Document:

EX-10.1

Exhibit 10.1

POST-PETITION LOAN AND SECURITY AGREEMENT

By and Among

LUMINENT MORTGAGE CAPITAL, INC.,

MAIA MORTGAGE FINANCE STATUTORY

TRUST, MERCURY MORTGAGE FINANCE

STATUTORY TRUST, PROSERPINE, LLC,

SATURN PORTFOLIO MANAGEMENT,

INC., LUMINENT CAPITAL MANAGEMENT,

INC., PANTHEON HOLDING COMPANY,

INC., MINERVA MORTGAGE FINANCE

CORP., MINERVA CDO DELAWARE SPV,

INC., AND OT REALTY TRUST

As Borrowers

-And-

ARCO CAPITAL CORPORATION, LTD.

As Lender

SEPTEMBER 5, 2008

1

ARTICLE I General Definitions

Section 1.1. Definitions

Section 1.2. Interpretive Provision

ARTICLE II Credit Facilities

Section 2.1. Commitment to Provide Loans

Section 2.2. Method of Borrowing

Section 2.3. Interest Rate

Section 2.4. Computation of Interest

Section 2.5. Maturity; Payments

Section 2.6. Reduction of Commitments

Section 2.7. Use of Proceeds

Section 2.8. Evidence of Debt

ARTICLE III Conditions to the Agreement and Loans

Section 3.1. Conditions to the Effectiveness of the Agreement

Section 3.2. Conditions Precedent to Funding

ARTICLE IV Security Interests and Priority Claims

Section 4.1. Security Interests.

Section 4.2. Continuing Liability of the Debtors

Section 4.3. Collections

ARTICLE V Representations and Warranties

Section 5.1. Corporate Existence and Power

Section 5.2. Corporate and Governmental Authorization; Contravention

Section 5.3. Binding Effect

Section 5.4. Ownership and Liens

Section 5.5. Filings

Section 5.6. Litigation

Section 5.7. Regulation U

Section 5.8. Financing Orders.

ARTICLE VI Covenants

Section 6.1. Conduct of Business and Maintenance of Existence

Section 6.2. Compliance with Laws

Section 6.3. Accounting; Inspection of Property, Books and Records

Section 6.4. Maintenance of Security Interests

Section 6.5. Debt

Section 6.6. Restriction on Liens

Section 6.7. Notices

Section 6.8. Transactions with Other Persons

Section 6.9. Use of Proceeds

Section 6.10. Budget Reconciliation

Section 6.11. Plan Support Agreement and Pleadings

Section 6.12. Independence of Covenants

ARTICLE VII Event of Default/Remedies

Section 7.1. Events of Default

Section 7.2. Remedies.

Section 7.3. Payments on Collateral

Section 7.4. Remedies Not Exclusive

Section 7.5. Application of Proceeds

ARTICLE VIII Miscellaneous

Section 8.1. Notices

Section 8.2. No Waivers

Section 8.3. Expenses.

Section 8.4. Amendments and Waivers

Section 8.5. Successors and Assigns; Survival

Section 8.6. New York Law

Section 8.7. Counterparts; Effectiveness

Section 8.8. Waiver of Jury Trial; Submission to Jurisdiction

Section 8.9. Severability

Section 8.10. Entire Agreement; Conflicts

EXHIBITS

	 	 	 
	Exhibit A -

Exhibit B -

	 	Budget

Interim DIP Order

2

POST-PETITION LOAN AND SECURITY AGREEMENT

This POST-PETITION LOAN AND SECURITY AGREEMENT (as amended, supplemented or modified from time
to time, this “Agreement”), dated as of September 5, 2008, by and among Luminent Mortgage Capital,
Inc., a Maryland corporation (“Luminent”), Maia Mortgage Finance Statutory Trust, a Maryland
Business Trust (“Maia”), Mercury Mortgage Finance Statutory Trust, a Maryland Business Trust
(“Mercury”), Proserpine, LLC, a Pennsylvania limited liability company (“Proserpine”), Saturn
Portfolio Management, Inc. (“Saturn”), Luminent Capital Management, Inc. (“Luminent Capital”),
Pantheon Holding Company, Inc., a Delaware corporation (“Pantheon”), Minerva Mortgage Finance
Corp., a Maryland corporation (“Minerva”), Minerva CDO Delaware SPV, Inc., a Delaware corporation
(“Minerva CDO”), and OT Realty Trust, a Maryland real estate investment trust (“OT”, together with
Luminent, MAIA, Mercury, Proserpine, Saturn, Luminent Capital, Pantheon, Minerva, and Minerva CDO,
the “Borrowers” or the “Debtors”), and Arco Capital Corporation Ltd. (the “Lender”).

RECITALS

A. The Debtors have determined that it is in the best interests of their creditors and other
stakeholders that they seek protection under the Bankruptcy Code, 11 U.S.C. §§ 101 et. seq. (the
“Bankruptcy Code”).

B. In connection with the Debtors determination that a reorganization pursuant to Chapter 11
of the Bankruptcy Code is in the best interest of the Debtors, their creditors and estates, the
Debtors prior to the date hereof entered into that certain Plan Support Agreement which sets forth
the principal terms of a plan of reorganization that the Debtors major creditor constituencies
agreed to support.

C. Consistent with the terms of the Plan Support Agreement, on September 5, the Debtors
commenced these bankruptcy proceedings by filing voluntary petitions for relief pursuant to 11
U.S.C. 301.

D. The Debtors have requested that the Lender make Loans available to the Debtors to fund the
Debtors post-petition operations and for certain reorganization expenses.

E. To provide security for the repayment of the Loans made available pursuant hereto and
payment of the other obligations of the Debtors under this Agreement, the Debtors have agreed to
provide the Lender with the following:

(a) an allowed administrative expense claim in each of the Bankruptcy Cases (as defined
herein) pursuant to Section 364(c)(1) of the Bankruptcy Code having priority over all
administrative expenses of the kind specified in or arising under any sections of the
Bankruptcy Code (including, without limitation, Sections 105, 326, 328, 330, 331, 364, 503(b),
507(a), 507(b), 546(c) or 726 thereof);

(b) a perfected first priority Lien, pursuant to Section 364(c)(2) of the Bankruptcy Code,
on all property of the Debtors which was unencumbered by any Lien as of the Petition Date; and

(c) a perfected Lien, pursuant to Section 364(c)(3) of the Bankruptcy Code, upon all
property of the Debtors, junior to existing valid, perfected, enforceable and unavoidable Liens
on such property;

F. The Lender has agreed to make Loans available to the Debtors upon the terms and conditions
set forth in this Agreement.

NOW, THEREFORE, for and in consideration of the above premises and the mutual covenants and
agreements contained herein, the Lender and the Debtors hereby agree as follows:

ARTICLE I

General Definitions

Section 1.1. Definitions. The following terms, as used herein, have the following
meanings:

“Account Debtor” means, with respect to any Receivable or General Intangible, any Person
obligated to make payment thereunder, including without limitation any account debtor thereon.

“Accounts” means any “Account,” as such term is defined in Section 9-102 of the UCC, now owned
or hereafter acquired by the Debtors, and any right of the Debtors to payment for goods sold or
leased or for services rendered which the Debtors may now have or hereafter acquire, whether or not
such right has been earned by performance.

“Affiliate” means, with respect to any Person, another Person that directly, or indirectly
through one or more intermediaries, controls or is controlled by or is under common control with
the Person specified. As used herein, the term “control” means possession, directly or indirectly,
of the power or authority to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract, or otherwise.
Controlling and controlled have meanings correlative thereto.

“Bankruptcy Cases” means the legal proceedings commenced by the Debtors in the Bankruptcy
Court seeking to reorganize the Debtors’ businesses pursuant to Chapter 11 of the Bankruptcy Code.

“Bankruptcy Code” means the United States Bankruptcy Code, 11 U.S.C. §§ 101 et seq., as
heretofore and hereafter amended.

“Bankruptcy Court” means the United States Bankruptcy Court for the District of Maryland or
such other court exercising jurisdiction over the Bankruptcy Cases.

“Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure and Official Forms that
govern procedure in cases under the Bankruptcy Code, as heretofore and hereafter amended.

“Budget” shall have the meaning ascribed to that term in Section 3.1(f) of this Agreement.

“Budget Period” means each period ending on the date specified in a column heading in the
Budget.

“Business Day” means any day except a Saturday, Sunday or other day on which commercial banks
in New York, NY are authorized by law to close.

“Carve-Out” shall mean a carve-out from the proceeds of any liquidation of the Collateral,
which shall be available to pay (i) all fees required to be paid to the Clerk of the Bankruptcy
Court and to the Office of the United States Trustee under section 1930(a) of title 28 of the
United States Code, (ii) the allowed professional fees and disbursements expenses incurred by any
statutory committees appointed in the Bankruptcy Cases (each, a “Committee”) in an amount not to
exceed $50,000 and (iii) after the occurrence and during the continuance of an Event of Default, an
amount not to exceed $25,000 to pay allowed professional fees and disbursements of counsel to the
Debtors ; provided, that no portion of the Carve-Out shall be utilized for the payment of
any fees and expenses incurred in connection with (x) any challenge to the amount, extent,
priority, validity, perfection or enforcement of indebtedness of the Debtors owing to the Lender,
the Pre-Petition Lender, the Repo Counterparty, or any affiliate thereof, or (y) any investigation
of or challenge to the collateral securing the Pre-Petition Loan or the perfection, priority or
validity of the liens granted in favor of the Pre-Petition Lender with respect to the Pre-Petition
Loan, or (z) any investigation, assertion, initiation or prosecutions of any claim, causes of
action, adversary proceedings or other litigation against the Lender, the Pre-Petition Lender, the
Repo Counterparty or their Affiliates.

“Causes of Action” means any and all claims, causes of action, and rights to sue now owned or
hereafter acquired.

“Claim” shall have the meaning ascribed to that term in Bankruptcy Code § 101(5).

“Code” means the Internal Revenue Code of 1986, as amended.

“Collateral” means all of the Debtors’ now existing or after acquired real and personal
property that is not Junior Collateral, including, but not limited to, (i) all Receivables; (ii)
all General Intangibles; (iii) all Investment Property; (iv) all Inventory; (v) all Equipment; (vi)
all Equity Interests; (vii) to the extent not included in the foregoing, all contracts, any right
to payment under a repurchase agreement, securities, chattel paper, owned real estate, real
property leaseholds, fixtures, machinery, equipment, deposit discounts and the proceeds of any
avoidance actions arising under chapter 5 of the Bankruptcy Code; (viii) to the extent not included
in the foregoing, all other personal property, whether tangible or intangible and wherever located,
including, but not limited to, the balance of every deposit account now or hereafter existing of
the Debtors with any bank and all monies of the Debtors and all rights to payment of money of the
Debtors; and (ix) to the extent not otherwise included, all cash and noncash Proceeds and products
of any or all of the foregoing, whether existing on the date hereof or arising hereafter.

“Commitment” means the commitment to make Loans up to an aggregate amount as set forth in
Section 2.1 and as such amount may be adjusted from time to time in accordance with this Agreement.

“Copyrights” means all right, title and interest the Debtors now own or hereafter acquire in
and to all statutory or common law copyrights, whether or not registered with the United States
Copyright Office, and all registrations and recordings thereof and all applications in connection
therewith, including without limitation all such registrations, recordings, and applications in the
U.S. Copyright Office or in any similar office or agency of the United States, any State thereof or
any other country or political subdivision thereof and all reissues, extensions, and renewals
thereof.

“Credit Period” means the period from the Effective Date to the Maturity Date.

“Debt” means (i) all indebtedness or other obligations of such Person for borrowed money and
all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other
similar agreements or under leases which would, in accordance with GAAP, be capitalized on the
balance sheet of such Person, (ii) all obligations of such Person to pay the deferred purchase
price of property or services (including indebtedness created under or arising out of any
conditional sale or other title retention agreement), (iii) all obligations of such Person
(contingent or otherwise) under reimbursement or similar agreements with respect to the issuance of
letters of credit, (iv) all indebtedness or other obligations of such Person under or with respect
to any MRA, swap, cap, collar or other financial or commodity hedging arrangement, (v) all
indebtedness or other obligations of any other Person of the type specified in clause (i), (ii),
(iii) or (iv) above, the payment or collection of which such Person has guaranteed (except by
reason of endorsement for collection in the ordinary course of business) or in respect of which
such Person is liable, contingently or otherwise, including liable by way of agreement to purchase
products or securities, to provide funds for payment, to maintain working capital or other balance
sheet conditions or otherwise to assure a creditor against loss, and (vi) all indebtedness or other
obligations of any other Person of the type specified in clause (i), (ii), (iii), (iv) or (v) above
secured by (or for which the holder of such indebtedness has an existing right contingent or
otherwise, to be secured by) any Lien, upon or in property (including accounts and contract rights)
owned by such Person, whether or not such Person has assumed or becomes liable for the payment of
such indebtedness or obligations.

“Debtors” shall have the meaning set forth in the preamble.

“Disclosure Statement” shall have the meaning ascribed to that term in the Plan Support
Agreement.

“Effective Date” means the date on which each of the conditions set forth in Section 3.1(a)
shall have been satisfied.

“Equipment” means all equipment now owned or hereafter acquired by the Debtors, including all
items of machinery, equipment, computer hardware and related items, furnishings and fixtures of
every kind, whether affixed to real property or not, as well as all automobiles, trucks and
vehicles of every description, equipment, all additions to, substitutions for, replacements of or
accessions to any of the foregoing, all attachments, components, parts (including spare parts) and
accessories whether installed thereon or affixed thereto and all fuel for any thereof.

“Equity Interests” means, with respect to any Person, all of the shares of capital stock of
(or other ownership or profit interests in) such Person, all of the warrants, options or other
rights for the purchase or acquisition from such Person of shares of capital stock of (or other
ownership or profit interests in) such Person, all of the securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person
or warrants, rights or options for the purchase or acquisition from such Person of such shares (or
such other interests), and all of the other ownership or profit interests in such Person (including
partnership, member or trust interests therein), whether voting or nonvoting, and whether or not
such shares, warrants, options, rights or other interests are outstanding on any date of
determination.

“Event of Default” shall have the meaning ascribed to that phrase in Section 7.1.

“Federal Tax Claims” means all federal tax claims of the Internal Revenue Service against the
Debtors entitled to priority under section 507(a)(8) of the Bankruptcy Code.

“Final DIP Order” means the order entered by the Bankruptcy Court approving this Agreement and
authorizing the financing contemplated by this Agreement, including the grant of security interests
in and Liens on the Collateral and the grant of a Superpriority Claim for all Obligations, which
order shall be in form and substance reasonably acceptable to the Lender and the Debtors.

“Financing Orders” means the Interim DIP Order and the Final DIP Order.

“FRB” means the Board of Governors of the Federal Reserve System of the United States.

“GAAP” means generally accepted accounting principles in the United States set forth in the
opinions and pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board or such other principles as may be approved by a significant segment of the
accounting profession in the United States, that are applicable to the circumstances as of the date
of determination, consistently applied.

“General Intangibles” means all right, title and interest the Debtors now own or hereafter
acquire in or to all Causes of Action, contract rights, documents, books, ledgers, records, money
and general intangibles now owned or hereafter acquired by the Debtors including, without
limitation, all customer lists, permits, federal and state tax refunds, Patents, Copyrights,
Trademarks, Licenses, other rights in intellectual property, and the balance of every deposit
account now or hereafter existing of the Debtors with any bank, all monies of the Debtors and all
rights to payment of money of the Debtors, and all books, ledgers and records and all computer
programs, tapes, discs, punch cards, data processing software, transaction files, master files and
related property and rights (including computer and peripheral equipment) necessary or helpful in
enforcing, identifying or establishing any item of Collateral.

“Governmental Authority” means the government of the United States or any other nation, or of
any political subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to
government.

“Indemnitees” has the meaning specified in Section 8.3(b).

“Interest Payment Date” has the meaning specified in Section 2.2.

“Interim Credit Period” means the period from the Effective Date to the earlier of (i) the
date of entry by the Bankruptcy Court of the Final DIP Order or (ii) the termination of the
Commitment pursuant to Section 7.2 hereof.

“Interim DIP Order” means the order entered by the Bankruptcy Court, in substantially the form
annexed hereto as Exhibit B, approving inter alia this Agreement and authorizing the
incurrence by the Debtors of post-petition secured indebtedness in accordance with this Agreement,
including the grant of security interests in and Liens on the Collateral and the grant of a
Superpriority Claim for all of the Obligations.

“Inventory” means all right, title and interest the Debtors now own or hereafter acquire in or
to inventory, including without limitation (i) all goods and other personal property held for
resale by the Debtors, (ii) all inventory, wherever located, evidenced by negotiable and
non-negotiable documents of title, warehouse receipts and bills of lading, (iii) all of the
Debtors’ rights in, to and under all purchase orders now owned or hereafter received or acquired by
it for goods or services and (iv) all rights of the Debtors as an unpaid seller, including
rescission, replevin, reclamation and stopping in transit.

“Investment Property” shall have the meaning ascribed to it in the UCC.

“Junior Collateral” means all of the Debtors’ real and personal property that is in existence
and that on the Petition Date is the subject of valid, enforceable, properly perfected Liens,
including, but not limited to, (i) all Receivables; (ii) all General Intangibles; (iii) all
Investment Property; (iv) all Inventory; (v) all Equipment; (vi) all Equity Interests; (vii) to the
extent not included in the foregoing, all contracts, any right to payment under a repurchase
agreement, securities, chattel paper, owned real estate, real property leaseholds, fixtures,
machinery, equipment, and deposit discounts; (viii) to the extent not included in the foregoing,
all other personal property, whether tangible or intangible and wherever located, including, but
not limited to, the balance of every deposit account now or hereafter existing of the Debtors with
any bank and all monies of the Debtors and all rights to payment of money of the Debtors; and (ix)
to the extent not otherwise included, all cash and noncash Proceeds and products of any or all of
the foregoing, whether existing on the date hereof or arising hereafter.

“Laws” means, collectively, all international, foreign, federal, state and local statutes,
treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial
precedents or authorities, including the interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or administration thereof, and
all applicable administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authority, in each case whether or not having the
force of law.

“Lender” shall have the meaning set forth in the preamble.

“LIBOR” means the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA
LIBOR”), as published by Reuters (or other commercially available source providing quotations of
BBA LIBOR) at approximately 11:00 a.m., London time, two Business Days prior to the Effective Date,
and as reset two Business Days prior to each Interest Payment Date.

“License” means any license or other agreement granting a Person the exclusive or
non-exclusive right to use and/or license the use of any Patent, Copyright, Trademark or other
intellectual property.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or preference, priority or other security interest
or preferential arrangement in the nature of a security interest of any kind or nature whatsoever
(including any conditional sale or other title retention agreement, any easement, right of way or
other encumbrance on title to real property, and any financing lease having substantially the same
economic effect as any of the foregoing).

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

“Loan Documents” means this Agreement, any Note executed by any Debtor and payable to the
Lender, and any other present or future agreements entered into in connection with this Agreement,
together with all alterations, amendments, changes, extensions, or modifications to any of the
foregoing.

“Mandatory Prepayment” shall have the meaning set forth in Section 2.5 hereof.

“Master Repurchase Agreements” mean (a) that certain Master Repurchase Agreement dated as of
August 14, 2007 between Saturn, as seller, and GGRE, as buyer; (b) that certain Master Repurchase
Agreement dated as of August 14, 2007 between Mercury, as seller, and GGRE, as buyer; (c) that
certain Master Repurchase Agreement dated as of August 14, 2007 between Minerva, as seller, and
GGRE, as buyer; and (d) that certain Master Repurchase Agreement dated as of December 6, 2007
between Minerva SPV, as seller, and GGRE, as buyer, in each case with respect to the foregoing (a)
through (d), including all confirmations and amendments thereto.

“Material Adverse Effect” means a material adverse effect upon (a) the properties, liabilities
(actual or contingent), condition (financial or otherwise) or prospects of any of the Debtors,
(b) the ability of each of the Debtors to perform its obligations under any Loan Document to which
it is a party, or (c) the legality, validity, binding effect or enforceability against any Debtor
of any Loan Document to which it is a party or (d) the value of the Collateral.

“Maturity Date” means the earlier of (i) January 31, 2009, unless the Lender in its sole
discretion agrees in writing to extend such date, (ii) the effective date of any confirmed plan of
reorganization for the Debtors, and (iii) the termination of the commitment to make Loans by the
Lender upon the occurrence of an Event of Default or the acceleration of the Obligations, in each
case, pursuant to Section 7.2 hereof.

“Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties
of, the Debtors arising under this Agreement or otherwise with respect to any Loan, whether direct
or indirect (including those acquired by assumption), absolute or contingent, due or to become due,
now existing or hereafter arising and including interest and fees that accrue before and after the
Effective Date. Any reference in this Agreement to Obligations shall include all or any portion
thereof and any extensions, modifications, renewals or alterations thereto.

“OT Put Agreement” means that certain Put Agreement dated as of January 22, 2008, by and among
the Lender and Luminent as purchasers, OT as REIT, the preferred shareholders party thereto, REIT
Administration, LLC and Charles B. Harrison.

“Outstanding Amount” means on any date, the aggregate outstanding principal amount of Loans
thereof after giving effect to any borrowings, occurring on such date.

“Patents” means all right, title and interest the Debtors now own or hereafter acquire in or
to all letters patent and the inventions described therein, and all registrations and recordings
thereof and all applications in connection therewith, including without limitation all such
recordings, registrations and applications in the U.S. Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof, or any other country (or
political subdivision thereof) and all reissues, extensions, and renewals thereof.

“Permitted Liens” means the Liens referred to in clauses (i) through (ii) of Section 6.6.

“Person” means an individual, a corporation, a partnership, a limited liability company, an
association, a trust or any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.

“Petition Date” shall have the meaning ascribed to that term in the Recitals to this
Agreement.

“Plan” shall have the meaning ascribed to that term in the Plan Support Agreement.

“Plan Support Agreement” means that certain Plan Support and Forbearance Agreement dated
September 4, 2008 by and among the Debtors, the Lender, GGRE LLC, WAMU Capital Corporation, Wells
Fargo Bank, NA, Bear Stearns, JMG Capital Partners, LP, William Stearn, David Eidelman, Watershed
Asset Management, LLC, Vicis Capital LLC, Argent Funds Group, Waterstone Capital, Bayerische
Hypo-Und Vereinsbank AG, AQR Capital Management, LLC, CNH Partners, LLC, and RREEF Alternative
Investments.

“Pre-Petition Credit Agreement” means that certain Amended and Restated Credit Agreement dated
as of September 26, 2007 as amended by the First Amendment to the Amended and Restated Credit
Agreement dated as of December 7, 2007, the Second Amendment to the Amended and Restated Credit
Agreement dated as of May 9, 2008, the Third Amendment to the Amended and Restated Credit Agreement
dated as of June 16, 2008, by and among Luminent as borrower, each of the other Debtors as
guarantors, and Arco Capital Corporation Ltd. as the lender, and those certain documents defined in
the Credit Agreement as “Related Documents.”

“Pre-Petition Financing Documents” means the Pre-Petition Credit Agreement, the Master
Repurchase Agreements and the OT Put Agreement, each as amended, restated or modified from time to
time.

“Pre-Petition Lender” means Arco Capital Corporation Ltd., as lender under the Pre-Petition
Credit Agreement.

“Proceeds” means all proceeds, including (i) whatever is received upon any collection,
exchange, sale or other disposition of any of the Collateral and any property into which any of the
Collateral is converted, whether cash or non-cash, (ii) any and all payments or other property (in
any form whatsoever) made or due and payable on account of any insurance, indemnity, warranty or
guaranty payable to the Debtors with respect to any of the Collateral, (iii) any and all payments
(in any form whatsoever) made or due and payable in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Collateral by any Governmental
Authority (or any person, corporation, agency, authority or other entity acting under color of any
governmental authority), (iv) any claim of the Debtors against third parties for past, present or
future infringement of any Patent or Copyright, for past, present or future infringement or
dilution of any Trademark, or for injury to the goodwill associated with any Trademark, Patent or
Copyright, or for the breach of any License and (v) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.

“Receivables” means all Accounts now or hereafter owing to the Debtors, and shall also mean
all accounts, accounts receivable, contract rights, book debts, instruments and chattel paper,
notes, drafts, acceptances, payments under leases of equipment or sale of Inventory and other forms
of obligations now or hereafter received by or belonging or owing to the Debtors for goods sold or
leased and/or services rendered by them, and all of the Debtors’ rights in, to and under all
purchase orders, instruments, and other documents now or hereafter received by them evidencing
obligations for and representing payment for goods sold or leased and/or services rendered, and all
monies due or to become due to the Debtors under all contracts for the sale or lease of goods
and/or the performance of services by them, now in existence or hereafter arising (including
without limitation the right to receive the Proceeds of said purchase orders and contracts),
together with all Inventory returned by or reclaimed from customers wherever such Inventory is
located, and all guaranties, securities and liens held for the payment of any such account, account
receivable, contract right, document, instrument or chattel paper.

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

“Repo Counterparty” means GGRE as buyer under those certain Master Repurchase Agreements.

“Responsible Officer” means, with respect to any Debtor, the chief executive officer,
president, chief financial officer, treasurer or comptroller and any other officer of the Debtor
with responsibility for the administration of the relevant portion of the Loan Documents. Any
document delivered hereunder that is signed by a Responsible Officer of such Debtor shall be
conclusively presumed to have been authorized by all necessary corporate, partnership and/or other
action on the part of the Debtor and such Responsible Officer shall be conclusively presumed to
have acted on behalf of the Debtor.

“Superpriority Claim” means in relation to the Lender, a claim against the Debtors in the
Bankruptcy Cases which is an administrative expense claim authorized and established by the
Bankruptcy Court pursuant to Sections 364(c) and 507(b) of the Bankruptcy Code and having priority
over any and all administrative expenses of the kind specified in Sections 503(b), 507(b) and
546(c) of the Bankruptcy Code.

“Tax” means any fee (including license, filing and registration fee), tax (including any
income, gross receipts, franchise, sales, use or real, personal, tangible or intangible property
tax), interest equalization or stamp tax, assessment, levy, impost, duty, charge or withholding of
any kind or nature whatsoever, imposed or assessed by any Government, together with any penalty,
fine or interest thereon.

“Trademarks” means all right, title and interest the Debtors now own or hereafter acquire in
or to all trademarks, trade names, corporate names, company name, business names, fictitious
business names, trade styles, service marks, logos, other source of business identifiers, print and
labels on which any of the foregoing have appeared or appear, designs and general intangibles of
like nature, now existing or hereafter adopted or acquired, all registrations and recordings
thereof and all applications in connection therewith, including without limitation all such
registrations, recordings and applications in the United States Patent and Trademark Office or in
any similar office or agency of the United States, any State thereof or any other country or
political subdivision thereof and all reissues, extensions, and renewals thereof.

“UCC” means at any time the Uniform Commercial Code as the same may from time to time be in
effect in the State of New York, provided that, if, by reason of mandatory provisions of law, the
validity or perfection of any security interest granted herein is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than New York then, as to the validity or
perfection of such security interest, “UCC” shall mean the Uniform Commercial Code in effect in
such other jurisdiction.

Section 1.2. Interpretive Provision. With reference to this Agreement, unless
otherwise specified herein:(a) The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words “include,”
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation.” The word “will” shall be construed to have the same meaning and effect as the
word “shall.” Unless the context requires otherwise, (i) any definition of or reference to
any agreement, instrument or other document shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications set forth herein,
(ii) any reference herein to any Person shall be construed to include such Person’s successors and
assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of
similar import when used in this Agreement shall be construed to refer to such Agreement in its
entirety and not to any particular provision thereof, (iv) any reference to any law shall include
all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law
and any reference to any law or regulation shall, unless otherwise specified, refer to such law or
regulation as amended, modified or supplemented from time to time, and (v) the words
“asset” and “property” shall be construed to have the same meaning and effect and
to refer to any and all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

(b) In the computation of periods of time from a specified date to a later specified
date, the word “from” means “from and including;” the words “to” and
“until” each mean “to but excluding;” and the word “through” means “to
and including.”

(c) Article, section and subsection headings herein are included for convenience of
reference only and shall not affect the interpretation of this Agreement.

ARTICLE II

Credit Facilities

Section 2.1. Commitment to Provide Loans. Subject to the terms and conditions set
forth in this Agreement and in the Financing Orders, the Lender agrees to make Loans (each such
Loan, a “Loan”) to the Debtors from time to time during the Credit Period in an aggregate principal
amount not to exceed the lesser of $3,242,000.00 and the aggregate drawdown amounts set forth in
the Budget through the most recent Budget Period (the “Commitment”). The Debtors, jointly and
severally, agree to repay all of the Obligations owed to the Lender under the terms of this Section
2.1 and this Agreement.

Section 2.2. Method of Borrowing. The Debtors shall request Loans by submitting a
written request to the Lender specifying the principal amount of the Loan requested. The Lender
shall honor each loan request by making a wire transfer to the Debtors’ operating account in the
amount of the Loan requested, provided that (i) honoring the request would not cause the aggregate
amount of outstanding Loans to exceed the Commitment, (ii) such request is in specific accordance
with the line items set forth in the Budget for the Budget Period to which such request relates and
(iii) an Event of Default has not occurred and is continuing. Each request for a Loan shall
constitute a representation by the Debtors that each of the representations and warranties in
Article V of this Agreement is true and complete in all material respects as of the date of such
request.

Section 2.3. Interest Rate. As provided further below, interest shall accrue on the
average daily outstanding balance of the Loans at the rate of LIBOR plus 2% per annum. On each
monthly anniversary of the Effective Date and on the effective date of the Plan (each such date, an
“Interest Payment Date”), accrued interest shall be paid in kind and shall be added to the
outstanding principal amount of the Obligations owing by the Debtors to the Lender pursuant to this
Agreement. Any accrued and unpaid interest shall be due and payable on the date that the
outstanding principal amount of the Loans is paid or becomes due and payable in full. In the event
of an Event of Default, the Loans shall bear interest on the outstanding principal balance thereof
at a rate equal to LIBOR plus 4% per annum for each day from the date of the Event of Default until
the Loans are paid in full.

Section 2.4. Computation of Interest. Interest hereunder shall be computed on the
basis of a year of 360 days and paid for the actual number of days elapsed (including the first day
but excluding the last day).

Section 2.5. Maturity; Payments. The Loans shall mature, and the principal amount of
all outstanding Loans, together with all accrued and unpaid interest thereon and all other
Obligations that may be due to the Lender under this Agreement, shall be immediately due and
payable by the Debtors to the Lender upon the Maturity Date. The Obligations may be prepaid at any
time by the Debtors without penalty. Immediately upon the receipt by the Debtors of any proceeds
of any recovery upon any of the Debtors’ litigation claims, the Debtors shall prepay the Loans in
an amount equal to the net proceeds of such recovery after taking into account expenses (a
“Mandatory Prepayment”). All payments by the Debtors shall be made to the Lender in lawful money
of the United States of America and in immediately available funds. Whenever any payment to be
made hereunder shall be due on a day that is not a Business Day, such payment shall be made on the
first Business Day thereafter, and such extension of time shall in such case be included in the
computation of interest hereunder.

Section 2.6. Reduction of Commitments. The Commitment of the Lender shall be
permanently reduced by (a) the amount of any Mandatory Prepayment, and (b) an amount equal to all
revenues received by the Debtors in a Budget Period net of amounts of up to 20% of such revenues to
the extent such amounts are paid to Persons unrelated to the Debtors for commissions and fees in
relation to such revenues.

Section 2.7. Use of Proceeds. The proceeds of the Loans shall be used only (i) to pay
the Debtors’ obligations to the Lender hereunder, (ii) to pay the costs of the Debtors’ operations
in the ordinary course of their businesses and in specific accordance with the line items set forth
in the Budget, or (iii) to pay restructuring expenses and fees incurred by the Debtors as set forth
in the Budget, and (iv) to pay such other amounts as may be agreed to by the Debtors and the
Lender. Notwithstanding anything herein, no proceeds of the Loans shall be utilized for the
payment of any fees and expenses incurred in connection with (x) any investigation of or challenge
to the amount, extent, priority, validity, perfection or enforcement of indebtedness of the Debtors
owing to the Lender, the Pre-Petition Lender, the Repo Counterparty or any Affiliate thereof, or to
the collateral securing the Pre-Petition Loan or the perfection, priority or validity of the liens
granted in favor of the Pre-Petition Lender with respect to the Pre-Petition Loan, or (y) any
investigation, assertion, initiation or prosecutions of any claim, causes of action, adversary
proceedings or other litigation against the Lender, the Pre-Petition Lender, Repo Counterparty or
their Affiliates.

Section 2.8. Evidence of Debt. The Loans made by the Lender shall be evidenced by one
or more accounts or records maintained by such Lender. The accounts or records maintained by the
Lender shall be conclusive absent manifest error of the amount of the Loans made by the Lender to
the Debtors and the interest and payments thereon. Upon the request of the Lender, the Debtors
shall execute and deliver to the Lender a Note, which shall evidence such Lender’s Loans in
addition to such accounts or records, however, no such Note will be necessary as evidence of the
Loans. The Lender may attach schedules to its Note and endorse thereon the date, amount and
maturity of its Loans and payments with respect thereto. 

ARTICLE III

Conditions to the Agreement and Loans

Section 3.1. Conditions to the Effectiveness of the Agreement. The effectiveness of
this Agreement is subject to the satisfaction of the following conditions precedent:

(a) The Lender shall have received executed counterparts of this Agreement;

(b) The Lender shall have received all documents reasonably requested by the Lender
relating to the existence of the Debtors and their corporate authority to execute, deliver and
perform this Agreement and any other documents to which the Debtors and the Lender are parties and
the validity of this Agreement and such other documents and any other matters relevant hereto or
thereto, all in form and substance satisfactory to the Lender.

(c) The Lender shall have received such certificates of resolutions or other action,
incumbency certificates and/or other certificates of Responsible Officers of each Debtor as the
Lenders may require evidencing the identity, authority and capacity of each Responsible Officer
thereof authorized to act in connection with this Agreement or any of the Loan Documents to which
such Debtor is a party.

(d) All legal matters incident to this Agreement, and the transactions contemplated
hereby and thereby shall be reasonably satisfactory to the Lender.

(e) The Lender shall have received a favorable opinion of counsel to the Debtors as
to such matters as the Lender may reasonably request.

(f) The Lender shall have received and approved a budget of sources and uses of
cash, substantially in the form annexed hereto as Exhibit A (the “Budget”).

(g) On or prior to the date of such initial Loan, each document (including, without
limitation, each UCC financing statement) required by law or reasonably requested by the Lender to
be filed, registered or recorded in order to create in favor of the Lender a perfected security
interest in and Lien on the Collateral shall have been properly filed, registered or recorded in
each jurisdiction in which the filing, registration or recordation thereof is so required or
requested, and the Lender shall have received a duly completed and signed perfection certificate
together with evidence that all filings, registrations and recordings required by law or reasonably
requested by the Lenders to perfect the Liens created hereunder have been or concurrently are being
made.

(h) The Interim DIP Order shall have been entered by the Bankruptcy Court in a form
and substance satisfactory to the Lender and shall have been entered on notice to parties in
accordance with Bankruptcy Rule 4001, and shall be in full force and effect and shall not have been
(x) stayed, vacated, revised or rescinded or (y) amended or modified without the prior written
consent of the Lender.

(i) All “First Day Orders” or other orders entered at the time of the Petition Date
shall be reasonably satisfactory in form and substance to the Lender in all respects.

Section 3.2. Conditions Precedent to Funding. As a condition precedent to any
obligation of the Lender to fund the Loans or to otherwise extend credit to the Debtors, the
following conditions must have been satisfied:

(a) The Lender shall have received a loan request in accordance with Section 2.2 and all such
other documents the Lender requires in connection with its commitment to make Loans.

(b) No Event of Default shall have occurred and be continuing or would result from making such
Loan;

(c) No event of default shall have occurred under the Plan Support Agreement and such
agreement shall not have been terminated in accordance with its terms;

(d) The Debtors shall have performed or complied with all agreements and conditions set forth
herein to be performed or complied with by them on or prior to the date of such Loan;

(e) The representations and warranties of the Debtors contained in this Agreement or any other
Loan Document shall be true and complete in all material respects.

(f) The Interim DIP Order or, following the entry of the Final DIP Order, the Final DIP Order
shall be in full force and effect, and shall not have been stayed, vacated, reversed or rescinded,
and such order shall not have been amended or modified without the prior written consent of the
Lender;

(g) The purpose of the Loan shall be consistent with and for purposes permitted under the
Budget and the Debtors shall, at the time of the delivery of any loan request pursuant to Section
2.2 hereof, have used for a purpose set forth in the Budget all cash on hand and any cash
collateral; and

(h) Other than the Bankruptcy Cases, there shall exist no claim, action, suit, litigation,
proceeding or investigation pending in any court or before any arbitrator or Governmental Authority
that relates to the Obligations.

Each Request for a Loan submitted by the Debtors shall be deemed to be a representation and
warranty that the conditions specified in this Article III have been satisfied on and as of the
date of the applicable Loan.

ARTICLE IV

Security Interests and Priority Claims

Section 4.1. Security Interests.

(a) To secure the prompt and complete payment and performance of the Obligations of
the Debtors to the Lender under this Agreement and under the Loan Documents, howsoever created,
arising or evidenced, whether direct or indirect, absolute or contingent, now existing or hereafter
arising or due or to become due, in accordance with the terms thereof, each of the Debtors hereby
grant to the Lender and upon entry of and pursuant to the Interim DIP Order (and when applicable,
the Final DIP Order), the Lender shall have (i) pursuant to 11 U.S.C. §364(c)(2), valid and
perfected senior continuing first priority security interests in and Liens on the Debtors rights,
title and interests to all Collateral; and (ii) pursuant to 11 U.S.C. §364(c)(3), perfected Liens
upon all pre- and post petition property of the Debtors that constitutes Junior Collateral, which
Liens shall be junior only to such valid and perfected Liens in existence on the Petition Date.
The Lender shall have all the rights of a secured party with respect to the Collateral and Junior
Collateral under the UCC and the other laws of the State of New York and any other applicable
jurisdiction. The Liens granted to the Lender hereunder shall in all respects be senior to any
pre-petition lien that is determined to be avoidable pursuant to 11 U.S.C. §544 or otherwise and,
the Liens shall not be (i) subject to any lien or security interest which is avoided and preserved
for the Borrower’s estate under 11 U.S.C. §551 or (ii) subordinated to or made pari passu with any
other lien or security interest under 11 U.S.C. §364(d) or otherwise and shall at all times be
senior to the rights of the Debtors and any successor trustee(s) in the Bankruptcy Cases or any
subsequent proceedings under the Bankruptcy Code.

(b) Pursuant to the Financing Orders and this Agreement, the Liens granted pursuant
to Section 4.1(a) shall constitute valid, enforceable and perfected first priority Liens and
security interests in the Collateral and, except as specifically provided for herein, at all times
shall be senior to and have priority over any and all other Liens, claims and interests, now
existing or hereafter arising, in favor of any other creditor or any Person whatsoever. The Liens
granted to the Lender in accordance with Section 4.1(a) with respect to the Junior Collateral shall
be valid, enforceable and perfected Liens subject only to valid and perfected Liens in existence on
the Petition Date. No claim of any kind or nature shall be assessed against or attributed to the
Lender, the Collateral or the Junior Collateral pursuant to 11 U.S.C. § 506(c) or 11 U.S.C. § 552
or otherwise.

(c) Pursuant to the Financing Orders and this Agreement, the Liens granted pursuant
to Section 4.1(a) and (b) shall be valid, enforceable and perfected without the necessity that the
Lender file financing statements or otherwise perfect its Liens and security interests under
applicable non-bankruptcy law except for such Collateral or Junior Collateral as is or may
hereafter be located outside of the territorial limits of the United States of America to the
extent that the same may not be subject to jurisdiction of the Bankruptcy Court.

(d) As to all real property the possession of which is held by the Debtors pursuant
to leasehold interests in real and personal property, the Debtors acknowledge that, pursuant to the
Financing Orders, the Liens in favor of the Lender in all of such leasehold instruments shall be
perfected without recordation of any instruments of mortgage or assignment. The Debtors further
agree that, upon the request of the Lender, the Debtors shall enter into separate fee and leasehold
mortgages in recordable form with respect to such properties on terms reasonably satisfactory to
the Lender.

(e) To induce the Lender to make the Loans and to assure the repayment thereof, upon
entry of and pursuant to the Interim DIP Order (and when applicable the Final DIP Order), the
Obligations of each of the Debtors shall, pursuant to 11 U.S.C. § 364(c)(1), at all times
constitute allowed administrative expense claims in the Bankruptcy Cases having priority over all
administrative expenses whether of the kind specified in or incurred pursuant to Sections 503(b)
and 507(b) of the Bankruptcy Code or otherwise and all superpriority administrative expense claims
granted to any other Person.

(f) Notwithstanding any contrary provision of the Agreement, the Lender agrees that
in the event of an Event of Default and an acceleration of the Obligations, if there are
insufficient funds to satisfy the administrative expenses of the Borrower, then the Liens and
Superpriority Claims granted to the Lender pursuant to the Agreement shall be subject to the
Carve-Out, provided that, if after any payment that utilizes any portion of the Carve-Out, the
proceeds of unencumbered assets from any source become available, the Lender shall be granted a
lien on the proceeds of the unencumbered assets to the extent of the Carve-Out paid. The Carve-Out
shall not be used by, or be available to, any Person to pay for fees or expenses incurred in
conjunction with the investigation, objection to or any attempt to contest in any manner, litigate
or to raise any defense to, the validity, perfection, priority or enforceability of the Obligations
or any Liens securing the Obligations, or to investigate, assert or pursue any claims against the
Lender, Pre-Petition Lender, Repo Counterparty or their Affiliates.

(g) Notwithstanding the foregoing, so long as an Event of Default shall not have
occurred and be continuing, the Debtors shall be permitted to pay fees and reimburse the expenses
of counsel or financial advisors to the Debtors that are allowed and payable under Sections 328,
330 and 331 of the Bankruptcy Code, as the same may be due and payable in accordance with the
Budget, and the same shall not reduce the Carve-Out.

Section 4.2. Continuing Liability of the Debtors. Anything herein to the contrary
notwithstanding, the Debtors shall remain liable to observe and perform all of the terms and
conditions to be observed and performed by them under any contract, agreement, warranty or other
obligation with respect to the Collateral, and shall do nothing to impair the security interests
herein granted. The Lender shall not have any obligation or liability under any such contract,
agreement, warranty or obligation by reason of or arising out of this Agreement or the receipt by
the Lender of any payment relating to any Collateral, nor shall the Lender be required to perform
or fulfill any of the obligations of the Debtors with respect to the Collateral, to make any
inquiry as to the nature or sufficiency of any payment received by the Lender or the sufficiency of
the performance of any party’s obligations with respect to any Collateral. Furthermore, the Lender
shall not be required to file any claim or demand to collect any amount due or to enforce the
performance of any party’s obligations with respect to, the Collateral.

Section 4.3. Collections. Subject to the Debtors’ obligations to, and the rights of,
the holders of Permitted Liens:

(a) All Proceeds and any other collections received by the Debtors shall be promptly
deposited in the Debtor’s operating accounts and until so deposited shall be held in trust for and
as the Lenders’ property and shall not be commingled with any funds of the Debtors not constituting
Proceeds of Collateral. However, the Lender may upon an Event of Default notify Account Debtors
obligated to make payments under any or all Receivables or General Intangibles that the Lender has
a security interest in such Collateral and that payments shall be made directly to the Lender.
Upon the request of the Lender at any time, the Debtors will so notify such Account Debtors. The
Debtors will use all reasonable efforts to cause each Account Debtor to comply with the foregoing
instruction. In furtherance of the foregoing, the Debtors authorize the Lender (i) to ask for,
demand, collect, receive and give acquittances and receipts for any and all amounts due and to
become due under any Collateral and, in the name of the Debtors or its own name or otherwise, (ii)
to take possession of, endorse and collect any checks, drafts, notes acceptances or other
instruments for the payment of monies due under any Collateral and (iii) to file any claim or take
any other action in any court of law or equity or otherwise which it may deem appropriate for the
purpose of collecting any amounts due under any Collateral. The Lender agrees to maintain a record
of the source of any receipts with respect to its efforts to realize against the Collateral.

(b) As to any amount payable under or in connection with any of the Collateral that
shall be or shall become evidenced by any promissory note or other instrument, the Debtors will
pledge immediately and deliver such note or other instrument to the Lender as part of the
Collateral, duly endorsed in a manner satisfactory to the Lender.

(c) The Debtors shall not, without the Lender’s prior written consent, (i) grant any
extension of the time of payment of any Receivable, (ii) compromise or settle any Receivable or
Cause of Action, (iii) release, wholly or partly, any person liable for the payment of any
Receivable or (iv) allow any credit or discount whatsoever with respect to any Receivable other
than trade discounts granted in the normal course of business consistent with past practices and
other reasonable discounts or compromises necessary in the reasonable judgment of the Debtor to
enhance the collectability of any Receivable.

ARTICLE V

Representations and Warranties

The Debtors represent and warrant to the Lender that:

Section 5.1. Corporate Existence and Power. Each Debtor is a corporation, limited
liability company, limited partnership or trust duly incorporated or formed, as the case may be,
validly existing, and in good standing under the Laws of the jurisdiction of its incorporation or
organization and has all requisite power and authority and all requisite governmental licenses,
authorizations, consents and approvals required to carry on the business of such Debtor as now
conducted and, subject to the entry of the Financing Orders, to execute, deliver and perform its
obligations under this Agreement.

Section 5.2. Corporate and Governmental Authorization; Contravention. Subject to the
entry of the Financing Orders, the execution, delivery and performance by the Debtors of this
Agreement and any other documents to which the Debtors and the Lender are parties, including but
not limited to the creation of the security interests provided for herein (i) are within the
Debtors’ corporate power, (ii) have been duly authorized by all necessary corporate action, (iii)
require no approval, consent, authorization or other action by or with respect to, or filing with,
any Government (except with respect to the filing and/or recording of financing statements or other
instruments) and (iv) do not contravene, or constitute (with or without the giving of notice or
lapse of time or both) a default under or violation of, any provision of applicable law or of the
respective articles of incorporation or by-laws of the Debtors or of any agreement, judgment,
injunction, order, decree or other instrument binding upon or affecting the Debtors or result in
the creation or imposition of any Lien (other than the Lien of the Collateral Documents) on any of
its assets.

Section 5.3. Binding Effect. Upon entry of the Financing Orders, as necessary, this
Agreement constitutes a legal, valid and binding agreement of the Debtors and the obligations
hereunder are enforceable against the Debtors, both jointly and severally, in accordance with its
terms.

Section 5.4. Ownership and Liens. The Debtors are the sole owners of and have good
and marketable title to all of their properties and the Debtors assets are subject to no Lien,
except Permitted Liens.

Section 5.5. Filings. All actions by or with respect to, and all filings with, any
Government required in connection with the execution, delivery and performance of this Agreement
and any other documents to which the Debtors and the Lender are parties, or necessary for the
validity or enforceability thereof or for the protection or perfection of the rights and interests
of the Lender thereunder, will, prior to the date of delivery thereof, have been duly taken or
made, as the case may be, and will at all times thereafter remain in full force and effect.

Section 5.6. Litigation. There are no actions, suits, proceedings, claims or disputes
pending or, to the knowledge of each of the Debtors after due and diligent investigation,
threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority,
by or against the Debtors that purport to affect or pertain to this Agreement or any other Loan
Document, or any of the transactions contemplated hereby.

Section 5.7. Regulation U. The Debtors are not engaged and will not engage, in the
business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the
FRB), or extending credit for the purpose of purchasing or carrying margin stock.

Section 5.8. Compliance with Laws. Each of the Debtors is in compliance in all
material respects with the requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its properties, except in such instances in which (a) such requirement of
Law or order, writ, injunction or decree is being contested in good faith by appropriate
proceedings diligently conducted or (b) the failure to comply therewith, either individually or in
the aggregate, could not reasonably be expected to have a Material Adverse Effect.

Section 5.9. Financing Orders.

(a) Each of the Debtors is in compliance with the terms and conditions of the
Interim DIP Order and the Final DIP Order, as applicable.

(b) Each of the Interim DIP Order (with respect to the period prior to the entry of
the Final DIP Order) or the Final DIP Order (upon entry of the Final DIP Order) is in full force
and effect and has not been stayed, vacated, reversed or rescinded or, without the prior written
consent of the Lender in its sole discretion, amended or modified.

ARTICLE VI

Covenants

The Debtors agree that so long as the Lender shall have any Commitment to make Loans hereunder
or any Loan or Obligation hereunder or under any other document to which the Debtors and the Lender
are parties remains unpaid or unsatisfied:

Section 6.1. Conduct of Business and Maintenance of Existence. The Debtors, or each
of them, shall continue to engage in business of the same general type as conducted by the Debtors
on the Effective Date and will maintain the Collateral in a commercially reasonable manner, and
will preserve, renew and keep in full force and effect the corporate existence of each of the
Debtors and their rights, privileges and franchises necessary or desirable in the normal conduct of
business. The Debtors will notify the Lender of any change in their place of business, location(s)
of the Collateral and location(s) of books and records at least ten (10) days prior to such
change(s). In addition, the Debtors will not change their name, identity or corporate structure in
any manner or use any trade, assumed or fictitious name except after providing at least ten (10)
days notice prior to the effective date of such change.

Section 6.2. Compliance with Laws. The Debtors shall comply with all applicable laws,
ordinances, rules, regulations, and requirements of Governmental Authorities except where the
necessity of compliance therewith is contested in good faith by appropriate proceedings.

Section 6.3. Accounting; Inspection of Property, Books and Records. The Debtors shall
keep proper books of record and account in which full, true and correct entries in conformity with
GAAP shall be made of all dealings and transactions in relation to each of their businesses and
activities, will maintain their fiscal reporting periods on the present basis and will permit
representatives of the Lender to visit and inspect any of their properties, to examine and make
abstracts from any of their books and records and to discuss their affairs, finances and accounts
with their officers, employees and independent public accountants, all at such reasonable times and
as often as may reasonably be desired.

Section 6.4. Maintenance of Security Interests. The Debtors shall, from time to time
and at their expense, execute, deliver, file or record such financing statements pursuant to the
UCC, applications for certificates of title and such other statements, assignments, instruments,
documents, agreements or other papers and take any other action that may be necessary or desirable,
or that the Lender may reasonably request, in order to create, preserve, perfect, confirm or
validate the security interests to enable the Lender to obtain the full benefits of this Agreement
or to enable the Lender to exercise and enforce any of its rights, powers and remedies hereunder,
including, without limitation, the Lender’s right to take possession of the Collateral, and will
use their best efforts to obtain such waivers from landlords and mortgagees as the Lender may
request.

Section 6.5. Debt. The Debtors shall not incur or at any time become liable with
respect to any Debt except (i) Debt outstanding under this Agreement or any other document to which
the Debtors and the Lender are parties; or (ii) normal and customary trade Debt incurred in the
ordinary course of the Debtors’ business and as specifically provided for in the Budget.

Section 6.6. Restriction on Liens. The Debtors shall not at any time create, assume
or suffer to exist any Lien on any property or asset now owned or hereafter acquired by them or
assign or subordinate any present or future right to receive assets except:

(a) any Liens created by any other documents to which the Debtors and the Lender are parties;
and

(b) Liens securing Taxes, assessments or Governmental charges provided (A) with respect to
Liens securing state and local Taxes, such Taxes are not yet payable, or (B) with respect to Taxes,
assessments or Governmental charges or levies or claims or demands secured by such Liens, payment
of which is not at the time required.

Section 6.7. Notices. The Debtors shall advise the Lender promptly and in reasonable
detail (i) of any Lien, security interest, encumbrance or claim made or asserted against any of the
Collateral, (ii) of any material change in the composition of the Collateral, and (iii) of the
occurrence of any other event which would have a Material Adverse Effect.

Section 6.8. Transactions with Other Persons. Except as contemplated hereby, the
Debtors shall not enter into any agreement with any Person whereby any of them shall agree to any
restriction on the Debtors’ right to amend or waive any of the provisions of this Agreement.

Section 6.9. Use of Proceeds. The Debtors shall not use the proceeds of the Loans,
directly or indirectly, in a manner or for any purpose other than as set forth in the Budget and in
this Agreement. The Debtors shall not use the proceeds of the Loans, directly or indirectly, and
whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the
meaning of Regulation U of the FRB) or to extend credit to others for the purpose pf purchasing or
carrying margin stock or to refund indebtedness originally incurred for such purpose.

Section 6.10. Budget Reconciliation. On or prior to the date on which the Debtors
make a request for a Loan pursuant to Section 2.2 of this Agreement other than the initial request
for a Loan, the Debtors shall provide the Lender with a comparison of actual receipts and
disbursement to the projected receipts and disbursements as set forth in the Budget for the prior
Budget Period and on a cumulative basis.

Section 6.11. Plan Support Agreement and Pleadings. The Debtors shall take all acts
required by or in furtherance of the Plan Support Agreement and shall take no act that would be
inconsistent with the provisions thereof. Without limiting the terms of the forgoing, the Debtors
shall provide the Lender for its review and approval prior to the filing thereof with the
Bankruptcy Court all material filings related to this Agreement or the Plan Support Agreement.

Section 6.12. Independence of Covenants. All covenants contained herein shall be
given independent effect so that if a particular action or condition is not permitted by any of
such covenants, the fact that such action or condition would be permitted by an exception to, or
otherwise be within the limitations of another covenant shall not avoid the occurrence of a Event
of Default if such action is taken or condition exists.

ARTICLE VII

Event of Default/Remedies

Section 7.1. Events of Default. The occurrence of each of the following conditions or
events shall constitute an Event of Default hereunder:

(a) The Debtors fail to pay when due any principal or interest on any Loan, any fee
or any other amount payable hereunder, or under any document to which the Debtors and the Lender
are parties or with respect to any other Obligation of the Debtors to the Lender;

(b) Any representation, warranty, certification or statement made by any of the
Debtors in this Agreement, in any certificate, financial statement or other document delivered
pursuant hereto or thereto or in connection with the Loans hereunder proves to have been incorrect
or misleading in any material respect when made or delivered;

(c) The Debtors fail to observe or perform any covenant or agreement contained in
this Agreement, the Financing Orders or any Loan Document;

(d) The Debtors’ expenses for any Budget Period exceed the amounts set forth in the
Budget;

(e) The Bankruptcy Court fails to enter (i) the Interim DIP Order within five (5)
Business Days following the Petition Date, or (ii) the Final DIP Order within thirty (30) days
following the Petition Date (unless such dates are extended with the written consent of the
Lender), or in the event that the Interim DIP Order, or after entry of the Final DIP Order, the
Final DIP Order ceases to be in full force and effect or shall have been stayed, vacated, reversed
rescinded or otherwise modified or amended without the prior written consent of the Lender;

(f) The Bankruptcy Court enters an order (i) appointing a trustee in any of the
Bankruptcy Cases under chapter 11 of the Bankruptcy Code or a responsible officer or an examiner
having enlarged powers (beyond those set forth under Section 1106(a)(3) and (4) of the Bankruptcy
Code or under Section 1106(b) of the Bankruptcy Code), or (B) dismissing any of the Bankruptcy
Cases or converting any of the Bankruptcy Cases to cases under chapter 7 of the Bankruptcy Code;

(g) The Bankruptcy Court enters an order granting relief from the automatic stay
applicable under Section 362 of the Bankruptcy Code so as to allow any Person other than the Lender
to proceed against any asset of the Debtors;

(h) The Bankruptcy Court enters an order in any of the Bankruptcy Cases amending,
supplementing, staying, reversing, revoking, rescinding, vacating or otherwise modifying the
Financing Orders, or any of the Debtors shall make an application for such relief without the
express prior written consent of the Lender;

(i) Any of the Debtors make any payments in respect of indebtedness arising prior to
the Petition Date without prior order of the Bankruptcy Court and the consent of the Lender;

(j) Any of the Debtors files an application seeking the approval of, or there shall
exist, be established or allowed, any other Superpriority Claim which is pari passu or senior to
the claim of the Lender under this Agreement or any other Lien on the Debtors’ property or assets
is granted by order of the Bankruptcy Court;

(k) Any judgment or decree is entered against any of the Debtors involving
post-Petition Date liability and such judgment or decree shall not have been vacated, discharged,
stayed or bonded pending appeal within the time required by the terms of the judgment;

(l) A settlement agreement with the Internal Revenue Service that definitively and
permanently settles the Federal Tax Claims for an amount no greater than $1,000,000.00 or such
other amount as the Lender may agree shall not have been fully executed on or before the date that
is ninety (90) days after the Petition Date unless such date is extended in writing by the Lender
in its sole discretion;

(m) The Debtors shall fail to file the Plan within five (5) Business Days after the
Petition Date;

(n) The Debtors shall file a plan of reorganization other than the Plan;

(o) The Debtors’ exclusive period to file a plan of reorganization or to solicit
acceptances of a plan of reorganization pursuant to Section 1121 of the Bankruptcy Code shall have
expired or terminated;

(p) An order approving the Debtors’ Disclosure Statement shall not have been entered
by the Bankruptcy Court by October 10, 2008;

(q) An order confirming the Plan shall not have been entered by the Bankruptcy Court
and the effective date of the Plan shall not have occurred by January 30, 2009;

(r) The Debtor shall sell, or seek to sell, any asset out of the ordinary course of
business without the express prior written consent of the Lender;

(s) The Debtors shall fail to comply with, or shall take any act that is contrary
to, the provisions of the Plan Support Agreement or such Plan Support Agreement is terminated;

(t) Any material provision of the Agreement or Loan Documents shall, for any reason,
cease to be valid and binding on any of the Debtors, or any of the Debtors shall so assert in any
pleading filed with the Bankruptcy Court or contests the validity or enforceability of any
provision of the Loan Documents; or

(u) Any of the Debtors shall seek, or support any other Person’s motion to (i)
disallow in whole or in part any Obligation arising under this Agreement; (ii) disallow any
obligations owed by the Debtors under the Pre-Petition Financing Documents, (iii) challenge the
validity and enforceability of the Liens or security interests granted in favor of the Lender or
confirmed herein or in the Interim DIP Order or the Final DIP Order as the case may be; (iv)
challenge the validity or enforceability of the Liens or security interests in favor of the
Pre-Petition Lender, or (v) seek to assert, initiate or prosecute on behalf of the Debtors or their
estates any claim, cause of action, adversary proceedings or other litigation against the Lender,
the Pre-Petition Lender, Repo Counterparty or their Affiliates.

Section 7.2. Remedies.

(a) Notwithstanding the provisions of section 362 of the Bankruptcy Code, if any
Event of Default occurs and is continuing, the Lender may take any or all of the following actions:

(1) declare the Commitment terminated, whereupon such Commitment shall be
terminated;

(2) declare the Obligations (together with accrued and unpaid interest and expenses
and any other obligations that may be due to the Lender under this Agreement) to be immediately due
and payable without presentment, demand, protest or other notice of any kind, all of which are
hereby expressly and irrevocably waived by the Debtors;

(3) set-off against any outstanding Obligations any and all amounts held for the
Debtors as cash collateral or in accounts of the Debtors maintained with or under the control of
the Lender or its respective Affiliates;

(4) take any other action or exercise any and all other right or remedy available to
the Lender under this Agreement, the Financing Orders or under applicable law including but not
limited to, all rights and remedies as a secured creditor under the UCC and all other rights
available to the Lender at law or in equity. The Lender may exercise any and all rights and
remedies available under this Agreement, the Financing Orders or under applicable law without any
duty to marshal assets or to be bound by any other doctrine which could prohibit or restrict the
ability or discretion of the Lender in choosing to foreclose on or enforce their rights as to any
portion of the Collateral;

provided, that with respect to items (3) and (4) above, the Lender shall provide the
Debtors, any Committee appointed in the Bankruptcy Cases, and the United States Trustee for the
District in which the Bankruptcy Cases are pending, with five (5) Business Days written notice
prior to taking such action contemplated thereby.

(b) Upon the occurrence and continuance of an Event of Default that has not been
waived by the Lender, and subject to Section 7.2(a), the automatic stay pursuant to Section 362 of
the Bankruptcy Code shall be vacated and terminated in accordance with the Interim DIP Order or
Final DIP Order, as applicable, so as to permit the Lender to exercise all of its rights and
remedies based on the occurrence of an Event of Default, including, without limitation, all of its
rights and remedies with respect to the Collateral. With respect to the Lender’s exercise of its
rights and remedies, each of the Debtors agree and warrant as follows:

(1) the Debtors waive and release any right to, and shall be enjoined from
attempting to, contest, delay to contest or otherwise challenge or dispute before the Bankruptcy
Court or otherwise the exercise by the Lender of their rights and remedies, except only as
expressly stated in subparagraph (ii) of this paragraph with respect only to the existence of an
Event of Default;

(2) if the Debtors dispute that an Event of Default has occurred, the Debtors will
be entitled to file an emergency motion with the Bankruptcy Court disputing whether an Event of
Default has occurred. Unless otherwise agreed by the Lender, any such motion shall be heard within
five (5) Business Days after it is filed, subject to the availability of the Bankruptcy Court. At
the hearing on the emergency motion, the only issue that will be heard by the Bankruptcy Court will
be whether an Event of Default has occurred and has not been cured, and, if an Event of Default has
occurred and has not been cured, the Lender shall be entitled to continue to exercise all of their
rights and remedies without the necessity of any further notice or order. Furthermore, nothing
herein shall be construed to impose or reimpose any stay or injunction of any kind against the
Lender.

(c) If an Event of Default has occurred and is continuing: (i) the Lender shall
have in addition to all other rights of the Lender, the rights and remedies of a secured party
under the UCC; (ii) the Lender may, at any time, take possession of the Collateral and keep it on
any Debtor’s premises, at no cost (including any charge pursuant to Section 506(c) of the
Bankruptcy Code) to the Lender, or remove any part of it to such other place or places as the
Lender may desire, or the Debtors shall, upon the Lender’s demand, at the Debtors’ cost, assemble
the Collateral and make it available to the Lender at a place or places reasonably convenient to
the Lender; and (iii) the Lender may sell and deliver any Collateral at public or private sales,
for cash, upon credit or otherwise, at such prices and upon such terms as the Lender deems
advisable, in its reasonable discretion, and may, if the Lender deems it reasonable, postpone or
adjourn any sale of the Collateral by an announcement at the time and place of sale or of such
postponed or adjourned sale without giving a new notice of sale. Without in any way requiring
notice to be given in the following manner, the Debtors agree that any notice by the Lender of
sale, disposition or other intended action hereunder or in connection herewith, whether required by
the UCC or otherwise, shall constitute reasonable notice to the Debtors if such notice is mailed by
registered or certified mail, return receipt requested, postage prepaid, or is delivered personally
against receipt to the Debtors, at least ten (10) Business Days prior to such action to the
Debtors’ address specified herein. If any Collateral is sold on terms other than payment in full
at the time of sale, no credit shall be given against the Obligations until the Lender receives
payment, and if the buyer defaults in payment, the Lender may resell the Collateral without further
notice to the Debtors. In the event the Lender seeks to take possession of all or any portion of
the Collateral by judicial process, the Debtors irrevocably waive: (A) the posting of any bond,
surety or security with respect thereto which might otherwise be required; (B) any demand for
possession prior to the commencement of any suit or action to recover the Collateral; and (C) any
requirement that the Lender retain possession and not dispose of any Collateral until after trial
or final judgment. The Debtors agree that the Lender has no obligation to preserve rights to the
Collateral or marshal any Collateral for the benefit of any Person. The Lender is hereby granted a
license or other right to use, without charge, the Debtors’ labels, patents, copyrights, name,
trade secrets, trade names, trademarks, and advertising matter, or any similar property, in
completing production of, advertising or selling any Collateral, and the Debtors’ rights under all
licenses and all franchise agreements shall inure to the Lender’s benefit for such purpose. The
proceeds of sale shall be applied first to all expenses of sale, including attorneys’ fees, and
then to the Obligations. After the Obligations have been indefeasibly paid in full in cash and the
Commitment terminated, the Lender will apply any excess proceeds of the Collateral in accordance
with an order of the Bankruptcy Court. The Debtors shall remain liable for any deficiency.

Section 7.3. Payments on Collateral. After the acceleration of the Obligations as
provided for in Section 7.2:

(a) all payments received by the Debtors under or in connection with any of the
Collateral shall be held by the Debtors in trust for the Lender, shall be segregated from other
funds of the Debtors and shall forthwith upon receipt by the Debtors be turned over to the Lender,
in the same form as received by the Debtors (duly indorsed by the Debtors to the Lender, if
required to permit collection thereof by the Lender); and

(b) all such payments received by the Lender (whether from the Debtors or with
respect to the Collateral) shall be applied by the Lender to the payment of Obligations and any
expenses as set forth in Section 7.5.

Section 7.4. Remedies Not Exclusive. No remedy conferred upon or reserved to the
Lender in this Agreement is intended to be exclusive of any other remedy or remedies, but every
such remedy shall be cumulative and shall be in addition to every other remedy conferred herein or
now or hereafter existing at law, in equity or by statute.

Section 7.5. Application of Proceeds. The Lender shall retain the net proceeds of any
collection, recovery, receipt, appropriation, realization or sale of the Collateral and, after
deducting all reasonable costs and expenses of every kind incurred therein or incidental to the
care and safekeeping of any or all of the Collateral or in any way relating to the rights of the
Lender hereunder, including reasonable attorneys’ fees and legal expenses, apply such net proceeds
to the payment in whole or in part of the Obligations or certain of the Obligations in such order
and against such Obligations as the Lender may elect, the Debtors remaining liable for any amount
remaining unpaid (and any attorneys fees paid by the Lender in collecting such deficiency) after
such application. Any such proceeds remaining after payment in full of the Obligations shall be
remitted to the Debtors. The Lender shall have no obligation whatsoever to seek satisfaction from
any particular item(s) or type(s) of property or Collateral, but may, in its sole discretion,
foreclose upon, realize against or otherwise enforce its rights in items of Collateral in any order
or priority.

ARTICLE VIII

Miscellaneous

Section 8.1. Notices. All notices and other communications provided for herein shall
be in writing and shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopier as follows:

If to the Debtors:

Luminent Mortgage Capital, Inc.

Attn: Mr. Zachary H Pashel

1515 Market Street, Suite 2000

Philadelphia, PA 19102

Facsimile: (215) 523-6968

With a copy to:

Peter S. Partee, Esq.

Richard P. Norton, Esq.

Hunton & Williams LLP

200 Park Avenue

New York, NY 10166-0091

Phone: 212-309-1000

Facsimile: 212-309-1100

If to the Lender:

Arco Capital Corporation Ltd.

c/o Arco Capital Management LLC

Attn: Juan Carlos Bou, Esq.

City View Plaza II

#48, Road 165, Suite 6000

Guaynabo, PR 00968

Phone: (787)993-9659

Facsimile: (787) 993-9651

With a copy (which shall not constitute notice to the Lender) to:

Anthony A. Lopez III, Esq.

Clifford Chance US LLP

31 West 52nd Street

New York, NY 10019

Facsimile: (212) 878-8375

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall
be deemed to have been given when received; notices sent by telecopier shall be deemed to have been
given when sent (except that, if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next Business Day for the recipient).

Section 8.2. No Waivers. No failure or delay by the Lender in exercising any right,
remedy, power or privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by law.

Section 8.3. Expenses.

(a) Costs and Expenses. The Debtors shall pay all reasonable out-of-pocket
expenses incurred by the Lender (including the reasonable fees, charges and disbursements of
counsel for the Lender) in connection with (i) the preparation, negotiation, execution, delivery
and administration of this Agreement and the other Loan Documents or any amendments, modifications
or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby
or thereby shall be consummated), (ii) the enforcement or protection of its rights in connection
with the Loans, this Agreement and the other Loan Documents, including its rights under this
Section 8.3(a), and (iii) the Bankruptcy Cases; provided however, that such fees and expenses shall
not exceed $450,000. The costs and expenses owing by the Debtors under this Section 8.3(a) shall
be advanced in accordance with the Budget and shall constitute Obligations hereunder.

(b) Indemnification by the Debtors. The Debtors shall indemnify the Lender
and each Related Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses (including the fees, charges and disbursements of any
counsel for any Indemnitee) incurred by any Indemnitee or asserted against any Indemnitee by any
third party or by the Debtors arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder, the consummation of the transactions contemplated hereby or
thereby, the administration of this Agreement and the other Loan Documents, (ii) any Loan or the
use or proposed use of the proceeds therefrom, (iii) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory, whether brought by a third party or by the Debtors, and regardless of whether any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related
expenses are determined by a court of competent jurisdiction by final and non-appealable judgment
to have resulted from the gross negligence or willful misconduct of such Indemnitee.

(c) Waiver of Consequential Damages, Etc. To the fullest extent permitted
by applicable law, the Debtors shall not assert, and hereby waive, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or as a result of,
this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof. No
Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use
by unintended recipients of any information or other materials distributed by it through
telecommunications, electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

(d) Payments. All amounts due under this Section shall be payable not later
than five Business Days after demand therefor.

(e) Survival. The agreements in this Section shall survive the termination
of the Commitment and the repayment, satisfaction or discharge of all the other Obligations.

Section 8.4. Amendments and Waivers. Any provision of this Agreement may be amended
or waived if, but only if, such amendment or waiver is in writing and is signed by the Debtors and
the Lender.

Section 8.5. Successors and Assigns; Survival. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns, except that the Debtors may not assign or otherwise transfer any of their rights under
this Agreement without the prior written consent of the Lender. The Lender may freely assign to
one or more of its affiliates all or any part of its interests, rights and obligations in and under
this Agreement without order of the Bankruptcy Court and without consent of the Debtor. The
provisions of this Agreement shall survive the termination of this Agreement and shall continue in
full force and effect so long as any Obligation is outstanding.

Section 8.6. New York Law. This Agreement and any other documents to which the
Debtors and the Lender are parties shall be governed by and construed in accordance with the laws
of the State of New York, except as otherwise provided herein, notwithstanding any conflicts of law
rules, principles or laws that would result in the application of another State’s laws.

Section 8.7. Counterparts; Effectiveness. This Agreement may be signed in any number
of counterparts, each of which shall constitute an original and all of which when taken together
shall constitute one and the same instrument. This Agreement shall become effective when the
Lender has received counterparts hereof signed by all parties.

Section 8.8. Waiver of Jury Trial; Submission to Jurisdiction. The Debtors hereby
irrevocably and unconditionally waive all right to trial by jury in any action, proceeding, or
counterclaim arising out of or related to this Agreement. Any legal action or proceeding with
respect to this Agreement, the Loans, or any other document to which the Debtors and the Lender are
parties or any document related hereto or thereto shall be brought in the Bankruptcy Court.

Section 8.9. Severability. If any provision hereof is invalid and unenforceable in
any jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions hereof
shall remain in full force and effect in such jurisdiction and shall be liberally construed in
order to carry out the intentions of the parties hereto as nearly as may be possible; and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the
validity or enforceability of such provisions in any other jurisdiction.

Section 8.10. Entire Agreement; Conflicts. This Agreement sets forth the entire
agreement of the parties hereto with respect to the subject matter hereof and supersedes all
previous understandings, written or oral, in respect thereof.

[SIGNATURES ON FOLLOWING PAGE]

3

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.

Debtors:

LUMINENT MORTGAGE CAPITAL, INC.

By:_Zachary H Pashel

MAIA MORTGAGE FINANCE STATUTORY TRUST

By:_ Zachary H Pashel

MERCURY MORTGAGE FINANCE STATUTORY TRUST

By:_ Zachary H Pashel

PROSERPINE, LLC

By:_ Zachary H Pashel

SATURN PORTFOLIO MANAGEMENT, INC.

By:_ Zachary H Pashel

LUMINENT CAPITAL MANAGEMENT, INC.

By:_ Zachary H Pashel

PANTHEON HOLDING COMPANY, INC.

By:_ Zachary H Pashel

MINERVA MORTGAGE FINANCE CORP.

By:_ Zachary H Pashel

MINERVA CDO DELAWARE SPV, INC.

By: /s/Zachary H Pashel

OT REALTY TRUST

By: /s/Zachary H Pashel

Lender:

ARCO CAPITAL CORPORATION, LTD.

By:     /s/Francesco N. Piovanetti

Francesco N. Piovanetti

President

4

EXHIBIT A

LUMINENT 12 MONTH BUDGET 

Deviations from the timetable and itemized, capped amounts contained in the Budget below shall not

be valid unless agreed to by Lender in its sole discretion

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Reorg Period Total
	Budgeted Drawdown Schedule ($000))
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	REORGAN	 	IZATION PERI	 	OD 1
    	 	sup>	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Amt*
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Per Business Plan of August 14, 2008
	 	 	8/20/08	 	 	 	8/31/08	 	 	 	9/5/08	 	 	 	9/20/08	 	 	 	10/5/08	 	 	 	10/20/08	 	 	 	11/5/08	 	 	 	11/20/08	 	 	 	12/5/08	 	 	 	12/20/08	 	 	 	1/5/09	 	 	 	1/31/09	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	OPERATING EXPENSES
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	SALARIES AND BENEFITS
	 	 	0	 	 	 	88	 	 	 	84	 	 	 	72	 	 	 	72	 	 	 	63	 	 	 	72	 	 	 	63	 	 	 	72	 	 	 	63	 	 	 	74	 	 	 	64	 	 	 	787	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	LEGAL/PROFESSIONAL
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Professional Fees and Expenses
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(including trustee & financial advisor)
	 	 	0	 	 	 	100	 	 	 	50	 	 	 	0	 	 	 	50	 	 	 	150	 	 	 	0	 	 	 	200	 	 	 	0	 	 	 	150	 	 	 	0	 	 	 	250	 	 	 	950	 
	DIP Lender Legal Fees
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	180	 	 	 	 	 	 	 	90	 	 	 	 	 	 	 	90	 	 	 	 	 	 	 	90	 	 	 	450	 
	Subtotal
	 	 	 	 	 	 	100	 	 	 	50	 	 	 	 	 	 	 	50	 	 	 	330	 	 	 	 	 	 	 	290	 	 	 	 	 	 	 	240	 	 	 	 	 	 	 	340	 	 	 	1,400	 
	OTHER OPERATING EXPENSES
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Rent
	 	 	0	 	 	 	16	 	 	 	0	 	 	 	16	 	 	 	0	 	 	 	16	 	 	 	0	 	 	 	16	 	 	 	0	 	 	 	24	 	 	 	0	 	 	 	10	 	 	 	98	 
	Information Tech/Systems
	 	 	0	 	 	 	27	 	 	 	0	 	 	 	28	 	 	 	0	 	 	 	25	 	 	 	0	 	 	 	25	 	 	 	5	 	 	 	25	 	 	 	5	 	 	 	25	 	 	 	165	 
	Board of directors
	 	 	0	 	 	 	19	 	 	 	0	 	 	 	19	 	 	 	0	 	 	 	19	 	 	 	0	 	 	 	11	 	 	 	0	 	 	 	9	 	 	 	0	 	 	 	11	 	 	 	88	 
	Accounting
	 	 	0	 	 	 	100	 	 	 	0	 	 	 	70	 	 	 	0	 	 	 	0	 	 	 	75	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	60	 	 	 	305	 
	Custody and bank fees
	 	 	0	 	 	 	1	 	 	 	0	 	 	 	1	 	 	 	0	 	 	 	1	 	 	 	0	 	 	 	1	 	 	 	0	 	 	 	2	 	 	 	0	 	 	 	2	 	 	 	8	 
	Tax
	 	 	0	 	 	 	1	 	 	 	0	 	 	 	1	 	 	 	0	 	 	 	1	 	 	 	0	 	 	 	1	 	 	 	0	 	 	 	1	 	 	 	0	 	 	 	1	 	 	 	6	 
	Printer
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	3	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	3	 	 	 	4	 	 	 	0	 	 	 	10	 
	Insurance
	 	 	0	 	 	 	7	 	 	 	0	 	 	 	7	 	 	 	0	 	 	 	7	 	 	 	0	 	 	 	7	 	 	 	0	 	 	 	7	 	 	 	0	 	 	 	7	 	 	 	42	 
	Public company
	 	 	0	 	 	 	7	 	 	 	0	 	 	 	5	 	 	 	0	 	 	 	3	 	 	 	2	 	 	 	3	 	 	 	0	 	 	 	5	 	 	 	0	 	 	 	3	 	 	 	28	 
	Marketing
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	1	 	 	 	0	 	 	 	2	 	 	 	0	 	 	 	2	 	 	 	0	 	 	 	2	 	 	 	0	 	 	 	2	 	 	 	9	 
	Travel & entertainment
	 	 	0	 	 	 	0	 	 	 	0	 	 	 	9	 	 	 	0	 	 	 	9	 	 	 	0	 	 	 	9	 	 	 	0	 	 	 	9	 	 	 	0	 	 	 	12	 	 	 	48	 
	Office Supplies
	 	 	0	 	 	 	7	 	 	 	0	 	 	 	7	 	 	 	0	 	 	 	7	 	 	 	0	 	 	 	5	 	 	 	0	 	 	 	5	 	 	 	0	 	 	 	5	 	 	 	36	 
	Other
	 	 	0	 	 	 	35	 	 	 	18	 	 	 	36	 	 	 	18	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	20	 	 	 	75	 	 	 	0	 	 	 	202	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Sub-total
	 	 	0	 	 	 	220	 	 	 	18	 	 	 	203	 	 	 	18	 	 	 	90	 	 	 	77	 	 	 	80	 	 	 	5	 	 	 	112	 	 	 	84	 	 	 	138	 	 	 	1,045	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	TOTAL DRAWDOWN SCHEDULE*
	 	 	0	 	 	 	408	 	 	 	152	 	 	 	275	 	 	 	140	 	 	 	483	 	 	 	149	 	 	 	433	 	 	 	77	 	 	 	415	 	 	 	158	 	 	 	542	 	 	 	3,232	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	* Budgeted Drawdowns will be reduced by cash released from blocked accounts, litigation revenues (other than the Barclays settlement proceeds) net of the related legal fees and expenses, and by
the amount of all cash revenues received in a given period net of up to 20% of such revenues to the extent paid for related commissions and fees.

	 

5

EXHIBIT B

66469.000040 EMF_US 26198744v2

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF MARYLAND

(BALTIMORE DIVISION)

	 	 	 	 	 	 	 	 	 
	 	 	)	 	 
	In re:	 	)	 	 
	 	 	)	 	Case No. 08-________
	LUMINENT MORTGAGE CAPITAL	 	)	 	Chapter 11
	INC. et al.2
	 	 	)	 	 	Jointly Administered
	 
	 	 	)	 	 	 	 	 
	Debtors.
	 	 	)	 	 	 	 	 

INTERIM ORDER (I) AUTHORIZING THE DEBTORS TO OBTAIN

POST-PETITION, SECURED, SUPER-PRIORITY FINANCING, AND

(II) SCHEDULING A FINAL HEARING

Upon the Motion (the “Motion”) filed by the above-captioned debtors and
debtors-in-possession (the “Debtors”) for, among other things, entry of an order pursuant to
sections 105, 362, 363, and 364 of the United States Bankruptcy Code, 11 U.S.C. §§ 101 et seq. (the
“Bankruptcy Code”), and Rules 2002, 4001 and 9014 of the Federal Rules of Bankruptcy
Procedure (the “Bankruptcy Rules”), (i) granting the Debtors authority to obtain
post-petition secured super-priority financing (the “DIP Financing”) from Arco Capital
Corporation Ltd. (“Arco” or the “Lender”) on the terms and conditions of that
certain Post-Petition Loan and Security Agreement, dated as of September 5, 2008, a copy of which
is annexed to the Motion as Exhibit A (the “DIP Agreement”)3, (ii)
authorizing the Debtors to execute and deliver the DIP Agreement and to perform such other and
further acts as may be necessary or appropriate in connection therewith; (iii) scheduling a
preliminary hearing (the “Preliminary Hearing”) on the relief requested in the Motion and
to consider entry of the proposed Interim Order (this “Interim Order”) authorizing the
Debtors to borrow, on an interim basis, up to $750,000 in accordance with the terms and conditions
of the DIP Agreement; and (iv) scheduling a final hearing (the “Final Hearing”) to consider
entry of a final order (the “Final Order”) on the relief requested in the Motion; notice of
the Motion having been given to the 30 largest unsecured creditors of the Debtors on a consolidated
basis, the Debtors’ secured lender and the United States Trustee; and the Court having scheduled
and conducted the Preliminary Hearing; and upon the entire record of the Preliminary Hearing,
including any evidence presented or statements of counsel at the Preliminary Hearing, and all
objections to the Motion having been withdrawn or overruled, and notice of the Preliminary Hearing
having been given in accordance with Bankruptcy Rules 4001(b), (c) and (d) and 9014, and after due
deliberation thereon; and good and sufficient cause appearing therefor;

IT IS HEREBY FOUND AND DETERMINED THAT:4

A. Filing of Petitions The Debtors filed for Chapter 11 relief on September 5, 2008 (the
“Petition Date”), and continue to manage their business and property as a
debtors-in-possession pursuant to Bankruptcy Code sections 1107 and 1108. No official statutory
creditors’ committee has been appointed in the cases (the “Bankruptcy Cases”).

B. Debtors’ Stipulations After consultation with their counsel, the Debtors admit, stipulate,
acknowledge and agree that:

(i) Pre-Petition Loans and Financial Accommodations. Luminent is a party to (a) that certain
Amended and Restated Credit Agreement dated as of September 26, 2007 as amended by the First
Amendment to the Amended and Restated Credit Agreement dated as of December 7, 2007, the Second
Amendment to the Amended and Restated Credit Agreement dated as of May 9, 2008, the Third Amendment
to the Amended and Restated Credit Agreement dated as of June 16, 2008 (the “Pre-Petition
Credit Agreement”), by and among Luminent as borrower, each of the other Debtors as guarantors,
and Arco as the Lender (the “Prepetition Lender”), and (b) severally with the other Debtors
listed therein, certain documents defined in the Credit Agreement as “Related Documents” (such
documents, collectively with the Credit Agreement, the “Pre-Petition Credit Documents”).
 Saturn, as seller, and GGRE, as buyer, are parties to that certain Master Repurchase Agreement,
dated as of August 14, 2007; Mercury, as seller, and GGRE, as buyer, are parties to that certain
Master Repurchase Agreement, dated as of August 14, 2007; Minerva, as seller, and GGRE, as buyer,
are parties to that certain Master Repurchase Agreement, dated as of August 14, 2007; and Minerva
SPV, as seller, and GGRE, as buyer, are parties to that certain Master Repurchase Agreement dated
as of December 6, 2007 (such Master Repurchase Agreements collectively, the “MRAs”) (the MRAs
together with the Pre-Petition Credit Documents, the “Pre-Petition Financing Documents”)
(GGRE as buyer under each of the MRAs, the “Repo Counterparty”)(each of the
transactions arising under and pursuant to the Pre-Petition Financing Documents, the
“Pre-Petition Financings”).

(ii) Pre-Petition Obligations. The obligations under the Pre-Petition Financing Documents
were valid and enforceable obligations for which the Debtors received significant value. As of
July 3, 2008 and at the Petition Date, defaults and Events of Default existed pursuant to the
Pre-Petition Financing Documents. As of July 3, 2008, the Debtors were justly and lawfully
indebted and liable without defense, counterclaim or offset of any kind, (x) to Arco in an amount
not less than $28,883,346.00 pursuant to the Pre-Petition Credit Documents, and (y) to GGRE in an
amount not less than $184,054,107.00 pursuant to the MRAs. On or about July 11, 2008, Arco validly
terminated the commitment and accelerated all obligations under the Credit Agreement. On or about
July 11, 2008, GGRE validly exercised its rights and remedies pursuant to the MRAs. None of the
Debtors disputed or dispute GGRE’s valuation of the Purchased Securities (as defined in each MRA).
The Debtors and their respective estates have no remaining interest in the Purchased Securities (as
defined in each MRA) (together with all other obligations contained in each of the Pre-Petition
Financing Documents (the “Pre-Petition Obligations”).

(iii) Validity of Pre-Petition Liens, Claims and Obligations The Debtors acknowledge and
agree that: (a) the first priority liens and security interests granted pursuant to the
Pre-Petition Financing Documents (the “Pre-Petition Liens”) are valid, binding,
enforceable, non-avoidable and perfected and are not subject to avoidance, subordination,
recharacterization, recovery, attack, offset, defense or Claim (as defined in the Bankruptcy Code)
of any kind pursuant to the Bankruptcy Code or applicable non-bankruptcy law; (b) as of the
Petition Date, the Pre-Petition Liens had priority over any and all other liens on such collateral;
(c) the Pre-Petition Obligations constitute legal, valid, binding obligations of the Debtors
enforceable in accordance with the terms of the Pre-Petition Financing Documents and no portion of
the Pre-Petition Obligations or any payments made or applied to the obligations owing under the
Pre-Petition Financing Documents prior to the Petition Date is subject to avoidance, subordination,
recharacterization, recovery, attack, offset, defense or Claim (as defined in the Bankruptcy Code)
of any kind pursuant to the Bankruptcy Code or applicable non-bankruptcy law; (d) the Debtors and
their estates have no claims. challenges, causes of action and choses in action, including without
limitation, avoidance claims under chapter 5 of the Bankruptcy Code, against Lender, GGRE or any of
their respective officers, directors, managers, shareholders, investors, employees, attorneys,
consultants, agents, advisors, service providers and any person acting on its or their behalf,
arising out of or based upon the Pre-Petition Financing Documents; and (f) the Debtors hereby
waive, discharge and release any right they might have to challenge any of the Pre-Petition
Obligations and Pre-Petition Liens and to assert any claims, challenges, causes of action, defenses
or set-off rights, including without limitation, avoidance claims under chapter 5 of the Bankruptcy
Code or under any other similar provisions of applicable state or federal law, against Lender,
GGRE, or any of their respective officers, directors, managers, shareholders, investors, employees,
attorneys, consultants, agents, advisors, service providers and any person acting on its or their
behalf.

(v) Cash Collateral The Debtors represent that all of the Debtors’ cash, wherever located,
whether as original collateral or as proceeds of other collateral subject to the Pre-Petition
Liens, constitutes the Cash Collateral of the Lender.

C. Post-Petition Financing

(i) Need for Post-Petition Financing The Debtors’ need to obtain credit on an interim basis
pursuant to the DIP Agreement is immediate and critical in order to enable the Debtors to continue
operations, pay employees and preserve the value of their estates. The Debtors do not have
sufficient available sources of working capital and financing to operate their businesses in the
ordinary course without the DIP Financing.

(ii) No Credit Available on More Favorable Terms Given their current financial condition and
capital structure, the Debtors are unable to obtain financing from sources other than the Lender on
terms more favorable than the DIP Financing and are unable to obtain unsecured credit allowable
under Bankruptcy Code Section 503(b)(1) as an administrative expense. The Debtors also have been
unable to obtain credit pursuant to Sections 364(c)(1), 364(c)(2) and 364(c)(3) for the purposes
set forth without the Debtors granting the DIP Liens and Superpriority Claims under the terms and
conditions of the DIP Agreement and as set forth in this Interim Order.

(iii) Fair and Reasonable The terms and conditions of the DIP Financing are fair and
reasonable, and the best available to the Debtors under the circumstances, reflect the exercise of
prudent business judgment of the Debtors consistent with the discharge of their fiduciary duties,
and are supported by reasonably equivalent value and fair consideration.

(iv) Good Faith of the Lender The DIP Agreement was negotiated in good faith and at arms’
length among the Debtors, the Lender and the Pre-Petition Lender. The extension of credit under
the DIP Financing by the Lender shall be deemed to be made in good faith and for valid business
purposes and uses within the meaning of Section 364(e) of the Bankruptcy Code and in reliance upon
the protections set forth therein. The Lender therefore is entitled to the full protections and
benefits of Section 364(e) in the event that this Interim Order or any provision thereof is
vacated, reversed or modified, on appeal or otherwise.

(v) Notice The notice given by the Debtors of the Motion, the relief requested therein and
the Preliminary Hearing under the circumstances constitutes due and sufficient notice thereof as
may be required by the Bankruptcy Code, the Bankruptcy Rules and the local rules of this Court
(including pursuant to Bankruptcy Rule 4001(b) and (c)) and no further notice relating to this
proceeding is necessary or required .

(vi) Cause Shown Good cause has been shown for the entry of this Interim Order. Absent
granting the interim relief sought by the Interim Order, the Debtors, their estates, their
creditors and the possibility for a successful reorganization would be immediately and irreparably
harmed. The DIP Financing and the entry of this Interim Order is in the best interests of the
Debtors, their estates and creditors.

D. Adequate Protection The Pre-Petition Lender is entitled to receive adequate protection to
the extent of the use of any cash collateral or any diminution in value of its interest in the
Pre-Petition Collateral. Pursuant to Sections 361, 363 and 507(b), as adequate protection, the
Pre-Petition Lender will receive adequate protection liens (“Adequate Protection Liens”)
and super priority claims, as more fully set forth in this Interim Order. In addition, the
Pre-Petition Lender is entitled to a waiver of any “equities of the case” claims under Section
552(b) of the Bankruptcy Code and, subject to the entry of a Final Order, the Pre-Petition Lender
and the Lender are entitled to a waiver of the provisions of Section 506(c) of the Bankruptcy Code
(without waiver of the right of the Lender to contest the applicability of Section 506(c) to the
DIP Financing under Section 364 of the Bankruptcy Code).

Based upon the foregoing findings and conclusions, it is hereby

ORDERED, ADJUDGED, AND DECREED that:

1. Jurisdiction This Court has jurisdiction over these proceedings and the parties and
property affected hereby pursuant to 28 U.S.C. §§ 157(b) and 1334. This is a core proceeding under
28 U.S.C. § 157(b).

2. Approval of Interim Financing; Objections Overruled The Motion is GRANTED and the DIP
Financing (as defined herein) is authorized and approved subject to the terms and conditions of
this Interim Order. All objections to the Motion are hereby overruled to the extent not withdrawn
or resolved.

3. DIP Obligations The terms and conditions of the DIP Agreement hereby are approved on an
interim basis and the Debtors are authorized and directed to execute and deliver the DIP Agreement
and any instruments or documentation in connection therewith, to borrow money and to perform the
obligations arising thereunder in accordance with and subject to the terms of this Interim Order
and the DIP Agreement. Upon execution and delivery, the DIP Agreement shall represent valid and
binding obligations of the Debtors and their estates, enforceable against the Debtors, their
estates and any successors thereto, including without limitation, any trustee or examiner appointed
in the Bankruptcy Cases, or in any case under chapter 7 of the Bankruptcy Code upon the conversion
of any of the Bankruptcy Cases in accordance with the terms of the DIP Agreement and this Interim
Order (all Obligations as defined in the DIP Agreement, the “DIP Obligations”).

4. Maximum Interim Borrowing. Pending the Final Hearing, the maximum aggregate borrowing by
the Debtors pursuant to the DIP Agreement and this Interim Order shall be limited to $750,000.00,
provided that any borrowing shall be subject to the terms and conditions set forth in the DIP
Agreement (the “Interim Financing”). Unless otherwise expressly agreed to in writing by
the Lender, the proceeds of the DIP Financing shall be used exclusively for the purposes identified
in, and in the line item amounts specified in, the Budget annexed to the DIP Agreement.

5. Post-Petition Liens In order to secure the DIP Obligations, effective immediately upon the
entry of this Interim Order and without the necessity of any other act or filing by the Lender, (i)
pursuant to Section 364(c)(2) of the Bankruptcy Code, the Lender is hereby granted a valid,
binding, continuing, enforceable, non-avoidable and automatically and properly perfected first
priority lien on, and security interest in, any and all assets and property of the Debtors and
their estates, whether existing on or as of the Petition Date or thereafter acquired, including,
without limitation, the proceeds of actions arising under chapter 5 of the Bankruptcy Code, that is
not subject to valid, perfected, enforceable, and non-avoidable liens existing as of the Petition
Date (the “Senior Liens”), and (ii) pursuant to Section 364(c)(3) of the Bankruptcy Code,
the Lender is hereby granted a valid, binding, continuing, enforceable, non-avoidable and
automatically and properly perfected lien on, and security interest in, any and all assets and
property of the Debtors and their estates, whether existing on or as of the Petition Date or
thereafter acquired, that is subject to valid, perfected, enforceable, and non-avoidable liens
existing as of the Petition Date junior only to such valid and perfected liens (the “Junior
Liens”) (collectively, the “DIP Liens”) (and as to all assets of the Debtors subject to
the DIP Liens, the “DIP Collateral”). This Interim Order shall be conclusive evidence of
the validity, perfection and priority of all liens granted herein including the DIP Liens and the
Adequate Protection Liens without the necessity of recording or filing any document necessary or
required under applicable non-bankruptcy law to perfect or maintain a lien and security interest.
In its discretion, the Lender and the Pre-Petition Lender may file a photocopy of this Interim
Order as a financing statement with any filing or recording or similar office in lieu of a
financing statement or similar document.

6. Super Priority Claims Upon the entry of this order, pursuant to § 364(c)(1) of the
Bankruptcy Code all of the DIP Obligations shall constitute allowed superpriority claims against
each of the Debtors with priority over any and all administrative expenses, including of the type
specified in, or claims arising under or ordered pursuant to Sections 105, 326, 328, 330-31, 365,
503(a), 503(b), 507(a), 507(b), 546(c), 546(d), 726 (to the fullest extent permitted by law), 1113,
1114, any other super priority claims granted pursuant to Section 364(c)(1) and any other provision
of the Bankruptcy Code (the “Superpriority Claim”).

7. Carve-Out The DIP Liens securing the DIP Obligations are senior, first priority liens
(except for the Junior Liens which are junior only to such valid and perfected Liens in existence
on the Petition Date) and the Superpriority Claims shall be superior to any lien or claim in the
DIP Collateral except to the extent of a carve-out (the “Carve Out”) for the payment of (a)
all fees required to be paid to the Clerk of the Bankruptcy Court and to the Office of the United
States Trustee pursuant to 28 U.S.C. § 1930, (b) allowed professional fees and disbursements
incurred by any statutory committee appointed in the Debtors’ Bankruptcy Cases (the “Committee”) in
an amount not to exceed $50,000.00, and (c) after the occurrence and during the continuance of an
Event of Default, allowed fees and disbursements incurred by the Debtors in an amount not to exceed
$25,000, provided however, that no portion of the Carve-Out and no proceeds of the DIP
Financing including advances pursuant to the Budget shall be used to pay any professional fees or
expenses incurred in connection with (i) any challenge to the amount, extent, priority, validity,
perfection or enforcement of indebtedness of the Debtors owing to the Lender, the Pre-Petition
Lender, or the Repo Counterparty, or (ii) any investigation of or challenge to the collateral
securing the Pre-Petition Loan or the perfection, priority or validity of the liens granted in
favor of the Pre-Petition Lender with respect to the Pre-Petition Loan, or (iii) any investigation,
assertion, initiation or prosecution, directly or indirectly, of any claim, causes of action,
adversary proceedings or other litigation against the Lender, the Pre-Petition Lender, the Repo
Counterparty or any person affiliated thereto, and provided further that if, after any
payment that utilizes any portion of the Carve-Out, the proceeds of unencumbered assets from any
source become available, the Lender shall be granted a lien on the proceeds of the unencumbered
assets to the extent of the Carve-Out paid. In accordance with the terms of the DIP Agreement, so
long as the DIP Financing has not terminated as a result of the occurrence of an Event of Default,
the Carve-Out shall not be reduced by the payment of fees and expenses of counsel to the Debtors
allowed by this Court and payable under Sections 328, 330 and 331 of the Bankruptcy Code and under
the DIP Agreement.

8. DIP Lien Priority The DIP Liens securing the DIP Obligations are senior, first priority
liens (except for the Junior Liens which are junior only to such valid and perfected Liens in
existence on the Petition Date) and the Superpriority Claims shall be superior to any lien or claim
in the DIP Collateral except as expressly and specifically set forth in paragraph 7. No other
claim or lien having a priority superior to or pari passu with any of the DIP Obligations, the DIP
Liens or the Adequate Protection Liens shall be granted while any of the DIP Obligations remain
outstanding. The DIP Liens shall not be (i) subject to any lien or security interest that is
avoided and preserved for the benefit of the Debtors’ estate under § 551 of the Bankruptcy Code,
(ii) subordinated to or made pari passu with any other lien or security interest under § 364(d) of
the Bankruptcy Code, or (iii) subject to marshalling or any similar remedy.

9. Modification of Automatic Stay The automatic stay pursuant to section 362(a) of the
Bankruptcy Code is hereby vacated and modified without further hearing or order as necessary to
effectuate all of the terms and provisions of this Interim Order, the DIP Agreement and the DIP
Financing, including without limitation to permit the Lender to file financing statements, deeds of
trust, mortgages or other similar documents to evidence the DIP Liens and to give the Debtors any
notice provided for in the DIP Agreement. As more particularly set forth in decretal paragraph 11
the automatic stay is further modified so that, upon the Maturity Date (as defined in the DIP
Agreement), the Lender shall be entitled to exercise all rights and remedies arising under and
pursuant to this Interim Order and the DIP Agreement and the Debtors waive and release any right
to, and shall be enjoined from attempting to, contest, delay to contest or otherwise challenge or
dispute the exercise by the Lender of its rights and remedies, provided that if the
Debtors dispute that an Event of Default has occurred, the Debtors shall be entitled to file an
emergency motion with the Bankruptcy Court disputing whether an Event of Default has occurred and
any such motion shall be heard within five (5) Business Days after it is filed, subject to the
availability of the Bankruptcy Court. At the hearing on the emergency motion, the only issue that
will be heard by the Bankruptcy Court will be whether an Event of Default has occurred and has not
been cured, and, if an Event of Default has occurred and has not been cured, in accordance with
decretal paragraph 11, the Lender shall be entitled to continue to exercise all of their rights and
remedies without the necessity of any further notice or order.

10. Events of Default The occurrence of an Event of Default under and as defined in the DIP
Agreement shall constitute and Event of Default under this Interim Order unless waived in writing
by the Lender.

11. Rights and Remedies Upon Event of Default; Maturity The DIP Financing and the Lender’s
willingness to make loans thereunder shall immediately terminate upon the occurrence of an Event of
Default. If any Event of Default occurs and is continuing, the Lender may take any or all of the
following actions each without further order of or application to the Bankruptcy Court: (i)
declare the commitment terminated, (ii) declare the DIP Obligations (together with accrued and
unpaid interest and expenses and any other obligations that may be due to the Lender under this DIP
Agreement) to be immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly and irrevocably waived by the Debtors; (iii)
set-off against any outstanding DIP Obligations any and all amounts held for the Debtors as cash
collateral or in accounts of the Debtors maintained with or under the control of the Lender or its
respective affiliates; and (iv) take any other action or exercise any and all other right or remedy
available to the Lender under the DIP Agreement, the Interim Order or under applicable law
including but not limited to, all rights and remedies as a secured creditor under the UCC and all
other rights available to the Lender at law or in equity; provided, that with respect to
items (iii) and (iv) above, the Lender shall provide the Debtors, any Committee appointed in the
Bankruptcy Cases and to the United States Trustee with five (5) Business Days prior written notice.
No party in interest may seek an order pursuant to Section 105 of the Bankruptcy Code to stay or
modify the provisions of this Interim Order or of the DIP Agreement with respect to the exercise of
the rights and remedies of the DIP Lender on the Maturity Date..

12. Good Faith Under Section 364(e) of the Bankruptcy Code The Lender has acted in good faith
in connection with this Interim Order and their reliance on this Interim Order is in good faith.
Based on the Findings set forth in this Interim Order and upon the record of the Interim Hearing,
all credit extended and loans made to the Debtors by the Lender shall be and hereby are deemed to
have been extended in good faith, as that term is used in § 364(e) of the Bankruptcy Code. If any
or all of the provisions of this Order are hereafter modified, vacated or stayed by a subsequent
order of a court, the Lender are entitled to the protections provided in Section 364(e) of the
Bankruptcy Code. Any such stay, modification or vacatur shall not affect (i) the validity and
enforceability of any of the DIP Obligations incurred by the Debtors or (ii) the validity,
priority, or enforceability of the Superpriority claim or of the DIP Liens granted hereby.
Notwithstanding any such stay, modification or vacation, any of the DIP Obligations incurred by the
Debtors shall be governed in all respects by the original provisions of this Interim Order and the
DIP Agreement, and the Lender shall be entitled to all the rights, remedies, privileges and
benefits granted by this Interim Order and the DIP Agreement with respect to all such DIP
Obligations, DIP Liens and super priority and other claims.

13. Exemption from Section 506(c) Expenses; Liability for Allowed Fees No expenses of
administration of the Debtors’ Bankruptcy Cases or any successor case shall be charged against or
recovered from the DIP Collateral pursuant to sections 105 or 506(c) of the Bankruptcy Code or
otherwise. Without limiting or expanding the foregoing, the Lender shall not have any liability or
obligation for any debt or obligation of the Debtors, their creditors or any successor with respect
to the administration of the Bankruptcy Cases or of a successor case. The Lender shall not have
any direct liability or obligation for the payment or reimbursement of any allowed professional
fees except as specifically set forth in the DIP Agreement and the Budget, each as limited by the
provisions of the DIP Agreement and this Interim Order.

14. Discharge of DIP Obligations Neither the DIP Obligations nor the Pre-Petition Obligations
shall be discharged by the entry of an order confirming any plan of reorganization, notwithstanding
the provisions of Section 1141(d) of the Bankruptcy Code, unless the DIP Obligations have been
indefeasibly paid in full in cash on or before the effective date of a confirmed plan of
reorganization.

15. Reservation of Rights Notwithstanding the entry of this Interim Order, the Lender and the
Pre-Petition Lender reserve all of their respective rights under the Bankruptcy Code, the
Bankruptcy Rules and under applicable non-bankruptcy law with respect to the Debtors, any party in
interest, and the Bankruptcy Cases.

16. No Liability to Third Parties In making decisions to advance loans or other extensions of
credit to the Debtors, in administering any loans or other extensions of credit, or in taking any
other actions related to the DIP Agreement and this Interim Order, including the exercise of
remedies in connection therewith, the Lender shall have no liability to any third party (including
creditors of the Debtors) and shall not be deemed to be in control of the operations of the Debtors
or to be acting as a “responsible person” or “owner or operator” with respect to the operation or
management of the Debtors.

17. No Modification of Interim Order Unless and until the DIP Obligations have been paid
indefeasibly in full in cash, the Debtors irrevocably waive the right to seek and shall not seek or
consent to, directly or indirectly, any modification to this Interim Order, or of any right or
benefit afforded the Lender hereunder, without the prior written consent of the Lender. The
Debtors and the Lender hereby are authorized to make any non-material amendments, modifications, or
waivers to the DIP Agreement without notice or further order of the Bankruptcy Court.

18. Interim Order Controls To the extent of any inconsistency between this Interim Order and
the DIP Agreement, except as otherwise may be agreed in writing by the Lender the provisions of
this Interim Order shall govern and control.

19. Survival Unless and until the DIP Obligations are paid indefeasibly in full in cash, the
provisions of this Interim Order and any actions taken, rights, claims or liens granted or benefits
arising under the Interim Order shall survive entry of any order that may be entered either
confirming a plan of reorganization in any of the Bankruptcy Cases; converting any of the
Bankruptcy Cases to a case under chapter 7 of the Bankruptcy Code; or dismissing (or the Court
abstaining from the exercise of its jurisdiction over) any of the Bankruptcy Cases, or a subsequent
case.

20. Final Hearing and Order Objections to the Final Order, if any shall be filed, in writing
and in accordance with the Local Rules of this Court, with the Clerk of the United States
Bankruptcy Court for the District of Maryland no later than 4:00 p.m. on      , 2008. All such
objections shall be served so that the same are received on or before such date by counsel
to the Debtors, Peter S. Partee, Esq. and Richard P. Norton, Esq., Hunton & Williams LLP, 200 Park
Avenue, 53rd Floor, New York, NY 10166, and Joel I. Sher, Esq., Shapiro Sher Guinot &
Sandler, 2000 Charles Center South, 36 South Charles Street, Baltimore, MD 21201-3104; and counsel
for the Lender, Andrew Brozman, Esq. and Jennifer C. DeMarco, Esq., Clifford Chance US LLP, 31 West
52nd Street, New York, NY 10019 and Brian F. Kenney, Esq., Miles & Stockbridge P.C.,
1751 Pinnacle Drive, Suite 500, McLean, VA 22102 and Richard L. Costella, Esq., Miles &
Stockbridge, P.C., 10 Light Street, Baltimore, Maryland 21202-1487 The Final Hearing on the Motion
shall be held on      , 2008 at      :00      .m.

21. Entry of Interim Order; Retention of Jurisdiction This Interim Order shall be effective
immediately upon entry by the Court. This Court has and will retain jurisdiction to enforce this
Interim Order in accordance with its terms and provisions.

	 	 	 
	Dated:

	 	Baltimore, Maryland
	
 
	 	     , 2008

     

United States Bankruptcy Judge

ARTICLE I1 The budget for
legal/professional fees is in addition to and assumes a $200,000 refreshment of
the existing retainer for Hunton & Williams LLP and the payment of a $50,000
retainer to Shapiro Sher Guinot & Sandler.

ARTICLE II2 The Debtors are the following:
Luminent Mortgage Capital, Inc. (“Luminent”), MAIA
Mortgage Finance Statutory Trust (“MAIA”), Mercury Mortgage
Finance Statutory Trust (“Mercury”), Proserpine, LLC
(“Proserpine”), Saturn Portfolio Management, Inc.
(“Saturn”), Luminent Capital Management, Inc.
(“LCM”), Pantheon Holding Company, Inc.
(“Pantheon”), Minerva Mortgage Finance Corp.
(“Minerva”), Minerva CDO Delaware SPV, Inc.
(“Minerva SPV”), and OT Realty Trust
(“OT”).

ARTICLE III3 Capitalized terms not defined
herein shall have the meanings ascribed such terms in the DIP Agreement.

ARTICLE IV4Findings of fact shall be
construed as conclusions of law and conclusions of law shall be construed as
findings of fact when appropriate. See Bankruptcy Rule 7052.

6FIRST AMENDMENT

EXHIBIT 10.1

FIRST AMENDMENT

TO

MASTER MANAGEMENT AGREEMENT

This FIRST AMENDMENT TO THE MASTER MANAGEMENT AGREEMENT (the “Amendment”) is made and entered into as of this 10th day of September, 2008 by and between INLAND AMERICAN REAL ESTATE TRUST, INC., a Maryland corporation (the “Company”), and INLAND AMERICAN APARTMENT MANAGEMENT LLC, a Delaware limited liability company (the “Property Manager”).

WHEREAS, the Company and the Property Manager are parties to the Master Management Agreement, dated August 31, 2005 (the “Agreement”), which, by its terms, expires on August 31, 2008; and

WHEREAS, the Company and the Property Manager desire to extend the term of the Agreement through August 31, 2009 and to amend certain portions of the Agreement; and

WHEREAS, on July 15, 2008, the board of directors of the Company, including a majority of the independent directors of the Company, voted to extend the term of the Agreement for one additional year, through August 31, 2009.

NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound hereby, do hereby agree, as follows:

1.

Defined Terms. Any term used herein that is not otherwise defined herein shall have the meaning ascribed to such term as provided in the Agreement.

2.

Extension of Term.  In accordance with Section 4(a) of the Agreement, the term of the Agreement is extended to August 31, 2009.

3.

Continuing Effect.  Except as otherwise set forth in this Amendment, the terms of the Agreement shall continue in full force and effect and shall not be deemed to have otherwise been amended, modified, revised or altered.

4.

Exhibit A.  The Amended and Restated Exhibit A to the Agreement, in the form attached hereto, be and hereby is approved.

5.

Counterparts.  The parties agree that this Amendment has been or may be executed in several counterparts, each of which shall be deemed an original, and all counterparts shall together constitute one and the same instrument.

IN WITNESS WHEREOF, the parties have duly executed this Amendment as of the date first written above.

					
	PROPERTY MANAGER:

	 
	OWNER:

	 
	 
	 

	INLAND AMERICAN APARTMENT MANAGEMENT LLC, a Delaware limited liability company

	 
	INLAND AMERICAN REAL ESTATE TRUST, INC., a Maryland corporation

	 
	 
	 

	By:

	/s/ Thomas P. McGuinness

	 
	By:

	/s/ Lori Foust

	Name:

	Thomas P. McGuinness

	 
	Name:

	Lori Foust 

	Its:

	President

	 
	Its:

	Treasurer

	 
	 
	 
	 
	 

2

AMENDED AND RESTATED

EXHIBIT A

FORM OF MANAGEMENT AGREEMENT

THIS MANAGEMENT AGREEMENT (this “Agreement”), dated as of [__________] [__], 20[__], is entered into by and between INLAND AMERICAN REAL ESTATE TRUST, INC., a Maryland corporation (“Owner”), and INLAND AMERICAN APARTMENT MANAGEMENT LLC, a Delaware limited liability company  (the “Property Manager”).

NOW, THEREFORE, in consideration of the mutual covenants and conditions herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1.

Owner hereby employs the Property Manager exclusively to rent, lease, operate and manage the property commonly known as and located in and legally described on Exhibit A attached hereto and made a part hereof (the “Premises”), upon the terms and conditions hereinafter set forth, for a term beginning on [__________] [__], 20[__] and ending on December 31, 20[__] (the “Initial Term”) and thereafter for three successive one-year renewal periods (each, a “Renewal Term”), with the first such one-year renewal period commencing on January 1, 20[__], and ending on December 31, 20[__], unless, between sixty (60) and ninety (90) days prior to the expiration of the Initial Term or the current Renewal Term, if applicable, either Owner or the Property Manager notifies the other party hereto in writing that it elects to terminate this Agreement, in which case this Agreement shall be terminated on the last day of the Initial Term or the current Renewal Term, if applicable.  The Owner also may terminate this Agreement without cause or penalty upon a vote of a majority of the Owner’s independent directors by providing no less than sixty (60) days written notice to the Property Manager.  In the event this Agreement is terminated for any reason prior to the expiration of the Initial Term or any Renewal Term, Owner shall indemnify, protect, defend, save and hold the Property Manager and all of its affiliates, shareholders, officers, directors, employees, agents, successors and assigns harmless from and against any and all claims, causes of action, demands, suits, proceedings, loss, judgments, damage, awards, liens, fines, costs, attorneys’ fees and expenses, of every kind and nature whatsoever that may be imposed on or incurred by the Property Manager by reason of the willful misconduct, gross negligence, malfeasance or unlawful acts (such unlawfulness having been adjudicated by a court of proper jurisdiction) of Owner.

2.

THE PROPERTY MANAGER AGREES:

2.1 (a)

To accept the management of the Premises, to the extent, for the period, and upon the terms herein provided and agrees to furnish the services of its organization in connection with renting, leasing, operating and managing the Premises, and, without limiting the generality of the foregoing, the Property Manager agrees to be responsible for those specific duties and functions set forth in Section 3 hereof.  The Property Manager shall be entitled at all times to manage the Premises in accordance with the Property Manager’s standard operating policies and procedures, except to the extent that any specific provisions contained herein are to the contrary, in which case the Property Manager shall manage the Premises consistent with the 

A-1

specific provisions of the Agreement. The Property Manager agrees to use its best efforts to maintain the highest occupancy at the highest rents for each space comprising the Premises.

2.1(b)

In performing its obligations under this Agreement, the Property Manager shall comply with the provisions of any federal, state or local law prohibiting discrimination in housing on the basis of race, color, creed, handicap or national origin, including Title VI of the Civil Rights Act of 1964 (Public Law 88-352, 78 Stat. 241), all requirements imposed by, or pursuant to, the Regulations of the Secretary (24 CFR, Subtitle A, Part I) issued pursuant to Title VI, regulations issued pursuant to Executive Order 1063 and Title VIII of the Civil Rights Act. The Property Manager shall not discriminate against any tenant or applicant for tenancy at the Premises on the basis of race, creed, color, religion, sex, martial status, sexual orientation, or national origin.

2.2

To render monthly reports for the Premises to Owner, to the attention of the individual and address as directed by Owner from time to time, and to remit to Owner the excess of Gross Income (as defined in Section 3.3 hereof) over expenses paid pursuant to Section 3.4 hereof (“Net Proceeds”) for each month on or before the 15th day of the following month.  The Property Manager will remit the Net Proceeds to Owner at the address as stated in Section 6.1 hereof. The reports to be submitted shall consist of the Property Manager’s commercial income report and commercial budget variance report, and such other monthly, quarterly and annual reports as are customary in commercial property management relationships and as reasonably requested by Owner in writing from time to time.

2.4

In the event that expenses paid pursuant to Section 3.4 hereof shall be in excess of Gross Income for any monthly period, to notify Owner of same and Owner agrees to pay the excess amount immediately upon request from the Property Manager, but nothing herein contained shall obligate the Property Manager to advance its own funds on behalf of Owner. All advances by the Property Manager on behalf of Owner shall be paid to the Property Manager by Owner within ten (10) days after request.

2.5

To prepare annualized budgets for operation of the Premises and submit them to Owner for approval. Annualized budgets shall be for planning and informational purposes only, and the Property Manager shall have no liability to Owner for any failure to meet any budget. However, the Property Manager will use its best efforts to operate the Premises pursuant to the annualized budget. The parties acknowledge that the first annualized budget has been prepared and approved for the year commencing [__________], [__] 20[__] and ending on December 31, 20[__].  Notwithstanding the period covered by the first annualized budget, all subsequent annualized budgets shall cover the period from January 1st of each year through December 31st of the same year. The proposed annualized budget for each calendar year shall be submitted by the Property Manager to Owner by December 1st of the year preceding the year for which it applies, and Owner shall notify the Property Manager within fifteen (15) days as to whether Owner has or has not approved the proposed annualized budget. If Owner does not approve the proposed annualized budget, Owner shall notify the Property Manager and the Property Manager shall make the necessary amendments to the annualized budget. During the time the Property Manager is preparing these amendments, the Property Manager will continue to operate the Premises according to the last approved annualized budget. Owner’s approval of the annualized budget shall constitute approval for the Property Manager to expend sums for all 

A-2

budgeted expenditures, without the necessity to obtain additional approval of Owner under any other expenditure limitations as set forth elsewhere in this Agreement.

3.

OWNER AGREES, and does hereby give the Property Manager the following exclusive authority and powers (all of which shall be exercised in the name of the Property Manager, as the Property Manager for Owner) and Owner agrees to assume and reimburse the Property Manager, its affiliates and agents for all expenses paid or incurred in connection therewith:

3.1

To advertise the Premises or any part thereof and to display signs thereon, which advertising and signs may contain the Property Manager’s name and customary logo; and to rent the same; to cause references of prospective tenants to be investigated; to sign leases for all or part of the Premises for terms not in excess of one year, or the period agreed to by the Owner and Property Manager, and to renew or cancel the existing leases and prepare and execute the new leases without additional charge to Owner; to terminate tenancies and to sign and serve in the name of the Owner of the Premises such notices as are deemed necessary by the Property Manager; to institute and prosecute actions to evict tenants and to recover possession of the Premises; with Owner’s authorization, to sue for, in the name of the Owner, and recover rent and other sums due; and, when expedient, to settle, compromise, and release any actions or suits, or reinstate such tenancies. Owner shall reimburse Property Manager for all expenses of litigation including attorneys’ fees, filing fees, and court costs that Property Manager does not recover from tenants.  The Property Manager may select the attorney of its choice to handle the litigation, with the Owner’s approval.  The Property Manager may collect from tenants all or any of the following: a late rent administrative charge; a non-negotiable check charge; a credit report fee; and a subleasing administrative charge or broker’s commission, without the need to account for that charges or commission to Owner.

3.2

To hire, supervise, discharge and pay salary and benefit expenses for all labor required for the operation and maintenance of the Premises including, but not limited to, on-site personnel, property managers, assistant property managers, leasing consultants, engineers, janitors, maintenance supervisors and other employees required for the operation and maintenance of the Premises, including personnel spending a portion of their working hours (to be charged on a pro rata basis) at the Premises (all of whom shall be deemed employees of the Premises, not of the Property Manager). All expenses of such employment shall be deemed operating expenses of the Premises. To make or cause to be made all ordinary repairs and replacements necessary to preserve the Premises in its present condition and for the operating efficiency thereof and all alterations required to comply with lease requirements, and to do decorating on the Premises; to negotiate and enter into, as the Property Manager for Owner of the Premises, contracts for all items on budgets that have been approved by Owner, any emergency services or repairs for items not exceeding $5,000.00, appropriate service agreements and labor agreements for normal operation of the Premises, which shall have terms not to exceed three  years, and agreements for all budgeted maintenance, minor alterations and utility services, including, but not limited to, electricity, gas, fuel, water, telephone, window washing, scavenger service, landscaping, snow removal, pest exterminating, decorating and legal services in collection with the leases and service agreements relating to the Premises, and other services or such of them as the Property Manager may consider appropriate; and to purchase supplies and pay all bills.  The Property Manager shall use its best efforts to obtain the foregoing services and 

A-3

utilities for the Premises at the most economical costs and terms available to the Property Manager. 

Owner hereby appoints the Property Manager as Owner’s authorized Property Manager for the purpose of executing, as the managing Property Manager for Owner, all of the foregoing types of agreements. In addition, Owner agrees to specifically assume in writing all obligations under all agreements so entered into by the Property Manager, on behalf of Owner of the Premises, upon the termination of this Agreement and Owner shall indemnify, protect, save, defend and hold the Property Manager and all of its affiliates, shareholders, officers, directors, employees, agents, successors and assigns harmless from and against any and all claims, causes of action, demands, suits, proceedings, loss, judgments, damage, awards, liens, fines, costs, attorneys’ fees and expenses, of every kind and nature whatsoever, resulting from, arising out of or in any way related to those agreements and which relate to or concern matters occurring after termination of this Agreement, but excluding matters arising out of the Property Manager’s misconduct, negligence, malfeasance or unlawful acts. The Property Manager shall secure the approval of, and execution of appropriate agreements by, Owner for any non-budgeted and non-emergency/contingency capital items, alterations or other expenditures in excess of $5,000.00 for anyone item, securing for each item at least three (3) written bids, if practicable, or providing evidence satisfactory to Owner that the agreed amount is lower than industry standard pricing, from responsible contractors. The Property Manager shall have the right from time to time during the term hereof, to contract with and make purchases from its affiliates and third party agents; provided that contract rates and prices are competitive with other available sources. The Property Manager may at any time, and from time to time, request and receive the prior written authorization of Owner of the Premises of any one or more purchases or other expenditures, notwithstanding that the Property Manager may otherwise be authorized hereunder to make such purchases or expenditures.

3.3

To collect rents, assessments and other items, including, but not limited to, the extent applicable, tenant payments for real estate taxes, property liability and other insurance, damages and repairs, common area maintenance, tax reduction fees and all other tenant reimbursements, administrative charges, proceeds of rental interruption insurance, parking fees, income from coin operated machines and other miscellaneous income, due or to become due (all such items being referred to herein as “Gross Income”) and give receipts therefore and to deposit all such Gross Income collected hereunder in the Property Manager’s custodial account which the Property Manager will open and maintain, in a state or national bank of the Property Manager’s choice and whose deposits are insured by the Federal Deposit Insurance Corporation, exclusively for the Premises and any other properties owned by Owner (or any entity that is owned or controlled by the Owner) and managed by the Property Manager. Owner agrees that the Property Manager shall be authorized to maintain a reasonable minimum balance (to be determined jointly from time to time) in the custodial account. The Property Manager may endorse any and all checks received in connection with the operation of the Premises and drawn to the order of Owner and Owner shall, upon request, furnish the Property Manager’s depository with an appropriate authorization for the Property Manager to make the endorsement.

3.4

To pay all expenses of the Premises from the Gross Income collected in accordance with Section 3.3 hereof, from the Property Manager’s custodial account. It is understood that the Gross Income will be used first to pay the compensation to the Property 

A-4

Manager as contained in Section 5 hereof, then operational expenses and then any mortgage indebtedness, including real estate tax and insurance impounds, but only as directed by Owner in writing and only if sufficient Gross Income is available for such payments.

3.5

Nothing in this Agreement shall be interpreted to obligate the Property Manager to pay from Gross Income, any expenses incurred by Owner prior to the commencement of this Agreement, except to the extent Owner advances additional funds to pay the expenses.

3.6

To collect and handle tenants’ security deposits, including the right to apply the security deposits to unpaid rent, and to comply, on behalf of Owner of the Premises, with applicable state or local laws concerning security deposits and interest thereon, if any.

3.7

The Property Manager shall not be required to advance any monies for the care or management of the Premises, and Owner agrees to advance all monies necessary therefor. If the Property Manager shall elect to advance any money in connection with the Premises, Owner agrees to reimburse the Property Manager in accordance with Section 2.4 above.

3.8

To handle all steps necessary regarding any claim for insured losses or damages; provided that the Property Manager will not make any adjustments or settlements in excess of $10,000.00 without Owner’s prior written consent.

3.9

Notwithstanding anything to the contrary contained in this Agreement, Owner acknowledges and agrees that any or all of the duties of the Property Manager as contained herein may be delegated by the Property Manager and performed by an affiliate or third-party agent (a “SubProperty Manager”) with whom the Property Manager contracts for the purpose of performing such duties. Owner specifically grants the Property Manager the authority to enter management agreements with any SubProperty Manager; provided that Owner shall have no liability or responsibility to any SubProperty Manager for the payment of the SubProperty Manager’s fee or for reimbursement to the SubProperty Manager of its expenses or to indemnify the SubProperty Manager in any manner for any matter; and provided further that the Property Manager shall require such SubProperty Manager to agree, in the written agreement setting forth the duties and obligations of such SubProperty Manager, to indemnify Owner for all loss, damage or claims incurred by Owner as a result of the willful misconduct, gross negligence, malfeasance or unlawful acts of the SubProperty Manager. Owner further acknowledges and agrees that the Property Manager may assign this Agreement and all of the Property Manager’s rights and obligations hereunder, to another management entity that is then managing other property for Owner (“Successor Property Manager”). Owner specifically grants the Property Manager the authority to make an assignment of this Agreement to a Successor Property Manager.

4.

OWNER FURTHER AGREES:

4.1

To indemnify, defend, protect, save and hold the Property Manager and all of its affiliates, shareholders, officers, directors, employees, agents, SubProperty Managers, successors and assigns (collectively, “Indemnified Parties”) harmless from any and all claims, causes of action, demands, suits, proceedings, loss, judgments, damage, awards, liens, fines, 

A-5

costs, attorneys’ fees and expenses, of every kind and nature whatsoever (collectively, “Losses”) in connection with or in any way related to the Premises and from liability for damage to the Premises and injuries to or death of any person whomsoever, and damage to property; provided, however, that any indemnification pursuant to this Section 4.1 shall not extend to any such Losses arising out of the negligence or misconduct of the Property Manager or any of the other Indemnified Party. Owner agrees to procure and pay for, at its own expense, public liability insurance, fire and extended coverage insurance, burglary and theft insurance, rental interruption insurance, flood insurance (if appropriate) and boiler insurance (if appropriate) naming Owner and the Property Manager as insured parties and adequate to protect their respective interests and in form, substance, and amounts reasonably satisfactory to the Property Manager, and to furnish to the Property Manager certificates and policies evidencing the existence of this insurance. The premiums for all insurance maintained by Owner shall be paid by either Owner directly or, provided sufficient Gross Income is available, by the Property Manager from Gross Income.  Unless Owner shall provide insurance and furnish certificates and policies within ten (10) days from the date of this Agreement, the Property Manager may, in its sole discretion, but shall not be obligated to, purchase insurance and charge the cost thereof to the account of Owner. All insurance policies shall provide that the Property Manager shall receive thirty (30) days’ written notice prior to cancellation of the policy.  The Property Manager shall not be liable for any error of judgment or for any mistake of fact or law, or for any thing that it may do or refrain from doing, except in cases of negligence or misconduct on the part of the Property Manager.

4.2

Owner hereby warrants and represents to the Property Manager that to the best of Owner’s knowledge, neither the Premises, nor any part thereof, has previously been or is presently being used to treat, deposit, store, dispose of or place any hazardous substance, that may subject the Property Manager to liability or claims under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Section 9607) or any constitutional provision, statute, ordinance, law or regulation of any governmental body or of any order or ruling of any public authority or official thereof, having or claiming to have jurisdiction thereover.  Furthermore, Owner agrees to indemnify, protect, defend, save and hold the Property Manager and all of its affiliates, shareholders, officers, directors, employees, agents, successors and assigns harmless from any and all claims, causes of action, demands, suits, proceedings, loss, judgments, damage, awards, liens, fines, costs, attorneys’ fees and expenses, of every kind and nature whatsoever, involving, concerning or in any way related to any past, current or future allegations regarding treatment, depositing, storage, disposal or placement by any party other than the Property Manager of hazardous substances on the Premises.

4.3

To give adequate advance written notice to the Property Manager if Owner desires that the Property Manager make payment, out of Gross Income, to the extent funds are available after the payment of the Property Manager’s compensation as contained in Section 5 hereof and all operational expenses, of mortgage indebtedness, general taxes, special assessments, or fire, boiler or any other insurance premiums. In no event shall the Property Manager be required to advance its own money in payment of any such indebtedness, taxes, assessments or premiums.

4.4

Nothing in this Section 4 or otherwise in this Agreement or any agreement executed by Owner in connection with this Agreement shall require Owner or a subsidiary of Owner to limit the liability of, waive any claims against, or indemnify and hold harmless any 

A-6

person or entity except to the extent Owner or that subsidiary is permitted by Section 8 of the Master Management Agreement, dated August 31, 2005, between Owner and the Property Manager, to so limit, waive, indemnify or hold harmless, as applicable.

5.

OWNER AGREES TO PAY THE PROPERTY MANAGER, AS A MONTHLY MANAGEMENT FEE HEREUNDER FOR MANAGING THE PREMISES DIRECTLY OR THROUGH ITS AFFILIATES OR AGENTS, an amount equal to four and one-half percent (4.5%) of Gross Income for the month for which the management fee is paid (each, a “Management Fee”), which shall be deducted monthly by the Property Manager and retained by the Property Manager from Gross Income prior to payment to Owner of Net Proceeds. The Management Fee shall be compensation for all services specified herein and provided by the Property Manager in connection with renting, leasing, operating and managing the Premises. Any services beyond those specified herein, such as sales brokerage, construction management, loan origination and servicing, property tax reduction and risk management services, shall be performed by Property Manager and compensated by Owner only if the parties agree on the scope of the services to be performed; provided that the compensation to be paid therefor will not exceed ninety percent (90.0%) of the market rate that would be paid to unrelated parties providing these services; provided further that all compensation must be approved by a majority of the independent directors of Owner. Owner acknowledges and agrees that Property Manager may pay or assign all or any portion of its Management Fee to a SubProperty Manager as described in Section 3.9 hereof.

5.1

The Property Manager shall retain all administrative charges actually collected from tenants in connection with annual common area maintenance reconciliations and tenant chargebacks for same.

6.

IT IS MUTUALLY AGREED THAT:

6.1

Owner shall designate one (1) person to serve as Owner’s Representative in all dealings with the Property Manager hereunder. Whenever the notification and reporting to Owner or the approval, consent or other action of Owner is called for hereunder, any notification and reporting if sent to or specified in writing to Owner’s Representative, and any approval, consent or action if executed by Owner’s Representative, shall be binding on Owner but only if approved by the Owner’s board of directors as may be required. Owner’s Representative initially shall be:

		
	Name

	Address

	Ms. Roberta S. Matlin,

Vice President, Administration

	2901 Butterfield Road

Oak Brook, IL 60523

Telephone:

(630) 218-8000

Facsimile:

(630) 218-4955

Owner’s Representative may be changed at the discretion of Owner, at any time and from time to time, and shall be effective upon the Property Manager’s receipt of written notice of the new Owner’s Representative.

A-7

6.2

Owner expressly withholds from the Property Manager any power or authority to make any structural changes in any building or to make any other major alterations or additions in or to any such building or equipment therein, or to incur any expense chargeable to Owner, other than expenses related to exercising the express powers above vested in the Property Manager without the prior written direction of Owner’s Representative, except that the Property Manager shall make all emergency repairs as may be required to ensure the safety of persons or property or which are immediately necessary for the preservation and safety of the Premises or the safety of the tenants and occupants thereof or are required to avoid the suspension of any necessary service to the Premises. 

6.3

The Property Manager shall be responsible for notifying Owner in the event it receives notice that any building on the Premises or any equipment therein does not comply with the requirements of any statute, ordinance, law or regulation of any governmental body or of any public authority or official thereof having or claiming to have jurisdiction thereover. The Property Manager shall forward to Owner promptly upon receipt, all material notices of violation or other material notices from any governmental authority, board of fire underwriters or insurance company relating to these matters. Owner represents that to the best of its knowledge the Premises and such equipment comply with all such requirements and authorizes the Property Manager to disclose Owner of the Premises to any officials and agrees to indemnify, protect, defend, save and hold the Property Manager and the other Indemnified Parties harmless of and from any and all Losses which may be imposed on them or any of them by reason of the failure of Owner to correct any present or future violation or alleged violation of any and all present or future laws, ordinances, statutes, or regulations of any public authority or official thereof, having or claiming to have jurisdiction thereover, of which it has actual notice.

6.4

In the event it is alleged or charged that any building on the Premises or any equipment therein or any act or failure to act by Owner with respect to the Premises or the sale, rental, or other disposition thereof fails to comply with, or is in violation of, any of the requirements of any constitutional provision, statute, ordinance, law or regulation of any governmental body or any order or ruling of any public authority or official thereof having or claiming to have jurisdiction thereover, and the Property Manager, in its sole and absolute discretion, considers that the action or position of Owner, with respect thereto may result in damage or liability to the Property Manager, the Property Manager shall have the right to cancel this Agreement at any time by written notice to Owner of its election so to do, which cancellation shall be effective upon delivery of the notice to Owner. Any notice may be delivered personally or by registered mail, on or to the person named to receive the Property Manager’s monthly statement at the address provided in Section 6.1 hereof, and if delivered by mail shall be deemed to have been delivered when deposited in the mails. Any cancellation pursuant to this Section 6.4 shall not release the indemnities of Owner set forth in this Agreement, including, but not limited to, those set forth in Sections 1, 3.2, 4.1, 4.2 and 6.3 above and shall not terminate any liability or obligation of Owner to the Property Manager for any payment, reimbursement, or other sum of money then due and payable to the Property Manager hereunder.

6.5

All personnel expenses, including but not limited to, wages, salaries, insurance, benefits, employment related taxes and other governmental charges, shall be charges incurred in connection with the Premises for purposes of Section 3.4 hereof, to the extent that these expenses are apportioned by the Property Manager to services rendered for the benefit of 

A-8

the Premises. The number and classification of employees serving the Premises shall be as determined by the Property Manager to be appropriate for the proper operation of the Premises; provided that Owner may request changes in the number and/or classification of employees, and the Property Manager shall make all requested changes unless in its judgment the resulting level of operation and/or maintenance of the Premises will be inadequate. The Property Manager shall honor any collective bargaining contract covering employment at the Premises which is in effect upon the date of execution of this Agreement; provided that the Property Manager shall not assume or otherwise become a party to any collective bargaining contract for any purpose whatsoever and all personnel subject to a collective bargaining contract shall be considered the employees of the Premises and not the Property Manager.

7.

Owner shall pay or reimburse the Property Manager, its affiliates or agents for all amounts due it under this Agreement for services and advances prior to termination of this Agreement. All provisions of this Agreement that require Owner to have insured, or to protect, defend, save, hold and indemnify or to reimburse the Property Manager shall survive any expiration or termination of this Agreement and, if the Property Manager is or becomes involved in any claim, proceeding or litigation by reason of having been the Property Manager of Owner, such provisions shall apply as if this Agreement were still in effect. The parties understand and agree that the Property Manager may withhold funds for sixty (60) days after the end of the month in which this Agreement is terminated to pay bills previously incurred but not yet invoiced and to close accounts. Should the funds withheld be insufficient to meet the obligation of the Property Manager to pay bills previously incurred, Owner shall, upon demand, advance sufficient funds to the Property Manager to ensure fulfillment of the Property Manager’s obligation to do so, within ten (10) days of receipt of notice and an itemization of all unpaid bills.

8.

Nothing contained herein shall be construed as creating any rights in third parties who are not the parties to this Agreement, nor shall anything contained herein be construed to impose any liability upon Owner or the Property Manager for the performance by Owner or the Property Manager under any other agreement they have entered into or may in the future enter into, without the express written consent of the other having been obtained.  Nothing contained in this Agreement shall be deemed or construed to create a partnership or joint venture between Owner and the Property Manager or to cause either party to be responsible in any way for the debts or obligations of the other or any other party (but nothing contained herein shall affect the Property Manager’s responsibility to transmit payments for the account of Owner as provided herein), it being the intention of the parties that the only relationship hereunder is that of the Property Manager and principal.

9.

Wherever possible, each provision of this Agreement shall be interpreted in a manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited or invalid under applicable law, the provision shall be ineffective only to the extent of the prohibition or invalidity, without invalidating the remainder of the provision or the remaining provisions of this Agreement. This Agreement, its validity, performance and enforcement shall be construed in accordance with, and governed by, the internal laws of the State in which the Premises are located without regard to that State’s conflicts of law principles.

10.

This Agreement shall be binding upon the successors and assigns of the Property Manager and the heirs, administrators, executors, successors and assignees of Owner.  This 

A-9

Agreement contains the entire Agreement of the parties relating to the subject matter hereof, and there are no understandings, representations or undertakings by either party except as herein contained. This Agreement may be modified solely by a written agreement executed by both parties hereto.

11.

If any party hereto defaults under the terms or conditions of this Agreement, the defaulting party shall pay the non-defaulting party’s court costs and attorneys’ fees incurred in the enforcement of any provision of this Agreement.

12.

The failure of either party to this Agreement to, in anyone or more instances, insist upon the performance of any of the terms, covenants or conditions of this Agreement, or to exercise any rights or privileges conferred in this Agreement, shall not be construed as thereafter waiving any such terms, covenants, conditions, rights or privileges, but the same shall continue in full force and effect as if no the forbearance or waiver had occurred.

13.

This Agreement is deemed to have been drafted jointly by the parties, and any uncertainty or ambiguity shall not be construed for or against either party as an attribution of drafting to either party.

14.

All notices given under this Agreement shall be sent by certified mail, return receipt requested, sent by facsimile transmission, or hand delivered at:

		
	If to Owner, to:

	Inland American Real Estate Trust, Inc.

2901 Butterfield Road

Oak Brook, IL  60523

Attention:

Ms. Roberta S. Matlin,

            Vice President, Administration

Telephone:

(630) 218-8000

Facsimile:

(630) 218-4955

	 
	 

	If to Property Manager, to:

	Inland American Apartment Management, LLC

2901 Butterfield Road

Oak Brook, IL  60523

Attention:

Thomas P. McGuinness

Telephone:

(630) 218-8000

Facsimile:

(630) 218-4955

A-10

WHEREFORE, the undersigned have executed this Agreement by their duly authorized officers or representatives as of the date first above written.

					
	PROPERTY MANAGER:

	 
	OWNER:

	 
	 
	 

	INLAND AMERICAN APARTMENT MANAGEMENT LLC, a Delaware limited liability company

	 
	INLAND AMERICAN REAL ESTATE TRUST, INC., a Maryland corporation

	 
	 
	 

	By:

	 
	 
	By:

	 

	Name:

	 
	 
	Name:

	 

	Its:

	 
	 
	Its:

	 

	 
	 
	 
	 
	 

A-11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}]]