending prior to the quarter in which such Distribution is paid,
provided that Borrower may declare and pay cash Distributions to GKK and other
holders of partnership interests in Borrower to the extent necessary for GKK
(i)  to be able to make, and GKK shall be
permitted to make, Distributions to its shareholders in such amounts as are
necessary (x) to maintain the REIT Status of GKK (as reasonably evidenced
by GKK to Agent) and (y) from amounts not included in the calculation of Funds
from Operations, to avoid the payment of taxes imposed under Code Section
857(b)(1) and 4981 of the Code and (ii) to pay any taxes imposed under Sections
857(b)(3), (4), (5), (6) or (7) of the Code; provided further that no Default
or Event of Default shall occur as a result of any such Distribution;

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(b)           Notwithstanding the terms of §8.7(a),
Borrower may make Distributions to GKK, and GKK may make Distributions in order
to repurchase or otherwise redeem up to an aggregate amount of $75,000,000.00
of equity securities of GKK, provided that such Distributions to repurchase or
otherwise redeem such equity securities shall only be made in the event that
(i) no Default or Event of Default shall have occurred and be continuing
on the date of any such repurchase or redemption and (ii) no Default or
Event of Default shall occur as a result of any such repurchase or redemption;
and

(c)           Notwithstanding the foregoing, at any
time when a Default under §12.1(a) or (b), any Default under §12.1(c) relating
to a Default under §§9.1 through 9.6 or Event of Default shall have occurred
and is continuing, neither the Borrower nor GKK shall make any Distributions
whatsoever, directly or indirectly.

§8.8        Limiting Agreements.  The Borrower,
the Subsidiary Guarantors and their respective Subsidiaries shall take such
actions as are necessary to preserve the right and ability, if any, of the
Borrower and each Subsidiary Guarantor to pledge those Eligible Assets (other
than Eligible CDO Equity Interests) within the Borrowing Base without any such
pledge after the date hereof causing or permitting the acceleration (after the
giving of notice or the passage of time, or otherwise) of any other
Indebtedness of the Borrower, the Guarantors or any of their respective
Subsidiaries.  The Borrower shall, upon
demand, provide to the Agent such evidence as the Agent may reasonably require
to evidence compliance with this §8.8, which evidence shall include, without
limitation, copies of any agreements or instruments which would in any way
restrict or limit a the Borrower’s or any Subsidiary Guarantor’s ability to
pledge assets as security for Indebtedness, or which provide for the occurrence
of a default (after the giving of notice or the passage of time, or otherwise)
if assets are pledged in the future as security for Indebtedness of the
Borrower, such Subsidiary Guarantor or any of their respective Subsidiaries.

§8.9        Management Agreement.  The Borrower
shall not, without the written consent of the Agent, such consent not to be
unreasonably withheld, amend, supplement, terminate, or otherwise modify the
Management Agreement in any material respect which (a) would increase the
compensation of Manager thereunder, (b) would reduce the obligations of Manager
thereunder, or (c) could reasonably be expected to have an adverse impact on
the business, assets or operations of Borrower. 
The Borrower shall not replace GKK Manager LLC as Manager except with a
replacement manager reasonably acceptable to the Majority Banks.

§8.10      Pledges.  Borrower shall
not, directly or indirectly or by operation of law, create, incur or suffer to
be created or incurred any Lien on any Unencumbered Borrowing Base Asset or
Borrower’s, any Subsidiary Guarantor’s or any CDO Subsidiary’s interest
therein, except any Lien in favor of Agent.

§8.11      More Restrictive
Agreements.  The Borrower, the Guarantors and their
respective Subsidiaries shall not enter into or modify any agreements or
documents pertaining to any existing or future Indebtedness, Debt Offering or
Equity Offering, which agreements or documents include covenants, whether
affirmative or negative (or any other provision which may have the same
practical effect as any of the foregoing), which are individually or in the
aggregate more restrictive against the Borrower or the Guarantors than those
set forth in §8 and §9 of this Agreement.

§9.          FINANCIAL COVENANTS.

The Borrower covenants
and agrees that, so long as any Loan, Note or Letter of Credit is outstanding
or any Bank has any obligation to make any Loans or issue Letters of Credit it
will comply with the following at all times:

 57
 

§9.1        Available Amount.  The Borrower
shall not at any time permit the sum of the Outstanding Loans and Outstanding
Letter of Credit Liabilities to be greater than the Borrowing Base.

§9.2        [Intentionally Omitted].

§9.3        Fixed Charges Coverage
Ratio. 
The Borrower will not at any time permit the ratio of Consolidated
EBITDA for the preceding calendar quarter (the “Test Period”) to Fixed Charges
for the Test Period to be less than 1.30 to 1.0.

§9.4        Consolidated Tangible Net
Worth. 
Borrower will not at any time permit the Consolidated Tangible Net Worth
of GKK to be less than (a) $450,000,000.00 plus (b) seventy-five percent (75%)
of the Net Offering Proceeds received after the Closing Date.

§9.5        [Intentionally Omitted].

§9.6        Senior Leverage Ratio.  The Borrower
will not at any time permit the Senior Leverage Ratio to be greater than 0.85
to 1.

§10.        CLOSING CONDITIONS.

The obligation of the
Banks to make the Loans or issue Letters of Credit to the Borrower is subject
to the satisfaction of the following conditions precedent:

§10.1      Loan Documents.  The Borrower,
the Guarantors and the CDO Subsidiaries shall have duly executed and delivered
to the Agent, each of the Loan Documents to which such Person is a party, each
of which shall be in full force and effect and shall be in form and substance
satisfactory to the Agent.  The Agent
shall have received a fully executed copy of each such document, except that
each Bank shall have received a fully executed counterpart of its Note.

§10.2      Certified Copies of
Organizational Documents.  The Agent shall have received from the
Borrower a copy, certified as of a recent date by the appropriate officer of
each State in which the Borrower, each Guarantor and each CDO Subsidiary is
organized or a duly authorized partner, member or officer of such Person, as
applicable, to be true and complete, of the partnership agreement, operating
agreement, corporate charter, declaration of trust or other organization
documents of the Borrower, the Guarantors and the CDO Subsidiaries, as
applicable (or as to such organizational agreements, a certification from a
duly authorized partner, member or officer of such Person that none of such
agreements have been modified, amended or terminated from those delivered in
connection with the closing of the Original Credit Agreement), or its
qualification to do business, as applicable, as in effect on such date of
certification.

§10.3      Authorizing Actions.  All action on
the part of the Borrower, the Guarantors and the CDO Subsidiaries, as
applicable, necessary for the valid execution, delivery and performance by such
Person of this Agreement and the other Loan Documents to which such Person is
or is to become a party shall have been duly and effectively taken, and
evidence thereof satisfactory to the Agent shall have been provided to the
Agent.

§10.4      Incumbency Certificate;
Authorized Signers.  The Agent shall have received incumbency
certificates, dated as of the date of this Agreement, signed by a duly
authorized officer, member or partner of the Borrower, the Guarantors and the
CDO Subsidiaries, and giving the name and bearing a specimen signature of each
individual who shall be authorized to sign, in the name and on behalf of such
Person, each of the Loan Documents to which such Person is or is to become a
party.  The

 58
 

Agent shall have
also received from the Borrower a certificate, dated as of the date of this
Agreement, signed by a duly authorized officer of the Borrower and giving the
name and specimen signature of each individual who shall be authorized to make
Loan Requests, Conversion Requests and Letter of Credit Requests and to give
notices and to take other action on behalf of the Borrower under the Loan
Documents.

§10.5      Opinion of Counsel.  The Agent
shall have received a favorable opinion addressed to the Banks and the Agent
and dated as of the date of this Agreement, in form and substance satisfactory
to the Banks and the Agent, from counsel of the Borrower, the Guarantors and
the CDO Subsidiaries, as to such matters as the Agent shall reasonably request.

§10.6      Payment of Fees.  The Borrower
shall have paid to the Agent the fees payable pursuant to §4.2.

§10.7      Performance; No Default. 
The Borrower and the Guarantors shall have performed and complied with
all terms and conditions herein required to be performed or complied with by it
on or prior to the Closing Date, and on the Closing Date there shall exist no
Default or Event of Default.

§10.8      Representations and
Warranties.  The representations and warranties made by
the Borrower and the Guarantors in the Loan Documents or otherwise made by or
on behalf of the Borrower, the Guarantors or any of their respective
Subsidiaries in connection therewith shall have been true and correct in all
material respects when made.

§10.9      Proceedings and Documents.  All proceedings
in connection with the transactions contemplated by this Agreement and the
other Loan Documents shall be reasonably satisfactory to the Agent and the
Agent’s Special Counsel in form and substance, and the Agent shall have
received all information and such counterpart originals or certified copies of
such documents and such other certificates, opinions or documents as the Agent
and the Agent’s Special Counsel may reasonably require.

§10.10   Compliance Certificate and
Borrowing Base Certificate.  A Compliance Certificate and Borrowing Base
Certificate dated as of the date of this Agreement demonstrating compliance
with each of the financial covenants calculated therein as of the most recent
quarter end for which the Borrower and the Guarantors have provided financial
statements under §6.4 adjusted in the best good faith estimate of the Borrower
or the Guarantors, as applicable, shall have been delivered to the Agent.

§10.11   Stockholder and Partner
Consents.  The Agent shall have received evidence
satisfactory to the Agent that all necessary stockholder, partner, member or
other similar consents required in connection with the consummation of the
transactions contemplated by this Agreement and the other Loan Documents have
been obtained.

§10.12   [Intentionally Omitted].

§10.13   Other.  The Agent
shall have reviewed such other documents, instruments, certificates, opinions,
assurances, consents and approvals as the Agent or the Agent’s Special Counsel
may reasonably have requested.

§11.        CONDITIONS TO ALL BORROWINGS.

The obligations of the
Banks to make any Loan or issue any Letter of Credit shall also be subject to
the satisfaction of the following conditions precedent:

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§11.1      Representations True; No
Default.  Each of the representations and warranties
made by or on behalf of the Borrower, the Guarantors and their respective
Subsidiaries contained in this Agreement, the other Loan Documents or in any
document or instrument delivered pursuant to or in connection with this
Agreement shall be true in all material respects as of the date as of which
they were made and shall also be true in all material respects at and as of the
time of the making of such Loan or the issuance of such Letter of Credit, with
the same effect as if made at and as of that time (except to the extent of
changes resulting from transactions contemplated or permitted by this Agreement
and the other Loan Documents and changes occurring in the ordinary course of
business that singly or in the aggregate are not materially adverse, and except
to the extent that such representations and warranties relate expressly to an
earlier date) and no Default or Event of Default shall have occurred and be
continuing.

§11.2      Borrowing Documents.  The Agent
shall have received a copy of the Loan Request for a Loan required by §2.6 in
the form of Exhibit B hereto, fully completed or a copy of the Letter of
Credit Request for a Letter of Credit required by §2.12 in the form of Exhibit G
hereto fully completed.

§12.        EVENTS OF DEFAULT;
ACCELERATION; ETC.

§12.1      Events of Default and
Acceleration.  If any of the following events (“Events of
Default” or, if the giving of notice or the lapse of time or both is required,
then, prior to such notice or lapse of time, “Defaults”) shall occur:

(a)           the Borrower shall fail to pay any
principal of the Loans when the same shall become due and payable, whether
pursuant to §3.2, at the stated date of maturity or any accelerated date of
maturity or at any other date fixed for payment;

(b)           the Borrower shall fail to pay any
interest on the Loans, any reimbursement obligations with respect to Letters of
Credit or any other sums due hereunder or under any of the other Loan
Documents, when the same shall become due and payable, whether at the stated
date of maturity or any accelerated date of maturity or at any other date fixed
for payment, and such failure shall continue for a period of five (5) days
(provided, however, that no such grace period shall apply to any payments due
upon the maturity of the Notes);

(c)           the Borrower, the Guarantors or any of
their respective Subsidiaries shall fail to perform any other term, covenant or
agreement contained herein or in any of the other Loan Documents (other than
those specified in this §12, or any other Default or Event of Default contained
in any other of the Loan Documents for which a shorter cure period or no cure
period is provided), and such failure shall continue for thirty (30) days after
written notice thereof shall have been given to the Borrower by the Agent;

(d)           any representation or warranty made by or
on behalf of the Borrower the Guarantors or any of their respective
Subsidiaries in this Agreement or any other Loan Document, or in any report,
certificate, financial statement, request for a Loan or Letter of Credit
Request, or in any other document or instrument delivered pursuant to or in
connection with this Agreement, any advance of a Loan, issuance of a Letter of
Credit, or any of the other Loan Documents shall prove to have been false or
misleading in any material respect upon the date when made or deemed to have
been made or repeated;

(e)           the Borrower, a Guarantor or any of their
respective Subsidiaries shall fail to pay at maturity, or within any applicable
period of grace, any obligation for borrowed money or credit received or other Indebtedness,
or fail to observe or perform any term, covenant or agreement contained in any
agreement by which it is bound, evidencing or securing any such borrowed money
or credit received or other Indebtedness for such period of time as would
permit (assuming the giving of

 60
 

appropriate notice
if required) the holder or holders thereof or of any obligations issued
thereunder to accelerate the maturity thereof or require the redemption,
prepayment, purchase or repurchase thereof; provided, however, that the events
described in this §12.1(e) shall not constitute an Event of Default unless such
failure to perform, together with other failures to perform as described in
this §12.1(e), involve singly or in the aggregate obligations for Indebtedness
totaling in excess of $10,000,000.00;

(f)            the Borrower, a Guarantor or any of their
respective Subsidiaries (i) shall make an assignment for the benefit of
creditors, or admit in writing its general inability to pay or generally fail
to pay its debts as they mature or become due, or shall petition or apply for
the appointment of a trustee or other custodian, liquidator or receiver of any
such Person or of any substantial part of the assets of any thereof, (ii) shall
commence any case or other proceeding relating to any such Person under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
receivership, dissolution or liquidation or similar law of any jurisdiction,
now or hereafter in effect, or (iii) shall take any action to authorize or in furtherance
of any of the foregoing;

(g)           a petition or application shall be filed
for the appointment of a trustee or other custodian, liquidator or receiver of
any of the Borrower, a Guarantor or any of their respective Subsidiaries or any
substantial part of the assets of any thereof, or a case or other proceeding
shall be commenced against any such Person under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation or similar law of any jurisdiction, now or hereafter in effect, and
any such Person shall indicate its approval thereof, consent thereto or
acquiescence therein or such petition, application, case or proceeding shall
not have been dismissed within sixty (60) days following the filing or commencement
thereof;

(h)           a decree or order is entered appointing
any trustee, custodian, liquidator or receiver or adjudicating any of the
Borrower, a Guarantor or any of their respective Subsidiaries bankrupt or
insolvent, or approving a petition in any such case or other proceeding, or a
decree or order for relief is entered in respect of any such Person in an
involuntary case under federal bankruptcy laws as now or hereafter constituted;

(i)            there shall remain in force,
undischarged, unsatisfied and unstayed, for more than (60) days, whether or not
consecutive, any uninsured final judgment against any of the Borrower, a
Guarantor or any of their respective Subsidiaries (i) that, with other
outstanding uninsured final judgments, undischarged, against such Persons exceeds
in the aggregate $10,000,000.00, or (ii) which is an injunction or other
non-monetary judgment that could reasonably be expected to have a Material
Adverse Effect;

(j)            any of the Loan Documents or the
Contribution Agreement shall be canceled, terminated, revoked or rescinded
otherwise than in accordance with the terms thereof or with the express prior
written agreement, consent or approval of the Banks, or any action at law, suit
in equity or other legal proceeding to cancel, revoke or rescind any of the
Loan Documents or the Contribution Agreement shall be commenced by or on behalf
of the Borrower, a Guarantor, any of their respective Subsidiaries or any of
their respective holders of Voting Interests, or any court or any other
governmental or regulatory authority or agency of competent jurisdiction shall
make a determination that, or issue a judgment, order, decree or ruling to the
effect that, any one or more of the Loan Documents or the Contribution
Agreement is illegal, invalid or unenforceable in accordance with the terms
thereof;

(k)           any dissolution, termination, partial or
complete liquidation, merger or consolidation of the Borrower, a Guarantor or
any of their respective Subsidiaries other than as permitted under the terms of
this Agreement or the other Loan Documents;

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(l)            a Guarantor denies that it has any
liability or obligation under the Guaranty or any other Loan Document or shall
notify the Agent or any of the Banks of such Guarantor’s intention to attempt
to cancel or terminate the Guaranty or any other Loan Document;

(m)          with respect to any Guaranteed Pension
Plan, an ERISA Reportable Event shall have occurred and the Majority Banks
shall have determined in their reasonable discretion that such event reasonably
could be expected to result in liability of the Borrower, the Guarantors or any
of their respective Subsidiaries to the PBGC or such Guaranteed Pension Plan in
an aggregate amount exceeding $10,000,000 and (i) such event in the
circumstances occurring reasonably could constitute grounds for the termination
of such Guaranteed Pension Plan by the PBGC or for the appointment by the
appropriate United States District Court of a trustee to administer such
Guaranteed Pension Plan, (ii) or a trustee shall have been appointed by
the United States District Court to administer such Plan, or (iii) the
PBGC shall have instituted proceedings to terminate such Guaranteed Pension
Plan; or

(n)           the occurrence of a Change of Control; or

(o)           without limiting the foregoing, any
Instruction Letter shall be revoked by Borrower, a Subsidiary Guarantor or a
CDO Subsidiary.

then, and in any such
event, the Agent may, and upon the request of the Majority Banks shall, by
notice in writing to the Borrower declare all amounts owing with respect to
this Agreement, the Notes, the Letters of Credit and the other Loan Documents
to be, and they shall thereupon forthwith become, immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower; provided that in the event of any
Event of Default specified in §12.1(f), §12.1(g) or §12.1(h), all such amounts
shall become immediately due and payable automatically and without any
requirement of presentment, demand, protest or other notice of any kind from
any of the Banks or the Agent.  Upon
demand by Agent or the Majority Banks in their absolute and sole discretion
after the occurrence of an Event of Default, and regardless of whether the
conditions precedent in this Agreement for a Revolving Credit Loan have been
satisfied, the Banks will cause a Revolving Credit Loan to be made in the
undrawn amount of all Letters of Credit. 
The proceeds of any such Revolving Credit Loan will be pledged to and
held by Agent as security for any amounts that become payable under the Letters
of Credit and all other Obligations.  In
the alternative, if demanded by Agent in its absolute and sole discretion after
the occurrence of an Event of Default, Borrower will deposit with and pledge to
Agent cash in an amount equal to the amount of all undrawn Letters of
Credit.  Such amounts will be pledged to
and held by Agent for the benefit of the Banks as security for any amounts that
become payable under the Letters of Credit and all other Obligations.  Upon any draws under Letters of Credit, at
Agent’s sole discretion, Agent may apply any such amounts to the repayment of
amounts drawn thereunder and upon the expiration of the Letters of Credit any
remaining amounts will be applied to the payment of all other Obligations or if
there are no outstanding Obligations and Banks have no further obligation to
make Revolving Credit Loans or issue Letters of Credit or if such excess no
longer exists, such proceeds deposited by Borrower will be released to
Borrower.

§12.2      Limitation of Cure Periods. 
Notwithstanding the provisions of §12.1, the cure periods provided
therein shall not be allowed and the occurrence of a Default thereunder
immediately shall constitute an Event of Default for all purposes of this Agreement
and the other Loan Documents if, within the period of six (6) months
immediately preceding the occurrence of such Default, there shall have occurred
two periods of cure or portions thereof under any one or more than one of said
subsections.

§12.3      Termination of Commitments.  If any one or
more Events of Default specified in §12.1(f), §12.1(g) or §12.1(h) shall occur,
then immediately and without any action on the part of the Agent or any Bank
any unused portion of the credit hereunder shall terminate and the Banks shall
be

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relieved of all
obligations to make Loans or issue Letters of Credit to the Borrower.  If any other Event of Default shall have
occurred, the Agent may, and upon the election of the Majority Banks shall, by
notice to the Borrower terminate the obligation to make Loans and issue Letters
of Credit to the Borrower.  No
termination under this §12.3 shall relieve the Borrower or Guarantors of their
obligations to the Banks arising under this Agreement or the other Loan
Documents.

§12.4      Remedies.  In case any
one or more of the Events of Default shall have occurred and be continuing, and
whether or not the Banks shall have accelerated the maturity of the Loans
pursuant to §12.1, the Agent on behalf of the Banks may, and upon the request
of the Majority Banks shall, proceed to protect and enforce their rights and
remedies under this Agreement, the Notes or any of the other Loan Documents by
suit in equity, action at law or other appropriate proceeding, whether for the
specific performance of any covenant or agreement contained in this Agreement
and the other Loan Documents or any instrument pursuant to which the
Obligations are evidenced, including to the full extent permitted by applicable
law the obtaining of the ex  parte appointment of a receiver, and,
if such amount shall have become due, by declaration or otherwise, proceed to
enforce the payment thereof or any other legal or equitable right.  No remedy herein conferred upon the Agent or
the holder of any Note is intended to be exclusive of any other remedy and each
and every remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute or any other provision of law. 
In the event that all or any portion of the Obligations is collected by
or through an attorney-at-law, the Borrower shall pay all costs of collection
including, but not limited to, reasonable attorneys’ fees.

§12.5      Distribution of Proceeds.  In the event
that, following the occurrence or during the continuance of any Event of
Default, any monies are received in connection with the enforcement of any of
the Loan Documents, or otherwise with respect to the realization upon any
collateral or any of the assets of Borrower or Guarantors, such monies shall be
distributed for application as follows:

(a)           First, to the payment of, or (as the case
may be) the reimbursement of, the Agent for or in respect of all reasonable
costs, expenses, disbursements and losses which shall have been incurred or
sustained by the Agent to protect or preserve the Pledged Collateral or in
connection with the collection of such monies by the Agent, for the exercise,
protection or enforcement by the Agent of all or any of the rights, remedies,
powers and privileges of the Agent under this Agreement or any of the other
Loan Documents or in support of any provision of adequate indemnity to the
Agent against any taxes or liens which by law shall have, or may have, priority
over the rights of the Agent to such monies;

(b)           Second, to all other Obligations in such
order or preference as the Majority Banks shall determine; provided, however,
that (i) Swing Loans shall be repaid first, (ii) distributions in respect of
such Obligations shall be made pari passu among Obligations with respect to the
Agent’s fee payable pursuant to §4.3 and all other Obligations, (iii) in the
event that any Bank shall have wrongfully failed or refused to make an advance
under §2.7, §2.11(d) or §2.12(f) and such failure or refusal shall be
continuing, advances made by other Banks during the pendency of such failure or
refusal shall be entitled to be repaid as to principal and accrued interest in
priority to the other Obligations described in this subsection (b), and
(iv) Obligations owing to the Banks with respect to each type of
Obligation such as interest, principal, fees and expenses (but excluding the
Swing Loans), shall be made among the Banks pro rata; and provided, further
that the Majority Banks may in their discretion make proper allowance to take
into account any Obligations not then due and payable; and

(c)           Third, the excess, if any, shall be
returned to the Borrower or to such other Persons as are entitled thereto.

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§13.        SETOFF.

Regardless of the
adequacy of any collateral, during the continuance of any Event of Default, any
deposits (general or specific, time or demand, provisional or final, regardless
of currency, maturity, or the branch of where such deposits are held) or other
sums credited by or due from any of the Banks to the Borrower or Guarantors and
any securities or other assets of the Borrower or Guarantors in the possession
of such Bank may be applied to or set off against the payment of Obligations of
such Person, now existing or hereafter arising, of such Person to such Bank;
provided that no Bank shall exercise such right of setoff without the prior
approval of the Agent.  Each of the Banks
agrees with each other Bank that if such Bank shall receive from the Borrower
or Guarantors, whether by voluntary payment, exercise of the right of setoff,
or otherwise, and shall retain and apply to the payment of the Note or Notes
held by such Bank (but excluding the Swing Loan Note) any amount in excess of
its ratable portion of the payments received by all of the Banks with respect
to the Notes held by all of the Banks, such Bank will make such disposition and
arrangements with the other Banks with respect to such excess, either by way of
distribution, pro  tanto assignment of claims, subrogation or
otherwise as shall result in each Bank receiving in respect of the Notes held
by it its proportionate payment as contemplated by this Agreement; provided
that if all or any part of such excess payment is thereafter recovered from
such Bank, such disposition and arrangements shall be rescinded and the amount
restored to the extent of such recovery, but without interest.

§14.        THE
AGENT.

§14.1      Authorization. 
The Agent is authorized to take such action on behalf of each of the
Banks and to exercise all such powers as are hereunder and under any of the
other Loan Documents and any related documents delegated to the Agent, together
with such powers as are reasonably incident thereto, provided that no duties or
responsibilities not expressly assumed herein or therein shall be implied to
have been assumed by the Agent.  The
obligations of Agent hereunder are primarily administrative in nature, and
nothing contained in this Agreement, or any of the other Loan Documents shall
be construed to constitute the Agent as a trustee for any Bank or to create an
agency or fiduciary relationship.  Agent
shall act as the contractual representative of the Banks hereunder, and
notwithstanding the use of the term “Agent”, it is understood and agreed that
the Agent shall not have any fiduciary duties or responsibilities to any Bank
by reason of this Agreement or any other Loan Document and is acting as an
independent contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Loan Documents.  The Borrower and any other Person shall be
entitled to conclusively rely on a statement from the Agent that it has the
authority to act for and bind the Banks pursuant to this Agreement and the
other Loan Documents.

§14.2      Employees
and Agents.  The Agent may exercise its powers and execute
its duties by or through employees or agents and shall be entitled to take, and
to rely on, advice of counsel concerning all matters pertaining to its rights
and duties under this Agreement and the other Loan Documents. The Agent may
utilize the services of such Persons as the Agent may reasonably determine, and
all reasonable fees and expenses of any such Persons shall be paid by the
Borrower.

§14.3      No
Liability.  Neither the Agent nor any of its
shareholders, directors, officers or employees nor any other Person assisting
them in their duties nor any agent, or employee thereof, shall be liable for
any waiver, consent or approval given or any action taken, or omitted to be taken,
in good faith by it or them hereunder or under any of the other Loan Documents,
or in connection herewith or therewith, or be responsible for the consequences
of any oversight or error of judgment whatsoever, except that the Agent or such
other Person, as the case may be, shall be liable for losses due to its willful
misconduct or gross negligence as finally determined by a court of competent
jurisdiction after the expiration of all applicable appeal periods.  The Agent shall not be deemed to have knowledge
or notice

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of the occurrence
of any Default or Event of Default, except with respect to defaults in the
payment of principal, interest and fees required to be paid to the Agent for
the account of the Banks, unless the Agent has received notice from a Bank or
the Borrower referring to the Loan Documents and describing with reasonable
specificity such Default or Event of Default and stating that such notice is a “notice
of default”.

§14.4      No
Representations.  The Agent shall not be responsible for the execution
or validity or enforceability of this Agreement, the Notes, any of the other
Loan Documents or any instrument at any time constituting, or intended to
constitute, collateral security for the Notes, or for the value of any such
collateral security or for the validity, enforceability or collectability of
any such amounts owing with respect to the Notes, or for any recitals or
statements, warranties or representations made herein, or any agreement,
instrument or certificate delivered in connection therewith or in any of the
other Loan Documents or in any certificate or instrument hereafter furnished to
it by or on behalf of the Borrower or Guarantors, or be bound to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
covenants or agreements herein or in any other of the Loan Documents.  The Agent shall not be bound to ascertain
whether any notice, consent, waiver or request delivered to it by the Borrower
or the Guarantors or any holder of any of the Notes shall have been duly
authorized or is true, accurate and complete. 
The Agent has not made nor does it now make any representations or
warranties, express or implied, nor does it assume any liability to the Banks,
with respect to the creditworthiness or financial condition of the Borrower,
the Guarantors or any of their respective Subsidiaries or the value of the
Pledged Collateral or any of the assets of Borrower, the Guarantors or any of
their respective Subsidiaries.  Each Bank
acknowledges that it has, independently and without reliance upon the Agent or
any other Bank, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement.  Each Bank also acknowledges
that it will, independently and without reliance upon the Agent or any other
Bank, based upon such information and documents as it deems appropriate at the
time, continue to make its own credit analysis and decisions in taking or not
taking action under this Agreement and the other Loan Documents.  Agent’s Special Counsel has only represented
Agent and KeyBank in connection with the Loan Documents and the only
attorney-client relationship or duty of care is between Agent’s Special Counsel
and Agent or KeyBank.  Each Bank has been
independently represented by separate counsel on all matters regarding the Loan
Documents.

§14.5      Payments.

(a)           A payment by the
Borrower or the Guarantors to the Agent hereunder or under any of the other
Loan Documents for the account of any Bank shall constitute a payment to such
Bank.  The Agent agrees to distribute to
each Bank not later than one Business Day after the Agent’s receipt of good
funds, determined in accordance with the Agent’s customary practices, such Bank’s
pro rata share of payments received by the Agent for the account of the Banks
except as otherwise expressly provided herein or in any of the other Loan
Documents.  In the event that the Agent
fails to distribute such amounts within one Business Day as provided above, the
Agent shall pay interest on such amount at a rate per annum equal to the
Federal Funds Effective Rate from time to time in effect.

(b)           If in the opinion of
the Agent the distribution of any amount received by it in such capacity
hereunder, under the Notes or under any of the other Loan Documents might
involve it in liability, it may refrain from making distribution until its
right to make distribution shall have been adjudicated by a court of competent
jurisdiction.  If a court of competent
jurisdiction shall adjudge that any amount received and distributed by the
Agent is to be repaid, each Person to whom any such distribution shall have
been made shall either repay to the Agent its proportionate share of the amount
so adjudged to be repaid or shall pay over the same in such manner and to such
Persons as shall be determined by such court.

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(c)           Notwithstanding
anything to the contrary contained in this Agreement or any of the other Loan
Documents, any Bank that fails (i) to make available to the Agent its pro rata
share of any Loan or participation in a Letter of Credit or Swing Loan, (ii) to
comply with the provisions of §13 with respect to making dispositions and
arrangements with the other Banks, where such Bank’s share of any payment
received, whether by setoff or otherwise, is in excess of its pro rata share of
such payments due and payable to all of the Banks, in each case as, when and to
the full extent required by the provisions of this Agreement, or (iii)  to perform any other obligation within the
time period specified for performance, or if no time period is specified, if
such failure continues for a period of five (5) Business Days after notice from
the Agent, shall be deemed delinquent (a “Delinquent Bank”) and shall be deemed
a Delinquent Bank until such time as such delinquency is satisfied.  In addition to the rights and remedies that
may be available to the Agent at law and in equity, a Delinquent Bank’s right
to participate in the administration of the Loan Documents, including, without
limitation, any rights to consent to or direct any action or inaction of the
Agent pursuant to this Agreement or otherwise, or to be taken into account in
the calculation of Majority Banks or Required Banks or any matter requiring
approval of all of the Banks, shall be suspended while such Bank is a
Delinquent Bank.  A Delinquent Bank shall
be deemed to have assigned any and all payments due to it from the Borrower and
the Guarantors, whether on account of outstanding Loans, interest, fees or
otherwise, to the remaining nondelinquent Banks for application to, and
reduction of, their respective pro rata shares of all outstanding Loans.  The Delinquent Bank hereby authorizes the
Agent to distribute such payments to the nondelinquent Banks in proportion to
their respective pro rata shares of all outstanding Loans.  The provisions of this Section shall apply
and be effective regardless of whether an Event of Default occurs and is then
continuing, and notwithstanding (i) any other provision of this Agreement to
the contrary or (ii) any instruction of Borrower as to its desired application
of payments.  The Agent shall be entitled
to (i) withhold or set off, and to apply to the payment of the obligations of
any Delinquent Bank any amounts to be paid to such Delinquent Bank under this
Agreement, (ii) to collect interest from such Bank for the period from the date
on which the payment was due at the rate per annum equal to the Federal Funds
Effective Rate plus two percent (2%), for each day during such period, and
(iii) bring an action or suit against such Delinquent Bank in a court of
competent jurisdiction to recover the defaulted obligations of such Delinquent
Bank.  A Delinquent Bank shall be deemed
to have satisfied in full a delinquency when and if, as a result of application
of the assigned payments to all outstanding Loans of the nondelinquent Banks or
as a result of other payments by the Delinquent Banks to the nondelinquent
Banks, the Banks’ respective pro rata shares of all outstanding Loans have
returned to those in effect immediately prior to such delinquency and without
giving effect to the nonpayment causing such delinquency.

§14.6      Holders
of Notes.  Subject to the terms of Article 18, the Agent
may deem and treat the payee of any Note as the absolute owner or purchaser
thereof for all purposes hereof until it shall have been furnished in writing
with a different name by such payee or by a subsequent holder, assignee or
transferee.

§14.7      Indemnity. 
The Banks ratably hereby agree to indemnify and hold harmless the Agent
from and against any and all claims, actions and suits (whether groundless or
otherwise), losses, damages, costs, expenses (including any expenses for which
the Agent has not been reimbursed by the Borrower as required by §15), and
liabilities of every nature and character arising out of or related to this
Agreement, the Notes or any of the other Loan Documents or the transactions
contemplated or evidenced hereby or thereby, or the Agent’s actions taken
hereunder or thereunder, except to the extent that any of the same shall be
directly caused by the Agent’s willful misconduct or gross negligence as
finally determined by a court of competent jurisdiction after the expiration of
all applicable appeal periods.

§14.8      Agent
as Bank.  In its individual capacity, the Bank acting
as the Agent shall have the same obligations and the same rights, powers and
privileges in respect to its Commitment and the Loans made by it, and as the
holder of any of the Notes as it would have were it not also the Agent.

 66
 

§14.9      Resignation. 
Subject to the terms of §18.1, the Agent may resign at any time by
giving 30 calendar days’ prior written notice thereof to the Banks and the
Borrower.  Any such resignation may at
Agent’s option also constitute Agent’s resignation as Issuing Lender and Swing
Loan Bank.  The Majority Banks shall have
the right to remove the Agent in the event of the Agent’s gross negligence or
willful misconduct.  Upon any such
resignation or removal, the Majority Banks, subject to the terms of §18.1,
shall have the right to appoint as a successor Agent and, if applicable,
Issuing Lender and Swing Loan Bank, any Bank or any bank whose senior debt
obligations are rated not less than “A” or its equivalent by Moody’s or not
less than “A” or its equivalent by S&P and which has a net worth of not
less than $500,000,000.  Unless an Event
of Default shall have occurred and be continuing, such successor Agent and, if
applicable, Issuing Lender and Swing Loan Bank (and any successor Agent appointed
pursuant to the following sentence) shall be reasonably acceptable to the
Borrower.  If no successor Agent shall
have been appointed and shall have accepted such appointment within thirty (30)
days after the retiring Agent’s giving of notice of resignation, then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent, which
shall be a bank whose debt obligations are rated not less than “A” or its
equivalent by Moody’s or not less than “A” or its equivalent by S&P and
which has a net worth of not less than $500,000,000.  Upon the acceptance of any appointment as
Agent and, if applicable, Issuing Lender and Swing Loan Bank, hereunder by a
successor Agent and, if applicable, Issuing Lender and Swing Loan Bank, such
successor Agent and, if applicable, Issuing Lender and Swing Loan Bank, shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Agent and, if applicable, Issuing Lender
and Swing Loan Bank, and the retiring or removed Agent and, if applicable,
Issuing Lender and Swing Loan Bank, shall be discharged from its duties and
obligations hereunder as Agent and, if applicable, Issuing Lender and Swing
Loan Bank.  After any retiring or removed
Agent’s resignation or removal, the provisions of this Agreement and the other
Loan Documents shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent,
Issuing Lender or Swing Loan Bank.  Upon
any change in the Agent under this Agreement, the resigning or removed Agent
shall execute such assignments of and amendments to the Loan Documents as may
be necessary to substitute the successor Agent for the resigning or removed
Agent.  If the resigning Agent shall also
resign as the Issuing Lender, such successor Agent shall issue letters of
credit in substitution for the Letters of Credit, if any, outstanding at the
time of such succession or shall make other arrangements satisfactory to the
current Issuing Lender with respect to such Letters of Credit

§14.10   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 Obligations shall have occurred, the Agent may and, if
so requested by the Majority Banks and the Banks have provided to the Agent
such additional indemnities and assurances in accordance with their respective
Commitment Percentages against expenses and liabilities as the Agent may
reasonably request, shall proceed to enforce the provisions of the Security Documents
authorizing the sale or other disposition of the Pledged Collateral and
exercise all or any legal and equitable and other rights or remedies as it may
have.  The Majority Banks may direct the
Agent in writing as to the method and the extent of any such exercise, the
Banks hereby agreeing to indemnify and hold the Agent harmless in accordance
with their respective Commitment Percentages from all liabilities incurred in
respect of all actions taken or omitted in accordance with such directions, provided
that the Agent need not comply with any such direction to the extent that the
Agent reasonably believes the Agent’s compliance with such direction to be
unlawful in any applicable jurisdiction or commercially unreasonable under the
UCC as enacted in any applicable jurisdiction.

§14.11   Bankruptcy. 
In the event a bankruptcy or other insolvency proceeding is commenced by
or against Borrower or any Guarantor with respect to the Obligations, the Agent
shall have the sole and exclusive right to file and pursue a joint proof claim
on behalf of all Banks.  Any votes with
respect to such claims or otherwise with respect to such proceedings shall be
subject to the vote of the Majority

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Banks, Required
Banks or all of the Banks as required by this Agreement.  Each Bank irrevocably waives its right to
file or pursue a separate proof of claim in any such proceedings unless Agent
fails to file such claim within thirty (30) days after receipt of written
notice from the Banks requesting that Agent file such proof of claim.

§14.12   Approvals. 
If consent is required for some action under this Agreement, or except
as otherwise provided herein an approval of the Banks, the Majority Banks or
the Required Banks is required or permitted under this Agreement, each Bank
agrees to give the Agent, within ten (10) days of receipt of the request for
action together with all reasonably requested information related thereto (or
such lesser period of time required by the terms of the Loan Documents), notice
in writing of approval or disapproval (collectively “Directions”) in respect of
any action requested or proposed in writing pursuant to the terms hereof.  To the extent that any Bank does not approve
any recommendation of Agent, such Bank shall in such notice to Agent describe
the actions that would be acceptable to such Bank.  If consent is required for the requested
action, any Bank’s failure to respond to a request for Directions within the
required time period shall be deemed to constitute a Direction to take such
requested action.  In the event that any
recommendation is not approved by the requisite number of Banks and a
subsequent approval on the same subject matter is requested by Agent, then for
the purposes of this paragraph each Bank shall be required to respond to a
request for Directions within five (5) Business Days of receipt of such
request.  Agent and each Bank shall be
entitled to assume that any officer of the other Banks delivering any notice,
consent, certificate or other writing is authorized to give such notice, consent,
certificate or other writing unless Agent and such other Banks have otherwise
been notified in writing.

§14.13   Borrower
not Beneficiary.  Except for the provisions of §14.9 relating
to the appointment of a successor Agent, the provisions of this §14 are solely
for the benefit of the Agent and the Banks, may not be enforced by Borrower or
any Guarantor, and except for the provisions of §14.9, may be modified or
waived without the approval or consent of Borrower and Guarantors.

§15.        EXPENSES.

The Borrower agrees to
pay (a) the reasonable costs of producing and reproducing this Agreement, the
other Loan Documents and the other agreements and instruments mentioned herein,
(b) any taxes (including any interest and penalties in respect thereto)
payable by the Agent or any of the Banks (other than Excluded Taxes), including
any recording, mortgage, documentary or intangibles taxes in connection with
the Loan Documents, or other taxes payable on or with respect to the
transactions contemplated by this Agreement, including any such taxes payable
by the Agent or any of the Banks after the Closing Date (the Borrower hereby
agreeing to indemnify the Agent and each Bank with respect thereto), (c) the
reasonable fees, expenses and disbursements of the counsel to the Agent and any
local counsel to the Agent incurred in connection with the preparation of the
Loan Documents and other instruments mentioned herein (excluding, however, the
preparation of agreements evidencing participations granted under §18.4), each
closing hereunder, and amendments, modifications, approvals, consents or
waivers hereto or hereunder, (d) the reasonable fees, expenses and
disbursements of the Agent incurred by the Agent in connection with the
preparation of the Loan Documents and other instruments mentioned herein, and
the making of each advance hereunder and the issuance of Letters of Credit,
(e) all reasonable expenses (including reasonable attorneys’ fees and
costs, and the fees and costs of appraisers, engineers, investment bankers or
other experts retained by any Bank or the Agent) incurred by any Bank or the
Agent in connection with (i) the enforcement of or preservation of rights under
any of the Loan Documents against the Borrower or Guarantors or the
administration thereof after the occurrence of a Default or Event of Default
and (ii) any litigation, proceeding or dispute whether arising hereunder or
under any of the other Loan Documents, in any way related to the Agent’s or any
of the Bank’s relationship with the Borrower or Guarantors, (f) all reasonable
fees, expenses and disbursements of the Agent incurred in connection with UCC
searches, UCC filings, title rundowns or title searches, (g) all

 68
 

reasonable fees,
expenses and disbursements (including reasonable attorneys’ fees and costs),
which may be incurred by KeyBank and the Agent in connection with the execution
and delivery of this Agreement and the other Loan Documents, (h) all reasonable
attorneys’ fees and costs which may be incurred by KeyBank and Lead Arranger in
connection with the initial syndication of the Loan and the assignment by
KeyBank of interests in the Loan pursuant to §18.1, and (i) all expenses
relating to the use of Intralinks, SyndTrak or any other similar system for the
dissemination and sharing of documents and information.  The covenants of this §15 shall survive
payment or satisfaction of payment of amounts owing with respect to the Notes.

§16.        INDEMNIFICATION.

The Borrower agrees to
indemnify and hold harmless the Agent, the Banks and the Lead Arranger and each
director, officer, employee, agent, Affiliate and Person who controls the Agent
or any Bank from and against any and all claims, actions and suits, whether
groundless or otherwise, and from and against any and all liabilities, losses,
damages and expenses of every nature and character arising out of or relating
to this Agreement or any of the other Loan Documents or the transactions
contemplated hereby and thereby including, without limitation, (a) any leasing
fees and any brokerage, finders or similar fees asserted against any Person
indemnified under this §16 based upon any agreement, arrangement or action made
or taken, or alleged to have been made or taken, by or on behalf of the
Borrower, a Guarantor or any of their respective Subsidiaries, (b) any condition
of any of the Real Estate or Unencumbered Borrowing Base Assets, (c) any actual
or proposed use by the Borrower or Guarantors of the proceeds of any of the
Loans or Letters of Credit, (d) any actual or alleged infringement of any
patent, copyright, trademark, service mark or similar right of any of the
Borrower, the Guarantors or any of their respective Subsidiaries, (e) the
Borrower and Guarantors entering into or performing this Agreement or any of
the other Loan Documents, (f) any actual or alleged violation of any law,
ordinance, code, order, rule, regulation, approval, consent, permit or license
relating to the Real Estate or Unencumbered Borrowing Base Assets, (g) any use
of Intralinks, SyndTrak or any other system for the dissemination and sharing
of documents and information, and (h) with respect to the Borrower, the
Guarantors and their respective Subsidiaries and their respective properties
and assets, the violation of any Environmental Law, the release or threatened
release of any Hazardous Substances or any action, suit, proceeding or
investigation brought or threatened with respect to any Hazardous Substances
(including, but not limited to claims with respect to wrongful death, personal
injury or damage to property), in each case including, without limitation, the
reasonable fees and disbursements of counsel incurred in connection with any
such investigation, litigation or other proceeding; provided, however, that the
Borrower shall not be obligated under this §16 to indemnify any Person for
liabilities arising from such Person’s own gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction after the
expiration of all applicable appeal periods. 
In litigation, or the preparation therefor, the Banks, the Agent and the
Lead Arranger shall be entitled to select a single law firm as their own
counsel and, in addition to the foregoing indemnity, the Borrower agrees to pay
promptly the reasonable fees and expenses of such counsel.  If, and to the extent that the obligations of
the Borrower under this §16 are unenforceable for any reason, the Borrower
hereby agrees to make the maximum contribution to the payment in satisfaction
of such obligations which is permissible under applicable law.  The provisions of this §16 shall survive the
repayment of the Loans and the termination of the obligations of the Banks
hereunder.

§17.        SURVIVAL
OF COVENANTS, ETC.

All covenants,
agreements, representations and warranties made herein, in the Notes, in any of
the other Loan Documents or in any documents or other papers delivered by or on
behalf of the Borrower, the Guarantors or any of their respective Subsidiaries
pursuant hereto or thereto shall be deemed to have been relied upon by the
Banks and the Agent, notwithstanding any investigation heretofore or hereafter
made by any of them, and shall survive the making by the Banks of any of the
Loans, as herein contemplated,

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and shall continue
in full force and effect so long as any amount due under this Agreement or the
Notes or any of the other Loan Documents remains outstanding or any Letters of
Credit remain outstanding or any Bank has any obligation to make any Loans or
issue Letters of Credit.  The
indemnification obligations of the Borrower provided herein and the other Loan
Documents shall survive the full repayment of amounts due and the termination
of the obligations of the Banks hereunder and thereunder to the extent provided
herein and therein.  All statements
contained in any certificate or other paper delivered to any Bank or the Agent
at any time by or on behalf of the Borrower, the Guarantors or any of their
respective Subsidiaries pursuant hereto or in connection with the transactions
contemplated hereby shall constitute representations and warranties by such
Person hereunder.

§18.        ASSIGNMENT
AND PARTICIPATION.

§18.1      Conditions
to Assignment by Banks.  Except as
provided herein, each Bank may assign to one or more banks or other lending
institutions all or a portion of its interests, rights and obligations under
this Agreement (including all or a portion of its Commitment Percentage and
Commitment and the same portion of the Loans at the time owing to it, and the
Notes held by it); provided that (a) the Agent, the Issuing Lender and,
provided no Event of Default shall have occurred and be continuing, the
Borrower shall have given its prior written consent to such assignment, which
consent shall not be unreasonably withheld, conditioned or delayed (provided
that such consent shall not be required for any assignment to another Bank, to
a Bank Affiliate, an Approved Fund or to a Wholly Owned Subsidiary of such Bank
provided that such assignee shall remain a Wholly Owned Subsidiary of such
Bank), (b) each such assignment shall be of a constant, and not a varying,
percentage of all the assigning Bank’s rights and obligations under this
Agreement, (c) the parties to such assignment shall execute and deliver to the
Agent, for recording in the Register (as hereinafter defined), an Assignment
and Acceptance Agreement (an “Assignment and Acceptance Agreement”) in the form
of Exhibit E hereto, together with any Notes subject to such assignment,
(d) in no event shall any assignment be to any Person controlling, controlled
by or under common control with, or which is not otherwise free from influence
or control by, the Borrower, the Guarantors or any of their respective
Subsidiaries or Affiliates, (e) such assignee shall acquire an interest in the
Commitments of not less than $5,000,000, (f) the assignor shall assign its
entire interest in the Commitments or retain an interest in the Commitments of
not less than $5,000,000, and (g) such assignee shall deliver to the Agent the
forms required by §4.4(c) indicating that payments to such assignee as of the
effectiveness of such assignment are not subject to withholding.  Upon such execution, delivery, acceptance and
recording, of such Assignment and Acceptance Agreement, (i) the assignee
thereunder shall be a party hereto and all other Loan Documents executed by the
Banks and, to the extent provided in such assignment, have the rights and
obligations of a Bank hereunder, and (ii) the assigning Bank shall, to the
extent provided in such assignment and upon payment to the Agent of the
registration fee referred to in §18.2, be released from its obligations under
this Agreement.  In connection with each
assignment, the assignee shall represent and warrant to the Agent, the assignor
and each other Bank as to whether such assignee is controlling, controlled by,
under common control with or is not otherwise free from influence or control
by, the Borrower, the Guarantors or any of their respective Subsidiaries or
Affiliates.  Upon any such assignment,
the Agent may unilaterally amend Schedule 1 to reflect any such
assignment.  Furthermore, in connection
with the syndication of the Loan by Agent and Lead Arranger, Borrower agrees to
assist Agent and Lead Arranger actively in achieving a timely syndication that
is reasonably satisfactory to Agent and Lead Arranger, such assistance to
include, among other things, (i) direct contact during the syndication between
Borrower’s senior officers, representatives and advisors, on the one hand, and
prospective Banks, on the other hand at such times and places as Agent and Lead
Arranger may reasonably request, (ii) providing to Agent and Lead Arranger all
financial and other information with respect to Borrower and the transactions
contemplated hereunder that Agent and Lead Arranger may reasonably request,
including but not limited to financial projections relating to the foregoing,
and (iii) assistance in the preparation of a confidential information
memorandum and other marketing materials to be used in connection with the
syndication.

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§18.2      Register. 
The Agent, for itself and on behalf of Borrower, shall maintain a copy
of each assignment delivered to it and a register or similar list (the “Register”)
for the recordation of the names and addresses of the Banks and the Commitment
Percentages of, and principal amount of the Loans owing to the Banks from time
to time.  The entries in the Register
shall be conclusive, in the absence of manifest error, and the Borrower, the
Agent and the Banks may treat each Person whose name is recorded in the
Register as a Bank hereunder for all purposes of this Agreement.  The Register shall be available for
inspection by the Borrower and the Banks at any reasonable time and from time
to time upon reasonable prior notice. 
Upon each such recordation, the assigning Bank agrees to pay to the
Agent a registration fee in the sum of $3,500.

§18.3      New
Notes.  Upon its receipt of an Assignment and
Acceptance Agreement executed by the parties to such assignment, together with
each Note subject to such assignment, the Agent shall (a) record the
information contained therein in the Register, and (b) give prompt notice
thereof to the Borrower and the Banks (other than the assigning Bank).  Within five (5) Business Days after receipt
of such notice, the Borrower, at its own expense, shall execute and deliver to
the Agent, in exchange for each surrendered Note, a new Note to the order of
such assignee in an amount equal to the amount assumed by such assignee
pursuant to such Assignment and Acceptance Agreement and, if the assigning Bank
has retained some portion of its obligations hereunder, a new Note to the order
of the assigning Bank in an amount equal to the amount retained by it
hereunder.  Such new Notes shall provide
that they are replacements for the surrendered Notes, shall be in an aggregate
principal amount equal to the aggregate principal amount of the surrendered
Notes, shall be dated the effective date of such assignment and shall otherwise
be in substantially the form of the assigned Notes.  The surrendered Notes shall be canceled and
returned to the Borrower.

§18.4      Participations. 
Each Bank may sell participations to one or more banks or other entities
in all or a portion of such Bank’s rights and obligations under this Agreement
and the other Loan Documents; provided that (a) the Agent and, provided
no Event of Default shall have occurred and be continuing, the Borrower shall
have given its prior written consent to such participant, which consent shall
not be unreasonably withheld, conditioned or delayed, (b) any such sale or
participation shall not affect the rights and duties of the selling Bank
hereunder to the Borrower, (c) such participation shall not entitle such
participant to any rights or privileges under this Agreement or any Loan
Documents, including without limitation, the right to approve waivers,
amendments or modifications, (d) such participant shall have no direct rights
against the Borrower or Guarantors except the rights granted to the Banks
pursuant to §13, (e) such sale is effected in accordance with all applicable
laws, and (f) such participant shall not be a Person controlling, controlled by
or under common control with, or which is not otherwise free from influence or
control by the Borrower, the Guarantors or any of their respective Subsidiaries
or Affiliates.  Any Bank which sells a
participation shall promptly notify the Agent and the Borrower of such sale and
the identity of the purchaser of such interest.

§18.5      Pledge
by Bank.  Any Bank may at any time pledge all or any
portion of its interest and rights under this Agreement (including all or any
portion of its Note) to any of the twelve Federal Reserve Banks organized under
§4 of the Federal Reserve Act, 12 U.S.C. §341 or, with Agent’s prior written
approval, to another Person.  No such
pledge or the enforcement thereof shall release the pledgor Bank from its obligations
hereunder or under any of the other Loan Documents and no such pledge shall
have the effect of transferring any voting rights such Bank may have hereunder
or under any other Loan Documents.

§18.6      No
Assignment by Borrower.  The Borrower
shall not assign or transfer any of its rights or obligations under any of the
Loan Documents without the prior written consent of each of the Banks.

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§18.7      Disclosure. 
Borrower agrees to promptly cooperate with any Bank in connection with
any proposed assignment or participation of all or any portion of its
Commitment.  The Borrower agrees that in
addition to disclosures made in accordance with standard banking practices any
Bank may disclose, subject to the terms of this §18.7, information obtained by
such Bank pursuant to this Agreement to assignees or participants and potential
assignees or participants hereunder. 
Each Bank agrees for itself that it shall use reasonable efforts in
accordance with its customary procedures to hold confidential all non-public
information obtained from GKK, Borrower or any other Guarantor that has been
identified in writing as confidential by any of them, and shall use reasonable
efforts in accordance with its customary procedures to not disclose such
information to any other Person, it being understood and agreed that,
notwithstanding the foregoing, a Bank may make (a) disclosures to its
participants (provided such Persons are advised of the provisions of this
§18.7), (b) disclosures to its directors, officers, employees, Affiliates, accountants,
appraisers, legal counsel and other professional advisors of such Bank
(provided that such Persons who are not employees of such Bank are advised of
the provision of this §18.7), (c) disclosures customarily provided or
reasonably required by any potential or actual bona fide assignee, transferee
or participant or their respective directors, officers, employees, Affiliates,
accountants, appraisers, legal counsel and other professional advisors in
connection with a potential or actual assignment or transfer by such Bank of
any Loans or any participations therein (provided such Persons are advised of
the provisions of this §18.7), (d) disclosures to bank regulatory authorities
or self-regulatory bodies with jurisdiction over such Bank, or (e) disclosures
required or requested by any other governmental authority or representative
thereof or pursuant to legal process; provided that, unless specifically
prohibited by applicable law or court order, each Bank shall notify Borrower of
any request by any governmental authority or representative thereof prior to
disclosure (other than any such request in connection with any examination of
such Bank by such government authority) for disclosure of any such non-public
information prior to disclosure of such information.  In addition, each Bank may make disclosure of
such information to any contractual counterparty in swap agreements or such
contractual counterparty’s professional advisors (so long as such contractual
counterparty or professional advisors agree to be bound by the provisions of
this §18.7).  Non-public information
shall not include any information which is or subsequently becomes publicly
available other than as a result of a disclosure of such information by a Bank,
or prior to the delivery to such Bank is within the possession of such Bank if
such information is not known by such Bank to be subject to another
confidentiality agreement with or other obligations of secrecy to GKK, the
Borrower or the other Guarantors, or is disclosed with the prior approval of
Borrower.  Nothing herein shall prohibit
the disclosure of non-public information to the extent necessary to enforce the
Loan Documents.

§18.8      Title
Agents.  The Titled Agents shall not have any
additional rights or obligations under the Loan Documents, except for those
rights, if any, as a Bank.

§18.9      Mandatory
Assignment.  In the event Borrower requests that certain
amendments, modifications or waivers be made to this Agreement or any of the
other Loan Documents which request is approved by Agent but is not approved by
one or more of the Banks (any such non-consenting Bank shall hereafter be
referred to as the “Non-Consenting Bank”), then, within thirty (30) days after
Borrower’s receipt of notice of such disapproval by such Non-Consenting Bank,
Borrower shall have the right as to such Non-Consenting Bank, to be exercised
by delivery of written notice delivered to the Agent and the Non-Consenting
Bank within thirty (30) days of receipt of such notice, to elect to cause the
Non-Consenting Bank to transfer its entire Commitment.  The Agent shall promptly notify the remaining
Banks that each of such Banks shall have the right, but not the obligation, to
acquire a portion of the Commitment, pro rata based upon their relevant
Commitment Percentages, of the Non-Consenting Bank (or if any of such Banks
does not elect to purchase its pro rata share, then to such remaining Banks in
such proportion as approved by the Agent). 
In the event that the Banks do not elect to acquire all of the
Non-Consenting Bank’s Commitment, then the Agent shall endeavor to find a new
Bank or Banks to acquire such remaining Commitment.  Upon any such purchase of the Commitment of
the

 72
 

Non-Consenting
Bank, the Non-Consenting Bank’s interests in the Obligations and its rights
hereunder and under the Loan Documents shall terminate at the date of purchase,
and the Non-Consenting Bank shall promptly execute and deliver any and all
documents reasonably requested by Agent to surrender and transfer such
interest, including, without limitation, an Assignment and Acceptance Agreement
and such Non-Consenting Bank’s original Note. 
The purchase price to be paid by the acquiring Banks for the
Non-Consenting Bank’s Commitment shall equal the principal owed to such
Non-Consenting Bank, and the Borrower shall pay to such Non-Consenting Bank in
addition thereto and as a condition to such sale any and all other amounts
outstanding and owed by Borrower to the Non-Consenting Bank hereunder or under
any of the other Loan Documents, including all accrued and unpaid interest or
fees which would be owed to such Non-Consenting Bank hereunder or under any of
the other Loan Documents if the Loans were to be repaid in full on the date of
such purchase of the Non-Consenting Bank’s Commitment.

§19.        NOTICES.

Each notice, demand,
election or request provided for or permitted to be given pursuant to this
Agreement (hereinafter in this §19 referred to as “Notice”), but specifically
excluding to the maximum extent permitted by law any notices of the institution
or commencement of foreclosure proceedings, must be in writing and shall be
deemed to have been properly given or served by personal delivery or by sending
same by overnight courier or by depositing same in the United States Mail,
postpaid and registered or certified, return receipt requested, or as expressly
permitted herein, by telecopy and addressed as follows:

If to the Agent or KeyBank:

KeyBank National Association

1200 Abernathy Road, Suite 1550

Atlanta, Georgia 30328

Attn:  Tayven Hike

Telecopy No.:  (770) 510-2195

With a copy to:

McKenna Long & Aldridge LLP

5300 SunTrust Plaza

303 Peachtree Street

Atlanta, Georgia 30308

Attn:  William F. Timmons, Esq.

Telecopy No.:  (404) 527-4198

If to the Borrower:

GKK Capital LP

c/o GKK Manager LLC

420 Lexington Avenue

New York, New York 10170

Attn:  Robert R. Foley

Telecopy No.:  (212) 297-1090

 73
 

With a copy to:

Gramercy Capital Corp.

420 Lexington Avenue

New York, New York 10170

Attn:  Andrew S. Levine

Telecopy No.:  (212) 216-1785

and to the extent
required hereunder, to each other Bank a party hereto at the address for such
party set forth on the signature page for such Bank, and to each other Bank
which may hereafter become a party to this Agreement at such address as may be
designated by such Bank.  Each Notice shall
be effective upon being personally delivered or upon being sent by overnight
courier or upon being deposited in the United States Mail as aforesaid, or if
transmitted by facsimile, upon being sent and confirmation of receipt.  The time period in which a response to such
Notice must be given or any action taken with respect thereto (if any),
however, shall commence to run from the date of receipt if personally delivered
or sent by overnight courier or facsimile (or if sent by facsimile, next
Business Day if received after 5:00 p.m. (Atlanta time) or on a day that is not
a Business Day), or if so deposited in the United States Mail, the earlier of
three (3) Business Days following such deposit or the date of receipt as
disclosed on the return receipt.  Rejection
or other refusal to accept or the inability to deliver because of changed
address for which no notice was given shall be deemed to be receipt of the
Notice sent.  By giving at least fifteen
(15) days prior Notice thereof, the Borrower, a Bank or Agent shall have the
right from time to time and at any time during the term of this Agreement to
change their respective addresses and each shall have the right to specify as
its address any other address within the United States of America.

§20.        RELATIONSHIP.

NEITHER THE AGENT NOR ANY
BANK HAS ANY FIDUCIARY RELATIONSHIP WITH OR FIDUCIARY DUTY TO THE BORROWER, THE
GUARANTORS OR THEIR RESPECTIVE SUBSIDIARIES ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREUNDER AND THEREUNDER, AND THE RELATIONSHIP BETWEEN EACH BANK AND THE
BORROWER IS SOLELY THAT OF A LENDER AND BORROWER, AND NOTHING CONTAINED HEREIN
OR IN ANY OF THE OTHER LOAN DOCUMENTS SHALL IN ANY MANNER BE CONSTRUED AS
MAKING THE PARTIES HERETO PARTNERS, JOINT VENTURERS OR ANY OTHER RELATIONSHIP
OTHER THAN LENDER AND BORROWER.

§21.        GOVERNING
LAW: CONSENT TO JURISDICTION AND SERVICE.

THIS AGREEMENT AND EACH
OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE STATE OF NEW
YORK AND SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1401,
FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
SUCH STATE.  THE BORROWER AND GUARANTORS
AGREE THAT ANY SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR ANY
FEDERAL COURT SITTING THEREIN AND CONSENT TO THE NONEXCLUSIVE JURISDICTION OF
SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE
BORROWER OR GUARANTORS BY MAIL AT THE ADDRESS SPECIFIED IN §19.  NOTHING CONTAINED HEREIN, HOWEVER, SHALL
PREVENT AGENT OR ANY BANK FROM BRINGING ANY SUIT, ACTION OR PROCEEDING OR
EXERCISING ANY RIGHTS UNDER THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS WITHIN
ANY OTHER STATE.  EACH OF THE BORROWER
AND

 74
 

GUARANTORS HEREBY
WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.

§22.        HEADINGS.

The captions in this
Agreement are for convenience of reference only and shall not define or limit
the provisions hereof.

§23.        COUNTERPARTS.

This Agreement and any
amendment hereof may be executed in several counterparts and by each party on a
separate counterpart, each of which when so executed and delivered shall be an
original, and all of which together shall constitute one instrument.  In proving this Agreement it shall not be
necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.

§24.        ENTIRE
AGREEMENT, ETC.

The Loan Documents and
any other documents executed in connection herewith or therewith express the
entire understanding of the parties with respect to the transactions
contemplated hereby.  Neither this
Agreement nor any term hereof may be changed, waived, discharged or terminated,
except as provided in §27.

§25.        WAIVER
OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS.

EACH OF THE BORROWER, THE
GUARANTORS, THE AGENT AND THE BANKS HEREBY WAIVES ITS RIGHT TO A JURY TRIAL
WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION
WITH THIS AGREEMENT, ANY NOTE OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR
OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS.  EXCEPT TO THE EXTENT
EXPRESSLY PROHIBITED BY LAW, THE BORROWER AND THE GUARANTORS EACH HEREBY WAIVES
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES.  THE
BORROWER AND THE GUARANTORS EACH (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY BANK OR THE AGENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH BANK OR THE AGENT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT THE AGENT AND THE BANKS HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH
THEY ARE PARTIES BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS
CONTAINED IN THIS §25.

§26.        DEALINGS
WITH THE BORROWER OR THE GUARANTORS.

The Agent, the Banks and
their affiliates may accept deposits from, extend credit to, invest in, act as
trustee under indentures of, serve as financial advisor of, and generally
engage in any kind of banking, trust or other business with the Borrower, the
Guarantors and their respective Subsidiaries or any of their affiliates
regardless of the capacity of the Agent or the Bank hereunder.  The Banks acknowledge that, pursuant to such
activities, the Agent, a Bank or its affiliates may receive information
regarding such Persons (including information that may be subject to
confidentiality obligations in favor of such Person)

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and acknowledge
that the Agent or such Bank, as applicable, shall be under no obligation to provide
such information to them.

§27.        CONSENTS,
AMENDMENTS, WAIVERS, ETC.

Except as otherwise
expressly provided in this Agreement, any consent or approval required or
permitted by this Agreement may be given and any term of this Agreement or of
any other instrument related hereto or mentioned herein may be amended, and the
performance or observance by the Borrower or Guarantors of any terms of this
Agreement or such other instrument or the continuance of any Default or Event
of Default may be waived (either generally or in a particular instance and
either retroactively or prospectively) with, but only with, the written consent
of the Majority Banks; provided that any modification or waiver of any covenant
contained in §9 (or of any defined term used therein) shall require the written
approval of the Required Banks. 
Notwithstanding the foregoing, none of the following may occur without
the written consent of each Bank:  a
decrease in the rate of interest on the Notes; except as otherwise provided in
this Agreement, a change in the Maturity Date of the Notes; an increase in the
amount of the Commitments of the Banks except pursuant to §2.10 and §18.1; a
forgiveness, reduction or waiver of the principal of any unpaid Loan or any
interest thereon or fee payable under the Loan Documents (other than default
interest); the postponement of any date fixed for any payment of principal of
or interest or fees on the Loans; a decrease of the amount of any fee (other
than late fees) payable to a Bank hereunder; the release of the Borrower, a
Guarantor or the Collateral, except as otherwise permitted hereby or the other
Loan Documents; a change in the manner of distribution of any payments to the
Banks or the Agent; an amendment of the definition of Majority Banks, Required
Banks or of any requirement for consent by all of the Banks; or an amendment of
this §27.  The amount of the Agent’s fee
and the provisions of §14 may not be amended without the written consent of the
Agent.  There shall be no amendment,
modification or waiver of any provision in the Loan Documents with respect to
Swing Loans without the consent of the Swing Loan Bank, nor any amendment,
modification or waiver of any provision in the Loan Documents with respect to
Letters of Credit without the consent of the Issuing Lender.  The Borrower and the Guarantors each agree to
enter into such modifications or amendments of this Agreement or the other Loan
Documents as may be reasonably requested by KeyBank in connection with the
acquisition by each Bank acquiring all or a portion of the Commitment, provided
that no such amendment or modification materially affects or increases any of
the obligations of the Borrower or the Guarantors hereunder.  No waiver shall extend to or affect any
obligation not expressly waived or impair any right consequent thereon.  No course of dealing or delay or omission on
the part of the Agent or any Bank in exercising any right shall operate as a
waiver thereof or otherwise be prejudicial thereto.  No notice to or demand upon the Borrower or
Guarantors shall entitle the Borrower and Guarantors to other or further notice
or demand in similar or other circumstances.

§28.        SEVERABILITY.

The provisions of this
Agreement are severable, and if any one clause or provision hereof shall be
held invalid or unenforceable in whole or in part in any jurisdiction, then
such invalidity or unenforceability shall affect only such clause or provision,
or part thereof, in such jurisdiction, and shall not in any manner affect such
clause or provision in any other jurisdiction, or any other clause or provision
of this Agreement in any jurisdiction.

§29.        TIME
OF THE ESSENCE.

Time is of the essence
with respect to each and every covenant, agreement and obligation of the
Borrower and Guarantors under this Agreement and the other Loan Documents.

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§30.        NO
UNWRITTEN AGREEMENTS.

THE WRITTEN LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.  THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. 
ANY ADDITIONAL TERMS OF THE AGREEMENT BETWEEN THE PARTIES ARE SET FORTH
BELOW.

§31.        REPLACEMENT
OF NOTES.

Upon receipt of evidence
reasonably satisfactory to Borrower of the loss, theft, destruction or
mutilation of any Note, and in the case of any such loss, theft or destruction,
upon delivery of an indemnity agreement reasonably satisfactory to Borrower or,
in the case of any such mutilation, upon surrender and cancellation of the
applicable Note, Borrower will execute and deliver, in lieu thereof, a
replacement Note, identical in form and substance to the applicable Note and
dated as of the date of the applicable Note and upon such execution and
delivery all references in the Loan Documents to such Note shall be deemed to
refer to such replacement Note.

§32.        RIGHTS
OF THIRD PARTIES.

This Agreement and the
other Loan Documents are made and entered into for the sole protection and
legal benefit of the Borrower, the Guarantors, the Banks and the Agent, and
their permitted successors and assigns, and no other Person shall be a direct
or indirect legal beneficiary of, or have any direct or indirect cause of
action or claim in connection with, this Agreement or any of the other Loan
Documents.  All conditions to the
performance of the obligations of the Agent and the Banks under this Agreement,
including the obligation to make Loans and issue Letters of Credit, are imposed
solely and exclusively for the benefit of the Agent and the Banks and no other
Person shall have standing to require satisfaction of such conditions in
accordance with their terms or be entitled to assume that the Agent and the
Banks will refuse to make Loans or issue Letters of Credit in the absence of
strict compliance with any or all thereof and no other Person shall, under any
circumstances, be deemed to be a beneficiary of such conditions, any and all of
which may be freely waived in whole or in part by the Agent and the Banks at
any time if in their sole discretion they deem it desirable to do so.

§33.        PATRIOT
ACT.

Each Bank and the Agent
(for itself and not on behalf of any Bank) hereby notifies the Borrower and
Guarantors that, pursuant to the requirements of the Patriot Act, it is
required to obtain, verify and record information that identifies Borrower, the
Guarantors and their respective Subsidiaries, which information includes names
and addresses and other information that will allow such Bank or the Agent, as
applicable, to identify Borrower, the Guarantors and their respective Subsidiaries
in accordance with the Patriot Act.

[SIGNATURE PAGES FOLLOW]

 77
 

IN
WITNESS WHEREOF,
the undersigned have duly executed this Agreement as of the date first set
forth above.

	
  

  	
   

  	
  BORROWER:

   

  
	
   

  	
   

  	
  GKK CAPITAL LP, a Delaware
  limited

  partnership 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Gramercy Capital Corp., a Maryland corporation,

  its sole general partner 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
								

 

 78
 

 

	
  

  	
   

  	
  BANKS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  KEYBANK NATIONAL ASSOCIATION,

  
	
   

  	
   

  	
  individually and as Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
								

 

	
  KeyBank National Association

  1200 Abernathy Road, Suite 1550

  Atlanta, Georgia 30328

  Attn:  Tayven
  Hike

  Telecopy No.: 
  (770) 510-2195

  	
   

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
								

 

Wells Fargo Bank

40 W 57th Street

New York, NY 10019

Attn:  Joshua A.
Barro

Telecopy No.:  (212) 581-0979

 79

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