Exhibit 10.8

 

 

 

MASTER REPURCHASE AND SECURITIES CONTRACT

dated as of June 7, 2013

by and between

SVP 2013 FINANCE, LLC,

Seller

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

Agent, Initial Buyer, Lead Arranger and Syndication Agent

 

 

 

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TABLE OF CONTENTS

 

          Page  

ARTICLE 1

  

APPLICABILITY

     1   

Section 1.01

  

Applicability

     1   

ARTICLE 2

  

DEFINITIONS AND INTERPRETATION

     1   

Section 2.01

  

Rules of Interpretation

     25   

ARTICLE 3

  

THE TRANSACTIONS

     26   

Section 3.01

  

Procedures

     26   

Section 3.02

  

Transfer of Purchased Asset; Servicing Rights

     27   

Section 3.03

  

Disbursement to Seller

     28   

Section 3.04

  

Early Repurchase Date; Voluntary Reduction of Purchase Price; Mandatory
Reductions of Purchase Price

     28   

Section 3.05

  

Repurchase

     29   

Section 3.06

  

Extension Option

     29   

Section 3.07

  

Payment of Price Differential and Fees

     32   

Section 3.08

  

Payment, Transfer and Custody

     32   

Section 3.09

  

Repurchase Obligations Absolute

     33   

ARTICLE 4

  

CONVERSION OF PURCHASED ASSET TO REO PROPERTY

     33   

Section 4.01

  

Conversion of Purchased Asset to REO Property

     33   

Section 4.02

  

Conversion Conditions

     34   

Section 4.03

  

Recording

     36   

Section 4.04

  

Environmental Compliance

     36   

Section 4.05

  

Completion of Conversion

     37   

ARTICLE 5

  

APPLICATION OF INCOME

     37   

Section 5.01

  

Waterfall Account

     37   

Section 5.02

  

Before an Event of Default

     38   

Section 5.03

  

After Event of Default

     39   

Section 5.04

  

Seller to Remain Liable

     39   

ARTICLE 6

  

CONDITIONS PRECEDENT; POST CLOSING OBLIGATION

     40   

Section 6.01

  

Conditions Precedent to Closing Date

     40   

Section 6.02

  

Conditions Precedent to the Transaction

     40   

ARTICLE 7

  

REPRESENTATIONS AND WARRANTIES OF SELLER

     42   

Section 7.01

  

Seller

     42   

Section 7.02

  

Repurchase Documents

     42   

Section 7.03

  

Solvency

     43   

Section 7.04

  

Taxes

     43   

Section 7.05

  

Financial Condition

     43   

Section 7.06

  

True and Complete Disclosure

     44   

Section 7.07

  

Compliance with Laws

     44   

Section 7.08

  

Compliance with ERISA

     44   

 

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TABLE OF CONTENTS

(continued)

 

          Page  

Section 7.09

  

No Default

     45   

Section 7.10

  

Purchased Asset

     45   

Section 7.11

  

Intentionally Omitted

     45   

Section 7.12

  

Transfer and Security Interest

     45   

Section 7.13

  

No Broker

     46   

Section 7.14

  

Separateness

     46   

ARTICLE 8

  

COVENANTS OF SELLER

     46   

Section 8.01

  

Existence; Governing Documents; Conduct of Business

     46   

Section 8.02

  

Compliance with Laws, Contractual Obligations and Repurchase Documents

     47   

Section 8.03

  

Protection of Buyer’s Interest in Purchased Asset

     47   

Section 8.04

  

Actions of Seller Relating to Distributions, Indebtedness, Guarantee
Obligations, Contractual Obligations, Investments and Liens

     48   

Section 8.05

  

Delivery of Income

     48   

Section 8.06

  

Delivery of Financial Statements and Other Information

     49   

Section 8.07

  

Delivery of Notices

     50   

Section 8.08

  

Intentionally Omitted

     50   

Section 8.09

  

Material Actions, Etc

     50   

Section 8.10

  

Maintenance of Property, Insurance and Records

     51   

Section 8.11

  

Tax Treatment of Seller

     51   

Section 8.12

  

Reserve Accounts

     51   

Section 8.13

  

Appraisals

     51   

ARTICLE 9

  

SINGLE-PURPOSE ENTITY

     52   

Section 9.01

  

Covenants Applicable to Seller

     52   

Section 9.02

  

Covenants Applicable to Seller

     53   

Section 9.03

  

Reliance

     53   

ARTICLE 10

  

EVENTS OF DEFAULT AND REMEDIES

     54   

Section 10.01

  

Events of Default

     54   

Section 10.02

  

Remedies of Agent as Owner of the Purchased Asset

     56   

ARTICLE 11

  

SECURITY INTEREST

     57   

Section 11.01

  

Grant

     57   

Section 11.02

  

Effect of Grant

     58   

Section 11.03

  

Seller to Remain Liable

     58   

Section 11.04

  

Waiver of Certain Laws

     58   

ARTICLE 12

  

INCREASED COSTS; CAPITAL ADEQUACY

     59   

Section 12.01

  

Market Disruption

     59   

Section 12.02

  

Illegality

     59   

Section 12.03

  

Breakfunding

     59   

 

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TABLE OF CONTENTS

(continued)

 

          Page  

Section 12.04

  

Increased Costs

     59   

Section 12.05

  

Capital Adequacy

     60   

Section 12.06

  

Withholding Taxes

     60   

Section 12.07

  

Payment and Survival of Obligations

     62   

ARTICLE 13

  

INDEMNITY AND EXPENSES

     63   

Section 13.01

  

Indemnity

     63   

Section 13.02

  

Expenses

     65   

ARTICLE 14

  

INTENT

     65   

Section 14.01

  

Safe Harbor

     65   

Section 14.02

  

Right to Liquidate

     65   

Section 14.03

  

Qualified Financial Contract

     66   

Section 14.04

  

Netting Contract

     66   

Section 14.05

  

Master Netting Agreement

     66   

ARTICLE 15

  

DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

     66   

ARTICLE 16

  

NO RELIANCE

     67   

ARTICLE 17

  

AGENT

     67   

Section 17.01

  

Reliance

     67   

Section 17.02

  

Knowledge

     68   

Section 17.03

  

No Representations; No Reliance

     68   

Section 17.04

  

Indemnification by Buyer

     68   

Section 17.05

  

Free Agent

     69   

Section 17.06

  

Exclusive Agent

     69   

Section 17.07

  

Resignation

     69   

Section 17.08

  

Administration

     69   

Section 17.09

  

Foreclosure; Post-Foreclosure Operations

     73   

ARTICLE 18

  

MISCELLANEOUS

     74   

Section 18.01

  

Governing Law

     74   

Section 18.02

  

Submission to Jurisdiction; Service of Process

     74   

Section 18.03

  

IMPORTANT WAIVERS

     75   

Section 18.04

  

Integration

     76   

Section 18.05

  

Intentionally Omitted

     76   

Section 18.06

  

Use of Employee Plan Assets

     76   

Section 18.07

  

Survival and Benefit of Seller’s Agreements

     76   

Section 18.08

  

Assignments and Participations

     76   

Section 18.09

  

Ownership and Hypothecation of Purchased Asset

     78   

Section 18.10

  

Confidentiality

     79   

Section 18.11

  

No Implied Waivers

     79   

Section 18.12

  

Notices and Other Communications

     80   

 

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TABLE OF CONTENTS

(continued)

 

          Page  

Section 18.13

  

Counterparts; Electronic Transmission

     80   

Section 18.14

  

No Personal Liability

     80   

Section 18.15

  

Protection of Buyer’s Interests in the Purchased Asset; Further Assurances

     80   

Section 18.16

  

Default Rate

     82   

Section 18.17

  

Set-off

     82   

Section 18.18

  

Seller’s Waiver of Setoff

     83   

Section 18.19

  

Power of Attorney; Release of Purchased Asset and Purchased Asset Documents

     83   

Section 18.20

  

Periodic Due Diligence Review

     84   

Section 18.21

  

Time of Essence

     85   

Section 18.22

  

Patriot Act Notice

     85   

Section 18.23

  

Successors and Assigns

     85   

Section 18.24

  

Acknowledgement of Anti-Predatory Lending Policies

     85   

Section 18.25

  

Servicing

     85   

Section 18.26

  

Funds Transfer Disbursements

     86   

 

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ANNEXES, SCHEDULES AND EXHIBITS

 

ANNEXES    ANNEX I    Names and Addresses for Communications Between Parties

 

SCHEDULES

   SCHEDULE I    Asset, Applicable Purchase Percentage and Original Purchase
Price SCHEDULE II    Representations and Warranties with respect to Asset
SCHEDULE III    Reserve Balances

 

EXHIBITS

   EXHIBIT A    Form of Transaction Request EXHIBIT B    Form of Confirmation
EXHIBIT C    Form of Irrevocable Redirection Notice EXHIBIT D-1    Form of
Closing Certificate EXHIBIT D-2    Form of Compliance Certificate EXHIBIT E   
Form of Power of Attorney EXHIBIT F    Form of Assignment and Acceptance EXHIBIT
G    Transfer Authorizer Designation

 

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THIS MASTER REPURCHASE AND SECURITIES CONTRACT, dated as of June 7, 2013 (this
“Agreement”), is made by and among SVP 2013 FINANCE, LLC, a Delaware limited
liability company (“Seller”), WELLS FARGO BANK, NATIONAL ASSOCIATION, a national
banking association (the initial “Buyer”) and WELLS FARGO BANK, NATIONAL
ASSOCIATION, a national banking association, as Agent for the initial Buyer (in
such capacity, the “Agent”). Seller, Agent and initial Buyer (each a “Party”)
hereby agree as follows:

ARTICLE 1

APPLICABILITY

Section 1.01 Applicability. Subject to the terms and conditions of the
Repurchase Documents, on or prior to the Funding Expiration Date and at the
request of Seller, the Parties may enter into a transaction in which Seller
agrees to sell, transfer and assign to Agent the Asset and all related rights in
and interests related to the Asset on a servicing released basis, against the
transfer of funds by initial Buyer representing the Original Purchase Price for
the Asset, with a simultaneous agreement by Agent to transfer to Seller and
Seller to repurchase the Asset in a repurchase transaction at a date not later
than the Facility Termination Date, against the transfer of funds by Seller
representing the Repurchase Price for the Asset.

ARTICLE 2

DEFINITIONS AND INTERPRETATION

“Accelerated Repurchase Date”: Defined in Section 10.02.

“Account Bank”: PNC Bank, National Association, or such other bank approved by
Agent.

“Actual Knowledge”: With respect to any Person, the actual knowledge of such
Person without further inquiry or investigation; provided, that for the
avoidance of doubt, such actual knowledge shall include the actual knowledge of
such Person and each of its Responsible Officers.

“Additional Amount”: Defined in Section 12.06(a).

“Affiliate”: With respect to any Person, any other Person directly or indirectly
Controlling, Controlled by, or under common Control with, such Person.

“Agent”: As defined in the introductory paragraph hereof.

“Alternative Rate”: A per annum rate based on an index approximating the
behavior of LIBOR, as reasonably determined by Agent.

“Anti-Terrorism Laws”: Any Requirements of Law relating to money laundering or
terrorism, including Executive Order 13224 signed into law on September 23,
2001, the regulations promulgated by the Office of Foreign Assets Control of the
Treasury Department, and the Patriot Act.

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“Applicable Purchase Percentage”: As of any date, the applicable Buyer purchase
price percentage for the Purchased Asset, as set forth on Schedule I hereto
under the column headed “Buyer Original Purchase Price (%)”.

“Appraisal”: A FIRREA-compliant appraisal, prepared by an Independent Appraiser
and addressed to and reasonably satisfactory to Agent, of the related Mortgaged
Property securing the Purchased Asset.

“Approval Information”: Defined in the definition of Deemed Approval
Requirements.

“Approved Expenses”: (a) Amounts expended which are Protective Advances; and
(b) any expenses with respect to the administration, enforcement, modification,
amendment, restructure or collection of the Transaction (including, without
limitation, any such actions taken with respect to the Purchased Asset) for
which Agent has obtained the prior consent of the Requisite Buyers, if
necessary.

“Approved Representation Exception”: Any Representation Exceptions furnished by
Seller to Agent and approved by Agent prior to the Purchase Date.

“Asset”: The Whole Loan described on Schedule I hereto and all other rights and
interests of Seller under the Purchased Asset Documents in connection therewith.

“Assignment and Acceptance”: Defined in Section 18.08(c).

“Bailee Agreement”: As defined in the Custodial Agreement.

“Bankruptcy Code”: Title 11 of the United States Code, as amended.

“Blank Assignment Documents”: Defined in Section 6.02(i).

“Business Day”: Any day other than (a) a Saturday or a Sunday, (b) a day on
which banks in the States of New York, California or North Carolina are
authorized or obligated by law or executive order to be closed, (c) any day on
which the New York Stock Exchange, the Federal Reserve Bank of New York or the
Custodian is authorized or obligated by law or executive order to be closed, or
(d) if the term “Business Day” is used in connection with the determination of
LIBOR, a day dealings in Dollar deposits are not carried on in the London
interbank market.

“Buyer”: As defined in the introductory paragraph hereof.

“Buyer Reply Period”: Defined in Section 17.08(f).

“Buyer’s Percentage Share”: The meaning set forth in the Fee and Pricing Letter,
which definition is incorporated by reference herein.

“Capital Lease Obligations”: With respect to any Person, the amount of all
obligations of such Person to pay rent or other amounts under a lease of
property to the extent and in the amount that such obligations are required to
be classified and accounted for as a capital lease on a balance sheet of such
Person.

 

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

“Change of Control”: Any “person” or “group” (within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended) shall
become, or obtain rights (whether by means of warrants, options or otherwise) to
become, the beneficial owner, directly or indirectly, of more than 49% of the
total voting power of all classes of Equity Interests of Seller entitled to vote
generally in the election of the directors (or the applicable equivalent) other
than Affiliates of Blackstone Mortgage Trust, Inc., a Maryland corporation.

“Closing Certificate”: A certificate in the form of Exhibit D-1, duly executed
by a Responsible Officer of Seller.

“Closing Date”: June 7, 2013.

“Code”: The Internal Revenue Code of 1986, and the regulations promulgated and
rulings issued thereunder, in each case as amended, modified or replaced from
time to time.

“Commitment Fee”: The meaning set forth in the Fee and Pricing Letter, which
definition is incorporated by reference herein.

“Compliance Certificate”: A certificate in the form of Exhibit D-2, duly
executed by a Responsible Officer of Seller.

“Confirmation”: A purchase confirmation in the form of Exhibit B, duly
completed, executed and delivered by Seller and Agent in accordance with
Section 3.01.

“Contractual Obligation”: With respect to any Person, any provision of any
securities issued by such Person or any indenture, mortgage, deed of trust, deed
to secure debt, contract, undertaking, agreement, instrument or other document
to which such Person is a party or by which it or any of its property or assets
are bound or are subject.

“Control”: 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 ability to exercise voting power, by contract or
otherwise. “Controlling,” “Controlled” and “under common Control” have
correlative meanings.

“Controlled Account Agreement”: A control agreement with respect to the
Waterfall Account among Seller, Agent and Account Bank.

“Conversion Conditions”: Defined in Section 4.02.

“Conversion Date”: Defined in Section 4.01.

 

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“Convert,” “Conversion” or “Converted”: With respect to the Purchased Asset, the
conversion of such Purchased Asset into a fee interest in REO Property, whether
by way of foreclosure, deed in lieu of foreclosure of such Purchased Asset or
otherwise, in each case in accordance with Article 4 hereof.

“Current Buyer”: A Buyer which is not a Defaulting Buyer.

“Custodial Agreement”: The Custodial Agreement, dated as of the date hereof,
among Agent, Seller and Custodian.

“Custodian”: Wells Fargo Bank, National Association, or any successor permitted
by the Custodial Agreement.

“Deemed Approval Requirements”: With respect to any matter that requires Agent’s
approval pursuant to Section 8.09 of this Agreement, (i) no Event of Default
shall have occurred and be continuing (either at the date of any notices
specified below or as of the effective date of any deemed approval), (ii) Seller
shall have sent Agent a written request for approval with respect to such matter
in accordance with the applicable terms and conditions hereof (the “Initial
Notice”), which Initial Notice shall have been (A) accompanied by any and all
required information and documentation relating thereto as may be reasonably
required in order to approve or disapprove such matter (the “Approval
Information”) and (B) marked in bold lettering with the following language:
“AGENT’S RESPONSE IS REQUIRED WITHIN FIVE (5) BUSINESS DAYS OF RECEIPT OF THIS
NOTICE PURSUANT TO THE TERMS OF A MASTER REPURCHASE AND SECURITIES CONTRACT
BETWEEN THE UNDERSIGNED AND AGENT” and the envelope containing the Initial
Notice shall have been marked “PRIORITY-DEEMED APPROVAL MAY APPLY”; (iii) Agent
shall have failed to respond to the Initial Notice within the aforesaid
time-frame; (iv) Seller shall have submitted a second request for approval with
respect to such matter in accordance with the applicable terms and conditions
hereof (the “Second Notice”), which Second Notice shall have been
(A) accompanied by the Approval Information and (B) marked in bold lettering
with the following language: “AGENT’S RESPONSE IS REQUIRED WITHIN FIVE
(5) BUSINESS DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A MASTER
REPURCHASE AND SECURITIES CONTRACT BETWEEN THE UNDERSIGNED AND AGENT” and the
envelope containing the Second Notice shall have been marked “PRIORITY-DEEMED
APPROVAL MAY APPLY”; and (v) Agent shall have failed to respond to the Second
Notice within the aforesaid time-frame. For purposes of clarification, Agent
requesting additional and/or clarified information, in addition to approving or
denying any request (in whole or in part), shall be deemed a response by Agent
for purposes of the foregoing.

“Default”: Any event that, with the giving of notice or the lapse of time, or
both, would become an Event of Default.

“Defaulting Buyer”: Any Buyer which for any reason shall fail or refuse to abide
by its obligations under this Agreement or the other Repurchase Documents within
the time periods specified for performance of such obligation or, if no time
frame is specified, if such failure or refusal continues for a period of five
(5) Business Days.

 

4

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“Default Rate”: As of any date, the Pricing Rate in effect on such date plus 400
basis points (4.00%).

“Derivatives Contract”: Any rate swap transaction, basis swap, credit derivative
transaction, forward rate transaction, commodity swap, commodity option, forward
commodity contract, equity or equity index swap or option, bond or bond price or
bond index swap or option or forward bond or forward bond price or forward bond
index transaction, interest rate option, forward foreign exchange transaction,
cap transaction, floor transaction, collar transaction, currency swap
transaction, cross-currency rate swap transaction, currency option, spot
contract, or any other similar transaction or any combination of any of the
foregoing (including any options to enter into any of the foregoing), whether or
not any such transaction is governed by or subject to any master agreement,
including any obligations or liabilities thereunder.

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

“Dollars” and “$”: Lawful money of the United States of America.

“Early Repurchase Date”: Defined in Section 3.04(b).

“Eligible Asset”: The Asset, provided no Representation Breach exists; provided,
that notwithstanding the existence of a Representation Breach with respect to
the Asset, Agent may, subject to such terms, conditions and requirements as
Agent may require, designate in writing any such non-conforming Asset as an
Eligible Asset, which designation may include a temporary or permanent waiver of
one or more Eligible Asset requirements.

“Eligible Assignee”: Any of the following Persons designated by Agent for
purposes of Section 18.08(b) or Section 18.08(c): (a) any Person that is a
“qualified institutional buyer” (as defined in the Securities Act) and has a
long-term unsecured debt rating of “A” or better by S&P and “A3” or better by
Moody’s or (b) an Affiliate of Agent or any Buyer or (c) any other Person to
which Seller provides consent; provided, that such consent of Seller shall not
be unreasonably withheld, delayed or conditioned, and shall not be required
following the occurrence and during the continuance of an Event of Default. Such
Person shall provide to Seller such duly executed IRS forms as Seller reasonably
requests. Notwithstanding anything herein to the contrary, any such Person must
also be a “qualified transferee” under all Purchased Asset Documents.

“Environmental Laws”: Any federal, state, foreign or local statute, law, rule,
regulation, ordinance, code, guideline, written policy and rule of common law
now or hereafter in effect, and any judicial or administrative interpretation
thereof, including any judicial or administrative order, consent decree or
judgment, relating to the environment, employee health and safety or hazardous
materials, including CERCLA, RCRA, the Federal Water Pollution Control Act, the

 

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Toxic Substances Control Act, the Clean Air Act, the Safe Drinking Water Act,
the Oil Pollution Act of 1990, the Emergency Planning and the Community
Right-to-Know Act of 1986, the Hazardous Material Transportation Act, the
Occupational Safety and Health Act, and any state and local or foreign
counterparts or equivalents.

“Equity Interests”: With respect to any Person, (a) any share, interest,
participation and other equivalent (however denominated) of Capital Stock of (or
other ownership, equity or profit interests in) such Person, (b) any warrant,
option or other right for the purchase or other acquisition from such Person of
any of the foregoing, (c) any security convertible into or exchangeable for any
of the foregoing, and (d) any other ownership or profit interest in such Person
(including partnership, member or trust interests therein), whether voting or
nonvoting, and whether or not such share, warrant, option, right or other
interest is authorized or otherwise existing on any date.

“ERISA”: The Employee Retirement Income Security Act of 1974.

“ERISA Affiliate”: Any person (as defined in Section 3(g) of ERISA which,
together with Seller would be deemed to be a “single employer” within the
meaning of Section 414(b), (c), (m) or (o) of the Code.

“Event of Default”: Defined in Section 10.01.

“Excluded Taxes”: Shall mean, with respect to Agent, any Buyer, any other
recipient of any payment to be made by or on account of any obligation of Seller
hereunder or any other Indemnified Person (each such person a “Tax Indemnity
Beneficiary”), (a) taxes imposed on or measured by its overall net income
(however denominated), and franchise taxes imposed on it (in lieu of net income
taxes), by the jurisdiction (or any political subdivision thereof) under the
laws of which such Tax Indemnity Beneficiary is organized, in which its
principal office is located, conducts business or is paying tax or, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which Seller is located, (c) any U.S. federal withholding tax
imposed on “withholdable payments”, if a Tax Indemnity Beneficiary is a “foreign
financial institution” that fails to comply with the requirements of section
1471(b) of the Code or a “non-financial foreign entity” that fails to comply
with section 1472(b) of the Code, each as in effect on the date hereof, or
Treasury regulations or administrative guidance promulgated thereunder, and
(d) any withholding taxes to the extent attributable to a failure to comply with
Section 12.06(d) or 12.06(f).

“Extended Facility Termination Date”: Defined in Section 3.06.

“Extension Exercise Notice”: Defined in Section 3.06.

“Extension Fee”: The meaning set forth in the Fee and Pricing Letter, which
definition is incorporated by reference herein.

“Facility Termination Date”: The earliest of (a) June 7, 2016 (or the next
Business Day thereafter if June 7, 2016 is not a Business Day), as such date may
be extended pursuant to Section 3.06, (b) any Accelerated Repurchase Date,
(c) any date on which the Facility

 

6

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Termination Date shall otherwise occur in accordance with Requirements of Law or
(d) if the Transaction has not occurred on or prior to the Funding Expiration
Date, the Funding Expiration Date.

“FDIA”: Defined in Section 14.03.

“FDICIA”: Defined in Section 14.04.

“Fee and Pricing Letter”: The fee and pricing letter, dated as of the date
hereof, between Agent, for the benefit of each Buyer and Seller.

“Fees”: The meaning set forth in the Fee and Pricing Letter, which definition is
incorporated by reference herein.

“FIRREA”: The Financial Institutions Reform, Recovery and Enforcement Act of
1989, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.

“Funding Expiration Date”: The earliest of (a) Forty-five (45) days following
the Closing Date (i.e., July 22, 2013), or such later date approved by Agent
pursuant to written notice delivered to Seller by Agent on or prior to such date
that is forty-five (45) days following the Closing Date, (b) the Purchase Date
and (c) any date on which the Funding Expiration Date shall otherwise occur in
accordance with Requirements of Law.

“GAAP”: Generally accepted accounting principles as in effect from time to time
in the United States, consistently applied.

“Governing Documents”: With respect to any Person, its articles or certificate
of incorporation or formation, by-laws, partnership, limited liability company,
memorandum and articles of association, operating or trust agreement and/or
other organizational, charter or governing documents.

“Governmental Authority”: Any (a) nation or government, (b) state or local or
other political subdivision thereof, (c) central bank or similar monetary or
regulatory authority, (d) Person, agency, authority, instrumentality, court,
regulatory body, central bank or other body or entity exercising executive,
legislative, judicial, taxing, quasi-judicial, quasi-legislative, regulatory or
administrative functions or powers of or pertaining to government, (e) court or
arbitrator having jurisdiction over such Person, its Affiliates or its assets or
properties, (f) stock exchange on which shares of stock of such Person are
listed or admitted for trading, (g) accounting board or authority that is
responsible for the establishment or interpretation of national or international
accounting principles, and (h) supra-national body such as the European Union or
the European Central Bank.

“Guarantee Agreement”: A Limited Guarantee Agreement made by Guarantor in favor
of Agent, for the benefit of each Buyer.

“Guarantee Obligation”: With respect to any Person (the “guaranteeing person”),
any obligation of (a) the guaranteeing person or (b) another Person (including
any bank under any letter of credit) to induce the creation of the obligations
for which the guaranteeing person has

 

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issued a reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends,
Contractual Obligation, Derivatives Contract or other obligations or
indebtedness (the “primary obligations”) of any other third Person (the “primary
obligor”) in any manner, whether directly or indirectly, including any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation, or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation, or (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; provided, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the maximum stated
amount of the primary obligation relating to such Guarantee Obligation (or, if
less, the maximum stated liability set forth in the instrument embodying such
Guarantee Obligation); provided, that in the absence of any such stated amount
or stated liability, the amount of such Guarantee Obligation shall be such
guaranteeing person’s maximum anticipated liability in respect thereof as
reasonably determined by such Person.

“Guarantor”: Individually and collectively, the parties named as such in the
Guarantee Agreement.

“Hazardous Substances”: Any and all substances (whether solid, liquid or gas)
defined, listed, or otherwise classified as pollutants, hazardous wastes,
hazardous substances, hazardous materials, extremely hazardous wastes, or words
of similar meaning or regulatory effect under any present or future
Environmental Laws or that may have a negative impact on human health or the
environment, including but not limited to petroleum and petroleum products,
asbestos and asbestos-containing materials, polychlorinated biphenyls, lead,
radon, radioactive materials, flammables, explosives, mold, mycotoxins,
microbial matter and airborne pathogens (naturally occurring or otherwise), but
excluding substances of kinds and in amounts ordinarily and customarily used or
stored in similar properties for the purpose of cleaning or other maintenance or
operations and otherwise in compliance with all Environmental Laws.

“Income”: All of the following (in each case with respect to the entire par
amount of the Asset represented by the Purchased Asset and not just with respect
to the portion of the par amount represented by the Purchase Price advanced
against the Asset): (a) all Principal Payments, (b) all Interest Payments, and
(c) all other income, distributions, receipts, payments, collections,
prepayments, recoveries, proceeds (including insurance and condemnation
proceeds) and other payments or amounts of any kind paid, received, collected,
recovered or distributed on, in connection with or in respect of the Purchased
Asset, including Principal Payments, Interest Payments, principal and interest
payments, prepayment fees, extension fees, exit fees, defeasance fees, transfer
fees, make whole fees, late charges, late fees and all other fees or charges of
any kind or nature, premiums, yield maintenance charges, penalties, default
interest, dividends, gains, receipts, allocations, rents, interests, profits,
payments in kind, returns or repayment of contributions, net sale, foreclosure,
liquidation, securitization or other disposition proceeds,

 

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insurance payments, settlements and proceeds; provided, that any amounts that
under the Purchased Asset Documents are required to be deposited into and held
in escrow or reserve to be used for a specific purpose, such as taxes and
insurance, shall not be included in the term “Income” unless and until such
amounts may be applied to all or a portion of the outstanding indebtedness under
the Purchased Asset Documents.

“Indebtedness”: With respect to any Person and any date, all of the following
with respect to such Person as of such date: (a) obligations in respect of money
borrowed, (b) obligations, whether or not for money borrowed (i) represented by
notes payable, letters of credit or drafts accepted, in each case representing
extensions of credit, (ii) evidenced by bonds, debentures, notes or similar
instruments, (iii) constituting purchase money indebtedness, conditional sales
contracts, title retention debt instruments or other similar instruments, upon
which interest charges are customarily paid or that are issued or assumed as
full or partial payment for property or services rendered, or (iv) in connection
with the issuance of Preferred Equity or trust preferred securities, (c) Capital
Lease Obligations, (d) reimbursement obligations under any letters of credit or
acceptances (whether or not the same have been presented for payment),
(e) Off-Balance Sheet Obligations, (f) obligations to purchase, redeem, retire,
defease or otherwise make any payment in respect of any mandatory redeemable
stock issued by such Person or any other Person (inclusive of forward equity
contracts), valued at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends, (g) as applicable, all obligations
of such Person (but not the obligation of others) in respect of any keep well
arrangements, and, in the case of Seller only, contingent or future funding
obligations under the Purchased Asset, purchase obligation, repurchase
obligation, sale/buy-back agreement, takeout commitment or forward equity
commitment or credit enhancements, in each case evidenced by a binding agreement
(excluding any such obligation to the extent the obligation can be satisfied by
the issuance of Equity Interests (other than mandatory redeemable stock)),
(h) net obligations under any Derivatives Contract not entered into as a hedge
against existing indebtedness, in an amount equal to the Derivatives Termination
Value thereof, (i) all Non-Recourse Indebtedness, recourse indebtedness and all
indebtedness of other Persons that such Person has guaranteed or is otherwise
recourse to such Person, (j) all indebtedness of another Person secured by (or
for which the holder of such indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien (other than certain Permitted Liens) on
property or assets owned by such Person, even though such Person has not assumed
or become liable for the payment of such indebtedness or other payment
obligation; provided, that if such Person has not assumed or become liable for
the payment of such indebtedness, then for the purposes of this definition the
amount of such indebtedness shall not exceed the market value of the property
subject to such Lien, (k) all Guarantee Obligations with respect to
Indebtedness, (l) all obligations of such Person incurred in connection with the
acquisition or carrying of fixed assets by such Person or obligations of such
Person to pay the deferred purchase or acquisition price of property or assets,
including contracts for the deferred purchase price of property or assets that
include the procurement of services, (m) indebtedness of general partnerships of
which such Person is liable as a general partner (whether secondarily or
contingently liable or otherwise), and (n) obligations to fund capital
commitments under any Governing Document, subscription agreement or otherwise,
except to the extent such indebtedness provides that such Person is not liable
therefor.

“Indemnified Amount”: Defined in Section 13.01(a).

 

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“Indemnified Person”: Defined in Section 13.01(a).

“Independent”: As to any Person, any other Person who (i) does not have and is
not committed to acquire any material direct or any material indirect financial
interest in such Person or in any Affiliate of such Person, and (ii) is not
connected with such Person as an officer, employee, promoter, underwriter,
voting trustee, partner, director or Person performing similar functions.

“Independent Appraiser”: An independent professional real estate appraiser who
is a member in good standing of the American Appraisal Institute and, if the
state in which the subject Mortgaged Property is located certifies or licenses
appraisers, is certified or licensed in such state, and in each case having a
minimum of five (5) years experience in the subject property type.

“Independent Manager”: An individual who has prior experience as an independent
director, independent manager or independent member with at least three
(3) years of employment experience and who is provided by CT Corporation,
Corporation Service Company, National Registered Agents, Inc., Wilmington Trust
Company, Stewart Management Company, Lord Securities Corporation or, if none of
those companies is then providing professional independent directors,
independent managers or independent members, another nationally recognized
company reasonably approved by Agent, in each case that is not an Affiliate of
Seller and that provides professional independent directors, independent
managers or independent members and other corporate services in the ordinary
course of its business, and which individual is duly appointed as a member of
the board of managers of Seller and is not, has never been, and will not while
serving as Independent Manager be, any of the following:

(a) a member, partner, equity holder, manager, director, officer or employee of
Seller, Guarantor, any of their respective equity holders or Affiliates (other
than (a) as an Independent Manager of Seller or Guarantor and (b) as an
Independent Manager of an Affiliate of Seller or Guarantor or any of their
respective single-purpose entity equity holder that is not in the direct chain
of ownership of Seller or Guarantor and that is required by a creditor to be a
single purpose bankruptcy remote entity, provided that such Independent Manager
is employed by a company that routinely provides professional independent
directors, independent managers or independent members);

(b) a creditor, supplier or service provider (including provider of professional
services) to Seller, any single-purpose entity equity holder, or any of their
respective equity holders or Affiliates (other than a nationally-recognized
company that routinely provides professional independent directors, independent
managers or independent members and other corporate services to Seller, any
single-purpose entity equity holder, or any of their respective equity holders
or Affiliates in the ordinary course of business);

(c) a family member of any such member, partner, equity holder, manager,
director, officer, employee, creditor, supplier or service provider; or

(d) a Person that controls (whether directly, indirectly or otherwise) any of
the individuals described in the preceding clauses (a), (b) or (c).

 

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An individual who otherwise satisfies the preceding definition other than clause
(a) by reason of being the Independent Manager of a special purpose entity
affiliated with Seller or Guarantor shall not be disqualified from serving as an
Independent Manager of Seller or Guarantor if the fees that such individual
earns from serving as Independent Managers of affiliates of Seller or Guarantor
in any given year constitute in the aggregate less than 5% of such individual’s
annual income for that year.

“Initial Notice”: Defined in the definition of Deemed Approval Requirements.

“Insolvency Action”: With respect to any Person, the taking by such Person of
any action resulting in an Insolvency Event, other than solely under clause
(g) of the definition thereof.

“Insolvency Event”: With respect to any Person, (a) the filing of a decree or
order for relief by a court having jurisdiction in the premises with respect to
such Person or any substantial part of its assets or property in an involuntary
case under any applicable Insolvency Law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official for such Person or for any substantial part of its assets or
property, or ordering the winding-up or liquidation of such Person’s affairs,
and such decree or order shall remain unstayed and in effect for a period of
sixty (60) days, (b) the commencement by such Person of a voluntary case under
any applicable Insolvency Law now or hereafter in effect, (c) the consent by
such Person to the entry of an order for relief in an involuntary case under any
Insolvency Law, (d) the consent by such Person to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
or similar official for such Person or for any substantial part of its assets or
property, (e) the making by such Person of any general assignment for the
benefit of creditors, (f) such Person is not Solvent, (g) the failure by such
Person generally to pay its debts as they become due, or (h) the taking of
action by such Person in furtherance of any of the foregoing.

“Insolvency Laws”: The Bankruptcy Code and all other applicable liquidation,
conservatorship, bankruptcy, 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.

“Insolvency Proceeding”: Any case, action or proceeding before any court or
other Governmental Authority relating to any Insolvency Event.

“Interest Payments”: All payments of interest, income, receipts, dividends, and
any other collections and distributions received from time to time in connection
with the Purchased Asset (other than Principal Payments and any Fees).

“Internal Control Event”: Fraud that involves management or other employees who
have a significant role in, the internal controls of Seller, Guarantor or any
Affiliate of Seller or Guarantor over financial reporting.

“Investment”: With respect to any Person, any acquisition or investment (whether
or not of a controlling interest) by such Person, whether by means of (a) the
purchase or other acquisition of any Equity Interest in another Person, (b) a
loan, advance or extension of credit to, capital contribution to, guaranty or
credit enhancement of Indebtedness of, or purchase or other

 

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acquisition of any Indebtedness of, another Person, including any partnership or
joint venture interest in such other Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute the business or a division or operating unit of
another Person. Any binding commitment or option to make an Investment in any
other Person shall constitute an Investment. Except as expressly provided
otherwise, for purposes of determining compliance with any covenant contained in
this Agreement, the amount of any Investment shall be the amount actually
invested, without adjustment for subsequent increases or decreases in the value
of such Investment.

“Investment Company Act”: The Investment Company Act of 1940, as amended,
restated or modified from time to time, including all rules and regulations
promulgated thereunder.

“Irrevocable Redirection Notice”: A notice in the form of Exhibit C sent by
Seller directing the remittance of Income with respect to the Purchased Asset to
the Waterfall Account.

“Knowledge”: With respect to any Person, means collectively (i) the Actual
Knowledge of such Person and (ii) notice of any fact, event, condition or
circumstance that would cause a reasonably prudent Person to conduct an inquiry
that would give such Person Actual Knowledge, whether or not such Person
actually undertook such an inquiry.

“LIBOR”: The rate of interest per annum determined by Buyer on the basis of the
rate for United States dollar deposits for delivery on the first (1st) day of
each Pricing Period, for a period approximately equal to such Pricing Period, as
reported on Reuters Screen LIBOR01 Page (or any successor page) at approximately
11:00 a.m., London time, two (2) Business Days prior to the first day of the
Pricing Period (or if not so reported, then as determined by Buyer from another
recognized source or interbank quotation).

“LIBO Rate”: For any Pricing Period, LIBOR.

“Lien”: Any mortgage, statutory or other lien, pledge, charge, right, claim,
adverse claim, attachment, levy, hypothecation, assignment, deposit arrangement,
security interest, UCC financing statement or encumbrance of any kind on or
otherwise relating to any Person’s assets or properties in favor of any other
Person or any preference, priority or other security agreement or preferential
arrangement of any kind.

“LTV”: The ratio, expressed as a percentage, of (a) the Purchase Price of the
Purchased Asset as of the applicable Facility Termination Date, taking into
account the application of all Income pursuant to Section 5.02 on such date, to
(b) the value of the Mortgaged Properties securing the Purchased Asset as set
forth in the Appraisals delivered pursuant to Section 3.06.

“Market Disruption Event”: Any event or events which, as determined by Agent,
acting in a reasonable manner, shall have resulted in (i) the effective absence
of a “repo market” or related “lending market” for purchasing (subject to
repurchase) or financing debt obligations secured by commercial mortgage loans
or securities, (ii) Agent or any Buyer not being able to finance mortgage assets
through the “repo market” or “lending market” with traditional counterparties at
rates which would have been reasonable prior to the occurrence of such event or
events, (iii) the effective absence of a “securities market” for securities
backed by mortgage assets or (iv) Agent or any Buyer not being able to sell
securities backed by mortgage assets at prices which would have been reasonable
prior to the occurrence of such event or events.

 

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“Material Action”: Any amendment, waiver or other modification to the terms of
the Purchased Asset or the Purchased Asset Documents, or any other action taken
pursuant to or with respect to the Purchased Asset or a Purchased Asset
Document, which, in each case, would have the effect of:

(a) decreasing the principal of, or interest on, the obligations evidenced by
the related Mortgage Note;

(b) (i) postponing or extending any scheduled date (other than the maturity
date, for which the provisions of clause (b)(ii) below shall apply) fixed for
any payment of principal of, or interest on, the obligations evidenced by the
Mortgage Note, or (ii) extending the maturity date thereunder (other than any
extension of the maturity date thereunder in accordance with the terms, and
satisfying the conditions, of such loan document);

(c) releasing any material portion of the collateral securing the obligations
evidenced by such Mortgage Note (other than any release required by the terms of
the underlying Purchased Asset Document, including, without limitation, releases
of condominium units as and when the same are sold), as applicable;

(d) releasing any obligor thereunder (other than any release required by the
terms of the underlying Purchased Asset Document or described in the
parenthetical to clause (a) above);

(e) waiving a Material Default under the Purchased Asset Documents;

(f) waiving, modifying, reducing or delaying the payment of any material Fees by
the Underlying Obligor with respect to the Purchased Asset;

(g) waiving, modifying, reducing or delaying any condition to the extension of
the maturity date of the Purchased Asset in accordance with the Purchased Asset
Documents; or

(h) (i) exercising any voting, consensual and other powers of ownership
pertaining to any membership interests of the Underlying Obligor as if Seller
were the an owner thereof or (ii) selling, assigning or otherwise disposing of
all or any part of the membership interests of the Underlying Obligor pursuant
to that certain Pledge and Security Agreement, dated as of the date of this
Agreement, by Pledgor in favor of Seller.

“Material Adverse Effect”: A material adverse effect on or material adverse
change in or to (a) the property, business, operations or financial condition of
Seller or Guarantor, (b) the ability of Seller or Guarantor to pay and perform
the Repurchase Obligations, (c) the validity, legality, binding effect or
enforceability of any Repurchase Document, Purchased Asset Document, Purchased
Asset or security interest granted hereunder or thereunder, (d) the rights and
remedies of Agent under any Repurchase Document, Purchased Asset Document or

 

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Purchased Asset, (e) the perfection or priority of any Lien on the Purchased
Asset, taken as a whole, granted under any Repurchase Document or Purchased
Asset Document, in each case, as reasonably determined by Agent or (f) the
nature as a going concern of any Mortgaged Property or Underlying Obligor (it
being understood that a default or event of default with respect to a Purchased
Asset Document, Mortgaged Property or Underlying Obligor shall not constitute a
“Material Adverse Affect” for purposes of this clause (f), which is intended to
relate solely to a catastrophic event with respect to a Mortgaged Property);
provided, however, that this clause (f) shall not apply to any casualty event
affecting any Mortgaged Property for which (x) such casualty is covered by
insurance proceeds under policies issued by Qualified Insurers and evidenced by
certificates of insurance naming Seller or the applicable administrative agent
under the Purchased Asset Documents as an insured party, (y) Seller’s pro rata
share of such insurance proceeds (net of deductibles) is equal to or greater
than the Purchase Price for the Purchased Asset, and (z) Seller provides to
Agent evidence reasonably satisfactory to Agent that such casualty is not
excluded from the coverage of such insurance policies.

“Material Default”: The occurrence and continuance of any of the following
defaults under the terms of the Purchased Asset Documents, regardless of whether
Seller shall have delivered notice to the Underlying Obligor of such default,
but taking into account any cure or grace periods allowed to such Underlying
Obligor in the Purchased Asset Documents:

(a) payment default,

(b) maturity default; provided, however, that a maturity default shall not be a
“Material Default” hereunder if Seller continues to pay as and when due pursuant
to the Repurchase Documents the Price Differential, any reduction in Purchase
Price, and Fees and any other amounts, sums of money, payments, deposits or
premiums due under the Repurchase Documents,

(c) breach of a material representation or a material covenant of which Seller
has Actual Knowledge,

(d) breach of any material provisions of a related guaranty delivered by a
guarantor of the obligations of an Underlying Obligor of which Seller has Actual
Knowledge; and

(e) bankruptcy or insolvency of an Underlying Obligor or any guarantor of the
obligations of an Underlying Obligor.

Notwithstanding the foregoing, a maturity default shall not constitute a
“Material Default” hereunder for so long as (x) Seller has delivered evidence
reasonably acceptable to Agent that Seller is actively and diligently pursuing a
resolution and/or cure of such Material Default under the applicable Purchased
Asset Documents to the extent permitted under Section 8.09 hereof and (y) Seller
continues to pay as and when due pursuant to the Repurchase Documents the Price
Differential, any reduction in Purchase Price, any Fees and any other amounts,
sums of money, payments, deposits or premiums due under the Repurchase
Documents.

 

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“Materials of Environmental Concern”: Any hazardous, toxic or harmful
substances, materials, wastes, pollutants or contaminants defined as such in or
regulated under any Environmental Law.

“Maximum Purchase Price”: An amount equal to eighty-three and thirty-three
one-hundredths percent (83.33%) of the then-outstanding principal balance of the
Asset as of the Purchase Date, as determined by Agent, subject to adjustment
downward only pursuant to Section 6.02 hereof, subject to reduction pursuant to
Section 8.13(b).

“Monetary Default”: The failure by Seller to pay when due any Price
Differential, reduction in Purchase Price or other amounts, sums of money,
payments, deposits or premiums due under the Repurchase Documents, and the
failure by Seller to cure such failure within the applicable notice and cure
period, if any.

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

“Mortgage”: Any mortgage, deed of trust, assignment of rents, security agreement
and fixture filing, or other similar instruments creating and evidencing a lien
on real property and other property and rights incidental thereto.

“Mortgage Note”: An original executed promissory note or other evidence of the
indebtedness of a Mortgagor with respect to a commercial mortgage loan.

“Mortgaged Property”: The real property (including all improvements, buildings,
fixtures, building equipment and personal property thereon and all additions,
alterations and replacements made at any time with respect to the foregoing) and
all other collateral securing repayment of the debt evidenced by the Mortgage
Note.

“Mortgagee”: The record holder of a Mortgage Note secured by a Mortgage.

“Mortgagor”: The obligor on a Mortgage Note, including any Person who has
assumed or guaranteed the obligations of the obligor thereunder.

“New Counterparty Office”: Defined in Section 12.06(d).

“Multiemployer Plan”: A Plan that is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.

“Non-Material Action”: Any amendment, waiver or other modification of the
Purchased Asset or a Purchased Asset Document, or any other action taken
pursuant or with respect to the Purchased Asset or a Purchased Asset Document
(other than a Material Action).

“Non-Monetary Default”: Any Default other than a Monetary Default.

“Non-Principal Income”: Defined in Section 5.02(a).

 

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“Non-Recourse Indebtedness”: With respect to any Person and any date,
indebtedness of such Person as of such date for borrowed money in respect of
which recourse for payment (except for customary exceptions for fraud,
misapplication of funds, environmental indemnities, Insolvency Events,
non-approved transfers or other events) is contractually limited to specific
assets of such Person encumbered by a Lien securing such Indebtedness.

“Non-U.S. Assignee”: Defined in Section 12.06(d).

“Notice of Conversion”: Defined in Section 4.02.

“Off-Balance Sheet Obligations”: With respect to any Person and any date, to the
extent not included as a liability on the balance sheet of such Person, all of
the following with respect to such Person as of such date: (a) monetary
obligations under any financing lease or so-called “synthetic,” tax retention or
off-balance sheet lease transaction that, upon the application of any Insolvency
Laws, would be characterized as indebtedness, (b) monetary obligations under any
sale and leaseback transaction that does not create a liability on the balance
sheet of such Person, or (c) any other monetary obligation arising with respect
to any other transaction that (i) is characterized as indebtedness for tax
purposes but not for accounting purposes, or (ii) is the functional equivalent
of or takes the place of borrowing but that does not constitute a liability on
the balance sheet of such Person (for purposes of this clause (c), any
transaction structured to provide tax deductibility as interest expense of any
dividend, coupon or other periodic payment will be deemed to be the functional
equivalent of a borrowing).

“Original Purchase Price”: With respect to the Purchased Asset the applicable
amount set forth on Schedule I hereto under the column headed “Buyer Original
Purchase Price ($)”.

“Other Taxes”: Defined in Section 12.06(b).

“Participant”: Defined in Section 18.08(b).

“Participant Register”: Defined in Section 18.08(e).

“Patriot Act”: The Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, as amended,
modified or replaced from time to time.

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

“Permitted Liens”: Any of the following as to which no enforcement, collection,
execution, levy or foreclosure proceeding has been commenced: (a) Liens for
state, municipal, local or other local taxes not yet due and payable, (b) Liens
imposed by Requirements of Law, such as materialmen’s, mechanics’, carriers’,
workmen’s, repairmen’s and similar Liens, arising in the ordinary course of
business securing obligations that are not overdue for more than thirty
(30) days, and (c) Liens granted pursuant to or by the Repurchase Documents.

 

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“Person”: An individual, corporation, limited liability company, business trust,
partnership, trust, unincorporated organization, joint stock company, sole
proprietorship, joint venture, Governmental Authority or any other form of
entity.

“Plan”: An employee benefit plan as defined in Section 3(3) of ERISA, subject to
Section 4001(a)(15) of ERISA in respect of which Seller, Guarantor or any ERISA
Affiliate thereof has any actual or potential liability or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to be, an
“employer” as defined in Section 3(5) of ERISA.

“Pledged Collateral”: The membership interests held by Pledgor in the Underlying
Obligor, together with all membership interest certificates, options or rights
of any nature whatsoever which currently exist or hereafter may be issued or
granted by the Underlying Obligor to Pledgor while this Agreement is in effect,
including, without limitation, any certificates evidencing such interests which
have been delivered to Seller.

“Pledgor”: Means SVCA Holdco, LLC, a Delaware limited liability company.

“Post-Foreclosure Plan”: Defined in Section 17.09.

“Preferred Equity”: A performing current pay preferred equity position (with a
put or synthetic maturity date structure replicating a debt instrument)
evidenced by a stock share certificate or other similar ownership certificate
representing the entire equity ownership interest in entities that own income
producing commercial real estate.

“Price Differential”: For any Pricing Period or portion thereof and for each day
during such Pricing Period or portion thereof, (a) 1/360th of the Pricing Rate
in effect during such Pricing Period, times (b) the outstanding Purchase Price.

“Pricing Margin”: Defined in the Fee and Pricing Letter.

“Pricing Period”: Means (a) in the case of the first Remittance Date, the period
from the Purchase Date to but excluding such Remittance Date, and (b) in the
case of any subsequent Remittance Date, the one-month period commencing on and
including the prior Remittance Date and ending on but excluding such Remittance
Date; provided, that no Pricing Period shall end after the Repurchase Date.

“Pricing Rate”: For any Pricing Period, the LIBO Rate for such Pricing Period
plus the applicable Pricing Margin, which shall be subject to adjustment and/or
conversion as provided in Sections 12.01 and 12.02; provided, that while an
Event of Default exists, the Pricing Rate shall be the Default Rate.

“Pricing Rate Reset Date”: (a) In the case of the first Pricing Period, the
Purchase Date, and (b) in the case of any subsequent Pricing Period, the
Business Day immediately preceding the Remittance Date on which such Pricing
Period begins.

 

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“Principal Income”: All Income described in Section 5.01 and deposited into the
Waterfall Account during each Pricing Period representing Principal Payments
(other than any Fees).

“Principal Payments”: All payments and prepayments (in whole or in part) of
principal received and applied as principal toward the Purchase Price for the
Purchased Asset (including, without limitation, insurance and condemnation
proceeds, scheduled amortization, principal paydowns associated with any
restructuring of the Purchased Asset, pay-offs in part (including in connection
with any sale of condominium units) and recoveries from liquidation or
foreclosure) (other than any Fees).

“Pro Rata Share”: With respect to any Buyer at any time, the proportionate
interest of such Buyer in the Transaction as the same may be adjusted from time
to time as a result of assignments to or from a Buyer pursuant to Section 18.08
hereof.

“Protective Advances”: Any amount (not to exceed $100,000.00 without the prior
written consent of the Requisite Buyers) advanced or expended by Agent to
preserve or protect the Purchased Asset or Agent’s right or title thereto.

“Purchase Date”: The date on which the Purchased Asset is transferred by Seller
to Agent and Buyers.

“Purchase Price”: As of any date, the Original Purchase Price, (i) reduced by
(x) any Principal Payments remitted to the Waterfall Account and which were
applied to the Purchase Price by Agent pursuant to Section 5.02(b), (y) any
Interest Payments remitted to the Waterfall Account and which were applied to
the Purchase Price by Agent pursuant to clause fourth of Section 5.02(a), and
(z) any Income remitted to the Waterfall Account and which was applied to the
Purchase Price by Agent pursuant to Section 5.03 and (ii) reduced by any
payments made by Seller in reduction of the outstanding Purchase Price pursuant
to Sections 3.04(c) and 3.05. In no event shall any Fees received by Agent or
Buyer reduce the Purchase Price hereunder.

“Purchased Asset”: For the Transaction, the Asset sold by Seller to Agent, for
the benefit of each Buyer in such Transaction, including, to the extent relating
to the Asset, all of Seller’s right, title and interest in and to: (i) the
Purchased Asset Documents, (ii) Servicing Rights, (iii) Servicing Files,
(iv) mortgage guaranties and insurance (issued by Governmental Authorities or
otherwise) and claims, payments and proceeds thereunder, (v) insurance policies,
certificates of insurance and claims, payments and proceeds thereunder, (vi) the
principal balance of the Asset, not just the amount advanced, (vii) amounts and
property from time to time on deposit in the Waterfall Account and the Waterfall
Account itself, (viii) collection, escrow, reserve or collateral accounts and
all amounts and property from time to time on deposit therein, to the extent of
Seller’s or the holder’s interest therein, (ix) Income, (x) security interests
of Seller in Derivatives Contracts entered into by Underlying Obligors,
(xi) rights of Seller under any letter of credit, guarantee, warranty, indemnity
or other credit support or enhancement, and (xii) all supporting obligations of
any kind; provided, that (A) the Purchased Asset shall not include any
obligations of Seller or any Retained Interests, and (B) for purposes of the
grant of security interest by Seller to Agent, for the benefit of each Buyer and
the other provisions of Article 11, the Purchased Asset shall include all of the
following: general intangibles, accounts, chattel paper, deposit

 

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accounts, securities accounts, instruments, securities, financial assets,
uncertificated securities, security entitlements and investment property (as
such terms are defined in the UCC) and replacements, substitutions, conversions,
distributions or proceeds relating to or constituting any of the items described
in the preceding clauses (i) through (xii). Notwithstanding anything herein to
the contrary, “Purchased Asset” shall not include the Asset if Seller has
repurchased the Asset pursuant to Sections 3.04(b), (d) or (e).

“Purchased Asset Documents”: Those documents executed in connection with,
evidencing or governing the Purchased Asset, the related Mortgaged Property and
the Pledged Collateral and which are required to be delivered to Agent (to the
extent that Seller holds legal title to such documents).

“Purchased Asset Event of Default”: Shall mean an “Event of Default”, as such
term is defined in the Underlying Loan Agreement.

“Qualified Insurer”: An insurance company having a general policy rating of A or
better and a financial class of X or better by A.M. Best Company, Inc., and a
claims paying ability/financial strength rating of “A+” (or its equivalent) or
better by at least two (2) of the Rating Agencies.

“Rating Agencies”: Each of Fitch, Inc., Moody’s and S&P.

“Reference Banks”: Banks each of which shall (a) be a leading bank in the
international Eurocurrency market, and (b) have an established place of business
in London. Initially, the Reference Banks shall be JPMorgan Chase Bank, Barclays
Bank, PLC and Deutsche Bank AG. If any such Reference Bank should be unwilling
or unable to act as such or if Agent shall terminate the appointment of any such
Reference Bank or if any of the Reference Banks should be removed from the
Reuters Monitor Money Rates Service or in any other way fail to meet the
qualifications of a Reference Bank, Agent may designate alternative banks
meeting the criteria specified in the preceding clauses (a) and (b).

“Register”: Defined in Section 18.08(f).

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

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

 

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“Remittance Date”: The twenty-sixth (26th) day of each month (or if such day is
not a Business Day, the next following Business Day), or such other day as is
mutually agreed to by Seller and Agent.

“REO Mortgage”: A mortgage or deed of trust, as applicable, on an REO Property,
given by an REO Owner to Agent in the form and substance reasonably acceptable
to Agent, in accordance with Article 4 hereof.

“REO Owner”: Individually and collectively, as the context may require, any
party that is formed to acquire title to REO Property pursuant to Article 4
hereof, which entity shall (a) be a newly formed single-purpose, bankruptcy
remote Delaware limited liability company that complies with this Agreement and
the other Repurchase Documents, (b) be a wholly owned subsidiary of Seller, and
(c) have Governing Documents substantially in the form of Seller.

“REO Propert(y)(ies)”: Individually or collectively, as the context may require,
each Mortgaged Property and/or Pledged Collateral that is Converted to direct
ownership by an REO Owner pursuant to Article 4.

“Reportable Event”: Any event set forth in Section 4043(c) of ERISA, other than
an event as to which the notice period is waived under Pension Benefit Guaranty
Commission Reg. §4043.

“Representation Breach”: Any representation, warranty, certification, statement
or affirmation made or deemed made by Seller or Guarantor in any Repurchase
Document (including in Schedule II) or in any certificate, notice, report or
other document delivered pursuant to any Repurchase Document proves to be
incorrect, false or misleading in any material respect when made or deemed made,
without regard to any Knowledge or lack of Knowledge thereof by such Person,
other than an Approved Representation Breach.

“Representation Exceptions”: A written list prepared by Seller specifying, in
reasonable detail, the representations and warranties (or portions thereof) set
forth in this Agreement (including in Schedule II) which are not satisfied with
respect to the Asset.

“Repurchase Date”: The earliest of (a) the Facility Termination Date, (b) any
Early Repurchase Date therefor, and (c) the Business Day on which Seller is to
repurchase the Purchased Asset as specified by Seller and agreed to by Agent in
the related Confirmation.

“Repurchase Documents”: Collectively, this Agreement, the Custodial Agreement,
the Fee and Pricing Letter, the Controlled Account Agreement, the Guarantee
Agreement, the Repurchase Deficiency Indemnity Agreement, all Irrevocable
Redirection Notices, all Confirmations, all UCC financing statements, amendments
and continuation statements filed pursuant to any Repurchase Document, any REO
Mortgage, any other agreements delivered in accordance with Article 4 hereof in
connection with a Conversion (including, without limitation, any pledge
agreement, joinder agreement, guaranty agreement or environmental indemnity
agreement), all other agreements, documents and instruments granting, attaching
or perfecting Liens to secure, inter alia, the Repurchase Obligations (whether
now or hereafter executed and/or filed, executed and delivered in connection
with the granting, attachment and perfection of Agent’s security interests and
Liens arising thereunder) and all additional documents,

 

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certificates, agreements or instruments, the execution of which is required or
necessary for performing or carrying out any other Repurchase Document;
provided, however, the Underwriting Package shall not constitute Repurchase
Documents.

“Repurchase Deficiency Indemnity Agreement”: A Facility Repurchase Deficiency
Indemnity Agreement made by Guarantor in favor of Agent, for the benefit of each
Buyer.

“Repurchase Obligation Trigger Event”: Shall mean the Facility Termination Date.

“Repurchase Obligations”: All obligations of Seller to pay the Repurchase Price
on the Repurchase Date and all other obligations and liabilities of Seller to
each Buyer arising under or in connection with the Repurchase Documents, whether
now existing or hereafter arising, and all interest and fees that accrue after
the commencement by or against Seller or Guarantor of any Insolvency Proceeding
naming such Person as the debtor in such proceeding, regardless of whether such
interest and fees are allowed claims in such proceeding (in each case, whether
due or accrued).

“Repurchase Price”: An amount equal to the sum of:

(a) the outstanding Purchase Price as of such date; and

(b) the accrued and unpaid Price Differential on the amount referred to in the
immediately preceding clause (a) for the Purchased Asset as of such date; and

(c) all other amounts due and payable as of such date by Seller to any Buyer
under this Agreement or any Repurchase Document;

(d) any accrued and unpaid fees and expenses and indemnity amounts and any other
amounts due and payable as of such date by Seller or Guarantor to Agent, any
Buyer or any of their respective Affiliates under this Agreement or any
Repurchase Document; and

(e) any unpaid Fees due to Buyer as of such Date.

“Requirements of Law”: With respect to any Person or property or assets of such
Person and as of any date, all of the following applicable thereto as of such
date: all Governing Documents and existing and future laws, statutes, rules,
regulations, treaties, codes, ordinances, permits, certificates, orders and
licenses of and interpretations by any Governmental Authority (including
Environmental Laws, ERISA, regulations of the Board of Governors of the Federal
Reserve System, and laws, rules and regulations relating to usury, licensing,
truth in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy), judgments, decrees,
injunctions, writs, awards or orders of any court, arbitrator or other
Governmental Authority.

“Requisite Buyers”: Buyers holding not less than 66 2/3% of the outstanding
Purchase Price of the Transaction held by all Current Buyers or, if the
commitments have been terminated or reduced to zero, Buyers holding at least 66
2/3% of the outstanding Purchase Price under the Transaction, provided that:
(a) in determining such percentage at any given time, all then existing

 

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Defaulting Buyers will be disregarded and excluded and the Pro Rata Shares of
the Transaction of Buyers shall be redetermined, for voting purposes only, to
exclude the Pro Rata Shares of the Transaction of such Defaulting Buyers; and
(b) at all times when two or more Buyers are party to this Agreement, the term
“Requisite Buyers” shall in no event mean less than two Current Buyers (unless
there are only two Buyers in which case the term “Requisite Buyers” shall mean
the Current Buyer(s)).

“Reserve Requirement”: For any Pricing Period, the aggregate of the rates
(expressed as a decimal fraction) of reserve requirements in effect during such
Pricing Period (including basic, supplemental, marginal and emergency reserves
under any regulations of the Board of Governors of the Federal Reserve System or
other Governmental Authority having jurisdiction with respect thereto) dealing
with reserve requirements prescribed for Eurocurrency funding (currently
referred to as “Eurocurrency Liabilities” in Regulation D of such Board of
Governors) maintained by any Buyer.

“Responsible Officer”: With respect to any Person, the chief executive officer,
the chief financial officer, the chief accounting officer, the treasurer or the
chief operating officer of such Person together with, in connection with a
determination of Knowledge, any employee, officer or director that has ongoing
responsibilities in connection with the administration of the Repurchase
Documents and/or the Purchased Asset.

“Retained Interest”: (a) With respect to the Purchased Asset, (i) all duties,
obligations and liabilities of Seller thereunder, including payment and
indemnity obligations, (ii) all obligations of agents, trustees, servicers,
administrators or other Persons under the documentation evidencing the Purchased
Asset, and (iii) if any portion of the Indebtedness related to the Purchased
Asset is owned by another lender or is being retained by Seller, the interests,
rights and obligations under such documentation to the extent they relate to
such portion, and (b) with respect to the Purchased Asset with an unfunded
commitment on the part of Seller, all obligations to provide additional funding,
contributions, payments or credits.

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

“Sanctioned Entity”: (a) A country or a government of a country, (b) an agency
of the government of a country, (c) an organization directly or indirectly
controlled by a country or its government, (d) a Person resident in or
determined to be resident in a country, that (in the case of the preceding
clauses (a), (b), (c) and this clause (d)) is subject to a country sanctions
program administered and enforced by the Office of Foreign Assets Control, or
(e) a Person named on the list of Specially Designated Nationals maintained by
the Office of Foreign Assets Control.

“Second Notice”: Defined in the definition of Deemed Approval Requirements.

“Securities Act”: Shall mean the Securities Act of 1933, together with any
amendment thereto or replacement thereof and any rules or regulations
promulgated thereunder, as the same are amended from time to time.

“Seller”: The Seller named in the preamble of this Agreement.

 

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“Seller’s Counsel”: Defined in Section 18.08(c).

“Servicer”: Shall mean Midland Loan Services, a division of PNC Bank, National
Association, in its capacity as servicer under the Servicing Agreement, together
with its successors and permitted assigns, or any other servicer approved by
Agent.

“Servicing Agreement”: Shall mean a tri-party servicing agreement acceptable to
Agent to be entered into by and among Seller, Buyer and Servicer on or prior to
the Purchase Date, as the same shall be amended, modified, waived, supplemented,
extended, replaced or restated from time to time or such other replacement
agreement entered into by Seller and Servicer (or Seller, Buyer and Servicer, as
the case may be) for the servicing of the Purchased Asset, acceptable to Agent
in its discretion.

“Servicing File”: With respect to the Purchased Asset, the file retained and
maintained by Seller or Servicer including the originals or copies of all
Purchased Asset Documents and other documents and agreements relating to the
Purchased Asset, including to the extent applicable all servicing agreements,
files, documents, records, data bases, computer tapes, insurance policies and
certificates, appraisals, other closing documentation, payment history and other
records relating to or evidencing the servicing of the Purchased Asset, which
file shall be held by Seller and/or Servicer for and on behalf of Agent.

“Servicing Rights”: All right, title and interest of Seller, Guarantor or any
Affiliate of Seller or Guarantor in and to any and all of the following, to the
extent applicable: (a) rights to service and collect and make all decisions with
respect to the Purchased Asset, (b) amounts received by Seller or any other
Person for servicing the Purchased Asset, (c) late fees, penalties or similar
payments with respect to the Purchased Asset, (d) agreements and documents
creating or evidencing any such rights to service, documents, files and records
relating to the servicing of the Purchased Asset, and rights of Seller or any
other Person thereunder, (e) escrow, reserve and similar amounts with respect to
the Purchased Asset, (f) rights to appoint, designate and retain any other
servicers, sub-servicers, special servicers, agents, custodians, trustees and
liquidators with respect to the Purchased Asset, and (g) accounts and other
rights to payment related to the Purchased Asset.

“Single Employer Plan”: Any Plan that is not a Multiemployer Plan.

“Solvent”: With respect to any Person at any time, having a state of affairs
such that all of the following conditions are met at such time: (a) the fair
value of the assets and property of such Person is greater than the amount of
such Person’s liabilities (including disputed, contingent and unliquidated
liabilities) as such value is established and liabilities evaluated for purposes
of Section 91(32) of the Bankruptcy Code, (b) the present fair salable value of
the assets and property of such Person in an orderly liquidation of such Person
is not less than the amount that will be required to pay the probable liability
of such Person on its debts as they become absolute and matured, (c) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay as such debts and liabilities
mature, and (d) such Person is not engaged in a business or a transaction, and
is not about to engage in a business or a transaction, for which such Person’s
assets and property would constitute unreasonably small capital.

 

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“Special Purpose Entity”: A corporation, limited partnership or limited
liability company that, since the date of its formation (unless otherwise
indicated in this Agreement) and at all times on and after the date hereof, has
complied with and shall at all times comply with the provisions of Article 9.

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

“Taxes”: Defined in Section 12.06(a).

“Tax Indemnity Beneficiary”: Defined in the definition of Excluded Taxes.

“Transaction”: With respect to the Asset, the sale and transfer of the Asset
from Seller to Agent and initial Buyer pursuant to the Repurchase Documents
against the transfer of funds from initial Buyer to Seller representing the
Original Purchase Price for the Asset.

“Transfer Authorizer Designation”: Defined in Section 18.26.

“UCC”: The Uniform Commercial Code as in effect in the State of New York;
provided, that, if, by reason of Requirements of Law, the perfection or priority
of the security interest in the Purchased Asset is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than New York, “Uniform
Commercial Code” shall mean the Uniform Commercial Code as in effect in such
other jurisdiction for purposes of the provisions hereof relating to such
perfection or priority.

“Underlying Loan Agreement”: Means that certain Loan Agreement, dated as of the
date hereof, between Seller and Underling Obligor.

“Underlying Obligor”: Individually and collectively, as the context may require,
the Mortgagor and other obligor or obligors under the Asset, including any other
Person who has assumed or guaranteed the obligations of such Mortgagor under the
Purchased Asset Documents relating to the Asset.

“Underwriting Package”: With respect to the Asset, (a) the internal underwriting
asset summary and abridged business plan (redacted to protect confidential
information), prepared by Seller for its evaluation of the Asset, (b) all
documents, instruments and agreements made available to Seller in respect of the
closing of the origination of the Purchased Asset, (c) all Purchased Asset
Documents required to be delivered to Custodian under the Custodial Agreement,
(d) an appraisal, and (e) such further documents or information as Agent may
reasonably request.

 

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“Waterfall Account”: A segregated account to be established at Account Bank, in
the name of Seller, pledged to Agent and subject to a Controlled Account
Agreement.

“Whole Loan”: A first priority commercial real estate whole loan.

Section 2.01 Rules of Interpretation. Headings are for convenience only and do
not affect interpretation. The following rules of this Section 2.01 apply unless
the context requires otherwise. The singular includes the plural and conversely.
A gender includes all genders. Where a word or phrase is defined, its other
grammatical forms have a corresponding meaning. A reference to an Article,
Section, Subsection, Paragraph, Subparagraph, Clause, Annex, Schedule, Appendix,
Attachment, Rider or Exhibit is, unless otherwise specified, a reference to an
Article, Section, Subsection, Paragraph, Subparagraph or Clause of, or Annex,
Schedule, Appendix, Attachment, Rider or Exhibit to, this Agreement, all of
which are hereby incorporated herein by this reference and made a part hereof. A
reference to a party to this Agreement or another agreement or document includes
the party’s permitted successors, substitutes or assigns. A reference to an
agreement or document is to the agreement or document as amended, modified,
novated, supplemented or replaced, except to the extent prohibited by any
Repurchase Document. A reference to legislation or to a provision of legislation
includes a modification, codification, replacement, amendment or reenactment of
it, a legislative provision substituted for it and a rule, regulation or
statutory instrument issued under it. A reference to writing includes a
facsimile or electronic transmission and any means of reproducing words in a
tangible and permanently visible form. A reference to conduct includes an
omission, statement or undertaking, whether or not in writing. A Default or
Event of Default exists until it has been cured or waived in writing by Agent.
The words “hereof,” “herein,” “hereunder” and similar words refer to this
Agreement as a whole and not to any particular provision of this Agreement,
unless the context clearly requires or the language provides otherwise. The word
“including” is not limiting and means “including without limitation.” The word
“any” is not limiting and means “any and all” unless the context clearly
requires or the language provides otherwise. In the computation of periods of
time from a specified date to a later specified date, the word “from” means
“from and including,” the words “to” and “until” each mean “to but excluding,”
and the word “through” means “to and including.” The words “will” and “shall”
have the same meaning and effect. A reference to day or days without further
qualification means calendar days. A reference to any time means New York time.
This Agreement may use several different limitations, tests or measurements to
regulate the same or similar matters. All such limitations, tests and
measurements are cumulative and shall each be performed in accordance with their
respective terms. Unless the context otherwise clearly requires, all accounting
terms not expressly defined herein shall be construed in accordance with GAAP,
and all accounting determinations, financial computations and financial
statements required hereunder shall be made in accordance with GAAP, without
duplication of amounts, and on a consolidated basis with all Subsidiaries. All
terms used in Articles 8 and 9 of the UCC, and used but not specifically defined
herein, are used herein as defined in such Articles 8 and 9. A reference to
“fiscal year” and “fiscal quarter” means the fiscal periods of the applicable
Person referenced therein. A reference to an agreement includes a security
interest, guarantee, agreement or legally enforceable arrangement whether or not
in writing. A reference to a document includes an agreement (as so defined) in
writing or a certificate, notice, instrument or document, or any information
recorded in computer disk form. Whenever a Person is required to provide any
document to Agent or any Buyer under the Repurchase Documents, the relevant
document shall

 

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be provided in writing, including in the form of a PDF attachment to an
electronic mail, or printed form unless Agent or such Buyer requests otherwise.
At the request of Agent or such Buyer, the document shall be provided in
computer disk form or both printed and computer disk form. The Repurchase
Documents are the result of negotiations between the Parties, have been reviewed
by counsel to Agent and each Buyer and counsel to Seller, and are the product of
both Parties. No rule of construction shall apply to disadvantage one Party on
the ground that such Party proposed or was involved in the preparation of any
particular provision of the Repurchase Documents or the Repurchase Documents
themselves. Except where otherwise expressly stated, Agent may give or withhold,
or give conditionally, approvals and consents, and may form opinions and make
determinations, in its sole and absolute discretion subject in all cases to the
implied covenant of good faith and fair dealing. Reference in any Repurchase
Document to Agent’s discretion, shall mean, unless otherwise expressly stated
herein or therein, Agent’s sole and absolute discretion, and the exercise of
such discretion shall be final and conclusive. In addition, unless otherwise
stated in a Repurchase Document, whenever Agent 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 Agent (or any similar
language or terms), the decision of Agent with respect thereto shall be in the
sole and absolute discretion of Agent, and such decision shall be final and
conclusive, absent manifest error.

ARTICLE 3

THE TRANSACTIONS

Section 3.01 Procedures.

(a) Prior to the Closing Date, Seller delivered to initial Buyer the
Underwriting Package for the Asset. On or prior to the Funding Expiration Date,
with not less than three (3) Business Days’ prior written notice to Agent,
Seller and Agent shall enter into the Transaction as evidenced by Seller sending
Agent a notice substantially in the form of Exhibit A (“Transaction Request”)
(i) describing the Asset and (ii) specifying which (if any) of the
representations and warranties of Seller set forth in this Agreement (including
in Schedule II applicable to the Asset) Seller will be unable to make with
respect to the Asset. Seller shall promptly deliver to Agent and each Buyer any
supplemental materials requested at any time by Agent or any Buyer, provided
such requested supplemental materials are either in Seller’s possession or are
reasonably obtainable by Seller. It is expressly agreed and acknowledged that
Agent is entering into the Transaction on behalf of each Buyer, on the basis of
all such representations and warranties. In the event of either (i) a
Representation Breach relating to Section 7.10 or to a representation contained
in Schedule II of this Agreement or (ii) a Representation Breach or breach of a
covenant set forth in Article 8 hereof arising solely out of clause (f) of the
definition of “Material Adverse Effect”, Seller shall (x) by not later than the
fifth (5th) Business Day after receipt of notice thereof from Agent or any Buyer
or the discovery thereof by Seller, either remedy such Representation Breach or
deliver evidence to Agent that Guarantor has delivered to the investors in
Guarantor capital calls in an amount sufficient to repurchase the Purchased
Asset and (y) if the Representation Breach remains unremedied at the end of the
five (5) Business Day period referred to in the immediately preceding
clause (x), repurchase the Asset in accordance with Section 3.05 by not later
than ten (10) Business Days after the end of the initial five (5) Business Day
period referred to in the preceding clause (x).

 

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(b) By not later than the Purchase Date, Seller shall deliver to Agent an
executed preliminary Confirmation for the Transaction, describing the Asset and
its proposed Purchase Date, Applicable Purchase Percentage and Original Purchase
Price. If Agent, in its commercially reasonable discretion, requires changes to
the preliminary Confirmation, Seller shall make such changes and re-execute the
preliminary Confirmation. Agent shall promptly execute and return the same to
Seller, which shall thereupon become effective as the Confirmation of the
Transaction. Upon the execution of the Confirmation by Agent and Seller, the
Transaction shall become effective and shall be subject to all of the terms and
conditions of the Repurchase Documents. Agent’s purchase of the Asset shall be
evidenced only by its execution and delivery of the Confirmation. For the
avoidance of doubt, neither Agent nor any Buyer shall (i) be bound by any
preliminary or final non-binding determination referred to above, or (ii) be
obligated to purchase the Asset notwithstanding the Confirmation executed by the
Parties unless and until all applicable conditions precedent in Article 6 have
been satisfied or waived by Agent.

(c) The Confirmation, together with this Agreement, shall be conclusive evidence
of the terms of the Transaction covered thereby, and shall be construed to be
cumulative to the extent possible. If terms in a Confirmation are inconsistent
with terms in this Agreement with respect to the Transaction, the Confirmation
shall prevail. Whenever the Applicable Purchase Percentage or any other term of
the Transaction (other than the Pricing Rate and outstanding Purchase Price)
with respect to the Asset is revised or adjusted in accordance with this
Agreement, an amended and restated Confirmation reflecting such revision or
adjustment and that is otherwise acceptable to the Parties shall be prepared by
Seller and executed by Seller and Agent.

(d) The fact that Agent or any Buyer has conducted or has failed to conduct any
partial or complete examination or any other due diligence review of the Asset
or Purchased Asset shall in no way affect any rights Agent or any Buyer may have
under the Repurchase Documents or otherwise with respect to any representations
or warranties or other rights or remedies thereunder or otherwise.

(e) The Transaction shall not be entered into if (i) any Default or Event of
Default exists or would exist as a result of such Transaction or (ii) after
giving effect to the Transaction, the Purchase Price of the Purchased Asset
would exceed the Maximum Purchase Price.

Section 3.02 Transfer of Purchased Asset; Servicing Rights. On the Purchase
Date, and subject to the satisfaction of all applicable conditions precedent in
Article 6, (a) ownership of and title to the Purchased Asset shall be
transferred to and vest in Agent and each Buyer or their respective designee
against the simultaneous transfer of the Purchase Price for the Purchased Asset
to the account of Seller specified in Annex 1 (or if not specified therein, in
the related Confirmation or as directed by Seller), and (b) Seller hereby sells,
transfers, conveys and assigns to Agent on a servicing-released basis all of
Seller’s right, title and interest (but no Retained Interests) in and to the
Purchased Asset, together with all related Servicing Rights. The

 

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Servicing Rights and other servicing provisions under this Agreement are not
severable from or to be separated from the Purchased Asset under this Agreement
and such Servicing Rights and other servicing provisions of this Agreement
constitute (a) “related terms” under this Agreement within the meaning of
Section 101(47)(A)(i) of the Bankruptcy Code and/or (b) a security agreement or
other arrangement or other credit enhancement related to the Repurchase
Documents. Subject to the satisfaction of all conditions precedent set forth in
Article 6, Buyer agrees to pay to Seller the Original Purchase Price for the
Purchased Asset.

Section 3.03 Disbursement to Seller. Seller may request and receive only one
payment hereunder in respect of the Transaction. Seller is not entitled to
receive any additional payment hereunder as a result of any payment by Seller to
Agent and/or Buyer hereunder with respect to the Repurchase Price.

Section 3.04 Early Repurchase Date; Voluntary Reduction of Purchase Price;
Mandatory Reductions of Purchase Price.

(a) Except as set forth in Sections 3.04(b), (d) and (e) hereof, Seller shall
not have any right to terminate the Transaction and repurchase the Purchased
Asset prior to the Repurchase Date. Except as set forth in Section 3.04(c) and
Section 3.06(a)(i)(E) hereof, Seller shall not have any right to reduce the
outstanding Purchase Price prior to the Repurchase Date.

(b) Notwithstanding anything herein to the contrary, during the continuance of a
Purchased Asset Event of Default, Seller may terminate the Transaction with
respect to the Purchased Asset and repurchase the Purchased Asset on any date
prior to the Repurchase Date (an “Early Repurchase Date”); provided, that:

(i) Seller notifies Agent at least three (3) Business Days before the proposed
Early Repurchase Date identifying the Purchased Asset to be repurchased and the
Repurchase Price thereof,

(ii) Seller delivers a certificate from a Responsible Officer of Seller in form
and substance reasonably satisfactory to Agent, certifying that (1) no Default
or Event of Default exists or would exist as a result of such repurchase which
would continue after the completion of such repurchase and (2) there are no
other Liens on the Purchased Asset other than Buyer’s Lien or a Permitted Lien
which would continue after the completion of such repurchase,

(iii) if the Early Repurchase Date is not a Remittance Date, Seller pays to
Agent any amount due under Section 12.03, and

(iv) Seller thereafter complies with Section 3.05.

(c) Notwithstanding anything herein to the contrary, upon any prepayment or
repayment in part of the debt evidenced by the Mortgage Note with respect to the
Purchased Asset in part in accordance with to the Purchased Asset Documents,
Seller shall deposit all amounts received by Seller with respect to such
prepayment or repayment of the debt evidenced by the Mortgage Note into the
Waterfall Account to be applied pursuant to Article 5 hereof. Seller shall not
be permitted to terminate the Transaction or repurchase the Purchased Asset in
connection with a reduction of the outstanding Purchase Price pursuant to this
Section 3.04(c).

 

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(d) Notwithstanding anything herein to the contrary, upon the prepayment or
repayment in full of the debt evidenced by the Mortgage Note with respect to the
Purchased Asset in accordance with the Purchased Asset Documents and the
satisfaction in full of all other obligations of the Underlying Obligor with
respect to the Purchased Asset, Seller shall (i) repurchase the Purchased Asset
simultaneously with the prepayment or repayment of the debt evidenced by the
Mortgage Note with respect to the Purchased Asset and (ii) comply with
Section 3.05 hereof. Upon the satisfaction of the terms and conditions of this
Section 3.04(d), the Transaction shall terminate with respect to the Purchased
Asset.

(e) Notwithstanding anything in this Agreement, and in addition to other rights
and remedies of Agent or any Buyer under any Repurchase Document, Seller shall
immediately repurchase in accordance with Section 3.05 the Purchased Asset if a
Repurchase Obligation Trigger Event occurs.

Section 3.05 Repurchase. On the Repurchase Date (or Early Repurchase Date, if
applicable), or on the date of any pay-off of the Purchased Asset pursuant to
which the obligor thereunder is released from future payment obligations in
accordance with this Agreement, or upon the payment in full for any reason of
the Repurchase Price with respect to the Purchased Asset, Seller shall transfer
to Agent the Repurchase Price for the Purchased Asset as of the Repurchase Date
(or Early Repurchase Date, if applicable) and, so long as no Event of Default
has occurred and is continuing, Agent shall promptly transfer to Seller the
Purchased Asset in accordance with Section 18.19, whereupon the Transaction with
respect to the Purchased Asset shall terminate; provided, however, that in the
event of a pay-off of the Purchased Asset, Agent shall transfer the Purchased
Asset to Seller regardless of whether an Event of Default has occurred and is
continuing. Any Income with respect to the Purchased Asset received by Agent or
any Buyer or Account Bank after payment of the Repurchase Price therefor shall
be promptly remitted to Seller. Notwithstanding the foregoing, not later than
the Facility Termination Date, Seller shall repurchase the Purchased Asset by
paying to Agent the outstanding Repurchase Price therefor and all other
outstanding Repurchase Obligations. Agent shall promptly remit to Seller the
excess, if any, remaining after application of such funds and any Income to the
outstanding Repurchase Obligations.

Section 3.06 Extension Option.

(a) At the request of Seller delivered to Agent (an “Extension Exercise
Notice”), Agent and each Buyer shall grant two (2) extensions of the Facility
Termination Date for a period of twelve (12) months each (each an “Extension
Option”), subject to the satisfaction of the conditions set forth below with
respect to each Extension Option (the “Extended Facility Termination Date”). Any
extension of the Facility Termination Date pursuant to this Section 3.06(a)
shall be subject to the following:

(i) If no Purchased Asset Event of Default exists on the Facility Termination
Date (or Extended Facility Termination Date, as applicable):

(A) Seller has delivered to Agent an Extension Exercise Notice with respect to
the applicable Extension Option within five (5) Business Days after Seller’s
receipt of notice from the Underlying Obligor that the Underlying Obligor has
elected to exercise the Underlying Obligor’s then-applicable extension option in
accordance with the Purchased Asset Documents,

 

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(B) the maturity date of the Purchased Asset has been extended in accordance
with the terms and conditions of the Underlying Loan Agreement,

(C) no Event of Default exists on the date of the request to extend or the
Facility Termination Date (or Extended Facility Termination Date, as
applicable),

(D) the payment by Seller to Agent of the Extension Fee on or before the
Facility Termination Date (or Extended Facility Termination Date, as
applicable), which payment may be made by Seller at any time on or before the
Facility Termination Date (or Extended Facility Termination Date, as applicable)
in Seller’s sole discretion, and

(E) if required by Agent pursuant to the last paragraph of this Section 3.06,
Agent shall have received an Appraisal with respect to the individual Mortgaged
Properties securing Purchased Asset which confirms that the LTV as of the
Facility Termination Date (or Extended Facility Termination Date, as applicable)
shall be equal to or less than fifty-four percent (54%); provided, however, that
Seller shall have the right to reduce the outstanding Purchase Price on or prior
to the Facility Termination Date (or Extended Facility Termination Date, as
applicable), without premium or penalty, in such an amount necessary to cause
the LTV to be equal to or less than fifty-four percent (54%).

(ii) If a Purchased Asset Event of Default exists on the Facility Termination
Date (or Extended Facility Termination Date, as applicable):

(A) Seller has delivered to Agent an Extension Exercise Notice with respect to
the applicable Extension Option no earlier than four (4) months or later than
thirty (30) days before the Facility Termination Date (or Extended Facility
Termination Date, as applicable),

(B) no Event of Default exists on the date of the request to extend or the
Facility Termination Date (or Extended Facility Termination Date, as
applicable),

(C) the payment by Seller to Agent of the Extension Fee, if any, on or before
the Facility Termination Date (or Extended Facility Termination Date, as
applicable), which payment may be made by Seller at any time on or before the
Facility Termination Date (or Extended Facility Termination Date, as applicable)
in Seller’s sole discretion,

 

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(D) Seller has delivered evidence reasonably satisfactory to Agent that Seller
is diligently pursuing a resolution and/or cure of the Purchased Asset Event of
Default; and

(E) Seller continues to pay as and when due pursuant to the Repurchase Documents
the Price Differential, any reduction in Purchase Price, and Fees and any other
amounts, sums of money, payments, deposits or premiums due under the Repurchase
Documents.

(b) If (i) Seller has exercised each applicable Extension Option in accordance
with Section 3.06(a) hereof, (ii) a Purchased Asset Event of Default has
occurred after the exercise of each applicable Extension Option in accordance
with Section 3.06(a) hereof and is continuing, and (iii) a Conversion has not
occurred on or prior to the then-current Extended Facility Termination Date,
then Agent and each Buyer shall grant one (1) additional extension of the
Facility Termination Date for a period of twelve (12) months subject to the
satisfaction of the conditions set forth below:

(i) Seller has delivered to Agent an Extension Exercise Notice with respect to
the applicable Extension Option no earlier than four (4) months or later than
thirty (30) days before the then-current Extended Facility Termination Date,

(ii) no Event of Default exists on the date of the request to extend or the
then-current Extended Facility Termination Date, and

(iii) Seller has delivered evidence reasonably satisfactory to Agent that Seller
is diligently pursuing a resolution and/or cure of the Purchased Asset Event of
Default.

(iv) Seller continues to pay as and when due pursuant to the Repurchase
Documents the Price Differential, any reduction in Purchase Price, and Fees and
any other amounts, sums of money, payments, deposits or premiums due under the
Repurchase Documents.

In the event Seller timely requests an extension of the Facility Termination
Date (or Extended Facility Termination Date, as applicable) pursuant to this
Section 3.06(a)(i), then Seller shall, at no cost or expense to Agent or Buyer,
order and commission pursuant to the Purchased Asset Documents, and deliver to
Agent, an Appraisal of the Mortgaged Property in form reasonably acceptable to
Agent for purposes of determining whether Section 3.06(a)(i)(E) above shall be
satisfied as of the Facility Termination Date (or Extended Facility Termination
Date, as applicable). If Seller fails to deliver such Appraisal to Agent within
five (5) Business Days prior to the Facility Termination Date (or Extended
Facility Termination Date, as applicable), then Agent shall have the right to
obtain an appraisal for any Mortgaged Property for purposes of determining
whether Section 3.06(a)(i)(F) above shall be satisfied as of the Facility
Termination Date (or Extended Facility Termination Date, as applicable), and
Seller shall be responsible for the reasonable out-of-pocket costs and expenses
incurred by Agent in obtaining any such Appraisal.

 

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Section 3.07 Payment of Price Differential and Fees.

(a) Notwithstanding that Agent, each Buyer and Seller intend that the
Transaction hereunder be a sale to Agent and each Buyer of the Purchased Asset,
Seller shall pay to Agent the accrued value of the Price Differential for the
Purchased Asset on each Remittance Date. Agent shall give Seller notice of the
Price Differential and any fees and other amounts due under the Repurchase
Documents on or prior to the second (2nd) Business Day preceding each Remittance
Date; provided, that Agent’s failure to deliver such notice shall not affect
Seller’s obligation to pay such amounts. If the Price Differential includes any
estimated Price Differential, Agent shall recalculate such Price Differential
after the Remittance Date and, if necessary, make adjustments to the Price
Differential amount due on the following Remittance Date.

(b) Seller shall pay to Agent all fees and other amounts, including, without
limitation, any Fees, as and when due as set forth in this Agreement and the Fee
and Pricing Letter.

Section 3.08 Payment, Transfer and Custody.

(a) Unless otherwise expressly provided herein, all amounts required to be paid
or deposited by Seller, Guarantor or any other Person under the Repurchase
Documents shall be paid or deposited in accordance with the terms hereof no
later than 3:00 p.m. (Central Standard Time) on the day when due, in immediately
available Dollars and without deduction, setoff or counterclaim, and if not
received before such time shall be deemed to be received on the next Business
Day. Whenever any payment under the Repurchase Documents shall be stated to be
due on a day other than a Business Day, such payment shall be made on the next
following Business Day, and such extension of time shall in such case be
included in the computation of such payment. Seller shall, to the extent
permitted by Requirements of Law, pay to Agent (in addition to, and together
with, such past-due Repurchase Price) a late fee equal to one percent (1%) of
the total amount of the late payment, plus interest on such past-due amount as
provided in Section 18.16, together with any other amounts not paid when due
under the Repurchase Documents, until all such past-due amounts are received in
full by Agent; provided, that notwithstanding the foregoing, Seller shall not
have any obligation to pay such late fee (x) with respect to up to three
(3) such late payments that occur prior to the Repurchase Date (unless such late
payments occur on consecutive Remittance Dates in which event the late fee shall
apply on the third (3rd) such Remittance Date) or (y) on the Repurchase Date
which occurs on the Facility Termination Date. Amounts payable to a Buyer and
not otherwise required to be deposited into the Waterfall Account shall be
deposited into an account of such Buyer. Seller shall have no rights in, rights
of withdrawal from, or rights to give notices or instructions regarding any
Buyer’s account or the Waterfall Account. Amounts in the Waterfall Account may
be invested at the direction of Agent in cash equivalents before they are
distributed in accordance with Article 5.

(b) Any Purchased Asset Documents not delivered to Agent or Custodian are and
shall be held in trust by Seller or its agent for the benefit of each Buyer as
the owner thereof. Seller or its agent shall maintain a copy of the Purchased
Asset Documents and the originals of the Purchased Asset Documents not delivered
to Agent or Custodian. The possession of Purchased Asset Documents by Seller or
its agent is in a custodial capacity only at the will of Agent and for the sole
purpose of assisting the Servicer with its duties under the Servicing

 

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Agreement. Each Purchased Asset Document retained or held by Seller or its agent
shall be segregated on Seller’s books and records from the other assets of
Seller or its agent, and the books and records of Seller or its agent shall be
marked to reflect clearly the sale of the Purchased Asset to Agent and each
Buyer on a servicing-released basis. Seller or its agent shall release its
custody of the Purchased Asset Documents only in accordance with written
instructions from Agent, unless such release is required as incidental to the
servicing of the Purchased Asset or is in connection with a repurchase the
Purchased Asset by Seller, in each case in accordance with the Custodial
Agreement.

Section 3.09 Repurchase Obligations Absolute. All amounts payable by Seller
under the Repurchase Documents shall be paid without notice, demand,
counterclaim, setoff, deduction or defense (as to any Person and for any reason
whatsoever) and without abatement, suspension, deferment, diminution or
reduction (as to any Person and for any reason whatsoever), and the Repurchase
Obligations shall not be released, discharged or otherwise affected, except as
expressly provided herein, by reason of: (a) any damage to, destruction of,
taking of, restriction or prevention of the use of, interference with the use
of, title defect in, encumbrance on or eviction from, the Purchased Asset or any
Mortgaged Property, (b) any Insolvency Proceeding relating to Seller or any
Underlying Obligor, or any action taken with respect to any Repurchase Document
or Purchased Asset Document by any trustee or receiver of Seller or any
Underlying Obligor or by any court in any such proceeding, (c) any claim that
Seller has or might have against Agent or any Buyer under any Repurchase
Document or otherwise, (d) any default or failure on the part of Agent or any
Buyer to perform or comply with any Repurchase Document or other agreement with
Seller; provided, however, that the foregoing shall not release Agent or any
Buyer of its obligation to release and transfer the Purchased Asset back to
Seller or Seller’s designee in a simultaneous transaction upon payment in full
of the Repurchase Price, (e) the invalidity or unenforceability of the Purchased
Asset, any Repurchase Document or any Purchased Asset Document, or (f) any other
occurrence whatsoever, whether or not similar to any of the foregoing, and
whether or not Seller has notice or Knowledge of any of the foregoing. The
Repurchase Obligations shall be full recourse to Seller. This Section 3.09 shall
survive the termination of the Repurchase Documents and the payment in full of
the Repurchase Obligations.

ARTICLE 4

CONVERSION OF PURCHASED ASSET TO REO PROPERTY

Section 4.01 Conversion of Purchased Asset to REO Property. Seller may, from
time to time after the occurrence of a Material Default with respect to the
Purchased Asset with the approval of Agent (such approval not to be unreasonably
withheld, conditioned or delayed), Convert all or part of the Mortgaged
Properties securing the Purchased Asset (or the entire Pledged Collateral) to
REO Property by satisfying the Conversion Conditions. Each date of Conversion of
all or part of the Mortgaged Properties securing the Purchased Asset (or the
entire Pledged Collateral), as evidenced by the recording of the related sale
deed in the applicable county records (which shall occur not later than five
(5) Business Days after the related foreclosure sale date or other resolution
date) (or the taking of ownership to the Pledged Collateral) is referred to as
the “Conversion Date” for the Purchased Asset. In the event that all or part of
the Mortgaged Properties securing the Purchased Asset (or the entire Pledged

 

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Collateral) is Converted to REO Property by Seller in accordance with this
Article 4, any term, condition or provision hereunder or under any other
Repurchase Agreement applicable to the Purchased Asset shall continue to apply
to the related REO Property owned by the related REO Owner and the related REO
Mortgage to the same extent as if the all or part of the Mortgaged Properties
securing the Purchased Asset was not subject to a Conversion (or the entire
Pledged Collateral).

Section 4.02 Conversion Conditions. To Convert all or part of the Mortgaged
Properties (or the entire Pledged Collateral) securing the Purchased Asset to
REO Property, Seller shall satisfy each of the following conditions (the
“Conversion Conditions”):

(a) Seller shall give Agent at least ten (10) Business Days prior written notice
(or such shorter period as may be acceptable to Agent in its sole and absolute
discretion) of Seller’s intent to Convert the Purchased Asset, which notice
shall specify the anticipated Conversion Date (a “Notice of Conversion”);

(b) no Event of Default shall exist;

(c) Prior to the occurrence of any Conversion, Seller shall form a new separate
REO Owner (for each REO Property) for the purpose of (i) taking the deed to the
applicable Mortgaged Property in the name of such REO Owner, (ii) taking sole
ownership and title to the Pledged Collateral in the name of the REO Owner or
(iii) taking the Purchased Asset by assignment in the name of such REO Owner and
thereafter taking the deed to the related Mortgaged Property in the name of such
REO Owner, and on the date on which such REO Owner is formed, such REO Owner
shall execute a guaranty agreement (guaranteeing Seller’s obligations under this
Agreement and the other Repurchase Documents), in form and substance reasonably
acceptable to Agent; and

(d) Prior to the occurrence of any Conversion, Seller and the applicable REO
Owner shall deliver or cause to be delivered to Agent the following items:

(i) a true and complete copy of the Governing Documents, together with any
original certificate representing 100% of the ownership interests in such REO
Owner endorsed or otherwise assigned in blank or to Agent for the benefit of
Buyers hereunder;

(ii) a pledge agreement, in form and substance reasonably acceptable to Agent,
whereby Seller pledges all of its right, title and interest in such REO Owner,
as additional collateral hereunder;

(iii) copies of UCC financing statements required under the pledge agreement
referenced in Section 4.02(d)(ii) with evidence of filing thereon that names
Seller as debtor and the Agent, on behalf of Buyers hereunder, as secured party
and that describes “all assets in which the debtor now or hereafter has rights”
as the collateral in which the Agent, on behalf of Buyers hereunder, has a
grant;

(iv) an updated organizational chart of Seller including such REO Owner;

 

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(v) an original REO Mortgage on the related Mortgaged Property securing the
applicable REO Owner’s obligations under the guaranty agreement referenced in
Section 4.02(c);

(vi) a true and complete copy of the deed, lease (and all amendments and
modifications thereof and any nondisturbance or other agreements related
thereto), if any, or other instrument pursuant to which the related REO Owner,
if any, acquired or will acquire its interest in the related REO Property;

(vii) an original title insurance policy, in form and substance reasonably
acceptable to Agent, insuring the REO Mortgage as a first priority lien on the
applicable Mortgaged Property, subject to no lien or encumbrance other than
Permitted Liens, together with a tie-in endorsement if available at commercially
reasonable rates, in an amount equal to at least the Original Purchase Price for
the Purchased Asset from a title insurance company reasonably acceptable to
Agent; provided, that in lieu of obtaining a new original title insurance
policy, Seller and the applicable REO Owner may, at their option, obtain a
date-down endorsement (in form and substance reasonably acceptable to Agent) of
the existing title insurance policy subject to the approval of Agent (such
approval not to be unreasonably withheld, conditioned or delayed);

(viii) a copy of an original owner’s policy insuring the related REO Owner as
the owner of the related REO Property in an amount equal to at least the
Original Purchase Price for the Purchased Asset;

(ix) a copy of any operating or master lease, if any, with respect to such REO
Property, in form and substance acceptable to Agent, together with any
subordination agreements as Agent may require;

(x) an asset management agreement, in form and substance acceptable to Agent,
providing for property management of the REO Property, together with any
assignment and subordination agreements as Agent may require;

(xi) copies of UCC financing statements with evidence of filing thereon that
names REO Owner as debtor and the Agent, on behalf of Buyers hereunder, as
secured party and that describes “all assets in which the debtor now or
hereafter has rights” as the collateral in which the Agent, on behalf of Buyers
hereunder, has a grant;

(xii) to the extent in Seller’s or REO Owner’s possession or control, copies of
any other material written agreements related to such REO Property or any other
documents, reports and/or certifications executed and/or delivered by the
related Underlying Obligor, the Seller, the REO Owner or any other person or
entity in connection with the closing of the Conversion or with respect to such
REO Property or any amendment thereof and any legal opinions delivered in
connection with the closing of the Conversion;

(xiii) such other documents and instruments as Agent may reasonably require in
order to obtain and perfect a first priority security interest in (x) the
related REO Property and/or REO Owner’s interest therein and (y) the REO Owner;

 

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(xiv) an environmental indemnity agreement, in form and substance reasonably
acceptable to Agent, executed by Seller, such REO Owner and Guarantor;

(xv) opinions of counsel, in form and substance reasonably acceptable to Agent
(provided, that opinions of counsel in form and substance consistent with
similar opinions delivered on the Closing Date shall be deemed reasonably
acceptable), with respect to (i) entity matters and enforceability of the
related guaranty agreement, pledge agreement, REO Mortgage and environmental
indemnity agreement, (ii) the creation and perfection of the Agent’s (on behalf
of the Buyers hereunder) security interest in all of the assets of Seller (with
respect to such REO Owner) and REO Owner and (iii) bankruptcy safe-harbor
protection;

(xvi) certificates of insurance, satisfactory to Agent, evidencing that
customary insurance has been obtained and is in full force and effect with
respect to such REO Property;

(xvii) an environmental site assessment (subject to any limitations set forth in
the underlying Purchased Asset Documents) and confirmation from Seller and the
applicable REO Owner pursuant to Section 4.04 hereof;

(xviii) such due diligence materials as Agent may reasonably require; and

(xix) such other documents, certificates, agreements (including, without
limitation, any necessary comfort letters, replacement franchise agreements or
assumptions thereof or any amendments or modifications to the Repurchase
Documents necessary to establish cash management, escrows and reserves with
respect to the applicable REO Property or to recognize that the Purchased Asset
has been subject to a Conversion) or materials as Agent may reasonably require.

Section 4.03 Recording. In connection with the transactions contemplated by this
Article 4, the Seller and applicable REO Owner shall promptly duly record or
file each of the documents, instruments and agreements delivered to the Agent
pursuant to Section 4.02 in such manner and in such places as is required by law
to establish, preserve, protect and perfect the interests and rights created or
intended to be created by this Agreement, the related REO Mortgage and the other
Repurchase Documents, and the Seller and applicable REO Owner shall pay all
transfer and mortgage recording taxes, fees and other charges in connection with
the execution, delivery and/or filing thereof.

Section 4.04 Environmental Compliance. Notwithstanding anything to the contrary
herein, neither the Seller nor any REO Owner shall obtain title to a Mortgaged
Property or the Pledged Collateral in connection with any Conversion, if as a
result of any such action Agent reasonably determines after consulting with
legal counsel and duly qualified environmental specialists that (i) Seller or
any REO Owner would fail to qualify under applicable CERCLA liability exemptions
for lenders or bona fide prospective purchasers or (ii) that Agent or any Buyer
would be considered to hold title to, to be a “mortgagee-in-possession” of, or
to be an “owner” or “operator” of such Mortgaged Property within the meaning of
the Comprehensive Environmental Responsibility, Cleanup and Liability Act of
1980, as amended from time to time,

 

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or any comparable law, unless the Agent has previously reasonably determined,
based on an Environmental Site Assessment prepared by an Independent Person who
regularly conducts environmental audits, that:

(a) such Mortgaged Property is in compliance in all material respects with
applicable environmental laws, or, if not, that it is reasonably prudent (as
determined by Agent) to take such actions as are necessary to bring the
Mortgaged Property in compliance in all material respects therewith; and

(b) there are no circumstances present at such Mortgaged Property relating to
the use, management or disposal of any Hazardous Substances for which
investigation, testing, monitoring, containment, clean-up or remediation could
be required under any then effective federal, state or local law or regulation,
or that, if any such Hazardous Substances are present for which such action
could be required, it is reasonably prudent (as determined by Agent) to take
such actions with respect to the affected Mortgaged Property.

In the event that the environmental site assessment first obtained by the Seller
with respect to the applicable Mortgaged Property indicates that such Mortgaged
Property may not be in compliance with applicable environmental laws or that
Hazardous Substances may be present but does not definitively establish such
fact, the Seller shall cause such further environmental tests as the Agent shall
deem reasonably prudent. Any such tests shall be deemed part of the
environmental site assessment obtained by the Seller for purposes of this
Section 4.04.

Section 4.05 Completion of Conversion. Upon the Conversion Date relating to the
Conversion of the Purchased Asset, so long as Seller has satisfied the
Conversion Conditions and except to the extent previously delivered to Seller,
Buyer shall, on such date (a) promptly deliver to Seller or a designee the
related transfer documents and any and all other documents and instruments held
by Buyer related to the Purchased Asset, and (b) solely for purposes of
consummating the Conversion, be deemed to have simultaneously (x) transferred
and released to Seller all of Buyer’s right, title and interest in and to the
Purchased Asset (including all Servicing Rights and Income related thereto,
subject to Seller’s obligations to cause all such Income to be deposited in the
Waterfall Account and to satisfy the Conversion Conditions (including, without
limitation, executing and delivering a REO Mortgage on the related Mortgaged
Property in favor of Agent and securing the Repurchase Obligations)), and
(y) released its lien on and security interest in the Purchased Asset and to
have irrevocably authorized Seller (or a designee thereof) to file any UCC
filing statements or mortgage assignments (without representation or warranty),
releases or mortgage, as applicable to terminate its lien on and security
interest in the Purchased Asset.

ARTICLE 5

APPLICATION OF INCOME

Section 5.01 Waterfall Account. The Waterfall Account shall be established at
the Account Bank. Agent shall have sole dominion and control (including, without
limitation, “control” within the meaning of Section 9-104(a) of the UCC) over
the Waterfall Account. Neither Seller nor any Person claiming through or under
Seller shall have any claim to or interest

 

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in the Waterfall Account. All Income received by Seller, Agent, any Buyer,
Servicer or Account Bank in respect of the Purchased Asset, as well as any
interest received from the reinvestment of such Income, shall be deposited
directly into the Waterfall Account and shall be applied to and remitted by
Waterfall Account Bank in accordance with this Article 5.

Section 5.02 Before an Event of Default.

(a) If no Event of Default exists, all Income described in Section 5.01 and
deposited into the Waterfall Account during each Pricing Period (other than
Principal Payments, Fees and amounts which Servicer is permitted to withhold and
retain in accordance with the Servicing Agreement) (collectively, the
“Non-Principal Income”) shall be applied by Account Bank by no later than the
next following Remittance Date in the following order of priority:

first, to pay amounts due and payable from Seller under any Derivatives Contract
that is included among the Purchased Asset Documents; provided, however, that
for any such Derivatives Contract, such payments shall not exceed the amount of
Non-Principal Income deposited into the Waterfall Account during the applicable
Pricing Period on account of the Purchased Asset;

second, to pay to Agent an amount equal to the Price Differential accrued with
respect to the Purchased Asset as of such Remittance Date;

third, to pay to Agent an amount equal to all default interest, late fees, fees,
expenses and Indemnified Amounts then due and payable from Seller and other
applicable Persons to Agent or any Buyer under the Repurchase Documents;

fourth, to pay any custodial and servicing fees and expenses due and payable
under the Custodial Agreement and the Servicing Agreement;

fifth, to pay to Agent any other amounts due and payable from Seller and other
applicable Persons to Agent or any Buyer under the Repurchase Documents;

sixth, to pay any amounts due and payable from Seller under any Derivatives
Contract that is included among the Purchased Asset Documents to the extent the
same were not paid pursuant to clause first of this Section 5.02(a); and

seventh, (i) if a Default exists, to be held in the Waterfall Account until such
Default is (A) cured, at which time to be applied in accordance with clause
(ii) below, or (B) matures into an Event of Default, at which time to be applied
in accordance with Section 5.03; and (ii) if no Default exists, to pay to Seller
any remainder for its own account.

(b) If no Event of Default exists, all Principal Income shall be applied by
Account Bank by no later than the next following Remittance Date in the
following order of priority:

first, to pay to Agent, an amount equal to Buyer’s Percentage Share of such
Income, to reduce the outstanding Purchase Price to zero; and

 

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second, to pay to Agent any other amounts due and payable from Seller and other
applicable Persons to Agent or any Buyer under the Repurchase Documents; and

third, if no Default exists, to pay to Seller any remainder for its own account.

(c) Seller shall pay to Agent Buyer’s Percentage Share of any and all Fees
received by Seller in accordance with the Fee and Pricing Letter, regardless of
whether or not the Transaction has occurred, within one (1) Business Day after
receipt thereof by Seller; provided, however, that upon the occurrence and
during the continuance of an Event of Default, Seller shall pay to Agent 100% of
all Fees received by Seller, regardless of whether or not the Transaction has
occurred, within one (1) Business Day after receipt thereof by Seller.

Section 5.03 After Event of Default. If an Event of Default exists, all Income
(other than Fees, which shall be payable pursuant to Section 5.02(c) hereof)
deposited into the Waterfall Account in respect of the Purchased Asset shall be
applied by Account Bank, on the Business Day next following the Business Day on
which each amount of Income is so deposited, in the following order of priority:

first, to pay to Agent an amount equal to the Price Differential accrued with
respect to the Purchased Asset as of such date;

second, to pay to Agent an amount equal to all default interest, late fees,
fees, expenses and Indemnified Amounts then due and payable from Seller and
other applicable Persons to Agent or any Buyer under the Repurchase Documents;

third, to pay to Agent an amount equal to the Repurchase Price of the Purchased
Asset (to be applied in such order and in such amounts as determined by Agent,
until such Repurchase Price has been reduced to zero);

fourth, to pay to Agent all other Repurchase Obligations due to Agent or any
Buyer; and

fifth, to pay the surplus, if any, to whoever may be lawfully entitled to
receive such surplus.

Section 5.04 Seller to Remain Liable. If the amounts remitted to Agent and any
Buyer as provided in Sections 5.02 and 5.03 are insufficient to pay all amounts
due and payable from Seller to Agent and any Buyer under this Agreement or any
Repurchase Document on a Remittance Date, a Repurchase Date, upon the occurrence
of an Event of Default or otherwise, Seller shall nevertheless remain liable for
and shall pay to Agent and such Buyer when due all such amounts.

 

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ARTICLE 6

CONDITIONS PRECEDENT; POST CLOSING OBLIGATION

Section 6.01 Conditions Precedent to Closing Date. Agent and Buyers shall not be
obligated to enter into the Transaction or purchase the Asset until the
following conditions have been satisfied or waived by Agent, on and as of the
Closing Date and the initial Purchase Date:

(a) Agent has received the following documents, each dated the Closing Date or
as of the Closing Date unless otherwise specified: (i) each Repurchase Document
duly executed and delivered by the parties thereto, (ii) an official good
standing certificate dated a recent date with respect to Seller,
(iii) certificates of the secretary or an assistant secretary of Seller with
respect to attached copies of the Governing Documents and applicable resolutions
of Seller, and the incumbencies and signatures of officers of Seller executing
the Repurchase Documents to which it is a party, evidencing the authority of
Seller with respect to the execution, delivery and performance thereof, (iv) a
Closing Certificate, (v) intentionally omitted, (vi) such customary opinions
from counsel to Seller as Agent may require, including with respect to corporate
matters, enforceability, non-contravention, no consents or approvals required
other than those that have been obtained, perfected security interests in the
Purchased Asset and any other collateral pledged pursuant to the Repurchase
Documents, Investment Company Act matters, and, if applicable, true sale
(limited to transfers of the Purchased Asset between Seller and any of its
Affiliates, but not with respect to transfers of the Purchased Asset from Seller
to Agent and each Buyer), and the applicability of Bankruptcy Code safe harbors,
and (vii) all other documents, certificates, information, financial statements,
reports, approvals and opinions of counsel as it may require;

(b) (i) UCC financing statements have been filed against Seller in all filing
offices required by Agent, (ii) Agent has received such searches of UCC filings,
tax liens, judgments, pending litigation and other matters relating to Seller
and the Purchased Asset as Agent may require, and (iii) the results of such
searches are satisfactory to Agent; and

(c) Agent has received payment from Seller of all fees and expenses then payable
under the Fee and Pricing Letter and the other Repurchase Documents, as
contemplated by Section 13.02.

Section 6.02 Conditions Precedent to the Transaction. Agent shall not be
obligated to enter into the Transaction, purchase the Asset, or be obligated to
take, fulfill or perform any other action hereunder, until the following
additional conditions have been satisfied or waived by Agent, with respect to
the Asset on and as of the Purchase Date:

(a) Agent has received the following documents: (i) a Transaction Request,
(ii) a Confirmation, (iii) Irrevocable Redirection Notices, (iv) subject to
Section 6.03 hereof, a trust receipt and other items required to be delivered
under the Custodial Agreement, and (v) if applicable and to the extent not
previously delivered, opinions of counsel with respect to true sale (limited to
transfers of the Purchased Asset between Seller and any of its Affiliates, but
not with respect to transfers of the Purchased Asset from Seller to Buyer) as
Agent may require in order to confirm its perfected security interest in the
Purchased Asset;

 

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(b) immediately before the Transaction and after giving effect thereto and to
the intended use thereof, no Representation Breach (including with respect to
the Purchased Asset), Default, Event of Default, Material Adverse Effect or
Market Disruption Event exists;

(c) Agent has executed the Confirmation;

(d) the Purchase Price for the Transaction does not exceed the Maximum Purchase
Price after giving effect to the Transaction;

(e) the Purchase Date is not later than the Funding Expiration Date and the
Repurchase Date specified in the Confirmation is not later than the Facility
Termination Date;

(f) Agent has not received notice and has no knowledge that Seller has not
satisfied in all material respects all requirements and conditions and has
performed in all material respects all covenants, duties, obligations and
agreements contained in the Repurchase Documents to be performed by such Person
on or before the Purchase Date;

(g) to the extent the Purchased Asset Documents contain notice, cure and other
provisions in favor of a pledgee under a repurchase or warehouse facility, and
without prejudice to the sale treatment of the Asset to Agent and each Buyer,
Agent and each Buyer have received evidence that Seller has given notice to the
applicable Persons of Agent and each Buyer’s interest in the Asset and otherwise
satisfied any other applicable requirements under such pledgee provisions so
that Agent is entitled to the rights and benefits of a pledgee under such
pledgee provisions;

(h) Agent shall have received executed blank assignments of the Purchased Asset
Documents (which where applicable shall be in appropriate form for recording in
the jurisdiction in which the underlying real estate is located) (the “Blank
Assignment Documents”);

(i) Agent shall have received an executed power of attorney of Seller in the
form of Exhibit E;

(j) Agent shall have received all Fees due and payable to Agent and/or Buyer as
of the Purchase Date;

(k) Servicer, Seller and Agent shall have entered into the Servicing Agreement,
which Servicing Agreement shall be subject to Agent’s approval in its
discretion;

(l) Account Bank, Seller and Agent shall have entered into a Controlled Account
Agreement acceptable to Agent with respect to the Waterfall Account;

(m) Agent shall have received a customary opinion from counsel to Seller
acceptable to Agent with respect to the enforceability of the Controlled Account
Agreement; and

(n) Agent shall have received any Environmental Workplans (as defined in the
Underlying Loan Agreement) with respect to the Environmental Workplan Properties
(as defined in the Underlying Loan Agreement) actually provided to Seller
pursuant to the Underlying Loan Agreement, which shall be acceptable to Agent in
its reasonable discretion,

 

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together with any other environmental, vapor testing, remediation or other
similar reports and/or plans actually delivered by the Underlying Obligor to the
Seller pursuant to the Underlying Loan Agreement, acceptable to Agent in its
reasonable discretion.

The Confirmation delivered by Seller shall constitute a certification by Seller
that all of the conditions precedent in this Article 6 have been satisfied or
waived by Agent.

ARTICLE 7

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants, on and as of the date of this Agreement and each
Purchase Date (except with respect to the representations and warranties in
Section 7.10 regarding Schedule II, Section B, which shall be made as of the
related Purchase Date and at all times when the Asset is subject to this
Agreement and in Sections 7.01, 7.02, 7.04, 7.07, and, except as permitted
otherwise pursuant to Section 10.01(j), 7.12 which shall be made at all times
when any Repurchase Document or the Transaction is in full force and effect) as
follows:

Section 7.01 Seller. Seller has been duly organized and validly exists in good
standing as a corporation, limited liability company or limited partnership, as
applicable, under the laws of the jurisdiction of its incorporation,
organization or formation. Seller (a) has all requisite power and authority,
(b) is duly qualified to do business in all jurisdictions, in which the failure
to do so could reasonably be expected to have a Material Adverse Effect, (c) has
legal right, license and franchise except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect, and (d) has been duly
authorized by all necessary action, to (w) own, lease and operate its properties
and the assets, (x) conduct its business as presently conducted, (y) execute,
deliver and perform its obligations under the Repurchase Documents to which it
is a party, and (z) acquire, own, sell, assign, pledge and repurchase the
Purchased Asset. Seller’s exact legal name is set forth in the preamble and
signature pages of this Agreement, subject to Section 8.01. Seller’s location
(within the meaning of Article 9 of the UCC) is at the address of Seller
referred to in Annex 1, subject to Section 8.01. Seller has not changed its name
or location within the past twelve (12) months, subject to Section 8.01.
Seller’s organizational identification number is 5229703 and its tax
identification number is 36-4761687. As of the Closing Date, Seller has no
subsidiaries. Seller is a wholly-owned Subsidiary of Guarantor. The fiscal year
of Seller is the calendar year. Seller has no Indebtedness, Contractual
Obligations or investments other than (a) ordinary trade payables (including,
without limitation, tax liabilities), (b) in connection with the Asset, (c) the
Repurchase Documents, (d) the Governing Documents of Seller, and (e) other
Indebtedness, Contractual Obligations and Investments expressly permitted by
this Agreement (including, without limitation, under the Purchased Asset
Documents). Seller has no Guarantee Obligations.

Section 7.02 Repurchase Documents. Each Repurchase Document to which Seller is a
party has been duly executed and delivered by Seller and constitutes the legal,
valid and binding obligation of Seller enforceable against Seller in accordance
with its terms, except as such enforceability may be limited by Insolvency Laws
and general principles of equity. The execution, delivery and performance by
Seller of each Repurchase Document to which it is a party do not (a) conflict
with, result in a breach of, or constitute (with or without notice or lapse

 

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of time or both) a default under, any (i) Governing Document, Indebtedness,
Guarantee Obligation or Contractual Obligation applicable to Seller or any of
its properties or assets, (ii) Requirements of Law, or (iii) approval, consent,
judgment, decree, order or demand of any Governmental Authority, or (b) result
in the creation of any Lien (other than Permitted Liens) on any of the
properties or assets of Seller. All approvals, authorizations, consents, orders,
filings, notices or other actions of any Person or Governmental Authority
required for the execution, delivery and performance by Seller of the Repurchase
Documents to which it is a party and the sale of and grant of a security
interest in the Purchased Asset to Agent, have been obtained, effected, waived
or given and are in full force and effect, except to the extent the failure to
obtain, effect, have waived or given such approvals, authorizations, consents,
orders, filings, notices or other actions could not reasonably be expected to
have a Material Adverse Effect. The execution, delivery and performance of the
Repurchase Documents do not require compliance by Seller with any “bulk sales”
or similar law. There is no material litigation, proceeding or investigation
pending or, to the Knowledge of Seller threatened, against Seller or Guarantor
before any Governmental Authority (a) asserting the invalidity of any Repurchase
Document, (b) seeking to prevent the consummation of the Transaction, or
(c) seeking any determination or ruling that could reasonably be expected to
have a Material Adverse Effect.

Section 7.03 Solvency. Seller is Solvent and the transactions contemplated under
the terms of the Repurchase Documents do not and will not render Seller not
Solvent.

Section 7.04 Taxes. Seller has filed all required federal income tax returns and
all other material tax returns, domestic and foreign, required to be filed by it
and has paid all material taxes (including mortgage recording taxes),
assessments, fees, and other governmental charges payable by it, or with respect
to any of its properties or assets, which have become due, or such taxes are
being contested in good faith by appropriate proceedings diligently conducted
and for which appropriate reserves have been established in accordance with
GAAP. As of the Closing Date, there is no material action, suit, proceeding,
investigation, audit or claim relating to any such taxes now pending or, to the
Actual Knowledge of Seller, threatened by any Governmental Authority which is
not being contested in good faith as provided above. As of the Closing Date,
Seller has not entered into any agreement or waiver or been requested to enter
into any agreement or waiver extending any statute of limitations relating to
the payment or collection of taxes or is aware of any circumstances that would
cause the taxable years or other taxable periods of Seller not to be subject to
the normally applicable statute of limitations. No tax Liens have been filed
against any property or assets of Seller, except for Permitted Liens.

Section 7.05 Financial Condition. The audited balance sheet of Guarantor as at
the fiscal year most recently ended for which such audited balance sheet is
available, and the related audited statements of income and retained earnings
and of cash flows for the fiscal year then ended, setting forth in each case in
comparative form the figures for the previous year, reported on without a “going
concern” or like qualification arising out of the audit conducted by Guarantor’s
independent certified public accountants, copies of which have been delivered to
Agent and each Buyer, present fairly in all material respects the financial
condition of Guarantor as of such date and the results of its operations and
cash flows for the fiscal year then ended. All such financial statements,
including related schedules and notes, were prepared in accordance with GAAP
except as disclosed therein and, in the case of unaudited financial statements,
footnotes and changes, resulting from audit and normal year-end adjustments.

 

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Section 7.06 True and Complete Disclosure. The written information, reports,
certificates, documents, books, records, files, exhibits and schedules furnished
by or on behalf of Seller or Guarantor to Agent in connection with the
Repurchase Documents and the Transaction (excluding financial statements, the
Purchased Asset Documents and any agreements and other documents delivered
pursuant thereto), when taken as a whole, do not contain any untrue statement of
material fact or omit to state any material fact necessary to make the
statements herein or therein, in light of the circumstances under which they
were made, not misleading. The representations and warranties by Seller
contained in all written information, reports, certificates, documents, books,
records, files, exhibits and schedules furnished after the date hereof by or on
behalf of Seller or Guarantor to Agent in connection with the Repurchase
Documents and the Transaction (excluding financial statements, the Purchased
Asset Documents and any agreements and other documents delivered pursuant
thereto) will be true, correct and complete in all material respects, on the
date as of which such information is stated or certified.

Section 7.07 Compliance with Laws. Seller has complied in all respects with all
Requirements of Laws, except in such instances in which the failure to so comply
could not reasonably be expected to have a Material Adverse Effect. Seller
(a) is not an “enemy” or an “ally of the enemy” as defined in the Trading with
the Enemy Act of 1917, (b) is not in violation of any Anti-Terrorism Laws,
(c) is not a blocked person described in Section 1 of Executive Order 13224 or
to its knowledge engages in any dealings or transactions or is otherwise
associated with any such blocked person, (d) is not in violation of any country
or list based economic and trade sanction administered and enforced by the
Office of Foreign Assets Control, (e) is not a Sanctioned Entity, (f) has no
more than 10% of its assets located in Sanctioned Entities, or (g) derives no
more than 10% of its operating income from investments in or transactions with
Sanctioned Entities. The proceeds of the Transaction have not been and will not
be used to fund any operations in, finance any investments or activities in or
make any payments to a Sanctioned Entity. Seller is a “qualified purchaser” as
defined in the Investment Company Act. Seller (a) is not or is not controlled by
an “investment company” as defined in such Act or is exempt from the provisions
of the Investment Company Act, (b) is not a “broker” or “dealer” as defined in,
or could be subject to a liquidation proceeding under, the Securities Investor
Protection Act of 1970, or (c) is not subject to regulation by any Governmental
Authority limiting its ability to incur the Repurchase Obligations. Seller is in
compliance with the Foreign Corrupt Practices Act of 1977 and any foreign
counterpart thereto. Seller has not made, offered, promised or authorized a
payment of money or anything else of value (a) in order to assist in obtaining
or retaining business for or with, or directing business to, any foreign
official, foreign political party, party official or candidate for foreign
political office, (b) to any foreign official, foreign political party, party
official or candidate for foreign political office, or (c) with the intent to
induce the recipient to misuse his or her official position to direct business
wrongfully to Seller or any other Person, in violation of the Foreign Corrupt
Practices Act.

Section 7.08 Compliance with ERISA. With respect to Seller, or any Affiliate of
Seller, during the immediately preceding five (5) year period, (a) neither a
Reportable Event nor an “accumulated funding deficiency” nor “an unpaid minimum
required contribution” as defined in the Code or ERISA has occurred, (b) each
Plan has complied in all material respects with the applicable provisions of the
Code and ERISA, (c) no termination of a Single Employer Plan has occurred
resulting in any material liability that has remained underfunded, and (d) no
Lien in favor of the Pension Benefit Guaranty Corporation or a Plan has arisen,
in each case of clauses (a)

 

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through (d) above which would reasonably be expected to result in a Material
Adverse Effect. The present value of all accumulated benefit obligations under
each Single Employer Plan (based on the assumptions used to fund such Plan)
relating to Seller or any Affiliate of Seller did not, as of the last annual
valuation date prior to the date hereof, exceed the value of the assets of such
Plan allocable to such accrued benefits which would reasonably be expected to
result in a Material Adverse Effect. Neither Seller nor any Affiliate of Seller
is currently subject to any liability for a complete or partial withdrawal from
a Multiemployer Plan.

Section 7.09 No Default. No Default or Event of Default exists. No Internal
Control Event has occurred. As of the Closing Date, to Seller’s Knowledge Seller
has provided Agent with access to a service, internet website or other system
where Agent can successfully access all underlying servicing agreements with
respect to the Purchased Asset.

Section 7.10 Purchased Asset. To the Actual Knowledge of Seller, each
representation and warranty set forth in Schedule II is true and correct in all
material respects. To the Actual Knowledge of Seller, no material representation
or warranty made by an Underlying Obligor in the Purchased Asset Documents with
respect to the Purchased Asset is false or misleading in any material respect.
Seller has no Knowledge of any fact that could reasonably lead it to expect that
the Purchased Asset will not be paid in full. To the Knowledge of Seller, the
Purchased Asset is not the subject of any setoff, counterclaim, defense,
abatement, suspension, deferment, deduction or reduction, whether arising out of
transactions concerning the Purchased Asset or otherwise, by Seller, Guarantor,
any Underlying Obligor or other Person with respect to any material amount,
except as set forth in the Purchased Asset Documents delivered to Agent. The
Purchased Asset was underwritten in accordance with and satisfies applicable
standards established by Seller. To the Knowledge of Seller, none of the
Purchased Asset Documents has any marks or notations indicating that it is
subject to an existing Lien in favor of any Person other than Agent. If any
Purchased Asset Document requires the holder or transferee of the Purchased
Asset to be a qualified transferee, qualified institutional lender, qualified
lender or other similar terms (however defined), Seller meets such requirement
and such terms are sufficiently broad enough for Agent and each initial Buyer to
meet such requirement. Assuming that Agent and each Buyer also meet such
requirement, the assignment and pledge of the Purchased Asset to Agent and each
Buyer pursuant to the Repurchase Documents does not violate such Purchased Asset
Document. There are no outstanding rights, options, warrants or agreements for
the purchase, sale or issuance of the Purchased Asset created by, through, or as
a result of Seller’s actions or inactions, and there are no agreements on the
part of Seller to issue, sell, pledge or distribute the Purchased Asset, other
than this Agreement and the other Repurchase Documents except as otherwise
provided in the Purchased Asset Documents provided to Agent and each Buyer prior
to the Closing Date.

Section 7.11 Intentionally Omitted.

Section 7.12 Transfer and Security Interest. The Repurchase Documents constitute
a valid and effective transfer to Agent and each Buyer of all right, title and
interest of Seller in, to and under the Purchased Asset (together with all
related Servicing Rights), free and clear of any Liens (other than Permitted
Liens). With respect to the protective security interest granted by Seller in
Section 11.01, upon the delivery of the Confirmations and the Purchased Asset
Documents to Custodian, the execution and delivery of the Controlled Account
Agreement and

 

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the filing of the UCC financing statements as provided herein, such security
interest shall be a valid first priority perfected security interest to the
extent such security interest can be perfected by possession, filing or control
under the UCC, subject only to Permitted Liens. Upon receipt by Custodian of
each Purchased Asset Document required to be endorsed in blank by Seller and
payment by each Buyer of the Purchase Price for the Purchased Asset, Agent and
each Buyer shall either own the Purchased Asset and the related Purchased Asset
Documents or have a valid first priority perfected security interest in such
Purchased Asset Document (subject only to Permitted Liens). The Purchased Asset
constitutes the following, as defined in the UCC: a general intangible,
instrument, investment property, security, deposit account, financial asset,
uncertificated security, securities account, security entitlement or supporting
obligation. Seller has not sold, assigned, pledged, granted a security interest
in, encumbered or otherwise conveyed the Purchased Asset to any Person other
than pursuant to the Repurchase Documents. Seller has not authorized the filing
of and has no Knowledge of any UCC financing statements filed against Seller as
debtor that include the Purchased Asset, other than any financing statement that
has been terminated or filed pursuant to this Agreement or any other Repurchase
Document.

Section 7.13 No Broker. Neither Seller nor any Affiliate of Seller has dealt
with any broker, investment banker, agent or other Person, except for Agent,
initial Buyer or an Affiliate of initial Buyer, who may be entitled to any
commission or compensation in connection with the Transaction.

Section 7.14 Separateness. Seller is in compliance in all material respects with
the requirements of Article 9.

ARTICLE 8

COVENANTS OF SELLER

From the date hereof until the Repurchase Obligations are paid in full and the
Repurchase Documents are terminated, Seller shall perform and observe the
following covenants:

Section 8.01 Existence; Governing Documents; Conduct of Business. Seller shall
(a) preserve and maintain its legal existence, (b) qualify and remain qualified
in good standing in each jurisdiction where the failure to be so qualified would
have a Material Adverse Effect, (c) comply with its Governing Documents,
including all Special Purpose Entity provisions, and (d) not modify, amend or
terminate its Governing Documents without Agent’s prior written consent. Seller
shall (a) continue to engage in the same (and no other) general lines of
business as presently conducted by it, (b) maintain and preserve all of its
material rights, privileges, licenses and franchises necessary for the operation
of its business, and (c) maintain Seller’s status as a qualified transferee,
qualified institutional lender or qualified lender (however defined) under the
Purchased Asset Documents. Seller shall not (a) change its name, organizational
number, tax identification number, fiscal year, identity, structure or
jurisdiction of organization (or have more than one such jurisdiction), or
(b) move, or consent to Custodian moving, the Purchased Asset Documents from the
location thereof on the Closing Date, unless in each case Seller has given at
least thirty (30) days’ prior notice to Agent and has taken all actions required
under the UCC to continue the first priority perfected security interest of
Agent and each Buyer in the Purchased Asset. Seller shall enter into the
Transaction as principal, unless Agent agrees before the Transaction that Seller
may enter into the Transaction as agent for a principal and under terms and
conditions disclosed to Agent.

 

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Section 8.02 Compliance with Laws, Contractual Obligations and Repurchase
Documents. Seller shall comply in all material respects with all Requirements of
Laws, including those relating to the Purchased Asset and to the reporting and
payment of taxes, except in such instances in which the failure to so comply
could not reasonably be expected to have a Material Adverse Effect. No part of
the proceeds of the Transaction shall be used for any purpose that violates
Regulation T, U or X of the Board of Governors of the Federal Reserve System.
Seller shall conduct the requisite due diligence in connection with the
origination or acquisition of the Asset for purposes of complying with the
Anti-Terrorism Laws, including with respect to the legitimacy of the applicable
Underlying Obligor and the origin of the assets used by such Person to purchase
the Mortgaged Property, and will maintain sufficient information to identify
such Person for purposes of the Anti-Terrorism Laws. Seller shall maintain the
Custodial Agreements and Controlled Account Agreement in full force and effect.

Section 8.03 Protection of Buyer’s Interest in Purchased Asset. Seller shall
take all action necessary or required by the Repurchase Documents, Purchased
Asset Documents or Requirements of Law, or reasonably requested by Agent, to
perfect, protect and more fully evidence the security interest granted in the
Purchased Asset and Agent’s ownership of and first priority perfected security
interest in the Purchased Asset and related Purchased Asset Documents (subject
to Permitted Liens), including executing or causing to be executed such other
instruments or notices as may be necessary or appropriate and filing and
maintaining effective UCC financing statements, continuation statements and
assignments and amendments thereto. Seller shall (a) not assign, sell, transfer,
pledge, hypothecate, grant, create, incur, assume or suffer or permit to exist
any security interest in or Lien (other than Permitted Liens) on any of its
property or assets (including the Purchased Asset) of any kind (whether real or
personal, tangible or intangible), whether now owned or hereafter acquired, to
or in favor of any Person, except (i) to Agent and each Buyer, (ii) Seller may
sell, assign or otherwise transfer the Purchased Asset to the extent Agent has
released the Purchased Asset, (iii) intentionally omitted, and (iv) as otherwise
permitted in Section 8.04, (b) defend the Purchased Asset against, and take such
action as is necessary to remove, any such Lien and (c) defend the right, title
and interest of Agent and each Buyer in and to the Purchased Asset against the
claims and demands of all Persons whomsoever. Seller shall not make any marks on
its computer records and tapes inconsistent with the interests granted to Agent
and each Buyer hereunder. Subject to Section 8.09 hereof, Agent and each Buyer
hereby revocably grants Seller a license to (a) direct and/or consult with
respect to the servicing of the Purchased Asset and (b) to direct, approve,
consult with or consent to or vote on specific actions to be taken with respect
to the Purchased Asset in a manner consistent with Section 8.09, so long as no
Event of Default has occurred and is continuing. Such revocable license is not
evidence of any ownership or other interest or right of Seller in the Purchased
Asset. Upon receipt of written notice from Agent that an Event of Default has
occurred and is continuing, such license shall immediately and automatically be
revoked and terminate, and Agent and each Buyer shall be entitled to direct the
servicing with respect to the Purchased Asset without regard to Seller’s
instructions, including, but not limited to, to the extent Seller controls or is
entitled to control selection of any servicer, transferring any or all of such
servicing to an entity satisfactory to Agent and each Buyer. Upon written
request of Seller and at Seller’s expense, Agent and each Buyer shall execute
and deliver such other agreements and documents as Seller may from time to time
reasonably request in order to give effect to such license.

 

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Section 8.04 Actions of Seller Relating to Distributions, Indebtedness,
Guarantee Obligations, Contractual Obligations, Investments and Liens. Seller
shall not declare or make any payment on account of, or set apart assets for, a
sinking or similar fund for the purchase, redemption, defeasance, retirement or
other acquisition of any Equity Interest 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;
provided, that Seller may declare and pay dividends or distributions in
accordance with its Governing Documents if no Event of Default exists or would
exist as a result thereof. Seller shall not contract, create, incur, assume or
permit to exist any Indebtedness, Guarantee Obligations, Contractual Obligations
or Investments, except to the extent (a) arising or existing under the
Repurchase Documents and the Purchased Asset Documents (and any agreements,
instruments and documents entered in connection with the foregoing),
(b) existing as of the Closing Date, as referenced in the financial statements
delivered to Agent prior to the Closing Date, and any renewals, refinancings or
extensions thereof in a principal amount not exceeding that outstanding as of
the date of such renewal, refinancing or extension, (c) of short-term, unsecured
payables incurred in the ordinary course of business in an amount no greater
than $250,000, (d) relating to engagement letters, retention letters and other
similar agreements with accounting firms, law firms and corporate service
companies and other similar agreements and contracts entered into the ordinary
course of its business, (e) other Contractual Obligations incidental to the
conduct of its business (including with respect to the assignment, sale or
transfer of the Purchased Asset and the Asset repurchased by Seller), (f) of any
cash held by Seller that has been released from the Waterfall Account,
(g) ordinary trade payables (including, without limitation, tax liabilities),
(h) the Governing Documents of Seller, and (i) other Indebtedness, Contractual
Obligations and Investments expressly permitted by this Agreement. Seller shall
not grant, allow or enter into any agreement or arrangement with any Person that
prohibits or restricts or purports to prohibit or restrict the granting of any
Lien on the Purchased Asset (except in connection with the Repurchase
Documents).

Section 8.05 Delivery of Income. Seller shall deliver to Agent a Irrevocable
Redirection Notice executed by Seller with respect to the Purchased Asset which
requires the underlying agent or lead lender for the Purchased Asset or if the
Underlying Obligor makes payment directly to lenders, such Underlying Obligor
under the Purchased Asset and all other applicable Persons to, deposit all
Income in respect of the Purchased Asset into the Waterfall Account in
accordance with Section 5.01 hereof. Seller (a) shall comply with and enforce
each Irrevocable Redirection Notice, (b) shall not amend, modify, waive,
terminate or revoke any Irrevocable Redirection Notice without Agent’s consent,
and (c) shall take all commercially reasonable steps to enforce each Irrevocable
Redirection Notice. In connection with each principal payment or prepayment
under the Purchased Asset, Seller shall provide or cause to be provided to Agent
and Custodian sufficient detail to enable Agent and Custodian to identify the
Purchased Asset to which such payment applies. If Seller receives any rights,
whether in addition to, in substitution of, as a conversion of, or in exchange
for the Purchased Asset, or otherwise in respect thereof, Seller shall accept
the same as agent of Agent and each Buyer, hold the same in trust for Agent and
immediately deliver the same to Agent or its designee in the exact form
received, together with duly executed instruments of transfer, stock powers or

 

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assignment in blank and such other documentation as Agent shall reasonably
request. If any Income is received by Seller, Guarantor or any Affiliate of
Seller or Guarantor, Seller shall pay or deliver such Income to Agent on behalf
of Agent and each Buyer or Custodian within two (2) Business Days after receipt,
and, until so paid or delivered, hold such Income in trust for Agent and each
Buyer, segregated from other funds of Seller.

Section 8.06 Delivery of Financial Statements and Other Information. Seller
shall deliver the following to Agent, as soon as available and in any event
within the time periods specified:

(a) within sixty (60) days after the end of each of the first three fiscal
quarters of each fiscal year of Guarantor, (i) the unaudited statement of
assets, liabilities and partners’ capital of Guarantor as at the end of such
period, (ii) the related unaudited statement of operations for such period, and
(iii) a Compliance Certificate;

(b) within one hundred and twenty (120) days after the end of each fiscal year
of Guarantor, (i) the audited statement of assets, liabilities and partners’
capital of Guarantor as at the end of such fiscal year, (ii) the related
statements of operations, changes in partners capital and cash flows for such
year, (iii) 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 financial statements fairly
present in all material respects the financial condition and results of
operations of Guarantor as at the end of and for such fiscal year in accordance
with GAAP, and (iv) a Compliance Certificate;

(c) intentionally omitted;

(d) with respect to the Purchased Asset and related Mortgaged Property, but
solely to the extent that Seller receives such report from the applicable
Underlying Obligor, as applicable: (i) within thirty (30) days after the end of
each fiscal quarter of Seller, a quarterly report of the following: delinquency,
loss experience, surveillance, rent roll, occupancy and other property-level
information, and (ii) within ten (10) days after receipt by Seller, remittance,
servicing, securitization, exception and other reports, operating and financial
statements of Underlying Obligors;

(e) any other material agreements, correspondence, documents or other written
information not included in the Underwriting Package received by Seller after
the Closing Date and not previously furnished to Agent which is related to
Seller or the Purchased Asset, promptly after the discovery thereof by Seller;
and

(f) such other information regarding the financial condition, operations or
business of Seller, any Underlying Obligor or the Purchased Asset as Agent may
reasonably request.

 

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Section 8.07 Delivery of Notices. Seller shall promptly notify Agent of the
occurrence of any of the following of which Seller has Actual Knowledge,
together with a certificate of a Responsible Officer of Seller setting forth
details of such occurrence and any action Seller has taken or proposes to take
with respect thereto:

(a) a Representation Breach;

(b) any of the following: (i) with respect to the Purchased Asset or related
Mortgaged Property: material loss or damage, material licensing or permit
issues, material violation of Requirements of Law, discharge of or damage from
Materials of Environmental Concern or any other actual or expected event or
change in circumstances that could reasonably be expected to result in a default
under the Purchased Asset or material decline in value or cash flow, and
(ii) with respect to Seller: violation of Requirements of Law, an Internal
Control Event or other event or circumstance, in each case, that could
reasonably be expected to have a Material Adverse Effect;

(c) the existence of any Default, Event of Default or Material Default under or
related to the Purchased Asset, any Purchased Asset Document, any Indebtedness,
any Guarantee Obligation or any Contractual Obligation of Seller; or

(d) the commencement of, settlement of or material judgment in any litigation,
action, suit, arbitration, investigation or other legal or arbitrable
proceedings before any Governmental Authority that (i) affects Seller,
Guarantor, the Purchased Asset, any Mortgaged Property or the Pledged
Collateral, (ii) questions or challenges the validity or enforceability of any
Repurchase Document, Transaction, Purchased Asset or Purchased Asset Document,
or (iii) individually or in the aggregate, could reasonably be likely to have a
Material Adverse Effect.

Section 8.08 Intentionally Omitted.

Section 8.09 Material Actions, Etc.

(a) With respect to the Purchased Asset, Seller shall not, and shall not direct
or permit the Servicer to, (i) take any Material Action without the prior
written consent of Agent or (ii) take any action which would result in a
violation of the obligations of any Person under or non-compliance with the
servicing agreement for the Purchased Asset or any Purchased Asset Document or
Repurchase Document.

(b) Seller (or Servicer on its behalf) may from time to time approve, direct or
permit Non-Material Actions without the prior written consent of Agent, provided
any such Non-Material Action is commercially reasonable under the facts and
circumstances. By not later than five (5) Business Days following the
implementation of any Non-Material Action with respect to the Purchased Asset,
Seller shall notify Agent in writing. Notwithstanding the foregoing, after the
occurrence and during the continuance of an Event of Default, the right of
Seller to approve, direct or permit Non-Material Actions shall terminate, and
all Non-Material Actions (and Material Actions) shall require the prior written
consent of Agent.

(c) Intentionally omitted.

(d) To the extent that the Deemed Approval Requirements are fully satisfied in
connection with any Seller request for Agent consent under this Section and
Agent thereafter fails to respond, Agent’s approval shall be deemed given with
respect to the matter for which approval was requested.

 

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Section 8.10 Maintenance of Property, Insurance and Records. Seller (or Servicer
on its behalf) shall maintain and implement administrative and operating
procedures (including the ability to recreate records evidencing the Purchased
Asset if the original records are destroyed) and shall keep and maintain all
documents, books, records and other information (including with respect to the
Purchased Asset) that are reasonably necessary or advisable in the conduct of
its business.

Section 8.11 Tax Treatment of Seller. Seller shall maintain its status as a
partnership for U.S. Federal income tax purposes, and neither the Seller nor a
portion of the Seller will be treated as a taxable mortgage pool under
Section 7701(i) of the Code.

Section 8.12 Reserve Accounts. To the extent of Seller’s control thereof and
interest therein under the Purchased Asset Documents, Seller shall use
commercially-reasonable efforts to cause all escrow and reserve amounts on
deposit in connection with the Purchased Asset (excluding amounts on deposit in
any tenant lockbox account maintained pursuant to the Purchased Asset Documents)
to be deposited and maintained (i) in an account or accounts established with
Agent or, if Wells Fargo Bank, National Association is no longer the Agent under
this Agreement, with any other financial institution selected by Seller and
approved in writing by the applicable replacement Agent in its reasonable
discretion; provided, however, that Wells Fargo Bank, National Association shall
at all times be an approved financial institution for purposes of this
Section 8.12, and (ii) in accordance with all requirements of the applicable
Purchased Asset Documents.

Section 8.13 Appraisals.

(a) Seller hereby acknowledges and agrees that Agent shall have the right to
commission and order an Appraisal of any related Mortgaged Property:
(i) pursuant to Section 8.13(b), below, (ii) at any time and from time to time
while the Purchased Asset is subject to this Agreement if Agent and/or Buyer is
required by any applicable rule, regulation or law to commission and order any
such Appraisal and/or (iii) if within thirty (30) days after the occurrence and
during the continuance of a Purchased Asset Event of Default Seller has not
delivered notice to Agent that Seller has elected to commission and order an
Appraisal of the related Mortgaged Property, and that Seller shall be
responsible for the reasonable out-of-pocket costs and expenses incurred by
Agent in obtaining any such Appraisal. Notwithstanding the foregoing, Agent and
each Buyer shall have the unlimited right, at any time and from time to time, to
obtain an appraisal for any Mortgaged Property at its own cost and expense. No
appraisal so obtained by Agent or any Buyer shall have any effect on the
Purchase Price for the Purchased Asset. Notwithstanding anything herein to the
contrary, other than with respect to the Appraisals required to be received by
Agent pursuant to Section 8.13(b), below, Agent’s right to obtain an Appraisal
with respect to any individual Mortgaged Property shall be limited to the rights
of the holder of the Purchased Asset pursuant to the Purchased Asset Documents.

(b) If Agent has determined that the Appraisals delivered to Agent in connection
with the Asset are not FIRREA-compliant, at Agent’s option, Agent shall have the
one-time right to commission and order an FIRREA-compliant Appraisal (or
Appraisals) of any related Mortgaged Property, at Buyer’s sole cost and expense,
with respect to the individual Mortgaged Properties securing Purchased Asset,
satisfactory to Agent in all respects, which

 

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Appraisal confirms that the LTV as of the Purchase Date shall be equal to or
less than fifty-four percent (54%). If Agent commissions and orders a
FIRREA-compliant Appraisal (or Appraisals) pursuant to the foregoing sentence,
and such Appraisal (or Appraisals) confirm an LTV greater than fifty-four
percent (54%), then (x) if such Appraisal (or Appraisals) are received prior to
the Purchase Date, then the Maximum Purchase Price shall be reduced to the
amount that will cause the LTV as of the Purchase Date to be equal to fifty-four
percent (54%) and (ii) if on or after the Purchase Date or (y) if such Appraisal
(or Appraisals) are received after the Purchase Date, then Seller shall reduce
the outstanding Purchase Price, without premium or penalty, in such an amount
necessary to cause the LTV to be equal to or less than fifty-four percent
(54%) (an “LTV Deficiency”). Any failure by Seller to pay to Agent any LTV
Deficiency within ten (10) Business Day after demand by Agent shall constitute
an Event of Default hereunder.

ARTICLE 9

SINGLE-PURPOSE ENTITY

Section 9.01 Covenants Applicable to Seller. Seller shall (a) own no assets, and
shall not engage in any business, other than the assets necessary to operate its
business as contemplated by this Agreement (including the Purchased Asset and
any REO Owner) and transactions specifically contemplated by this Agreement and
any other Repurchase Document and any business that is incidental, necessary and
appropriate to accomplish the foregoing, (b) not incur any Indebtedness or other
obligation, secured or unsecured, direct or indirect, absolute or contingent
(including guaranteeing any obligation), other than (i) with respect to the
Purchased Asset Documents and the Retained Interests, and (ii) as otherwise
permitted under this Agreement, (c) not make any loans or advances to any
Affiliate or third party and shall not acquire obligations or securities of its
Affiliates, except as permitted under this Agreement, (d) pay its debts and
liabilities (including, as applicable, shared personnel and overhead expenses)
only from its own assets, (e) comply with the provisions of its Governing
Documents, (f) do all things necessary to observe organizational formalities and
to preserve its existence, and shall not amend, modify, waive provisions of or
otherwise change its Governing Documents, (g) maintain all of its books,
records, financial statements and bank accounts separate from those of its
Affiliates, except that no separate financial statements will be required if
such financial information is consolidated with those of its direct or indirect
parent (“Parent”) in accordance with GAAP; provided, that, if permitted by GAAP,
appropriate notation shall be made on such financial statements to indicate that
certain of the consolidated assets and credit are not available to satisfy the
debts and other obligations of the Parent, any Affiliate or any other Person,
(h) 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), 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, (i) maintain adequate capital for the
normal obligations reasonably foreseeable in a business of its size and
character and in light of its contemplated business operations and shall remain
Solvent, provided, however, that the foregoing shall not require any member of
Seller to make any additional capital contributions to Seller, (j) not engage in
or suffer any Change of Control, dissolution, winding up, liquidation,
consolidation or merger in whole or in part or convey or transfer all or
substantially all of its properties and assets to any Person (except as
contemplated herein), (k) not commingle its funds or other assets with those of
any Affiliate or any other Person and shall maintain its properties

 

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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,
(l) maintain its properties, assets and accounts separate from those of any
Affiliate or any other Person, (m) not hold itself out to be responsible for the
debts or obligations of any other Person, (n) not, without the prior unanimous
written consent of all of its Independent Managers, take any Insolvency Action,
(o) (i) have at all times at least one Independent Manager and (ii) provide
Agent with up-to-date contact information for each such Independent Manager and
a copy of the agreement pursuant to which such Independent Manager consents to
and serves as an “Independent Manager” for Seller, (p) the Governing Documents
for Seller shall provide (i) that Agent be given at least two (2) Business Days
prior notice of the removal and/or replacement of any Independent Manager,
together with the name and contact information of the replacement Independent
Manager and evidence of the replacement’s satisfaction of the definition of
Independent Manager and (ii) that any Independent Manager 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, the Insolvency Action;
provided, that the foregoing shall not eliminate the implied contractual
covenant of good faith and fair dealing, (q) 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, (r) maintain a
sufficient number of employees in light of contemplated business operations,
(s) use separate stationary, invoices and checks bearing its own name, and
(t) allocate fairly and reasonably any overhead for shared office space and for
services performed by an employee of an affiliate, (u) not pledge its assets to
secure the obligations of any other Person, and (v) not form, acquire or hold
any Subsidiary or own any Equity Interest in any other entity other than a REO
Owner.

Section 9.02 Covenants Applicable to Seller. Seller (a) shall be a Delaware
limited liability company, (b) shall have at least one Independent Manager
serving as manager of such company and (c) shall not take any Insolvency Action
and shall not cause or permit the members or managers of such entity to take any
Insolvency Action, with respect to itself unless all of its Independent Managers
then serving as managers of the company shall have consented in writing to such
action. At all times hereunder, Seller’s limited liability company agreement
shall provide that the Seller shall have either (A) a member which owns no
economic interest in the company, has signed the Seller’s limited liability
company agreement and has no obligation to make capital contributions to the
Seller, or (B) one natural person or one entity that is not a member of the
company, that has signed its limited liability company agreement and that, under
the terms of such limited liability company agreement becomes a member of the
company immediately prior to the resignation or dissolution of the last
remaining member of the company.

Section 9.03 Reliance. Seller acknowledges that each Buyer is entering into the
transactions contemplated by this Agreement in reliance upon Seller’s identity
as a legal entity that is separate from Guarantor (other than for U.S. federal
income tax purposes) and in reliance upon the compliance of Seller and guarantor
with Article 14 hereof.

 

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ARTICLE 10

EVENTS OF DEFAULT AND REMEDIES

Section 10.01 Events of Default. An Event of Default shall exist upon the
occurrence and during the continuance of any of the following specified events
(each, an “Event of Default”):

(a) Seller fails to make a payment of (i) any Repurchase Price or Price
Differential when due, whether by acceleration or otherwise, or (ii) any fee or
other amount payable hereunder or under the Repurchase Documents within two
(2) Business Days of when due;

(b) Seller fails to observe or perform in any material respect any other
Repurchase Obligation of Seller under the Repurchase Documents or the Purchased
Asset Documents to which Seller is a party (other than breach of a covenant in
Article 8 hereof arising solely out of clause (f) of the definition of “Material
Adverse Effect”), and (except in the case of a failure to perform or observe the
Repurchase Obligations of Seller under Section 8.03 and 18.08(a)) such failure
continues unremedied for twenty (20) Business Days after the earlier of receipt
of notice thereof from Agent or any Buyer or the discovery of such failure by
Seller; provided, however, that such twenty (20) Business Day cure period shall
be extended for up to an additional thirty (30) days so long as such obligation
is susceptible of cure and Seller is taking action reasonably designed to
achieve a cure within the initial twenty (20) Business Days and thereafter
diligently and continuously pursues such cure (it being agreed that during such
cure period any such failure shall not constitute any Event of Default);

(c) any Representation Breach (other than a Representation Breach arising out of
the representations and warranties set forth in Section 7.10 or Schedule II)
exists and continues unremedied for twenty (20) Business Days after the earlier
of receipt of notice thereof from Agent or any Buyer or the discovery of such
failure by Seller;

(d) Seller or Guarantor defaults beyond any applicable grace period in paying
any amount or performing any obligation under any Indebtedness with an
outstanding amount of at least $100,000 with respect to Seller, or $15,000,000
with respect to Guarantor;

(e) an Insolvency Event occurs with respect to Seller or Guarantor;

(f) a Change of Control occurs;

(g) a final judgment or judgments for the payment of money in excess of $100,000
with respect to Seller, or $25,000,000 with respect to Guarantor in the
aggregate that is not insured against is entered against Seller or Guarantor by
one or more Governmental Authorities and the same is not satisfied, discharged
(or provision has not been made for such discharge) or bonded, or a stay of
execution thereof has not been procured, within sixty (60) Business Days from
the date of entry thereof; provided, however, notwithstanding the foregoing, no
Event of Default will result with respect to a judgment with respect to
Guarantor if Guarantor will be in compliance with all financial covenants set
forth in the Guarantee Agreement applicable when calculated after subtracting
the aggregate amount of any such judgments (to the extent not bonded or insured
to the satisfaction of Agent) multiplied by two (2) from the Net Worth (as such
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(h) a Governmental Authority takes any action to (i) displace the management of
Seller or Guarantor or curtail its authority in the conduct of the business of
Seller or Guarantor, (ii) terminate the activities of Seller or Guarantor as
contemplated by the Repurchase Documents, and in each case such action is not
discontinued or stayed within ninety (90) days and any such actions
(individually or in the aggregate) could reasonably be expected to result in a
Material Adverse Effect;

(i) any material provision of any material Repurchase Document, any material
right or material remedy of Agent or any Buyer or material obligation, covenant,
agreement or duty of Seller thereunder is declared null and void, ceases to be
valid and effective, ceases to be the legal, valid, binding and enforceable
obligation of Seller or any other Person, or the validity, effectiveness,
binding nature or enforceability thereof is contested, challenged, denied or
repudiated by Seller or any other Person, in each case directly, indirectly, in
whole or in part;

(j) Any Lien created under any Repurchase Document ceases to be a valid,
perfected first-priority Lien in the Purchased Asset purported to be covered
thereby;

(k) Seller or Guarantor is required to register as an “investment company” (as
defined in the Investment Company Act) or the arrangements contemplated by the
Repurchase Documents shall require registration of Seller or Guarantor as an
“investment company”;

(l) Seller fails to deposit to the Waterfall Account, as applicable, all Income
and other amounts as required by Section 5.01 and other provisions of this
Agreement within two (2) Business Days of the date such deposit is required to
be made;

(m) Guarantor’s audited annual financial statements or the notes thereto or
other opinions or conclusions stated therein are qualified or limited by
reference to the status of Guarantor as a “going concern” or a reference of
similar import, other than a qualification or limitation expressly related to
Agent’s rights in the Purchased Asset;

(n) (i) Guarantor breaches any of the payment obligations set forth in the
Guarantee Agreement or (ii) Guarantor breaches any of the other obligations,
terms or conditions set forth in the Guarantee Agreement and such failure
referred to in this clause (ii) continues for more than twenty (20) Business
Days after the earlier of receipt of notice thereof from Agent or the discovery
of such failure by Guarantor; provided, however, that such twenty (20) Business
Day cure period shall be extended for up to an additional thirty (30) days so
long as Guarantor is taking action reasonably designed to achieve a cure within
the initial twenty (20) Business Days and thereafter diligently and continuously
pursues such cure (it being agreed that during such cure period any such failure
shall not constitute an Event of Default); or

(o) any Material Action is taken or made to the Purchased Asset or any Purchased
Asset Document other than in accordance with Section 8.09.

 

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Notwithstanding anything contained in the Repurchase Documents to the contrary,
unless waived by Agent in its discretion, neither Seller or Guarantor nor any
other Person shall be permitted to cure an Event of Default after the
acceleration of any of the Repurchase Obligations.

Section 10.02 Remedies of Agent as Owner of the Purchased Asset. If an Event of
Default exists, at the option of Agent, exercised by written notice to Seller
(which option shall be deemed to be exercised, even if no notice is given,
automatically and immediately upon the occurrence of an Event of Default under
Section 10.01(e)), the Repurchase Date for the Purchased Asset shall be deemed
automatically and immediately to occur (the date on which such option is
exercised or deemed to be exercised, the “Accelerated Repurchase Date”). If
Agent exercises or is deemed to have exercised the foregoing option:

(a) All Repurchase Obligations shall become immediately due and payable on and
as of the Accelerated Repurchase Date.

(b) All amounts in the Waterfall Account and all Income paid after the
Accelerated Repurchase Date shall be retained by Agent and applied in accordance
with Article 5.

(c) Agent may complete any assignments, allonges, endorsements, powers or other
documents or instruments executed in blank and otherwise obtain physical
possession of the Purchased Asset Documents and all other instruments,
certificates and documents then held by Custodian under the Custodial Agreement.
Agent may obtain physical possession of all Servicing Files, the Servicing
Agreement and other files and records of Seller. Seller shall deliver to Agent
such assignments and other documents with respect thereto as Agent shall
request.

(d) Agent may immediately, at any time, and from time to time, exercise either
of the following remedies with respect to the Purchased Asset: (i) sell the
Purchased Asset on a servicing-released basis and/or without providing any
representations and warranties on an “as-is where is” basis, in a recognized
market and by means of a public or private sale at such price or prices as Agent
accepts, and apply the net proceeds thereof in accordance with Article 5, or
(ii) retain the Purchased Asset and give Seller credit against the Repurchase
Price for the Purchased Asset (or if the amount of such credit exceeds the
Repurchase Price for the Purchased Asset, to credit against Repurchase
Obligations due and any other amounts then owing to Agent or any Buyer by any
other Person pursuant to any Repurchase Document, in such order and in such
amounts as determined by Agent), in an amount equal to the market value for the
Purchased Asset as of such date as determined by Agent. Until such time as Agent
exercises either such remedy with respect to the Purchased Asset, Agent may hold
the Purchased Asset for each Buyer’s account and retain all Income with respect
thereto.

(e) The Parties agree that the Purchased Asset is of such a nature that they may
decline rapidly in value, and may not have a ready or liquid market. Agent may
determine whether, when and in what manner the Purchased Asset shall be sold, it
being agreed that both a good faith public and a good faith private sale shall
be deemed to be commercially reasonable. Agent shall not be required to give
notice to Seller or any other Person prior to exercising any remedy in respect
of an Event of Default. If no prior notice is given, Agent shall give notice to
Seller of the remedies exercised by Agent promptly thereafter.

 

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(f) Seller shall be liable to Agent and each Buyer for (i) any amount by which
the Repurchase Obligations due to such Buyer exceeds the aggregate of the net
proceeds and credits referred to in the preceding clause (d), (ii) the amount of
all actual out-of-pocket expenses, including reasonable and documented legal
fees and expenses, actually incurred by Agent or any Buyer in connection with or
as a consequence of an Event of Default and (iii) any costs and losses payable
under Section 12.03.

(g) Agent shall be entitled to an injunction, an order of specific performance
or other equitable relief to compel Seller to fulfill any of its obligations as
set forth in the Repurchase Documents, including this Article 10, if Seller
fails or refuses to perform its obligations as set forth herein or therein.

(h) Seller hereby appoints Agent as attorney-in-fact of Seller for purposes of
carrying out the Repurchase Documents, including executing, endorsing and
recording any instruments or documents and taking any other actions that Agent
deems necessary or advisable to accomplish such purposes, which appointment is
coupled with an interest and is irrevocable.

(i) Agent may, without prior notice to Seller, exercise any or all of its
set-off rights including those set forth in Section 18.17. This Section 10.02(i)
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.

(j) All rights and remedies of Agent and each Buyer under the Repurchase
Documents, including those set forth in Section 18.17, are cumulative and not
exclusive of any other rights or remedies that Agent or such Buyer may have and
may be exercised at any time when an Event of Default exists. Such rights and
remedies may be enforced without prior judicial process or hearing. Seller
agrees 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. Seller hereby expressly waives any defenses Seller might have to
require Agent or such Buyer to enforce its rights by judicial process or
otherwise arising from the use of nonjudicial process, disposition of the
Purchased Asset, or any other election of remedies.

ARTICLE 11

SECURITY INTEREST

Section 11.01 Grant. Agent, each Buyer and Seller intend that the Transaction
shall be a sale to Agent and Buyer of the Purchased Asset and not loans from
Agent and Buyer to Seller secured by the Purchased Asset. However, to preserve
and protect Agent and each Buyer’s rights with respect to the Purchased Asset
and under the Repurchase Documents in the event that any Governmental Authority
recharacterizes the Transaction as other than a sale, and as security for
Seller’s performance of the Repurchase Obligations, Seller hereby grants to
Agent a Lien on and security interest in all of the right, title and interest of
Seller in, to and under the Purchased Asset (which for this purpose shall be
deemed to include the items described in the proviso in the

 

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definition thereof), and the transfers of the Purchased Asset to Agent and Buyer
shall be deemed to constitute and confirm such grant, to secure the payment and
performance of the Repurchase Obligations (including the obligation of Seller to
pay the Repurchase Price, or if the Transaction is recharacterized as loans, to
repay such loans for the Repurchase Price).

Section 11.02 Effect of Grant. If any circumstance described in Section 11.01
occurs, (a) this Agreement shall also be deemed to be a security agreement as
defined in the UCC, (b) Agent and Buyer shall have all of the rights and
remedies provided to a secured party by Requirements of Law (including the
rights and remedies of a secured party under the UCC and the right to set off
any mutual debt and claim) and under any other agreement between Agent and Buyer
and Seller, (c) without limiting the generality of the foregoing, Agent and
Buyer shall be entitled to set off the proceeds of the liquidation of the
Purchased Asset against all of the Repurchase Obligations, without prejudice to
any Buyer’s right to recover any deficiency, (d) the possession by any Buyer or
any of its agents, including Agent and Custodian, of the Purchased Asset
Documents, the Purchased Asset and such other items of property as constitute
instruments, money, negotiable documents, securities or chattel paper shall be
deemed to be possession by the secured party for purposes of perfecting such
security interest under the UCC and Requirements of Law, and (e) notifications
to Persons (other than Agent or any Buyer) holding such property, and
acknowledgments, receipts or confirmations from Persons (other than Agent or any
Buyer) holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, securities intermediaries,
bailees or agents (as applicable) of the secured party for the purpose of
perfecting such security interest under the UCC and Requirements of Law. The
security interest of Agent and Buyer granted herein shall be, and Seller hereby
represents and warrants to Agent and each Buyer that it is, a first priority
perfected security interest (subject to Permitted Liens). For the avoidance of
doubt, (i) the Purchased Asset secures the Repurchase Obligations of Seller with
respect to the Transaction, and (ii) if an Event of Default exists, the
Purchased Asset will not be released from Agent and Buyer’s Lien or transferred
to Seller until the Repurchase Obligations are paid in full, or the payment by
the Underlying Obligor of its obligations in accordance with the Purchased Asset
Documents. Notwithstanding the foregoing, the Repurchase Obligations shall be
full recourse to Seller.

Section 11.03 Seller to Remain Liable. Agent, each Buyer and Seller agree that
the grant of a security interest under this Article 11 shall not constitute or
result in the creation or assumption by any Buyer of any Retained Interest or
other obligation of Seller or any other Person in connection with the Purchased
Asset, whether or not such Buyer exercises any right with respect thereto.
Seller shall remain liable under the Purchased Asset and Purchased Asset
Documents to perform all of Seller’s duties and obligations thereunder to the
same extent as if the Repurchase Documents had not been executed.

Section 11.04 Waiver of Certain Laws. Seller agrees, to the extent permitted by
Requirements of 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, extension or redemption law now or hereafter in force in any locality
where the Purchased Asset may be situated in order to prevent, hinder or delay
the enforcement or foreclosure of this Agreement, or the absolute sale of the
Purchased Asset, or the final and absolute putting into possession thereof,
immediately after such sale, of the purchasers thereof, and Seller, for itself
and all who may at any time claim through or

 

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under it, hereby waives, 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 Asset marshaled upon any such sale, and agrees
that Agent or any court having jurisdiction to foreclose the security interests
granted in this Agreement may sell the Purchased Asset as an entirety or in such
parcels as each Buyer or such court may determine.

ARTICLE 12

INCREASED COSTS; CAPITAL ADEQUACY

Section 12.01 Market Disruption. If prior to any Pricing Period, Agent
reasonably determines that, by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the LIBO
Rate for such Pricing Period, Agent shall give prompt notice thereof to Seller,
whereupon the Pricing Rate for such Pricing Period, and for all subsequent
Pricing Periods until such notice has been withdrawn by Agent, shall be the
Alternative Rate.

Section 12.02 Illegality. If the adoption of or any change in any Requirements
of Law or in the interpretation or application thereof after the date hereof
shall make it unlawful for a Buyer or Agent to effect or continue the
Transaction as contemplated by the Repurchase Documents, (a) any commitment of
Buyers hereunder to enter into the Transaction shall be terminated and the
Funding Expiration Date shall be deemed to have occurred, (b) the Pricing Rate
shall be converted automatically to the Alternative Rate on the last day of the
then current Pricing Period or within such earlier period as may be required by
Requirements of Law, and (c) if required by such adoption or change, the
Facility Termination Date shall be deemed to have occurred.

Section 12.03 Breakfunding. Seller shall indemnify Agent and each Buyer and hold
Agent and each Buyer harmless from any loss, cost or expense (including
reasonable and documented legal fees and expenses, but excluding loss of
anticipated profit) which Agent or such Buyer may sustain or incur arising from
(a) the failure by Seller to terminate the Transaction after Seller has given a
notice of termination pursuant to Section 3.04, (b) any payment to Agent on
account of the outstanding Repurchase Price, including a payment made pursuant
to Section 3.04 but excluding a payment made pursuant to Section 5.02, on any
day other than a Remittance Date (based on the assumption that each Buyer funded
its commitments with respect to the Transaction in the London Interbank
Eurodollar market and using any reasonable attribution or averaging methods that
Agent deems appropriate and practical), (c) any failure by Seller to sell
Eligible Assets to Buyer after Seller has notified Agent of the Transaction and
Agent has agreed to purchase such Eligible Assets in accordance with this
Agreement, or (d) any conversion of the Pricing Rate to the Alternative Rate
because the LIBO Rate is not available for any reason on a day that is not the
last day of the then current Pricing Period.

Section 12.04 Increased Costs. If the adoption of or any change in any
Requirements of Law or in the interpretation or application thereof by any
Governmental Authority or compliance by Agent or any 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 Agent or any Buyer made
after the date of this Agreement (a) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement against assets
held by, deposits

 

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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
Agent or any Buyer, or (b) shall impose on Agent or any Buyer any other
condition; and the result of any of the preceding clauses (a) and (b) is to
increase the cost to Agent or any Buyer, by an amount that Agent or such Buyer
deems to be material, of entering into, continuing or maintaining the
Transaction, or to reduce any amount receivable under the Repurchase Documents
in respect thereof, then, in any such case, upon not less than thirty (30) days’
prior written notice to Seller, Seller shall pay to Agent or such Buyer such
additional amount or amounts as reasonably necessary to fully compensate Agent
or such Buyer for such increased cost or reduced amount receivable; provided,
however, that Agent or such Buyer shall not treat Seller differently than other
similarly situated customers in requiring the payment of such amount or amounts.

Section 12.05 Capital Adequacy. If Agent reasonably determines that the adoption
of or any change in any Requirements of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by any 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 after the date of this Agreement has or shall have the effect of
reducing the rate of return on such Buyer’s or such corporation’s capital as a
consequence of its obligations hereunder to a level below that which such Buyer
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Buyer’s or such corporation’s
policies with respect to capital adequacy) by an amount deemed by such Buyer to
be material, then, in any such case, upon not less than thirty (30) days’ prior
written notice to Seller, Seller shall pay to Agent such additional amount or
amounts as reasonably necessary to fully compensate such Buyer for such
reduction; provided, however, that such Buyer shall not treat Seller differently
than other similarly situated customers in requiring the payment of such amount
or amounts.

Section 12.06 Withholding Taxes.

(a) All payments made by Seller to Agent or any Buyer or any other Eligible
Assignee under the Repurchase Documents shall be made free and clear of and
without deduction or withholding for or on account of any present or future
taxes, levies, imposts, deductions, charges or withholdings, and all liabilities
(including penalties, interest and additions to tax) with respect thereto
imposed by any Governmental Authority therewith or thereon, excluding income
taxes, branch profits taxes, franchise taxes or any other tax imposed on net
income by the United States, a state or a foreign jurisdiction under the laws of
which Agent, such Buyer or such other Eligible Assignee is organized or of its
applicable lending office, or a state, local or foreign jurisdiction with
respect to which Agent, such Buyer or such other Eligible Assignee has a present
or former connection, or any political subdivision thereof (collectively,
“Taxes”), all of which shall be paid by Seller for its own account not later
than the date when due. If any taxes are required to be deducted or withheld
from any amounts payable to Agent, such Buyer and/or any other Eligible
Assignee, then Seller shall (a) make such deduction or withholding, (b) pay the
amount so deducted or withheld to the appropriate Governmental Authority not
later than the date when due; and (c) pay to Agent, such Buyer or other Eligible
Assignee such additional amounts (the “Additional Amount”) as may be necessary
so that every net payment made under this Agreement after deduction or
withholding for or on account of any Taxes (including any Taxes on such increase
and any penalties) is not less than the amount that

 

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would have been paid absent such deduction or withholding. The foregoing
obligation to pay Additional Amounts, however, will not apply with respect to
(i) net income or franchise taxes, or any tax imposed on net income, imposed on
Agent, such Buyer and/or any other Eligible Assignee, with respect to payments
required to be made by Seller under the Repurchase Documents, by a taxing
jurisdiction in which Agent, such Buyer and/or any other Eligible Assignee is
organized, conducts business or is paying taxes (as the case may be), or
(ii) Excluded Taxes. Promptly after Seller pays any taxes referred to in this
Section 12.06, Seller will send Agent appropriate evidence of such payment.

(b) In addition, Seller agrees to pay to the relevant Governmental Authority in
accordance with applicable law any current or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies (including,
without limitation, mortgage recording taxes, transfer taxes and similar fees)
imposed by the United States or any taxing authority thereof or therein that
arise from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement (“Other Taxes”).

(c) Seller agrees to indemnify Agent or any Buyer for the full amount of Taxes
and Other Taxes, and the full amount of Taxes of any kind imposed by any
jurisdiction on amounts payable under this Section 12.06(c) arising therefrom or
with respect thereto, provided that Agent or such Buyer shall have provided
Seller with evidence, reasonably satisfactory to Seller, of payment of Taxes or
Other Taxes, as the case may be.

(d) An Eligible Assignee that is organized under the laws of a jurisdiction
outside the United States (a “Non-U.S. Assignee”) shall deliver to Seller two
properly completed, and duly executed copies of either U.S. Internal Revenue
Service Form W-8BEN, W-8ECI, W-8EXP or W-8IMY (with applicable attachments), as
appropriate, or any subsequent versions thereof or successors thereto, in each
case claiming complete exemption from, or reduced rate of, U.S. Federal
withholding tax with respect to payments of interest hereunder. In addition, in
the case of a Non-U.S. Assignee claiming exemption from U.S. Federal withholding
tax under Section 871(h) or 881(c) of the Code, such Non-U.S. Assignee hereby
represents that such Non-U.S. Assignee is not a bank for purposes of
Section 881(c) of the Code, is not a 10- percent shareholder (within the meaning
of Section 871(h)(3)(B) of the Code) of Seller and is not a controlled foreign
corporation related to Seller (within the meaning of Section 864(d)(4) of the
Code), and such Non-U.S. Assignee agrees that it shall promptly notify Seller in
the event any such representation is no longer accurate. Such forms shall be
delivered by each Non-U.S. Assignee on or before the date it becomes a party to
this Agreement and on or before the date, if any, such Non-U.S. Assignee changes
its applicable counterparty office by designating a different counterparty
office (a “New Counterparty Office”). In addition, each Non-U.S. Assignee shall
deliver such forms within twenty (20) days after receipt of a written request
therefor from Seller.

(e) Seller shall not be required to indemnify any Non-U.S. Assignee, or pay any
additional sums to any Non-U.S. Assignee, in respect of United States Federal
withholding tax pursuant to this Section 12.06 to the extent that (i) the
obligation to withhold amounts with respect to United States Federal withholding
tax existed on the date such Non-U.S. Assignee became a party to this Agreement
or, with respect to payments to a New Counterparty Office, the date such
Non-U.S. Assignee designated such New Counterparty Office with respect to the

 

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Transaction or (ii) the obligation to pay such additional amounts would not have
arisen but for a failure by such Non-U.S. Assignee to provide the forms and
representations required in Section 12.06(d) above.

(f) Upon the execution of this Agreement, each Buyer and Agent shall, and upon
the request of Seller, any Eligible Assignee that is a “United States person”
within the meaning of Section 7701(a)(30) of the Code shall deliver to Seller a
duly executed original of Internal Revenue Service Form W-9 or such other
documentation or information prescribed by applicable laws or reasonably
requested by Seller as will enable Seller to determine whether or not such
Eligible Assignee is subject to backup withholding or information reporting
requirements. Unless Seller has received such forms or other documents or
information required by this Section 12.06(f) to establish any such Eligible
Assignee’s exemption from backup withholding tax, Seller shall not be required
to pay additional sums or indemnify such Eligible Assignee for any amount
withheld.

(g) Any Person claiming any indemnity payment or additional sums payable
pursuant to this Section 12.06 shall use reasonable efforts (consistent with
legal and regulatory restrictions) to file any certificate or document
reasonably requested in writing by Seller or to change the jurisdiction of its
applicable counterparty office if the making of such a filing or change would
avoid the need for, or reduce the amount of, any such indemnity payment or
additional sums which may thereafter accrue, so long as such filing or change in
the applicable lending office, in the reasonable judgment of Agent, any Buyer or
Eligible Assignee, would not be otherwise disadvantageous to such Person. In
addition, Seller shall not be required to indemnify or pay Buyer or any Eligible
Assignee to the extent that any amounts due are a result of the fault,
misconduct or negligence of Buyer or Eligible Assignee.

(h) Without prejudice to the survival or any other agreement of Seller
hereunder, the agreements and obligations of Seller contained in this
Section 12.06 shall survive the termination of this Agreement. Nothing contained
in this Section 12.06 shall require Buyer to make available any of its tax
returns or other information that it reasonably deems to be confidential or
proprietary; provided, that any claim for Taxes made by Buyer or Eligible
Assignee against Seller shall include all information reasonably necessary in
order for Seller to fully understand the nature and amount of the claim.

Section 12.07 Payment and Survival of Obligations. Agent or any Buyer may at any
time send Seller a notice showing the calculation (in reasonable detail) of any
amounts payable pursuant to this Article 12, and Seller shall pay such amounts
to Agent or such Buyer within thirty (30) days after Seller receives such
notice. Agent or any Buyer shall be entitled to any compensation claimed under
this Article 12 only if it shall at the time be the general policy of Agent or
any Buyer (which, for purposes of this Section 12.07, shall mean such Person in
its capacity as a buyer of assets similar to the Purchased Asset in similar
transactions with similar terms and conditions) to claim compensation under
similar circumstances with respect to similarly situated sellers. Failure or
delay on the part of Agent or such Buyer to demand compensation pursuant to this
Section 12.07 shall not constitute a waiver of Agent or such Buyer’s right to
demand such compensation; provided, that the Seller shall not be required to
compensate Agent or such Buyer pursuant to this Article for any increased costs
or reductions incurred more than four hundred and fifty (450) days prior to the
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notifies the Seller of the change in any Requirements of Law or in the
interpretation or application thereof giving rise to such increased costs or
reductions and of such Agent or such Buyer’s intention to claim compensation
therefor; provided, further, that, if the change in any Requirements of Law or
in the interpretation or application thereof giving rise to such increased costs
or reductions is retroactive, then the four hundred and fifty (450) day period
referred to above shall be extended to include the period of retroactive effect
thereof. The obligations of Seller under this Article 12 shall apply to Eligible
Assignees and Participants (subject to the foregoing) and survive the
termination of the Repurchase Documents.

ARTICLE 13

INDEMNITY AND EXPENSES

Section 13.01 Indemnity.

(a) Seller shall release, defend, indemnify and hold harmless Agent, each Buyer,
Affiliates of Agent and each Buyer and its and their respective officers,
directors, shareholders, partners, members, owners, employees, agents,
attorneys, Affiliates and advisors (each an “Indemnified Person” and
collectively the “Indemnified Persons”), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
fees, costs, expenses (including reasonable legal fees and expenses), penalties
or fines of any kind that may be imposed on, incurred by or asserted against
such Indemnified Person (collectively, the “Indemnified Amounts”) in any way
relating to, arising out of or resulting from or in connection with (i) the
Repurchase Documents, the Purchased Asset Documents, the Purchased Asset, the
Transaction, any Mortgaged Property, the Pledged Collateral or any action taken
or omitted to be taken by any Indemnified Person in connection with or under any
of the foregoing, or any transaction contemplated hereby or thereby, or any
amendment, supplement or modification of, or any waiver or consent under or in
respect of any Repurchase Document, the Transaction, the Purchased Asset, any
Purchased Asset Document, (ii) any claims, actions or damages by an Underlying
Obligor or lessee with respect to the Purchased Asset, (iii) any violation or
alleged violation of, non-compliance with or liability under any Requirements of
Law, (iv) ownership of, Liens on, security interests in or the exercise of
rights or remedies under any of the items referred to in the preceding clause
(i), (v) any accident, injury to or death of any person or loss of or damage to
property occurring in, on or about any Mortgaged Property or on the adjoining
sidewalks, curbs, parking areas, streets or ways, (vi) any use, nonuse or
condition in, on or about, or possession, alteration, repair, operation,
maintenance or management of, any Mortgaged Property or on the adjoining
sidewalks, curbs, parking areas, streets or ways, (vii) any failure by Seller to
perform or comply with any Repurchase Document, Purchased Asset Document or the
Purchased Asset, (viii) performance of any labor or services or the furnishing
of any materials or other property in respect of any Mortgaged Property or the
Purchased Asset, (ix) any claim by brokers, finders or similar Persons claiming
to be entitled to a commission in connection with any lease or other transaction
involving any Repurchase Document, the Purchased Asset, any Mortgaged Property
or the Pledged Collateral, (x) any Lien or claim arising on or against the
Purchased Asset, any Mortgaged Property or the Pledged Collateral under any
Requirements of Law or any liability asserted against Agent, any Buyer or any
Indemnified Person with respect thereto, (xi) (1) a past, present or future
violation or alleged violation of any Environmental Laws in connection with any
property or Mortgaged Property by any Person or other source,

 

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whether related or unrelated to Seller or any Underlying Obligor, (2) any
presence of any Materials of Environmental Concern in, on, within, above, under,
near, affecting or emanating from any Mortgaged Property, (3) the failure to
timely perform any Remedial Work, (4) any past, present or future activity by
any Person or other source, whether related or unrelated to Seller or any
Underlying Obligor in connection with any actual, proposed or threatened use,
treatment, storage, holding, existence, disposition or other release,
generation, production, manufacturing, processing, refining, control,
management, abatement, removal, handling, transfer or transportation to or from
any Mortgaged Property of any Materials of Environmental Concern at any time
located in, under, on, above or affecting any Mortgaged Property, (5) any past,
present or future actual Release (whether intentional or unintentional, direct
or indirect, foreseeable or unforeseeable) to, from, on, within, in, under, near
or affecting any Mortgaged Property by any Person or other source, whether
related or unrelated to Seller or any Underlying Obligor, (6) the imposition,
recording or filing or the threatened imposition, recording or filing of any
Lien on any Mortgaged Property with regard to, or as a result of, any Materials
of Environmental Concern or pursuant to any Environmental Law, or (7) any
misrepresentation or failure to perform any obligations pursuant to any
Repurchase Document or Mortgage Loan Document relating to environmental matters
in any way, (xii) any business communications or dealings between the Parties
relating thereto, or (xiii) Seller’s conduct, activities, actions and/or
inactions in connection with, relating to or arising out of any of the foregoing
clauses of this Section 13.01, that, in each case, results from anything
whatsoever other than any Indemnified Person’s gross negligence or intentional
misconduct, as determined by a court of competent jurisdiction pursuant to a
final, non-appealable judgment. In any suit, proceeding or action brought by an
Indemnified Person in connection with the Purchased Asset for any sum owing
thereunder, or to enforce any provisions of the Purchased Asset, Seller shall
defend, indemnify and hold such Indemnified Person harmless from and against all
expense, loss or damage suffered by reason of any defense, setoff, counterclaim,
recoupment or reduction of liability whatsoever of the account debtor or
Underlying Obligor arising out of a breach by Seller 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 Underlying Obligor from
Seller. In the case of an investigation, litigation or other proceeding to which
the indemnity in this Section 13.01 applies, such indemnity shall be effective
whether or not such investigation, litigation or proceeding is brought by
Seller, an Indemnified Person or any other Person or any Indemnified Person is
otherwise a party thereto and whether or not the Transaction is entered into.

(b) If for any reason the indemnification provided in this Section 13.01 is
unavailable to the Indemnified Person or is insufficient to hold an Indemnified
Person harmless, even though such Indemnified Person is entitled to
indemnification under the express terms thereof, then Seller shall contribute to
the amount paid or payable by such Indemnified Person as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative benefits received by such Indemnified Person on the one hand and Seller
on the other hand, the relative fault of such Indemnified Person, and any other
relevant equitable considerations.

(c) An Indemnified Person may at any time send Seller a notice showing the
calculation in reasonable detail of Indemnified Amounts, and Seller shall pay
such Indemnified Amounts to such Indemnified Person within ten (10) Business
Days after Seller receives such notice. The obligations of Seller under this
Section 13.01 shall apply to Eligible Assignees and Participants and survive the
termination of this Agreement.

 

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Section 13.02 Expenses. Seller shall promptly on demand pay to or as directed by
Agent all reasonable and documented third-party out-of-pocket costs and expenses
(including legal, accounting and advisory fees and expenses) incurred by Agent
or any Buyer in connection with (a) the development, evaluation, preparation,
negotiation, execution, consummation, delivery and administration of, and any
amendment, supplement or modification to, or extension, renewal or waiver of,
the Repurchase Documents and the Transaction, (b) subject to the next sentence,
the Purchased Asset, including due diligence, inspection, testing, review,
recording, registration, travel custody, care, insurance or preservation, (c) so
long as an Event of Default exists, the enforcement of the Repurchase Documents
or the payment or performance by Seller of any Repurchase Obligations, and
(d) so long as an Event of Default exists, any actual or attempted sale,
exchange, enforcement, collection, compromise or settlement relating to the
Purchased Asset. Notwithstanding the foregoing, provided no Event of Default
exists after the Purchase Date with respect to the Purchased Asset, Seller shall
not be required to pay Agent’s or any Buyer’s out-of-pocket costs and expenses
with respect to surveillance of the Purchased Asset in an amount greater than
$1,000.00 per annum.

ARTICLE 14

INTENT

Section 14.01 Safe Harbor. The Parties intend (a) for the Transaction to qualify
for the safe harbor treatment provided by the Bankruptcy Code and for Buyer to
be entitled to all of the rights, benefits and protections afforded to Persons
under the Bankruptcy Code with respect to a “repurchase agreement” as defined in
Section 101(47) of the Bankruptcy Code and a “securities contract” as defined in
Section 741(7) of the Bankruptcy Code and that payments under this Agreement are
deemed “margin payments” or “settlement payments,” as defined in Sections 101 or
741 of the Bankruptcy Code, (b) for the grant of a security interest set forth
in Article 11 to also be a “securities contract” as defined in
Section 741(7)(A)(xi) of the Bankruptcy Code and a “repurchase agreement” as
that term is defined in Section 101(47)(A)(v) of the Bankruptcy Code, and
(c) that Buyer (for so long as Buyer is a “financial institution,” “financial
participant” or other entity listed in Section 555, 559 or 362(b)(6) of the
Bankruptcy Code) shall be entitled to the “safe harbor” benefits and protections
afforded under the Bankruptcy Code with respect to a “repurchase agreement” and
a “securities contract,” including (x) the rights, set forth in Article 10 and
in Section 555, 559 and 561 of the Bankruptcy Code, to liquidate the Purchased
Asset and terminate this Agreement, and (y) the right to offset or net out as
set forth in Article 10 and Section 18.17 and in Section 362(b)(6) of the
Bankruptcy Code.

Section 14.02 Right to Liquidate. The Parties acknowledge and agree that Agent’s
right to liquidate the Purchased Asset delivered to it in connection with the
Transaction hereunder or to exercise any other remedies pursuant to Articles 10
and 11 and as otherwise provided in the Repurchase Documents is a contractual
right to liquidate the Transaction as described in Section 555, 559 and 561 of
the Bankruptcy Code.

 

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Section 14.03 Qualified Financial Contract. The Parties acknowledge and agree
that if a Party is an “insured depository institution,” as such term is defined
in the Federal Deposit Insurance Act, as amended (“FDIA”), then the Transaction
hereunder is a “qualified financial contract,” as that term is defined in FDIA
and any rules, orders or policy statements thereunder (except insofar as the
type of assets subject to the Transaction would render such definition
inapplicable).

Section 14.04 Netting Contract. The Parties acknowledge and agree 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 the Transaction 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).

Section 14.05 Master Netting Agreement. The Parties expressly represent,
warrant, acknowledge and agree that this Agreement constitutes a “master netting
agreement” as defined in Section 101(38A) of the Bankruptcy Code.

ARTICLE 15

DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

The Parties acknowledge that they have been advised and understand that:

(a) if one of the Parties to the Transaction is a broker or dealer registered
with the Securities and Exchange Commission under Section 14 of the Securities
Exchange Act of 1934, the Securities Investor Protection Corporation has taken
the position that the provisions of the Securities Investor Protection Act of
1970 do not protect the other Party with respect to the Transaction;

(b) if one of the Parties to the Transaction is a government securities broker
or a government securities dealer registered with the Securities and Exchange
Commission under Section 14C of the Securities Exchange Act of 1934, the
Securities Investor Protection Act of 1970 will not provide protection to the
other Party with respect to the Transaction;

(c) if one of the Parties to the Transaction is a financial institution, funds
held by the financial institution pursuant to the Transaction 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; and

(d) if one of the Parties to the Transaction is an “insured depository
institution” as that term is defined in Section 1813(c)(2) of Title 12 of the
United States Code, funds held by the financial institution pursuant to the
Transaction are not a deposit and therefore are not insured by the Federal
Deposit Insurance Corporation, the Savings Association Insurance Fund or the
Bank Insurance Fund, as applicable.

 

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ARTICLE 16

NO RELIANCE

Each Party acknowledges, represents and warrants to the other Party that, in
connection with the negotiation of, entering into, and performance under, the
Repurchase Documents and the Transaction:

(a) It is not relying (for purposes of making any investment decision or
otherwise) on any advice, counsel or representations (whether written or oral)
of the other Party, other than the representations expressly set forth in the
Repurchase 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 the Transaction) based on its own
judgment and on any advice from such advisors as it has deemed necessary and not
on 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 Repurchase
Documents and the Transaction and is capable of assuming and willing to assume
(financially and otherwise) those risks;

(d) It is entering into the Repurchase Documents and the Transaction for the
purposes of managing its borrowings or investments or hedging its underlying
Asset or liabilities and not for purposes of speculation;

(e) It is not acting as a fiduciary or financial, investment or commodity
trading advisor for the other Party and has not given the other Party (directly
or indirectly through any other Person) any assurance, guaranty or
representation whatsoever as to the merits (either legal, regulatory, tax,
business, investment, financial accounting or otherwise) of the Repurchase
Documents or the Transaction; and

(f) No partnership or joint venture exists or will exist as a result of the
Transaction or entering into and performing the Repurchase Documents.

ARTICLE 17

AGENT

Section 17.01 Reliance. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, statement,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon the advice and statements of legal counsel
(including, without limitation, counsel to Seller), independent accountants and
other experts selected by Agent. Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Repurchase
Document unless it shall first receive such advice or

 

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concurrence of each Buyer as Agent deems appropriate or it shall first be
indemnified to its satisfaction by each Buyer against any and all liability and
expense which may be incurred by it by reason of taking, continuing or failing
to take any such action.

Section 17.02 Knowledge. Agent shall not be deemed to have knowledge or notice
of the occurrence of any Default or Event of Default hereunder unless Agent has
received notice from a Buyer or Seller referring to this Agreement, describing
such Default or Event of Default and stating that such notice is a “notice of
default”. In the event that Agent receives any such notice from Seller, Agent
shall give notice thereof to each Buyer. Agent shall take such action (or
refrain from taking any action) with respect to such Default or Event of Default
on behalf of each Buyer. Agent shall not incur liability to any Person by reason
of so acting or refraining from acting.

Section 17.03 No Representations; No Reliance. Each Buyer expressly acknowledges
that neither the Agent nor any of its officers, directors, employees, agents,
attorneys in fact or Affiliates has made any representations or warranties to it
and that no act by the Agent hereinafter taken, including any review of the
affairs of Seller shall be deemed to constitute any representation or warranty
by the Agent to any Buyer. Each Buyer represents to the Agent that it has,
independently and without reliance upon the Agent or any other Buyer, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, Property,
financial and other condition and creditworthiness of Seller and made its own
decision to purchase Eligible Assets hereunder and enter into this Agreement.
Each Buyer also represents that it will, independently and without reliance upon
the Agent or any other Buyer, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Repurchase Documents, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, financial
and other condition and creditworthiness of Seller. Except for notices, reports
and other documents expressly required to be furnished to each Buyer by the
Agent hereunder or under the other Repurchase Documents, the Agent shall not
have any duty or responsibility to provide any Buyer with any credit or other
information concerning the business, operations, Property, condition (financial
or otherwise), prospects or creditworthiness of Seller that may come into the
possession of the Agent or any of its officers, directors, employees, agents,
attorneys in fact or Affiliates.

Section 17.04 Indemnification by Buyer. Each Buyer agrees to indemnify the Agent
in its capacity as such (to the extent not reimbursed by Seller and without
limiting the obligation of Seller to do so), ratably according to its percentage
interest in the rights and obligations of a Buyer in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Repurchase Obligations shall have been satisfied,
ratably in accordance with such Buyer’s percentage interest in the rights and
obligations of a Buyer immediately prior to such date), for, and to save Agent
harmless from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever that may at any time (including, without limitation, at any time
following satisfaction of the Repurchase Obligations) be imposed on, incurred by
or asserted against Agent in any way relating to or arising out of, this
Agreement, any of the other Repurchase Documents or any documents contemplated
by or referred to herein

 

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or therein or the transactions contemplated hereby or thereby or any action
taken or omitted by Agent under or in connection with any of the foregoing;
provided, that no Buyer shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements that are found by a final and non-appealable
decision of a court of competent jurisdiction to have resulted from Agent’s
gross negligence or willful misconduct. The agreements in this Section shall
survive the satisfaction of the Repurchase Obligations and all other amounts
payable hereunder.

Section 17.05 Free Agent. Agent and its Affiliates may make loans to, accept
deposits from, and generally engage in any kind of business with Seller as
though Agent were not Agent hereunder and under the other Repurchase Documents.

Section 17.06 Exclusive Agent. Agent shall act as exclusive agent for each Buyer
in any dealings with Seller and with the Transaction hereunder. Seller shall not
be obligated to deal directly with any party other than Agent in connection with
the Transaction hereunder. Any action taken by Agent shall be an action on
behalf of and for the benefit of each Buyer and any payments made by or on
behalf of Seller hereunder to Agent shall be a payment for the account of each
Buyer.

Section 17.07 Resignation. Agent at any time may resign by giving sixty
(60) days’ prior written notice of resignation to Seller and each Buyer and
complying with the applicable provisions of this Section 17.07; provided,
however, that if the resignation of Agent due to a Requirement of Law renders
such prior notice either impossible or impracticable, no such prior written
notice shall be required. Upon receiving such notice of resignation, with
Seller’s consent for appointment, which consent for appointment shall not
unreasonably be conditioned, delayed or withheld (provided, that Seller’s
consent for appointment shall not be required if an Event of Default has
occurred and is continuing), a successor agent shall be promptly appointed by
each Buyer by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Agent and one copy to the successor agent.
Any successor agent appointed as provided in this Section 17.07 shall execute
and deliver to Seller, each Buyer and to its predecessor Agent an instrument
accepting such appointment, and thereupon the resignation or removal of the
predecessor Agent shall become effective and such successor agent, without any
further act, deed or conveyance, shall become vested with all the rights and
obligations of its predecessor, with like effect as if originally named as
Agent; provided, that upon the written request of either Seller, each Buyer or
the successor agent, Agent ceasing to act shall execute and deliver (a) an
instrument transferring to such successor agent all of the rights of Agent so
ceasing to act and (b) to such successor agent such instruments as are necessary
to transfer the Purchased Items to such successor agent (including assignments
of the Purchased Asset or Repurchase Documents). Upon the request of any such
successor agent made from time to time, Seller shall execute any and all papers
necessary to more fully and certainly vest in and confirm to such successor
agent all such rights.

Section 17.08 Administration.

(a) Expenses. Each Buyer shall reimburse Agent for its Pro Rata Share of any
Approved Expenses which are not reimbursed by Seller pursuant to and within the
period required by the Repurchase Documents, or if payable upon demand or upon
less than five (5)

 

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Business Days under the Repurchase Documents or not otherwise specified in the
Repurchase Documents, within five (5) Business Days of the date after written
demand by Agent is received by Buyers. Agent shall have the right, but not the
obligation, to incur such Approved Expenses prior to reimbursement therefor by
Buyers.

(b) Actions by Agent; Required Consents.

(i) Except as specified in this Section 17.08, Agent shall exercise its sole
discretion to act or not to act under the Repurchase Documents. Such discretion
may be exercised with respect to the granting of approvals, consents and
modifications under the Repurchase Documents and with respect to the exercise or
refraining from exercise of rights under the Repurchase Documents.

(ii) Notwithstanding Section 17.08(b)(i), the following matters shall require
the prior written unanimous consent of all of Buyers:

(A) any action which would subject Buyers to any additional obligations.

(B) any change (other than by operation of the Repurchase Documents) in the
Pricing Rate under the Transaction;

(C) any change (other than by operation of the Repurchase Documents) in any fees
to be shared among Buyers;

(D) any change (other than by operation of the Repurchase Documents) in the
Facility Termination Date of the Transaction;

(E) any release, termination, modification or amendment of the Guarantee
Agreement;

(F) any forgiveness of or reduction in Purchase Price or Price Differential or
any extension of time for payment of Purchase Price or Price Differential;

(G) any change in the definition of Requisite Buyers or Pro Rata Share (except
in connection with a permitted assignment of a portion of a Buyer’s Pro Rata
Share);

(H) any amendment to this Section 17.08(b)(ii);

(I) the waiver of any Monetary Default that continues for any length of time or
any Non-Monetary Default that continues for more than sixty (60) days;

(J) the approval of any request by Seller to release all or any portion of the
Purchased Asset which is not otherwise specifically provided in this Agreement;

 

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(K) any sale, assignment or transfer by Seller of any of its rights under this
Agreement or the other Repurchase Documents or delegations of its duties
thereunder.

(iii) Notwithstanding Sections 17.08(b)(i) and (ii), the following matters shall
require the prior consent of the Requisite Buyers:

(A) the acceleration of the Repurchase Date under the Repurchase Documents or
the commencement of remedies or the rescission thereof for any Default or Event
of Default (other than accelerations and rescissions that are provided for under
the terms of the Repurchase Documents);

(B) the approval of a Post-Foreclosure Plan or any amendment thereto after Agent
(or its nominee) declares an Accelerated Repurchase Date, pursuant to
Section 17.08(e);

(C) the waiver of any Non-Monetary Default to the extent not cured within the
sixty (60) day period referred to in Section 17.08(b)(ii);

(D) the waiver of any late charges;

(E) the waiver of any Price Differential which accrues at the Default Rate;

(F) any waiver of any material condition to the Transaction;

(G) except for the approval rights of Agent set forth elsewhere in this
Agreement, and except as referred to in Section 17.08(b)(ii), approval of any
amendment, modification or termination of this Agreement, or any other
Repurchase Document, or waiver of any provision herein or therein;

(H) delivery of notices, including notices of Default, hereunder and under the
other Repurchase Documents, in accordance with the terms of this Agreement;

(I) except as may be otherwise specifically restricted by the terms of this
Agreement or any other Repurchase Documents, exercise all remedies given to
Agent or Buyers with respect to the Purchased Asset which is the subject of the
Transaction under the Repurchase Documents, applicable law or otherwise;

(J) intentionally omitted;

(K) approval of the Transaction, including accepting exceptions to the
representations and warranties set forth on Schedule II to this Agreement;

(L) intentionally omitted; and

(M) approval of Material Actions.

 

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(c) Instructions. In addition to the required consents or approvals referred to
in Sections 17.08(b)(ii) and (iii) above, Agent may at any time request
instructions from the Requisite Buyers with respect to any actions or approvals
which, by the terms of this Agreement, or of any of the other Repurchase
Documents, Agent is permitted or required to take or to grant without
instructions from any Buyers, and if such instructions are promptly requested,
Agent shall be absolutely entitled to refrain from taking any action or to
withhold any approval and shall not be under any liability whatsoever to any
Person for refraining from taking any action or withholding any approval under
any of the Repurchase Documents until it shall have received such instructions
from the Requisite Buyers. Without limiting the foregoing, no Buyer shall have
any right of action whatsoever against Agent as a result of Agent acting or
refraining from acting under this Agreement or any of the other Repurchase
Documents in accordance with the instructions of the Requisite Buyers or, where
applicable, all of Buyers. Agent shall promptly notify each Buyer at any time
that Buyers have instructed Agent to act or refrain from acting pursuant
thereto.

(d) Reimbursement of Costs. If Agent shall: (i) employ counsel for advice or
other representation (whether or not any suit has been or shall be filed) with
respect to the Purchased Asset or any part thereof, or any of the Repurchase
Documents, or the attempt to enforce any security interest or any of the
Repurchase Documents; or (ii) commence any proceeding or in any way seek to
enforce its rights or remedies under the Repurchase Documents, irrespective of
whether as a result thereof Agent shall acquire title to the Purchased Asset,
each Buyer, upon demand therefor from time to time, shall contribute its Pro
Rata Share of the reasonable costs and/or expenses of any advice or other
representation, enforcement or acquisition, to the extent not otherwise
reimbursed by Seller; provided that Agent shall not be entitled to reimbursement
of its attorneys’ fees and expenses incurred in connection with the resolution
of disputes between Agent and other Buyers unless Agent shall be the prevailing
party in any such dispute. Any loss of Purchase Price and Price Differential
resulting from any Default shall be shared by Buyers in accordance with their
respective Pro Rata Shares. It is understood and agreed that in the event Agent
determines it is necessary to engage counsel for Buyers from and after the
occurrence of Default, such counsel shall be selected by Agent and written
notice of such selection, together with a copy of such counsel’s engagement
letter and fee estimate, shall be delivered to Buyers. In no event will Agent
retain counsel for Buyers to which any Buyer has a reasonable objection,
provided that such Buyer gives Agent written notice of such objection within
five (5) Business Days after receipt of Agent’s written notice identifying such
counsel.

(e) Remedies. Notwithstanding any provisions of Section 17.08(b) to the
contrary, if an Event of Default shall occur and be continuing, and if, within
sixty (60) days thereafter, the Requisite Buyers shall not agree upon what
action, if any, Agent shall take under the Repurchase Documents by reason
thereof, then Agent shall provide written notice to Buyers of Agent’s intention
to take the actions provided for in this Section 17.08(e) and, unless Agent
shall be instructed not to take such actions, or to take other or different
actions, by Requisite Buyers prior to the expiration of the Buyer Reply Period,
Agent shall proceed to take the following actions unless and until Agent shall
be instructed by Requisite Buyers to cease taking such actions and/or to take
other or different actions: (i) declare an Accelerated Repurchase Date

 

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and all amounts outstanding under this Agreement and the other Repurchase
Documents to be immediately due and payable and (ii) enforce Agent’s rights
under the Repurchase Documents. Notwithstanding anything to the contrary
contained in this Section 17.08)(e) or this Agreement, Buyers hereby authorize
Agent, at any time prior to the expiration of the sixty (60) day period referred
to in the previous sentence after a Default has occurred, to commence the
actions described in Sections 17.08(e)(i) and (ii) herein only if the Requisite
Buyers have not already agreed to such action, so long as Agent determines, in
good faith, that such action or actions are necessary in order to preserve the
value of the Purchased Asset.

(f) Notices. Each Buyer agrees that any action taken by Agent which is
authorized under this Agreement or any action taken at the direction or with the
consent of the Requisite Buyers in accordance with the provisions of this
Agreement or any other Repurchase Documents, and the exercise by Agent at the
direction or with the consent of the Requisite Buyers of the powers set forth
herein or therein, together with such other powers as are reasonably incidental
thereto, shall be authorized and binding upon all Buyers, except for actions
specifically requiring the approval of all Buyers. All communications from Agent
to Buyers requesting Buyers’ determination, consent, approval or disapproval:
(1) shall be given in the form of a written notice to each Buyer delivered in
accordance with Section 18.12 hereof; (2) shall be accompanied by a description
of the matter or thing as to which such determination, approval, consent or
disapproval is requested, or shall advise each Buyer where such matter or thing
may be inspected, or shall otherwise describe the matter or issue to be
resolved; (3) shall include, if reasonably requested by a Buyer and to the
extent not previously provided to such Buyer, written materials and a summary of
all oral information provided to Agent by Seller in respect of the matter or
issue to be resolved; and (4) shall include Agent’s recommended course of action
or determination in respect thereof. Each Buyer shall reply promptly, but in any
event within ten (10) Business Days (the “Buyer Reply Period”). Unless a Buyer
shall give written notice to Agent that it objects to the recommendation or
determination of Agent (together with a written explanation of the reasons
behind such objection) within the Buyer Reply Period, such Buyer shall be deemed
to have approved of or consented to such recommendation or determination. With
respect to decisions requiring the approval of the Requisite Buyers or all
Buyers, Agent shall submit its recommendation or determination for approval of
or consent to such recommendation or determination to all Buyers and upon
receiving the required approval or consent shall follow the course of action or
determination recommended to Buyers by Agent or such other course of action
recommended by the Requisite Buyers, and each non-responding Buyer shall be
deemed to have concurred with such recommended course of action.

Section 17.09 Foreclosure; Post-Foreclosure Operations. In the event that all or
any portion of the Purchased Asset shall be acquired by Agent as the result of
an Accelerated Repurchase Date, the Purchased Asset shall be held in the name of
a special purpose entity that is a subsidiary of Agent, as agent, for the
ratable benefit of Buyers. Agent shall prepare a recommended course of action
and operating budget for the Purchased Asset (the “Post-Foreclosure Plan”),
which shall be subject to the approval of the Requisite Buyers as soon as
reasonably practicable, but not more than ninety (90) days, after it succeeds to
the interest of Seller in the Purchased Asset. In the event that the Requisite
Buyers do not approve such Post-Foreclosure Plan, Agent shall submit alternative
Post-Foreclosure Plans to Buyers for evaluation and the approval of the
Requisite Buyers. In accordance with the approved Post-Foreclosure Plan, Agent
shall manage, operate, repair, administer, complete, construct, restore or
otherwise

 

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deal with the Purchased Asset acquired, and administer all transactions relating
thereto. Actions taken by Agent with respect to the Collateral which are not
provided for in the approved Post-Foreclosure Plan or reasonably incidental
thereto, shall require the consent of the Requisite Buyers by way of supplement
to such Post-Foreclosure Plan. Within five (5) Business Days after demand
therefor from time to time, each Buyer shall contribute its Pro Rata Share of
all costs and expenses incurred by Agent permitted under this Agreement in
connection with the ownership of the Purchased Asset. In addition, Agent shall
render or cause to be rendered to each Buyer, monthly, an income and expense
statement for the Purchased Asset, and each Buyer shall promptly contribute its
Pro Rata Share of any operating loss for the Purchased Asset, and such other
expenses and operating reserves as Agent shall deem reasonably necessary. To the
extent there is net operating income from the Purchased Asset, Agent shall, in
accordance with the Post-Foreclosure Plan, determine the amount and timing of
distributions to Buyers. All such distributions shall be made to Buyers in
accordance with their respective Pro Rata Shares. Buyers acknowledge that if
title to the Purchased Asset is obtained by Agent or its nominee, the Purchased
Asset will not be held as a permanent investment but will be liquidated as soon
as practicable. Agent shall undertake to sell the Purchased Asset to a third
party or parties, at such price and upon such arms-length terms and conditions
as the Requisite Buyers shall reasonably determine to be most advantageous to
Buyers.

ARTICLE 18

MISCELLANEOUS

Section 18.01 Governing Law. This Agreement and any claim, controversy or
dispute arising under or related to or in connection with this Agreement, the
relationship of the parties, and/or the interpretation and enforcement of the
rights and duties of the parties will be governed by the laws of the State of
New York without regard to any conflicts of law principles other than
Section 5-1401 of the New York General Obligations Law.

Section 18.02 Submission to Jurisdiction; Service of Process. Agent and each
Buyer irrevocably and unconditionally submits, for itself and its property, to
the non-exclusive jurisdiction of the courts of the State of New York sitting in
the Borough of Manhattan and of the United States District Court of the Southern
District of New York, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to the Repurchase Documents, or for
recognition or enforcement of any judgment, and each Party irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such State court or, to the fullest
extent permitted by applicable law, in such Federal court. Each Party agrees
that a final 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 Agreement or the other Repurchase
Documents shall affect any right that Agent or any Buyer may otherwise have to
bring any action or proceeding arising out of or relating to the Repurchase
Documents against Seller or its properties in the courts of any jurisdiction.
Seller irrevocably and unconditionally waives, to the fullest extent permitted
by Requirements of Law, any objection that it may now or hereafter have to the
laying of venue of any action or proceeding arising out of or relating to the
Repurchase Documents in any court referred to above, and the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court. Each Party irrevocably consents to service of process in the manner
provided for notices in Section 18.12. Nothing in this Agreement will affect the
right of any party hereto to serve process in any other manner permitted by
applicable law.

 

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Section 18.03 IMPORTANT WAIVERS.

(a) SELLER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO
ASSERT A COUNTERCLAIM, OTHER THAN A COMPULSORY COUNTERCLAIM, IN ANY ACTION OR
PROCEEDING BROUGHT AGAINST IT BY AGENT OR ANY INDEMNIFIED PERSON, BUT SUCH
WAIVER SHALL NOT PREVENT SELLER FROM ASSERTING AGAINST AGENT IN A SEPARATE
ACTION ANY CLAIM, ACTION, CAUSE OF ACTION OR DEMAND THAT SELLER MIGHT HAVE,
WHETHER OR NOT ARISING OUT OF THIS AGREEMENT.

(b) TO THE EXTENT PERMITTED BY REQUIREMENTS OF LAW, EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE BETWEEN THEM, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, ARISING OUT OF, CONNECTED WITH OR RELATED TO THE REPURCHASE
DOCUMENTS, THE PURCHASED ASSET, THE TRANSACTION, ANY DEALINGS OR COURSE OF
CONDUCT BETWEEN THEM, OR ANY STATEMENTS (WRITTEN OR ORAL) OR OTHER ACTIONS OF
EITHER PARTY. NEITHER PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY
OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. INSTEAD,
ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A
JURY.

(c) TO THE EXTENT PERMITTED BY REQUIREMENTS OF LAW, SELLER HEREBY WAIVES ANY
RIGHT TO CLAIM OR RECOVER IN ANY LITIGATION WHATSOEVER INVOLVING ANY INDEMNIFIED
PERSON, 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 SUCH WAIVED DAMAGES ARE BASED ON STATUTE,
CONTRACT, TORT, COMMON LAW OR ANY OTHER LEGAL THEORY, WHETHER THE LIKELIHOOD OF
SUCH DAMAGES WAS KNOWN AND REGARDLESS OF THE FORM OF THE CLAIM OF ACTION. NO
INDEMNIFIED PERSON SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY
UNINTENDED RECIPIENTS OF ANY INFORMATION OR OTHER MATERIALS DISTRIBUTED BY IT
THROUGH TELECOMMUNICATIONS, ELECTRONIC OR OTHER INFORMATION TRANSMISSION SYSTEMS
IN CONNECTION WITH ANY REPURCHASE DOCUMENT OR THE TRANSACTION.

(d) SELLER CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF AGENT, ANY
BUYER OR AN INDEMNIFIED PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
AGENT, ANY BUYER OR AN INDEMNIFIED PERSON WOULD NOT SEEK TO ENFORCE ANY OF THE
WAIVERS IN THIS SECTION 18.03 IN THE EVENT OF LITIGATION OR OTHER CIRCUMSTANCES.
THE SCOPE OF SUCH WAIVERS IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL
DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF
THE REPURCHASE DOCUMENTS, REGARDLESS OF THEIR LEGAL THEORY.

 

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(e) EACH PARTY ACKNOWLEDGES THAT THE WAIVERS IN THIS SECTION 18.03 ARE A
MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT SUCH PARTY HAS
ALREADY RELIED ON SUCH WAIVERS IN ENTERING INTO THE REPURCHASE DOCUMENTS, AND
THAT SUCH PARTY WILL CONTINUE TO RELY ON SUCH WAIVERS IN THEIR RELATED FUTURE
DEALINGS UNDER THE REPURCHASE DOCUMENTS. EACH PARTY FURTHER REPRESENTS AND
WARRANTS THAT IT HAS REVIEWED SUCH WAIVERS WITH ITS LEGAL COUNSEL AND THAT IT
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL AND OTHER RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL.

(f) THE WAIVERS IN THIS SECTION 18.03 ARE IRREVOCABLE, MEANING THAT THEY MAY NOT
BE MODIFIED EITHER ORALLY OR IN WRITING, AND SHALL APPLY TO ANY AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO ANY OF THE REPURCHASE DOCUMENTS. IN
THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.

(g) THE PROVISIONS OF THIS SECTION 18.03 SHALL SURVIVE TERMINATION OF THE
REPURCHASE DOCUMENTS AND THE PAYMENT IN FULL OF THE REPURCHASE OBLIGATIONS.

Section 18.04 Integration. The Repurchase Documents supersede and integrate all
previous negotiations, contracts, agreements and understandings (whether written
or oral) between the Parties relating to a sale and repurchase of the Purchased
Asset and the other matters addressed by the Repurchase Documents, and contain
the entire final agreement of the Parties relating to the subject matter
thereof.

Section 18.05 Intentionally Omitted.

Section 18.06 Use of Employee Plan Assets. No assets of an employee benefit plan
subject to any provision of ERISA shall be used by either Party in the
Transaction.

Section 18.07 Survival and Benefit of Seller’s Agreements. The Repurchase
Documents and the Transaction shall be binding on and shall inure to the benefit
of the Parties and their successors and permitted assigns. All of Seller’s
representations, warranties, agreements and indemnities in the Repurchase
Documents shall survive the termination of the Repurchase Documents and the
payment in full of the Repurchase Obligations, and shall apply to and benefit
all Indemnified Persons, Buyer and its successors and assigns, Eligible
Assignees and Participants. No other Person shall be entitled to any benefit,
right, power, remedy or claim under the Repurchase Documents.

Section 18.08 Assignments and Participations.

(a) Seller shall not sell, assign or transfer any of its rights or the
Repurchase Obligations or delegate its duties under this Agreement or any other
Repurchase Document without the prior written consent of Agent, and any attempt
by a Seller to do so without such consent shall be null and void.

 

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(b) Any Buyer may at any time, upon notice to Seller, sell participations to any
Eligible Assignee (a “Participant”) in all or any portion of such Buyer’s rights
and/or obligations under the Repurchase Documents; provided, that (i) such
Buyer’s obligations under the Repurchase Documents shall remain unchanged,
(ii) such Buyer shall remain solely responsible to Seller for the performance of
such obligations, and (iii) Seller shall continue to deal solely and directly
with Agent in connection with Buyer’s rights and obligations under the
Repurchase Documents. No Participant shall have any right to approve any
amendment, waiver or consent with respect to any Repurchase Document, except to
the extent that the Repurchase Price or Price Differential of the Purchased
Asset would be reduced or the Repurchase Date of the Purchased Asset would be
postponed. Each Participant shall be entitled to the benefits of Article 12 to
the same extent as if it had acquired its interest by assignment pursuant to
Section 18.08(c), but shall not be entitled to receive any greater payment
thereunder than Buyer would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with Seller’s prior written consent. To the extent
permitted by Requirements of Law, each Participant shall be entitled to the
benefits of Sections 10.02(i) and 18.17 to the same extent as if it had acquired
its interest by assignment pursuant to Section 18.08(c).

(c) Any Buyer may at any time, upon notice to Seller, sell and assign to any
Eligible Assignee all or any portion of all of the rights and obligations of
such Buyer under the Repurchase Documents. Notwithstanding anything herein to
the contrary, Wells Fargo Bank, National Association, in its capacity as a
Buyer, agrees that it will at all times hold directly at least 51% of the rights
and obligations of a Buyer which Wells Fargo Bank, National Association holds as
of the Closing Date under the Repurchase Documents, free and clear of any
assignment or participation. Each such assignment shall be made pursuant to an
Assignment and Acceptance substantially in the form of Exhibit F (an “Assignment
and Acceptance”). From and after the effective date of such Assignment and
Acceptance, (i) such Eligible Assignee shall be a Party and, to the extent
provided therein, have the rights and obligations of such Buyer under the
Repurchase Documents with respect to the percentage and amount of the Repurchase
Price allocated to it, (ii) such Buyer shall, to the extent provided therein, be
released from such obligations (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of such Buyer’s rights and obligations
under the Repurchase Documents, such Buyer shall cease to be a Party), (iii) the
obligations of such Buyer shall be deemed to be so reduced, and (iv) Agent will
give prompt written notice thereof (including identification of the Eligible
Assignee and the amount of Repurchase Price allocated to it) to each Party (but
Buyer shall not have any liability for any failure to timely provide such
notice). Any sale or assignment by Buyer of rights or obligations under the
Repurchase Documents that does not comply with this Section 18.08(c) shall be
treated for purposes of the Repurchase Documents as a sale by Buyer of a
participation in such rights and obligations in accordance with
Section 18.08(b). Upon written request of Agent or any Buyer who proposes to
sell and assign to an Eligible Assignee the rights and obligations of such Buyer
under the Repurchase Documents, Seller shall cause its counsel(s) who issued
opinions on behalf of Seller and Guarantor (collectively, “Seller’s Counsel”),
to issue a reliance letter, within a commercially reasonable period of time
following such request, in favor of such Eligible Assignee permitting such
Eligible Assignee to rely on the legal opinions issued by Seller’s Counsel on
the Closing Date (but which did not otherwise by its terms permit reliance).

 

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(d) Seller shall cooperate with Agent in connection with any such sale and
assignment of participations or assignments and shall enter into such
restatements of, and amendments, supplements and other modifications to, the
Repurchase Documents to give effect to any such sale or assignment; provided,
that (i) none of the foregoing shall change any economic or other material term
of the Repurchase Documents in a manner adverse to Seller without the consent of
Seller or require the Seller to incur any out-of-pocket costs or expenses
(ii) the form and substance of such restatement, amendment, supplement or
modification shall be reasonably acceptable to Seller, and (iii) Seller shall
have no obligation to pay any fees, costs and expenses in connection with such
restatement, amendment, supplement or modification.

(e) Agent, acting for this purpose solely as a non-fiduciary agent of Seller,
shall maintain, or cause to be maintained, a record with the name and address of
each Participant and the principal amounts (and stated interest, if any) due to
any such Participants under the Agreement and the Transaction (the “Participant
Register”). The entries in the Participant Register shall be conclusive, absent
manifest error. The Parties shall treat each Person whose name is recorded in
the Participant Register pursuant to the terms hereof as the owner of the
applicable rights and obligations and no sale of participation shall be
effective unless duly noted in the Participant Register. The portion of the
Participant Register relating to any Participant requesting (directly or through
Buyer or through an Assignee) payment from Seller under the Agreement shall be
made available to Seller upon reasonable request.

(f) Agent, acting for this purpose solely as a non-fiduciary agent of Seller,
shall maintain, or cause to be maintained, a record with the name and address of
each Assignee and the principal amounts (and stated interest, if any) due to any
such Assignee under the Agreement and the Transaction (the “Register”). The
entries in the Register shall be conclusive, absent manifest error. The Parties
shall treat each Person whose name is recorded in the Register pursuant to the
terms hereof as the owner of the applicable rights and obligations and no
transfer or assignment shall be effective unless duly noted in the Register. The
Register shall be made available to Seller upon reasonable request.

Section 18.09 Ownership and Hypothecation of Purchased Asset. Title to the
Purchased Asset shall pass to and vest in Agent and each Buyer on the applicable
Purchase Dates and, subject to the terms of the Repurchase Documents, Agent and
each Buyer or its designees shall have free and unrestricted use of the
Purchased Asset and be entitled to exercise all rights, privileges and options
relating to the Purchased Asset as the owner thereof, including rights of
subscription, conversion, exchange, substitution, voting, consent and approval,
and to direct any servicer or trustee. Each Buyer or its designees may engage in
repurchase transactions with the Purchased Asset or otherwise sell, pledge,
repledge, transfer, hypothecate, or rehypothecate the Purchased Asset, all on
terms that Buyer may determine; provided, that (i) no such transaction shall
affect the obligations of Agent to transfer the Purchased Asset to Seller on the
applicable Repurchase Dates free and clear of any pledge, Lien, security
interest, encumbrance, charge or other adverse claim and (ii) Seller shall not
have any obligation to pay any fees, costs or expenses in connection with such
transaction. In the event Agent engages in a repurchase transaction with any of
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Purchased Asset, Agent shall have the right to assign to its counterparty any of
the applicable representations or warranties herein and the remedies for breach
thereof, as they relate to the Purchased Asset that are subject to such
repurchase transaction.

Section 18.10 Confidentiality. All information regarding the terms set forth in
any of the Repurchase Documents or the Transaction and all information provided
to Agent regarding Seller, Guarantor and their respective businesses shall be
kept confidential and shall not be disclosed by either Party to any Person
except (a) to the Affiliates of such Party or its or their respective directors,
members, managers, officers, employees, agents, advisors, attorneys and other
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 required by Requirements of Law, (c) to the extent
required to be included in the financial statements of either Party or an
Affiliate thereof, (d) to the extent required to exercise any rights or remedies
under the Repurchase Documents, Purchased Asset or Mortgaged Properties, (e) to
any current or potential investors in Seller, Guarantor or any of their
Affiliates, or their respective advisors, attorneys and accountants, provided
each of the foregoing (except in the case of Persons bound by professional
obligations of confidentiality who have been instructed to keep such information
confidential) has agreed in writing to keep all such information confidential
and, to the extent the recipient has more than one group or division, such
Person has further agreed in writing not to share or disclose such confidential
information to any other group or division within such Person unless such other
group or division is actively involved in the transaction and has complied with
requirements of this clause (e), (f) to the extent required to consummate and
administer the Transaction or (g) to any actual or prospective Participant or
Eligible Assignee which agrees to comply with this Section 18.10; provided, that
no such disclosure made with respect to any Repurchase Document shall include a
copy of such Repurchase Document to the extent that a summary would suffice, but
if it is necessary for a copy of any Repurchase Document to be disclosed, all
pricing and other economic terms set forth therein shall be redacted before
disclosure. Notwithstanding anything to the contrary herein, the tax treatment
of the Transaction contemplated under the Repurchase Documents shall not be
treated as confidential.

Section 18.11 No Implied Waivers. No failure on the part of Agent, any Buyer to
exercise, or delay in exercising, any right or remedy under the Repurchase
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right or remedy thereunder preclude any further exercise thereof
or the exercise of any other right. The rights and remedies in the Repurchase
Documents are cumulative and not exclusive of any rights and remedies provided
by law. Application of the Default Rate after an Event of Default shall not be
deemed to constitute a waiver of any Event of Default or Agent’s or any Buyer’s
rights and remedies with respect thereto, or a consent to any extension of time
for the payment or performance of any obligation with respect to which the
Default Rate is applied. Except as otherwise expressly provided in the
Repurchase Documents, no amendment, waiver or other modification of any
provision of the Repurchase Documents shall be effective without the signed
agreement of Seller and Agent, on behalf of each Buyer. Any waiver or consent
under the Repurchase Documents shall be effective only if it is in writing and
only in the specific instance and for the specific purpose for which given.

 

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Section 18.12 Notices and Other Communications. Unless otherwise provided in
this Agreement, all notices, consents, approvals, requests and other
communications required or permitted to be given to a Party hereunder shall be
in writing and sent prepaid by hand delivery, by certified or registered mail,
by expedited commercial or postal delivery service, or by facsimile or email if
also sent by one of the foregoing, to the address for such Party specified in
Annex I or such other address as such Party shall specify from time to time in a
notice to the other Party. Any of the foregoing communications shall be
effective upon receipt, or in the case of (a) notice by mail, five (5) days
after being deposited in the United States mail, first class postage prepaid,
(b) notice by guaranteed overnight courier, upon confirmation of delivery by
such courier service, or (c) notice by facsimile copy or e-mail, when verbal or
electronic response of receipt is obtained, in each case sent to the address
specified in the first sentence of this Section. A Party receiving a notice that
does not comply with the technical requirements of this Section 18.12 may elect
to waive any deficiencies and treat the notice as having been properly given.

Section 18.13 Counterparts; Electronic Transmission. Any Repurchase Document may
be executed in counterparts, each of which shall be deemed to be an original,
but all of which shall together constitute but one and the same instrument. The
parties agree that this Agreement, any documents to be delivered pursuant to
this Agreement, any other Repurchase Document and any notices hereunder may be
transmitted between them by email and/or facsimile. The parties intend that
faxed signatures and electronically imaged signatures such as .pdf files shall
constitute original signatures and are binding on all parties.

Section 18.14 No Personal Liability. No administrator, incorporator, Affiliate,
owner, member, partner, stockholder, officer, director, employee, agent or
attorney of Agent or any Buyer, any Indemnified Person, Seller or Guarantor, as
such, shall be subject to any recourse or personal liability under or with
respect to any obligation of Agent, any Buyer, Seller or Guarantor under the
Repurchase Documents, whether by the enforcement of any assessment, by any legal
or equitable proceeding, by virtue of any statute or otherwise; it being
expressly agreed that (a) the obligations of Agent, each Buyer, Seller or
Guarantor under the Repurchase Documents are solely their respective corporate,
limited liability company or partnership obligations, as applicable, (b) any
such recourse or personal liability is hereby expressly waived, and (c) no
deficiency or other judgment may be sought or obtained against any Person other
than any Buyer, Agent, Seller and Guarantor solely in their respective
corporate, limited liability company or partnership obligations, as applicable.
This Section 18.14 shall survive the termination of the Repurchase Documents.

Section 18.15 Protection of Buyer’s Interests in the Purchased Asset; Further
Assurances.

(a) Seller shall cause the Repurchase Documents and/or all financing statements
and continuation statements and any other necessary documents covering the
right, title and interest of each Buyer to the Purchased Asset to be promptly
recorded, registered and filed, and at all times to be kept recorded, registered
and filed, all in such manner and in such places as may be required by law fully
to preserve and protect such right, title and interest. Seller shall deliver to
Agent file-stamped copies of, or filing receipts for, any document recorded,
registered or filed as provided above, as soon as available following such
recording, registration or filing. Seller shall execute any and all documents
reasonably required to fulfill the intent of this Section 18.15.

 

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(b) Seller will promptly at its expense execute and deliver such instruments and
documents and take such other actions as Agent may reasonably request from time
to time in order to perfect, protect, evidence, exercise and enforce any Buyer’s
rights and remedies under and with respect to the Repurchase Documents, the
Transaction and the Purchased Asset.

(c) If Seller fails to perform any of its Repurchase Obligations, upon
reasonable prior written notice to Seller, Agent may (but shall not be required
to) perform or cause to be performed such Repurchase Obligation, and the
reasonable and documented costs and expenses incurred by Agent in connection
therewith shall be payable by Seller. Without limiting the generality of the
foregoing, if an Event of Default has occurred and is continuing, Seller
authorizes Agent at the option of Agent and the expense of Seller, at any time
and from time to time, to take all actions and pay all amounts that Agent deems
necessary or appropriate to protect, enforce, preserve, insure, service,
administer, manage, perform, maintain, safeguard, collect or realize on the
Purchased Asset and each Buyer’s Liens and interests therein or thereon and to
give effect to the intent of the Repurchase Documents. No Default or Event of
Default shall be cured by the payment or performance of any Repurchase
Obligation by Agent on behalf of Seller. Agent may make any such payment in
accordance with any bill, statement or estimate procured from the appropriate
public office or holder of the claim to be discharged without inquiry into the
accuracy of such bill, statement or estimate or into the validity of any tax
assessment, sale, forfeiture, tax Lien, title or claim except to the extent such
payment is being contested in good faith by Seller in appropriate proceedings
and against which adequate reserves are being maintained in accordance with
GAAP.

(d) Without limiting the generality of the foregoing, Seller will no earlier
than six (6) or later than three (3) months before the fifth (5th) anniversary
of the date of filing of each UCC financing statement filed in connection with
to any Repurchase Document or any Transaction, (i) deliver and file or cause to
be filed an appropriate continuation statement with respect to such financing
statement (provided that Agent may elect to file such continuation statement),
and (ii) deliver or cause to be delivered to Agent an opinion of counsel, in
form and substance reasonably satisfactory to Agent, confirming and updating the
opinion delivered pursuant to Section 6.01(a) with respect to perfection and
otherwise to the effect that the security interests hereunder continue to be
enforceable and perfected security interests, subject to no other Liens of
record except as provided herein or otherwise permitted hereunder, which opinion
may contain usual and customary assumptions, limitations and exceptions.

(e) Except as provided in the Repurchase Documents, the sole duty of Agent, any
Buyer, Custodian or any other designee or agent of any Buyer with respect to the
Purchased Asset shall be to use reasonable care in the custody, use, operation
and preservation of the Purchased Asset in its possession or control. Neither
Agent nor any Buyer shall incur any liability to Seller or any other Person for
any act of Governmental Authority, act of God or other destruction in whole or
in part or negligence or wrongful act of custodians or agents selected and
supervised by Agent or any Buyer with reasonable care, or Agent’s or any Buyer’s
failure to provide adequate protection or insurance for the Purchased Asset.
Neither Agent nor any Buyer shall have any obligation to take any action to
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Asset against prior parties, and Seller hereby agrees to take such action.
Neither Agent nor any Buyer shall have any obligation to realize upon the
Purchased Asset except through proper application of any distributions with
respect to the Purchased Asset made directly to Agent or any Buyer or its
agent(s). So long as Agent, any Buyer and Custodian shall act in good faith in
their handling of the Purchased Asset, Seller waives or is deemed to have waived
the defense of impairment of the Purchased Asset by Buyer and Custodian.

(f) At Buyer’s election (at Buyer’s sole cost and expense) and at any time
during the term of this Agreement, Buyer may complete and record any or all of
the Blank Assignment Documents as further evidence of Buyer’s ownership interest
in the Purchased Asset.

Section 18.16 Default Rate. To the extent permitted by Requirements of Law,
Seller shall pay interest at the Default Rate on the amount of all Repurchase
Obligations not paid when due under the Repurchase Documents until such
Repurchase Obligations are paid or satisfied in full.

Section 18.17 Set-off.

(a) In addition to any rights now or hereafter granted under the Repurchase
Documents, Requirements of Law or otherwise, Seller hereby grants to Agent, each
Buyer and each Indemnified Person, to secure repayment of the Repurchase
Obligations, a right of set-off upon any and all of the following: monies,
securities, collateral or other property of Seller and any proceeds from the
foregoing, now or hereafter held or received by Agent, any Buyer, any Affiliate
of Agent or any Buyer or any Indemnified Person, for the account of Seller,
whether for safekeeping, custody, pledge, transmission, collection or otherwise,
and also upon any and all deposits (general, specified, special, time, demand,
provisional or final) and credits, claims or Indebtedness of Seller, at any time
existing, and any obligation owed by Agent or any Buyer or any Affiliate of
Agent or any Buyer to Seller, and to set-off against any Repurchase Obligations
or Indebtedness owed by Seller and any Indebtedness owed by Agent or any Buyer
or any Affiliate of Agent or any Buyer to Seller, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, whether or not arising
under the Repurchase Documents and irrespective of the currency, place of
payment or booking office of the amount or obligation and in each case at any
time held or owing by Agent or any Buyer, any Affiliate of Agent or any Buyer or
any Indemnified Person to or for the credit of Seller, without prejudice to
Agent’s or any Buyer’s right to recover any deficiency. Each of Agent, each
Buyer, each Affiliate of Agent and each Buyer and each Indemnified Person is
hereby authorized upon any amount becoming due and payable by Seller to Agent or
any Buyer or any Indemnified Person under the Repurchase Documents, the
Repurchase Obligations or otherwise or upon the occurrence and during the
continuance of an Event of Default, without notice to Seller, any such notice
being expressly waived by Seller to the extent permitted by any Requirements of
Law, 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 Agent,
any Buyer or any Indemnified Person by Seller under the Repurchase Documents and
the Repurchase Obligations, irrespective of whether Agent, any Buyer, any
Affiliate of Buyer or any Indemnified Person shall have made any demand under
the Repurchase Documents and regardless of any other collateral securing such
amounts, and in all cases without waiver or prejudice of any Buyer’s rights to
recover a

 

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deficiency. Seller shall be deemed directly indebted to Agent, any Buyer and the
other Indemnified Persons in the full amount of all amounts owing to Agent, any
Buyer and the other Indemnified Parties by Seller under the Repurchase Documents
and the Repurchase Obligations, and Agent, any Buyer and the other Indemnified
Persons shall be entitled to exercise the rights of set-off provided for above.
ANY AND ALL RIGHTS TO REQUIRE AGENT, ANY BUYER OR OTHER INDEMNIFIED PERSONS TO
EXERCISE THEIR RIGHTS OR REMEDIES WITH RESPECT TO THE PURCHASED ASSET OR OTHER
INDEMNIFIED PERSONS UNDER THE REPURCHASE DOCUMENTS, PRIOR TO EXERCISING THE
FOREGOING RIGHT OF SET-OFF, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY
WAIVED BY SELLER.

(b) Agent, each Buyer or any Indemnified Person shall promptly notify the Seller
after any such set-off and application made by Agent, such Buyer or such
Indemnified Person, provided that the failure to give such notice shall not
affect the validity of such set-off and application. If an amount or obligation
is unascertained, Agent or such 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 Party when the amount or obligation is ascertained. Nothing in this
Section 18.17 shall be effective to create a charge or other security interest.
This Section 18.17 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.

(c) Agent and each Buyer hereby expressly waive any and all right of set-off
upon any monies, securities, collateral or other property of Guarantors and any
proceeds from the foregoing now or hereafter held or received by Agent or any
Buyer for the account of Guarantor.

Section 18.18 Seller’s Waiver of Setoff. Seller hereby waives any right of
setoff it may have or to which it may be or become entitled under the Repurchase
Documents or otherwise against Agent, any Buyer, any Affiliate of Agent or any
Buyer, any Indemnified Person or their respective assets or properties.

Section 18.19 Power of Attorney; Release of Purchased Asset and Purchased Asset
Documents.

(a) Seller hereby authorizes Agent to file such financing statement or
statements relating to the Purchased Asset as Agent, at its option, on behalf of
each Buyer, may deem appropriate. Seller hereby appoints Agent as Seller’s agent
and attorney in fact to perform all other acts which Agent, on behalf of each
Buyer, deems reasonably appropriate to perfect and continue its ownership
interest in and/or the security interest granted hereby, if applicable, and,
upon the occurrence and during the continuance of an Event of Default, to
protect, preserve and realize upon the Purchased Asset, including, but not
limited to, the right to endorse notes, complete blanks in documents, transfer
servicing, and sign assignments on behalf of such Seller as its agent and
attorney in fact. This agency and power of attorney is coupled with an interest
and is irrevocable without Agent’s consent. Seller shall pay the filing costs
for any financing statement or statements prepared pursuant to this
Section 18.19. In addition, Seller shall execute and deliver to Agent a power of
attorney in the form set forth in Exhibit E attached hereto.

 

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(b) On the Repurchase Date (or Early Repurchase Date, if applicable), or on the
date of any pay-off of the Purchased Asset pursuant to which the obligor
thereunder is released from future payment obligations in accordance with this
Agreement, or upon the payment in full for any reason of the Repurchase Price
with respect to the Purchased Asset, (i) all right, title and interest of Agent
and each Buyer in the Purchased Asset shall automatically and immediately
terminate hereunder and of record, and Agent and each Buyer shall be deemed to
have simultaneously released their respective security interests in the
Purchased Asset, (ii) all right, title and interest in the Purchased Asset shall
revert to Seller, (iii) Agent and/or each Buyer (as applicable), at Seller’s
expense, shall promptly execute and deliver to Seller, or otherwise authorize
the filing by Seller of, such agreements, instruments and other documents as
Seller shall reasonably request to evidence the foregoing, including, without
limitation, by (A) returning (or causing the Custodian to return) the Purchased
Asset Documents, (B) executing such assignments or terminations with respect to
the Purchased Asset Documents as Seller may reasonably request, (C) to the
extent that any UCC financing statement filed by Agent or Buyer against Seller
specifically indentifies the Purchased Asset, delivering an amendment thereto or
termination thereof (as applicable) evidencing the release of the Purchased
Asset from each Buyer’s security interest therein, (D) to the extent that any
control agreement executed by Seller in favor of Agent and/or Buyer specifically
indentifies the Purchased Asset, delivering an amendment thereto or termination
thereof (as applicable) evidencing the release of the Purchased Asset under such
control agreement, (E) causing the Agent to execute and deliver appropriate
documentation evidencing the termination of any Irrevocable Redirection Notices,
and (F) promptly executing and delivering to Seller a limited power of attorney,
in a form satisfactory to Agent and Seller, sufficient to permit Seller to
execute (or cause to be executed) and send for recording, in accordance with
applicable Requirements of Law or otherwise in Seller’s discretion, any
instrument of satisfaction regarding the related Mortgage (if applicable) or any
other related Purchased Asset Document. Any such transfer or release shall be
without recourse to Agent or any Buyer and without representation or warranty by
Agent or any Buyer, except that Agent shall be deemed to represent to Seller, to
the extent that good title was transferred and assigned by Seller to Agent
hereunder on the related Purchase Date, that Agent is the sole owner of the
Purchased Asset, free and clear of any other interests or Liens caused by
actions or inactions of Agent or any Buyer.

Section 18.20 Periodic Due Diligence Review. Agent may perform continuing due
diligence reviews with respect to the Purchased Asset, Seller and Guarantor,
including ordering new third party reports, for purposes of, among other things,
verifying compliance with the representations, warranties, covenants,
agreements, duties, obligations and specifications made under the Repurchase
Documents or otherwise. Upon reasonable prior notice to Seller, unless a Default
or Event of Default exists, in which case no notice is required, Agent or its
representatives may during normal business hours inspect any properties and
examine, inspect and make copies of the books and records of Seller, the
Purchased Asset Documents and the Servicing Files. Seller shall make available
to Agent one or more knowledgeable financial or accounting officers and
representatives of the independent certified public accountants of Seller for
the purpose of answering questions of Agent or any Buyer concerning any of the
foregoing. Agent may purchase the Purchased Asset from Seller based solely on
the information provided by Seller to Agent in the Underwriting Materials and
the representations, warranties, duties, obligations and covenants contained
herein, and Agent may at any time conduct a partial or complete due diligence
review of the Purchased Asset, including ordering new credit reports and

 

84

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new appraisals on the Mortgaged Properties and otherwise re-generating the
information used to originate and underwrite the Purchased Asset. The provisions
of this Section 18.20 shall be subject to Section 13.02 with respect to the
obligation of Seller to pay any expenses incurred in connection therewith.

Section 18.21 Time of Essence. Time is of the essence with respect to all
obligations, duties, covenants, agreements, notices or actions or inactions of
the parties under the Repurchase Documents.

Section 18.22 Patriot Act Notice. Agent hereby notifies Seller that Agent and
each Buyer is required by the Patriot Act to obtain, verify and record
information that identifies Seller.

Section 18.23 Successors and Assigns. Subject to the foregoing, the Repurchase
Documents and the Transaction shall be binding upon and shall inure to the
benefit of the Parties and their successors and permitted assigns. Nothing in
the Repurchase Documents, express or implied, shall give to any Person other
than the Parties any benefit or any legal or equitable right, power, remedy or
claim under the Repurchase Documents.

Section 18.24 Acknowledgement of Anti-Predatory Lending Policies. Seller and
Buyer each have in place internal policies and procedures that expressly
prohibit their purchase of any high cost mortgage loan.

Section 18.25 Servicing. From and after the effective date of the Servicing
Agreement:

(a) Servicer shall service the Purchased Asset on behalf of Buyer.

(b) The servicing fee payable to Servicer shall be payable as a servicing fee in
accordance with the Servicing Agreement. Servicer shall also be entitled to
additional servicing compensation under the Servicing Agreement. Notwithstanding
the foregoing or anything herein to the contrary, Buyer shall not be liable for
any servicing fees, additional servicing compensation, costs and expenses
incurred by Servicer in connection with the Servicing of the Purchased Asset and
Servicer shall look solely to the Underlying Obligor and/or Seller for payment
of all and any servicing fees, additional servicing compensation, costs and
expenses incurred by Servicer in connection with the Servicing of the Purchased
Asset.

(c) From and after the Purchase Date, upon the occurrence and during the
continuance of an Event of Default under the Repurchase Agreement, in addition
to all of the other rights and remedies of Buyer and Servicer under the
Servicing Agreement, the Repurchase Agreement and the other Repurchase Documents
(and in addition to the provisions of the Servicing Agreement providing for
termination of the Servicing Agreement pursuant to its terms), (i) for the
avoidance of doubt, the right, if any, of Seller to direct the servicing of the
Purchased Asset shall immediately and automatically cease to exist, and
(ii) either Buyer or Servicer may at any time terminate the Servicing Agreement
upon the delivery of a written termination notice from Buyer, in accordance with
the Servicing Agreement. Seller shall pay all expenses associated with any such
termination, including, without limitation, any fees and expenses required in
connection with the transfer of servicing.

 

85

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Section 18.26 Funds Transfer Disbursements. Seller hereby authorizes each Buyer
to disburse the proceeds due to Seller from such Buyer pursuant to the
Repurchase Documents as requested by an authorized representative of the Seller
to any of the accounts designated in that certain Transfer Authorizer
Designation dated as of the date hereof, a copy of which is attached as Exhibit
G hereto and made a part hereof (the “Transfer Authorizer Designation”). Seller
agrees to be bound by any transfer request: (i) authorized or transmitted by
Seller; or (ii) made in Seller’s name and accepted by Agent and any Buyer in
good faith and in compliance with these transfer instructions, even if not
properly authorized by Seller. Seller further agrees and acknowledges that each
Buyer may rely solely on any bank routing number or identifying bank account
number or name provided by Seller to effect a wire or funds transfer even if the
information provided by Seller identifies a different bank or account holder
than named by the Seller. No Buyer is obligated or required in any way to take
any actions to detect errors in information provided by Seller. If any Buyer
takes any actions in an attempt to detect errors in the transmission or content
of transfer or requests or takes any actions in an attempt to detect
unauthorized funds transfer requests, Seller agrees that no matter how many
times such Buyer takes these actions such Buyer will not in any situation be
liable for failing to take or correctly perform these actions in the future and
such actions shall not become any part of the transfer disbursement procedures
authorized under this provision, the Repurchase Documents, or any agreement
between such Buyer and Seller. Seller agrees to notify any Buyer of any errors
in the transfer of any funds or of any unauthorized or improperly authorized
transfer requests within fourteen (14) days after such Buyer’s confirmation to
Seller of such transfer. Each Buyer will, in its sole discretion, determine the
funds transfer system and the means by which each transfer will be made. Each
Buyer may delay or refuse to accept a funds transfer request if the transfer
would: (i) violate the terms of this authorization; (ii) require use of a bank
unacceptable to such Buyer or prohibited by government authority; (iii) cause
such Buyer to violate any Federal Reserve or other regulatory risk control
program or guideline; or (iv) otherwise cause such Buyer to violate any
applicable law or regulation. No Buyer shall be liable to Seller or any other
parties for (i) errors, acts or failures to act of others, including other
entities, banks, communications carriers or clearinghouses, through which
Seller’s transfers may be made or information received or transmitted, and no
such entity shall be deemed an agent of any Buyer, (ii) any loss, liability or
delay caused by fires, earthquakes, wars, civil disturbances, power surges or
failures, acts of government, labor disputes, failures in communications
networks, legal constraints or other events beyond such Buyer’s control, or
(iii) any special, consequential, indirect or punitive damages, whether or not
(a) any claim for these damages is based on tort or contract or (b) any Buyer or
Seller knew or should have known the likelihood of these damages in any
situation. Each Buyer makes no representations or warranties other than those
expressly made in this Agreement.

[ONE OR MORE UNNUMBERED SIGNATURE PAGES FOLLOW]

 

86

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed
as of the date first above written.

 

SELLER: SVP 2013 FINANCE, LLC, a Delaware limited liability company By:  

/s/ Douglas Armer

  Name:   Douglas Armer   Title:   Principal, Head of Capital Markets AGENT:
WELLS FARGO BANK, NATIONAL ASSOCIATION By:  

/s/ Craig R. Larsen

  Name:   Craig R. Larsen   Title:   Senior Vice President BUYER: WELLS FARGO
BANK, NATIONAL ASSOCIATION By:  

/s/ Craig R. Larsen

  Name:   Craig R. Larsen   Title:   Senior Vice President

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

ANNEX I

Names and Addresses for Communications Between Parties

Buyer:

 

Wells Fargo Bank, National Association

600 California Street

19th Floor

San Francisco, CA 94108 Attention:    Sean Flannery Telephone:    (415) 396-6764
Email:    seanf@wellsfargo.com

Agent:

 

Wells Fargo Bank, National Association 600 California Street 19th Floor San
Francisco, CA 94108 Attention:    Sean Flannery Telephone:    (415) 396-6764
Email:    seanf@wellsfargo.com

With copies to:

 

Dechert LLP Cira Centre 2929 Arch Street Philadelphia, Pennsylvania 19104
Attention:    Richard D. Jones, Esq. Telephone:    (212) 698-3844 Fax:    (215)
655-2501 Email:    richard.jones@dechert.com

Seller:

 

SVP 2013 Finance, LLC c/o The Blackstone Group LP 345 Park Avenue New York, New
York 10154 Attention: Douglas N. Armer Email: douglas.armer@blackstone.com

 

Annex I-1

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

With copies to:

 

Gibson, Dunn & Crutcher LLP

200 Park Avenue

New York, New York 10166-0193

Attention:    Andrew Dady Telephone:    (212) 351-2411 Fax:    (212) 351-6211
Email:    adady@gibsondunn.com

 

Annex I-1

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

SCHEDULE I

Asset, Applicable Purchase Percentage and Original Purchase Price

Attached

 

Sch. I-1

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

SCHEDULE II

Representations and Warranties With Respect to the Asset

A. Seller represents and warrants to Agent and Buyers, with respect to the
Purchased Asset, that except as specifically disclosed in the Confirmation for
the Purchased Asset, as of the Purchase Date for the Purchased Asset by Agent
from Seller, the representations set forth on this Schedule II, Section A, shall
be true and correct in all material respects. For purposes of this Schedule II,
Section A and the representations and warranties set forth herein, a breach of a
representation or warranty shall be deemed to have been cured with respect to
the Purchased Asset if and when Seller has taken or caused to be taken action
such that the event, circumstance or condition that gave rise to such breach no
longer affects the Purchased Asset or has repurchased the Purchased Asset in
accordance with the terms of the Agreement.

 

  1. Seller is the sole owner and holder of the Purchased Asset.

 

  2. No fraudulent acts were committed by Seller in connection with its
origination of the Purchased Asset.

 

  3. To the Actual Knowledge of Seller, no consent, approval, authorization or
order of, or registration or filing with, or notice to, any Governmental
Authority having jurisdiction or regulatory authority is required for any
transfer, assignment or pledge by the holder of the Purchased Asset.

 

  4. Seller has full right, power and authority to sell and assign the Purchased
Asset to Agent and Seller has not previously assigned, sold or otherwise
transferred or created any liens or encumbrances upon or granted any options to
purchase, pledge or otherwise hypothecate any of its interest in and to the
Purchased Asset. There are no participation agreements affecting the Purchased
Asset.

 

  5. To the Actual Knowledge of Seller, all real estate taxes and governmental
assessments, or installments thereof, which would be a Lien on the Mortgaged
Property and that prior to the Purchase Date have become delinquent in respect
of the Mortgaged Property have been paid, or an escrow of funds in an amount
sufficient to cover such payments has been established. For purposes of this
representation and warranty, real estate taxes and governmental assessments 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.

 

  6. To the Actual Knowledge of Seller, the related Mortgaged Property is free
and clear of any material damage (other than deferred maintenance for which
escrows were established at origination) that would affect materially and
adversely the value of such Mortgaged Property as security for the related Whole
Loan and, to the Actual Knowledge of Seller, there is no proceeding pending or,
based solely upon the delivery of written notice thereof from the appropriate
condemning authority, threatened for the total or partial condemnation of such
Mortgaged Property.

 

Sch. II-1

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

  7. To the Actual Knowledge of Seller and except as set forth on the phase 1
environmental reports with respect to the Mortgaged Property provided to Agent
prior to the Closing Date, there is no material and adverse environmental
condition or circumstance affecting the Mortgaged Property. To the Actual
Knowledge of Seller and except as set forth on the phase 1 environmental reports
with respect to the Mortgaged Property provided to Agent prior to the Closing
Date, there is no violation of any applicable Environmental Law with respect to
the Mortgaged Property. Neither Seller nor, to the Actual Knowledge of Seller,
the Mortgagor or Underlying Obligor, as applicable, or any prior holder of the
Purchased Asset, has taken any actions which would cause the Mortgaged Property
not to be in compliance with all applicable Environmental Laws.

 

  8. To the Actual Knowledge of Seller, there are no material violations of any
applicable zoning ordinances, building codes or land laws applicable to the
Mortgaged Property or the use and occupancy thereof which would have a Material
Adverse Effect on the value, operation or net operating income of the Mortgaged
Property.

 

  9. To the Actual Knowledge of Seller, there is no pending action, suit or
proceeding, or governmental investigation of which Seller has received written
notice, against the Mortgagor or Underlying Obligor, as applicable, the related
Mortgaged Property or the Pledged Collateral the adverse outcome of which could
reasonably be expected to materially and adversely affect such Mortgagor’s or
Underlying Obligor’s ability to pay principal, interest or any other amounts due
under the Purchased Asset or the security intended to be provided by the
Purchased Asset Documents or the current use of the Mortgaged Property.

 

  10. To the Actual Knowledge of Seller, the improvements located on the
Mortgaged Property are either not located in a federally designated special
flood hazard area or, if so located, the Mortgagor or Underlying Obligor, as
applicable, is required to maintain or the Mortgagee maintains, flood insurance
with respect to such improvements and such policy is in full force and effect in
an amount no less than the lesser of (i) the original principal balance of the
Whole Loan (ii) the value of such improvements on the related Mortgaged Property
located in such flood hazard area or (iii) the maximum allowed under the related
federal flood insurance program.

 

  11. To the Actual Knowledge of Seller, the related Mortgagor or Underlying
Obligor, as applicable, the related lessee, franchisor or operator was in
possession of all material licenses, permits and authorizations then required
for use of the related Mortgaged Property by the related Mortgagor or Underlying
Obligor.

 

  12.

To Seller’s Actual Knowledge, the Underwriting Package in respect of the
Purchased Asset does not contain any untrue statement of material fact or omit
to

 

Sch. II-2

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

  state any material fact that would reasonably be expected to result in a
Material Adverse Affect with respect to the Purchased Asset. To Seller’s Actual
Knowledge, Seller has made available to Agent and Buyers, with respect to the
Purchased Asset, true, correct and complete Purchased Asset Documents.

 

  13. To the Actual Knowledge of Seller, each related Mortgaged Property
constitutes one or more complete separate tax lots (or the related Mortgagor or
Underlying Obligor, as applicable, has covenanted to obtain separate tax lots
and a Person has indemnified the Mortgagee for any loss suffered in connection
therewith or an escrow of funds in an amount sufficient to pay taxes resulting
from a breach thereof has been established) or is subject to an endorsement
under the related title insurance policy.

 

  14. Seller has delivered to Agent or its designee the original Mortgage Note
related to the Purchased Asset, together with an original assignment thereof,
executed by Seller in blank.

 

  15. The related Blank Assignment Documents constitute the legal, valid and
binding first priority assignment from Seller (assuming the insertion of the
Agent’s name), except as such enforcement may be limited by bankruptcy,
insolvency, receivership, reorganization, moratorium, redemption, liquidation or
other laws relating to or affecting the enforcement of creditors’ rights
generally, or by general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law).

 

  16. Seller, to Seller’s Actual Knowledge, 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 the Purchased Asset is or may become obligated.

 

  17. To Seller’s Actual Knowledge, there is no valid offset, defense,
counterclaim, abatement or right to rescission with respect to the Purchased
Asset Document, except with respect to the enforceability of any provisions
requiring the payment of default interest, late fees, additional interest,
prepayment premiums or yield maintenance charges, and no advance of funds has
been made other than pursuant to the Purchased Asset Documents, directly or
indirectly, by Seller and, to Seller’s Actual Knowledge, any prior holder of the
Purchased Asset to the Mortgagor or Underlying Obligor, as applicable, and no
funds have been received from any Person other than the Mortgagor or Underlying
Obligor, as applicable, for or on account of payments due on the Purchased Asset
Documents.

 

  18.

(a) To the Actual Knowledge of Seller, other than payments due but not yet
thirty (30) days or more delinquent (and excepting, for avoidance of doubt, any
defaults which have been cured prior to the date hereof), there is no default,
breach, violation or event of acceleration currently existing under the
Purchased Asset Documents, and no event has occurred (other than payments due
but not yet delinquent) which, with the passage of time or with notice and the
expiration of

 

Sch. II-3

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

  any grace or cure period, would constitute a material default, breach,
violation or event of acceleration, provided, however, that this representation
and warranty does not address or otherwise cover any default, breach, violation
or event of acceleration that specifically pertains to any matter otherwise
covered by any other representation and warranty made by Seller in any paragraph
of this Schedule II and (b) neither Seller nor, to Seller’s Actual Knowledge,
any prior holder of the Purchased Asset, has waived any default, breach,
violation or event of acceleration under the Purchased Asset Documents and
pursuant to the terms of the Purchased Asset Documents.

 

  19. The Purchased Asset is not, and to the Actual Knowledge of Seller, since
origination, has not been, thirty (30) days or more past due in respect of any
scheduled payment.

 

  20. To the Actual Knowledge of Seller, no Mortgagor or Underlying Obligor, as
applicable, with respect to the Purchased Asset, is a debtor in any state or
federal bankruptcy or insolvency proceeding.

 

  21. The Purchased Asset is presently outstanding and, to the Actual Knowledge
of Seller, (a) the proceeds thereof have been fully and properly disbursed and,
(b) except for amounts held in escrow by Seller, there is no requirement for any
future advances by Seller thereunder.

 

  22. To Seller’s Actual Knowledge, as of the Closing Date the reserve balances
for the Asset are as shown on Schedule III to the Agreement. Seller is not
holding any letters of credit as collateral for the Purchased Asset.

 

  23. Except as set forth in the Purchased Asset Documents, the Purchased Asset
or any related Mortgage Note has not been cancelled, satisfied or rescinded in
whole or part nor has any instrument been executed that would (i) effect a
cancellation, satisfaction or rescission thereof or (ii) operate to release any
part of the Mortgaged Property and/or the Pledged Collateral from the lien of
the Purchased Asset Documents.

 

  24. To Seller’s Actual Knowledge, except as set forth in the Purchased Asset
Documents, no Underlying Obligor under any of the applicable Purchased Asset
Documents has been released from any obligation or liability thereunder.

 

  25. Seller has not, nor to Seller’s Actual Knowledge has any other lender
under the Purchased Asset, received any request, which request is currently
outstanding, for any consent to restructure, modify, extend or waive any of the
Underlying Obligors’ obligations under any of the applicable Purchased Asset
Documents, and no agreement to restructure, modify, extend or waive any of such
obligations in the future has been entered into relating to the Purchased Asset.

 

  26.

Seller has not, nor to Seller’s Actual Knowledge has any other lender under the
Purchased Asset, received written notice of any litigation, actions, suits or
proceedings currently pending before any court, administrative agency or

 

Sch. II-4

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

  arbitrator concerning the Purchased Asset, the applicable Mortgaged Property
or the Pledged Collateral that would reasonably be expected to adversely affect
the validity or enforceability of the liens on and security interests in such
Mortgaged Property or the Pledged Collateral or that would reasonably be
expected, if determined adversely, to materially and adversely affect the value
of the Purchased Asset, the Mortgaged Property or the Pledged Collateral.

 

  27. To Seller’s Actual Knowledge, the Purchased Asset is not
cross-collateralized with any other loan or financing.

B. Seller represents and warrants to Agent and Buyers, with respect to the
Purchased Asset, that except as specifically disclosed in the Confirmation for
the Purchased Asset, as of the Purchase Date for the Purchased Asset by Agent
from Seller, and at all times when the Purchased Asset is subject to the
Agreement, the representations set forth in this Schedule II, Section B shall be
true and correct in all material respects. For purposes of this Schedule II,
Section B, and the representations and warranties set forth herein, a breach of
a representation or warranty shall be deemed to have been cured with respect to
the Purchased Asset if and when Seller has taken or caused to be taken action
such that the event, circumstance or condition that gave rise to such breach no
longer affects the Purchased Asset or has repurchased the Purchased Asset in
accordance with the terms of the Agreement.

 

  1. The Purchased Asset is a Whole Loan.

 

  2. To the Actual Knowledge of Seller, other than the right of first refusal by
the Mortgagor or Underlying Obligor, as applicable, for the Purchased Asset, and
except for the rights of Agent under the Agreement, no third party holds any
“right of first refusal,” “right of first negotiation,” “right of first offer,”
purchase option, or other similar rights of any kind, and no other impediment
exists to any such pledge to Agent or Agent’s exercise of rights or remedies.

 

  3. Seller holds no preferred equity interest and neither Seller nor any
Affiliate has any obligation to make capital contributions to the Mortgagor or
Underlying Obligor, as applicable, under the Purchased Asset.

 

Sch. II-5

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

SCHEDULE III

Reserve Balances

[Attached]

 

Sch. III-1

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

EXHIBIT A

Form of Transaction Request

[            ], 2013

 

Wells Fargo Bank, National Association 600 California Street 19th Floor San
Francisco, CA 94108 Attention:    Sean Flannery Telephone:    (415) 396-6764
Email:    seanf@wellsfargo.com

 

  Re: Master Repurchase and Securities Contract dated as of June 7, 2013 (the
“Agreement”) between SVP 2013 Finance, LLC, a Delaware limited liability company
(“Seller”) and Wells Fargo Bank, National Association (“Buyer” and “Agent”)

Ladies and Gentlemen:

This is a Transaction Request (as this and other terms used but not defined
herein are defined in the Agreement) delivered pursuant to Section 3.01(a) of
the Agreement. Seller hereby requests that Agent, on behalf of Buyers, enter
into a Transaction upon the proposed terms set forth below.

 

Assets:    As described in Appendix 1 hereto Asset Documents:    As described in
Appendix 1 hereto Purchase Date:    [            ], 2013 Purchase Price:    $
        

Except as specified in Appendix 1 hereto, on the Purchase Date for each Asset
described in this Transaction Request, Seller will make all of the
representations and warranties contained in the Agreement (including Schedule II
to the Agreement) with respect thereto.

 

Ex. A-1

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

 

Seller: SVP 2013 FINANCE, LLC, a Delaware limited liability company By:  

 

  Name:     Title:  

 

Ex. A-2

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

Appendix 1 to Transaction Request

List of Eligible Assets requested to be purchased, to include, as applicable:

[Description of any exceptions to representations and warranties to be made by
Seller in the related Confirmation]

 

Ex. A-3

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

EXHIBIT B

Form of Confirmation

[            ], 20[    ]

 

Wells Fargo Bank, National Association 600 California Street 19th Floor San
Francisco, CA 94108 Attention:    Sean Flannery Telephone:    (415) 396-6764
Email:    seanf@wellsfargo.com

 

  Re: Master Repurchase and Securities Contract dated as of June 7, 2013 (the
“Agreement”) between SVP 2013 Finance, LLC, a Delaware limited liability company
(“Seller”) and Wells Fargo Bank, National Association (“Buyer” and “Agent”)

Ladies and Gentlemen:

This is a Confirmation (as this and other terms used but not defined herein are
defined in the Agreement) executed and delivered by Seller and Agent pursuant to
Section 3.01(c) of the Agreement. Seller and Agent hereby confirm and agree
that, as of the Purchase Date and upon the other terms specified below, Seller
shall sell and assign to Agent, on behalf of Buyers, and Agent, on behalf of
Buyers, shall purchase from Seller, all of Seller’s right, title and interest
in, to and under the Purchased Asset listed in Appendix 1 hereto.

 

Purchased Asset:    As described in Appendix 1 hereto Asset Documents:    As
described in Appendix 1 hereto Purchase Date:    [            ], 20[    ]
Purchase Price:    $         

Seller hereby certifies as follows, on and as of the above Purchase Date with
respect to each Purchased Asset described in this Confirmation:

1. All of the conditions precedent in Article 6 of the Agreement have been
satisfied.

2. Except as specified in Appendix 1 hereto, Seller will make all of the
representations and warranties contained in the Agreement.

 

Ex. B-1

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

Seller: SVP 2013 FINANCE, LLC, a Delaware limited liability company By:  

 

  Name:     Title:  

Agent:

Acknowledged and Agreed:

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Agent for Buyer

 

By:  

 

  Name:     Title:  

 

Ex. B-2

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

Appendix 1 to Confirmation

Purchased Asset, including, as applicable:

[Description of any exceptions to representations and warranties made by Seller
in the Confirmation]

 

Ex. B-3

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

EXHIBIT C

Form of Irrevocable Redirection Notice

 

[PAYOR ADDRESS]    [DATE]

Attention: [                    ]

 

Re: Payment Redirection Letter

Ladies and Gentlemen:

[INSERT PARTY NAME] (“Payor”) is obligated to pay over to [                    ]
(“Payee”) the proceeds of, or the payments, dividends or distributions with
respect thereto, the Asset identified on Appendix A attached hereto (the
“Proceeds”). Payor is hereby irrevocably instructed to deposit all Proceeds into
the account identified below.

 

Bank:   

 

  

ABA#:   

 

  

Acct#:   

 

  

Attn:   

 

  

Reference: Prime/Loan #    [                    ]   

The instructions set forth herein are irrevocable without the consent of Payee
and Wells Fargo Bank, National Association (“Agent”), in each party’s respective
sole and absolute discretion. No provision of this instruction letter may be
revoked, amended or otherwise modified without the prior written consent of
Payee and Agent, in each party’s respective sole and absolute discretion. Agent
is an intended third party beneficiary of this instruction letter and may
enforce this instruction letter the same as if it were a party hereto.

Please acknowledge receipt of this instruction letter by signing in the
signature block below and forwarding an executed copy to Agent promptly upon
receipt. Any notices to Agent should be delivered to the following address:
Wells Fargo Bank, National Association, Wells Fargo Bank, National Association,
600 California Street, 19th Floor, San Francisco, CA 94108, Sean Flannery

This instruction letter may be executed in any number of counterparts and by
different parties hereto in separate counterparts (including by facsimile), each
of which when so executed shall be deemed to be an original and all of which
when taken together shall constitute one and the same agreement.

 

Very truly yours, [                    ], as Payee By:  

 

Name:  

 

Title:  

 

 

Ex. C-1

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

Appendix A

Asset

[describe Asset to which Irrevocable Redirection Notice relates]

 

Ex. C-1

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

EXHIBIT D-1

Form of Closing Certificate

SVP 2013 FINANCE, LLC

(the “Company”)

CERTIFICATE OF [                    ]

            , 20    

I,                     , a [                    ] of the Company, DO HEREBY
CERTIFY AND CONFIRM that I am authorized to execute and deliver this Certificate
on behalf of the Company and I further certify, in my capacity as
[                    ], the following:

1. Attached as Exhibit A hereto is a true, up to date and correct copy of the
Certificate of [                    ] of the Company.

2. Attached as Exhibit B hereto is a true, up to date and correct copy of the
[                    ] of the Company.

3. Attached as Exhibit C hereto is an Incumbency Certificate of the Company
setting forth, as of the date hereof, each duly elected or appointed, qualified
and acting [                    ] of the Company and the signature appearing
opposite his or her name is his or her true and genuine signature (or true
facsimile thereof).

4. Attached as Exhibit D hereto is a true and correct copy of a Resolution duly
executed by the [                    ] of the Company approving the documents
referred to therein and their signing, execution and performance of such
resolutions have not been amended, modified or revoked and are in full force and
effect.

5. Attached as Exhibit E hereto is a true, up to date and correct copy of a
Certificate of Good Standing of the Company in the State of
[                    ].

6. The Registered Office of the Company is at [                    ].

This Certificate is given without personal recourse or liability to the signor.

[Signature Page Follows]

 

Ex. D-1-1

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IN WITNESS WHEREOF, the undersigned has hereunto executed this Certificate for
and on behalf of the Company on             , 20    .

 

SVP 2013 FINANCE, LLC, a Delaware limited liability company By:  

 

  Name:     Title:  

 

Ex. D-1-2

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EXHIBIT D-2

Form of Compliance Certificate

[            ], 20[    ]

 

Wells Fargo Bank, National Association 600 California Street 19th Floor San
Francisco, CA 94108 Attention:    Sean Flannery Telephone:    (415) 396-6764
Email:    seanf@wellsfargo.com

 

  Re: Master Repurchase and Securities Contract dated as of June 7, 2013 (the
“Agreement”) between SVP 2013 Finance, LLC, a Delaware limited liability company
(“Seller”) and Wells Fargo Bank, National Association (“Buyer” and “Agent”)

This Compliance Certificate is furnished pursuant to the above Agreement. Unless
otherwise defined herein, capitalized terms used in this Compliance Certificate
have the respective meanings ascribed thereto in the Agreement.

THE UNDERSIGNED HEREBY CERTIFIES THAT:

1. I am a duly elected Responsible Officer of [                    ].

The financial statements attached hereto with respect to Seller fairly present
in all material respects the financial condition and results of operations of
Seller as of the end of and for the period covered thereby in accordance with
GAAP (except in the case of quarterly financial statements, subject to yearend
audit adjustments and the absence of footnotes).

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

To the best of my knowledge, Seller has, during the period since the delivery of
the immediately preceding Compliance Certificate, observed or performed all of
its covenants and other agreements in all material respects, and satisfied in
all material respects every condition, contained in the Agreement and the other
Repurchase Documents to be observed, performed or satisfied by it, and I have no
knowledge of the occurrence during such period, or present existence, of any
condition or event which constitutes an Event of Default or Default, except as
set forth below.

Attached as Exhibit 1 hereto are the financial statements required to be
delivered pursuant to Section 8.06 of the Agreement (or, if none are required to
be delivered as of the date

 

Ex. D-2-1

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of this Compliance Certificate, the financial statements most recently delivered
pursuant to Section 8.06 of the Agreement), which financial statements, to the
best of my knowledge after due inquiry, fairly present in all material respects,
the consolidated financial condition and operations of Guarantor and the
consolidated results of their operations as of the date or with respect to the
period therein specified, determined in accordance with GAAP.

Attached as Exhibit 2 hereto are the calculations demonstrating compliance with
the financial covenants set forth in Section 9 of the Guarantee Agreement, each
for the immediately preceding fiscal quarter.

Described below are the exceptions, if any, to the above paragraph, setting
forth in detail the nature of the condition or event, the period during which it
has existed and the action which Seller has taken, is taking, or proposes to
take with respect to 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             , 20    .

 

SVP 2013 FINANCE, LLC, a Delaware limited liability company By:  

 

  Name:     Title:  

Exhibit 1: Financial Statements

Exhibit 2: Financial Covenant Compliance Calculations

 

Ex. D-2-2

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EXHIBIT E

Form of Power of Attorney

Know All Men by These Presents, that SVP 2013 FINANCE, LLC, a Delaware limited
liability company (“Seller”), does hereby appoint WELLS FARGO BANK, NATIONAL
ASSOCIATION, a national banking association, as Agent (in such capacity,
“Agent”) for Wells Fargo Bank, National Association, a national banking
association (“Buyer”), its attorney in fact to act in Seller’s name, place and
stead, upon the occurrence and during the continuance of an Event of Default, in
any way that Seller could do with respect to the enforcement of Seller’s rights
under the Purchased Asset purchased by Agent, on behalf of Buyer, pursuant to
the Master Repurchase and Securities Contract, dated as of June 7, 2013 between
Seller, Buyer and Agent (the “Repurchase Agreement”), and to take such other
steps as may be necessary or desirable to enforce Buyer’s rights against the
Purchased Asset to the extent that Seller is permitted by law to act through an
agent.

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 OF SUCH REVOCATION
OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY, AND SELLER, 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.

[SIGNATURE PAGE FOLLOWS]

 

Ex. E-1

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IN WITNESS WHEREOF Seller has caused this Power of Attorney to be executed as a
deed on the date first written above.

 

SVP 2013 FINANCE, LLC, a Delaware limited liability company By:  

 

  Name:     Title:  

 

Ex. E-2

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EXHIBIT F

Form of Assignment and Acceptance

1. Reference is made to the Master Repurchase and Securities Contract dated as
of June 7, 2013, (the “Repurchase Agreement”) between SVP 2013 Finance, LLC, a
Delaware limited liability company (“Seller”), Wells Fargo Bank, National
Association (“Buyer”), and Wells Fargo Bank, National Association, as Agent for
Buyer (in such capacity, “Agent”).

2. [                    ] (“Assignor”) and [                    ] (“Assignee”)
hereby agree as follows:

3. Assignor hereby sells and assigns and delegates, without recourse except as
to the representations and warranties made by it herein, to Assignee, and
Assignee hereby purchases and assumes from Assignor, an interest in and to
Assignor’s rights and obligations under the Agreement as of the Effective Date
(as hereinafter defined) equal to the percentage interest specified on Schedule
I hereto of all outstanding rights and obligations under the Repurchase
Agreement (collectively, the “Assigned Interest”).

4. Assignor:

(a) hereby represents and warrants that its name set forth on Schedule I hereto
is its legal name, that it is the legal and beneficial owner of the Assigned
Interest and that such Assigned Interest is free and clear of any adverse claim;

(b) other than as provided herein, makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Repurchase Agreement or any of
the other Repurchase Documents, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, the Repurchase Agreement or any of the other
Repurchase Documents, or any other instrument or document furnished pursuant
thereto; and

(c) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of Seller or the performance or observance by
Seller of any of its Repurchase Obligations.

5. Assignee:

(a) confirms that it has received a copy of the Repurchase Agreement, the other
Repurchase Documents and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance;

(b) agrees that it will, independently and without reliance upon Agent or
Buyers, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Repurchase Agreement;

 

Ex. F-1

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(c) represents and warrants that its name set forth on Schedule I hereto is its
legal name;

(d) agrees that, from and after the Effective Date, it will be bound by the
provisions of the Repurchase Agreement and the other Repurchase Documents and,
to the extent of the Assigned Interest, it will perform in accordance with their
terms all of the obligations that by the terms of the Repurchase Agreement are
required to be performed by it as a Buyer; and

(e) The effective date for this Assignment and Acceptance (the “Effective Date”)
shall be the date specified on Schedule I hereto.

6. As of the Effective Date, (a) Assignee shall be a party to the Agreement and,
to the extent of the Assigned Interest, shall have the rights and obligations of
a Buyer thereunder and (b) Assignor shall, to the extent that any rights and
obligations under the Agreement have been assigned and delegated by it pursuant
to this Assignment and Acceptance, relinquish its rights (other than provisions
of the Repurchase Agreement and the other Repurchase Documents that are
specified under the terms thereof to survive the payment in full of the
Repurchase Obligations) and be released from its obligations under the
Repurchase Agreement (and, if this Assignment and Acceptance covers all or the
remaining rights and obligations of such Assignor under the Agreement, such
Assignor shall cease to be a party thereto).

7. Assignor and Assignee shall make all appropriate adjustments in payments
under the Repurchase Agreement for periods prior to the Effective Date directly
between themselves.

8. This Assignment and Acceptance shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York.

9. This Assignment and Acceptance shall be binding upon, and inure to the
benefit of, the parties hereto and their respective successors and assigns. This
Assignment and Acceptance may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
Schedule I hereto in Portable Document Format (PDF) or by telecopier or
facsimile transmission shall be effective as delivery of an originally executed
counterpart of this Assignment and Acceptance.

 

Ex. F-2

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IN WITNESS WHEREOF, each of Assignor and Assignee have caused Schedule I hereto
to be executed by their respective officers thereunto duly authorized, as of the
date specified thereon.

 

Ex. F-3

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Schedule I

to

ASSIGNMENT AND ACCEPTANCE

Assignor: [                    ]

Assignee: [                    ]

Effective Date: [            ], 20[    ]

 

Assigned Purchase Price

   $                

Aggregate Purchase Price

   $                

Assigned Buyer Percentage

          % 

Outstanding Aggregate Purchase Amount

   $                

Outstanding Buyer Purchase Amount

   $                

 

Assignor: [                    ], as Assignor [Type or print legal name of
Assignor] By:  

 

  Name:     Title:   Dated: [            ], 20[    ] Assignee:

[                    ], as Assignee

[Type or print legal name of Assignee]

By:  

 

  Name:     Title:   Address for Notices:

 

Ex. F-4

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EXHIBIT G

Transfer Authorizer Designation

(Attached)

 

Ex. G-1