Exhibit 10.1

 

 

 

MASTER REPURCHASE AGREEMENT

Dated as of April 23, 2018

by and among

NSREIT CB LOAN, LLC,

CB LOAN NT-II, LLC,

CLNC CREDIT 3, LLC,

CLNC CREDIT 4, LLC

and any other Person when such Person joins as a Seller under

this Agreement from time to time

individually and/or collectively, as the context requires, as Seller,

and

CITIBANK, N.A.,

as Buyer

 

 

 

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TABLE OF CONTENTS

 

     Page  

ARTICLE 1 APPLICABILITY

     1  

ARTICLE 2 DEFINITIONS

     1  

ARTICLE 3 INITIATION; CONFIRMATION; TERMINATION; FEES

     22  

ARTICLE 4 MARGIN MAINTENANCE

     33  

ARTICLE 5 PAYMENTS; WATERFALL ACCOUNT

     33  

ARTICLE 6 SECURITY INTEREST

     38  

ARTICLE 7 TRANSFER AND CUSTODY

     40  

ARTICLE 8 SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS

     41  

ARTICLE 9 REPRESENTATIONS AND WARRANTIES

     41  

ARTICLE 10 NEGATIVE COVENANTS OF SELLER

     47  

ARTICLE 11 AFFIRMATIVE COVENANTS OF SELLER

     49  

ARTICLE 12 SINGLE PURPOSE ENTITY

     53  

ARTICLE 13 EVENTS OF DEFAULT; REMEDIES; SET-OFF

     56  

ARTICLE 14 SINGLE AGREEMENT

     61  

ARTICLE 15 RECORDING OF COMMUNICATIONS

     62  

ARTICLE 16 NOTICES AND OTHER COMMUNICATIONS

     62  

ARTICLE 17 ENTIRE AGREEMENT; SEVERABILITY

     62  

ARTICLE 18 NON-ASSIGNABILITY

     62  

ARTICLE 19 GOVERNING LAW

     64  

ARTICLE 20 NO WAIVERS, ETC

     64  

ARTICLE 21 INTENT

     64  

ARTICLE 22 DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

     66  

ARTICLE 23 CONSENT TO JURISDICTION; WAIVERS

     66  

ARTICLE 24 NO RELIANCE

     67  

ARTICLE 25 INDEMNITY AND EXPENSES

     68  

ARTICLE 26 DUE DILIGENCE

     69  

ARTICLE 27 SERVICING

     70  

ARTICLE 28 MISCELLANEOUS

     71  

ARTICLE 29 JOINT AND SEVERAL OBLIGATIONS

     73  

 

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SCHEDULES

 

Schedule 1

  

Prohibited Transferees

Schedule 2

  

Reporting Website Address

EXHIBITS

 

Exhibit I

 

Names and Addresses for Communications

Exhibit II

 

Form of Transaction Request

Exhibit III

 

Form of Confirmation Statement

Exhibit IV

 

Authorized Representatives of Seller

Exhibit V

 

Form of Power of Attorney

Exhibit VI

 

Form of Covenant Compliance Certificate

Exhibit VII

 

Due Diligence Checklist

Exhibit VIII

 

Form of Margin Call Notice

Exhibit IX

 

[Intentionally Omitted]

Exhibit X(A)

 

Representations and Warranties Regarding Each Individual Purchased Asset
Consisting of Whole Loans

Exhibit X(B)

 

Representations and Warranties Regarding Each Individual Purchased Asset
Consisting of Senior Interests

Exhibit X(C)

 

Representations and Warranties Regarding Each Individual Purchased Asset
Consisting of Mezzanine Loans

Exhibit XI

 

Form of Joinder Agreement

 

-ii-

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MASTER REPURCHASE AGREEMENT

MASTER REPURCHASE AGREEMENT, dated as of April 23, 2018 (as amended, restated,
supplemented or otherwise modified and in effect from time to time, this
“Agreement”), by and among NSREIT CB LOAN, LLC, CB LOAN NT-II, LLC, CLNC CREDIT
3, LLC and CLNC CREDIT 4, LLC, each a Delaware limited liability company (each
such Person and any other Person when such Person joins as a Seller hereunder
from time to time, individually and/or collectively as the context may require,
“Seller”) and CITIBANK, N.A., a national banking association (including any
successor thereto, “Buyer”).

ARTICLE 1

APPLICABILITY

Subject to the terms of the Transaction Documents, from time to time the parties
hereto may enter into transactions in which Seller will sell to Buyer, all of
Seller’s right, title and interest in and to certain Eligible Assets (as defined
herein) and the other related Purchased Items (as defined herein) (collectively,
the “Assets”) against the transfer of funds by Buyer to Seller, with a
simultaneous agreement by Buyer to re-sell back to Seller, and by Seller to
repurchase, such Assets at a date certain or on demand, against the transfer of
funds by Seller to Buyer. Each such transaction shall be referred to herein as a
“Transaction” and, unless otherwise agreed in writing by Seller and Buyer, shall
be governed by this Agreement, including any supplemental terms or conditions
contained in any exhibits, schedules or annexes identified herein as applicable
hereunder. Each individual transfer of an Eligible Asset shall constitute a
distinct Transaction. Notwithstanding any provision or agreement herein, this
Agreement is not a commitment by Buyer to engage in Transactions, but sets forth
the requirements under which Buyer would consider entering into Transactions
from time to time. At no time shall Buyer be obligated to purchase or effect the
transfer of any Eligible Asset from Seller to Buyer. Any commitment to enter
into a Transaction shall be subject to Buyer’s sole discretion, shall be
evidenced by Buyer’s delivery of a Confirmation pursuant to Article 3(c)(ii) and
shall be subject to satisfaction of all terms and conditions of this Agreement.

ARTICLE 2

DEFINITIONS

The following capitalized terms shall have the respective meanings set forth
below.

“Accelerated Repurchase Date” shall have the meaning specified in
Article 13(b)(i).

“Accepted Servicing Practices” shall mean with respect to any Purchased Asset,
those commercial mortgage loan servicing practices of prudent commercial
mortgage lending institutions that service commercial mortgage loans of the same
type as such Purchased Asset in the state where the related underlying real
estate directly or indirectly securing or supporting such Purchased Asset is
located.

“Account Bank” shall mean Wells Fargo Bank, National Association or any
successor approved by Buyer in its sole discretion.

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“Account Control Agreement” shall mean that certain Amended and Restated Deposit
Account Control Agreement, dated as of the Closing Date, among Buyer, Seller and
Account Bank with respect to the Waterfall Account, as the same may be amended,
modified, and/or restated from time to time, and/or any replacement agreement.

“Act of Insolvency” shall mean, with respect to any Person, (a) the filing of a
petition, commencing, or authorizing the commencement of any case or proceeding,
or the voluntary joining of any case or proceeding under any Insolvency Law, or
suffering any such petition or proceeding to be commenced by another which is
consented to, not timely contested or results in entry of an order for relief,
or, in the case of a petition not initiated by, on behalf of or with the consent
of Seller, is not dismissed or stayed within ninety (90) days; (b) the seeking
of or consenting to the appointment of a receiver, trustee, custodian or similar
official for such Person or all or substantially all of the property of such
Person; (c) the appointment of a receiver, conservator, or manager for such
Person by any governmental agency or authority having the jurisdiction to do so;
(d) the making of a general assignment for the benefit of creditors; or (e) the
admission in writing by such Person of its inability to pay its debts or
discharge its obligations as they become due or mature (including without
limitation, its obligations under any Transaction Documents).

“Affiliate” shall mean, (a) when used with respect to Seller, Guarantor or
Parent, each of Manager, Parent or Parent’s Subsidiaries or (b) when used with
respect to any specified Person, any other Person directly or indirectly
Controlling, Controlled by, or under common Control with, such Person.

“Agreement” shall have the meaning specified in the introductory paragraph
hereof.

“Anti-Money Laundering Laws” shall have the meaning specified in Article 9(kk).

“Applicable Spread” shall have the meaning specified in the Fee Letter.

“Appraisal” shall mean a FIRREA compliant appraisal of the related Mortgaged
Property from a third party appraiser in form and substance satisfactory to
Buyer.

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

“Assets” shall have the meaning specified in Article 1.

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

“Bailee Agreement” shall have the meaning specified in the Custodial Agreement.

“Bankruptcy Code” shall mean Title 11 of the United States Code, as amended from
time to time, or any successor statute.

 

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“Business Day” shall mean a day other than (a) a Saturday or Sunday, or (b) a
day in which the New York Stock Exchange or banks in the State of New York are
authorized or obligated by law or executive order to be closed.

“Buyer” shall have the meaning specified in the introductory paragraph hereof.

“Capital Stock” shall mean, with respect to any Person, all of the shares of
capital stock or share capital 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 or share capital of (or
other ownership or profit interest in) such Person, all of the securities
convertible into or exchangeable for shares of capital stock or share capital of
(or other ownership or profit interest 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

“Capital Lease Obligations” shall mean, for any Person, all obligations of such
Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) property to the extent such obligations are required
to be classified and accounted for as a capital lease on a balance sheet of such
Person under GAAP, and, for purposes of this Agreement, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP.

“Change of Control” shall mean the occurrence of any of the following events:
(a) any “person” or “group” (within the meaning of Section 13(d) or 14(d) of the
Exchange Act) (other than the Manager or any Affiliate of CLNS) shall become, or
obtain rights (whether by means of warrants, options or otherwise) to become,
the beneficial owner, directly or indirectly, of 49% or more of the total voting
power of all classes of Capital Stock of Parent or Manager entitled to vote
generally in the election of the directors (or the applicable equivalent) of
either such Person, (b) the Guarantor shall cease to directly or indirectly own
and control, of record and beneficially, 100% of the Capital Stock of Seller,
(c) Parent or CLNS shall cease to be the sole managing member of Guarantor or
Parent shall cease to own, directly, (1) at least a majority of the total voting
power of the then outstanding voting Capital Stock of Guarantor or (2) Capital
Stock of Guarantor representing at least a majority of the total economic
interests of the Capital Stock of Guarantor, (d) the board of directors of
Parent shall cease to consist of a majority of Continuing Directors, and
(e) prior to an internalization of management by Parent, the Manager or any
Affiliate thereof (as replacement manager) shall cease to act as the external
manager for the Parent pursuant to a Management Agreement or CLNS shall cease to
Control Manager or any Affiliate thereof (as replacement manager).

Notwithstanding the foregoing, Buyer shall not (i) be deemed to approve or to
have approved any internalization of management by Parent or (ii) have waived or
be deemed to have waived Article 10(o), in either case, as a result of this
definition or any other provision herein.

“CLNS” shall mean Colony NorthStar Inc., a Maryland corporation.

“Closing Date” shall mean April 23, 2018.

 

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“Collateral” shall have the meaning specified in Article 6(a).

“Commercial Asset” shall mean, an Eligible Asset with respect to which the
Mortgaged Property consists of office, retail, industrial and/or mixed use
properties.

“Confidential Information” shall have the meaning specified in Article 28(j).

“Confirmation” shall mean a confirmation substantially in the form of Exhibit
III hereto, as same may be amended, modified and/or restated from time to time.

“Continuing Directors” shall mean, as of any date of determination, (i) any
member of the board of directors who was a member of the board of directors of
Parent on the Closing Date, or (ii) directors whose election or nomination was
approved by individuals referred to in the foregoing clause (i) constituting at
the time of such election or nomination at least a majority of the board of
directors, or (iii) directors whose election or nomination was approved by
individuals referred to in the foregoing clauses (i) and/or (ii) constituting at
the time of such election or nomination at least a majority of the board of
directors.

“Control” shall mean, with respect to any Person, the direct or indirect
possession of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, the
ability to exercise voting power, by contract or otherwise. “Controlling,”
“Controlled” and “under common Control” have correlative meanings.

“Controlling Participation Interest” shall mean, an interest in a performing
Whole Loan as identified by Seller to Buyer from time to time which
(a) represents a majority of the interests (or such lesser portion of the
interests as Buyer may approve on a case by case basis that constitutes
effective control), (b) represents a controlling position (including control
through approval or veto rights over customary major decisions) in such Asset as
reasonably determined by Buyer, (c) is senior to or pari passu with all other
interests in such Asset, and (d) vests the holders thereof with approval or veto
rights over customary major decisions concerning such Whole Loan.

“Covenant Compliance Certificate” shall mean an officer’s certificate from
Seller substantially in the form of Exhibit VI attached hereto.

“Covered Taxes” shall mean any Taxes imposed on or with respect to any payment
made by or on account of any obligation of Seller under the Transaction
Documents excluding (a) income taxes, branch profits taxes, franchise taxes or
any other Taxes imposed on net income (however denominated) or any similar Taxes
imposed by the jurisdiction in which Buyer is organized, maintains either its
principal office or a lending or purchasing office, or any other jurisdiction in
which Buyer is engaged in a trade or business, or any political subdivision of
any thereof or that are Other Connection Taxes, (b) any and all withholding
Taxes that are in effect (x) as of the date of this Agreement, or (y) as of the
date when such Person becomes an assignee of Buyer pursuant to Article 18(b),
(c) any Taxes attributable to Buyer’s or any assignee’s of Buyer failure to
comply with Article 5(j)(v) or Article 18(f), (d) any U.S. federal withholding
Taxes imposed under FATCA, and (e) any Tax imposed on a transferee, assignee or
participant at the time it acquired its interest in a Transaction, except, in
each case, to the extent the relevant transferor, assignor or Buyer was entitled
to receive additional amounts hereunder.

 

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“Credit Event” shall mean, with respect to any Purchased Asset, a material
adverse change in the credit characteristics (other than changes underwritten by
Buyer as of the related Purchase Date), taken in the aggregate, of the related
Mortgaged Property, any related Mortgagor or other obligor (including, without
limitation, any guarantor or sponsor), properties comparable to the Mortgaged
Property within the same commercial real estate market or, with respect to any
Purchased Asset that is a Senior Interest or Mezzanine Loan, the related Whole
Loan and, in any event, without regard to any event that results in the increase
or decrease of current interest rates or interest rate spreads or other similar
benchmarks (including, without limitation, U.S. treasury rates, interest rate
swaps, LIBOR or the prime rate). Any determination that a Credit Event has
occurred shall be made by Buyer in its sole but good faith business judgment.

“Custodial Agreement” shall mean the Custodial Agreement, dated as of the
Closing Date, by and among Custodian, Seller and Buyer, as the same may be
amended, modified and/or restated from time to time, and/or any replacement
agreement.

“Custodial Delivery” shall mean compliance by Seller with the delivery
obligations set forth in Section 2.02 of the Custodial Agreement.

“Custodian” shall mean Wells Fargo Bank, National Association, or any successor
custodian appointed by Buyer with the prior written consent of Seller (which
consent shall not be unreasonably withheld or delayed).

“Customary Recourse Exceptions” means, with respect to any Non-Recourse
Indebtedness, exclusions from the exculpation provisions with respect to such
Non-Recourse Indebtedness such as fraud, misapplication of cash, voluntary
bankruptcy, environmental claims, breach of representations and warranties,
failure to pay taxes and insurance, as applicable, and other circumstances
customarily excluded by institutional lenders from exculpation provisions and/or
included in separate indemnification agreements in non-recourse financings of
commercial real estate.

“Default” shall mean any event which, with the giving of notice, the passage of
time, or both, would constitute an Event of Default.

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

“Due Diligence Checklist” shall mean, with respect to any Eligible Asset, the
due diligence materials set forth on Exhibit VII hereto, in the case of each
item, to the extent applicable.

“Due Diligence Package” shall mean, with respect to any Eligible Asset, (a) the
items on the Due Diligence Checklist, in the case of each item, to the extent
applicable, (b) the Requested Exceptions Report and (c) such other documents or
information as Buyer or its counsel shall reasonably deem necessary.

“Early Repurchase” shall mean a repurchase of a Purchased Asset as described in
Article 3(d).

“Early Repurchase Date” shall have the meaning specified in Article 3(d).

 

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“Economic Sanctions” shall have the meaning specified in Article 9(hh).

“Effective Date” shall mean April 23, 2018.

“Effective Purchase Price Percentage” shall have the meaning specified in the
Fee Letter.

“Eligibility Criteria” shall mean, with respect to any Eligible Asset, as of the
Purchase Date therefor, (i) the proposed Purchased Asset is a Whole Loan, Senior
Interest or Mezzanine Loan accruing interest at a floating rate based on LIBOR,
(ii) after giving effect to the purchase of the proposed Purchased Asset, the
Portfolio Purchase Price Debt Yield (including the proposed Purchased Asset), as
determined by Buyer, will be greater than the Minimum Portfolio Purchase Price
Debt Yield, (iii) there is no monetary or material non-monetary default or event
of default (beyond all applicable notice and grace periods) under the related
Purchased Asset Documents, (iv) the Mortgaged Property LTV of the proposed
Purchased Asset does not exceed the Mortgaged Property LTV Threshold and (v) the
maximum term of the proposed Purchased Asset, including all extension options,
is not more than five (5) years.

“Eligible Asset” shall mean any performing, floating-rate Whole Loan, Senior
Interest or Mezzanine Loan (i) that is approved by Buyer in its sole and
absolute discretion as of the Purchase Date, (ii) with respect to which, upon
such Eligible Asset becoming a Purchased Asset, the applicable representations
and warranties set forth in this Agreement (including the exhibits hereto) are
true and correct in all material respects except to the extent disclosed in a
Requested Exceptions Report approved by Buyer, as evidenced by Buyer’s execution
of a Confirmation with respect thereto, (iii) which, in the case of a Whole Loan
or Senior Interest, is secured by stabilized or transitional Commercial Assets,
Multifamily Assets or Hotel Assets (provided that other property types will be
considered by Buyer on a case-by-case basis) and is not secured by any land
loans, properties under ground up construction or for-sale residential
properties (or, in the case of a Mezzanine Loan, is secured by first priority
pledges of all of the Capital Stock of Persons that directly or indirectly own
stabilized or transitional Commercial Assets, Multifamily Assets or Hotel Assets
and not any land, construction properties or for sale residential property),
(iv) with respect to which, in the case of a Mezzanine Loan, the related Whole
Loan is a Purchased Asset and (v) that satisfies the Eligibility Criteria as of
the relevant Purchase Date as determined by Buyer in its sole discretion (except
to the extent waived by Buyer as of the Purchase Date).

“Environmental Law” shall mean: (a) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund Amendments
and Re-authorization Act of 1986, 42 U.S.C. §9601 et seq.; (b) the Resource
Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid
Waste Amendments of 1984, 42 U.S.C. §6901 et seq.; (c) the Clean Air Act, 42
U.S.C. §7401 et seq., as amended by the Clean Air Act Amendments of 1990; (d)
the Clean Water Act of 1977, 33 U.S.C. §1251 et seq.; (e) the Toxic Substances
Control Act, 15 U.S.C.A. §2601 et seq.; (f) all other federal, state and local
laws, ordinances, regulations or policies relating to pollution or protection of
human health or the environment including without limitation, air pollution,
water pollution, or the use, handling, discharge, disposal or release or
recovery of on-site or off-site hazardous materials, as each of the foregoing
may be amended from time to time; and (g) any and all regulations promulgated
under or pursuant to any of the foregoing statutes.

 

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

“ERISA Affiliate” shall mean any corporation or trade or business that is a
member of any group of organizations (i) described in Section 414(b) or (c) of
the Internal Revenue Code of which Seller is a member and (ii) solely for
purposes of potential liability under Section 302(c)(11) of ERISA and
Section 412(c)(11) of the Internal Revenue Code and the lien created under
Section 302(f) of ERISA and Section 412(n) of the Internal Revenue Code,
described in Section 414(m) or (o) of the Internal Revenue Code of which Seller
is a member.

“Event of Default” shall have the meaning specified in Article 13(a).

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

“Exit Fee” shall have the meaning specified in the Fee Letter.

“Exit Fee Side Letter” shall mean the side letter agreement, dated as of the
date hereof, from Citigroup Global Markets, Inc. and accepted and agreed by
Seller, as same may be amended, modified and/or restated from time to time.

“Extension Term” shall have the meaning specified in Article 3(h).

“Facility Amount” shall have the meaning specified in the Fee Letter.

“Facility Expiration Date” shall mean the day that is the earlier of (i) the
Stated Facility Expiration Date and (ii) any Accelerated Repurchase Date.

“FATCA” means Internal Revenue Code sections 1471 through 1474, as of the date
of this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), any current or
future regulations or official interpretations thereof, any agreements entered
into pursuant to section 1471(b)(1) of the Internal Revenue Code, any
intergovernmental agreement entered into in connection with the implementation
of such sections of the Internal Revenue Code and any fiscal or regulatory
legislation, rules or practices adopted pursuant to any such intergovernmental
agreement.

“FDIA” shall have the meaning specified in Article 21(c).

“FDICIA” shall have the meaning specified in Article 21(d).

“Fee Letter” shall mean the letter agreement, dated as of the date hereof, from
Buyer and accepted and agreed by Seller, as same may be amended, modified and/or
restated from time to time.

“Filings” shall have the meaning specified in Article 6(c).

“Future Funding Advance Draw” shall have the meaning specified in
Article 3(e)(iii).

 

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“Future Funding Advance Draw Request” shall have the meaning specified in
Article 3(e)(iii).

“GAAP” shall mean United States generally accepted accounting principles
consistently applied as in effect from time to time.

“Governmental Authority” shall mean any national or federal government, any
state, regional, local or other political subdivision thereof with jurisdiction
and any Person with jurisdiction exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government (including
any applicable supra national bodies such as the European Union or the European
Central Bank).

“Guarantee” shall mean, as to any Person, any obligation of such Person directly
or indirectly guaranteeing any Indebtedness of any other Person or in any manner
providing for the payment of any Indebtedness of any other Person or otherwise
protecting the holder of such Indebtedness against loss (whether by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, or to take-or-pay or otherwise); provided that the term
“Guarantee” shall not include endorsements for collection or deposit in the
ordinary course of business. The amount of any Guarantee of a Person shall be
deemed to be the lower of (a) an amount equal to the stated or determinable
amount of the primary obligation in respect of which the Guarantee is made and
(b) the maximum amount for which such Person may be liable pursuant to the terms
of the instrument embodying such Guarantee, unless such primary obligation or
maximum amount for which such Person may be liable is not stated or
determinable, in which case the amount of such Guarantee shall be such Person’s
maximum reasonably anticipated liability in respect thereof as determined by
such Person in good faith in accordance with GAAP. The terms “Guarantee” and
“Guaranteed” used as verbs shall have correlative meanings.

“Guarantor” shall mean Credit RE Operating Company, LLC, a Delaware limited
liability company.

“Guarantor Threshold” shall have the meaning specified in the Fee Letter.

“Guaranty” shall mean the Guaranty, dated as of the date hereof, from Guarantor
in favor of Buyer, as same may be amended, modified and/or restated from time to
time.

“Hotel Asset” shall mean, an Eligible Asset with respect to which the Mortgaged
Property consists of one or more hotel properties.

“Income” shall mean, with respect to any Purchased Asset at any time, all monies
collected from or in respect of such Purchased Asset, including without
limitation, payments of interest, principal, repayment, rental or other income,
insurance and liquidation proceeds, plus all proceeds from sale or other
disposition of such Purchased Asset, but excluding all related escrow and
reserve payments and all expense reimbursement payments, which shall be applied
pursuant to the Servicing Agreement. For the avoidance of doubt, Income shall
not include (i) origination fees and expense deposits paid in connection with
the origination and closing of the Purchased Asset or (ii) if Servicer has the
right to deduct fees or other amounts from such amounts collected by Servicer in
accordance with the Servicing Agreement, the amount of such fees.

 

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“Indebtedness” shall mean, as to any Person at a particular time, without
duplication, the following to the extent they are included as indebtedness or
liabilities in accordance with GAAP:

(i) obligations created, issued or incurred by such Person for borrowed money
(whether by loan, the issuance and sale of debt securities or the sale of
property to another Person subject to an understanding or agreement, contingent
or otherwise, to repurchase such property from such Person);

(ii) obligations of such Person to pay the deferred purchase or acquisition
price of property or services, other than trade accounts payable (other than for
borrowed money) arising, and accrued expenses incurred, in the ordinary course
of business so long as such trade accounts payable are payable within sixty
(60) days of the date the respective goods are delivered or the respective
services are rendered;

(iii) Indebtedness of others secured by a lien on the property of such Person,
whether or not the respective Indebtedness so secured has been assumed by such
Person;

(iv) obligations (contingent or otherwise) of such Person in respect of letters
of credit or similar instruments issued or accepted by banks and other financial
institutions for the account of such Person;

(v) Capital Lease Obligations of such Person;

(vi) obligations of such Person under repurchase agreements, sale/buy-back
agreements or like arrangements;

(vii) Indebtedness of others Guaranteed by such Person;

(viii) all obligations of such Person incurred in connection with the
acquisition or carrying of fixed assets by such Person;

(ix) Indebtedness of general partnerships of which such Person is a general
partner; and

(x) all net liabilities or obligations under any interest rate swap, interest
rate cap, interest rate floor, interest rate collar or other hedging instrument
or agreement.

“Indemnified Amounts” and “Indemnified Parties” shall each have the meaning
specified in Article 25(a).

“Independent Member” shall mean a natural Person who:

(a) is not at the time of initial appointment and has never been, and will not
while serving as Independent Member be: (i) a stockholder, director, officer,
employee, partner, member (other than a “special member” or “springing member”),
manager (with the exception of serving as the Independent Member of Seller or
any Affiliate thereof), attorney or counsel of any Seller Party or any Affiliate
or equity owner of any Seller Party; (ii) a customer, supplier or other Person
who derives any of its purchases or revenues (other than any revenue derived
from serving as the Independent Member of such party) from its activities with
any Seller Party, or any Affiliate or

 

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equity owner of any Seller Party; (iii) a Person Controlled, Controlling or
under common Control with any such stockholder, director, officer, employee,
partner, member, manager, attorney, counsel, equity owner, customer, supplier or
other Person of any Seller Party or any Affiliate or equity owner of any Seller
Party; or (iv) a member of the immediate family of any such stockholder,
director, officer, employee, partner, member, manager, attorney, counsel, equity
owner, customer, supplier or other Person of any Seller Party or any Affiliate
or equity owner of any Seller Party; and

(b) has (i) prior experience as an independent director or independent member
for a corporation, a trust or limited liability company whose charter documents
required the unanimous consent of all independent directors or independent
members thereof before such corporation, trust or limited liability company
could consent to the institution of bankruptcy or insolvency proceedings against
it or could file a petition seeking relief under any applicable federal or state
law relating to bankruptcy and (ii) at least three (3) years of employment
experience and who is provided by CT Corporation, Corporation Service Company,
National Corporate Research, Ltd., National Registered Agents, Inc., Wilmington
Trust Company, Stewart Management Company or Lord Securities Company, MaplesFS
Limited, Maples Fiduciary Services (Delaware) Inc., or, if none of these
companies is then providing professional independent directors, another
nationally recognized company reasonably acceptable to Buyer, that is not an
Affiliate of Seller and that provides, inter alia, professional independent
directors or independent members in the ordinary course of their respective
business to issuers of securitization or structured finance instruments,
agreements or securities or lenders originating commercial real estate loans for
inclusion in securitization or structured finance instruments, agreements or
securities (a “Professional Independent Member”) and is an employee of such a
company or companies at all times during his or her service as an Independent
Member.

A natural Person who satisfies the foregoing definition except for being (or
having been) the independent director or independent member of a “special
purpose entity” that is an Affiliate of any Seller Party (provided that such
Affiliate does not or did not own a direct or indirect equity interest in
Seller) shall not be disqualified from serving as an Independent Member,
provided that such natural Person satisfies all other criteria set forth above
and that the fees such individual earns from serving as independent director or
independent member of Affiliates of Seller or in any given year constitute in
the aggregate less than five percent (5%) of such individual’s annual income for
that year. A natural person who satisfies the foregoing definition other than
subparagraph (a)(ii) shall not be disqualified from serving as an Independent
Member if such individual is a Professional Independent Member and such
individual complies with the requirements of the previous sentence.

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

“Internal Revenue Code” shall mean the Internal Revenue Code of 1986, as amended
from time to time, or any successor statute.

“Joinder Agreement” shall have the meaning specified in the definition of
Seller.

 

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“Knowledge” shall mean, whenever in this Agreement or any of the Transaction
Documents, or in any document or certificate executed on behalf of any Person
pursuant to the Transaction Documents, reference is made to the knowledge of any
such Person (whether by use of the words “knowledge” or “know”), unless
otherwise expressly specified, same shall mean (a) the actual knowledge of the
individuals of such Person or its Affiliates who have responsibility for
material day-to-day decision making, or the legal, operational or financial
affairs of such Person; or (b) with respect to any representations, warranties,
certifications or statements with respect to any Purchased Asset, the actual
knowledge of those individuals of such Person or its Affiliate who have primary
responsibility for the origination or acquisition, as applicable, management or
sale of such Purchased Asset.

“LIBOR” shall mean, with respect to each Pricing Rate Period, the rate
(expressed as a percentage per annum and rounded upward, if necessary, to the
next nearest 1/1000 of 1%) for deposits in U.S. dollars, for a one month period,
that appears on “Page BBAM” of the Bloomberg Financial Markets Services Screen
(or the successor thereto) as of 11:00 a.m., London time, on the related Pricing
Rate Determination Date. If such rate does not appear on “Page BBAM” of the
Bloomberg Financial Markets Services Screen (or the successor thereto) as of
11:00 a.m., London time, on such Pricing Rate Determination Date, Buyer shall
request the principal London office of any four major reference banks in the
London interbank market selected by Buyer to provide such bank’s offered
quotation (expressed as a percentage per annum) to prime banks in the London
interbank market for deposits in U.S. dollars for a one month period as of 11:00
a.m., London time, on such Pricing Rate Determination Date for amounts of not
less than the Repurchase Price of the applicable Transaction. If at least two
such offered quotations are so provided, LIBOR shall be the arithmetic mean of
such quotations. If fewer than two such quotations are so provided, Buyer shall
request any three major banks in New York City selected by Buyer to provide such
bank’s rate (expressed as a percentage per annum) for loans in U.S. dollars to
leading European banks for a one month period as of approximately 11:00 a.m.,
New York City time on the applicable Pricing Rate Determination Date for amounts
of not less than the Repurchase Price of such Transaction. If at least two such
rates are so provided, LIBOR shall be the arithmetic mean of such rates. LIBOR
shall be determined by Buyer or its agent, which determination shall be
conclusive absent manifest error. Buyer’s determination of LIBOR shall be
binding and conclusive on Seller absent manifest error. Notwithstanding the
foregoing, in no event shall LIBOR be less than zero.

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

“London Business Day” shall mean any day other than (a) a Saturday, (b) a Sunday
or (c) any other day on which commercial banks in London, England are not open
for business.

“Manager” shall mean CLNC Manager, LLC, a Delaware limited liability company.

 

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“Management Agreement” shall mean the Management Agreement, dated as of
January 31, 2018, by and between Manager, Guarantor and Parent, or such other
agreement acceptable to Buyer in its reasonable discretion, in each case, as the
same may be amended, modified, waived, supplemented, extended, replaced or
restated from time to time.

“Mandatory Early Repurchase Event” shall mean, with respect to any Purchased
Asset, and in the case of any Senior Interest or Mezzanine Loan, any related
Whole Loan, as applicable, (a) such Purchased Asset is subject to a payment
default at maturity or is delinquent (beyond any applicable notice and cure
periods) in the payment of any other scheduled principal or interest payable
(other than a payment at maturity) under the terms of the related Purchased
Asset Documents, (b) other than with respect to a Mark to Market Representation,
such Purchased Asset is subject to a material breach of a representation and
warranty set forth in Exhibit X hereto, as determined by Buyer, in its sole
discretion that has not been cured (except to the extent disclosed in a
Requested Exceptions Report and approved by Buyer in writing as evidenced by
Buyer’s execution of a Confirmation), (c) an Act of Insolvency shall have
occurred with respect to the related Mortgagor or guarantor, (d) any other
material Purchased Asset Event of Default exists with respect to such Purchased
Asset or (e) Seller fails to purchase any Related Purchased Asset simultaneously
with the repurchase of any Purchased Asset.

“Margin Amount” shall have the meaning specified in the Fee Letter.

“Margin Call Deadline” shall mean either (i) if Buyer delivers a Margin Call
Notice at or prior to 10:00 a.m. (New York City time) on any Business Day, the
close of business on the second (2nd) Business Day following the Business Day on
which such Margin Call Notice is delivered or (ii) if Buyer delivers a Margin
Call Notice after 10:00 a.m. (New York City time) on any Business Day or on any
day which is not a Business Day, the close of business on the third (3rd)
Business Day following the Business Day on which such Margin Call Notice is
delivered; provided, that if the Margin Call Notice results from a Mandatory
Early Repurchase Event, then the Margin Call Deadline shall mean the close of
business on the fifth (5th) Business Day following the Business Day on which
such Margin Call Notice is delivered.

“Margin Call Notice” shall have the meaning specified in Article 4(a).

“Margin Deficit” shall mean an amount equal to the positive difference (if any)
between the aggregate Margin Amount for all Purchased Assets and the aggregate
Market Value of all Purchased Assets.

“Margin Excess” shall mean, with respect to any Purchased Asset on any date, the
product of (a) the amount by which the Market Value of such Purchased Asset
exceeds the Margin Amount of such Purchased Asset on such date, multiplied by
(b) the maximum Purchase Price Percentage for such Purchased Asset.

“Margin Excess Advance” shall have the meaning specified in Article 3(e)(iv).

“Margin Excess Request” shall have the meaning specified in Article 3(e)(iv).

“Margin Threshold” shall have the meaning specified in Article 4(a).

 

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“Mark to Market Representation” shall mean the representations and warranties
set forth as items (A)(14) (with respect to the last sentence of the second
paragraph only), (A)(15), (A)(16), (A)(18), (A)(29), (A)(37)(f), (A)(38),
(A)(39), (A)(40), (A)(43) (with respect to the last sentence only), (B)(7),
(C)(8) (with respect to the last sentence of the second paragraph only),
(C)(27)(f) and (C)(33) (with respect to the last sentence only) on Exhibit X of
this Agreement.

“Market Value” shall mean, with respect to any Purchased Asset, on any date, the
market value for such Purchased Asset, as determined by Buyer on a continuous
basis and in its sole discretion exercised in good faith. The Market Value of a
Purchased Asset as of the Purchase Date will be set forth in the Confirmation
executed in connection with the Transaction for such Purchased Asset and,
notwithstanding anything to the contrary contained herein or in any Transaction
Document, such Market Value will not be adjusted by Buyer for any Purchased
Asset after the related Purchase Date for purposes of determining if a Margin
Deficit exists except during the continuance of a Credit Event which has
occurred with respect to such Purchased Asset. The Market Value may be reduced
by Buyer, at Buyer’s discretion, exercised in good faith (including to zero)
with respect to any Purchased Asset (i) as to which a Mandatory Early Repurchase
Event occurs, (ii) in respect of which the complete Purchased Asset File has not
been delivered to the Custodian in accordance with the terms of the Custodial
Agreement (or a Bailee Agreement, as the case may be), (iii) which has been
released from the possession of the Custodian under the Custodial Agreement to
Seller for a period in excess of the time period permitted under the Custodial
Agreement, (iv) which does not qualify for safe harbor treatment as contemplated
by Article 23 (or, with respect to any Senior Interest or Mezzanine Loan, the
related Whole Loan) or (v) if such Purchased Asset is not repurchased on its
Repurchase Date, from and after the Repurchase Date of such Purchased Asset.

“Material Adverse Effect” shall mean a material adverse effect on (a) the
business, financial condition or operations of the Seller Parties, taken as a
whole, (b) the ability of any Seller Party to perform its obligations under any
of the Transaction Documents, (c) the validity or enforceability of any of the
Transaction Documents or (d) the rights and remedies of Buyer under any of the
Transaction Documents.

“Mezzanine Borrower” shall mean the obligor on any applicable Mezzanine Note.

“Mezzanine Loan” shall mean a mezzanine loan secured by pledges of 100% of the
Capital Stock of the Mortgagor under a related Whole Loan which is a Purchased
Asset.

“Mezzanine Loan Documents” shall mean, respect to any Purchased Asset that is a
Mezzanine Loan, the Mezzanine Note, those documents executed in connection with,
evidencing or governing such Mezzanine Loan, including, without limitation,
those documents which are required to be delivered to Custodian under the
Custodial Agreement.

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

“Minimum Portfolio Purchase Price Debt Yield” shall have the meaning specified
in the Fee Letter.

 

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“Mortgage” shall mean a mortgage, deed of trust, deed to secure debt or other
instrument, creating a valid and enforceable first Lien on or a first priority
ownership interest in (subject to Permitted Encumbrances) an estate in fee
simple in real property and the improvements thereon or a ground lease, securing
a Mortgage Note or similar evidence of indebtedness.

“Mortgage Note” shall mean a note or other evidence of indebtedness of a
Mortgagor secured by a Mortgage in connection with a Purchased Asset.

“Mortgaged Property” shall mean (i) with respect to any Whole Loan or Senior
Interest, the mortgaged property securing such Whole Loan and (ii) with respect
to any Mezzanine Loan, the real property owned by the Person the Capital Stock
of which is pledged as collateral for such Mezzanine Loan.

“Mortgaged Property LTV” shall mean, with respect to any Purchased Asset, as of
the related Purchase Date, a fraction (expressed as a percentage) (A) the
numerator of which is the outstanding principal balance of such Purchased Asset
and (B) the denominator of which is the “as-is” appraised value as identified on
the most recent Appraisal(s) of the related Mortgaged Property or Mortgaged
Properties.

“Mortgaged Property LTV Threshold” shall have the meaning set forth in the Fee
Letter.

“Mortgagor” shall mean, the obligor on a Mortgage Note and the grantor of the
related Mortgage.

“Multiemployer Plan” shall mean a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been, or were required to
have been, made by Seller or any ERISA Affiliate in the last five (5) years and
that is covered by Title IV of ERISA.

“Multifamily Asset” shall mean, an Eligible Asset with respect to which the
Mortgaged Property consists of real property with five (5) or more residential
units (including mixed use multi-family/office and multi-family retail) as to
which the majority of the underwritten revenue is from residential rental units,
and which may include mobile housing and student housing.

“Non-Controlling Participation Interest” shall mean an interest in any Whole
Loan as identified by Seller to Buyer from time to time which does not represent
a Controlling Participation Interest in such Asset as reasonably determined by
Buyer.

“Non-Recourse Indebtedness” shall mean Indebtedness of a Person that is not
Recourse Indebtedness.

“Non-U.S. Person” shall have the meaning specified in Article 5(j)(v).

“Other Connection Taxes” shall mean Taxes imposed on Buyer or an assignee of the
Buyer’s rights and obligations under this Agreement as a result of a present or
former connection between Buyer or such assignee and the jurisdiction imposing
such Tax (other than connections arising from Buyer or such assignee having
executed, delivered, become a party to, performed its obligations under,
received payments under, received or perfected a security interest under,
engaged in any other transaction pursuant to or enforced any Transaction
Document).

 

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“Other Taxes” shall have the meaning specified in Article 5(j)(ii).

“Parent” shall mean Colony NorthStar Credit Real Estate Inc., a Maryland
corporation.

“Participant Register” shall have the meaning specified in Article 18(e).

“Patriot Act” shall have the meaning specified in Article 9(hh).

“Permitted Encumbrances” shall mean, with respect to any Purchased Asset
(a) such liens, easements, rights and encumbrances as are permitted by the
related Purchased Asset Documents and (b) Liens granted pursuant to the
Transaction Documents.

“Person” shall mean an individual, corporation, limited liability company,
business trust, partnership, joint tenant or tenant-in-common, trust, joint
stock company, joint venture, unincorporated organization, or any other entity
of whatever nature, or a Governmental Authority.

“Plan” shall mean an employee benefit or other plan established or maintained by
Seller or any ERISA Affiliate during the five year period ended prior to the
date of this Agreement or to which Seller or any ERISA Affiliate makes, is
obligated to make or has, within the five year period ended prior to the date of
this Agreement, been required to make contributions and that is covered by Title
IV of ERISA or Section 302 of ERISA or Section 412 of the Internal Revenue Code,
other than a Multiemployer Plan.

“Portfolio Purchase Price Debt Yield” shall have the meaning specified in the
Fee Letter.

“Pre-Purchase Legal/Due Diligence Review Fee” shall mean a non-refundable fee
payable by Seller to Buyer, in the amount of Buyer’s reasonable attorneys’ fees
and disbursements of outside counsel in connection with each proposed Purchased
Asset to be subject to a Transaction.

“Pricing Rate” shall have the meaning specified in the Fee Letter.

“Pre-Purchase Due Diligence” shall have the meaning specified in Article 3(c).

“Pricing Rate Determination Date” shall mean with respect to any Pricing Rate
Period with respect to any Transaction, the second (2nd) London Business Day
preceding the first day of such Pricing Rate Period.

“Pricing Rate Period” shall mean, with respect to any Transaction and any
Remittance Date, (a) in the case of the first Pricing Rate Period, the period
commencing on and including the Purchase Date for such Transaction and ending on
and excluding the following Remittance Date, and (b) in the case of any
subsequent Pricing Rate Period, the period commencing on and including the
immediately preceding Remittance Date and ending on and excluding the following
Remittance Date; provided, however, that in no event shall any Pricing Rate
Period for a Purchased Asset end subsequent to the Repurchase Date for such
Purchased Asset.

“Principal Payment” shall mean, with respect to any Purchased Asset, any payment
or prepayment of principal received as, or applied to, as a payment or
prepayment of principal in respect thereof.

 

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“Prohibited Person” shall mean (i) a person or entity whose name appears on, is
directly or indirectly owned or controlled by anyone appearing on the list of
Specially Designated Nationals and Blocked Persons by the Office of Foreign
Asset Control (“OFAC”), (ii) any foreign shell bank and (iii) any person or
entity resident in or whose subscription funds are transferred from or through
an account in a jurisdiction that has been designated as a non-cooperative with
international anti-money laundering principles or procedures by an
intergovernmental group or organization, such as the Financial Action Task Force
on Money Laundering (“FATF”), of which the U.S. is a member and with which
designation the U.S. representative to the group or organization continues to
concur. See http://www.fatf-gati.org for FATF’s list of Non-Cooperative
Countries and Territories.

“Prohibited Transferee” shall mean any of the Persons listed on Schedule 1
attached to this Agreement.

“Purchase Date” shall mean, with respect to any Purchased Asset, the date on
which Buyer purchases such Purchased Asset from Seller hereunder.

“Purchase Price” shall have the meaning specified in the Fee Letter.

“Purchase Price Debt Yield” shall have the meaning specified in the Fee Letter.

“Purchase Price Differential” shall have the meaning specified in the Fee
Letter.

“Purchase Price LTV” shall have the meaning specified in the Fee Letter.

“Purchase Price Percentage” shall have the meaning specified in the Fee Letter.

“Purchased Asset” shall mean (a) with respect to any Transaction, the Eligible
Asset, and any related rights, interests or claims of any kind with respect to
such Eligible Asset sold by Seller to Buyer in such Transaction and (b) with
respect to the Transactions in general, all Eligible Assets sold by Seller to
Buyer (other than Purchased Assets that have been repurchased by Seller), in the
case of each of sub-clauses (a) and (b) above, including to the extent related
to the Purchased Assets, all of Seller’s right, title and interest in and to,
(i) the Purchased Asset Documents, (ii) the Servicing Rights, (iii) the
Servicing Records, (iv) mortgage guaranties, mortgage insurance, insurance
policies, insurance certificates, insurance claims, insurance proceeds,
collection and escrow accounts, letters of credit, (v) the principal balances of
the Purchased Assets, not just the amount advanced by Buyer to Seller in respect
of the Purchase Price of such Purchased Asset, (vi) Income, (vii) indemnities,
warranties or other credit support or enhancement, (viii) all related pledged
collateral and (ix) all supporting obligations of any kind. Any Purchased Asset
that is repurchased by Seller in accordance with this Agreement shall cease to
be a Purchased Asset.

“Purchased Asset Documents” shall mean, with respect to a Purchased Asset, the
documents comprising the Purchased Asset File for such Purchased Asset.

“Purchased Asset Event of Default” shall mean for any Purchased Asset, an “Event
of Default” as defined in the Purchased Asset Documents for such Purchased Asset
(subject to the expiration of any cure or grace periods).

 

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“Purchased Asset File” shall mean the documents specified as the “Purchased
Asset File” with respect to each Purchased Asset in the Custodial Agreement,
together with any additional documents and information required to be delivered
to Buyer or its designee (including the Custodian) pursuant to this Agreement
and/or the Custodial Agreement.

“Purchased Items” shall mean all of Seller’s right, title and interest in, to
and under each of the following items of property, whether now owned or
hereafter acquired, now existing or hereafter created and wherever located:

(a) the Purchased Assets;

(b) all proceeds relating to the sale, securitization, liquidation, or other
disposition of the Purchased Assets;

(c) all “general intangibles”, “accounts”, “chattel paper”, “investment
property”, “instruments”, “securities accounts” and “deposit accounts”, each as
defined in the UCC, relating to or constituting any and all of the foregoing;
and

(d) all replacements, substitutions or distributions on or proceeds, payments,
Income and profits of, and records (but excluding any financial models or other
proprietary information) and files relating to any and all of any of the
foregoing.

“Qualified Transferee Requirements” shall mean any requirement under any
Purchased Asset Document that the holder or the transferee of the related
Purchased Asset be a qualified or eligible transferee, qualified institutional
lender or qualified or eligible lender (however defined).

“Recourse Indebtedness” shall mean, with respect to any Person, for any period,
without duplication, the aggregate Indebtedness in respect of which such Person
is subject to recourse for payment, whether as a borrower, guarantor or
otherwise; provided, that Indebtedness arising pursuant to Customary Recourse
Exceptions shall not constitute Recourse Indebtedness until such time (if any)
as demand has been made for the payment or performance of such Indebtedness.

“Register” shall have the meaning specified in Article 18(d).

“Related Credit Enhancement” shall have the meaning specified in Article 6(a).

“Related Purchased Asset” shall mean (i) with respect to any Whole Loan which is
a Purchased Asset, any Mezzanine Loan related to such Whole Loan and (ii) with
respect to any Mezzanine Loan which is a Purchased Asset, the related Whole
Loan.

“Remittance Date” shall mean the nineteenth (19th) calendar day of each month,
or the immediately succeeding Business Day, if such calendar day shall not be a
Business Day, or such other day as is mutually agreed to in writing by Seller
and Buyer.

“Representatives” shall have the meaning specified in Article 28(j).

 

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“Repurchase Date” shall mean, with respect to any Purchased Asset, the earliest
to occur of (a) the date set forth in the applicable Confirmation, or if such
day is not a Business Day, the immediately following Business Day; (b) the
maturity date of such Purchased Asset (as same may be extended pursuant to the
Purchased Asset Documents); (c) the Facility Expiration Date (as such date may
be extended pursuant to the terms of this Agreement); (d) the Early Repurchase
Date with respect to such Purchased Asset; (e) the Accelerated Repurchase Date;
(f) the date set forth in Article 3(i)(1)(B); or (g) the second (2nd) Business
Day following a Principal Payment in full with respect to such Purchased Asset
prior to the related maturity date.

“Repurchase Obligations” shall have the meaning specified in Article 6(a).

“Repurchase Price” shall mean, with respect to any Purchased Asset as of any
Repurchase Date or any date on which the Repurchase Price is required to be
determined hereunder, the price at which such Purchased Asset is to be
transferred from Buyer to Seller; such price will be determined in each case as
the sum of (i) the outstanding Purchase Price of such Purchased Asset as of such
date; (ii) the accrued and unpaid Purchase Price Differential with respect to
such Purchased Asset as of such date; (iii) all accrued and unpaid costs and
expenses (including, without limitation, the documented fees and expenses of
outside counsel) of Buyer relating to such Purchased Asset; and (iv) any other
amounts due and owing by Seller to Buyer and its Affiliates pursuant to the
terms of the Transaction Documents as of such date with respect to such
Purchased Asset (including, without limitation, any amount payable pursuant to
Article 3(f)(ii) or any Exit Fee payable pursuant to the Fee Letter).

“Requested Exceptions Report” shall mean, with respect to any proposed Purchased
Asset, a list delivered to Buyer as part of the Due Diligence Package containing
any and all exceptions to the representations and warranties and any other
Eligibility Criteria contained in this Agreement applicable to such proposed
Purchased Asset (or that will be applicable to such proposed Purchased Asset if
it becomes a Purchased Asset). A Requested Exceptions Report shall be deemed
approved by Buyer in writing upon Buyer’s execution of a Confirmation with
respect to the related Purchased Asset.

“Requirement of Law” shall mean, as of any date, any applicable law, treaty,
rule, regulation, code, directive, policy, order or requirement or determination
of an arbitrator or a court or other Governmental Authority whether now or
hereafter enacted or in effect.

“S&P” shall mean Standard and Poor’s Ratings Services and any successor or
successors thereto.

“SEC” shall have the meaning specified in Article 22(a).

“Securities Act” shall mean the Securities Act of 1933, as amended.

“Seller” shall mean, collectively, NSREIT CB Loan, LLC, CB Loan NT-II, LLC, CLNC
Credit 3, LLC, CLNC Credit 4, LLC and each other Person as and when same may be
approved by Buyer in its sole discretion from time to time and admitted to this
Agreement as a Seller by a joinder agreement executed and delivered by Buyer,
Seller and such approved other Seller in the form of Exhibit XI to this
Agreement (as “Joinder Agreement”).

“Seller Party” shall mean, collectively or individually, as the context may
require, Seller and Guarantor.

 

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“Seller Threshold” shall have the meaning specified in the Fee Letter.

“Senior Interest” shall mean (a) a senior or pari passu participation interest
in a Whole Loan (including Controlling Participation Interests but not including
Non-Controlling Participation Interests) (i) that is evidenced by a Senior
Interest Note, (ii) that represents an undivided interest in part of the
underlying Whole Loan and its proceeds, (iii) that represents a pass through of
a portion of the payments made on the underlying Whole Loan which lasts for the
same length of time as such Whole Loan, and (iv) as to which there is no
guaranty of payments to the holder of the Senior Interest Note or other form of
credit support for such payments, or (b) an “A note” in an “A/B structure” in a
Whole Loan.

“Senior Interest Note” shall mean (a) the original executed promissory note,
participation or other certificate or other tangible evidence of a Senior
Interest, (b) the related original Mortgage Note (or, if Seller cannot obtain
the original, then a certified copy thereof), and (c) the related original
participation and/or intercreditor agreement, as applicable (or, if Seller
cannot obtain the original, then a certified copy thereof with a lost note
affidavit signed by a senior officer of Seller in such form as is acceptable to
Buyer in its discretion).

“Servicer” shall mean (i) Wells Fargo Bank, National Association, or (ii) any
other third-party servicer (a) having a primary and special servicer rating of
“average” or better from S&P, and (b) approved by Buyer in its reasonable
discretion.

“Servicer Account” shall mean the account created pursuant to Section 3.05 of
the Servicing Agreement.

“Servicer Letter” shall have the meaning specified in Article 27(e).

“Servicing Agreement” shall mean the Amended and Restated Servicing Agreement,
dated as of the Closing Date, by and among the Servicer, Buyer and Seller, as
same may be amended, modified and/or restated, or any replacement thereof with a
successor Servicer, which replacement servicing agreement is acceptable to Buyer
in its sole discretion exercised in good faith.

“Servicing Records” shall have the meaning specified in Article 27(f).

“Servicing Rights” shall mean rights of any Person, to administer, service or
subservice the Purchased Assets or to possess related Servicing Records.

“Settlement Agent” shall mean a nationally recognized title company, escrow
company or law firm, as applicable, in accordance with local law and practice,
which is a party to the Bailee Agreement and is approved by Buyer in its sole
and absolute discretion.

“Significant Modification” shall mean:

(i) any modification, consent to a modification or waiver of any monetary term
or material non-monetary term (including, without limitation, prepayment terms,
timing of scheduled payments and acceptance of discounted payoffs) of a
Purchased Asset (or related Whole Loan, as applicable) or any extension of the
maturity date of such Purchased Asset (or related Whole Loan, as applicable),
except any such modification, consent or waiver or the exercise of any extension
term expressly provided in the related Purchased Asset Documents, in each case,
for which there is no material lender discretion (or, in the case of a Senior
Interest, material discretion in favor of Seller);

 

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(ii) any release of collateral or any acceptance of substitute or additional
collateral for a Purchased Asset (or related Whole Loan, as applicable) or any
consent to either of the foregoing, other than if required pursuant to the
specific terms of the related Purchased Asset Documents (or related Whole Loan,
as applicable) and for which there is no material lender discretion (or, in the
case of a Senior Interest, material discretion in favor of Seller) (it being
acknowledged that Seller’s right to calculate the debt service coverage ratio,
debt yield, loan to value ratio or other similar financial tests (but not the
waiver or modification of any such tests) shall not be considered material
lender discretion for purposes of this clause (ii));

(iii) any waiver of a “due-on-sale” or “due-on-encumbrance” clause with respect
to a Purchased Asset (or related Whole Loan, as applicable) or, if lender
consent is required, any consent to such a waiver or consent to a transfer of a
Mortgaged Property or interests in the Mortgagor or consent to the incurrence of
additional debt, other than any such transfer or incurrence of debt as may be
effected without the consent of the lender (or, in the case of a Senior
Interest, the consent of Seller) under the related Purchased Asset Documents;
and

(iv) any acceptance of an assumption agreement releasing a Mortgagor from
liability under a Purchased Asset (or related Whole Loan, as applicable) other
than pursuant to the specific terms of such Purchased Asset (or related Whole
Loan, as applicable) and for which there is no material lender discretion (or,
in the case of a Senior Interest, material discretion in favor of Seller).

“SIPA” shall have the meaning specified in Article 22(a).

“Stated Facility Expiration Date” shall mean April 23, 2021 (or if such day is
not a Business Day, the immediately succeeding Business Day) as such date may be
extended pursuant to Article 3(h) of this Agreement.

“Subsidiary” shall mean, as to any Person, a corporation, partnership, limited
liability company, or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person.

“Substitute Index” shall have the meaning specified in the Fee Letter.

“Substitute Rate” shall have the meaning specified in the Fee Letter.

“Substitute Rate Applicable Spread” shall have the meaning specified in the Fee
Letter.

“Substitute Rate Transaction” shall mean, with respect to any Pricing Rate
Period or portion thereof, any Transaction with respect to which the Pricing
Rate for such Pricing Rate Period or portion thereof is calculated at the
Substitute Rate.

 

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“Taxes” shall mean all present or future taxes, levies, imposts, duties,
deductions, withholdings (including backup withholding), assessments, fees or
other charges imposed by any Governmental Authority, including any interest,
additions to tax or penalties applicable thereto.

“Transaction” shall have the meaning specified in Article 1.

“Transaction Documents” shall mean, collectively, this Agreement, the Fee
Letter, the Exit Fee Side Letter, the Guaranty, the Custodial Agreement, the
Servicing Agreement, the Servicer Letter (if any), the Account Control
Agreement, all Confirmations and assignment documentation executed pursuant to
this Agreement in connection with specific Transactions, all other documents
executed by any Seller Party in connection with this Agreement or any
Transaction, in each case, as such document may be amended, modified and/or
restated from time to time.

“Transaction Request” shall mean a transaction request substantially in the form
of Exhibit II hereto.

“Transfer” shall mean, with respect to any Person, any sale or other whole or
partial conveyance of all or any portion of such Person’s assets, or any direct
or indirect interest therein to a third party (other than in connection with the
transfer of a Purchased Asset to Buyer in accordance herewith), including the
granting of any purchase options, rights of first refusal, rights of first offer
or similar rights in respect of any portion of such assets or the subjecting of
any portion of such assets to restrictions on transfer.

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

“UCC” shall have the meaning specified in Article 6(c).

“UCC Filing Jurisdiction” shall mean, with respect to Seller, the State of
Delaware.

“UCC Financing Statement” shall have the meaning specified in Article
3(b)(i)(K).

“Upfront Fee” shall have the meaning specified in the Fee Letter.

“U.S. Person” shall mean any Person that is a “United States Person” as defined
in Section 7701(a)(30) of the Internal Revenue Code.

“Volcker Rule” shall have the meaning specified in Article 9(x).

“Waterfall Account” shall have the meaning specified in Article 5(c).

“Whole Loan” shall mean a commercial real estate whole loan made to the related
underlying obligor and secured primarily by a perfected, first priority Lien in
the related underlying Mortgaged Property, including, without limitation
(A) with respect to any Senior Interest, the Whole Loan in which Seller owns a
Senior Interest, and (B) with respect to any Mezzanine Loan, the Whole Loan made
to the Mortgagor or Affiliate of such Mortgagor whose equity interests, directly
or indirectly, secure such Mezzanine Loan.

 

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The terms defined in this Agreement have the meanings assigned to them in this
Agreement and include the plural as well as the singular, and the use of any
gender herein shall be deemed to include the other gender. All references to
articles, schedules and exhibits are to articles, schedules and exhibits in or
to this Agreement unless otherwise specified. The words “hereof,” “herein” and
“hereunder” and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. The term “include” or “including” shall mean without limitation by
reason of enumeration. All accounting terms not specifically defined herein
shall be construed in accordance with generally accepted accounting principles.
References to “good faith” in any Transaction Document shall mean “honesty in
fact in the conduct or transaction concerned”. In addition, with respect to any
Transaction Document, whenever Buyer has a decision or right of determination,
opinion or request, exercises any right given to it to agree, disagree, accept,
consent, grant waivers, take action or no action or to approve or disapprove (or
any similar language or terms), or any arrangement or term is to be satisfactory
or acceptable to or approved by Buyer (or any similar language or terms), the
decision of Buyer with respect thereto shall be subject in all cases to the
implied covenant of good faith and fair dealing.

ARTICLE 3

INITIATION; CONFIRMATION; TERMINATION; FEES

(a) Initiation and Confirmation. (i) On or after the Effective Date but prior to
the Facility Expiration Date, Seller may, from time to time, request that Buyer
enter into a Transaction with respect to a proposed Purchased Asset by
delivering to Buyer a Transaction Request and Due Diligence Package. Buyer shall
have the right to request such additional diligence materials with respect to a
proposed Purchased Asset (and/or with respect to a Senior Interest or Mezzanine
Loan, the related Whole Loan) as Buyer deems necessary in its sole discretion.
Buyer shall use commercially reasonable efforts to, within ten (10) Business
Days after receipt of a Transaction Request, Due Diligence Package and
additionally requested diligence materials, (i)(A) complete its due diligence
review of the proposed Purchased Asset and (B) receive an internal credit
decision with respect to the proposed Transaction and (ii) upon completion of
the conditions in the preceding clause, (A) notify Seller that the proposed
Transaction is approved by delivering to Seller a duly completed Confirmation
executed by Buyer or (B) notify Seller that the proposed Transaction is
disapproved; provided that Buyer’s decision to approve any Transaction shall be
made in Buyer’s sole and absolute discretion. Upon receipt of a completed
Confirmation executed by Buyer, Seller may evidence its agreement to proceed
with the proposed Transaction by promptly returning to Buyer a counter-executed
Confirmation. Unless Buyer and Seller agree otherwise in writing, Buyer’s
failure to respond to Seller within the time period set forth in the second
preceding sentence shall be deemed disapproval of Seller’s request to enter into
a proposed Transaction. For the avoidance of doubt, Seller acknowledges that at
no time shall Buyer be obligated to agree to purchase or effect the transfer of
any asset proposed by Seller.

(ii) Upon the satisfaction of all conditions set forth in Article 3(b) for the
initial Transaction and Article 3(c) for each Transaction (including the initial
Transaction), the proposed Purchased Asset shall be transferred to Buyer as
specified in Article 7(a).

(iii) Each Confirmation, together with this Agreement, shall be conclusive
evidence of the terms of the Transaction covered thereby. In the event of any
conflict between the terms of such Confirmation and the terms of this Agreement,
the Confirmation shall prevail.

 

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(b) Conditions Precedent to Initial Transaction. Buyer’s agreement to enter into
the initial Transaction is subject to the satisfaction, immediately prior to or
concurrently with the making of such Transaction, of the following conditions
precedent:

(i) Delivery of Documents. The following documents, shall have been delivered to
Buyer:

(A) this Agreement, duly completed and executed by each of the parties hereto;

(B) the Fee Letter, duly completed and executed by each of the parties thereto;

(C) the Exit Fee Side Letter, duly completed and executed by each of the parties
thereto;

(D) the Custodial Agreement, duly completed and executed by each of the parties
thereto;

(E) the Account Control Agreement, duly completed and executed by each of the
parties thereto;

(F) the Guaranty, duly completed and executed by each of the parties thereto;

(G) the Servicing Agreement, duly completed and executed by each of the parties
thereto;

(H) [Intentionally Omitted];

(I) any and all consents and waivers applicable to Seller;

(J) a power of attorney from Seller substantially in the form of Exhibit V
hereto, duly completed and executed;

(K) a UCC financing statement for filing in the UCC Filing Jurisdiction of
Seller, naming Seller as “Debtor” and Buyer as “Secured Party” and describing as
“Collateral” “all assets of the debtor whether now owned or existing or
hereafter acquired or arising and wheresoever located, including all accessions
thereto and products and proceeds thereof” (the “UCC Financing Statement”),
together with any other documents necessary or reasonably requested by Buyer to
perfect the security interests granted by Seller in favor of Buyer under this
Agreement or any other Transaction Document;

 

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(L) opinions of outside counsel to the Seller Parties reasonably acceptable to
Buyer (including, but not limited to, those relating to enforceability,
corporate matters, applicability of the Investment Company Act of 1940, security
interests and a Bankruptcy Code safe harbor opinion);

(M) for each of the Seller Parties, good standing certificates, certified copies
of organizational documents and certified copies of resolutions (or similar
authority documents) with respect to the execution, delivery and performance of
the Transaction Documents and each other document to be delivered by the Seller
Parties from time to time in connection herewith; and

(N) all such other and further documents and documentation as Buyer in its
discretion shall reasonably require.

(ii) Payment of Expenses. Buyer shall have received payment from Seller in the
amount of all expenses, including but not limited to legal fees of outside
counsel and due diligence fees, actually incurred by Buyer in connection with
the preparation and execution of this Agreement, the other Transaction Documents
and any other documents prepared in connection herewith or therewith and
required to be paid by Seller pursuant to Article 25(b).

(iii) Payment of Fees. Buyer shall have received payment from Seller of the
Upfront Fee.

(c) Conditions Precedent to All Transactions. Buyer’s agreement to enter into
each Transaction (including the initial Transaction) is subject to the
satisfaction of the following further conditions precedent, both immediately
prior to entering into such Transaction and also after giving effect to the
consummation thereof and the intended use of the proceeds of the sale:

(i) Transaction Approval. Buyer shall have (A) determined, in its sole
discretion, that the each related proposed Purchased Asset is an Eligible Asset
and (B) received internal credit approval with respect to the proposed
Transaction, each of the foregoing, as evidenced by Buyer’s execution and
delivery of a Confirmation with respect thereto.

(ii) Confirmation. Seller shall have received from Buyer a duly completed and
executed Confirmation, and Seller shall have duly executed the same and
delivered such Confirmation to Buyer.

(iii) Waiver of Exceptions. Buyer shall have waived all exceptions contained in
the related Requested Exceptions Report (as evidenced by its execution and
delivery of a Confirmation with respect thereto).

(iv) Custodial Delivery; Trust Receipt; Asset Schedule and Exception Report.
Seller shall have delivered to Custodian in accordance with the Custodial
Agreement (or a bailee pursuant to a Bailee Agreement), the Custodial Delivery
and the Purchased Asset File with respect to each Eligible Asset and, if the
Custodial Delivery and Purchased Asset File with respect to such Eligible Asset
was delivered to Custodian as a Non-Table Funded

 

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Asset (as defined in the Custodial Agreement), (A) Custodian shall have issued
to Buyer a Trust Receipt and a final Asset Schedule and Exception Report and
(B) Buyer shall have, in its sole and absolute discretion, approved any and all
exceptions listed on such Asset Schedule and Exception Report.

(v) Due Diligence. Any due diligence review performed by Buyer with respect to
the Eligible Asset (including without limitation, confirmation by Buyer that it
meets any applicable Qualified Transferee Requirements) or otherwise in
accordance with Article 26 is satisfactory to Buyer in its sole discretion (as
evidenced by its execution and delivery of a Confirmation with respect thereto).

(vi) Facility Amount. The sum of (A) the aggregate Purchase Price for all
Purchased Assets, plus (B) the requested Purchase Price for the pending
Transaction, plus (C) the aggregate amount of potential Future Funding Advance
Draws with respect to all Purchased Assets (if any), plus (D) the amount of any
Margin Excess, in the aggregate, shall not exceed Facility Amount.

(vii) No Margin Deficit. No Margin Deficit shall exist after giving effect to
the requested Transaction (including in the event any existing Margin Deficit
immediately prior to the Transaction is cured through consummation of the
Transaction).

(viii) No Default or Event of Default. No Default or Event of Default shall have
occurred and be continuing under any Transaction Document.

(ix) No Material Adverse Effect. No event shall have occurred which is
reasonably expected to result in a material adverse change in the business,
condition (financial or otherwise) or results of operations (or prospects) with
respect to Seller and Guarantor, taken as a whole.

(x) Representations and Warranties. The representations and warranties made by
Seller in Article 9 (other than (a) any Mark to Market Representation or (b) the
representation and warranty in Article 9(s) with respect to any Purchased Asset
as to which Seller has provided notice to Buyer of a breach of any such
representation and warranty and Buyer has (i) not demanded a repurchase of such
Purchased Asset pursuant to the last paragraph of Article 3(d) or (ii) demanded
a repurchase of such Purchased Asset which repurchase is in process pursuant to
the last paragraph of Article 3(d)) shall be true and correct in all material
respects on and as of the Purchase Date for the pending Transaction with the
same force and effect as if made on and as of such date (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date).

(xi) Acknowledgement of Servicer. Buyer shall have received from Servicer a
written acknowledgement that each Eligible Asset to be sold to Buyer will be
serviced in accordance with the Servicing Agreement as of the related Purchase
Date, which acknowledgment may be provided in a Servicer Letter.

(xii) No Change in Law. Buyer shall not have determined that the introduction of
or a change in any Requirement of Law or in the interpretation or administration
of any Requirement of Law has made it unlawful, and no Governmental Authority
shall have asserted that it is unlawful, for Buyer to enter into Transactions.

 

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(xiii) Repurchase Date. The Repurchase Date for such Transaction is not later
than the Facility Expiration Date.

(xiv) Security Interest. Seller shall have taken such other action as is
necessary or, in the reasonable opinion of Buyer, desirable in order to transfer
the related Eligible Asset to Buyer pursuant to this Agreement and to perfect
all security interests granted under this Agreement or any other Transaction
Document in favor of Buyer as secured party under the UCC with respect to such
Eligible Asset.

(xv) Other Documents. Buyer, Custodian or a bailee pursuant to a Bailee
Agreement shall have received all such other and further documents,
documentation and legal opinions (including, without limitation, opinions
regarding the perfection of Buyer’s security interests) as Buyer in its
reasonable discretion shall require including, but not limited to, endorsements
in blank of the original Mortgage Note (or, in the case of a Senior Interest
consisting of a participation interest, the original participation certificate,
in each case, to the extent applicable) and assignments in blank of the
underlying Mortgage and related Mortgage documents, if applicable.

(xvi) Payment of Fees. Buyer shall have received payment from Seller of all fees
then due and payable hereunder or under the Fee Letter and the Pre-Purchase
Legal/Due Diligence Review Fee on the Purchase Date; provided, that Seller
agrees to pay Pre-Purchase Legal/Due Diligence Review Fee with respect to any
proposed Asset that Buyer determines will not be a Purchased Asset within five
(5) Business Days of Buyer’s written notice of such determination.

(xvii) Mezzanine Loans. With respect to any proposed Purchased Asset which
constitutes a Mezzanine Loan, Buyer, Custodian or a bailee pursuant to a Bailee
Agreement shall have received the original Mezzanine Note and each original
certificate representing the related equity interests together with an undated
stock power covering each certificate, duly executed in blank to Buyer.

(d) Early Repurchase of Purchased Assets. Seller shall be entitled to terminate
a Transaction on demand and repurchase the Purchased Asset subject to such
Transaction on any Business Day prior to the Repurchase Date (as determined in
accordance with subclauses (a), (b), (c) and (e) of the definition of Repurchase
Date) (an “Early Repurchase Date”); provided, however, that:

(i) no later than two (2) Business Days prior to such Early Repurchase Date,
Seller notifies Buyer in writing of its intent to terminate such Transaction and
repurchase such Purchased Asset, setting forth the Early Repurchase Date and
identifying with particularity the Purchased Asset to be repurchased on such
Early Repurchase Date; provided that, (x) Seller shall have the right to revoke
such notice at any time prior to such Early Repurchase Date and (y) the Early
Repurchase Date may be the same Business Day written notice is delivered in the
event such repurchase shall cure a Default, Event of Default or Margin Deficit
or be consummated after Buyer notifies Seller of its intention to record
Assignments of Mortgages and/or complete endorsements of the Purchased Assets;

 

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(ii) no Default or Event of Default shall have occurred and be continuing both
as of the date notice is delivered pursuant to Article 3(d)(i) above and as of
the applicable Early Repurchase Date, unless such Default or Event of Default is
cured by such repurchase;

(iii) on such Early Repurchase Date, Seller pays to Buyer an amount equal to the
Repurchase Price for the applicable Purchased Asset and any other amounts then
due and payable under this Agreement, including, without limitation, any amount
payable pursuant to Article 3(f)(ii) or the Fee Letter; and

(iv) no Margin Deficit shall exist both as of the date notice is delivered
pursuant to Article 3(d)(i) above and as of the applicable Early Repurchase Date
unless such Margin Deficit is cured contemporaneously with such repurchase.

With respect to any Purchased Asset, within five (5) Business Days after receipt
of written notice from Buyer instructing a mandatory early repurchase with
respect to any Purchased Asset as to which a Mandatory Early Repurchase Event
has occurred and is continuing, Seller shall be required to terminate the
relevant Transaction and repurchase such Purchased Asset and pay to Buyer cash
in an amount equal to the Repurchase Price for such Purchased Asset.

(e) Repurchase of Purchased Assets; Prepayment; Future Funding Advances; Margin
Excess.

(i) Repurchase. On the Repurchase Date for any Transaction, termination of the
Transaction will be effected by transfer to Seller or its designee of the
Purchased Assets being repurchased and any Income in respect thereof received by
Buyer (and not previously credited or transferred to, or applied to the
obligations of, Seller pursuant to Article 5) against the simultaneous transfer
of the Repurchase Price to an account of Buyer; provided, however, that
(x) Buyer shall have no obligation to permit Seller to repurchase any Purchased
Asset if a Default or an Event of Default shall have occurred and be continuing
or any unsatisfied Margin Deficit beyond the Margin Threshold shall exist unless
such Margin Deficit, Default or Event of Default would be cured by the
repurchase of such Purchased Asset or such Margin Deficit is concurrently cured
by Seller in accordance with Article 4 of this Agreement or such Default or
Event of Default is concurrently cured in accordance with this Agreement and
(y) notwithstanding anything to the contrary in Article 5(f), with respect to
Principal Payments in full with respect to any Purchased Asset prior to the
related maturity date, termination of the related Transaction may be effected by
Seller causing the Mortgagor to transfer directly to an account of Buyer, rather
than the Waterfall Account, the Repurchase Price for such Purchased Asset.
Concurrently with payment of the Repurchase Price to Buyer in accordance with
the foregoing on such Repurchase Date, Buyer’s security interest in the related
Collateral shall terminate in accordance with Article 6(c).

 

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(ii) Prepayment. On any Business Day before the Repurchase Date for a Purchased
Asset, upon two (2) Business Days’ prior written notice to Buyer, Seller shall
have the right, from time to time, to transfer cash to Buyer for the purpose of
reducing the Purchase Price of, but not terminating, a Transaction and without
the release of any Collateral and without any prepayment fee or penalty;
provided, that (x) no such advance notice shall be required with respect to any
payment made by Seller to cure a Margin Deficit, Default or Event of Default,
(y) each such transfer of cash shall be in a minimum amount equal to $1,000,000
and (z) Seller shall not be permitted to elect to transfer cash and to receive
Margin Excess Advances more often than two times in any calendar month.

(iii) Future Funding Advance Draws. In the event that (i) Seller is
contractually obligated to make a future funding advance of loan proceeds to the
Mortgagor under a Purchased Asset pursuant to the related Purchased Asset
Documents and (ii) Buyer has agreed in its sole discretion to make an additional
advance with respect to the Purchase Price of such Purchased Asset (which
approval may be given prior to the related Purchase Date), then in connection
with making such future funding advance to such Mortgagor, Seller may submit to
Buyer a written request (a “Future Funding Advance Draw Request”) requesting
that Buyer transfer to Seller cash in an amount that is not less than $250,000
(with respect to one or more future funding advances to the applicable
Mortgagor, in the aggregate) but does not exceed the Margin Excess for such
Purchased Asset (calculated on a pro forma basis taking into account the then
effective Market Value), and Buyer shall (x) transfer to Seller the amount of
cash so requested (such transfer, a “Future Funding Advance Draw”) (which shall
increase the Purchase Price for such Purchased Asset) and (y) deliver to Seller
a revised executed Confirmation reflecting the corresponding increase in the
Purchase Price of such Purchased Asset and the increased principal amount
outstanding under the Purchased Asset and accordingly, the increase in Market
Value and such other consequential revisions as may be appropriate, in each
case, by no later than 5:00 p.m. (New York City time) on the second (2nd)
Business Day following the Business Day on which Buyer determines in its
commercially reasonable discretion that the conditions precedent set forth below
are satisfied or will be satisfied contemporaneously with such Future Funding
Advance Draw (or, in Buyer’s sole discretion, waived):

(A) no Default or Event of Default shall have occurred and be continuing both as
of the date of such request and as of the date of the Future Funding Advance
Draw;

(B) the Future Funding Advance Draw shall not cause the sum of the (A) the
aggregate Purchase Price for all Purchased Assets, plus (B) the requested
Purchase Price for any pending Transaction, plus (C) the aggregate amount of any
potential Future Funding Advance Draws with respect to all Purchased Assets,
plus (D) the amount of any Margin Excess (after giving effect to such Future
Funding Advance Draw), in the aggregate, to exceed the Facility Amount;

(C) the Effective Purchase Price Percentage after giving effect to such Future
Funding Advance Draw and the corresponding increase in the outstanding principal
balance of the Purchased Asset shall not exceed the Purchase Price Percentage
set forth in the related Confirmation for such Purchased Asset;

 

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(D) there is no Margin Deficit in excess of the Margin Threshold immediately
prior to the Future Funding Advance Draw and no Margin Deficit immediately after
the Future Funding Advance Draw;

(E) if the Confirmation of the Transaction relating to the applicable Purchased
Asset specifies additional future advance conditions precedent (including,
without limitation, debt yield, debt service coverage ratio and loan-to-value
ratio tests as determined by Buyer and Seller), such additional conditions
precedent shall be satisfied immediately upon the Future Funding Advance Draw;

(F) Seller shall have delivered evidence reasonably satisfactory to Buyer that
all conditions precedent to the future funding advance under the related
Purchased Asset Documents shall have been satisfied in all material respects;

(G) [Intentionally Omitted];

(H) The representations and warranties made by Seller in Article 9 (other than
(a) any Mark to Market Representation or (b) the representation and warranty in
Article 9(s) with respect to any Purchased Asset as to which Seller has provided
notice to Buyer of a breach of any such representation and warranty and Buyer
has (i) not demanded a repurchase of such Purchased Asset pursuant to the last
paragraph of Article 3(d) or (ii) demanded a repurchase of such Purchased Asset
which repurchase is in process pursuant to the last paragraph of Article 3(d))
shall be true and correct in all material respects on and as of the date of such
Future Funding Advance Draw with the same force and effect as if made on and as
of such date (or, if any such representation or warranty is expressly stated to
have been made as of a specific date, as of such specific date); and

(I) Buyer shall have received all such other and further documents and
documentation as Buyer in its reasonable discretion shall require in connection
with such Future Funding Advance Draw, provided that such documents or
documentation are in Seller’s possession or reasonably obtainable to Seller.

The failure or delay of Seller, on any one or more occasions, to exercise its
rights under this Article 3(e)(iii) shall not change or alter the terms and
conditions of this Agreement or limit or waive the right of Seller to request a
Future Funding Advance Draw Request at a later date.

(iv) Margin Excess. With respect to any Purchased Asset, Seller may submit to
Buyer a written request, to be delivered no more frequently than twice each
calendar month (in total together with any prepayments pursuant to Article
3(e)(ii))(a “Margin Excess Request”), requesting that Buyer make an additional
advance (a “Margin Excess Advance”) with respect to the applicable Purchased
Asset in the amount requested by Seller in such Margin Excess Request that is
not less than $1,000,000 (but not to exceed the Margin Excess for such Purchased
Asset). Buyer shall by no later than 5:00 p.m. (New York City time) on the
second (2nd) Business Day following the Business Day of Buyer’s receipt of such
Margin Excess Request, (x) transfer to Seller the amount of cash requested

 

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by Seller, and (y) deliver to Seller a revised Confirmation reflecting the
corresponding increase in the Purchase Price of such Purchased Asset. Buyer’s
disbursement of any Margin Excess Advance (if any) shall be subject to
satisfaction of the following conditions precedent, as determined by Buyer in
its commercially reasonable discretion (or, in Buyer’s sole discretion, waived):

(A) no Default or Event of Default shall have occurred and be continuing both as
of the date of such request and as of the date of the Margin Excess Advance;

(B) the Margin Excess Advance shall not cause (A) the aggregate Purchase Price
for all Purchased Assets, plus (B) the requested Purchase Price for any pending
Transaction, plus (C) the aggregate amount of potential Future Funding Advance
Draws with respect to all Purchased Assets, plus (D) the amount of any Margin
Excess (after giving effect to such Margin Excess Advance), in the aggregate, to
exceed the Facility Amount;

(C) the Effective Purchase Price Percentage after giving effect to such Margin
Excess Advance shall not exceed the Purchase Price Percentage set forth in the
related Confirmation for such Purchased Asset;

(D) there is no Margin Deficit in excess of the Margin Threshold immediately
prior to the Margin Excess Advance and no Margin Deficit immediately after the
Margin Excess Advance;

(E) [Intentionally Omitted]; and

(F) the representations and warranties made by Seller in Article 9 (other than
(a) any Mark to Market Representation or (b) the representation and warranty in
Article 9(s) with respect to any Purchased Asset as to which Seller has provided
notice to Buyer of a breach of any such representation and warranty and Buyer
has (i) not demanded a repurchase of such Purchased Asset pursuant to the last
paragraph of Article 3(d) or (ii) demanded a repurchase of such Purchased Asset
which repurchase is in process pursuant to the last paragraph of Article 3(d))
shall be true and correct in all material respects on and as of the date of such
Margin Excess Advance with the same force and effect as if made on and as of
such date (or, if any such representation or warranty is expressly stated to
have been made as of a specific date, as of such specific date).

(f) Costs and Expenses. Upon written demand by Buyer, Seller shall indemnify
Buyer and hold Buyer harmless from any actual cost or expense (including,
without limitation, reasonable attorneys’ fees and disbursements of outside
counsel) that Buyer may sustain or incur as a consequence of (i) a failure by
Seller in repurchasing any Purchased Asset on the Early Repurchase Date after
Seller has given a notice in accordance with Article 3(d) of an Early Repurchase
Date, (ii) any payment of the Repurchase Price on any day other than a
Remittance Date (including, without limitation, such cost or expense arising
from interest or fees payable by Buyer to lenders of funds obtained by it in
order to effect or maintain a Transaction hereunder net of all interest income
Buyer may receive by redeploying the Purchase Price at LIBOR from and after the
date of

 

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such payment), (iii) any conversion to the Substitute Rate in accordance with
Article 3(g) on any day other than a Pricing Rate Determination Date, and/or
(iv) any determination by Seller to not sell an Eligible Asset to Buyer after
Seller has notified Buyer of a proposed Transaction and Buyer has agreed to
purchase such Eligible Assets in accordance with the provisions of this
Agreement. A certificate as to such actual costs and expenses setting forth the
calculations therefor shall be submitted promptly by Buyer to Seller.

(g) Alternative Rate. If on the Pricing Rate Determination Date for any Pricing
Rate Period with respect to any Transaction, Buyer shall have determined in the
exercise of its sole and absolute business judgment (which determination shall
be conclusive and binding upon Seller absent manifest error) that, by reason of
circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining LIBOR for such Pricing Rate Period or that LIBOR has
been succeeded by a Substitute Index, Buyer shall give written notice thereof to
Seller as soon as practicable thereafter. If such notice is given, such
Transaction shall be converted to a Substitute Rate Transaction and the Pricing
Rate with respect to such Transaction for the Pricing Rate Period to which such
Pricing Rate Determination Date relates, and for any subsequent Pricing Rate
Periods until such notice has been withdrawn by Buyer (which withdrawal shall be
delivered by Buyer promptly after Buyer becomes aware that the condition for
switching to the Substitute Rate no longer exists), shall be equal to the
Substitute Rate based on the Substitute Index in effect on each Pricing Rate
Determination Date. In exercising its rights and remedies under this Article
3(g), Buyer shall act in a manner similar to all repurchase facilities of which
Buyer is contemporaneously exercising similar remedies in agreements with
similarly situated counterparties.

(h) Extension Option. Seller shall have two (2) options to extend the Stated
Facility Expiration Date for an additional term of one (1) year (each, an
“Extension Term”); provided, that the exercise of each such extension option by
Seller shall be subject to the following conditions precedent: (i) Seller shall
have delivered to Buyer a written request to extend the then applicable Stated
Facility Expiration Date not less than thirty (30) and not more than one hundred
twenty (120) calendar days prior to the then applicable Stated Facility
Expiration Date, (ii) on the date Seller delivers the written request to extend
the Stated Facility Expiration Date and on the first day of the Extension Term,
no Default or Event of Default has occurred and is continuing and no uncured
Margin Deficit in excess of the Margin Threshold then exists, (iii) on the first
day of each Extension Term, Seller pays to Buyer any amount payable pursuant to
the Fee Letter and (iv) on the first day of the second Extension Term, no
Purchased Asset is subject to a Transaction where the related Purchase Date
occurred prior to the date which is one (1) calendar year from the Closing Date.

(i) Requirements of Law. (1) Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof after the date of this Agreement shall make it unlawful for
Buyer (A) to enter into Transactions, then the commitment of Buyer hereunder to
enter into new Transactions shall forthwith be canceled, (B) to maintain or
continue Transactions, then a Repurchase Date shall occur for all Transactions
on the next Remittance Date or on such earlier date as may be required by law,
or (C) to accrue Purchase Price Differential based on a LIBOR rate, then the
Transactions then outstanding shall be converted automatically to Substitute
Rate Transactions on the next Pricing Rate Determination Date or within such
earlier period as may be required by law, as long as Buyer

 

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contemporaneously acts in a similar manner under all similar repurchase
facilities of Buyer. If any termination or conversion of a Transaction shall
occur in accordance with subclause (B) or (C) of the preceding sentence, Seller
shall pay to Buyer such amounts, if any, as may be required pursuant to
Article 3(f)(ii).

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

(A) shall subject Buyer to any Taxes (other than (i) Covered Taxes, (ii) Taxes
described in clauses (a) through (e) of the definition of Covered Taxes and
(iii) Other Connection Taxes) with respect to the Transaction Documents, any
Purchased Asset or any Transaction, or change the basis of taxation of payments
to Buyer in respect thereof;

(B) shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other extensions of
credit by, or any other acquisition of funds by, any office of Buyer that is not
otherwise included in the determination of LIBOR hereunder; or

(C) shall impose on Buyer any other condition (excluding, in the case of this
clause (C) only, any Taxes);

and the result of any of the foregoing is to increase the cost to Buyer of
entering into or maintaining the Transactions, then Seller shall promptly pay
Buyer, upon demand therefor, any additional amounts necessary to compensate
Buyer for such increased cost, as long as such increased cost is also assessed
against all sellers under similar repurchase facilities with Buyer. This
covenant shall survive the termination of this Agreement and the repurchase by
Seller of any or all of the Purchased Assets.

(3) If Buyer shall have determined that the adoption of or any change in any
Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by Buyer or any corporation controlling Buyer
with any request or directive regarding capital adequacy (whether or not having
the force of law) from any Governmental Authority made subsequent to the date
hereof has the effect of reducing the rate of return on Buyer’s or such
corporation’s capital as a consequence of its obligations hereunder to a level
below that which Buyer or such corporation could have achieved but for such
adoption, change or compliance (taking into consideration Buyer’s or such
corporation’s policies with respect to capital adequacy), then Seller shall
promptly pay to Buyer such additional amount or amounts as will compensate Buyer
for such reduction, as long as such additional amount is also assessed against
all sellers under similar repurchase facilities with Buyer.

 

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(4) If Buyer becomes entitled to claim any amount pursuant to clauses (2) or
(3) above, Buyer shall, within ten (10) Business Days after becoming aware that
it is so entitled, notify Seller in writing specifying the event by reason of
which it has become so entitled and setting forth the calculation of any such
amount, which calculation shall be conclusive evidence of any such amount absent
manifest error.

(5) Buyer’s failure or delay to demand compensation pursuant to the foregoing
provisions of this Article 3(i) shall not constitute a waiver of Buyer’s right
to demand such compensation; provided that Seller shall not be required to
compensate Buyer pursuant to the foregoing provisions of this Section for any
increased costs incurred or reductions suffered more than nine (9) months prior
to the date that Buyer notifies Seller of the adoption or any change in any
Requirement of Law giving rise to such increased costs or reductions and of
Buyer’s intention to claim compensation therefor (except that, if the adoption
or change in the Requirement of Law giving rise to such increased costs or
reductions is retroactive, then the nine (9) month period referred to above
shall be extended to include the period of retroactive effect thereof).

ARTICLE 4

MARGIN MAINTENANCE

(a) Upon the occurrence and continuation of a Credit Event with respect to any
Purchased Asset, Buyer may, in its sole discretion exercised in good-faith,
re-determine the Market Value for such Purchased Asset for purposes of
determining whether a Margin Deficit exists. At any time that a Margin Deficit
exceeds an amount equal to $250,000 (the “Margin Threshold”), Buyer may deliver
written notice to Seller substantially in the form of Exhibit VIII (a “Margin
Call Notice”).

(b) No later than the Margin Call Deadline, Seller shall (at Seller’s election)
utilize any combination of the following, so that after giving effect to such
transfer or repurchase, no Margin Deficit shall be outstanding: (A) transfer to
Buyer cash in reduction of the Purchase Price of Transactions determined by
Seller, (B) repurchase one or more Purchased Assets pursuant to Article 3(d),
(C) pledge additional collateral acceptable to Buyer in its sole discretion,
(D) deliver a Margin Excess Request and apply a Margin Excess Advance from one
or more other Purchased Assets to reduce the Purchase Price of Transactions
determined by Seller or (E) any combination of the foregoing clauses (A) through
(D).

(c) The failure or delay by Buyer or Seller, on any one or more occasions, to
exercise its rights under this Article 4 shall not (i) change or alter the terms
and conditions of this Agreement, (ii) limit or waive the right of Buyer or
Seller to exercise its rights under this Agreement at a later date or (iii) in
any way create additional rights for any party hereto.

ARTICLE 5

PAYMENTS; WATERFALL ACCOUNT

(a) All transfers of funds to be made by Seller hereunder shall be made in
Dollars, in immediately available funds, without deduction, set-off or
counterclaim.

 

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(b) All payments required to be made directly to Buyer shall be made in
accordance with the wiring instructions set forth below (or such other wire
instructions provided by Buyer to Seller in writing), not later than 5:00 p.m.
(New York City time), on the date on which such payment shall become due (and
each such payment made after such time shall be deemed to have been made on the
next succeeding Business Day unless accepted by Buyer in writing on such due
date).

 

  

Bank Name:

  

######

     

ABA Number:

  

######

     

Account Number:

  

######

     

Account Name:

  

######

     

Attention:

  

######

     

Reference:

  

######

  

(c) Concurrently with the execution and delivery of this Agreement, Seller shall
establish a segregated deposit account (the “Waterfall Account”) in the name of
Seller for the benefit of Buyer at Account Bank. The Waterfall Account shall be
subject to the Account Control Agreement in favor of Buyer. All amounts required
to be deposited to the Waterfall Account shall be sent in accordance with the
wiring instructions set forth below.

 

 

Bank Name:

  

######

 

ABA Number:

  

######

    

Account Number:

  

######

    

Account Title:

  

######

  

(d) On each Remittance Date, Seller shall pay to Buyer all accrued and unpaid
Purchase Price Differential with respect to such Remittance Date, to the extent
not paid to Buyer in accordance with Article 5(g). Notwithstanding anything to
the contrary contained herein, on the Remittance Date occurring in May 2018,
Purchase Price Differential shall include accrued and unpaid Purchase Price
Differential calculated from April 19, 2018 through and including the Closing
Date for Purchased Assets subject to Transactions on the Effective Date.

(e) Seller shall cause (1) all Income it or Servicer receives with respect to
the Purchased Assets to be deposited within two (2) Business Days of receipt of
properly identified funds into the Servicer Account (which Income in the case of
a Principal Payment in full, will be further deposited into the Waterfall
Account within such time period) and (2) Servicer to remit on a monthly basis
all other funds on deposit in the Servicer Account (net of permitted withdrawals
pursuant to the Servicing Agreement) to the Waterfall Account in accordance with
the Servicing Agreement. In furtherance of the foregoing, if Buyer is at any
time not a party to the Servicing Agreement, Seller shall cause any Servicer to
execute and deliver a Servicer Letter in accordance with Article 27(e). If a
Servicer, Mortgagor or any other Person, as applicable, forwards any Income with
respect to a Purchased Asset to Seller rather than directly to the Servicer
Account or

 

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the Servicer, Seller shall (i) take commercially reasonable efforts to cause
such Servicer, Mortgagor or Person, as applicable, to forward any such future
amounts directly to the Servicer Account or the Servicer, as applicable, and
(ii) deposit in the Servicer Account any such amounts within two (2) Business
Days of Seller’s receipt thereof. Amounts in the Waterfall Account shall be
remitted by Account Bank in accordance with the applicable provisions of
Articles 5(f) and (g).

(f) So long as no Event of Default shall have occurred and be continuing,
Account Bank shall (i) on each Remittance Date, remit all amounts on deposit in
the Waterfall Account in the following amounts and order of priority, and
(ii) with respect to Principal Payments on any Purchased Asset received by
Account Bank, on the second (2nd) Business Day after receipt from the Servicer
Account remit from the Waterfall Account to Buyer the amount equal to the
product of (x) the amount of such Principal Payment multiplied by (y) the
related Effective Purchase Price Percentage for such Purchased Asset (or in the
case of a Principal Payment in full, the amount necessary to reduce the
outstanding Purchase Price to zero) together with accrued and unpaid Purchase
Price Differential thereon and remit the balance of such Principal Payments on
deposit in the Waterfall Account in the following amounts and order of priority:

(i) first, to pay all fees and other amounts then due and payable to Custodian
pursuant to the Custodial Agreement and Servicer pursuant to the Servicing
Agreement (to the extent not previously paid);

(ii) second, to Buyer, an amount equal to all accrued and unpaid Purchase Price
Differential then due and payable;

(iii) third, to Buyer, an amount equal to all accrued and unpaid amounts (if
any) then due and payable pursuant to the Fee Letter;

(iv) fourth, to Buyer, an amount necessary to cure any Margin Deficit in excess
of the Margin Threshold;

(v) fifth, to Buyer, an amount equal to any other amounts then due and payable
to Buyer under any Transaction Document; and

(vi) sixth, the surplus, if any, to Seller.

(g) Upon receipt of notice from Buyer that an Event of Default shall have
occurred and is continuing, and so long as Buyer has not withdrawn such notice,
Account Bank shall cease remitting funds to, or at the direction of, Seller
pursuant to Article 5(h) and shall instead remit, on each Business Day beginning
on the Business Day after receipt of such notice from Buyer, all amounts on
deposit in the Waterfall Account as of the prior Business Day to Buyer for
application to the Repurchase Obligations in such order of priority as Buyer
shall determine in its sole and absolute discretion; provided that surplus, if
any, after payment in full of the Repurchase Obligations shall be remitted to
whoever is lawfully entitled to such surplus.

(h) All remittances by Account Bank shall be made (i) so long as no Event of
Default shall have occurred and be continuing, in accordance with instructions
received from Seller or any Servicer on its behalf and approved by Buyer, and
(ii) during the continuance of an Event of Default, in accordance with
instructions received from Buyer.

 

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(i) If the amounts applied by Buyer as provided in Articles 5(f) or (g) above
are insufficient to pay all amounts due and payable from Seller to Buyer under
this Agreement or any Transaction Document on a Remittance Date, the Repurchase
Date, upon the occurrence of an Event of Default or otherwise, Seller shall
nevertheless remain liable for and shall pay to Buyer when due all such amounts.

(j) Withholding Taxes.

(i) All payments made by Seller under the Transaction Documents shall be made
free and clear of and without deduction or withholding for or on account of any
Taxes unless the withholding or deduction is required by applicable law. If
Seller is required by applicable law to deduct or withhold any Taxes from any
such payment, Seller shall: (i) make such deduction or withholding; (ii) pay the
amount so deducted or withheld to the appropriate Governmental Authority not
later than the date when due; (iii) deliver to Buyer, as soon as practicable,
original tax receipts or a certified copy of a receipt issued by such
Governmental Authority or other evidence reasonably satisfactory to Buyer of the
payment when due of the full amount of such Taxes; and (iv) if such deduction or
withholding are Covered Taxes, then the sum payable by Seller shall be increased
as necessary so that after such deduction or withholding has been made
(including such deductions and withholdings applicable to additional sums
payable under this Article 5) Buyer receives an amount equal to the sum it would
have received had no such deduction or withholding been made.

(ii) In addition, without duplication, Seller agrees to pay to the relevant
Governmental Authority in accordance with applicable law any current or future
recordation, stamp, documentary, intangible, filing or similar Taxes that arise
from any payment made under, from the execution, delivery, performance,
enforcement or registration of, from the receipt or perfection of a security
interest under, or otherwise with respect to, any Transaction Document, except
any such Taxes that are Other Connection Taxes imposed with respect to an
assignment of the Buyer’s rights and obligations under this Agreement (such
Taxes other than Other Connection Taxes, “Other Taxes”).

(iii) Without duplication of the obligation of Seller to pay additional amounts
on account of Covered Taxes pursuant to Article 5(j)(i) and to pay Other Taxes
pursuant to Article 5(j)(ii), Seller agrees to indemnify Buyer for the full
amount of any and all Covered Taxes and Other Taxes, and the full amount of any
Covered Taxes imposed on amounts payable under this Article 5(j)(iii), and any
reasonable expenses arising therefrom or with respect thereto, (excluding any
Taxes that are neither Covered Taxes nor Other Taxes) arising therefrom or with
respect thereto, whether or not such Covered Taxes or Other Taxes were correctly
or legally imposed or asserted by the relevant Government Authority. A
certificate as to the amount of such payment or liability delivered to Seller by
Buyer shall be conclusive absent manifest error.

(iv) Without prejudice to the survival of any other agreement hereunder, the
agreements and obligations of each party contained in this Article 5(j) shall
survive the termination of this Agreement.

 

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(v) If Seller is required by law or regulation to deduct or withhold any Taxes
from or in respect of any amount payable hereunder and Buyer is entitled to an
exemption from or reduction of such Taxes, Buyer agrees that it will deliver to
Seller and, if applicable, to the authority imposing the Taxes, any certificate
or document reasonably requested by Seller that would entitle Buyer to an
exemption from, or reduction in the rate of, withholding or deduction of Taxes
from amounts payable hereunder by Seller to Buyer. In addition, Buyer, if
reasonably requested by Seller, shall deliver such other documentation
prescribed by applicable law or reasonably requested by Seller as will enable
Seller to determine whether or not Buyer is subject to backup withholding or
information reporting requirements. Without limiting the foregoing, Buyer (and
any U.S. Person that is an acquirer of any of the rights and obligations of
Buyer as an assignee under this Agreement) shall deliver to Seller on or before
the Closing Date (or in the case of an assignee that is a U.S. Person on or
before the date when such Person becomes a party to this Agreement) two duly
completed and executed copies of IRS Form W-9 certifying that such Buyer (or
assignee) is exempt from U.S. federal backup withholding tax. If a Person
acquires any of the rights and obligations of Buyer as an assignee under this
Agreement, and such Person is not a U.S. Person (a “Non-U.S. Person”), then such
Non-U.S. Person shall, to the extent it is legally entitled to do so, deliver to
Seller on or before the date when such Person becomes a party to this Agreement,
two duly completed and executed copies of, as applicable, IRS Form W-8BEN, IRS
Form W-8BEN-E or IRS Form W-8ECI or any successor forms thereto designated as
such by the IRS. If the Non-U.S. Person is eligible for and wishes to claim
exemption from US federal withholding tax under Section 881(c) of the Internal
Revenue Code with respect to payments of “portfolio interest,” then such Person
shall deliver both the Form W-8BEN or Form W-8BEN-E and a statement certifying
that such Person is not a bank, a “10 percent shareholder” or a “controlled
foreign corporation” within the meaning of Section 881(c)(3) of the Internal
Revenue Code. If any previously delivered form or statement becomes inaccurate
with respect to the Person that delivered it, the Person shall promptly notify
Seller of this fact. If a payment made to a Person under any Transaction
Document would be subject to U.S. federal withholding Tax imposed by FATCA if
such Person were to fail to comply with the applicable reporting requirements of
FATCA (including those contained in Section 1471(b) or 1472(b) of the Internal
Revenue Code, as applicable), such Person shall deliver to Seller at the time or
times prescribed by law and at such time or times reasonably requested by Seller
such documentation prescribed by applicable law (including as prescribed by
Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such additional
documentation reasonably requested by Seller as may be necessary for Seller to
comply with its obligations under FATCA and to determine that such Person has
complied with such Person’s obligations under FATCA or to determine the amount
to deduct and withhold from such payment. Solely for purposes of this Article
5(j)(v), “FATCA” shall include any amendments made to FATCA after the date of
this Agreement.

(vi) [Reserved].

(vii) If any party determines, in its sole discretion exercised in good faith,
that it has received a refund of any Taxes or credit for the withholding taxes
paid under Section 5(j)(i) as to which it has been indemnified pursuant to this
Article 5(j) (including by the

 

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payment of additional amounts pursuant to this Article 5(j)), it shall pay to
the indemnifying party an amount equal to such refund (but only to the extent of
the indemnity payments made under this Article 5(j) with respect to Taxes giving
rise to such refund), net of all out-of-pocket expenses (including Taxes) of
such indemnified party and without interest (other than interest paid by the
relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this Article 5(j)(vii) (plus
any penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this Article 5(j)(vii), in no event will the indemnified party be required to
pay any amounts to an indemnifying party pursuant to this Article 5(j)(vii) the
payment of which would place the indemnified party in a less favorable net
after-Tax position than the indemnified party would have been in if the Tax
subject to the indemnification and giving rise to such refund had not been
deducted, withheld or otherwise imposed and the indemnification payments or
additional amounts with respect to such Tax had never been paid. This paragraph
shall not be construed to require any indemnified party to make available its
tax returns (or any other information relating to its Taxes that it deems
confidential) to the indemnifying party or any other Person.

(viii) If Buyer requests compensation under this Article 5(j), Seller may, at
its option, within thirty (30) days after delivery of such request, terminate
this facility by payment in full to Buyer of the then outstanding Repurchase
Price of all Purchased Assets and any other amounts then otherwise due and
payable under the facility (excluding any compensation which is not already due
and payable pursuant to this Agreement), and, in connection with any such
termination, notwithstanding anything to the contrary contained herein or in any
other Transaction Document, there shall be no Exit Fee or prepayment fee or
premium due.

ARTICLE 6

SECURITY INTEREST

(a) Buyer and Seller intend that the Transactions hereunder be sales to Buyer of
the Purchased Assets and not loans from Buyer to Seller secured by the Purchased
Assets (other than as described in Article 21(g)). However, in order to preserve
Buyer’s rights under the Transaction Documents, in the event that a court or
other forum re-characterizes the Transactions hereunder as other than sales, and
as security for the performance by Seller of all of Seller’s obligations to
Buyer under the Transaction Documents and the Transactions entered into
hereunder, or in the event that a transfer of a Purchased Asset is otherwise
ineffective to effect an outright transfer of such Purchased Asset to Buyer,
Seller hereby assigns, pledges and grants a security interest in all of its
right, title and interest in, to and under the Collateral, whether now owned or
hereafter acquired, now existing or hereafter created and wherever located,
subject to the terms and conditions of this Agreement, to Buyer to secure the
payment of the Repurchase Price on all Transactions to which Seller is a party
and all other amounts owing by Seller to Buyer hereunder, including, without
limitation, amounts owing pursuant to Article 25, and under the other
Transaction Documents (collectively, the “Repurchase Obligations”). Without
limiting the generality of the foregoing and for the avoidance of doubt, if any
determination is made that any Mezzanine Loan which is a

 

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Purchased Asset was not sold by Seller to Buyer pursuant to this Agreement, or
that mezzanine loans do not qualify for the safe harbor treatment provided by
the Bankruptcy Code, then Seller hereby pledges, assigns and grants to Buyer as
further security for Seller’s obligations to Buyer hereunder, a continuing first
priority security interest in and Lien upon each such Mezzanine Loan which
constitutes a Purchased Asset hereunder, and Buyer shall have all the rights and
remedies of a “secured party” under the Uniform Commercial Code with respect
thereto (such pledge, the “Related Credit Enhancement”). For purposes of this
Agreement, “Collateral” shall mean:

(i) the Waterfall Account and the Servicer Account and all monies from time to
time on deposit in the Waterfall Account and the Servicer Account and any and
all replacements, substitutions, distributions on, income relating to or
proceeds of any and all of the foregoing; and

(ii) the Purchased Items.

(b) [Intentionally Omitted]

(c) Buyer’s security interest in the Collateral and the Waterfall Account shall
terminate only upon satisfaction of the Repurchase Obligations. Upon such
satisfaction and upon request of Seller, Buyer shall deliver promptly, at
Seller’s sole expense, to Seller such UCC termination statements and other
release documents as may be commercially reasonable and return (or approve the
return by Custodian in accordance with the Custodial Agreement, as applicable)
the Purchased Assets, Purchased Items, Purchased Asset Documents and Purchased
Asset Files to Seller and reconvey the Purchased Assets and Purchased Items to
Seller and release its security interest in the Collateral and the Waterfall
Account, such release to be effective automatically without further action by
any party. For purposes of the grant of the security interest pursuant to this
Article 6, this Agreement shall be deemed to constitute a security agreement
under the New York Uniform Commercial Code (the “UCC”). Buyer shall have all of
the rights and may exercise all of the remedies of a secured creditor under the
UCC and the other laws of the State of New York. In furtherance of the
foregoing, (i) Buyer, at Seller’s sole cost and expense, shall cause to be filed
in such locations as may be reasonably necessary to perfect and maintain
perfection and priority of the security interest granted hereby, UCC financing
statements and continuation statements (collectively, the “Filings”), and shall
forward copies of such Filings to Seller upon completion thereof, and
(ii) Seller shall from time to time take such further actions as may be
requested by Buyer in its reasonable discretion to maintain and continue the
perfection and priority of the security interest granted hereby (including
marking its records and files to evidence the interests granted to Buyer
hereunder). Notwithstanding the foregoing, the Repurchase Obligations shall be
full recourse to Seller.

(d) Seller acknowledges that it has no rights to service the Purchased Assets
but only has rights granted to it pursuant to Article 27. Without limiting the
generality of the foregoing and the grant of a security interest pursuant to
Article 6(a), and in the event that Seller is deemed by a court, other forum or
otherwise to retain any residual Servicing Rights (notwithstanding that such
Servicing Rights are Purchased Items hereunder), and for the avoidance of doubt,
Seller hereby acknowledges and agrees that the Servicing Rights constitute
Collateral hereunder for all purposes. The foregoing provision is intended to
constitute a security agreement or other arrangement or other credit enhancement
related to the Agreement and Transactions hereunder as defined under
Section 741(7)(xi) of the Bankruptcy Code.

 

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(e) Seller agrees, to the extent permitted by applicable law, that neither it
nor anyone claiming through or under it will set up, claim or seek to take
advantage of any appraisement, valuation, stay or extension law now or hereafter
in force in any locality where any Purchased Asset may be situated in order to
prevent, hinder or delay the enforcement or foreclosure of this Agreement, or
the absolute sale of any of the Purchased Assets, in each case in accordance
with the terms of this Agreement, or the final and absolute putting into
possession thereof, immediately after such sale, of the Buyers thereof, and
Seller, for itself and all who may at any time claim through or under it, hereby
waives until the Repurchase Obligations are paid in full, to the full extent
that it may be lawful so to do, the benefit of all such laws and any and all
right to have any of the properties or assets constituting the Purchased Assets
marshaled upon any such sale, and agrees that, upon the occurrence and during
the continuance of an Event of Default, Buyer or any court having jurisdiction
to foreclose the security interests granted in this Agreement may, upon the
occurrence and during the continuance of an Event of Default, sell the Purchased
Assets as an entirety or in such parcels as Buyer or such court may determine.

ARTICLE 7

TRANSFER AND CUSTODY

(a) On the Purchase Date for each Transaction, ownership of the related proposed
Purchased Assets and other Purchased Items shall be transferred to Buyer or its
designee (including the Custodian) against the simultaneous transfer of the
Purchase Price for such proposed Purchased Asset to an account of Seller
specified in the related Confirmation and such proposed Purchased Asset shall
become a Purchased Asset hereunder.

(b) Seller shall deposit the Purchased Asset Files representing the Purchased
Assets, or direct (including through a bailee) that such Purchased Asset Files
be deposited directly with the Custodian in accordance with the Custodial
Agreement. The Purchased Asset Files shall be maintained in accordance with the
Custodial Agreement. If a Purchased Asset File is not delivered to Buyer or its
designee (including the Custodian), such Purchased Asset File shall be held in
trust by Seller or its designee for the benefit of Buyer as the owner thereof.
Seller or its designee shall maintain a copy of the Purchased Asset File and the
originals of the Purchased Asset File not delivered to Buyer or its designee
(including the Custodian). The possession of the Purchased Asset File by Seller
or its designee is at the will of Buyer for the sole purpose of servicing the
related Purchased Asset, and such retention and possession by Seller or its
designee is in a custodial capacity only. The books and records (including,
without limitation, any computer records or tapes) of Seller or its designee
shall be marked appropriately to reflect clearly the sale of the related
Purchased Asset to Buyer. Seller or its designee (including the Custodian) shall
release its custody of the Purchased Asset File only in accordance with a
written request acknowledged in writing by Buyer and otherwise in accordance
with the Custodial Agreement.

(c) From time to time, Seller shall forward to the Custodian, with copy to
Buyer, additional original documents or additional documents evidencing any
assumption, modification, consolidation or extension of a Purchased Asset
approved (if and to the extent required) in accordance with the terms of this
Agreement, and upon receipt of any such other documents (which shall be clearly
marked as to which Purchased Asset File such documents relate) Custodian will be
required to hold such other documents in the related Purchased Asset File in
accordance with the Custodial Agreement.

 

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ARTICLE 8

SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS

(a) Title to each Purchased Asset shall pass to Buyer on the related Purchase
Date, and Buyer shall have free and unrestricted use of all Purchased Assets,
subject, however, to the terms of this Agreement. Nothing in this Agreement or
any other Transaction Document shall preclude Buyer from engaging in repurchase
transactions with the Purchased Assets or otherwise selling, transferring,
pledging, repledging, hypothecating or rehypothecating the Purchased Assets, all
on terms that Buyer may determine in its sole discretion, but no such
transaction shall relieve Buyer (i) of its obligations to transfer the same
Purchased Assets to Seller pursuant to Article 3 or (ii) of its obligation to
apply all amounts as required under Article 5(f).

(b) Nothing contained in this Agreement or any other Transaction Document shall
obligate Buyer to segregate any Purchased Assets delivered to Buyer by Seller.
Except to the extent expressly set forth in this Agreement or any other
Transaction Document, no Purchased Asset shall remain in the custody of Seller
or any Affiliate of Seller.

ARTICLE 9

REPRESENTATIONS AND WARRANTIES

Seller represents and warrants to Buyer as of the Closing Date, each Purchase
Date, the date of any Future Funding Advance Draw and the date of any Margin
Excess Advance as follows:

(a) Organization, Etc. Seller (i) is duly organized, validly existing and in
good standing under the laws and regulations of the State of Delaware, (ii) is
duly licensed, qualified, and in good standing in every state where such
licensing or qualification is necessary for the transaction of its business
except where failure to do so could not be reasonably likely to result in a
Material Adverse Effect, (iii) has the limited liability company power to own
and hold the assets it purports to own and hold, and to carry on its business as
now being conducted and proposed to be conducted and (iv) has the limited
liability company power to execute, deliver, and perform its obligations under
the Transaction Documents.

(b) Authorization, Acting as Principal, Approvals, Compliance. Seller represents
that (i) it is duly authorized to execute and deliver the Transaction Documents
to which it is a party, to enter into Transactions as contemplated hereunder and
to perform its obligations under the Transaction Documents, and has taken all
necessary action to authorize such execution, delivery and performance, (ii) it
will engage in such Transactions as principal, (iii) each person signing any
Transaction Document on its behalf is duly authorized to do so on its behalf and
(iv) it has obtained all authorizations of any Governmental Authority required
in connection with the Transaction Documents and the Transactions hereunder and
such authorizations are in full force and effect.

 

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(c) Consents. No consent, approval or other action of, or filing by Seller with,
any Governmental Authority or any other Person is required to authorize, or is
otherwise required in connection with, the execution, delivery and performance
of any of the Transaction Documents (other than consents, approvals and filings
that have been obtained or made, as applicable).

(d) Licenses and Permits. Seller is duly licensed, qualified and in good
standing in every jurisdiction where such licensing, qualification or standing
is necessary, and has all licenses, permits and other consents that are
necessary, for the transaction of Seller’s business, including the acquisition,
origination (if applicable), ownership or sale of any Purchased Asset or other
Purchased Item, except, in each case, where failure to do so could not be
reasonably likely to result in a Material Adverse Effect.

(e) Due Execution; Enforceability. The Transaction Documents to which it is a
party have been or will be duly executed and delivered by Seller, for good and
valuable consideration. Once executed by each applicable counterparty, the
Transaction Documents constitute the legal, valid and binding obligations of
Seller, enforceable against Seller in accordance with their respective terms
subject to bankruptcy, insolvency, and other limitations on creditors’ rights
generally and to general principles of equity.

(f) Intentionally Omitted.

(g) Non-Contravention. Neither the execution and delivery of the Transaction
Documents, nor consummation by Seller of the transactions contemplated by the
Transaction Documents (or any of them), nor compliance by Seller with the terms,
conditions and provisions of the Transaction Documents (or any of them) will
conflict with or result in a breach of any of the terms, conditions or
provisions of (i) the organizational documents of Seller, (ii) any contractual
obligation to which Seller is now a party or the rights under which have been
assigned to Seller or the obligations under which have been assumed by Seller or
to which the assets of Seller is subject or constitute a default thereunder, or
result thereunder in the creation or imposition of any lien upon any of the
assets of Seller, other than pursuant to the Transaction Documents, (iii) any
judgment or order, writ, injunction, decree or demand of any court applicable to
Seller, or (iv) any applicable Requirement of Law, in each case of clauses
(ii)-(iv) above, to the extent that such conflict or breach would have a
Material Adverse Effect.

(h) Litigation; Requirements of Law. Except as disclosed in writing to Buyer,
there is no action, suit, proceeding, investigation or arbitration pending or,
to Seller’s Knowledge, threatened in writing against Seller or Guarantor or any
of its respective assets that (i) is in an amount greater than the Seller
Threshold with respect to Seller or the Guarantor Threshold with respect to
Guarantor or (ii) would result in a Material Adverse Effect. Seller is in
compliance with all Requirements of Law, except where failure to comply could
not be reasonably likely to result in a Material Adverse Effect. Seller is not
in default in any material respect with respect to any judgment, order, writ,
injunction, or decree of any arbitrator or Governmental Authority that may
result in a Material Adverse Effect or could reasonably be expected to
constitute a Default or an Event of Default or that would affect the legality,
validity or enforceability of any Transaction Document.

(i) Judgments. Except as disclosed in writing to Buyer, there are no judgments
against Seller in an amount greater than the Seller Threshold, or against
Guarantor in the aggregate in an amount greater than the Guarantor Threshold
that, in each case, are unsatisfied of record or docketed in any court located
in the United States of America.

 

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(j) No Bankruptcies. No Act of Insolvency has ever occurred with respect to any
Seller Party.

(k) Intentionally Omitted.

(l) No Broker. Seller has not dealt with any broker, investment banker, agent,
or other Person (other than Buyer or an Affiliate of Buyer) who may be entitled
to any commission or compensation in connection with the sale of Purchased
Assets pursuant to any of the Transaction Documents.

(m) No Default. Except as disclosed in writing by Seller to Buyer, Seller has no
Knowledge of an Event of Default or Default that has occurred and is continuing
under or with respect to the Transaction Documents.

(n) Intentionally Omitted.

(o) No Material Adverse Effect. Seller has no Knowledge of any actual
development, event or other fact that has not been disclosed in writing by
Seller and would reasonably be expected to result in a material adverse change
in the business, condition (financial or otherwise) or results of operations (or
prospects) with respect to Seller and Guarantor, taken as a whole.

(p) Intentionally Omitted.

(q) Authorized Representatives. The duly authorized representatives of Seller
are listed on and true signatures of such authorized representatives are set
forth on Exhibit IV hereto, or such other most recent list of authorized
representatives substantially in the form of Exhibit IV hereto as Seller may
from time to time deliver to Buyer.

(r) Chief Executive Office; Jurisdiction of Organization; Location of Books and
Records. Each Seller Party’s chief executive office is located at the address
for notices specified for such Seller Party on Exhibit I, unless such Seller
Party has provided a new chief executive office address to Buyer in writing.
Seller’s jurisdiction of organization is the State of Delaware. The location
where Seller keeps its books and records is its chief executive office.

(s) Representations and Warranties Regarding the Purchased Assets. Each of the
representations and warranties made in respect of the Purchased Assets pursuant
to Exhibit X are true, complete and correct in all material respects, except as
disclosed in writing by Seller prior to a Purchase Date for any Purchased Asset
and reflected in the related Confirmation.

(t) Good Title to Purchased Assets. Immediately prior to the purchase of any
Purchased Assets by Buyer from Seller, (i) such Purchased Assets are free and
clear of any lien, encumbrance or impediment to transfer (including any “adverse
claim” as defined in Article 8-102(a)(1) of the UCC), (ii) such Purchased Assets
are not subject to any right of set-off, any prior sale, transfer, assignment or
participation (other than a transfer or chain of transfers from Affiliates of
Seller to Seller on or prior to the Purchase Date), or any agreement by Seller
to assign, convey,

 

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transfer or participate such Purchased Assets, in each case, in whole or in
part, (iii) Seller is the sole record and beneficial owner of and has good and
marketable title to such Purchased Assets and (iv) Seller has the right to sell
and transfer such Purchased Assets to Buyer. Upon the purchase of any Purchased
Assets by Buyer from Seller, Buyer shall be the sole owner of such Purchased
Assets free of any adverse claim existing as of the Purchase Date, subject to
the terms and conditions of the Purchased Asset Documents and Seller’s rights
under this Agreement.

(u) No Encumbrances. There are (i) no outstanding rights, options, warrants or
agreements on the part of Seller for a purchase, sale or issuance, in connection
with any Purchased Asset or other Purchased Item, (ii) no agreements on the part
of Seller to issue, sell or distribute any Purchased Asset or other Purchased
Item and (iii) no obligations on the part of Seller (contingent or otherwise) to
purchase, redeem or otherwise acquire any securities or interest therein, in
each case, except, in each of the foregoing instances, as contemplated by the
Transaction Documents.

(v) Security Interest in Collateral. Upon execution and delivery of the Account
Control Agreement, Buyer shall have a legal, valid, enforceable and fully
perfected first priority security interest in all right, title and interest of
Seller in the Waterfall Account and all funds credited thereto. In the event any
related Transaction is recharacterized as a secured financing of the Purchased
Assets, the provisions of this Agreement are effective to create in favor of
Buyer a valid “security interest” (as defined in Section 1-201(b)(35) of the
UCC) in all rights, title and interest of Seller in, to and under the
Collateral, and:

(i) with respect to the portion of the Collateral constituting an “instrument”
(as defined in Section 9-102(a)(47) of the UCC), upon possession of such
Collateral constituting an “instrument” by the Custodian endorsed in blank in
accordance with the Custodial Agreement or by a bailee pursuant to a Bailee
Agreement, Buyer shall have a valid, perfected first priority security interest
in such Collateral constituting an “instrument”; and

(ii) upon filing the UCC Financing Statements in the applicable UCC Filing
Jurisdiction, Buyer shall have a valid, perfected first priority security
interest in the Collateral to the extent that a security interest in the
Collateral can be perfected under the UCC by the filing of financing statements.

(w) Delivery of Purchased Asset File. With respect to each Purchased Asset, the
Mortgage Note, the Mortgage, the Assignment of Mortgage, any applicable
Mezzanine Note and Mezzanine Loan Documents, and any other document required to
be delivered under this Agreement and the Custodial Agreement for such Purchased
Asset has been delivered to the Buyer or the Custodian on its behalf (or shall
be delivered in accordance with the time periods set forth herein).

(x) Intentionally Omitted.

(y) Federal Regulations. Seller is not required to register as an “investment
company,” or a company “controlled by an investment company,” within the meaning
of the Investment Company Act of 1940, as amended.

 

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(z) Taxes. Seller has filed or caused to be filed all U.S. federal and other
material tax returns which are required to be filed or extensions thereto that,
to Seller’s Knowledge, would be delinquent if they had not been filed on or
before the date hereof (taking into account any extensions) and has paid all
Taxes shown to be due and payable on or before the date hereof on such returns
or on any assessments made against it or any of its property (in each case
taking into account any extensions) except for any such Taxes as are being
appropriately contested in good faith by appropriate proceedings and with
respect to which adequate reserves have been provided in accordance with GAAP;
to Seller’s Knowledge, no Tax liens have been filed against any of Seller’s
assets, except for such Tax liens for Taxes not yet due and payable or for Taxes
being appropriately contested in good faith by appropriate proceedings and with
respect to which adequate reserves have been provided in accordance with GAAP,
and, to Seller’s Knowledge, no material claims are being asserted with respect
to any such Taxes.

(aa) ERISA. Seller does not have any Plans and has no liability with respect to
any Plans or any Multiemployer Plans.

(bb) Solvency; No Fraudulent Transfer. As of each Purchase Date, Seller has
access to adequate capital for the normal obligations foreseeable in a business
of its size and character and in light of its contemplated business operations.
Seller is generally able to pay, and is paying, its debts as they come due.
Neither the Transaction Documents nor any Transaction thereunder are entered
into in contemplation of insolvency or with intent to hinder, delay or defraud
any creditors of Seller. As of each Purchase Date, Seller is not insolvent
within the meaning of 11 U.S.C. Section 101(32) or any successor provision
thereof and the transfer and sale of the related Purchased Assets on such
Purchase Date pursuant hereto and the obligation to repurchase such Purchased
Assets (i) will not cause the liabilities of Seller to exceed the assets of
Seller, (ii) will not result in Seller having unreasonably small capital, and
(iii) will not result in debts that would be beyond Seller’s ability to pay as
the same mature. Seller has not entered into agreements with Affiliates other
than agreements on terms that would be considered arm’s length and otherwise on
terms consistent with other similar agreements with other similarly situated
entities.

(cc) Use of Proceeds; Margin Regulations. All proceeds of each Transaction shall
be used by Seller for purposes permitted under Seller’s governing documents,
provided that no part of the proceeds of any Transaction shall be used by Seller
to purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock. Neither the entering into of
any Transaction nor the use of any proceeds thereof shall be done in violation
any provision of Regulation T, U or X of the Board of Governors of the Federal
Reserve System.

(dd) Full and Accurate Disclosure. All information, reports, statements,
exhibits, schedules and certificates (i) furnished in writing by or on behalf of
any Seller Party in connection with the negotiation, preparation or delivery of
the Transaction Documents, or after the date hereof pursuant to the terms of any
Transaction Document or (ii) included in any Transaction Document, when taken as
a whole, do not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements contained therein not
misleading in light of the circumstances under which they were made, or (in the
case of projections) is or will be based on reasonable estimates, on the date as
of which such information is stated or certified; provided that, with respect to
projected information, Seller represents only that such information was prepared
in good faith based upon assumptions believed to be reasonable at the time.

 

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(ee) Financial Information; Business Condition. All financial data concerning
the Seller Parties and, to Seller’s Knowledge, the Purchased Assets that has
been delivered by or on behalf of Seller to Buyer is true, complete and correct
in all material respects on the date of the delivery thereof to Buyer. All
financial data concerning each Seller Party has been prepared fairly in
accordance with GAAP consistently applied. All financial data concerning the
Purchased Assets and the other Purchased Items has been prepared in accordance
with standard industry practices. Since the delivery of such data, except as
otherwise disclosed in writing to Buyer, there has been no change in the
business condition (financial or otherwise) or the results of operations (or
prospects) of any Seller Party or in the results of operations of any Seller
Party, or, to Seller’s Knowledge, the Purchased Assets, which change would
reasonably be likely to result in a Material Adverse Effect.

(ff) Intentionally Omitted.

(gg) No Reliance. Seller has made its own independent decisions to enter into
the Transaction Documents and each Transaction and as to whether such
Transaction is appropriate and proper for it based upon its own judgment and
upon advice from such advisors (including without limitation, legal counsel and
accountants) as it has deemed necessary. Seller is not relying upon any advice
from Buyer as to any aspect of the Transactions, including without limitation,
the legal, accounting or tax treatment of the Transactions.

(hh) Economic Sanctions, Patriot Act and Foreign Corrupt Practices Act. The
Seller Parties are in compliance, in all material respects, with (i) the U. S.
laws related to economic sanctions administered by the U.S. Department of
Treasury, including its Office of Foreign Assets Control, or the U.S. Department
of State (the “Economic Sanctions”), including the Trading with the Enemy Act,
as amended, and each of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any
other applicable enabling legislation or executive order relating thereto, and
(ii) the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism (the “Patriot Act”). No part of the
proceeds of any Transaction will be used, directly or, with Seller’s Knowledge,
indirectly (i) for any payments to any governmental official or employee,
political party, official of a political party, candidate for political office,
or anyone else acting in an official capacity, in order to obtain, retain or
direct business or obtain any improper advantage, in violation of the United
States Foreign Corrupt Practices Act of 1977, as amended, or (ii) to fund or
finance any activities or business of or with any individual or entity or in any
country or territory that, at the time of such funding or financing, is subject
to country-wide or territory-wide Economic Sanctions (including, as of the date
hereof, Cuba, Iran, North Korea, Sudan and Syria) or of or with any individual
or entity that, at the time of such funding or financing, is subject to Economic
Sanctions.

(ii) Prohibited Persons. No Seller Party is a Prohibited Person, or is located,
organized or resident in a country or territory that is subject to country-wide
or territory-wide Economic Sanctions (including, as of the date hereof, Cuba,
Iran, North Korea, Sudan and Syria).

(jj) Intentionally Omitted.

 

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(kk) Anti-Money Laundering Laws. Seller has complied in all material respects
with all applicable anti-money laundering laws and regulations (collectively,
the “Anti-Money Laundering Laws”), by (i) establishing an adequate anti-money
laundering compliance program as required by the Anti-Money Laundering Laws,
(ii) conducting the requisite due diligence in connection with the origination
of each Purchased Asset for purposes of the Anti-Money Laundering Laws, and
(iii) maintaining sufficient information to identify the related obligor (if
applicable) for purposes of the Anti-Money Laundering Laws.

(ll) Notice Address; Jurisdiction of Organization. Seller’s address for notices
is as specified on Exhibit I hereto, unless Seller has provided a new address to
Buyer in writing. Seller’s jurisdiction of organization is the State of
Delaware. The location where Seller keeps its books and records, at its notice
address, unless Seller has provided a different address to Buyer in writing
within thirty (30) days following any change of address.

(mm) Ownership. Seller is and shall remain at all times a wholly-owned direct or
indirect Subsidiary of the Guarantor.

(nn) Tax Status. For U.S. federal income tax purposes, Seller is a disregarded
entity.

ARTICLE 10

NEGATIVE COVENANTS OF SELLER

On and as of the date hereof and at all times while this Agreement or any
Transaction hereunder is in effect, Seller shall not, without the prior written
consent of Buyer:

(a) subject to Seller’s right to repurchase the Purchased Assets, take any
action that would directly or indirectly impair or adversely affect Buyer’s
title to the Purchased Assets;

(b) transfer, assign, convey, grant, bargain, sell, set over, deliver or
otherwise dispose of, or pledge or hypothecate, directly or indirectly, any
interest in any Purchased Assets to any Person other than Buyer, or engage in
repurchase transactions or similar transactions with respect to any Purchased
Assets with any Person other than Buyer, unless and until such Purchased Loans
are repurchased by Seller in accordance with this Agreement;

(c) create, incur, assume or suffer to exist any Lien, encumbrance or security
interest in or on any of the Purchased Assets or the other Collateral, whether
now owned or hereafter acquired, other than the Liens and security interest
granted by Seller pursuant to the Transaction Documents;

(d) create, incur, assume or suffer to exist any Indebtedness or other
obligation, secured or unsecured, direct or indirect, absolute or contingent
(including guaranteeing any obligation) if the same would cause Seller to
violate the covenants contained in Article 12;

(e) subject to Article 27, permit (through Seller’s giving of consent or a
waiver) any Mortgaged Property or Mortgagor, in each case, relating to any
Purchased Asset, to create, incur, assume or suffer to exist any Liens or
Indebtedness, including without limitation, junior mortgage debt or mezzanine
debt (in each case, excluding Permitted Encumbrances against the related
Mortgaged Property and except to the extent that any such Liens or Indebtedness
are otherwise created, incurred, assumed or permitted in accordance with the
Purchased Asset Documents);

 

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(f) consent or assent to any Significant Modification relating to any Purchased
Asset or other agreement or instrument relating to any Purchased Asset other
than in accordance with Article 27 and the Servicing Agreement or Servicer
Letter (as applicable);

(g) permit the organizational documents or organizational structure of Seller to
be amended in any material respect; provided, however that the foregoing shall
not prohibit any modifications to Seller’s organizational documents which are
administrative in nature (other than with respect to the special purpose entity
provisions) or solely reflect new direct ownership so long as no Change of
Control has occurred;

(h) enter into any transaction of merger or consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or
dissolution), sell all or substantially all of its assets which are Purchased
Assets (except in connection with the repurchase of such Purchased Assets in
accordance with this Agreement);

(i) suffer a Change of Control;

(j) during the continuance of an Event of Default which has occurred, make any
distribution, payment on account of, or set apart assets for, a sinking or other
analogous fund for the purchase, redemption, defeasance, retirement or other
acquisition of any Capital Stock of Seller, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of Seller, except,
after the occurrence and during the continuance of a non-monetary Event of
Default, to the extent required to maintain Parent’s qualification as a real
estate investment trust;

(k) acquire or maintain any right or interest in any Purchased Asset or
Mortgaged Property relating to any Purchased Asset that is senior to or pari
passu with the rights and interests of Buyer therein under the Transaction
Documents other than in connection with the addition of such other rights or
interests as Collateral hereunder;

(l) use any part of the proceeds of any Transaction hereunder for any purpose
which violates, or would be inconsistent with, the provisions of Regulation T, U
or X of the Board of Governors of the Federal Reserve System;

(m) directly, or through a Subsidiary, acquire or hold title to any real
property;

(n) make any election or otherwise take any action that would cause Seller to be
treated as an association taxable as a corporation for U.S. federal income tax
purposes, except to the extent required to maintain Parent’s qualification as a
real estate investment trust; or

(o) permit Parent or Guarantor to internalize its management without Buyer’s
prior written approval, which approval shall not be unreasonably withheld,
conditioned or delayed.

 

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ARTICLE 11

AFFIRMATIVE COVENANTS OF SELLER

On and as of the date hereof and at all times while this Agreement or any
Transaction hereunder is in effect, Seller covenants that:

(a) Seller Notices.

(i) Material Adverse Effect. Seller shall promptly notify Buyer of any Material
Adverse Effect of which Seller has Knowledge; provided, however, that nothing in
this Article 11 shall relieve Seller of its obligations under this Agreement.

(ii) Default or Event of Default. Seller shall notify Buyer of the occurrence of
any Default or Event of Default with respect to Seller as soon as possible but
in no event later than two (2) Business Days after obtaining Knowledge of such
event.

(iii) Purchased Asset Defaults. Seller shall promptly, and in any event not
later than two (2) Business Days following receipt thereof, deliver to Buyer any
notice of the occurrence of any Purchased Asset Event of Default.

(iv) Other Defaults, Litigation and Judgments.

(A) Seller shall promptly, and in any event not later than two (2) Business
Days, after obtaining Knowledge thereof, notify Buyer of (x) any event of
default (beyond applicable notice and grace periods) on the part of Seller under
any Indebtedness or other material contractual obligations; and (y) the
commencement or written threat of, or judgment in, any action, suit, proceeding,
investigation or arbitration before any Governmental Authority involving Seller
or any of its respective assets.

(B) Seller shall promptly, and in any event not later than two (2) Business Days
after obtaining Knowledge thereof, notify Buyer of (1) to the extent such
default or event of default could reasonably be expected to constitute an Event
of Default hereunder, any default or event of default (or similar event) on the
part of a Guarantor under any Indebtedness or other contractual obligations; and
(2) the commencement or written threat of, or judgment in, any action, suit,
proceeding, investigation or arbitration before any Governmental Authority
involving a Guarantor or any of its assets, which is likely (in Seller’s
reasonable judgment) to be adversely determined and, if so, could reasonably be
expected to have a Material Adverse Effect as reasonably determined by Seller.

(v) Mandatory Early Repurchase Event. Seller shall promptly, and in any event
not later than two (2) Business Days after obtaining Knowledge thereof, notify
Buyer of any Mandatory Early Repurchase Event that has occurred, which notice to
Buyer shall state the details of such Mandatory Early Repurchase Event including
the related Purchased Assets for which such Mandatory Early Repurchase Event has
occurred and whether such Mandatory Early Repurchase Event is continuing.

 

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(vi) Decline in Market Value. Seller shall notify Buyer of any events, facts or
circumstances that, in Seller’s good faith determination, have caused or are
reasonably likely to cause the Market Value of any Purchased Asset to decline in
any material respect from the Market Value set forth in the Confirmation
therefor as of the Purchase Date (or any applicable later determination of
Market Value), promptly, and in any event not later than two (2) Business Days,
after obtaining Knowledge thereof.

(vii) Corporate Change. Seller shall advise Buyer in writing of the opening of
any new chief executive office, or the closing of any such office, of any Seller
Party and of any change in any Seller Party’s name or the places where the books
and records pertaining to the Purchased Asset are held not less than ten
(10) Business Days prior to taking any such action.

(viii) Anti-Terrorism; Anti-Bribery and Anti-Money Laundering Laws. Seller shall
promptly (and in any event within two (2) Business Days after obtaining
Knowledge thereof) notify Buyer of any violation of the representation and
warranty contained in Article 9(hh) (Economic Sanctions, Patriot Act and Foreign
Corrupt Practices Act), Article 9(ii) (Prohibited Persons) or Article 9(kk)
(Anti-Money Laundering Laws).

(b) Reporting.

(i) Purchased Asset Information. Seller shall provide, or shall cause to be
provided, to Buyer (A) no later than the fifth (5th) day of each month, any and
all property level financial information (including, without limitation,
operating and financial statements) with respect to the Purchased Assets that
was received during the preceding calendar month and is in the possession of
Seller or an Affiliate, including, without limitation, rent rolls, income
statements and STR reports, in each case, if applicable; and (B) promptly upon
request, such other information with respect to the Purchased Assets that may be
reasonably requested by Buyer from time to time and to the extent available to
Seller.

(ii) Monthly Servicing Report. With respect to the Purchased Assets and related
Mortgaged Properties, on or prior to the Remittance Date each calendar month,
Seller shall provide, or shall cause to be provided, to Buyer a monthly
operations/servicing report covering collections, delinquencies, losses,
recoveries, and cash flows, in form reasonably acceptable to Buyer.

(iii) Quarterly Purchased Asset Reports. With respect to the Purchased Assets
and related Mortgaged Properties, as frequently as provided, but in no event
later than within thirty (30) days after the last day of any calendar quarter in
any fiscal year, Seller shall provide, or shall cause to be provided, to Buyer
an asset management report prepared by Seller or Guarantor (to the extent of
information in the possession of Seller or an Affiliate), in form reasonably
acceptable to Buyer.

(iv) Quarterly Financial Reports. Seller shall provide, or shall cause to be
provided, to Buyer within forty-five (45) days after the end of the first three
quarterly fiscal periods of each fiscal year of the Guarantor, the unaudited
consolidated balance

 

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sheets of the Guarantor, as at the end of such period and the related unaudited,
consolidated statements of income and member equity of the Guarantor for such
period (without footnotes) and the portion of the fiscal year through the end of
such period, accompanied by an officer’s certificate of the Guarantor, which
certificate shall state that said consolidated financial statements fairly
present the financial condition of Guarantor, as applicable, in accordance with
GAAP, consistently applied, as at the end of, and for, such period (subject to
normal year-end audit adjustments).

(v) Annual Financial Reports. Seller shall provide, or shall cause to be
provided, to Buyer within ninety (90) days after the end of each fiscal year of
the Seller and the Guarantor, the audited consolidated balance sheets of
Guarantor and the unaudited balance sheet of Seller, as at the end of such
fiscal year and the related audited, consolidated statements of income, member
equity and cash flows of Guarantor and unaudited statement of income and member
equity of Seller for such fiscal year, and in the case of such Guarantor
financial statements, accompanied by an opinion thereon of independent certified
public accountants of recognized national standing, which opinion shall not be
qualified as to scope of audit or going concern and shall state that said
consolidated financial statements fairly present the consolidated financial
condition and results of operations of Guarantor in accordance with GAAP, as at
the end of, and for, such period (subject to normal year-end audit adjustments).

(vi) Covenant Compliance Certificate. Simultaneously with the delivery of
financial statements for each fiscal quarter in any fiscal year and for fiscal
year end, Seller shall deliver to Buyer a Covenant Compliance Certificate from
Seller addressed to Buyer certifying that, as of the end of such fiscal quarter
or fiscal year, as applicable, (x) the Seller Parties are in compliance in all
material respects with all of the terms and requirements of the Transaction
Documents (or, if any material non-compliance exists, the steps being or
proposed to be taken to remedy such noncompliance), (y) Guarantor is in
compliance with the financial covenants set forth in the Guaranty (including
therein detailed calculations demonstrating such compliance) and (z) to such
officer’s Knowledge, no Event of Default is then continuing.

(vii) Other Information. Seller shall provide, or shall cause to be provided, to
Buyer such other information regarding the financial condition, operations or
business of Seller or any Mortgagor or underlying guarantor with respect to a
Purchased Asset as Buyer may reasonably request and to the extent reasonably
available to Seller, including without limitation, such documents as Buyer may
request evidencing the truthfulness of the representations set forth in
Article 9.

Documents required to be delivered pursuant to the foregoing may be delivered by
electronic communication (including email or otherwise) and if so delivered,
shall be deemed to have been delivered on the date (i) on which the applicable
party transmits such documents via email, (ii) on which the applicable party
posts such documents, or provides a link thereto, on the applicable party’s
website on the Internet at the website address listed on Schedule 2 (which
website address may be updated by Seller by written notice to the Buyer), or
(iii) on which such documents are posted on the applicable party’s behalf on an
Internet or intranet website, if any, to which the Buyer has access (whether a
commercial, third-party website or whether sponsored by the Buyer).

 

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(c) Additional Rights. If Seller shall at any time become entitled to receive or
shall receive any rights, whether in addition to, in substitution of, as a
conversion of, or in exchange for a Purchased Asset, or otherwise in respect
thereof, Seller shall accept the same as Buyer’s agent, hold the same in trust
for Buyer and deliver the same forthwith to Buyer (or the Custodian, as
appropriate) in the exact form received, duly endorsed by Seller to Buyer, if
required, together with an undated power covering such rights duly executed in
blank to be held by Buyer hereunder as additional collateral security for the
Transactions. If any sums of money or property so paid or distributed in respect
of the Purchased Assets shall be received by Seller, Seller shall, until such
money or property is paid or delivered to Buyer, hold such money or property in
trust for Buyer, segregated from other funds of Seller, as additional collateral
security for the Transactions. If any amount payable under or in connection with
any of the Collateral shall be or become evidenced by any promissory note, other
instrument or certificated security, such note, instrument or certificated
security shall be promptly delivered to Buyer, duly endorsed in a manner
satisfactory to Buyer, to be itself held as Collateral pursuant to the
Transaction Documents.

(d) Defense of Buyer’s Security Interest; Further Assurances. At any time from
time to time, at the sole expense of Seller, Seller shall (i) defend the right,
title and interest of Buyer in and to the Purchased Assets and other Collateral
against, and take such other action as is necessary to remove, the Liens,
security interests, claims and demands of all Persons, (ii) at Buyer’s
reasonable request, take all action Buyer reasonably deems necessary or
desirable to ensure that Buyer will have a first priority security interest in
the Purchased Assets and other Collateral subject to any of the Transactions in
the event such Transactions are recharacterized as secured financings and
(iii) at Buyer’s reasonable request, promptly and duly execute and deliver such
further instruments, documents and information and take such further actions as
Buyer may deem reasonably necessary or desirable to (1) obtain or preserve the
security interest granted hereunder, (2) ensure that such security interest
remains fully perfected at all times and remains at all times first in priority
as against all other creditors of Seller (whether or not existing as of the date
hereof or in the future), (3) obtain or preserve the rights and powers herein
granted (including, among other things, filing such UCC financing statements as
Buyer may request) or (4) ensure compliance with the Patriot Act or any other
Requirements of Law in all material respects.

(e) Preservation of Existence; Compliance with Law. Seller shall, and shall
cause Guarantor to, at all times (i) comply with all contractual obligations,
(ii) comply in all respects with all Requirements of Law, (iii) maintain and
preserve its legal existence, and (iv) maintain and preserve all of its rights,
privileges, licenses and franchises necessary for the operation of its business
(including, without limitation, with respect to Seller, all lending licenses
held by it and its status as a “qualified transferee” (however denominated)
under all documents which govern the Purchased Assets), except, in each case
other than clause (iii) above, to the extent that any noncompliance or failure
would not be reasonably likely to result in a Material Adverse Effect.

(f) Operations. Seller shall continue to engage in business of the same general
type as now conducted by it or otherwise as approved by Buyer prior to the date
hereof. Seller shall maintain records with respect to the Collateral and the
conduct and operation of its business with no less a degree of prudence than if
the Collateral were held by Seller for its own account and shall furnish Buyer,
upon reasonable request by Buyer or its designated representative, with
reasonable information obtainable by Seller with respect to the Collateral and
the conduct and operation of its business.

 

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(g) Books and Record. Seller shall at all times keep proper books and records in
which full, true and correct entries shall be made of its transactions fairly in
accordance with GAAP, and set aside on its books from its earnings for each
fiscal year all such proper reserves in accordance with GAAP.

(h) Compliance with Transaction Documents. Seller shall observe, perform and
satisfy all the terms, provisions and covenants required to be observed,
performed or satisfied by it, and shall pay when due all costs, fees and
expenses required to be paid by it, under the Transaction Documents. Seller
shall cause the Guarantor to at all times comply with the terms and conditions
of the Guaranty, including without limitation, any financial covenants contained
therein. Seller shall be solely responsible for the fees and expenses of
Custodian, Account Bank, and Servicer.

(i) Taxes and Other Charges. Seller shall timely file all income, franchise and
other tax returns required to be filed by it and shall timely pay and discharge
all taxes, levies, assessments, liens and other charges imposed on it, on its
income or profits, on any of its property or on the Collateral prior to the date
on which penalties attach thereto, except for any such tax, levy, assessment,
liens or other charge which is being contested in good faith and by proper
proceedings and against which adequate reserves are being maintained in
accordance with GAAP.

(j) Intentionally Omitted.

(k) Ownership. Seller is and shall remain at all times a wholly-owned direct or
indirect Subsidiary of the Guarantor.

(l) Intentionally Omitted.

(m) Future Advances. To the extent any future advance is required to be made
pursuant to the Purchased Asset Documents with respect to any Purchased Asset,
Seller shall be required to fund such future advance in accordance with such
Purchased Asset Documents, regardless of whether Buyer agrees to fund an
increase in the Purchase Price or the conditions for increasing the Purchase
Price under this Agreement have been satisfied with regard to such future
advance.

ARTICLE 12

SINGLE PURPOSE ENTITY

On and as of the date hereof and at all times while this Agreement or any
Transaction hereunder is in effect and Seller covenants that:

(a) Seller shall own no assets, and shall not engage in any business, other than
the Purchased Assets, proposed Purchased Assets and Purchased Assets reacquired
by Seller from Buyer, and other assets incidental to the origination,
acquisition, ownership, financing, securitization and disposition of the
Purchased Assets; provided, however, that Seller shall not be in breach of this
provision to the extent that Seller acquires or originates an Eligible Asset
under its good faith belief that such Eligible Asset will become a Purchased
Asset; provided, further, that

 

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in the event Buyer does not approve such Eligible Asset for inclusion in a
Transaction, then Seller shall convey all of its right, title and interest in
such Eligible Asset to a third party by not later than ten (10) Business Days
after Buyer disapproves (or is deemed to have disapproved) such Eligible Asset;

(b) Seller shall not make any loans or advances to any Affiliate or third party
and shall not acquire obligations or securities of its Affiliates other than
those obligations related to Purchased Assets or securities consisting of
Purchased Assets or Eligible Assets which Seller believes in good faith will
become a Purchased Asset;

(c) Seller shall pay its debts and liabilities (including, as applicable, shared
personnel and overhead expenses) only from its own assets;

(d) Seller shall comply with the provisions of its organizational documents;

(e) Seller shall do all things necessary to observe its organizational
formalities and to preserve its existence;

(f) Seller shall maintain all of its books, records, financial statements and
bank accounts separate from those of its Affiliates that are not a Seller
(except that such financial statements may be consolidated to the extent
consolidation is permitted or required under GAAP or as a matter of Requirements
of Law; provided that (i) appropriate notation shall be made on such financial
statements to indicate that Seller’s assets and credit are not available to
satisfy the debts and other obligations of such Affiliate that is not a Seller
or any other Person that is not a Seller and (ii) such assets shall also be
listed on Seller’s own separate balance sheet) and file its own tax returns
(except to the extent consolidation is required or permitted under Requirements
of Law, such as in the case of a disregarded entity);

(g) Seller shall be, and at all times shall hold itself out to the public as, a
legal entity separate and distinct from any other entity (including any
Affiliate) (other than for tax purposes), shall correct any known
misunderstanding regarding its status as a separate entity, shall conduct
business in its own name, and shall not identify itself or any of its Affiliates
as a division of the other;

(h) Seller shall maintain adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its
contemplated business operations and shall remain solvent, in each case, only to
the extent sufficient Income is produced from its assets. The foregoing shall in
no way be construed as requiring the contribution of capital to Seller by any
direct or indirect holders of interests in Seller;

(i) Seller shall not commingle its funds or other assets with those of any
Affiliate that is not a Seller or any other Person and shall maintain its
properties and assets in such a manner that it would not be costly or difficult
to identify, segregate or ascertain its properties and assets from those of
others;

(j) Seller shall maintain its properties, assets and accounts separate from
those of any Affiliate that is not a Seller or any other Person;

 

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(k) Seller shall not hold itself out to be responsible for the debts or
obligations of any other Person that is not a Seller;

(l) Seller shall not, without the prior written consent of its Independent
Member, take any action that will result in an Act of Insolvency;

(m) Seller shall, at all times, have at least one (1) Independent Member;

(n) Seller’s organizational documents shall provide (i) that Buyer be given at
least two (2) Business Days prior notice of the removal and/or replacement of
any Independent Member, together with the name and contact information of the
replacement Independent Member and evidence of the replacement’s satisfaction of
the definition of Independent Member and (ii) that any Independent Member of
Seller shall not have any fiduciary duty to anyone including the holders of the
equity interest in Seller and any Affiliates of Seller except Seller and the
creditors of Seller with respect to taking of, or otherwise voting on, any Act
of Insolvency; provided that the foregoing shall not eliminate the implied
contractual covenant of good faith and fair dealing;

(o) Seller shall not enter into any transaction with an Affiliate of Seller
except on commercially reasonable terms similar to those available to
unaffiliated parties in an arm’s length transaction;

(p) Seller shall maintain a sufficient number of employees in light of
contemplated business operations; provided, however, that Seller shall not be
required to maintain any employees;

(q) Seller shall use separate stationary, invoices and checks bearing its own
name, and allocate fairly and reasonably any overhead for shared office space
and for services performed by an employee of an Affiliate;

(r) Seller shall not pledge its assets to secure the obligations of any other
Person (other than another Seller and as otherwise pledged under the Transaction
Documents);

(s) Seller shall not form, acquire or hold any Subsidiary or own any equity
interest in any other entity; and

(t) Seller shall not create, incur, assume or suffer to exist any Indebtedness,
Lien, encumbrance or security interest in or on any of its property, assets,
revenue, the Purchased Assets, the other Collateral, whether now owned or
hereafter acquired, other than (i) obligations under the Transaction Documents,
(ii) obligations under the documents evidencing the Purchased Assets, and
(iii) unsecured trade payables, in an aggregate amount not to exceed the Seller
Threshold at any one time outstanding, incurred in the ordinary course of
acquiring, owning, financing and disposing of the Purchased Assets; provided,
however, that any such trade payables incurred by Seller shall be paid within
sixty (60) days of the date incurred.

 

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ARTICLE 13

EVENTS OF DEFAULT; REMEDIES; SET-OFF

(a) Events of Default. Each of the following events shall constitute an “Event
of Default” under this Agreement:

(i) Failure to Repurchase or Repay. Seller shall fail to repurchase Purchased
Assets upon the applicable Repurchase Date or shall fail to repay the Purchase
Price with respect to any Purchased Asset when and as required pursuant to the
Transaction Documents.

(ii) Failure to Pay Purchase Price Differential. Buyer shall fail to receive on
or before any Remittance Date the accrued and unpaid Purchase Price Differential
when due; provided, that such failure shall not be an Event of Default hereunder
if sufficient Income is on deposit in the Waterfall Account to make such payment
and the Account Bank fails to remit such funds to Buyer at the time such payment
is due.

(iii) Failure to Cure Margin Deficit. Seller shall fail to cure any Margin
Deficit in accordance with Article 4 when due.

(iv) Failure to Remit Principal Payment. Seller fails to remit (or cause to be
remitted) to Buyer any Principal Payment received with respect to a Purchased
Asset for application to the payment of the Repurchase Price for such Purchased
Asset in accordance with Article 5(e).

(v) Failure to Pay Fees. Buyer shall fail to receive any fee payable to Buyer
hereunder or pursuant to the Fee Letter as and when due.

(vi) Other Failure to Pay. Seller shall fail to make any payment not otherwise
enumerated that is owing to Buyer under the Transaction Documents that has
become due, whether by acceleration or otherwise, and, if no notice and/or grace
period is expressly provided for such payment in this Agreement, the same is not
cured within two (2) Business Days after receipt of demand thereto from Buyer.

(vii) Act of Insolvency. An Act of Insolvency occurs with respect to Seller or
Guarantor.

(viii) Intentionally Omitted.

(ix) Transaction Documents. Any Transaction Document or a replacement therefor
acceptable to Buyer shall for whatever reason be terminated (other than by Buyer
or with Buyer’s consent without cause) or cease to be in full force and effect,
or shall not be enforceable in accordance with its terms, or any Seller Party or
Affiliate of a Seller Party shall contest the validity or enforceability of any
Transaction Document or the validity, perfection or priority of any Lien granted
thereunder, or any Seller Party or Affiliate of a Seller Party shall seek to
disaffirm, terminate or reduce its obligations under any Transaction Document.

 

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(x) Cross-Default.

(A) Seller shall be in default (beyond any applicable notice and cure periods)
under any of its Indebtedness which default is a monetary default in an amount
of at least the Seller Threshold or is a default (beyond any applicable notice
and cure periods) that permits the acceleration of the maturity of obligations
by any other party to or beneficiary with respect to such Indebtedness in an
amount of at least the Seller Threshold, and Seller fails to repurchase all
Purchased Assets within one (1) Business Day thereafter.

(B) Guarantor shall be in default (beyond any applicable notice and cure
periods) under any of its Indebtedness which default is a monetary default in an
amount of at least the Guarantor Threshold or is a default (beyond any
applicable notice and cure periods) that permits the acceleration of the
maturity of obligations by any other party to or beneficiary with respect to
such Indebtedness in an amount of at least the Guarantor Threshold, and Seller
fails to repurchase all Purchased Assets within one (1) Business Day thereafter.

(C) Guarantor shall be in a material non-payment default (beyond any applicable
notice and cure periods) under any of its Indebtedness which default results in
the acceleration of the maturity of obligations in an amount of at least the
Guarantor Threshold by any other party to or beneficiary with respect to such
Indebtedness and Seller fails to repurchase all Purchased Assets within one
(1) Business Day thereafter.

(xi) Judgment. A final non appealable judgment by any competent court in the
United States of America for the payment of money shall have been (A) rendered
against Seller in an amount greater than the Seller Threshold or (B) rendered
against Guarantor in an amount greater than the Guarantor Threshold, and in each
case, such judgment remains undischarged or unpaid, unless the execution of such
judgment is stayed by posting of cash, bond or other collateral acceptable to
Buyer in the amount of such judgment within forty-five (45) days after the entry
thereof.

(xii) ERISA. Seller shall violate the representations and warranties contained
in Article 9(aa) (ERISA).

(xiii) Ownership; Security Interest. If the Transaction Documents shall for any
reason not cause, or shall cease to cause, Buyer to be the owner free of any
adverse claim of any of the Purchased Assets or if a Transaction is
recharacterized as a secured financing, a secured party with respect to the
related Purchased Asset free of any adverse claim liens and rights of others
(other than as granted herein), and, in either case, such condition is not cured
by Seller within one (1) Business Day after the earlier of receipt of notice
thereof from Buyer or Seller obtaining Knowledge thereof.

(xiv) Government or Regulatory Action. Any Governmental Authority or agency, any
person, agency or entity acting or purporting to act under Governmental
Authority or any regulatory or self-regulatory authority shall have taken any
action to (1)

 

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condemn, seize or appropriate, or assume custody or control of, all or any
substantial part of the property of any Seller Party, (2) displace the
management of Seller or Guarantor or curtail its authority in the conduct of its
business and such action has not been dismissed or stayed within thirty
(30) days or (3) remove, limit, restrict, suspend or terminate the rights,
privileges, or operations of Seller or Guarantor which, in each case of clauses
(1), (2) or (3) above, results in a Material Adverse Effect.

(xv) Intentionally Omitted.

(xvi) Change of Control. A Change of Control shall occur without the prior
written consent of Buyer.

(xvii) Representations. Any representation, warranty or certification made by
any Seller Party to Buyer under this Agreement or any Transaction Document
(other than any representation contained in Article 9(s)) shall have been
incorrect or untrue when made or repeated or deemed to have been made or
repeated in any material respect and, to the extent that such incorrect or
untrue representation is capable of being cured by Seller, such breach is not
cured by Seller within five (5) Business Days after the earlier of receipt of
written notice thereof from Buyer or Seller’s Knowledge of such incorrect or
untrue representation.

(xviii) Guarantor Breach. The breach by Guarantor of the financial covenants
made by it in the Guaranty.

(xix) Other Covenant Default. If Seller, or any Servicer that is an Affiliate of
Seller, shall breach or fail to perform any of the terms, covenants or
obligations under this Agreement or any other Transaction Document, other than
as specifically otherwise referred to in this definition of “Event of Default”,
and such breach or failure to perform is not remedied within the earlier of ten
(10) Business Days after (a) delivery of notice thereof to Seller by Buyer, or
(b) Knowledge by Seller of such breach or failure to perform; provided, however,
that if such breach is not reasonably susceptible of cure within such ten
(10) Business Day period, then, provided that Seller commences within such ten
(10) Business Day period and diligently pursues a cure, such ten (10) Business
day period shall be extended as reasonably necessary to complete the cure
thereof for a period not to exceed ten (10) additional Business Days.

(b) Remedies. Seller shall appoint Buyer as attorney-in-fact of Seller in
accordance with Exhibit V hereto for the purpose of taking any action and
executing or endorsing any instruments that Buyer may deem necessary or
advisable to accomplish the purposes of this Agreement, which appointment as
attorney-in-fact is irrevocable and coupled with an interest; provided, that so
long as an Event of Default has not occurred and is not continuing, Buyer shall
provide five (5) Business Days’ prior written notice to Seller before recording
any Assignments of Mortgages and/or completing the endorsements of the Purchased
Assets. If an Event of Default shall occur and be continuing with respect to
Seller, the following rights and remedies shall be available to Buyer:

 

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(i) At the option of Buyer, the Repurchase Date for each Transaction hereunder
shall, if it has not already occurred, immediately occur (such date, the
“Accelerated Repurchase Date”).

(ii) If Buyer exercises or is deemed to have exercised the option referred to in
Article 13(b)(i):

(A) Seller’s obligations hereunder to repurchase all Purchased Assets shall
become immediately due and payable on and as of the Accelerated Repurchase Date
and Buyer may immediately terminate all Transactions pursuant to the Transaction
Documents, in each case, with notice to Seller (except such termination shall be
deemed to have occurred, even if notice is not given, upon the occurrence of an
Act of Insolvency);

(B) to the extent permitted by applicable law, the Repurchase Price with respect
to each Transaction (determined as of the Accelerated Repurchase Date) shall be
increased by the aggregate amount obtained by daily application of, on a 360 day
per year basis for the actual number of days during the period from and
including the Accelerated Repurchase Date to, but excluding, the date of payment
of the Repurchase Price (as so increased), (x) the Pricing Rate for such
Transaction multiplied by (y) the Purchase Price for such Transaction (decreased
by (I) any amounts actually remitted to Buyer by the Account Bank or Seller
pursuant to this Agreement and applied to such Repurchase Price, and (II) any
amounts applied to the Repurchase Price pursuant to Article 13(b)(ii)(D));

(C) the Custodian shall, upon the request of Buyer, deliver to Buyer all
instruments, certificates and other documents then held by the Custodian
relating to the Purchased Assets; and

(D) Buyer may in accordance with Requirements of Law (1) immediately after the
Accelerated Repurchase Date, sell any and all of the Purchased Assets in its
sole discretion, and/or (2) in its sole and absolute discretion elect, in lieu
of selling all or a portion of such Purchased Assets, to give Seller credit for
such Purchased Assets in an amount equal to the fair market value of such
Purchased Assets, as determined by Buyer in its sole discretion exercised in
good faith, against the aggregate unpaid Repurchase Price for such Purchased
Assets and any other amounts owing by Seller under the Transaction Documents.
The proceeds of any disposition of Purchased Assets effected pursuant to
sub-clause (1) above shall be applied by Buyer in the order and manner set forth
in Article 5(g).

(iii) The parties acknowledge and agree that (A) the Purchased Assets subject to
any Transaction hereunder are not instruments traded in a recognized market,
(B) in the absence of a generally recognized source for prices or bid or offer
quotations for any Purchased Asset, the Buyer may establish the source therefor
in its sole and absolute discretion in accordance with any applicable
Requirements of Law and (C) all prices, bids and offers shall be determined
together with accrued Income (except to the extent contrary to market practice
with respect to the relevant Purchased Assets). The parties recognize

 

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that it may not be possible to purchase or sell all of the Purchased Assets on a
particular Business Day, or in a transaction with the same Buyer, or in the same
manner because the market for such Purchased Assets may not be liquid. In view
of the nature of the Purchased Assets, the parties agree that liquidation of a
Transaction or the Purchased Assets does not require a public purchase or sale
and that a good faith private purchase or sale shall be deemed to have been made
in a commercially reasonable manner. Accordingly, Buyer may elect, in its sole
discretion in accordance with any applicable Requirements of Law, the time and
manner of liquidating any Purchased Assets, and nothing contained herein shall
(A) obligate Buyer to liquidate any Purchased Assets on the occurrence and
during the continuance of an Event of Default or to liquidate all of the
Purchased Assets in the same manner or on the same Business Day or
(B) constitute a waiver of any right or remedy of Buyer.

(iv) Seller shall be liable to Buyer and its Affiliates and shall indemnify
Buyer and its Affiliates for the amount (including in connection with the
enforcement of this Agreement) of all actual losses, costs and expenses,
including reasonable legal fees and expenses of outside counsel, actually
incurred by Buyer in connection with or as a consequence of an Event of Default.

(v) Buyer shall have, in addition to its rights and remedies under the
Transaction Documents, all of the rights and remedies provided by applicable
federal, state, foreign (where relevant), and local laws (including, without
limitation, if the Transactions are recharacterized as secured financings, the
rights and remedies of a secured party under the UCC, to the extent that the UCC
is applicable, and the right to offset any mutual debt and claim), in equity,
and under any other agreement between Buyer and Seller. Without limiting the
generality of the foregoing, Buyer shall be entitled to set off the proceeds of
the liquidation of the Purchased Assets against all of Seller’s obligations to
Buyer under this Agreement, without prejudice to Buyer’s right to recover any
deficiency.

(vi) Buyer may exercise any or all of the remedies available to Buyer
immediately upon the occurrence of an Event of Default and at any time during
the continuance thereof. All rights and remedies arising under the Transaction
Documents, as amended from time to time, are cumulative and not exclusive of any
other rights or remedies that Buyer may have.

(vii) Buyer may enforce its rights and remedies hereunder without prior judicial
process or hearing, and Seller hereby expressly waives any defenses Seller might
otherwise have to require Buyer to enforce its rights by judicial process.
Seller also waives, to the extent permitted by law, any defense Seller might
otherwise have arising from the use of nonjudicial process, disposition of any
or all of the Purchased Assets, or from any other election of remedies. Seller
recognizes that nonjudicial remedies are consistent with the usages of the
trade, are responsive to commercial necessity and are the result of a bargain at
arm’s length.

 

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(c) Set-off. In addition to any rights now or hereafter granted under applicable
law or otherwise, and not by way of limitation of any such rights, Seller hereby
grants to Buyer and its Affiliates a right of set-off, without notice to Seller,
any sum or obligation (whether or not arising under this Agreement, whether
matured or unmatured, whether or not contingent and irrespective of the
currency, place of payment or booking office of the sum or obligation) owed by
Seller to Buyer or any Affiliate of Buyer against (i) any sum or obligation
(whether or not arising under this Agreement, whether matured or unmatured,
whether or not contingent and irrespective of the currency, place of payment or
booking office of the sum or obligation) owed by Buyer or its Affiliates to
Seller and (ii) any and all deposits (general or specified), monies, credits,
securities, collateral or other property of Seller and the proceeds therefrom,
now or hereafter held or received for the account of Seller (whether for
safekeeping, custody, pledge, transmission, collection, or otherwise) by Buyer
or its Affiliates or any entity under the control of Buyer or its Affiliates and
its respective successors and assigns (including, without limitation, branches
and agencies of Buyer, wherever located).

Buyer and its Affiliates are hereby authorized at any time and from time to time
upon the occurrence and during the continuance of an Event of Default, without
notice to Seller, to set-off, appropriate, apply and enforce such right of
set-off against any and all items hereinabove referred to against any amounts
owing to Buyer or its Affiliates by Seller under the Transaction Documents,
irrespective of whether Buyer or its Affiliates shall have made any demand
hereunder and although such amounts, or any of them, shall be contingent or
unmatured and regardless of any other collateral securing such amounts. If a sum
or obligation is unascertained, Buyer may in good faith estimate that obligation
and set-off in respect of the estimate, subject to the relevant party accounting
to the other when the obligation is ascertained. Nothing in this Article 13(c)
shall be effective to create a charge or other security interest. This
Article 13(c) shall be without prejudice and in addition to any right of
set-off, combination of accounts, lien or other rights to which any party is at
any time otherwise entitled (whether by operation of law, contract or
otherwise).

ANY AND ALL RIGHTS TO REQUIRE BUYER OR ITS AFFILIATES TO EXERCISE THEIR RIGHTS
OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL OR PURCHASED ITEMS THAT SECURE
THE AMOUNTS OWING TO BUYER OR ITS AFFILIATES BY SELLER UNDER THE TRANSACTION
DOCUMENTS, PRIOR TO EXERCISING THEIR RIGHT OF SET-OFF WITH RESPECT TO SUCH
MONIES, SECURITIES, COLLATERAL, DEPOSITS, CREDITS OR OTHER PROPERTY OF SELLER,
ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED BY SELLER.

ARTICLE 14

SINGLE AGREEMENT

Buyer and Seller acknowledge that, and have entered hereinto and will enter into
each Transaction hereunder in consideration of and in reliance upon the fact
that, all Transactions hereunder (as well as the grant of the security interest
in Article 6 hereof) constitute a single business and contractual relationship
and have been made in consideration of each other. Accordingly, each of Buyer
and Seller agrees (i) to perform all of its obligations in respect of each
Transaction hereunder, and that a default in the performance of any such
obligations shall constitute a default by it in respect of all Transactions
hereunder, (ii) that each of them shall be entitled to set-off claims and apply
property held by them in respect of any Transaction against obligations owing to
them in respect of any other Transactions hereunder and (iii) that payments,

 

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deliveries and other transfers made by either of them in respect of any
Transaction shall be deemed to have been made in consideration of payments,
deliveries and other transfers in respect of any other Transactions hereunder,
and the obligations to make any such payments, deliveries and other transfers
may be applied against each other and netted.

ARTICLE 15

RECORDING OF COMMUNICATIONS

BUYER AND SELLER SHALL HAVE THE RIGHT (BUT NOT THE OBLIGATION) FROM TIME TO TIME
TO MAKE OR CAUSE TO BE MADE TAPE RECORDINGS OF COMMUNICATIONS BETWEEN ITS
EMPLOYEES, IF ANY, AND THOSE OF THE OTHER PARTY WITH RESPECT TO TRANSACTIONS;
PROVIDED, HOWEVER, THAT SUCH RIGHT TO RECORD COMMUNICATIONS SHALL BE LIMITED TO
COMMUNICATIONS OF EMPLOYEES TAKING PLACE ON THE TRADING FLOOR OF THE APPLICABLE
PARTY AFTER WRITTEN NOTICE OF SUCH RECORDING HAS BEEN DELIVERED.

ARTICLE 16

NOTICES AND OTHER COMMUNICATIONS

Unless otherwise provided in this Agreement, all notices, consents, approvals
and requests required or permitted hereunder shall be given in writing and shall
be effective for all purposes if sent by (a) hand delivery, with proof of
delivery, (b) certified or registered United States mail, postage prepaid,
(c) expedited prepaid delivery service, either commercial or United States
Postal Service, with proof of delivery or (d) by electronic mail to the address
and person specified in Exhibit I hereto or to such other address and person as
shall be designated from time to time by any party hereto in a written notice to
the other parties hereto in the manner provided for in this Article 16. A notice
shall be deemed to have been given: (w) in the case of hand delivery, at the
time of delivery, (x) in the case of registered or certified mail, when
delivered or the first attempted delivery on a Business Day, (y) in the case of
expedited prepaid delivery, upon the first attempted delivery on a Business Day
or (z) in the case of electronic mail, upon receipt of a verbal or electronic
communication confirming receipt thereof. A party receiving a notice that does
not comply with the technical requirements for notice under this Article 16 may
elect to waive any deficiencies and treat the notice as having been properly
given.

ARTICLE 17

ENTIRE AGREEMENT; SEVERABILITY

This Agreement shall supersede any existing agreements between the parties
containing general terms and conditions for repurchase transactions. Each
provision and agreement herein shall be treated as separate and independent from
any other provision or agreement herein and shall be enforceable notwithstanding
the unenforceability of any such other provision or agreement.

ARTICLE 18

NON-ASSIGNABILITY

(a) No Seller Party may assign any of its rights or obligations under this
Agreement or the other Transaction Documents without the prior written consent
of Buyer (which may be

 

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granted or withheld in Buyer’s sole and absolute discretion) and any attempt by
any Seller Party to assign any of its rights or obligations under this Agreement
or any other Transaction Document without the prior written consent of Buyer
shall be null and void.

(b) Buyer may, without consent of Seller, at any time and from time to time,
assign or participate some or all of its rights and obligations under the
Transaction Documents and/or under any Transaction (subject to Article 8(a)) to
any Person that is not a Prohibited Transferee or an Affiliate of any Mortgagor
and, in connection therewith, may bifurcate or allocate (i.e.
senior/subordinate) amounts due to Buyer. Seller agrees to cooperate with Buyer
in connection with any such assignment, transfer or sale of participating
interest and to enter into such restatements of, and amendments, supplements and
other modifications to, the Transaction Documents to which it is a party in
order to give effect to such assignment, transfer or sale of participating
interest. In connection with any sale, assignment or transfer by initial Buyer
hereunder (other than a sale, assignment or transfer by initial Buyer of one
hundred percent (100%) of its rights and obligations under the Transaction
Documents) provided no Event of Default has occurred and is continuing,
(i) initial Buyer shall retain control and authority over its rights and
obligations under the Transaction Documents (including Buyer’s rights to
(A) sole decision-making to determine whether to purchase any Eligible Asset in
a Transaction and (B) determine the Market Value of the Purchased Assets, in
each case in accordance with the Transaction Documents) and any Transaction and
(ii) Seller shall not be obligated or required to deal directly with any Person
other than Buyer, and (iii) Buyer will give written notice of any such
assignment or participation within five (5) calendar days of the effective date
thereof.

(c) Subject to the foregoing, the Transaction Documents and any Transactions
shall be binding upon and shall inure to the benefit of the parties and their
respective successors and assigns. Nothing in the Transaction Documents, express
or implied, shall give to any Person, other than the parties to the Transaction
Documents and their respective successors, any benefit or any legal or equitable
right, power, remedy or claim under the Transaction Documents.

(d) Seller shall maintain a record of ownership (the “Register”) identifying the
name and address of each assignee hereunder and the amount of each such
assignee’s interest in the Purchased Assets, which Register is intended to be
maintained in accordance with Section 5f.103-1(c) of the Treasury Regulations.
Transfers made pursuant to Article 18(b) shall be recorded upon such Register.
Such Register shall be available for inspection by Buyer at any reasonable time
and from time to time upon reasonable prior notice. The entries in the Register
shall be conclusive absent manifest error, and Seller and Buyer shall treat each
person whose name is recorded in the Register pursuant to the terms hereof as a
Buyer hereunder for all purposes of this Agreement.

(e) If Buyer sells a participation with respect to its rights under this
Agreement or under any other Transaction Document with respect to the Purchased
Assets, Buyer shall, acting for this purposes as an agent of Seller, maintain a
record of ownership (the “Participant Register”) identifying the name and
address of each participant and the amount of each such participant’s interest
in the Purchased Assets, provided that the Buyer and any such other participant
shall not have any obligation to disclose all or any portion of the
Participation Register (including the identity of any participant or any
information related to a participant’s interest in any Transaction Document) to
any Person except to the extent necessary to establish that such interests are
in registered form under Section 5f.103-1(c) of the Treasury Regulations. The
entries in the

 

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Participant Register shall be conclusive absent manifest error and Buyer shall
treat each Person whose name is recorded in the Participant Register as the
owners of such participation for all purposes of this Agreement notwithstanding
any notice to the contrary.

(f) Buyer shall cause each assignee, participant or other transferee of Buyer to
provide to Seller a property completed and duly executed United States Internal
Revenue Service form W-9, W-8BEN, W-8BEN-E, W-8ECI, or W-8IMY and/or, as
appropriate, other applicable forms as described by the United States Internal
Revenue Service or other certifications reasonably requested by Seller for
purposes of compliance with applicable withholding provisions pursuant to the
Internal Revenue Code and underlying Treasury Regulations. Buyer and each
assignee, participant or transferee hereby agrees to notify Seller of any change
in circumstance that causes a certificate or document provided by it to Seller
to no longer be true and to provide updated forms upon the obsolescence of any
previously delivered form or promptly notify Seller in writing of its legal
inability to do so. Seller shall have no obligation to pay any additional
amounts hereunder that may result from the tax status of any assignee,
participant or transferee differing from the tax status of Buyer.

ARTICLE 19

GOVERNING LAW

THIS AGREEMENT (AND ANY CLAIM OR CONTROVERSY HEREUNDER) SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS,
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS WITHOUT REGARD TO THE CONFLICT OF LAWS DOCTRINE APPLIED IN SUCH STATE
(OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE
STATE OF NEW YORK).

ARTICLE 20

NO WAIVERS, ETC.

No express or implied waiver of any Event of Default by either party shall
constitute a waiver of any other Event of Default and no exercise of any remedy
hereunder by any party shall constitute a waiver of its right to exercise any
other remedy hereunder. No modification or waiver of any provision of this
Agreement and no consent by any party to a departure herefrom shall be effective
unless and until such shall be in writing and duly executed by both of the
parties hereto.

ARTICLE 21

INTENT

(a) The parties intend and acknowledge that (i) each Transaction is a
“repurchase agreement” as that term is defined in Section 101(47) of Title 11 of
the United States Code, as amended (except insofar as the type of Assets subject
to such Transaction or the term of such Transaction would render such definition
inapplicable), and a “securities contract” as that term is defined in
Section 741(7) of the Bankruptcy Code (except insofar as the type of assets
subject to such Transaction would render such definition inapplicable),
(ii) each Purchased Asset constitutes either a “mortgage loan,” “an interest in
a mortgage loan” or a “security” as such terms are used in the Bankruptcy Code
and (iii) all payments hereunder are deemed “margin payments,” “settlement
payments,” or “transfers” as defined in the Bankruptcy Code.

 

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(b) The parties intend and acknowledge that either party’s right to cause the
termination, liquidation or acceleration of, or to set-off or net termination
values, payment amounts or other transfer obligations arising under, or in
connection with, this Agreement or any Transaction hereunder or to exercise any
other remedies pursuant to Article 13 is in each case a contractual right to
cause or exercise such right as described in Sections 362(b)(6), 555 and 561 of
the Bankruptcy Code.

(c) The parties intend and acknowledge that if a party hereto is an “insured
depository institution,” as such term is defined in the Federal Deposit
Insurance Act, as amended (“FDIA”), then this Agreement and each Transaction
hereunder is a “qualified financial contract,” as that term is defined in the
FDIA and any rules, orders or policy statements thereunder (except insofar as
the type of assets subject to such Transaction would render such definition
inapplicable).

(d) The parties intend and acknowledge that this Agreement constitutes a
“netting contract” as defined in and subject to Title IV of the Federal Deposit
Insurance Corporation Improvement Act of 1991 (“FDICIA”) and each payment
entitlement and payment obligation under any Transaction hereunder shall
constitute a “covered contractual payment entitlement” or “covered contractual
payment obligation”, respectively, as defined in and subject to FDICIA (except
insofar as one or both of the parties is not a “financial institution” as that
term is defined in FDICIA).

(e) The parties intend and acknowledge that this Agreement constitutes a “master
netting agreement” as defined in Section 101(38A) of the Bankruptcy Code, and as
used in Section 561 of the Bankruptcy Code and a “securities contract” with the
meaning of Section 555 and Section 559 of the Bankruptcy Code.

(f) The parties intend and acknowledge that any provisions hereof or in any
other document, agreement or instrument that is related in any way to this
Agreement shall be deemed “related to” this Agreement within the meaning of
Section 741 of the Bankruptcy Code.

(g) Notwithstanding anything to the contrary in this Agreement or any other
Transaction Document it is the intention of the parties that, for U.S. Federal,
state and local income and franchise Tax purposes and for accounting purposes,
each Transaction constitute a financing from Buyer to Seller (or any person from
whom Seller is disregarded for U.S. federal income tax purposes), and that
Seller (or any person from whom Seller is disregarded for U.S. federal income
tax purposes) be (except to the extent that Buyer shall have exercised its
remedies following an Event of Default) the owner of the Purchased Assets for
such purposes. Unless prohibited by applicable law, Seller and Buyer agree to
treat the Transactions as described in the preceding sentence (such as on any
and all filings with any U.S. Federal, state, or local taxing authority) and
agree not to take any action inconsistent with such treatment.

 

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ARTICLE 22

DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

The parties acknowledge that they have been advised that:

(a) in the case of Transactions in which one of the parties is a broker or
dealer registered with the Securities and Exchange Commission (“SEC”) under
Section 15 of the Exchange Act, the Securities Investor Protection Corporation
has taken the position that the provisions of the Securities Investor Protection
Act of 1970 (“SIPA”) do not protect the other party with respect to any
Transaction hereunder;

(b) in the case of Transactions in which one of the parties is a government
securities broker or a government securities dealer registered with the SEC
under Section 15C of the 1934 Act, SIPA will not provide protection to the other
party with respect to any Transaction hereunder; and

(c) in the case of Transactions in which one of the parties is a financial
institution, funds held by the financial institution pursuant to a Transaction
hereunder are not a deposit and therefore are not insured by the Federal Deposit
Insurance Corporation or the National Credit Union Share Insurance Fund, as
applicable.

ARTICLE 23

CONSENT TO JURISDICTION; WAIVERS

(a) Each party irrevocably and unconditionally (i) submits to the exclusive
jurisdiction of any United States Federal or New York State court sitting in
Manhattan, and any appellate court from any such court, solely for the purpose
of any suit, action or proceeding brought to enforce its obligations under this
Agreement or relating in any way to this Agreement or any Transaction under this
Agreement and (ii) waives, to the fullest extent it may effectively do so, any
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court and any right of jurisdiction on account of its place of
residence or domicile.

(b) To the extent that either party has or hereafter may acquire any immunity
(sovereign or otherwise) from any legal action, suit or proceeding, from
jurisdiction of any court or from set off or any legal process (whether service
or notice, attachment prior to judgment, attachment in aid of execution of
judgment, execution of judgment or otherwise) with respect to itself or any of
its property, such party hereby irrevocably waives and agrees not to plead or
claim such immunity in respect of any action brought to enforce its obligations
under this Agreement or relating in any way to this Agreement or any Transaction
under this Agreement.

(c) The parties hereby irrevocably waive, to the fullest extent each may
effectively do so, the defense of an inconvenient forum to the maintenance of
such action or proceeding and irrevocably consent to the service of any summons
and complaint and any other process by the mailing of copies of such process to
them at their respective address specified herein. The parties hereby agree that
a final non-appealable judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Article 23 shall affect the
right of either party to serve legal process in any other manner permitted by
law or affect the right of either party to bring any action or proceeding
against the other party or its property in the courts of other jurisdictions.

 

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(d) EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT,
ANY OTHER TRANSACTION DOCUMENT OR ANY INSTRUMENT OR DOCUMENT DELIVERED HEREUNDER
OR THEREUNDER.

(e) EACH PARTY HEREBY WAIVES ANY RIGHT TO CLAIM OR RECOVER FROM THE OTHER PARTY
OR ANY INDEMNIFIED PARTY ANY SPECIAL, EXEMPLARY, PUNITIVE, INDIRECT, INCIDENTAL
OR CONSEQUENTIAL DAMAGES OF ANY KIND OR NATURE WHATSOEVER OR ANY DAMAGES OTHER
THAN, OR IN ADDITION TO, ACTUAL DAMAGES, WHETHER THE LIKELIHOOD OF SUCH DAMAGES
WAS KNOWN AND REGARDLESS OF THE FORM OF THE CLAIM OF ACTION.

ARTICLE 24

NO RELIANCE

Each of Buyer and Seller hereby acknowledges, represents and warrants to the
other that, in connection with the negotiation of, the entering into, and the
performance under, the Transaction Documents and each Transaction thereunder:

(a) it is not relying (for purposes of making any investment decision or
otherwise) upon any advice, counsel or representations (whether written or oral)
of the other party to the Transaction Documents, other than the representations
expressly set forth in the Transaction Documents;

(b) it has consulted with its own legal, regulatory, tax, business, investment,
financial and accounting advisors to the extent that it has deemed necessary,
and it has made its own investment, hedging and trading decisions (including
decisions regarding the suitability of any Transaction) based upon its own
judgment and upon any advice from such advisors as it has deemed necessary and
not upon any view expressed by the other party;

(c) it is a sophisticated and informed Person that has a full understanding of
all the terms, conditions and risks (economic and otherwise) of the Transaction
Documents and each Transaction thereunder and is capable of assuming and willing
to assume (financially and otherwise) those risks;

(d) it is entering into the Transaction Documents and each Transaction
thereunder for the purposes of managing its borrowings or investments or hedging
its assets or liabilities and not for purposes of speculation;

(e) no joint venture exists between Buyer and any Seller Party; and

(f) it is not acting as a fiduciary or financial, investment or commodity
trading advisor for the other party and has not given to the other party
(directly or indirectly through any other Person) any assurance, guarantee or
representation whatsoever as to the merits (either legal, regulatory, tax,
business, investment, financial accounting or otherwise) of the Transaction
Documents or any Transaction thereunder.

 

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ARTICLE 25

INDEMNITY AND EXPENSES

(a) Seller hereby agrees to indemnify Buyer, Buyer’s Affiliates and each of
their officers, directors, employees and agents (“Indemnified Parties”) from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, fees, reasonable, out-of-pocket costs and expenses or
disbursements (including reasonable and documented attorneys’ fees and
disbursements of outside counsel) (all of the foregoing included amounts,
collectively “Indemnified Amounts”) that may at any time (including, without
limitation, such time as this Agreement shall no longer be in effect and the
Transactions shall have been repaid in full) be imposed on or asserted against
any Indemnified Party in any way arising out of or in connection with, or
relating to, or as a result of, this Agreement, the other Transaction Documents,
any Event of Default or any Transaction or any action taken or omitted to be
taken by any Indemnified Party under or in connection with any of the foregoing;
provided that Seller shall not be liable for Indemnified Amounts resulting from
the gross negligence or willful misconduct of any Indemnified Party. Without
limiting the generality of the foregoing, Seller agrees to hold Buyer harmless
from and indemnify Buyer against all Indemnified Amounts with respect to all
Purchased Assets relating to or arising out of any violation or alleged
violation of any Environmental Law or any consumer credit laws, including
without limitation ERISA, the Truth in Lending Act and/or the Real Estate
Settlement Procedures Act, that, in each case, results from anything other than
the bad faith, gross negligence or willful misconduct of an Indemnified Party.
In any suit, proceeding or action brought by Buyer in connection with any
Purchased Asset for any sum owing thereunder, or to enforce any provisions of
any Purchased Asset, Seller shall save, indemnify and hold Buyer harmless from
and against all Indemnified Amounts suffered by reason of any defense, set-off,
counterclaim, recoupment or reduction or liability whatsoever of the account
debtor or obligor thereunder, arising out of a breach by any Seller Party or any
Affiliate thereof of any obligation thereunder or arising out of any other
agreement, indebtedness or liability at any time owing to or in favor of such
account debtor or obligor or its successors from Seller. Seller also agrees to
reimburse Buyer as and when billed by Buyer for all Buyer’s actual out-of-pocket
costs and expenses incurred in connection with the enforcement or the
preservation of Buyer’s rights under any Transaction Document or Transaction,
including without limitation the reasonable and documented fees and
disbursements of its outside counsel. Seller hereby acknowledges that the
obligations of Seller hereunder are recourse obligations of Seller.

(b) Seller agrees to pay or reimburse on demand all of Buyer’s costs and
expenses, including, without limitation, the fees and expenses of accountants,
attorneys and advisors, incurred in connection with (i) the preparation,
negotiation, execution and consummation of, and any amendment, supplement or
modification to, any Transaction Document or any Transaction thereunder, whether
or not such Transaction Document (or amendment thereto) or such Transaction is
ultimately consummated, (ii) the consummation and administration of any
Transaction, (iii) any enforcement of any of the provisions of the Transaction
Documents, any preservation of the Buyer’s rights under the Transaction
Documents or any performance by Buyer of any obligations of Seller in respect of
any Purchased Asset, or any actual or attempted sale, or any exchange,
enforcement, collection, compromise or settlement in respect of any of the
Collateral and for the custody, care or preservation of the Collateral
(including insurance, filing and recording costs) and defending or asserting
rights and claims of Buyer in respect thereof, by litigation or otherwise,
(iv) the maintenance of the Waterfall Account and registering the Collateral

 

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in the name of Buyer or its nominee, (v) any default by Seller in repurchasing
the Purchased Asset after Seller has given a notice in accordance with
Article 3(e) of an Early Repurchase Date, (vi) [Intentionally Omitted], (vii)
any failure by Seller to sell any Eligible Asset to Buyer on the Purchase Date
thereof, (viii) any actions taken to perfect or continue any lien created under
any Transaction Document, (ix) Buyer owning any Purchased Asset or other
Purchased Item until the time Buyer exercises its right to sell all of the
Purchased Assets pursuant to Article 13(b)(ii)(D)(1) after an Event of Default
and/or (x) any due diligence performed by Buyer in accordance with Article 26.
All such expenses shall be recourse obligations of Seller to Buyer under this
Agreement. A certificate as to such costs and expenses, setting forth the
calculations thereof shall be conclusive and binding upon Seller absent manifest
error.

(c) This Article 25 shall survive termination of this Agreement and the
repurchase of all Purchased Assets.

(d) This Article 25 shall have no application with respect to Taxes other than
any Covered Taxes that represent, losses, claims, damages, etc. arising from any
non-Tax claim.

ARTICLE 26

DUE DILIGENCE

(a) Seller acknowledges that, at reasonable times and upon reasonable notice to
Seller, Buyer has the right to perform continuing due diligence reviews with
respect to the Purchased Assets, the Seller Parties and Servicer for purposes of
verifying compliance with the representations, warranties and specifications
made hereunder, or otherwise. Seller agrees that upon reasonable prior written
notice from Buyer (unless an Event of Default has occurred and is continuing, in
which case no prior notice shall be required), Seller shall provide (or shall
cause any other Seller Party or Servicer, as applicable, to provide) reasonable
access to Buyer and any of its agents, representatives or permitted assigns to
the offices of Seller, such other Seller Party or Servicer, as the case may be,
during normal business hours and permit them to examine, inspect, and make
copies and extracts of the Purchased Asset Files, Servicing Records and any and
all documents, records, agreements, instruments or information relating to such
Purchased Assets in the possession or under the control of such party.

(b) Seller agrees that it shall, promptly upon reasonable request of Buyer,
deliver (or shall cause to be delivered) to Buyer and any of its agents,
representatives or permitted assigns copies of any documents permitted to be
reviewed by Buyer in accordance with Article 26(a).

(c) Seller agrees to make available (or to cause any other Seller Party or
Servicer, as applicable, to make available) to Buyer and any of its agents,
representatives or permitted assigns (i) in person at the time of any inspection
pursuant to Article 26(a) or (ii) upon prior written notice (unless an Event of
Default has occurred and is continuing, in which case no prior notice shall be
required and there shall be no limitation on frequency), by phone, as
applicable, a knowledgeable financial or accounting officer or asset manager, as
applicable, of Seller, such other Seller Party or Servicer, as the case may be,
for the purpose of answering questions about any of the foregoing Persons, or
any other matters relating to the Transaction Documents or any Transaction that
Buyer wishes to discuss with such Person.

 

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(d) Without limiting the generality of the foregoing, Seller acknowledges that
Buyer may enter into Transactions with Seller based solely upon the information
provided by Seller to Buyer and the representations, warranties and covenants
contained herein, and that Buyer, at its option, has the right at any time to
conduct a partial or complete due diligence review on some or all of the
Purchased Assets. Buyer may underwrite such Purchased Assets itself or engage a
third-party underwriter to perform such underwriting with respect to any
individual Purchased Asset; provided, that with respect to any individual
Purchased Asset as to which Buyer engages a third party underwriter, Seller
shall not be responsible for payment or reimbursement of costs and expenses of
such underwriter in excess of $2,000 per Purchased Asset during any twelve
(12) consecutive month period. Seller agrees to cooperate with Buyer and any
third party underwriter in connection with such underwriting, including, but not
limited to, providing Buyer and any third party underwriter with access to any
and all documents, records, agreements, instruments or information relating to
such Purchased Assets in the possession, or under the control, of any Seller
Party or any Affiliate thereof.

(e) Seller hereby acknowledges and agrees that Buyer shall have the right to
commission and order an Appraisal of any Mortgaged Property at any time and from
time to time, and Seller shall be responsible for the costs and expenses
incurred by Buyer in obtaining such Appraisals once annually with any additional
Appraisals to be ordered at Buyer’s sole cost and expense. Seller shall
cooperate with Buyer in connection with the commission or order of any Appraisal
by Buyer, and Seller shall use commercially reasonable efforts to cause the
applicable Mortgagor to cooperate with Buyer in obtaining any such Appraisal,
including, without limitation, by providing Buyer with access to the Mortgaged
Property.

(f) Seller agrees to reimburse Buyer on demand for any and all costs and
expenses (including, without limitation, the fees and expenses of counsel)
incurred by Buyer in connection with its due diligence activities pursuant to
this Article 26.

ARTICLE 27

SERVICING

(a) The parties hereto agree and acknowledge that the Purchased Assets are sold
to Buyer on a “servicing released” basis and Buyer is the sole owner of all
Servicing Rights so long as the Purchased Assets are subject to this Agreement.
Notwithstanding the foregoing, Seller shall be granted a revocable license
(which license shall automatically be revoked upon the occurrence of an Event of
Default) to cause Servicer to service the Purchased Assets, and Seller shall, at
Seller’s sole cost and expense, cause the Servicer to service the Purchased
Assets in accordance with the Servicing Agreement and this Article 27 and for
the benefit of Buyer. Notwithstanding the foregoing, Seller shall not take any
Significant Modification of any Purchased Asset without first having given prior
notice thereof to Buyer in each such instance and receiving the prior written
consent of Buyer.

(b) The obligation of Servicer (or Seller to cause Servicer) to service any of
the Purchased Assets shall cease, at Buyer’s option, upon the earliest of
(i) Buyer’s termination of Servicer in accordance with Article 27(c) or (ii) the
transfer of servicing to any other Servicer and the assumption of such servicing
by such other Servicer. Seller agrees to cooperate with Buyer in connection with
any termination of Servicer. Upon any termination of Servicer, if no Event of

 

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Default shall have occurred and be continuing, Seller shall at its sole cost and
expense transfer the servicing of the affected Purchased Assets to another
Servicer approved by Buyer, such approval not to be unreasonably withheld,
conditioned or delayed, as expeditiously as possible.

(c) Buyer may, in its sole and absolute discretion, terminate Servicer or any
sub-servicer with respect to any Purchased Asset (i) upon the occurrence of a
default by the Servicer under the Servicing Agreement or Servicer Letter (as
applicable) or (ii) during the continuance of an Event of Default, either for
cause or without cause, in each case of clauses (i) and (ii), without payment of
any penalty or termination fee.

(d) Seller shall not, and shall not permit Servicer to, employ any sub-servicers
to service the Purchased Assets without the prior written approval of Buyer. If
the Purchased Assets are serviced by a sub-servicer, Seller shall irrevocably
assign all rights, title and interest in the servicing agreement with such
sub-servicer to Buyer.

(e) Seller shall cause Servicer and any sub-servicer to service the Purchased
Assets in accordance with Accepted Servicing Practices. With respect to any
Servicing Agreement as to which Buyer is not a party, Seller shall cause
Servicer (at the request of Buyer) and any sub-servicers engaged by Seller to
execute a letter agreement with Buyer in a form acceptable to Buyer (a “Servicer
Letter”) acknowledging Buyer’s security interest in the Purchased Assets and
agreeing to remit all Income received with respect to the Purchased Asset to the
Waterfall Account in accordance with Article 5(e) or as otherwise directed by
Buyer in accordance with the Servicer Letter.

(f) Seller agrees that Buyer is the owner of all servicing records relating to
the Purchased Assets, including but not limited to the Servicing Agreement,
files, documents, records, data bases, computer tapes, copies of computer tapes,
proof of insurance coverage, insurance policies, appraisals, other closing
documentation, payment history records, and any other records relating to or
evidencing the servicing of Purchased Assets (the “Servicing Records”) so long
as the Purchased Assets are subject to this Agreement. Seller covenants to (or
to cause Servicer to) safeguard such Servicing Records which are in Seller’s or
Servicer’s possession, as applicable, and to deliver them promptly to Buyer or
its designee (including the Custodian) at Buyer’s request.

(g) The payment of servicing fees under the Servicing Agreement shall be solely
the responsibility of Seller and shall be subordinate to payment of amounts
outstanding and due to Buyer under the Transaction Documents.

ARTICLE 28

MISCELLANEOUS

(a) All rights, remedies and powers of Buyer hereunder and in connection
herewith are irrevocable and cumulative, and not alternative or exclusive, and
shall be in addition to all other rights, remedies and powers of Buyer whether
under law, equity or agreement. In addition to the rights and remedies granted
to it in this Agreement, to the extent this Agreement is determined to create a
security interest, Buyer shall have all rights and remedies of a secured party
under the UCC.

 

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(b) The Transaction Documents may be executed in counterparts, each of which so
executed shall be deemed to be an original, but all of such counterparts shall
together constitute but one and the same instrument. Signatures delivered by
email (in PDF format) shall be considered binding with the same force and effect
as original signatures.

(c) The headings in the Transaction Documents are for convenience of reference
only and shall not affect the interpretation or construction of the Transaction
Documents.

(d) Each provision of this Agreement shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or be invalid under such law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.

(e) This Agreement together with the other Transaction Documents contains a
final and complete integration of all prior expressions by the parties with
respect to the subject matter hereof and thereof and shall constitute the entire
agreement among the parties with respect to such subject matter, superseding all
prior oral or written understandings.

(f) The parties understand that this Agreement is a legally binding agreement
that may affect such party’s rights. Each party represents to the other that it
has received legal advice from counsel of its choice regarding the meaning and
legal significance of this Agreement and that it is satisfied with its legal
counsel and the advice received from it.

(g) Should any provision of this Agreement require judicial interpretation, it
is agreed that a court interpreting or construing the same shall not apply a
presumption that the terms hereof shall be more strictly construed against any
Person by reason of the rule of construction that a document is to be construed
more strictly against the Person who itself or through its agent prepared the
same, it being agreed that all parties have participated in the preparation of
this Agreement.

(h) Unless otherwise specifically enumerated, wherever pursuant to this
Agreement Buyer exercises any right given to it to consent or not consent, or to
approve or disapprove, or any arrangement or term is to be satisfactory to,
Buyer in its sole and absolute discretion, Buyer shall decide to consent or not
consent, or to approve or disapprove or to decide that arrangements or terms are
satisfactory or not satisfactory, in its sole and absolute discretion subject,
in each case, to the terms set forth in the last paragraph of Article 2 and such
decision by Buyer shall be final and conclusive absent manifest error.

(i) Buyer hereby acknowledges and agrees that except to the extent of the
Guaranteed Obligations (as defined in the Guaranty) of the Guarantor pursuant to
the Guaranty, and subject to the terms, conditions and limitations set forth
therein, (a) all obligations of Seller under the Agreement and the other
Transaction Documents are recourse obligations solely of Seller, and (b) none of
the obligations of Seller under this Agreement and the other Transaction
Documents are recourse to the Guarantor or any of their Affiliates,
subsidiaries, members, partners, officers, directors or personnel.

 

72

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(j) All information regarding the terms set forth in any of the Transaction
Documents or the Transactions (the “Confidential Information”) shall be kept
confidential and shall not be disclosed by either Seller or Buyer to any Person
except (a) to the Affiliates of such party (including, for the avoidance of
doubt, Manager and its Affiliates) or its or their respective directors,
officers, employees, agents, accountants, attorneys, advisors and other
representatives (collectively, “Representatives”) who are informed of the
confidential nature of such information and instructed to keep it confidential,
(b) to the extent requested by any regulatory authority or Governmental
Authority or required by Requirements of Law (including any disclosures required
pursuant to any subpoena, legal process or other court or regulatory authority
order), (c) to the extent required to be included in the financial statements of
either Seller or Buyer or their respective Affiliates, (d) to the extent
required to exercise any rights or remedies under the Transaction Documents or
Purchased Asset Documents, (e) to the extent required to consummate and
administer a Transaction, and (f) to any actual or prospective holder of a
Participation Interest or other Person which agrees to comply with this Article
28(j); provided, however, that, except for disclosures made pursuant to
clause (f) of this sentence, no such disclosure made with respect to any
Transaction Document shall include a copy of such Transaction Document to the
extent that a summary would suffice, but if it is necessary for a copy of any
Transaction Document to be disclosed, all pricing and other economic terms set
forth therein shall be redacted before disclosure. In furtherance of the
foregoing, Buyer agrees to keep confidential all non-public information
delivered by or on behalf of Seller or either Guarantor or any of their
Affiliates and shall not disclose such information other than as permitted or
required pursuant to the foregoing clauses (a) through (f), inclusive, except
that, after the occurrence of an Event of Default, all such information relating
solely to any Purchased Asset and the Collateral, but not, for the avoidance of
doubt, any such information relating to a Guarantor or any of its Affiliates,
shall be automatically excluded from the provisions of this Article 28(j) solely
to the extent that disclosure is required to exercise any rights or remedies
hereunder. Notwithstanding anything in this Article 28(j) to the contrary,
Confidential Information shall not include any information that (i) is or
becomes generally available to the public through no fault of Buyer or any of
its Representatives in violation of this Article 28(j); (ii) is or becomes
available to Buyer or any of its Representatives on a non-confidential basis
from a source other than Seller not known to Buyer or its Representatives to be
prohibited from disclosing such information by a contractual, legal or fiduciary
obligation of confidentiality after due inquiry; (iii) is independently
developed by Buyer or any of its Representatives without use of or reliance on,
either directly or indirectly, any Confidential Information; (iv) was known to
or in the possession of Buyer or any of its Representatives on a
non-confidential basis, without appropriate documentary evidence thereof, prior
to disclosure by Seller.

ARTICLE 29

JOINT AND SEVERAL OBLIGATIONS

Each Seller hereby acknowledges and agrees that (i) each Seller shall be jointly
and severally liable to Buyer to the maximum extent permitted by Requirements of
Law for all Repurchase Obligations, (ii) the liability of each Seller with
respect to the Repurchase Obligations (A) shall be absolute and unconditional to
the extent set forth in this Agreement and the other Transaction Documents and
shall remain in full force and effect (or be reinstated) until all Repurchase
Obligations shall have been paid, performed and/or satisfied, as applicable, in
full, and

 

73

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(B) until such payment, performance and/or satisfaction, as applicable, has
occurred, shall not be discharged, affected, modified or impaired on the
occurrence from time to time of any event, including any of the following,
whether or not with notice to or the consent of each Seller, (1) the waiver,
compromise, settlement, release, termination or amendment (including any
extension or postponement of the time for payment, performance, satisfaction,
renewal or refinancing) of any of the Repurchase Obligations (other than a
waiver, compromise, settlement, release or termination in full of the Repurchase
Obligations), (2) the failure to give notice to each Seller of the occurrence of
an Event of Default, (3) the release, substitution or exchange by Buyer of any
Purchased Asset (whether with or without consideration) or the acceptance by
Buyer of any additional collateral or the availability or claimed availability
of any other collateral or source of repayment or any non-perfection or other
impairment of collateral, (4) the release of any Person primarily or secondarily
liable for all or any part of the Repurchase Obligations, whether by Buyer or in
connection with any Act of Insolvency affecting any Seller or any other Person
who, or any of whose property, shall at the time in question be obligated in
respect of the Repurchase Obligations or any part thereof, or (5) to the extent
permitted by Requirements of Law, any other event, occurrence, action or
circumstance that would, in the absence of this Article 29, result in the
release or discharge of any or all Sellers from the performance or observance of
any Repurchase Obligation, (iii) Buyer shall not be required first to initiate
any suit or to exhaust its remedies against any Seller or any other Person to
become liable, or against any of the Purchased Assets, in order to enforce the
Transaction Documents and each Seller expressly agrees that, notwithstanding the
occurrence of any of the foregoing, each Seller shall be and remain directly and
primarily liable for all sums due under any of the Transaction Documents,
(iv) when making any demand hereunder against any Seller, Buyer may, but shall
be under no obligation to, make a similar demand on any other Seller, and any
failure by Buyer to make any such demand or to collect any payments from any
other Seller, or any release of any such other Seller shall not relieve any
Seller in a respect of which a demand or collection is not made or Sellers not
so released of their obligations or liabilities hereunder, and shall not impair
or affect the rights and remedies, express or implied, or as a matter of law, of
Buyer against Sellers, and (v) on disposition by Buyer of any property
encumbered by any Purchased Assets, each Seller shall be and shall remain
jointly and severally liable for any deficiency to the extent set forth in this
Agreement and the other Transaction Documents.

[SIGNATURES FOLLOW]

 

74

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IN WITNESS WHEREOF, the parties have executed this Agreement as a deed as of the
day first written above.

 

SELLER:

NSREIT CB LOAN, LLC,

a Delaware limited liability company

By:

 

/s/ David A. Palamé

Name:

 

David A. Palamé

Title:

 

Vice President

CB LOAN NT-II, LLC,

a Delaware limited liability company

By:

 

/s/ David A. Palamé

Name:

 

David A. Palamé

Title:

 

Vice President

CLNC CREDIT 3, LLC,

a Delaware limited liability company

By:

 

/s/ David A. Palamé

Name:

 

David A. Palamé

Title:

 

Vice President

CLNC CREDIT 4, LLC,

a Delaware limited liability company

By:

 

/s/ David A. Palamé

Name:

 

David A. Palamé

Title:

 

Vice President

 

[Signature Page to Master Repurchase Agreement]

--------------------------------------------------------------------------------

BUYER:

CITIBANK, N.A.

By:

 

/s/ Richard B. Schlenger

Name:

 

Richard B. Schlenger

Title:

 

Authorized Signatory

 

[Signature Page to Master Repurchase Agreement]

--------------------------------------------------------------------------------

SCHEDULE 2

REPORTING WEBSITE ADDRESS

http://ir.clncredit.com/financial-information/sec-filings

 

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EXHIBIT II

FORM OF TRANSACTION REQUEST

[DATE]

To: Citibank, N.A.

 

 

Re:

Master Repurchase Agreement, dated as of April 23, 2018 (as amended, restated,
supplemented, or otherwise modified and in effect from time to time, the
“Repurchase Agreement”) by and among NSREIT CB Loan, LLC, CB Loan NT-II, LLC,
CLNC Credit 3, LLC and CLNC Credit 4, LLC, each a Delaware limited liability
company (each such Person and any other Person when such Person joins as a
Seller under the Repurchase Agreement from time to time, individually and/or
collectively as the context may require, “Seller”) and Citibank, N.A. (“Buyer”).

Ladies and Gentlemen:

Pursuant to Article 3(a) of the Repurchase Agreement, the undersigned hereby
requests that Buyer enter into a Transaction with respect to the Eligible
Asset(s) specified below in accordance with the other terms specified below.
Capitalized terms used but not otherwise defined herein shall have the meanings
assigned thereto in the Repurchase Agreement.

 

Eligible Asset(s):

  

As identified on
attached Schedule 1

Aggregate Principal Amount of Eligible Asset(s):

  

As identified on
attached Schedule 1

Governing Agreements:

  

As identified on
attached Schedule 1

Requested Purchase Price:

  

$                             

Purchase Price Percentage:

  

        %

Effective Purchase Price Percentage:

  

        %

Amount of Seller’s Future Funding Obligations:

  

$                             

Amount of Buyer’s Future Funding Advance Obligations:

  

$                             

Requested Purchase Date:

  

                                     

Seller’s Wiring Instructions:

  

 

Bank Name:

  

JP Morgan Chase Bank

ABA Number:

  

021-000-021

Account Number:                             

  

209-598-819

Reference:

  

Credit RE Operating Company, LLC

 

Ex. II-1

--------------------------------------------------------------------------------

In connection with this request for a Transaction, the Requested Exceptions
Report is attached as Schedule 2 hereto. The applicable materials listed on the
Due Diligence Checklist are also enclosed herewith or have been otherwise
provided.

 

Ex. II-2

--------------------------------------------------------------------------------

[                                                                              ]

By:

     

Name:

 

Title:

 

Ex. II-3

--------------------------------------------------------------------------------

Schedule 1 to Transaction Request

ASSET INFORMATION

Loan / Property Flag:

Number of Properties:

Borrower:

Property Name (for each property):

Property Address (for each property):

Origination Date:

 

Loan Amount:

  

Current Principal Balance

  

$                                 

Maximum Principal Balance

  

$                                 

Interest Rate:

Maturity Date:

Governing Agreements:

 

Ex. II-4

--------------------------------------------------------------------------------

Schedule 2 to Transaction Request

REQUESTED EXCEPTIONS REPORT

INSTRUCTIONS: LIST ANY AND ALL EXCEPTIONS TO THE REPRESENTATIONS AND WARRANTIES
AND ANY OTHER ELIGIBILITY CRITERIA CONTAINED IN THE REPURCHASE AGREEMENT THAT
ARE APPLICABLE TO THE PROPOSED ASSET(S).

 

Ex. II-5

--------------------------------------------------------------------------------

EXHIBIT III

FORM OF CONFIRMATION STATEMENT

[DATE]

To: [                                                     ]

 

 

Re:

Master Repurchase Agreement, dated as of April 23, 2018 (as amended, restated,
supplemented, or otherwise modified and in effect from time to time, the
“Repurchase Agreement”) by and among NSREIT CB Loan, LLC, CB Loan NT-II, LLC,
CLNC Credit 3, LLC and CLNC Credit 4, LLC, each a Delaware limited liability
company (each such Person and any other Person when such Person joins as a
Seller under the Repurchase Agreement from time to time, individually and/or
collectively as the context may require, “Seller”) and Citibank, N.A. (“Buyer”).

Ladies and Gentlemen:

In accordance with Article 3(a) of the Repurchase Agreement, Buyer is pleased to
deliver this written CONFIRMATION of its agreement to enter into a Transaction
with you pursuant to which Buyer will purchase from you the Eligible Asset
identified below on the terms set forth herein and in accordance with the
Repurchase Agreement. Capitalized terms used but not otherwise defined herein
shall have the meanings assigned thereto in the Repurchase Agreement.

 

Purchase Date:

  

                         , 20        

Eligible Asset(s):

  

As identified on
attached Schedule 1

Aggregate Principal Amount of Eligible Asset(s):

  

As identified on
attached Schedule 1

Governing Agreements:

  

As identified on
attached Schedule 1

Repurchase Date:

  

                         , 20        

Purchase Price:

  

$                                 

Initial Market Value of Purchased Asset:

  

$                                 

Purchase Price Debt Yield

  

                                         %

Pricing Rate:

  

LIBOR plus Applicable
Spread of                     
basis points

Purchase Price Percentage:

 

Effective Purchase Price Percentage:

  

                     %

 

                     %

Amount of Seller’s Future Funding Obligations:

  

$                                 

Purchase Price LTV:

  

                     %

Amount of Buyer’s Future Funding Advance Obligations:

  

$                                 

 

Ex. III-1

--------------------------------------------------------------------------------

[FOR FUTURE FUNDING ADVANCE DRAW, IF APPLICABLE][In addition to the satisfaction
of all terms and conditions set forth in the Repurchase Agreement, the pending
Transaction shall be subject to the following conditions precedent:]

[FUTURE FUNDING ADVANCE DRAW CONDITIONS PRECEDENT TO BE ADDED]

 

Seller’s Wiring Instructions:        

     

Bank Name:

  

JP Morgan Chase Bank

  

ABA Number:

  

021-000-021

  

Account Number:

  

209-598-819

  

Reference:

  

Credit RE Operating Company, LLC

  

You hereby certify that the representations and warranties in Article 9 of the
Repurchase Agreement (subject to any exceptions set forth in the Requested
Exceptions Report attached hereto) are true and correct with respect to the
Purchased Asset subject to this Confirmation on and as of the Purchase Date for
this Transaction in all material respects (or, if any such representation or
warranty is expressly stated to have been made as of a specific date, as of such
specific date).

Please evidence your agreement to proceed with the proposed Transaction by
promptly returning to Buyer a countersigned counterpart of this Confirmation.

 

CITIBANK, N.A.

By:

     

Name:

 

Title:

 

AGREED AND ACKNOWLEDGED:

[                                                          ]

By:

     

Name:

 

Title:

 

Ex. III-2

--------------------------------------------------------------------------------

Schedule 1 to Confirmation Statement

ASSET INFORMATION

Loan / Property Flag:

Number of Properties:

Borrower:

Property Name (for each property):

Property Address (for each property):

Origination Date:

 

Loan Amount:

  

Current Principal Balance

  

$______________

Maximum Principal Balance

  

$______________

Interest Rate:

Maturity Date:

Governing Agreements:

 

Ex. III-3

--------------------------------------------------------------------------------

EXHIBIT V

FORM OF POWER OF ATTORNEY

Know All Men by These Presents, that [NSREIT CB Loan, LLC]/[CB Loan NT-II,
LLC]/[CLNC Credit 3, LLC]/[CLNC Credit 4, LLC], a Delaware limited liability
company (“Seller”), does hereby appoint Citibank, N.A. (“Buyer”), its
attorney-in-fact to act, subject to the terms of the Repurchase Agreement
(hereafter defined), in Seller’s name, place and stead, in any way that Seller
could do with respect to (i) the completion of the endorsements of the Purchased
Assets, including without limitation the Mortgage Notes, Assignments of
Mortgages and Mezzanine Notes, and any transfer documents related thereto,
(ii) the recordation of the Assignments of Mortgages, (iii) the preparation and
filing, in form and substance satisfactory to Buyer, of such financing
statements, continuation statements, and other uniform commercial code forms, as
Buyer may from time to time, reasonably consider necessary to create, perfect,
and preserve Buyer’s security interest in the Purchased Assets and (iv) upon the
occurrence and during the continuance of an Event of Default, the enforcement of
Seller’s rights under the Purchased Assets purchased by Buyer pursuant to the
Master Repurchase Agreement, dated as of April 23, 2018 (as amended, restated,
supplemented, or otherwise modified and in effect from time to time, the
“Repurchase Agreement”), by and among NSREIT CB Loan, LLC, CB Loan NT-II, LLC,
CLNC Credit 3, LLC, CLNC Credit 4, LLC and any other Person when such Person
joins as a Seller under the Repurchase Agreement from time to time, each a
Delaware limited liability company and Buyer, and to take such other steps as
may be necessary or desirable to enforce Buyer’s rights against such Purchased
Assets, the related Purchased Asset Files and the Servicing Records to the
extent that Seller is permitted by law to act through an agent; provided, that
so long as an Event of Default has not occurred and is not continuing, Buyer
shall provide five (5) Business Days’ prior written notice to Seller before
recording any Assignments of Mortgages and/or completing the endorsements of the
Purchased Assets. Capitalized terms used but not otherwise defined herein shall
have the meanings assigned thereto in the Repurchase Agreement.

TO INDUCE ANY THIRD PARTY TO ACT HEREUNDER, SELLER HEREBY AGREES THAT ANY THIRD
PARTY RECEIVING A DULY EXECUTED COPY OR FACSIMILE OF THIS INSTRUMENT MAY ACT
HEREUNDER, AND THAT REVOCATION OR TERMINATION HEREOF SHALL BE INEFFECTIVE AS TO
SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE OR KNOWLEDGE OR SUCH REVOCATION
OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY, AND SELLER ON ITS
OWN BEHALF AND ON BEHALF OF SELLER’S ASSIGNS, HEREBY AGREES TO INDEMNIFY AND
HOLD HARMLESS ANY SUCH THIRD PARTY FROM AND AGAINST ANY AND ALL CLAIMS THAT MAY
ARISE AGAINST SUCH THIRD PARTY BY REASON OF SUCH THIRD PARTY HAVING RELIED ON
THE PROVISIONS OF THIS INSTRUMENT AND ACTED AT THE DIRECTION OF BUYER.

THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICT
OF LAWS DOCTRINE APPLIED IN SUCH STATE (OTHER THAN SECTION 1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK).

 

Ex. V-1

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, Seller has caused this Power of Attorney to be executed as a
deed this ___ day of ______, 20__.

 

[_________________________]

By:

     

Name:

 

Title:

STATE OF    ______________    )

COUNTY OF    ____________    )

On ________, 20__, before me, _____________________, a Notary Public, personally
appeared ___________________, who proved to me on the basis of satisfactory
evidence to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument the person, or the entity upon
behalf of which the person acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the ______________ that the
foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature _______________________________

(Seal)

 

Ex. V-2

--------------------------------------------------------------------------------

EXHIBIT VI

FORM OF COVENANT COMPLIANCE CERTIFICATE

[DATE]

Citibank, N.A.

390 Greenwich Street

New York, New York 10013

 

 

Re:

Master Repurchase Agreement, dated as of April 23, 2018 (as amended, restated,
supplemented, or otherwise modified and in effect from time to time, the “Master
Repurchase Agreement”) by and among Citibank, N.A. (“Buyer”) and NSREIT CB Loan,
LLC, CB Loan NT-II, LLC, CLNC Credit 3, LLC and CLNC Credit 4, LLC, each a
Delaware limited liability company (each such Person and any other Person when
such Person joins as a Seller under the Master Repurchase Agreement from time to
time, individually and/or collectively as the context may require, “Seller”)

Ladies and Gentlemen:

This Compliance Certificate is furnished pursuant to that Master Repurchase
Agreement and the Guaranty dated as of April 23, 2018 (the “Guaranty”) made by
Credit RE Operating Company, LLC, a Delaware limited liability company
(“Guarantor”), in favor of Buyer. Capitalized terms used but not otherwise
defined herein shall have the meanings assigned thereto in the Master Repurchase
Agreement.

THE UNDERSIGNED HEREBY CERTIFIES IN HIS OR HER CAPACITY AS AN OFFICER OF
GUARANTOR AND NOT IN ANY INDIVIDUAL CAPACITY THAT:

 

 

(v)

I am a duly elected, qualified and authorized [Chief Financial Officer] of
Guarantor.

 

 

(vi)

All of the financial statements, calculations and other information set forth in
this Compliance Certificate, including, without limitation, in any exhibit or
other attachment hereto, are true and correct as of the date hereof.

 

 

(vii)

I have reviewed the terms of the Master Repurchase Agreement, the Guaranty and
the other Transaction Documents and I have made, or have caused to be made under
my supervision, a detailed review of the transactions and financial condition of
the Seller Parties during the accounting period covered by the financial
statements attached (or most recently delivered to Purchaser if none are
attached).

 

 

(viii)

As of the date hereof, and since the date of the certificate most recently
delivered pursuant to Article 11(b)(iv) or 11(b)(v) of the Master Repurchase
Agreement, each Seller Party has observed or performed all of its covenants and
other agreements, and satisfied every condition, contained in the Master
Repurchase Agreement, the Guaranty and the other Transaction Documents to be
observed, performed or satisfied by it in all material respects, except as set
forth below.

 

Ex. VI-1

--------------------------------------------------------------------------------

 

(ix)

The examinations described in paragraph (iii) above did not disclose, and I have
no knowledge of, the existence of any condition or event which constitutes a
Default or an Event of Default during or at the end of the accounting period
covered by the attached financial statements, or as of the date of this
Compliance Certificate (including after giving effect to any pending
Transactions requested to be entered into), except as set forth below.

 

 

(x)

Attached hereto are the financial statements required to be delivered pursuant
to Article 11(b) of the Master Repurchase Agreement, which financial statements,
to the best of my knowledge after due inquiry, fairly and accurately present,
the financial condition and results of operations of Guarantor as of the date or
with respect to the period therein specified, determined in accordance with the
requirements set forth in Article 11(b) of the Master Repurchase Agreement.

 

 

(xi)

Attached hereto are the calculations demonstrating compliance with the financial
covenants set forth in the Guaranty.

Described below are the exceptions, if any, to any of the foregoing, listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Seller Party has taken, is taking, or proposes
to take with respect to each such condition or event:

 

                   

The foregoing certifications, together with the financial statements, updates,
reports, materials, calculations and other information set forth in any exhibit
or other attachment hereto, or otherwise covered by this Compliance Certificate,
are made and delivered as of the date first above written.

 

 

 

Name:

Title:

 

Ex. VI-2

--------------------------------------------------------------------------------

EXHIBIT VII

DUE DILIGENCE CHECKLIST

 

General Information

Asset Summary Report, including without

limitation, material issues summary

(credit and/or underwriting) and market analysis

Site Inspection Report

Maps and Photos

Summary of Qualified Transferee

Requirements

Borrower/Sponsor Information

Credit Reports

Financial Statements

Tax Returns (to the extent obtained by the

Seller or required by the loan

documents)

Borrower Structure or Org Chart

Bankruptcy and Foreclosure History

Property Information

Historical Operating Statements

Rent Rolls

Budget

Retail Sales Figures (to the extent obtained

by the applicable Seller or required by

the loan documents)

Leasing Information

Stacking Plan

Major Leases and Abstracts (to the extent

abstracts are prepared or available)

Tenant Estoppels

Standard Lease Forms

SNDA’s

Third Party Reports1 and Internal Reviews

Appraisals

Engineering Reports

Environmental Reports (Phase I and, if

recommended, Phase II)

Insurance Review (including Evidence of

Insurance if not otherwise included in

Legal Binder)

Seismic Reports

Title Policy or final Pro Forma or binding

“marked commitment”

Survey

Zoning Report

Flood Zone Certificates

For Hotel Assets

Hotel Franchise Compliance Reports

Hotel Franchise Agreement and Abstract

Hotel Franchise Comfort Letters

Documentation

Purchase and Sale Agreement

Closing Statement

Complete Legal Binder

Ground Lease and Abstract (to the extent

abstracts are prepared or available)

Management Contract and Abstract (to the

extent abstracts are prepared or

available)

 

 

 

1 

All third party reports must be (1) satisfactory to Buyer in accordance with its
underwriting policies then in effect and (2) sufficient to cause Buyer to be in
compliance with all applicable regulatory requirements.

 

Ex. VII-1

--------------------------------------------------------------------------------

EXHIBIT VIII

FORM OF MARGIN CALL NOTICE

[DATE]

Via Electronic Transmission

To:     [_________________________]

 

 

Re:

Master Repurchase Agreement, dated as of April 23, 2018 (as amended, restated,
supplemented, or otherwise modified and in effect from time to time, the
“Repurchase Agreement”), by and among NSREIT CB Loan, LLC, CB Loan NT-II, LLC,
CLNC Credit 3, LLC and CLNC Credit 4, LLC, each a Delaware limited liability
company (each such Person and any other Person when such Person joins as a
Seller under the Repurchase Agreement from time to time, individually and/or
collectively as the context may require, “Seller”) and Citibank, N.A. (“Buyer”).

Ladies and Gentlemen:

Pursuant to Article 4(a) of the Repurchase Agreement, Buyer hereby notifies
Seller that a Margin Deficit has occurred as set forth below. Capitalized terms
used but not otherwise defined herein shall have the meanings assigned thereto
in the Repurchase Agreement.

(a) Aggregate Market Value of all Purchased Assets:     $__________

(b) Aggregate Margin Amount of all Purchased Assets: $__________

A Margin Deficit exists when the amount in (a) above is less than the amount in
(b) above by an amount in excess of $250,000.

(c) Margin Deficit to be cured by reduction of Purchase Price for the following
Purchased Assets:

 

Purchased Asset

  

Current Market Value

  

(d) The following Purchased Assets have Margin Excess remaining:

 

Purchased Asset

  

Current Market Value

  

 

Ex. VIII-1

--------------------------------------------------------------------------------

WHEN A MARGIN DEFICIT EXISTS, SELLER IS REQUIRED TO CURE THE MARGIN DEFICIT
SPECIFIED IN (c) ABOVE IN ACCORDANCE WITH THE REPURCHASE AGREEMENT AND WITHIN
THE TIME PERIOD SPECIFIED IN ARTICLE 4(b) THEREOF.

 

CITIBANK, N.A.

By:

     

Name:

 

Title:

 

Ex. VIII-2

--------------------------------------------------------------------------------

EXHIBIT IX

[INTENTIONALLY OMITTED]

 

Ex. IX-1

--------------------------------------------------------------------------------

EXHIBIT X

REPRESENTATIONS AND WARRANTIES REGARDING

EACH INDIVIDUAL PURCHASED ASSET

For purposes of the representations and warranties contained in this Exhibit X,
the phrases “the Seller’s Knowledge” or “the Seller’s belief” and other words
and phrases of like import shall mean, except where otherwise expressly set
forth herein, the Knowledge of the Seller. All information contained in
documents which are part of the Servicing Records shall be deemed to be within
the Seller’s Knowledge.

Capitalized terms used but not defined in this Exhibit X shall have the
respective meanings given them in the Master Repurchase Agreement (the
“Agreement”) to which this Exhibit X is attached.

CERTAIN DEFINED TERMS

“Assignment of Leases” shall mean, with respect to any Mortgaged Property
related to a Purchased Asset, any assignment of leases, rents and profits
derived from the ownership, operation or leasing of such Mortgaged Property, or
similar document or instrument executed by a Mortgagor in connection with the
origination of a Mortgage Loan.

“Fixed Rate Loan” shall mean any Mortgage Loan for which interest accrues at a
fixed rate.

“Ground Lease” shall mean a lease creating a leasehold estate in real property
where the fee owner as the ground lessor conveys for a term or terms of years
its entire interest in the land and buildings and other improvements, if any,
comprising the premises demised under such lease to the ground lessee (who may,
in certain circumstances, own the building and improvements on the land),
subject to the reversionary interest of the ground lessor as fee owner and does
not include industrial development agency (IDA) or similar leases for purposes
of conferring a tax abatement or other benefit.

“Moody’s” shall mean Moody’s Investors Service, Inc. and any successor thereto.

“S&P” shall mean Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc. and any successor thereto.

“Servicing Records” shall mean the servicing records relating to the Purchased
Assets, including but not limited to the Servicing Agreement, files, documents,
records, data bases, computer tapes, proof of insurance coverage, copies of
insurance policies, appraisals, copies of other closing documentation, payment
history records, and any other records relating to or evidencing the servicing
of Purchased Assets, provided that Servicer shall not hold any originals of
documents required to be included in the Purchased Asset File.

 

Ex. X-1

--------------------------------------------------------------------------------

“Single-Purpose Entity” shall mean an entity, other than an individual, whose
organizational documents (or if the Mortgage Loan has a maximum principal
balance equal to $5 million or less, its organizational documents or the related
Purchased Asset Documents) provide substantially to the effect that it was
formed or organized solely for the purpose of owning and operating one or more
of the Mortgaged Properties securing the Mortgage Loans and prohibit it from
engaging in any business unrelated to such Mortgaged Property or Properties, and
whose organizational documents further provide, or which entity represented in
the related Purchased Asset Documents, substantially to the effect that it does
not have any significant assets other than those related to its interest in and
operation of such Mortgaged Property or Properties, or any indebtedness other
than as permitted by the related Mortgage(s) or the other related Purchased
Asset Documents, that it has its own books and records and accounts separate and
apart from those of any other person (other than a Mortgagor for a Mortgage Loan
that is cross-collateralized and cross-defaulted with the related Mortgage
Loan), and that it holds itself out as a legal entity, separate and apart from
any other person or entity.

“Treasury Regulations” shall mean applicable final or temporary regulations of
the U.S. Department of the Treasury.

REPRESENTATIONS AND WARRANTIES

A. Whole Loans. With respect to each Whole Loan that is a Purchased Asset:

(1) Complete Servicing File. All documents comprising the Servicing Records are
in the possession of the Servicer.

(2) Type of Purchased Asset; Ownership of Purchased Assets. Immediately prior to
the sale, transfer and assignment to Buyer, no Purchased Asset was subject to
any assignment (other than assignments to the Seller), participation or pledge,
and the Seller had good title to, and was the sole owner of, each Purchased
Asset free and clear of any and all liens, charges, pledges, encumbrances,
participations, any other ownership interests on, in or to such Purchased Asset
other than Permitted Liens (as defined in the Purchased Asset Documents) and
Permitted Encumbrances (as defined below). Seller has full right and authority
to sell, assign and transfer each Purchased Asset, and upon the insertion of
Buyer’s name where applicable and countersignature by Buyer where applicable,
the assignment to Buyer constitutes a legal, valid and binding assignment of
such Purchased Asset free and clear of any and all liens, pledges, charges or
security interests of any nature encumbering such Purchased Asset.

(3) Purchased Asset File. The Purchased Asset File contains a true, correct and
complete copy (or, if required by the Custodial Agreement, original) of each
document evidencing or securing the Purchased Asset, or affecting the rights of
any holder thereof. With respect to any document contained in the Purchased
Asset File that is required to be recorded or filed in accordance with the
requirements set forth in the Custodial Agreement, such document is in form
suitable for recording or filing, as applicable, in the appropriate jurisdiction
and has been or will be recorded or filed as required by the Custodial
Agreement. With respect to each assignment, assumption, modification,
consolidation or extension contained in the Purchased Asset File, if the
document or agreement being assigned, assumed, modified, consolidated or
extended is required to be recorded or filed, such assignment, assumption,
modification, consolidation or extension is in form suitable for recording or
filing, as applicable, in the appropriate jurisdiction.

 

Ex. X-2

--------------------------------------------------------------------------------

(4) Whole Loans. Such Mortgage Loan is a Whole Loan and not a Senior Interest or
other partial interest in a Whole Loan.

(5) Loan Document Status. Each related Mortgage Note, Mortgage, Assignment of
Leases (if a separate instrument) and other agreement executed by or on behalf
of the related Mortgagor in connection with such Purchased Asset is the legal,
valid and binding obligation of the related Mortgagor (subject to any
non-recourse provisions contained in any of the foregoing agreements and any
applicable state anti-deficiency or market value limit deficiency legislation),
as applicable, and is enforceable in accordance with its terms, except as such
enforcement may be limited by (i) anti-deficiency laws, bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other similar laws affecting
the enforcement of creditors’ rights generally and (ii) general principles of
equity (regardless of whether such enforcement is considered in a proceeding in
equity or at law) and except that certain provisions in such Purchased Asset
Documents (including, without limitation, provisions requiring the payment of
default interest, late fees or prepayment/yield maintenance fees, charges and/or
premiums) are, or may be further limited or rendered unenforceable by or under
applicable law, but (subject to the limitations set forth in clause (i) above)
such limitations or unenforceability will not render such Purchased Asset
Documents invalid as a whole or materially interfere with the mortgagee’s
realization of the principal benefits and/or security provided thereby (clauses
(i) and (ii) collectively, the “Standard Qualifications”).

Except as set forth in the immediately preceding sentences, to Seller’s
Knowledge, there is no valid offset, defense, counterclaim or right of
rescission available to the related Mortgagor with respect to any of the related
Mortgage Notes, Mortgages or other operative Purchased Asset Documents,
including, without limitation, any such valid offset, defense, counterclaim or
right based on intentional fraud by Seller in connection with the origination of
the Mortgage Loan, that would deny the mortgagee the principal benefits intended
to be provided by the Mortgage Note, Mortgage or other operative Purchased Asset
Documents.

(6) Mortgage Provisions. Subject to the Standard Qualifications, the Purchased
Asset Documents for each Mortgage Loan contain provisions that render the rights
and remedies of the holder thereof adequate for the practical realization
against the Mortgaged Property of the principal benefits of the security
intended to be provided thereby, including realization by judicial or, if
applicable, nonjudicial foreclosure.

(7) Hotel Provisions. The Purchased Asset Documents for each Mortgage Loan that
is secured by a hotel property operated pursuant to a franchise agreement or
license agreement include an executed copy of such franchise agreement or
license agreement as well as a comfort letter or similar agreement signed by the
Mortgagor and franchisor or licensor of such property enforceable by the Buyer
or any subsequent holder of such Mortgage Loan (including a securitization
trustee) against such franchisor, either directly or as an assignee of the
originator, or pursuant to a replacement comfort letter or similar agreement
with Buyer. Subject to the Standard Qualifications, the Mortgage or related
security agreement for each Mortgage Loan secured by a hospitality property
creates a valid and enforceable security interest in the revenues of such
property for which a UCC financing statement has been filed in the appropriate
filing office.

 

Ex. X-3

--------------------------------------------------------------------------------

(8) Mortgage Status; Waivers and Modifications. Since origination and except by
written instruments set forth in the related Purchased Asset File or as
otherwise permitted under the Agreement, (a) the material terms of each
Mortgage, Mortgage Note, Mortgage Loan guaranty and related operative Purchased
Asset Documents have not been waived, impaired, modified, altered, satisfied,
canceled, subordinated or rescinded in any respect which materially interferes
with the security intended to be provided by such Mortgage; (b) no related
Mortgaged Property or any portion thereof has been released from the lien of the
related Mortgage in any manner which materially interferes with the security
intended to be provided by such Mortgage or the use or operation of the
remaining portion of such Mortgaged Property; and (c) the Mortgagor has not been
released from its material obligations under the related Purchased Asset
Documents.

(9) Lien; Valid Assignment. Subject to the Standard Qualifications, each
assignment of Mortgage and assignment of Assignment of Leases from the Seller
will constitute a legal, valid and binding assignment from the Seller. Each
related Mortgage and Assignment of Leases is freely assignable without the
consent of the related Mortgagor. Each related Mortgage is a legal, valid and
enforceable first lien on the related Mortgagor’s fee (or if identified on the
related Seller Asset Schedule and Exception Report, leasehold) interest in the
Mortgaged Property in the principal amount of such Mortgage Loan or allocated
loan amount (subject only to Permitted Encumbrances (as defined below) or any
other title exceptions identified to Buyer in a Requested Exceptions Report
(“Title Exceptions”)), except as the enforcement thereof may be limited by the
Standard Qualifications. Such Mortgaged Property (subject to and excepting
Permitted Encumbrances or any Title Exceptions) as of the origination date of
the related Mortgage Loan and as of the related Purchase Date, to Seller’s
Knowledge, is free and clear of any recorded mechanics’ liens, recorded
materialmen’s liens and other recorded encumbrances which are prior to or equal
with the lien of the related Mortgage, except those which are bonded over,
escrowed for or insured against by a lender’s title insurance policy, and, to
the Seller’s Knowledge and subject to the rights of tenants (subject to and
excepting Permitted Encumbrances and any other Title Exceptions), and no rights
exist which under law could give rise to any such lien or encumbrance that would
be prior to or equal with the lien of the related Mortgage, except those which
are bonded over, escrowed for or insured against by a lender’s title insurance
policy (as described below). Notwithstanding anything herein to the contrary, no
representation is made as to the perfection of any security interest in rents or
other personal property to the extent that possession or control of such items
or actions other than the filing of UCC financing statements is required in
order to effect such perfection.

(10) Permitted Liens; Title Insurance. Each Mortgaged Property securing a
Mortgage Loan is covered by an American Land Title Association loan title
insurance policy or a comparable form of loan title insurance policy approved
for use in the applicable jurisdiction (or, if such policy is yet to be issued,
by a pro forma policy, a preliminary title policy with escrow instructions or a
“marked up” commitment, in each case binding on the title insurer) (the “Title
Policy”) in the original principal amount of such Mortgage Loan (or with respect
to a Mortgage Loan secured by multiple properties, an amount equal to at least
the allocated loan amount with respect to the Title Policy for each such
property) after all advances of principal (including any advances held in escrow
or reserves), that insures

 

Ex. X-4

--------------------------------------------------------------------------------

for the benefit of the owner of the indebtedness secured by the Mortgage, the
first priority lien of the Mortgage, which lien is subject only to (a) the lien
of current real property taxes, water charges, sewer rents and assessments not
yet due and payable; (b) covenants, conditions and restrictions, rights of way,
easements and other matters of public record; (c) the exceptions (general and
specific) and exclusions set forth in such Title Policy; (d) other matters to
which like properties are commonly subject; (e) the rights of tenants (as
tenants only) under leases (including subleases) pertaining to the related
Mortgaged Property and condominium declarations; and (f) if the related Mortgage
Loan is cross-collateralized with any other Mortgage Loan, the lien of the
Mortgage for another Mortgage Loan contained in the same cross-collateralized
group, provided that none of which items (a) through (f), individually or in the
aggregate, materially and adversely interferes with the value or current use of
the Mortgaged Property or the security intended to be provided by such Mortgage
or the Mortgagor’s ability to pay its obligations when they become due
(collectively, the “Permitted Encumbrances”). Except as contemplated by clause
(f) of the preceding sentence none of the Permitted Encumbrances are mortgage
liens that are senior to or coordinate and co-equal with the lien of the related
Mortgage. Such Title Policy (or, if it has yet to be issued, the coverage to be
provided thereby) is in full force and effect, all premiums thereon have been
paid and no claims have been made thereunder and no claims have been paid
thereunder. Neither the Seller, nor to the Seller’s Knowledge, any other holder
of the Mortgage Loan, has done, by act or omission, anything that would
materially impair the coverage under such Title Policy.

(11) Junior Liens. It being understood that B notes secured (and any other
Purchased Assets that are cross-collateralized and/or cross defaulted with a
Purchased Asset) by the same Mortgage as a Mortgage Loan are not subordinate
mortgages or junior liens, except as set forth on the related Transaction
Request, there are no subordinate mortgages or junior liens securing the payment
of money encumbering the related Mortgaged Property (other than Permitted
Encumbrances and the Title Exceptions, taxes and assessments, mechanics’ and
materialmen’s liens (which are the subject of the representation in paragraph
(9) above), and equipment and other personal property financing). Except as set
forth on the related Transaction Request, to Seller’s Knowledge there is no
mezzanine debt secured directly by interests in the related Mortgagor.

(12) Assignment of Leases and Rents. There exists as part of the related
Purchased Asset File an Assignment of Leases (either as a separate instrument or
incorporated into the related Mortgage). Subject to Permitted Encumbrances and
Title Exceptions, each related Assignment of Leases creates a valid
first-priority collateral assignment of, or a valid first-priority lien or
security interest in, rents and certain rights under the related lease or
leases, subject only to a license granted to the related Mortgagor to exercise
certain rights and to perform certain obligations of the lessor under such lease
or leases, including the right to operate the related leased property, except as
the enforcement thereof may be limited by the Standard Qualifications. The
related Mortgage or related Assignment of Leases, subject to applicable law and
the Standard Qualifications, provides that, upon an event of default under the
Mortgage Loan, a receiver is permitted to be appointed for the collection of
rents or for the related mortgagee to enter into possession to collect the rents
or for rents to be paid directly to the mortgagee.

 

Ex. X-5

--------------------------------------------------------------------------------

(13) UCC Filings. If the related Mortgaged Property is operated as a hospitality
property, the Seller has filed and/or recorded or caused to be filed and/or
recorded (or, if not filed and/or recorded, have been submitted in proper form
for filing and/or recording), UCC financing statements in the appropriate public
filing and/or recording offices necessary at the time of the origination of the
Mortgage Loan to perfect a valid security interest in all items of physical
personal property reasonably necessary to operate such Mortgaged Property owned
by such Mortgagor and located on the related Mortgaged Property (other than any
non-material personal property, any personal property subject to a purchase
money security interest, a sale and leaseback financing arrangement as permitted
under the terms of the related Mortgage or any other personal property leases
applicable to such personal property), to the extent a security interest may be
perfected pursuant to applicable law by recording or filing, as the case may be.
Subject to the Standard Qualifications, each related UCC financing statement (or
equivalent document) creates a valid and enforceable lien and security interest
on the items of personalty described above. No representation is made as to the
perfection of any security interest in rents or other personal property to the
extent that possession or control of such items or actions other than the filing
of UCC financing statements are required in order to effect such perfection.

(14) Condition of Property. The Seller or the originator of the Purchased Asset
(or related Mortgage Loan, as applicable) inspected or caused to be inspected
each related Mortgaged Property no more than six (6) months prior to the
origination of such Purchased Asset (or related Mortgage Loan, as applicable) or
no more than twelve (12) months prior to the related Purchase Date.

An engineering report or property condition assessment was prepared in
connection with the origination of such Mortgage Loan no more than twelve (12)
months prior to the related Purchase Date, which indicates that the related
Mortgaged Property is free of any material damage, except to the extent that
such material damage (i) would not have a material adverse effect on the value
of such Mortgaged Property as security for the related Purchased Asset, (ii) has
been repaired in all material respects or (iii) has not yet been repaired but is
addressed by the escrow of funds established in an aggregate amount consistent
with the standards utilized by Seller with respect to similar loans it holds for
its own account have been established, which escrowed amount will in all events
be in an aggregate amount not less than the estimated cost of the necessary
repairs. Seller has no Knowledge of any issues with the physical condition of
the Mortgaged Property that Seller believes would have a material adverse effect
on the use, operation or value of the Mortgaged Property other than those
disclosed in the engineering report or property condition assessment and those
addressed in sub-clauses (i), (ii) and (iii) of the preceding sentence.

(15) Taxes and Assessments. All taxes, governmental assessments and other
outstanding governmental charges (including, without limitation, water and
sewage charges), or installments thereof, which could be a lien on the related
Mortgaged Property that would be of equal or superior priority to the lien on
the Mortgage and that have become delinquent in respect of each related
Mortgaged Property have been paid, or an escrow of funds has been established in
an amount sufficient to cover such payments and reasonably

 

Ex. X-6

--------------------------------------------------------------------------------

estimated interest and penalties, if any, thereon. For purposes of this
representation and warranty, real estate taxes and governmental assessments and
other outstanding governmental charges and installments thereof shall not be
considered delinquent until the earlier of (a) the date on which interest and/or
penalties would first be payable thereon and (b) the date on which enforcement
action is entitled to be taken by the related taxing authority.

(16) Condemnation. As of the date of origination of such Mortgage Loan and to
the Seller’s Knowledge, as of the Purchase Date, there is no proceeding pending
and, to the Seller’s Knowledge as of the date of origination of such Mortgage
Loan and as of the Purchase Date, there is no proceeding threatened for the
total or partial condemnation of such Mortgaged Property that would have a
material adverse effect on the value, use or operation of the Mortgaged
Property.

(17) Actions Concerning Mortgage Loan. As of the date of origination of such
Mortgage Loan and to the Seller’s Knowledge, as of the Purchase Date, there was
no pending, filed or threatened action, suit or proceeding, arbitration or
governmental investigation involving any Mortgagor, guarantor, or Mortgagor’s
interest in the Mortgaged Property, an adverse outcome of which would reasonably
be expected to materially and adversely affect (a) such Mortgagor’s title to the
Mortgaged Property, (b) the validity or enforceability of the Mortgage, (c) such
Mortgagor’s ability to perform under the related Mortgage Loan, (d) such
guarantor’s ability to perform under the related guaranty, (e) the principal
benefit of the security intended to be provided by the Purchased Asset Documents
or (f) the current principal use of the Mortgaged Property.

(18) Escrow Deposits. All escrow deposits and payments required to be escrowed
with lender pursuant to each Mortgage Loan are in the possession, or under the
control, of the Seller or its Servicer, and there are no deficiencies (subject
to any applicable grace or cure periods) in connection therewith, and the right
to all such escrows and deposits that are required to be escrowed with lender
under the related Purchased Asset Documents are being conveyed by the Seller to
Buyer or its Servicer.

(19) No Holdbacks. The principal amount of the Mortgage Loan stated on the
related Transaction Request has been fully disbursed as of the Purchase Date and
there is no requirement for future advances thereunder (except in those cases
where the full amount of the Mortgage Loan has been disbursed but a portion
thereof is being held in escrow or reserve accounts pending the satisfaction of
certain conditions relating to leasing, repairs or other matters with respect to
the related Mortgaged Property, the Mortgagor or other considerations determined
by Seller to merit such holdback), except as set forth in the related
Confirmation.

(20) Insurance. Each related Mortgaged Property is, and is required pursuant to
the related Purchased Asset Documents to be, insured by a property insurance
policy providing coverage for loss in accordance with coverage found under a
“special cause of loss form” or “all risk form” that includes replacement cost
valuation issued by an insurer meeting the requirements of the related Purchased
Asset Documents and having a claims-paying or financial strength rating of at
least “A-:VIII” from A.M. Best Company, “A”

 

Ex. X-7

--------------------------------------------------------------------------------

from Moody’s or “A-” from S&P (collectively, the “Insurance Rating
Requirements”), in an amount (subject to a customary deductible) not less than
the lesser of (x) the original principal balance of the Mortgage Loan and
(y) the full insurable value on a replacement cost basis of the improvements,
furniture, furnishings, fixtures and equipment owned by the related Mortgagor
included in the Mortgaged Property (with no deduction for physical
depreciation), but, in any event, not less than the amount necessary or
containing such endorsements as are necessary to avoid the operation of any
coinsurance provisions with respect to the related Mortgaged Property.

Each related Mortgaged Property is also covered, and required to be covered
pursuant to the related Purchased Asset Documents, by business interruption or
rental loss insurance which (subject to a customary deductible) covers a period
of not less than twelve (12) months (or with respect to each Mortgage Loan on a
single asset with a maximum principal balance of $50 million or more, eighteen
(18) months).

If any material part of the improvements, exclusive of a parking lot, located on
a Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards, the related
Mortgagor is required to maintain insurance in the maximum amount available
under the National Flood Insurance Program.

If the Mortgaged Property is located within twenty-five (25) miles of the coast
of the Gulf of Mexico or the Atlantic coast of Florida, Georgia, South Carolina
or North Carolina, the related Mortgagor is required to maintain coverage for
windstorm and/or windstorm related perils and/or “named storms” issued by an
insurer meeting the Insurance Rating Requirements or endorsement covering damage
from windstorm and/or windstorm related perils and/or named storms.

The Mortgaged Property is covered, and required to be covered pursuant to the
related Purchased Asset Documents, by a commercial general liability insurance
policy issued by an insurer meeting the Insurance Rating Requirements including
coverage for property damage, contractual damage and personal injury (including
bodily injury and death) in amounts as are generally required by prudent
institutional commercial mortgage lenders, and in any event not less than
$1 million per occurrence and $2 million in the aggregate.

An architectural or engineering consultant has performed an analysis of each of
the Mortgaged Properties located in seismic zones 3 or 4 in order to evaluate
the structural and seismic condition of such property for the sole purpose of
assessing either the scenario expected limit (“SEL”) or the probable maximum
loss (“PML”) for the Mortgaged Property in the event of an earthquake. In such
instance, the SEL or PML, as applicable was based on a 475-year return period,
an exposure period of 50 years and a 10% probability of exceedance. If the
resulting report concluded that the SEL or PML, as applicable would exceed 20%
of the amount of the replacement costs of the improvements, earthquake insurance
on such Mortgaged Property was obtained by an insurer meeting the Insurance
Rating Requirements in an amount not less than 100% of the SEL or PML, as
applicable.

 

Ex. X-8

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The Purchased Asset Documents require insurance proceeds in respect of a
property loss to be applied either (a) to the repair or restoration of all or
part of the related Mortgaged Property, with respect to all property losses in
excess of 5% of the then outstanding principal amount of the related Mortgage
Loan, the lender (or a trustee appointed by it) having the right to hold and
disburse such proceeds as the repair or restoration progresses, or (b) to the
payment of the outstanding principal balance of such Mortgage Loan together with
any accrued interest thereon.

All premiums on all insurance policies referred to in this section required to
be paid as of the related Purchase Date have been paid, and such insurance
policies name the lender under the Mortgage Loan and its successors and assigns
as a loss payee under a mortgagee endorsement clause or, in the case of the
general liability insurance policy, as named or additional insured. Such
insurance policies will inure to the benefit of the Buyer. Each related Mortgage
Loan obligates the related Mortgagor to maintain all such insurance and, at such
Mortgagor’s failure to do so, authorizes the lender to maintain such insurance
at the Mortgagor’s cost and expense and to charge such Mortgagor for premiums.
All such insurance policies (other than commercial liability policies) require
at least ten (10) days’ prior notice to the lender of termination or
cancellation arising because of nonpayment of a premium and at least thirty
(30) days prior notice to the lender of termination or cancellation (or such
lesser period, not less than ten (10) days, as may be required by applicable
law) arising for any reason other than non-payment of a premium and no such
notice has been received by Seller.

(21) Access; Utilities; Separate Tax Lots. To Seller’s Knowledge, based solely
upon Seller’s review of the related Title Policy and current surveys obtained in
connection with origination, each Mortgaged Property (a) is located on or
adjacent to a public road and has direct legal access to such road, or has
access via an irrevocable easement or irrevocable right of way permitting
ingress and egress to/from a public road, and (b) is served by or has
uninhibited access rights to public or private water and sewer (or well and
septic) and all required utilities, all of which are appropriate for the current
use of the Mortgaged Property. Each Mortgaged Property constitutes one or more
separate tax parcels which do not include any property which is not part of the
Mortgaged Property or is subject to an endorsement under the related Title
Policy insuring the Mortgaged Property, or in certain cases, an application has
been, or will be, made to the applicable governing authority for creation of
separate tax lots, in which case the Mortgage Loan requires the Mortgagor to
escrow an amount sufficient to pay taxes for the existing tax parcel of which
the Mortgaged Property is a part until the separate tax lots are created.

(22) No Encroachments. To the Seller’s Knowledge based solely on surveys
obtained in connection with origination and the lender’s Title Policy (or, if
such policy is not yet issued, a pro forma title policy, a preliminary title
policy with escrow instructions or a “marked up” commitment) obtained in
connection with the origination of such Purchased Asset (or related Mortgage
Loan, as applicable), (a) all material improvements that were included for the
purpose of determining the appraised value of the related Mortgaged Property at
the time of the origination of such Purchased Asset (or related Mortgage Loan,
as applicable) are within the boundaries of the related Mortgaged Property,
except encroachments that do not materially and adversely affect the value or
current use

 

Ex. X-9

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of such Mortgaged Property or for which insurance or endorsements were obtained
under the Title Policy, (b) no improvements on adjoining parcels encroach onto
the related Mortgaged Property except for encroachments that do not materially
and adversely affect the value or current use of such Mortgaged Property or for
which insurance or endorsements were obtained under the Title Policy and (c) no
improvements encroach upon any easements except for encroachments that do not
violate the terms of the easement, do not materially and adversely affect the
value or current use of such Mortgaged Property or for which insurance or
endorsements were obtained with respect to the Title Policy.

(23) No Contingent Interest or Equity Participation. No Mortgage Loan has a
shared appreciation feature, any other contingent interest feature or a negative
amortization feature or an equity participation by Seller.

(24) REMIC. Seller shall only make the representations in the following
paragraphs with respect to Purchased Assets which have been identified by Seller
to Buyer, in writing, as REMIC-eligible Purchased Assets: The Purchased Asset is
a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code (but
determined without regard to the rule in Treasury Regulations
Section 1.860G-2(f)(2) that treats certain defective mortgage loans as qualified
mortgages), and, accordingly, (A) the issue price of the Purchased Asset to the
related Mortgagor at origination did not exceed the non-contingent principal
amount of the Purchased Asset and (B) either: (a) such Purchased Asset is
secured by an interest in real property (including buildings and structural
components thereof, but excluding personal property) having a fair market value
(i) at the date the Purchased Asset was originated at least equal to 80% of the
adjusted issue price of the Purchased Asset on such date or (ii) at the Purchase
Date at least equal to 80% of the adjusted issue price of the Purchased Asset on
such date, provided that for purposes hereof, the fair market value of the real
property interest must first be reduced by (A) the amount of any lien on the
real property interest that is senior to the Purchased Asset and (B) a
proportionate amount of any lien that is in parity with the Purchased Asset; or
(b) substantially all of the proceeds of such Purchased Asset were used to
acquire, improve or protect the real property which served as the only security
for such Purchased Asset (other than a recourse feature or other third-party
credit enhancement within the meaning of Treasury Regulations
Section 1.860G-2(a)(1)(ii)). If the Purchased Asset was “significantly modified”
prior to the Purchase Date so as to result in a taxable exchange under
Section 1001 of the Code, it either (x) was modified as a result of the default
or reasonably foreseeable default of such Purchased Asset or (y) satisfies the
provisions of either sub-clause (B)(a)(i) above (substituting the date of the
last such modification for the date the Purchased Asset was originated) or
sub-clause (B)(a)(ii), including the proviso thereto. Any prepayment premium and
yield maintenance charges applicable to the Purchased Asset constitute
“customary prepayment penalties” within the meaning of Treasury Regulations
Section 1.860G-1(b)(2). All terms used in this paragraph shall have the same
meanings as set forth in the related Treasury Regulations.

(25) Compliance with Usury Laws. The interest rate (exclusive of any default
interest, late charges, yield maintenance charges or prepayment premiums) of
such Mortgage Loan complied as of the date of origination of such Mortgage Loan
with, or was exempt from, applicable state or federal laws, regulations and
other requirements pertaining to usury.

 

Ex. X-10

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(26) Authorized to do Business. To the extent required under applicable law, as
of the Purchase Date or as of the date that such entity held the Mortgage Note,
Seller and any Affiliate of Seller is, and to Seller’s Knowledge, any other
holder of a Mortgage Note (that is not an Affiliate of Seller) was, authorized
to transact and do business in the jurisdiction in which each related Mortgaged
Property is located, or the failure to be so authorized does not materially and
adversely affect the enforceability of such Mortgage Loan by any holder thereof.

(27) Trustee under Deed of Trust. With respect to each Mortgage which is a deed
of trust, as of the date of origination of the related Mortgage Loan and, to the
Seller’s Knowledge, as of the Purchase Date, a trustee, duly qualified under
applicable law to serve as such, currently so serves and is named in the deed of
trust or has been substituted in accordance with the Mortgage and applicable law
or may be substituted in accordance with the Mortgage and applicable law by the
related mortgagee.

(28) Local Law Compliance. To the Seller’s Knowledge, based upon any of a letter
from any governmental authorities, a legal opinion, an architect’s letter, a
zoning consultant’s report, an endorsement to the related Title Policy, or other
affirmative investigation of local law compliance consistent with the
investigation conducted by the Seller for similar commercial and multifamily
mortgage loans, with respect to the improvements located on or forming part of
each Mortgaged Property securing a Mortgage Loan as of the date of origination
of such Mortgage Loan and as of the Purchase Date, there are no material
violations of applicable zoning ordinances, building codes and land laws other
than those which (i) are insured by the Title Policy or law and ordinance
insurance coverage has been obtained or (ii) would not have a material adverse
effect on the value, operation or net operating income of the Mortgaged
Property. The terms of the Purchased Asset Documents require the Mortgagor to
comply in all material respects with all applicable governmental regulations,
zoning and building laws.

(29) Licenses and Permits. Each Mortgagor covenants in the Purchased Asset
Documents that it shall keep all material licenses, permits and applicable
governmental authorizations necessary for its operation of the Mortgaged
Property in full force and effect, and, to the Seller’s Knowledge based upon any
of a letter from any government authorities or other affirmative investigation
of local law compliance consistent with the investigation conducted by the
Seller for similar commercial and multifamily mortgage loans intended for
securitization; all such material licenses, permits and applicable governmental
authorizations are in effect. The Mortgage Loan requires the related Mortgagor
to be qualified to do business in the jurisdiction in which the related
Mortgaged Property is located.

(30) Recourse Obligations. The Purchased Asset Documents for each Mortgage Loan
provide that such Mortgage Loan (a) becomes full recourse to the Mortgagor and
guarantor (which is a natural person or persons, or an entity distinct from the
Mortgagor (but may be affiliated with the Mortgagor) that has assets other than
equity in the related

 

Ex. X-11

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Mortgaged Property that are not de minimis) in any of the following events:
(i) if any voluntary petition for bankruptcy, insolvency, dissolution or
liquidation pursuant to federal bankruptcy law, or any similar federal or state
law, shall be filed by the Mortgagor; (ii) Mortgagor or guarantor shall have
colluded with other creditors to cause an involuntary bankruptcy filing with
respect to the Mortgagor or (iii) voluntary transfers of either the Mortgaged
Property or equity interests in Mortgagor made in violation of the Purchased
Asset Documents; and (b) contains provisions providing for recourse against the
Mortgagor and guarantor (which is a natural person or persons, or an entity
distinct from the Mortgagor (but may be affiliated with the Mortgagor) that has
assets other than equity in the related Mortgaged Property that are not de
minimis), for losses and damages sustained by reason of Mortgagor’s
(i) misappropriation of rents after the occurrence of an event of default under
the Mortgage Loan, (ii) misappropriation of security deposits, insurance
proceeds, or condemnation awards; (iii) fraud or intentional material
misrepresentation; (iv) breaches of the environmental covenants in the Purchased
Asset Documents; or (v) commission of intentional material physical waste at the
related Mortgaged Property.

(31) Mortgage Releases. The terms of the related Mortgage or related Purchased
Asset Documents do not provide for release of any material portion of the
Mortgaged Property from the lien of the Mortgage except (a) a partial release,
accompanied by principal repayment of not less than a specified percentage at
least equal to the lesser of (i) 110% of the related allocated loan amount of
such portion of the Mortgaged Property and (ii) the outstanding principal
balance of the Mortgage Loan, (b) upon payment in full of such Mortgage Loan,
(c) releases of out-parcels that are unimproved or other portions of the
Mortgaged Property which will not have a material adverse effect on the
underwritten value of the Mortgaged Property and which were not afforded any
material value in the appraisal obtained at the origination of the Mortgage Loan
and are not necessary for physical access to the Mortgaged Property or
compliance with zoning requirements, or (d) as required pursuant to an order of
condemnation. Seller shall only make the representations in the following
sentence with respect to Purchased Assets which have been identified by Seller
to Buyer, in writing, as REMIC-eligible Purchased Assets: With respect to any
partial release under the preceding clauses (a) or (c) either: (x) such release
of collateral (i) would not constitute a “significant modification” of the
subject Purchased Asset within the meaning of Treasury Regulations
Section 1.860G-2(b)(2) and (ii) would not cause the subject Purchased Asset to
fail to be a “qualified mortgage” within the meaning of Section 860G(a)(3)(A) of
the Code; or (y) the mortgagee or servicer can, in accordance with the related
Purchased Asset Documents, condition such release of collateral on the related
Mortgagor’s delivery of an opinion of tax counsel to the effect specified in the
immediately preceding clause (x). For purposes of the preceding clause (x), for
all Purchased Assets originated after December 6, 2010, if the fair market value
of the real property constituting such Mortgaged Property after the release is
not equal to at least 80% of the principal balance of the Purchased Asset
outstanding after the release, the Mortgagor is required to make a payment of
principal in an amount not less than the amount required by any applicable legal
requirements relating to any “real estate mortgage investment conduit” within
the meaning of Section 860D of the Code that holds any interest in all or any
portion of such Purchased Asset.

 

Ex. X-12

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With respect to any partial release under the preceding clause (d) for all
Purchased Assets originated after December 6, 2010, the Mortgagor can be
required to pay down the principal balance of the Purchased Asset in an amount
not less than the amount required by any applicable legal requirements relating
to any “real estate mortgage investment conduit” within the meaning of
Section 860D of the Code that holds any interest in all or any portion of such
Purchased Asset and, to such extent, may not be required to be applied to the
restoration of the Mortgaged Property or released to the Mortgagor, if,
immediately after the release of such portion of the Mortgaged Property from the
lien of the Mortgage (but taking into account the planned restoration) the fair
market value of the real property constituting the remaining Mortgaged Property
is not equal to at least 80% of the remaining principal balance of the Purchased
Asset.

No Purchased Asset that is secured by more than one Mortgaged Property or that
is cross-collateralized with another Purchased Asset permits the release of
cross-collateralization of the related Mortgaged Properties, other than in
compliance with the any applicable legal requirements relating to any “real
estate mortgage investment conduit” within the meaning of Section 860D of the
Code that holds any interest in all or any portion of such Purchased Asset.

(32) Financial Reporting and Rent Rolls. The Purchased Asset Documents for each
Mortgage Loan require the Mortgagor to provide the owner or holder of the
Mortgage with quarterly (other than for single-tenant properties) and annual
operating statements, and quarterly (other than for single-tenant properties)
rent rolls for properties that have leases contributing more than 5% of the
in-place base rent and annual financial statements, which annual financial
statements with respect to each Mortgage Loan with more than one Mortgagor are
in the form of an annual combined balance sheet of the Mortgagor entities (and
no other entities), together with the related combined statements of operations,
members’ capital and cash flows, including a combining balance sheet and
statement of income for the Mortgaged Properties on a combined basis.

(33) Acts of Terrorism Exclusion. With respect to each Mortgage Loan with a
maximum principal balance over $20 million, the related special-form all-risk
insurance policy and business interruption policy (issued by an insurer meeting
the Insurance Rating Requirements) do not specifically exclude Acts of
Terrorism, as defined in the Terrorism Risk Insurance Act of 2002, as amended by
the Terrorism Risk Insurance Program Reauthorization Act of 2007 (collectively
referred to as “TRIA”), from coverage, or if such coverage is excluded, it is
covered by a separate terrorism insurance policy. With respect to each other
Mortgage Loan, the related special all-risk insurance policy and business
interruption policy (issued by an insurer meeting the Insurance Rating
Requirements) did not, as of the date of origination of the Mortgage Loan, and,
to Seller’s Knowledge, do not, as of the Purchase Date, specifically exclude
Acts of Terrorism, as defined in TRIA, from coverage, or if such coverage is
excluded, it is covered by a separate terrorism insurance policy. With respect
to each Mortgage Loan, the related Purchased Asset Documents do not expressly
waive or prohibit the mortgagee from requiring coverage for Acts of Terrorism,
as defined in TRIA, or damages related thereto except to the extent that any
right to require such coverage may be limited by commercial availability on
commercially reasonable terms; provided, however, that if TRIA or a similar or
subsequent statute is not

 

Ex. X-13

--------------------------------------------------------------------------------

in effect, then, provided that terrorism insurance is commercially available,
the Mortgagor under each Mortgage Loan is required to carry terrorism insurance,
but in such event the Mortgagor shall not be required to spend on terrorism
insurance coverage more than two times the amount of the insurance premium that
is payable at such time in respect of the property and business
interruption/rental loss insurance required under the related Purchased Asset
Documents (without giving effect to the cost of terrorism and earthquake
components of such casualty and business interruption/rental loss insurance) at
the time of the origination of the Mortgage Loan, and if the cost of terrorism
insurance exceeds such amount, the Mortgagor is required to purchase the maximum
amount of terrorism insurance available with funds equal to such amount.

(34) Due-on-Sale or Encumbrance. Subject to certain exceptions set forth below,
each Mortgage Loan contains a “due on sale” or other such provision for the
acceleration of the payment of the unpaid principal balance of such Mortgage
Loan if, without the consent of the holder of the Mortgage (which consent, in
some cases, may not be unreasonably withheld) and/or complying with the
requirements of the related Purchased Asset Documents (which provide for
transfers without the consent of the lender which are customarily acceptable to
prudent commercial and multifamily mortgage lending institutions lending on the
security of property comparable to the related Mortgaged Property, including,
without limitation, transfers of worn-out or obsolete furnishings, fixtures, or
equipment promptly replaced with property of equivalent value and functionality
and transfers by leases entered into in accordance with the Purchased Asset
Documents), (a) the related Mortgaged Property, or any controlling equity
interest in the related Mortgagor, is directly or indirectly pledged,
transferred or sold, other than as related to (i) family and estate planning
transfers or transfers upon death or legal incapacity, (ii) transfers to certain
affiliates as defined in the related Purchased Asset Documents, (iii) transfers
of less than, or other than, a controlling interest in the related Mortgagor,
(iv) transfers to another holder of direct or indirect equity in the Mortgagor,
a specific Person designated in the related Purchased Asset Documents or a
Person satisfying specific criteria identified in the related Purchased Asset
Documents, (v) transfers of stock or similar equity units in publicly traded
companies, (vi) a substitution or release of collateral within the parameters of
paragraphs 28 and 33 herein or (vii) any mezzanine debt that existed at the
origination of the related Mortgage Loan, or future permitted mezzanine debt or
(b) the related Mortgaged Property is encumbered with a subordinate lien or
security interest against the related Mortgaged Property, other than (i) any
Companion Interest in such Mortgage Loan or subordinate debt that existed at
origination and is permitted under the related Purchased Asset Documents,
(ii) purchase money security interests, (iii) any Mortgage Loan that is
cross-collateralized and cross-defaulted with another Mortgage Loan or
(iv) Permitted Encumbrances; provided, however, that the Mortgage Loan may
provide a mechanism for the assumption of the Mortgage Loan by a third party
upon the Mortgagor’s satisfaction of certain conditions precedent and the
payment of a required transfer fee. The Mortgage or other Purchased Asset
Documents provide that to the extent any rating agency fees are incurred in
connection with the review of and consent to any transfer or encumbrance, the
Mortgagor is responsible for such payment along with all other reasonable fees
and expenses incurred by the mortgagee relative to such transfer or encumbrance.

 

Ex. X-14

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(35) Single-Purpose Entity. Each Mortgage Loan requires the Mortgagor to be a
Single-Purpose Entity for at least as long as the Mortgage Loan is outstanding.
Both the Purchased Asset Documents and the organizational documents of the
Mortgagor with respect to each Mortgage Loan with a maximum principal balance in
excess of $5 million provide that the Mortgagor is a Single-Purpose Entity, and
each Mortgage Loan with a maximum principal balance of $50 million or more has a
counsel’s opinion regarding non-consolidation of the Mortgagor.

(36) Interest Rates. Each Mortgage Loan bears interest at a rate that remains
fixed throughout the remaining term of such Mortgage Loan. With respect to each
Mortgage Loan that is a Floating Rate Loan, such Mortgage Loan bears interest at
a floating rate of interest that is based on LIBOR plus a margin (which interest
rate may be subject to a minimum or “floor” rate).

(37) Ground Leases. With respect to any Mortgage Loan where the Mortgage Loan is
secured by a ground leasehold estate under a Ground Lease in whole or in part,
and the related Mortgage does not also encumber the related lessor’s fee
interest in such Mortgaged Property, based upon the terms of the Ground Lease
and any estoppel or other agreement received from the ground lessor in favor of
the originator, its successors and assigns, Seller represents and warrants that:

(a) The Ground Lease or a memorandum regarding such Ground Lease has been duly
recorded or submitted for recording in a form that is acceptable for recording
in the applicable jurisdiction. The Ground Lease or an estoppel or other
agreement received from the ground lessor permits the interest of the lessee to
be encumbered by the related Mortgage and does not restrict the use of the
related Mortgaged Property by such lessee, its successors or assigns in a manner
that would materially adversely affect the security provided by the related
Mortgage. No material change in the terms of the Ground Lease has occurred since
the origination of the applicable Mortgage Loan, except by a written instrument
which has been included in the Due Diligence Package.

(b) The lessor under such Ground Lease has agreed in a writing included in the
related Purchased Asset File (or in such Ground Lease) that the Ground Lease may
not be amended, modified, or cancelled or terminated by agreement of lessor and
lessee without the prior written consent of the lender, and no such consent has
been granted since the origination of the Mortgage Loan, except as reflected in
any written instruments included in the related Purchased Asset File.

(c) The Ground Lease has an original term (or an original term plus one or more
optional renewal terms, which, under all circumstances, may be exercised, and
will be enforceable, by either the Mortgagor or the mortgagee) that extends not
less than twenty (20) years beyond the stated maturity of the related Mortgage
Loan.

 

Ex. X-15

--------------------------------------------------------------------------------

(d) The Ground Lease either (i) is not subject to any liens or encumbrances
superior to, or of equal priority with, the Mortgage, except for the related fee
interest of the ground lessor and the Permitted Encumbrances, or (ii) is subject
to a subordination, non-disturbance and attornment agreement to which the
mortgagee on the lessor’s fee interest in the Mortgaged Property is subject.

(e) The Ground Lease does not place commercially unreasonable restrictions on
the identity of the mortgagee and the Ground Lease is assignable to the holder
of the Mortgage Loan and its assigns without the consent of the lessor
thereunder (or if such consent is necessary it has been obtained), and in the
event it is so assigned, it is further assignable by the holder of the Mortgage
Loan and its successors and assigns without the consent of the lessor.

(f) The Seller has not received any written notice of material default under or
notice of termination of such Ground Lease. To the Seller’s Knowledge, there is
no material default under such Ground Lease and no condition that, but for the
passage of time or giving of notice, would result in a material default under
the terms of such Ground Lease and to the Seller’s Knowledge, such Ground Lease
is in full force and effect as of the Purchase Date.

(g) The Ground Lease or ancillary agreement between the lessor and the lessee
requires the lessor to give to the lender written notice of any material
default, and provides that no notice of default or termination is effective
against lender unless such notice is given to the lender.

(h) A lender is permitted a reasonable opportunity (including, where necessary,
sufficient time to gain possession of the interest of the lessee under the
Ground Lease through legal proceedings) to cure any default under the Ground
Lease which is curable after the lender’s receipt of notice of any default
before the lessor may terminate the Ground Lease.

(i) Intentionally Omitted.

(j) Under the terms of the Ground Lease, an estoppel or other agreement received
from the ground lessor and the related Mortgage (taken together), any related
insurance proceeds or the portion of the condemnation award allocable to the
ground lessee’s interest (other than (i) de minimis amounts for minor casualties
or (ii) in respect of a total or substantially total loss or taking as addressed
in subpart (k)) will be applied either to the repair or to restoration of all or
part of the related Mortgaged Property with (so long as such proceeds are in
excess of the threshold amount specified in the related Purchased Asset
Documents) the lender or a trustee appointed by it having the right to hold and
disburse such proceeds as repair or restoration progresses, or to the payment of
the outstanding principal balance of the Mortgage Loan, together with any
accrued interest.

(k) In the case of a total or substantially total taking or loss, under the
terms of the Ground Lease, an estoppel or other agreement and the related
Mortgage (taken together), any related insurance proceeds, or portion of the
condemnation award allocable to ground lessee’s interest in respect of a total
or substantially total loss or taking of the related Mortgaged Property to the
extent not applied to restoration, will be applied first to the payment of the
outstanding principal balance of the Mortgage Loan, together with any accrued
interest.

 

Ex. X-16

--------------------------------------------------------------------------------

(l) Provided that the lender cures any defaults which are susceptible to being
cured, the ground lessor has agreed to enter into a new lease with lender upon
termination of the Ground Lease for any reason, including rejection of the
Ground Lease in a bankruptcy proceeding.

(38) Servicing. To the Seller’s Knowledge, the servicing and collection
practices used by the Seller with respect to the Mortgage Loan have been, in all
material respects, legal and have met Accepted Servicing Practices.

(39) Origination and Underwriting. The origination practices of the Seller, or
any Affiliate of Seller (or, to Seller’s Knowledge, the related originator if
the Seller or an Affiliate of Seller was not the originator), with respect to
each Mortgage Loan have been, in all material respects, legal and as of the date
of its origination, such Mortgage Loan and the origination thereof complied in
all material respects with, or was exempt from, all requirements of federal,
state or local law relating to the origination of such Mortgage Loan; provided
that such representation and warranty does not address or otherwise cover any
matters with respect to federal, state or local law otherwise covered in this
Exhibit X.

(40) No Material Default; Payment Record. No Mortgage Loan has been more than
thirty (30) days delinquent, without giving effect to any grace or cure period,
in making required payments since origination, and as of its Purchase Date, no
Mortgage Loan is more than thirty (30) days delinquent (beyond any applicable
grace or cure period) in making required payments. To the Seller’s Knowledge,
there is (a) no material default, breach, violation or event of acceleration
existing under the related Mortgage Loan, or (b) no event (other than payments
due but not yet delinquent) which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a material default,
breach, violation or event of acceleration, which default, breach, violation or
event of acceleration, in the case of either (a) or (b), materially and
adversely affects the value of the Mortgage Loan or the value, use or operation
of the related Mortgaged Property, provided, however, that this representation
and warranty does not cover any default, breach, violation or event of
acceleration that specifically pertains to or arises out of an exception
scheduled to any other representation and warranty made by the Seller in this
Exhibit X. No person other than the holder of such Mortgage Loan may declare any
event of default under the Mortgage Loan or accelerate any indebtedness under
the Purchased Asset Documents.

(41) Bankruptcy. As of the date of origination of such Mortgage Loan and to the
Seller’s Knowledge as of the Purchase Date, neither the Mortgaged Property
(other than tenants of such Mortgaged Property), nor any portion thereof, is the
subject of, and no Mortgagor, guarantor or tenant occupying a single-tenant
property is a debtor in state or federal bankruptcy, insolvency or similar
proceeding.

 

Ex. X-17

--------------------------------------------------------------------------------

(42) Organization of Mortgagor. With respect to each Mortgage Loan, in reliance
on certified copies of the organizational documents of the Mortgagor delivered
by the Mortgagor in connection with the origination of such Mortgage Loan, the
Mortgagor is an entity organized under the laws of a state of the United States
of America, the District of Columbia or the Commonwealth of Puerto Rico.

(43) Environmental Conditions. A Phase I environmental site assessment (or
update of a previous Phase I and or Phase II site assessment) and, with respect
to certain Mortgage Loans, a Phase II environmental site assessment
(collectively, an “ESA”) meeting ASTM requirements conducted by a reputable
environmental consultant in connection with such Mortgage Loan within twelve
(12) months prior to its origination date, and such ESA (i) did not identify the
existence of recognized environmental conditions (as such term is defined in
ASTM E1527-05 or its successor, hereinafter “Environmental Condition”) at the
related Mortgaged Property or the need for further investigation, or (ii) if the
existence of an Environmental Condition or need for further investigation was
indicated in any such ESA, then at least one of the following statements is
true: (A) an amount reasonably estimated by a reputable environmental consultant
to be sufficient to cover the estimated cost to cure any material noncompliance
with applicable Environmental Laws or the Environmental Condition has been
escrowed by the related Mortgagor and is held or controlled by the related
lender; (B) if the only Environmental Condition relates to the presence of
asbestos-containing materials, radon in indoor air, lead based paint or lead in
drinking water, and the only recommended action in the ESA is the institution of
such a plan, an operations or maintenance plan has been required to be
instituted by the related Mortgagor that can reasonably be expected to mitigate
the identified risk; (C) the Environmental Condition identified in the related
environmental report was remediated or abated in all material respects prior to
the Purchase Date, and, if and as appropriate, a no further action or closure
letter was obtained from the applicable governmental regulatory authority (or
the environmental issue affecting the related Mortgaged Property was otherwise
listed by such governmental authority as “closed” or a reputable environmental
consultant has concluded that no further action is required); (D) an
environmental policy or a lender’s pollution legal liability insurance policy
meeting the requirements set forth below that covers liability for the
identified circumstance or condition was obtained from an insurer rated no less
than A- (or the equivalent) by Moody’s, S&P and/or Fitch; (E) a party not
related to the Mortgagor was identified as the responsible party for such
condition or circumstance and such responsible party has financial resources
reasonably estimated to be adequate to address the situation; or (F) a party
related to the Mortgagor having financial resources reasonably estimated to be
adequate to address the situation is required to take action. To Seller’s
Knowledge, except as set forth in the ESA, there is no Environmental Condition
(as such term is defined in ASTM E1527-05 or its successor) at the related
Mortgaged Property.

(44) Appraisal. The Purchased Asset File contains an appraisal of the related
Mortgaged Property with an appraisal date within six (6) months of the Mortgage
Loan origination date. The appraisal is signed by an appraiser who is a Member
of the Appraisal Institute and, to the Seller’s Knowledge, had no interest,
direct or indirect, in the Mortgaged Property or the Mortgagor or in any loan
made on the security thereof, and whose compensation is not affected by the
approval or disapproval of the Mortgage Loan. Each

 

Ex. X-18

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appraiser has represented in such appraisal or in a supplemental letter that the
appraisal satisfies the requirements of the “Uniform Standards of Professional
Appraisal Practice” as adopted by the Appraisal Standards Board of the Appraisal
Foundation. Each appraisal contains a statement, or is accompanied by a letter
from the appraiser, to the effect that the appraisal was performed in accordance
with the requirements of FIRREA, as in effect on the date such Purchased Asset
was originated.

(45) Transaction Request. The information pertaining to each Purchased Asset
which is set forth in the related Transaction Request delivered to Buyer is true
and correct in all material respects as of the Purchase Date and contains all
information required by the Agreement to be contained therein.

(46) Cross-Collateralization. No Mortgage Loan is cross-collateralized or
cross-defaulted with any other Mortgage Loan, except as set forth in the
Requested Exception Report.

(47) Advance of Funds by the Seller. After origination of such Mortgage Loan, no
advance of funds has been made by Seller to the related Mortgagor other than in
accordance with the Purchased Asset Documents, and, to Seller’s Knowledge, no
funds have been received from any person other than the related Mortgagor or an
Affiliate for, or on account of, payments due on the Mortgage Loan (other than
as contemplated by the Purchased Asset Documents, such as, by way of example and
not in limitation of the foregoing, amounts paid by the tenant(s) into a
lender-controlled lockbox if required or contemplated under the related lease or
Purchased Asset Documents). Neither Seller nor any Affiliate thereof has any
obligation to make any capital contribution to any Mortgagor under a Mortgage
Loan, other than contributions made on or prior to the date hereof.

(48) Compliance with Anti-Money Laundering Laws. The Seller has complied with
all applicable anti-money laundering laws and regulations, including without
limitation the USA Patriot Act of 2001 with respect to the origination of the
Mortgage Loan.

(49) Affiliates. The related Mortgagor is not an Affiliate of the Seller.

 

 

B.

Senior Interests.

 

 

(I)

With respect to each Purchased Asset that is a Senior Note:

(1) Whole Loan. The related Whole Loan complies with all of the representations
set forth in Exhibit X(A) to the Master Repurchase Agreement (except to the
extent disclosed in a Requested Exceptions Report and/or approved by Buyer in
writing).

 

Ex. X-19

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(II)

With respect to each Purchased Asset that is a Participation Interest:

(1) Whole Loan. The related Whole Loan complies with all of the representations
set forth in Exhibit X(A) to the Master Repurchase Agreement (except to the
extent disclosed in a Requested Exceptions Report and/or approved by Buyer in
writing).

(2) Participation. Such Participation Interest is evidenced by a physical
Participation Certificate.

(3) Lead Participant; Status of Participation Agreement. Such Participation
Interest is a is a senior or pari passu participation interest (in each case,
with no existing more-senior participation interest) in a Whole Loan. Seller is
the record mortgagee of the related Whole Loan (“Lead Participant”) pursuant to
a participation agreement that is legal, valid and enforceable as between its
parties. If such Participation Interest is (i) a pari passu participation
interest or (ii) a senior participation interest with respect to which no
related junior participation interest accounts for more than ten (10) percent of
the maximum principal balance of the related Whole Loan, the related
participation agreement provides that the Lead Participant has full power,
authority and discretion to service the related Whole Loan, modify and amend the
terms thereof, pursue remedies and enforcement actions, including foreclosure or
other legal action, without consent or approval of any participant (each, a
“Third Party Participant”) holding any related participation (the “Other
Participation Interests”). If such Participation Interest is a senior
participation interest with respect to which the related junior participation
interest accounts for more than ten (10) percent of the maximum principal
balance of the related Whole Loan, the control rights granted to the holder of
such junior participation pursuant to the related participation agreement are
customary for holders of junior participations in commercial mortgage loans.

(4) Costs and Expenses. If the Participation Interest is pari passu with any
Other Participation Interests, the holder of such Other Participation Interest
is required to pay its pro rata share of any expenses, costs and fees associated
with servicing and enforcing rights and remedies under the related Whole Loan
upon request therefor by the Lead Participant. If the Participation Interest is
senior to any Other Participation Interests, the holder of such Other
Participation Interest is required to bear any expenses, costs and fees
associated with servicing and enforcing rights and remedies under the related
Whole Loan prior to the holder of such Participation Interest.

(5) Third Party Participants. Each Participation Agreement is effective to
convey the related Other Participation Interests to the related Third Party
Participants and is not intended to be or effective as a loan or other financing
secured by the related Mortgaged Property. The Lead Participant owes no
fiduciary duty or obligation to any Third Party Participant pursuant to the
Participation Agreement.

(6) Purchased Asset File. The Purchased Asset File with respect to such
Participation Interest includes all material documents evidencing and/or
securing such Participation Interest and the terms of such documents have not
been waived, impaired, modified, altered, satisfied, canceled, subordinated or
rescinded in any material respect except as set forth in the documents contained
in the Purchased Asset File.

 

Ex. X-20

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(7) No Defaults or Waivers Under Participation Documents. All amounts due and
owing to any Third Party Participant pursuant to the related Participation
Agreement or related documents have been duly and timely paid. (a) There is
(i) no default, breach or violation existing under any Participation Agreement
or related document, and (ii) no event (other than payments due but not yet
delinquent) which, with the passage of time or with notice and the expiration of
any grace or cure period, would constitute a material default, breach, or
violation under any Participation Agreement or related document, and (b) no
default, breach or violation under any Participation Agreement or related
document has been waived, that, in the case of either (a) or (b), materially and
adversely affects the value of the Participation Interest; provided, however,
that this representation and warranty does not cover any default, breach or
violation that specifically pertains to or arises out of an exception scheduled
to any other representation and warranty made by the Seller in this Exhibit X.
No person other than the holder of such Participation Interest or the related
Other Participation Interests (or, in each case, a pledgee of any such
Participation Interests) may declare any default, breach or violation under the
applicable Participation Agreement or related documents.

(8) Bankruptcy. To the Seller’s Knowledge, after due inquiry, no issuer of such
Participation Interest or Third Party Participant is a debtor in any outstanding
state or federal bankruptcy or insolvency proceeding.

(9) No Known Liabilities. Except as disclosed to Buyer, the Seller has not
received written notice of any outstanding liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind for which the holder of such Participation Interest is or may become
obligated.

(10) Transfer. The Lead Participant’s role, rights and responsibilities are
assignable by the Seller without consent or approval other than those that have
been obtained.

(11) No Repurchase. The terms of the Participation Agreement do not require or
obligate the Lead Participant or its successor or assigns to repurchase any
Other Participation Interest under any circumstances.

(12) No Misrepresentations. The Seller, in selling any Other Participation
Interest to a Third Party Participant made no misrepresentation, fraud or
omission of information which was in Seller’s possession and required to be
delivered to such Third Party Participant.

C. Mezzanine Loans. With respect to each Purchased Asset that is a Mezzanine
Loan:

(1) Type of Mezzanine Loan. The Mezzanine Loan is a senior mezzanine whole loan
secured by a first priority pledge of one hundred percent (100%) of the Capital
Stock of the Mortgagor or the related Mortgage Loan. At the time of the pledge
and grant of the security interest in the Mezzanine Loan to Buyer, the Mezzanine
Loan was not

 

Ex. X-21

--------------------------------------------------------------------------------

subject to any assignment (other than assignments to the Seller), participation
or pledge, and the applicable Seller had good title to, and was the sole owner
of, such Mezzanine Loan free and clear of any and all liens, charges, pledges,
encumbrances, participations, any other ownership interests on, in or to such
Mezzanine Loan. Seller has full right and authority to pledge and grant a
security interest in and to each Mezzanine Loan, and such pledge and grant of a
security interest to Buyer constitutes a legal, valid and binding pledge of such
Mezzanine Loan free and clear of any and all liens, pledges, charges or security
interests of any nature encumbering such Mezzanine Loan other than the rights of
the holder of the related Mortgage Loan pursuant to an intercreditor agreement.

(2) Mortgage Loan. The related Mortgage Loan complies with all of the
representations set forth in Section A (except to the extent disclosed in a
Requested Exceptions Report and/or approved by Buyer in writing).

(3) Mezzanine Loan Document Status. Each related Mezzanine Note and other
agreement executed by or on behalf of the related Mezzanine Borrower in
connection with such Mezzanine Loan is the legal, valid and binding obligation
of the related Mezzanine Borrower (subject to any non-recourse provisions
contained in any of the foregoing agreements and any applicable state
anti-deficiency or market value limit deficiency legislation), as applicable,
and is enforceable in accordance with its terms, subject to the Standard
Qualifications.

Except as set forth in the immediately preceding sentences, to Seller’s
Knowledge, there is no valid offset, defense, counterclaim or right of
rescission available to the related Mezzanine Borrower with respect to any of
the related Mezzanine Notes or other Mezzanine Loan Documents, including,
without limitation, any such valid offset, defense, counterclaim or right based
on intentional fraud by the Seller in connection with the origination of such
Mezzanine Loan, that would deny the mortgagee the principal benefits intended to
be provided by the Mezzanine Note or other Mezzanine Loan Documents.

(4) Mezzanine Note Provisions. The Mezzanine Loan Documents for each Mezzanine
Loan contain provisions that render the rights and remedies of the holder
thereof adequate for the practical realization against the Capital Stock of the
principal benefits of the security intended to be provided thereby, including
realization by judicial or, if applicable, nonjudicial foreclosure subject to
the limitations set forth in the Standard Qualifications.

(5) Mezzanine Loan Status; Waivers and Modifications. Since origination and
except by written instruments set forth in the related Purchased Asset File or
as otherwise permitted under the Agreement, (a) the material terms of the
related pledge agreement, Mezzanine Note, Mezzanine Loan guaranty, and the other
Mezzanine Loan Documents have not been waived, impaired, modified, altered,
satisfied, canceled, subordinated or rescinded in any respect which materially
interferes with the security intended to be provided by the related pledge
agreement and other applicable Mezzanine Loan Documents; (b) no related Capital
Stock or any portion thereof has been released from the lien of the related
pledge or other security agreement in any manner which materially interferes
with the security intended to be provided by such agreement; and (c) the related
Mezzanine Borrower has not been released from its material obligations under the
Mezzanine Loan (or related Mezzanine Loan, as applicable).

 

Ex. X-22

--------------------------------------------------------------------------------

(6) Title Insurance. The Seller’s security interest in the Capital Stock of the
Mortgagor is covered by a UCC 9 insurance policy and: (i) such policy is in full
force and effect, (ii) all premiums thereunder have been paid, (iii) no claims
have been made by or on behalf of such Seller thereunder, and (iv) no claims
have been paid thereunder. Such Seller obtained a mezzanine endorsement to the
Mortgagor’s “owner’s” title policy and an assignment of title proceeds in
connection therewith.

(7) Junior Liens. There are no subordinate junior liens securing the payment of
money encumbering the related pledged Capital Stock. Except as set forth in the
related Transaction Request, to Seller’s Knowledge there is no subordinate
mezzanine debt secured directly or indirectly by interests in the related
Mezzanine Borrower.

(8) Condition of Property. The Seller or the originator of the Mezzanine Loan
(or related Mortgage Loan, as applicable) inspected or caused to be inspected
each related Mortgaged Property (indirectly securing the Mezzanine Loan and
securing the related Mortgage Loan) no more than six (6) months prior to the
origination of such Mezzanine Loan (or related Mortgage Loan, as applicable) or
no more than twelve (12) months prior to the related Purchase Date.

An engineering report or property condition assessment was prepared in
connection with the origination of such Purchased Asset (or related Mortgage
Loan, as applicable) no more than twelve (12) months prior to the related
Purchase Date, which indicates that the related Mortgaged Property is free of
any material damage, except to the extent that such material damage (i) would
not have a material adverse effect on the value of such Purchased Asset (or
related Mortgaged Property, as applicable) as security for the related Purchased
Asset, (ii) has been repaired in all material respects or (iii) is addressed by
the escrow of funds established in an aggregate amount consistent with the
standards utilized by Seller with respect to similar loans it holds for its own
account have been established, which escrowed amount will in all events be in an
aggregate amount not less than the estimated cost of the necessary repairs.
Seller has no Knowledge of any issues with the physical condition of the
Mortgaged Property that Seller believes would have a material adverse effect on
the use, operation or value of the Mortgaged Property other than those disclosed
in the engineering report or property condition assessment and those addressed
in sub-clauses (i), (ii) and (iii) of the preceding sentence.

(9) Taxes and Assessments. All taxes, governmental assessments and other
outstanding governmental charges (including, without limitation, water and
sewage charges), or installments thereof, which could be a lien on the related
Mortgaged Property (indirectly securing the Mezzanine Loan and securing the
related Mortgage Loan) that would be of equal or superior priority to the lien
on the related Mortgage Loan and that prior to the related Purchase Date for the
related Mortgage Loan have become delinquent in respect of each such related
Mortgaged Property have been paid, or an escrow of funds has been established in
an amount sufficient to cover such payments and reasonably estimated interest
and penalties, if any, thereon. For purposes of this representation and

 

Ex. X-23

--------------------------------------------------------------------------------

warranty, real estate taxes and governmental assessments and other outstanding
governmental charges and installments thereof shall not be considered delinquent
until the earlier of (a) the date on which interest and/or penalties would first
be payable thereon and (b) the date on which enforcement action is entitled to
be taken by the related taxing authority.

(10) Condemnation. As of the date of origination of such Mezzanine Loan (or
related Mortgage Loan, as applicable) and to the Seller’s Knowledge, as of the
Purchased Date, there is no proceeding pending and as of the date of origination
of such Mezzanine Loan (or related Mortgage Loan, as applicable) and as of the
Purchase Date for the related Mezzanine Loan, there is no proceeding threatened,
for the total or partial condemnation of the related Mortgaged Property
(indirectly securing the Mezzanine Loan and securing the related Mortgage Loan)
that would have a material adverse effect on the value, use or operation of such
Mortgaged Property.

(11) Actions Concerning Mezzanine Loan. As of the date of origination of each
Mezzanine Loan and to the Seller’s Knowledge as of the Purchase Date for the
Mezzanine Loan, there was no pending or filed action, suit or proceeding,
arbitration or governmental investigation involving any related Mezzanine
Borrower, guarantor, or the related Mezzanine Borrower’s interest in the related
Capital Stock, or the related Mortgage Borrower (under the related Mortgage
Loan) or such Mortgage Borrower’s interests in the related Mortgaged Property,
an adverse outcome of which would reasonably be expected to materially and
adversely affect (a) such Mezzanine Borrower’s title to such Capital Stock,
(b) the related Mortgage Borrowers title to the related Mortgaged Property,
(c) the validity or enforceability of the related Mezzanine Loan Documents,
(d) such Mezzanine Borrower’s ability to perform under the related Mezzanine
Loan (or related Mortgage Loan, as applicable), (e) such guarantor’s ability to
perform under the related guaranty, (f) the principal benefit intended to be
provided by the Purchased Asset Documents or (g) the current principal use of
such related Mortgaged Property.

(12) Escrow Deposits. All escrow deposits and payments required to be escrowed
with lender pursuant to each Mezzanine Loan are in the possession, or under the
control, of the Seller or its Servicer, and there are no deficiencies (subject
to any applicable grace or cure periods) in connection therewith, and all of the
Seller’s rights under the Mezzanine Loan Documents in and to all such escrows
and deposits (or the right thereto) that are required to be escrowed with lender
under the related Mezzanine Loan Documents are being conveyed by the Seller to
Buyer or its Servicer.

(13) No Holdbacks. The principal amount of the Mezzanine Loan has been fully
disbursed as of the Purchase Date thereof and there is no requirement for future
advances thereunder (except in those cases where the full amount of the
Mezzanine Loan has been disbursed but a portion thereof is being held in escrow
or reserve accounts pending the satisfaction of certain conditions relating to
matters with respect to the related Capital Stock or underlying Mortgaged
Property (indirectly securing the Mezzanine Loan and securing the related
Mortgage Loan)), except as set forth in the related Confirmation.

 

Ex. X-24

--------------------------------------------------------------------------------

(14) Insurance. Each related Mortgaged Property (indirectly securing the
Mezzanine Loan and securing the related Mortgage Loan) is, and is required
pursuant to the related Mezzanine Loan Documents to be, insured by a property
insurance policy providing coverage for loss in accordance with coverage found
under a “special cause of loss form” or “all risk form” that includes
replacement cost valuation issued by an insurer meeting the requirements of the
related Mezzanine Loan Documents and meeting the Insurance Rating Requirements,
in an amount (subject to a customary deductible) not less than the lesser of
(x) the original principal balance of the Mezzanine Loan (and the related
Mortgage Loan) and (y) the full insurable value on a replacement cost basis of
the improvements, furniture, furnishings, fixtures and equipment owned by the
related Mortgagor included in the Mortgaged Property (with no deduction for
physical depreciation), but, in any event, not less than the amount necessary or
containing such endorsements as are necessary to avoid the operation of any
coinsurance provisions with respect to such Mortgaged Property.

Each such related Mortgaged Property is also covered, and required to be covered
pursuant to the related Mezzanine Loan Documents, by business interruption or
rental loss insurance which (subject to a customary deductible) covers a period
of not less than twelve (12) months (or with respect to each Mezzanine Loan and
its Related Purchase Asset with an aggregate maximum principal balance of
$50 million or more, eighteen (18) months).

If any material part of the improvements, exclusive of a parking lot, located on
a Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards, the related
Mezzanine Borrower is required to be covered pursuant to the related Mezzanine
Loan Documents, by flood insurance in the maximum amount available under the
National Flood Insurance Program.

If any such related Mortgaged Property is located within twenty-five (25) miles
of the coast of the Gulf of Mexico or the Atlantic coast of Florida, Georgia,
South Carolina or North Carolina, such Mortgaged Property is covered, and is
required to be covered pursuant to the related Mezzanine Loan Documents, by
insurance for windstorm and/or windstorm related perils and/or named storms
issued by an insurer meeting the Insurance Rating Requirements or endorsement
covering damage from windstorm and/or windstorm related perils and/or named
storms.

Each such related Mortgaged Property is covered, and required to be covered
pursuant to the related Mezzanine Loan Documents, by a commercial general
liability insurance policy issued by an insurer meeting the Insurance Rating
Requirements including coverage for property damage, contractual damage and
personal injury (including bodily injury and death) in amounts as are generally
required by prudent institutional commercial mortgage and mezzanine lenders, and
in any event not less than $1 million per occurrence and $2 million in the
aggregate.

An architectural or engineering consultant has performed an analysis of the
related Mortgaged Property located in seismic zones 3 or 4 in order to evaluate
the structural and seismic condition of such property for the sole purpose of
assessing either the SEL or the

 

Ex. X-25

--------------------------------------------------------------------------------

PML for the related Mortgaged Property in the event of an earthquake. In such
instance, the SEL or PML, as applicable was based on a 475-year return period,
an exposure period of 50 years and a 10% probability of exceedance. If the
resulting report concluded that the SEL or PML, as applicable would exceed 20%
of the amount of the replacement costs of the improvements, earthquake insurance
on such Mortgaged Property was obtained by an insurer meeting the Insurance
Rating Requirements in an amount not less than 100% of the SEL or PML, as
applicable.

The related Mezzanine Loan Documents require insurance proceeds in respect of a
property loss to be applied either (a) to the repair or restoration of all or
part of such related Mortgaged Property, with respect to all property losses in
excess of 5% of the then outstanding principal amount of the related Mortgage
Loan, the lender (or the related mortgage lender or trustee appointed by it)
having the right to hold and disburse such proceeds as the repair or restoration
progresses, or (b) to the payment of the outstanding principal balance of such
Mezzanine Loan (and the related Mortgage Loan) together with any accrued
interest thereon.

All premiums on all insurance policies referred to in this section required to
be paid as of the Purchase Date for the related Mortgage Loan have been paid,
and such insurance policies name the lender under the Mezzanine Loan and its
successors and assigns as a loss payee under a mortgagee endorsement clause or,
in the case of the general liability insurance policy, as named or additional
insured. Such insurance policies will inure to the benefit of Buyer. Each
related Mezzanine Loan obligates the related Mezzanine Borrower to maintain all
such insurance and, at such Mezzanine Borrower’s failure to do so, authorizes
the lender to maintain such insurance at the Mezzanine Borrower’s cost and
expense and to charge such Mezzanine Borrower for related premiums. All such
insurance policies (other than commercial liability policies) require at least
ten (10) days’ prior notice to the lender of termination or cancellation arising
because of nonpayment of a premium and at least thirty (30) days’ prior notice
to the lender of termination or cancellation (or such lesser period, but not
less than ten (10) days, as may be required by applicable law) arising for any
reason other than non-payment of a premium and no such notice has been received
by the Seller.

Notwithstanding anything to the contrary contained above, the insurance
coverages required above may be maintained by the related Mortgagor under the
related Mortgage Loan Documents and/or by the Mezzanine Borrower under the
Mezzanine Loan Documents.

(15) Access; Utilities; Separate Tax Lots. To Seller’s Knowledge, based solely
upon Seller’s review of the related Title Policy and current surveys obtained in
connection with origination, each related Mortgaged Property (indirectly
securing the Mezzanine Loan and securing the related Mortgage Loan) (a) is
located on or adjacent to a public road and has direct legal access to such
road, or has access via an irrevocable easement or irrevocable right of way
permitting ingress and egress to/from a public road, and (b) is served by or has
uninhibited access rights to public or private water and sewer (or well and
septic) and all required utilities, all of which are appropriate for the current
use of such Mortgaged Property. Each related Mortgaged Property (indirectly
securing the Mezzanine Loan and

 

Ex. X-26

--------------------------------------------------------------------------------

securing the related Mortgage Loan) constitutes one or more separate tax parcels
which do not include any property which is not part of such Mortgaged Property
or is subject to an endorsement under the related Title Policy insuring such
Mortgaged Property, or in certain cases, an application has been made to the
applicable governing authority for creation of separate tax lots, in which case
the Mezzanine Loan requires the Mezzanine Borrower to (or cause the related
Mortgage Borrower to) escrow an amount sufficient to pay taxes for the existing
tax parcel of which such Mortgaged Property is a part until the separate tax
lots are created.

(16) No Encroachments. To the Seller’s Knowledge based solely on surveys
obtained in connection with the origination of the Mezzanine Loan (or related
Mortgage Loan, as applicable), (a) all material improvements that were included
for the purpose of determining the appraised value of the related Mortgaged
Property (indirectly securing the Mezzanine Loan and securing the related
Mortgage Loan) at the time of the origination of such Mezzanine Loan are within
the boundaries of the related Mortgaged Property, except encroachments that do
not materially and adversely affect the value or current use of such Mortgaged
Property or for which insurance or endorsements were obtained under the
applicable owner’s title policy, (b) no improvements on adjoining parcels
encroach onto the related Mortgaged Property except for encroachments that do
not materially and adversely affect the value or current use of such Mortgaged
Property or for which insurance or endorsements were obtained under the Title
Policy and (c) no improvements encroach upon any easements except for
encroachments that do not materially and adversely affect the value or current
use of such Mortgaged Property or for which insurance or endorsements under the
applicable owner’s title policy.

(17) No Contingent Interest or Equity Participation. No Mezzanine Loan has a
shared appreciation feature, any other contingent interest feature or a negative
amortization feature or an equity participation by any Seller.

(18) Compliance with Usury Laws. The interest rate (exclusive of any default
interest, late charges, yield maintenance charges, or prepayment premiums) of
such Mezzanine Loan complied as of the date of origination with, or was exempt
from, applicable state or federal laws, regulations and other requirements
pertaining to usury.

(19) Authorized to do Business. To the extent required under applicable law, as
of the Purchase Date for the related Mortgage Loan or as of the date that such
entity held the related Mezzanine Note, Seller is, and to Seller’s Knowledge,
any other holder of a Mortgage Note was, authorized to transact and do business
in the jurisdiction in which each related Mortgaged Property (indirectly
securing the Mezzanine Loan and securing the related Mortgage Loan) is located,
or the failure to be so authorized does not materially and adversely affect the
enforceability of the related Mezzanine Loan by the Buyer.

(20) Local Law Compliance. To the Seller’s Knowledge, based upon any of a letter
from any governmental authorities, a legal opinion, an architect’s letter, a
zoning consultant’s report, an endorsement to the related Title Policy (for the
related Mortgage Loan), or other affirmative investigation of local law
compliance consistent with the investigation conducted by such Seller for
similar related commercial and multifamily

 

Ex. X-27

--------------------------------------------------------------------------------

mortgage loans, the improvements located on or forming part of each Mortgaged
Property (indirectly securing the Mezzanine Loan and securing the related
Mortgage Loan) as of the date of origination of such Mezzanine Loan and as of
the Purchase Date for thereof, there are no material violations of applicable
zoning ordinances, building codes and land laws (collectively “Zoning
Regulations”) other than those which (i) are insured by the Title Policy or law
and ordinance insurance coverage has been obtained or (ii) would not have a
material adverse effect on the value, operation or net operating income of such
Mortgaged Property. The terms of the related Mezzanine Loan Documents require
the related Mezzanine Borrower to comply in all material respects with all
applicable governmental regulations, zoning and building laws.

(21) Licenses and Permits. Each related Mezzanine Borrower covenants in the
related Mezzanine Loan Documents that it shall keep (and shall cause the related
Mortgage Borrower to keep) all material licenses, permits and applicable
governmental authorizations necessary for the operation of the related Mortgaged
Property (indirectly securing the Mezzanine Loan and securing the related
Mortgage Loan) in full force and effect, and to the Seller’s Knowledge based
upon any of a letter from any government authorities or other affirmative
investigation of local law compliance consistent with the investigation
conducted by such Seller for similar related commercial and multifamily mortgage
loans intended for securitization, all such material licenses, permits and
applicable governmental authorizations are in effect. The Mezzanine Loan
Documents for each Mezzanine Loan (or related Mortgage Loan, as applicable)
require the related Mortgage Borrower to be qualified to do business in each
jurisdiction in which such related Mortgaged Property is located.

(22) Recourse Obligations. The Mezzanine Loan Documents for each Mezzanine Loan
provide that such Mezzanine Loan (a) becomes full recourse to the Mezzanine
Borrower and guarantor (which is a natural person or persons, or an entity
distinct from the related Mezzanine Borrower (but may be affiliated with such
Mezzanine Borrower) that has assets other than Capital Stock that are not de
minimis) in any of the following events: (i) if any voluntary petition for
bankruptcy, insolvency, dissolution or liquidation pursuant to federal
bankruptcy law, or any similar federal or state law, shall be filed by the
related Mortgagor or Mezzanine Borrower; (ii) if the related Mortgagor or
Mezzanine Borrower or guarantor shall have colluded with other creditors to
cause an involuntary bankruptcy filing with respect to the Mortgagor or the
Mezzanine Borrower; or (iii) upon any voluntary transfer of either the related
Mortgaged Property, Capital Stock, or equity interests in the related Mezzanine
Borrower made in violation of the related Mezzanine Loan Documents; and
(b) contains provisions providing for recourse against the Mezzanine Borrower
and guarantor (which is a natural person or persons, or an entity distinct from
the related Mezzanine Borrower (but may be affiliated with such Mezzanine
Borrower) that has assets other than Capital Stock that are not de minimis), for
losses and damages sustained by reason of the related Mortgagor’s or Mezzanine
Borrower’s (i) misappropriation of rents after the occurrence of an event of
default under the related Mezzanine Loan Documents; (ii) misappropriation of
security deposits, insurance proceeds, or condemnation awards; (iii) fraud or
intentional material misrepresentation; (iv) breach of the environmental
covenants in the related Mezzanine Loan Documents; or (v) commission of
intentional material physical waste at the related Mortgaged Property.

 

Ex. X-28

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(23) Financial Reporting and Rent Rolls. The Mezzanine Loan Documents require
the related Mezzanine Borrower to provide the Seller with quarterly (other than
for single-tenant properties) and annual operating statements, and quarterly
(other than for single-tenant properties) and annual rent rolls for properties
that have leases contributing more than 5% of the in-place base rent and annual
financial statements, which annual financial statements with respect to each
Mezzanine Loan with more than one Mezzanine Borrower are in the form of an
annual combined balance sheet of the Mezzanine Borrower entities (and no other
entities), together with the related combined statements of operations, members’
capital and cash flows, including a combining balance sheet and statement of
income for the related Mortgaged Properties (indirectly securing the Mezzanine
Loan and securing the related Mortgage Loan) on a combined basis.

(24) Acts of Terrorism Exclusion. With respect to each Mezzanine Loan having an
maximum principal balance of over $20 million, the related special-form all-risk
insurance policy and business interruption policy (issued by an insurer meeting
the Insurance Rating Requirements) do not specifically exclude Acts of
Terrorism, as defined in TRIA, from coverage, or if such coverage is excluded,
the related Mortgaged Property (indirectly securing the Mezzanine Loan and
securing the related Mortgage Loan) is covered by a separate terrorism insurance
policy. With respect to each other Mezzanine Loan, the related special all-risk
insurance policy and business interruption policy (issued by an insurer meeting
the Insurance Rating Requirements) did not, as of the date of origination of
such Mezzanine Loan and, do not, as of the Purchase Date for the related
Mortgage Loan, specifically exclude Acts of Terrorism, as defined in TRIA, from
coverage, or if such coverage is excluded, the related Mortgaged Property
(indirectly securing the Mezzanine Loan and securing the related Mortgage Loan)
is covered by a separate terrorism insurance policy. With respect to each
Mezzanine Loan, the related Mezzanine Loan Documents do not expressly waive or
prohibit the lender from requiring coverage for Acts of Terrorism, as defined in
TRIA, or damages related thereto except to the extent that any right to require
such coverage may be limited by commercial availability on commercially
reasonable terms; provided, however, that if TRIA or a similar or subsequent
statute is not in effect, then, provided that terrorism insurance is
commercially available, the Mezzanine Borrower under each Mezzanine Loan is
required to carry terrorism insurance, but in such event the Mezzanine Borrower
shall not be required to spend on terrorism insurance coverage more than two
times the amount of the insurance premium that is payable at such time in
respect of the property and business interruption/rental loss insurance required
under the related Mezzanine Loan Documents (without giving effect to the cost of
terrorism and earthquake components of such casualty and business
interruption/rental loss insurance) at the time of the origination of such
Mezzanine Loan, and if the cost of terrorism insurance exceeds such amount, the
Mezzanine Borrower is required to purchase the maximum amount of terrorism
insurance available with funds equal to such amount.

Notwithstanding anything to the contrary contained above, the insurance
coverages required above may be maintained by the related Mortgagor under the
related Mortgage Loan Documents and/or by the Mezzanine Borrower under the
Mezzanine Loan Documents.

 

Ex. X-29

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(25) Due on Sale or Encumbrance. Subject to certain exceptions set forth below,
each Mezzanine Loan contains a “due on sale” or other such provision for the
acceleration of the payment of the unpaid principal balance of such Mezzanine
Loan if, without the consent of the holder of the Mezzanine Loan (which consent,
in some cases, may not be unreasonably withheld) and/or complying with the
requirements of the related Mezzanine Loan Documents (which provide for
transfers without the consent of the lender which are customarily acceptable to
prudent mezzanine lending institutions lending on the security of property
comparable to the related Capital Stock, (a) the related Mortgaged Property, or
any equity interest of greater than 50% in the related Mortgagor or Mezzanine
Borrower, is directly or indirectly pledged, transferred or sold, other than as
related to (i) family and estate planning transfers or transfers upon death or
legal incapacity, (ii) transfers to certain affiliates as defined in the related
Mezzanine Loan Documents, (iii) transfers of less than, or other than, a
controlling interest in the related Mortgagor or Mezzanine Borrower,
(iv) transfers to another holder of direct or indirect equity in the related
Mortgagor or Mezzanine Borrower, a specific Person designated in the related
Mezzanine Loan Documents or a Person satisfying specific criteria identified in
the related Mezzanine Loan Documents, such as a qualified equityholder,
(v) transfers of stock or similar equity units in publicly traded companies or
(vi) a substitution or release of collateral or the exceptions thereto set forth
in the Requested Exception Report, or (vii) by reason of any mezzanine debt that
existed at the origination of the related Mezzanine Loan (or related Mortgage
Loan, as applicable) or that was permitted after origination pursuant to the
related Mezzanine Loan Documents or (b) the related Mortgaged Property is
encumbered with a subordinate lien or security interest against the related
Mortgaged Property, other than (i) any Companion Interest of such Mezzanine Loan
or any subordinate debt that existed at origination and is permitted under the
related Mezzanine Loan Documents, (ii) purchase money security interests,
(iii) with respect to any Mezzanine Loan that is cross-collateralized and
cross-defaulted with another Mortgage Loan, the lien of such
cross-collateralized or cross-defaulted Mortgage Loan or (iv) Permitted
Encumbrances. The related Mezzanine Loan Documents provide that to the extent
any rating agency fees are incurred in connection with the review of and consent
to any transfer or encumbrance, the related Mezzanine Borrower is responsible
for such payment along with all other reasonable fees and expenses incurred by
the mortgagee relative to such transfer or encumbrance.

(26) Single-Purpose Entity. Each Mezzanine Loan requires the related Mezzanine
Borrower to be a Single-Purpose Entity for at least as long as such Mezzanine
Loan is outstanding. Both the Mezzanine Loan Documents and the organizational
documents of the Mezzanine Borrower with respect to each Mezzanine Loan with a
maximum principal balance as of the Purchase Date for the related Mortgage Loan
in excess of $5 million provide that the Mezzanine Borrower is a Single-Purpose
Entity, and each Mezzanine Loan with a maximum principal balance as of the
Purchase Date for the related Mortgage Loan of $20 million or more has a
counsel’s opinion regarding non-consolidation of the Mezzanine Borrower.

 

Ex. X-30

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(27) Ground Leases. With respect to any Mezzanine Loan where the related
Mortgage Loan for such Mezzanine Loan is secured by a leasehold estate under a
Ground Lease in whole or in part, and the related Mortgage (for such Mortgage
Loan) does not also encumber the related lessor’s fee interest in such related
Mortgaged Property (indirectly securing the Mezzanine Loan and securing the
related Mortgage Loan), based upon the terms of such Ground Lease, the related
Mortgage Loan, the Mezzanine Loan and any estoppel or other agreement received
from the ground lessor in favor of the Seller, its successors and assigns:

(a) Such Ground Lease or a memorandum regarding such Ground Lease has been duly
recorded or submitted for recordation in a form that is acceptable for recording
in the applicable jurisdiction. The Ground Lease or an estoppel or other
agreement received from the ground lessor permits the interest of the lessee to
be encumbered by the related Mortgage and does not restrict the use of the
related Mortgaged Property by such lessee, its successors or assigns in a manner
that would materially adversely affect the security provided by the related
Mortgage.

(b) The lessor under such Ground Lease has agreed in a writing included in the
related Purchased Asset File (or in such Ground Lease) that such Ground Lease
may not be amended or modified, or canceled or terminated by agreement of lessor
and lessee, without the prior written consent of the lender.

(c) Such Ground Lease has an original term (or an original term plus one or more
optional renewal terms, which, under all circumstances, may be exercised, and
will be enforceable, by either borrower or the mortgagee) that extends not less
than twenty (20) years beyond the stated maturity of the related Mezzanine Loan.

(d) Such Ground Lease either (i) is not subject to any liens or encumbrances
superior to, or of equal priority with, the Mortgage, except for the related fee
interest of the ground lessor and the Permitted Encumbrances, or (ii) is subject
to a subordination, non-disturbance and attornment agreement to which the
mortgagee on the lessor’s fee interest in the Mortgaged Property is subject.

(e) Such Ground Lease is assignable to the holder of the related Mortgage Loan
and its assigns without the consent of the lessor thereunder (or if such consent
is necessary, it has been obtained).

(f) The Seller has not received any written notice of material default under or
notice of termination of such Ground Lease. To the Seller’s Knowledge, there is
no material default under such Ground Lease and no condition that, but for the
passage of time or giving of notice, would result in a material default under
the terms of such Ground Lease and to the Seller’s Knowledge, such Ground Lease
is in full force and effect as of the Purchase Date for the related Mortgage
Loan.

(g) Such Ground Lease or ancillary agreement between the lessor and the lessee
requires the lessor to give to the lender written notice of any default, and
provides that no notice of default or termination is effective against the
lender unless such notice is given to the lender.

 

Ex. X-31

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(h) A lender is permitted a reasonable opportunity (including, where necessary,
sufficient time to gain possession of the interest of the lessee under such
Ground Lease through legal proceedings) to cure any default under such Ground
Lease which is curable after the lender’s receipt of notice of any default
before the lessor may terminate such Ground Lease.

(i) Intentionally Omitted.

(j) Under the terms of such Ground Lease, an estoppel or other agreement
received from the ground lessor and the related Mortgage (taken together), any
related insurance proceeds or the portion of the condemnation award allocable to
the ground lessee’s interest (other than (i) de minimis amounts for minor
casualties or (ii) in respect of a total or substantially total loss or taking
as addressed in subpart (k)) will be applied either to the repair or to
restoration of all or part of the related Mortgaged Property with (so long as
such proceeds are in excess of the threshold amount specified in the related
Mezzanine Loan Documents) the lender or a trustee appointed by it having the
right to hold and disburse such proceeds as repair or restoration progresses, or
to the payment of the outstanding principal balance of the Mezzanine Loan,
together with any accrued interest.

(k) In the case of a total or substantially total taking or loss, under the
terms of such Ground Lease, an estoppel or other agreement and the related
Mortgage (taken together), any related insurance proceeds, or portion of the
condemnation award allocable to ground lessee’s interest in respect of a total
or substantially total loss or taking of the related Mortgaged Property to the
extent not applied to restoration, will be applied first to the payment of the
outstanding principal balance of the Mezzanine Loan (and the related Mortgage
Loan), together with any accrued interest.

(l) Provided that the lender cures any defaults which are susceptible to being
cured, the ground lessor has agreed to enter into a new lease with lender upon
early termination of such Ground Lease for any reason, including rejection of
such Ground Lease in a bankruptcy proceeding.

(28) Servicing. To the Seller’s Knowledge, the servicing and collection
practices used by the Seller with respect to the Mezzanine Loan have been, in
all respects, legal and have met customary industry standards for servicing of
commercial mezzanine loans.

(29) Origination and Underwriting. The origination practices of the Seller, or
any Affiliate of Seller (or, to Seller’s Knowledge, the related originator if
Seller or an Affiliate of Seller was not the originator) with respect to each
Mezzanine Loan have been, in all material respects, legal and as of the date of
its origination, such Mezzanine Loan and the origination thereof complied in all
material respects with, or was exempt from, all requirements of federal, state
or local law relating to the origination of such Mezzanine Loan; provided that
such representation and warranty does not address or otherwise cover any matters
with respect to federal, state or local law otherwise covered in this Exhibit X.

 

Ex. X-32

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(30) No Material Default; Payment Record. No Mezzanine Loan has been more than
thirty (30) days delinquent, without giving effect to any grace or cure period,
in making required payments since origination, and as of the Purchase Date for
the related Mortgage Loan, no Mezzanine Loan is more than thirty (30) days
delinquent (beyond any applicable grace or cure period) in making required
payments. To Seller’s Knowledge, there is (a) no material default, breach,
violation or event of acceleration existing under any Mezzanine Loan, or (b) no
event (other than payments due but not yet delinquent) which, with the passage
of time or with notice and the expiration of any grace or cure period, would
constitute a material default, breach, violation or event of acceleration, which
default, breach, violation or event of acceleration, in the case of either
(a) or (b), materially and adversely affects the value of the Mezzanine Loan or
the value, use or operation of the related Mortgaged Property or Capital Stock,
provided, however, that this representation and warranty does not cover any
default, breach, violation or event of acceleration that specifically pertains
to or arises out of an exception scheduled to any other representation and
warranty made by the Seller in this Exhibit X. No person other than the holder
of such Mezzanine Loan may declare any event of default under the Mezzanine Loan
or accelerate any indebtedness under the Mezzanine Loan Documents.

(31) Bankruptcy. As of the date of origination of each Mezzanine Loan and to the
Seller’s Knowledge as of the Purchase Date for the related Mortgage Loan,
neither the related Mortgaged Property (other than any tenants of such Mortgaged
Property), nor any portion thereof, nor the Capital Stock, is the subject of,
and no related Mortgagor, Mezzanine Borrower, guarantor or tenant occupying a
single-tenant property is a debtor in, any state or federal bankruptcy,
insolvency or similar proceeding.

(32) Organization of Mezzanine Borrower. With respect to each Mezzanine Loan, in
reliance on certified copies of the organizational documents of the related
Mezzanine Borrower delivered by such Mezzanine Borrower in connection with the
origination of such Mezzanine Loan, such Mezzanine Borrower is an entity
organized under the laws of a state of the United States of America, the
District of Columbia or the Commonwealth of Puerto Rico. Except with respect to
any Mezzanine Loan that is cross-collateralized or cross-defaulted with another
Mezzanine Loan, no Mezzanine Loan has a Mezzanine Borrower that is an affiliate
of a Mezzanine Borrower with respect to another Mezzanine Loan.

(33) Environmental Conditions. An ESA meeting ASTM requirements was conducted by
a reputable environmental consultant in connection with the origination of such
Mezzanine Loan within twelve (12) months prior to its origination date, and such
ESA (i) did not identify the existence of recognized environmental conditions
(as such term is defined in ASTM E1527-05 or its successor, hereinafter
“Environmental Condition”) at the related Mortgaged Property (indirectly
securing the Mezzanine Loan and securing the related Mortgage Loan) or the need
for further investigation, or (ii) if the existence of an Environmental
Condition or need for further investigation was indicated in any such ESA, then
at least one of the following statements is true: (A) an amount reasonably
estimated by a reputable environmental consultant to be sufficient to cover the
estimated cost to cure any material noncompliance with applicable Environmental
Laws or the Environmental Condition has been escrowed by the related Mortgagor
and is held by the related lender;

 

Ex. X-33

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(B) if the only Environmental Condition relates to the presence of
asbestos-containing materials, radon in indoor air, lead based paint or lead in
drinking water, the only recommended action in the ESA is the institution of
such a plan, an operations or maintenance plan has been required to be
instituted by the Mezzanine Borrower (or by the related Mortgagor under the
related Mortgage Loan) that can reasonably be expected to mitigate the
identified risk; (C) the Environmental Condition identified in the related
environmental report was remediated or abated in all material respects prior to
the Purchase Date and, if and as appropriate, a no further action or closure
letter was obtained from the applicable governmental regulatory authority (or
the environmental issue affecting such related Mortgaged Property was otherwise
listed by such governmental authority as “closed” or a reputable environmental
consultant has concluded that no further action is required); (D) an
environmental policy or a lender’s pollution legal liability insurance policy
meeting the requirements set forth below that covers liability for the
identified circumstance or condition was obtained from an insurer rated no less
than A- (or the equivalent) by Moody’s, S&P and/or Fitch; (E) a party not
related to the Mortgagor and Mezzanine Borrower was identified as the
responsible party for such condition or circumstance and such responsible party
has financial resources reasonably estimated to be adequate to address the
situation; or (F) a party related to the Mortgagor and Mezzanine Borrower having
financial resources reasonably estimated to be adequate to address the situation
is required to take action. To Seller’s Knowledge, except as set forth in the
ESA, there is no Environmental Condition (as such term is defined in ASTM
E1527-05 or its successor) at any related Mortgaged Property.

(34) Appraisal. The Purchased Asset Files contains an appraisal of the related
Mortgaged Property (indirectly securing the Mezzanine Loan and securing the
related Mortgage Loan) with an appraisal date within six (6) months of the
Mezzanine Loan origination date. The appraisal is signed by an appraiser who is
a Member of the Appraisal Institute and, to Seller’s Knowledge, had no interest,
direct or indirect, in the related Mortgaged Property or the Capital Stock or
the related Mortgagor or Mezzanine Borrower or in any loan made on the security
thereof, and whose compensation is not affected by the approval or disapproval
of the Mezzanine Loan. Each appraiser has represented in such appraisal or in a
supplemental letter that the appraisal satisfies the requirements of the
“Uniform Standards of Professional Appraisal Practice” as adopted by the
Appraisal Standards Board of the Appraisal Foundation.

(35) Transaction Request. The information pertaining to each Purchased Asset
which is set forth in the related Transaction Request delivered to Buyer is true
and correct in all material respects as of the Purchase Date and contains all
information required by the Agreement to be contained therein.

(36) Cross-Collateralization. No Mezzanine Loan is cross-collateralized or
cross-defaulted with any other Mortgage Loan or Mezzanine Loan, except as set
forth in the Requested Exception Report.

 

Ex. X-34

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(37) Advance of Funds by the Seller. After origination of each Mezzanine Loan,
no advance of funds has been made by the Seller to the related Mezzanine
Borrower other than in accordance with the related Mezzanine Loan Documents,
and, to the Seller’s Knowledge, no funds have been received from any person
other than the related Mezzanine Borrower or an Affiliate of the related
Mezzanine Borrower for, or on account of, payments due on such Mezzanine Loan
(other than as contemplated by the related Mezzanine Loan Documents, such as, by
way of example and not in limitation of the foregoing, amounts paid by the
tenant(s) into a lender-controlled lockbox if required or contemplated under the
related lease or the related Mezzanine Loan Documents). Neither the Seller nor
any Affiliate thereof has any obligation to make any capital contribution to any
Mezzanine Borrower under a Mezzanine Loan, other than contributions made on or
prior to the date hereof.

(38) Compliance with Anti-Money Laundering Laws. The Seller has complied in all
material respects with all applicable anti-money laundering laws and
regulations, including without limitation the Patriot Act with respect to the
origination of such Mezzanine Loan (or related Mortgage Loan, as applicable)
originated by it.

(39) Affiliates. The related Mezzanine Borrower is not an Affiliate of the
Seller.

 

Ex. X-35

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EXHIBIT XI

FORM OF JOINDER AGREEMENT

This JOINDER AGREEMENT (this “Joinder Agreement”) dated as of [•], is made by
and among NSREIT CB Loan, LLC, CB Loan NT-II, LLC, CLNC Credit 3, LLC and CLNC
Credit 4, LLC, [ADD OTHER PREVIOUSLY ADDED SELLERS] each a Delaware limited
liability company (collectively, the “Existing Sellers”),
[                    ], a Delaware limited liability company (the “Joining
Seller”) and Citibank, N.A. (“Buyer”).

W I T N E S S E T H:

WHEREAS, Existing Sellers and Buyer, entered into that certain Master Repurchase
Agreement, dated as of April 23, 2018 (as the same may be amended, supplemented,
extended, restated, replaced or otherwise modified from time to time, the
“Repurchase Agreement”), pursuant to which Existing Sellers agreed to sell to
Buyer certain Eligible Assets upon the terms and subject to the conditions set
forth therein (each such transaction, a “Transaction”);

WHEREAS, all capitalized terms used herein and not otherwise defined shall have
the respective meanings set forth in the Repurchase Agreement; and

WHEREAS, Existing Sellers and Buyer desire to modify certain terms and
provisions of the Repurchase Agreement and the other Transaction Documents to
admit Joining Seller to the Repurchase Agreement and the other Transaction
Documents as a Seller in accordance with this Joinder Agreement.

NOW, THEREFORE, in order to induce Buyer to enter into a Transaction with
Joining Seller, and in consideration of the benefit Joining Seller will derive
from Buyer entering into such Transaction, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, Joining Seller hereby agrees as follows:

1. In consideration of Joining Seller becoming a Seller entitled to enter into
Transactions with Buyer under and subject to the terms and conditions of the
Repurchase Agreement, Joining Seller hereby agrees that, effective as of the
date hereof, Joining Seller is, and shall be deemed to be, a “Seller” under the
Repurchase Agreement and each of the other Transaction Documents to which a
Seller is a party (including, without limitation, the Fee Letter), and agrees
that from the date hereof and so long as the Repurchase Obligations remain
outstanding, Joining Seller hereby assumes the obligations of a “Seller” under,
and Joining Seller shall perform, comply with and be subject to and bound by
each of the terms, covenants and conditions of the Repurchase Agreement and each
of the other Transaction Documents which are stated to apply to or are made by a
Seller (including, without limitation, the Fee Letter). Without limiting the
generality of the foregoing, Joining Seller hereby represents and warrants that
(i) each of the representations and warranties set forth in the Repurchase
Agreement are true and correct as to Joining Seller on and as of the date hereof
and (ii) Joining Seller has received true and correct copies of the Repurchase
Agreement and each of the other Transaction Documents as in effect on the date
hereof.

 

XI-1

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2. In furtherance of the foregoing, Joining Seller shall execute and deliver or
cause to be executed and delivered, at any time and from time to time, such
further instruments and documents, and shall do or cause to be done such further
commercially reasonable acts, as may be reasonably necessary or proper in the
opinion of Buyer to carry out more effectively the provisions and purposes of
this Joinder Agreement and the Repurchase Agreement.

3. The Existing Sellers and Joining Seller each acknowledge and agree that,
except as modified by this Joinder Agreement, the Repurchase Agreement and each
of the other Transaction Documents remains unmodified and in full force and
effect and all of the terms, covenants and conditions thereof are hereby
ratified and confirmed in all respects.

4. Notice information for Joining Seller for purposes of Section 16 and Annex I
of the Repurchase Agreement and each other applicable Transaction Document shall
be as specified in the signature pages hereto for Joining Seller, or at such
other address and person as shall be designated from time to time in a written
notice to the other parties hereto in the manner provided for in Section 16 of
the Repurchase Agreement.

5. THIS JOINDER AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.

6. This Joinder Agreement may be executed in any number of counterparts, and all
such counterparts shall together constitute the same agreement. Signatures
delivered by email (in PDF format) shall be considered binding with the same
force and effect as original signatures.

[Remainder of page intentionally left blank; signatures follow on next page.]

 

XI-2

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IN WITNESS WHEREOF, each of Joining Seller, Exiting Sellers and Buyer has duly
executed and delivered this Joinder Agreement as of the date and year first
above written.

 

JOINING SELLER:

[•]

By:

     

Name:

 

Title:

 

XI-3

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EXISTING SELLERS:

NSREIT CB LOAN, LLC

By:

     

Name:

 

Title:

CB LOAN NT-II, LLC

By:

     

Name:

 

Title:

CLNC CREDIT 3, LLC

By:

     

Name:

 

Title:

CLNC CREDIT 4, LLC

By:

     

Name:

 

Title:

 

XI-4

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BUYER:

CITIBANK, N.A.

By:

     

Name:

 

Title:

 

XI-5