Exhibit 10.2

 

EXECUTION VERSION

 

MORTGAGE ASSET PURCHASE AGREEMENT

 

This MORTGAGE ASSET PURCHASE AGREEMENT (this “Agreement”) is made as of June 14,
2018 by and between Arbor Realty SR, Inc., a Maryland corporation (the
“Seller”), and Arbor Realty Commercial Real Estate Notes 2018-FL1, Ltd., an
exempted company incorporated in the Cayman Islands with limited liability (the
“Issuer” and, in some instances, the “Purchaser”).

 

W I T N E S S E T H:

 

WHEREAS, the Issuer desires to purchase from the Seller and the Seller desires
to sell to the Issuer an initial portfolio of mortgage assets (“Initial Mortgage
Assets”);

 

WHEREAS, in connection with the sale of such mortgage assets to the Issuer, the
Seller desires to release any interest it may have in the mortgage assets and
desires to make certain representations and warranties regarding the mortgage
assets;

 

WHEREAS, pursuant to an indenture, dated as of June 14, 2018 (the “Indenture”),
by and among the Issuer, the Co-Issuer (hereinafter defined), U.S. Bank National
Association, as trustee, paying agent, calculation agent, transfer agent,
custodial securities intermediary, backup advancing agent and notes registrar
(together with any successor trustee permitted under the Indenture, the
“Trustee”), U.S. Bank National Association, as custodian and Arbor Realty
SR, Inc., as advancing agent, (A) the Issuer and Arbor Realty Commercial Real
Estate Notes 2018-FL1, LLC, a Delaware limited liability company (the
“Co-Issuer”), intend to issue the U.S.$308,000,000 Class A Senior Secured
Floating Rate Notes Due 2028 (the “Class A Notes”), the U.S.$50,400,000
Class A-S Senior Secured Floating Rate Notes Due 2028 (the “Class A-S Notes”),
the U.S.$22,400,000 Class B Secured Floating Rate Notes Due 2028 (the “Class B
Notes”), the U.S.$23,100,000 Class C Secured Floating Rate Notes Due 2028 (the
“Class C Notes”) and the U.S.$37,100,000 Class D Secured Floating Rate Notes Due
2028 (the “Class D Notes”, and together with Class A Notes, Class A-S Notes,
Class B Notes and Class C Notes, the “Offered Notes”), and (B) the Issuer
intends to issue the U.S.$30,800,000 Class E Floating Rate Notes Due 2028 (the
“Class E Notes”) and the U.S.$22,400,000 Class F Floating Rate Notes Due 2028
(the “Class F Notes” and, together with the Class E Notes and the Offered Notes,
the “Notes”);

 

WHEREAS, pursuant to its Governing Documents, certain resolutions of its Board
of Directors and a preferred share paying agency agreement, the Issuer also
intends to issue the U.S.$65,800,000 aggregate notional amount preferred shares
(the “Preferred Shares” and, together with the Notes, the “Securities”);

 

WHEREAS, the Issuer intends to pledge the mortgage assets purchased hereunder by
the Issuer to the Trustee as security for the Offered Notes;

 

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NOW, THEREFORE, the parties hereto agree as follows:

 

1.             Defined Terms.

 

Capitalized terms used and not otherwise defined herein shall have the same
meanings ascribed to such terms in the Indenture.

 

“Accountants’ Due Diligence Report”:  The meaning specified in
Section 4(l) hereof.

 

“Assignment of Leases, Rents and Profits”:  With respect to any Mortgage, an
assignment of leases thereunder, notice of transfer or equivalent instrument in
recordable form, sufficient under the laws of the jurisdiction wherein the
Underlying Mortgaged Property is located to reflect the assignment of leases to
the Mortgagee.

 

“Assignment of Mortgage”:  With respect to any Mortgage, an assignment of the
Mortgage, notice of transfer or equivalent instrument in recordable form,
sufficient under the laws of the jurisdiction wherein the related Underlying
Mortgaged Property is located to reflect the assignment of the Mortgage to the
Mortgagee.

 

“Borrower”:  The borrower under a Mortgage Loan.

 

“Closing Date”:  The meaning specified in Section 2(b) hereof.

 

“Collateral File”:  With respect to any Mortgage Asset, the Underlying
Instruments.

 

“Companion Loan”: Any Non-Acquired Participation.

 

“Cut-off Date”:  Has the same meaning as Reference Date.

 

“Cut-off Date Stated Principal Balance”:  With respect to each Mortgage Loan,
the outstanding principal balance of the Underlying Note as of the Cut-off Date.

 

“Exception Schedule”: The schedule identifying any exceptions to the
representations and warranties made with respect to the Mortgage Assets conveyed
hereunder, which is attached hereto as Schedule 1(a).

 

“Exchange Act”:  The meaning specified in Section 4(l) hereof.

 

“Form 15G”:  The meaning specified in Section 4(m) hereof.

 

“Junior Participation”: One or more junior participation interests (or B notes
in a Whole Loan.

 

“Loan Documents”:  The documents evidencing a Mortgage Loan.

 

“Loss Value Payment”:  The meaning specified in Section 4(e) hereof.

 

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“Mortgage”:  With respect to each Mortgage Asset, the mortgage, deed of trust,
deed to secure debt or similar instrument that secures the Underlying Note and
creates a lien on the fee or leasehold interest in the related Underlying
Mortgaged Property.

 

“Mortgagee”: With respect to each Mortgage Loan, the party secured by the
related Mortgage.

 

“Mortgage Asset”:  Each Whole Loan or Participation identified on Exhibit A
hereto.

 

“Mortgage File”:  The file containing the Loan Documents.

 

“Mortgage Loan”:  With respect to (1) each Mortgage Asset that is a Whole Loan,
such Whole Loan and (2) with respect to each Mortgage Asset that is a
Participation, the underlying Whole Loan in which such Participation represents
an interest.

 

“Mortgage Rate”:  The stated rate of interest on a Mortgage Loan.

 

“Mortgaged Property”:  With respect to each Mortgage Loan, the real property
securing such Mortgage Loan.

 

“Participation”: Any Senior Participation or Junior Participation.

 

“Participation Agreement”: With respect to each Mortgage Asset that is a
Participation, the participation agreement and/or sub-participation agreement
that governs the rights and obligations of the holders of such Participation and
the related Non-Acquired Participations.

 

“Qualifying REIT Subsidiary”:  As defined in the Indenture.

 

“Reference Date”:  With respect to each Mortgage Asset and Mortgage Loan, the
later of April 1, 2018, or the related asset origination date.

 

“Senior Participation”:  A senior participation interest in a Whole Loan.

 

“Servicing File”:  The file maintained by the servicer with respect to each
Mortgage Asset.

 

“Stated Principal Balance”:  With respect to each Mortgage Asset and Mortgage
Loan, the outstanding principal balance thereof.

 

“UCC”:  The applicable Uniform Commercial Code.

 

“Underlying Note or Note”:  With respect to each Mortgage Loan, the promissory
note evidencing the indebtedness of the related Underlying Obligor, together
with any rider, addendum or amendment thereto, or any renewal, substitution or
replacement of such note.

 

“Underlying Obligor”:  With respect to any Mortgage Loan, the related Borrower
or other obligor thereunder.

 

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“Whole Loan”:  A mortgage loan secured by a first mortgage lien on one or more
multi-family properties (including student housing properties) or office
properties, industrial properties, retail properties, healthcare properties,
hospitality properties or self-storage properties.

 

2.             Purchase and Sale of the Mortgage Assets.

 

(a)           Set forth in Exhibit A hereto is a list of Mortgage Assets and
certain other information with respect to each of the Mortgage Assets.  The
Seller agrees to sell to the Issuer, and the Issuer agrees to purchase from the
Seller, all of the Mortgage Assets at an aggregate purchase price of
U.S.$494,281,207.91 plus accrued interest (the “Purchase Price”).  Immediately
prior to such sale, the Seller hereby conveys and assigns all right, title and
interest it may have in such Mortgage Asset to the Issuer.

 

(b)           Delivery or transfer of the Mortgage Assets shall be made on or
about June 14, 2018 (the “Closing Date”) at the time and in the manner agreed
upon by the parties. Upon receipt of evidence of the delivery or transfer of the
Mortgage Assets to the Issuer or its designee, the Issuer shall pay or cause to
be paid to the Seller the Purchase Price in the manner agreed upon by the Seller
and the Issuer.

 

3.             Conditions.

 

The obligations of the parties under this Agreement are subject to satisfaction
of the following conditions:

 

(a)           the representations and warranties contained herein shall be
accurate and complete;

 

(b)           on the Closing Date, counsel for the Issuer shall have been
furnished with all such documents, certificates and opinions as such counsel may
reasonably request in order to evidence the accuracy and completeness of any of
the representations, warranties or statements of the Seller, the performance of
any of the obligations of the Seller hereunder or the fulfillment of any of the
conditions herein contained; and

 

(c)           the issuance of the Securities and receipt by the Issuer of full
payment therefor.

 

4.             Covenants, Representations and Warranties.

 

(a)           Each party hereby represents and warrants to the other party that
(i) it is duly organized or incorporated, as the case may be, and validly
existing as an entity under the laws of the jurisdiction in which it is
incorporated, chartered or organized, (ii) it has the requisite power and
authority to enter into and perform this Agreement, and (iii) this Agreement has
been duly authorized by all necessary action, has been duly executed by one or
more duly authorized officers and is the valid and binding agreement of such
party enforceable against such party in accordance with its terms.

 

(b)           The Seller further represents and warrants to the Issuer that:

 

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(i)       immediately prior to the sale of the Mortgage Assets to the Issuer,
the Seller shall own the Mortgage Assets, shall have good and marketable title
thereto, free and clear of any pledge, lien, security interest, charge, claim,
equity, or encumbrance of any kind, and upon the delivery or transfer of the
Mortgage Assets to the Issuer as contemplated herein, the Issuer shall receive
good and marketable title to the Mortgage Assets, free and clear of any pledge,
lien, security interest, charge, claim, equity or encumbrance of any kind;

 

(ii)      the Seller acquired its ownership in the Mortgage Assets in good faith
without notice of any adverse claim, and upon the delivery or transfer of the
Mortgage Assets to the Issuer as contemplated herein, the Issuer shall acquire
ownership in the Mortgage Assets in good faith without notice of any adverse
claim;

 

(iii)     the Seller has not assigned, pledged or otherwise encumbered any
interest in the Mortgage Assets (or, if any such interest has been assigned,
pledged or otherwise encumbered, it has been released);

 

(iv)    none of the execution, delivery or performance by the Seller of this
Agreement shall (x) conflict with, result in any breach of or constitute a
default (or an event which, with the giving of notice or passage of time, or
both, would constitute a default) under, any term or provision of the
organizational documents of the Seller, or any material indenture, agreement,
order, decree or other material instrument to which the Seller is party or by
which the Seller is bound which materially adversely affects the Seller’s
ability to perform its obligations hereunder or (y) violate any provision of any
law, rule or regulation applicable to the Seller of any regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Seller or its properties which has a material adverse effect;

 

(v)     no consent, license, approval or authorization from, or registration or
qualification with, any governmental body, agency or authority, nor any consent,
approval, waiver or notification of any creditor or lessor is required in
connection with the execution, delivery and performance by the Seller of this
Agreement the failure of which to obtain would have a material adverse effect
except such as have been obtained and are in full force and effect;

 

(vi)    it has adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its
contemplated business operations.  It is generally able to pay, and as of the
date hereof is paying, its debts as they come due.  It has not become or is not
presently, financially insolvent nor will it be made insolvent by virtue of its
execution of or performance under any of the provisions of this Agreement within
the meaning of the bankruptcy laws or the insolvency laws of any jurisdiction. 
It has not entered into this Agreement or the transactions effectuated hereby in
contemplation of insolvency or with intent to hinder, delay or defraud any
creditor;

 

(vii)   no proceedings are pending or, to its knowledge, threatened against it
before any federal, state or other governmental agency, authority,
administrative or regulatory body, arbitrator, court or other tribunal, foreign
or domestic, which, singularly

 

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or in the aggregate, could  materially and adversely affect the ability of the
Seller to perform any of its obligations under this Agreement; and

 

(viii)  the consideration received by it upon the sale of the Mortgage Assets
owned by it constitutes fair consideration and reasonably equivalent value for
such Mortgage Assets.

 

(c)           the Seller further represents and warrants to the Issuer that:

 

(i)       the Underlying Instruments with respect to each Mortgage Asset do not
prohibit the Issuer from granting a security interest in and assigning and
pledging such Mortgage Asset to the Trustee;

 

(ii)      the information set forth with respect to the Mortgage Assets in
Schedule A of the Indenture is true and correct;

 

(iii)     none of the Mortgage Assets will cause the Issuer to have payments
subject to foreign or United States withholding tax;

 

(iv)    with respect to each Mortgage Asset, except as set forth in the
Exception Schedule, the representations and warranties set forth in Schedule 1
are true and correct; and

 

(v)     the Seller has delivered to the Issuer or its designee (A) the original
of any note (or a copy of such note together with a lost note affidavit and
indemnity), certificate or other instrument, if any, constituting or evidencing
such Mortgage Asset together with an assignment in blank and all other
assignment documents reasonably necessary to evidence the transfer of the
Mortgage Asset including, where applicable, UCC assignments and any other
Underlying Instrument and copies of any other documents related to the Mortgage
Asset in the Seller’s possession, including copies of any related mortgage loan
documents if the Mortgage Asset is a Mortgage Loan, related to such Mortgage
Asset the delivery of which is necessary to perfect the security interest of the
Trustee in such Mortgage Asset and (B) copies of the Underlying Instruments.

 

(d)           For purposes of the representations and warranties set forth in
Schedule 1, the phrases “to the knowledge of the Seller” or “to the Seller’s
knowledge” shall mean, except where otherwise expressly set forth in a
particular representation and warranty, the actual state of knowledge of the
Seller or any servicer acting on its behalf regarding the matters referred to,
in each case:  (i) at the time of the Seller’s origination or acquisition of the
particular Mortgage Asset, after the Seller having conducted such inquiry and
due diligence into such matters as would be customarily performed by a prudent
institutional commercial or multifamily, as applicable, mortgage lender; and
(ii) subsequent to such origination, the Seller having utilized monitoring
practices that would be utilized by a prudent institutional commercial or
multifamily, as applicable, mortgage lender and having made prudent inquiry as
to the knowledge of the servicer servicing such Mortgage Asset on its behalf. 
Also, for purposes of such representations and warranties, the phrases “to the
actual knowledge of the Seller” or “to the Seller’s actual knowledge” shall
mean, except where otherwise expressly set forth below, the actual state of
knowledge of the Seller or any servicer acting on its behalf without any express
or implied

 

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obligation to make inquiry.  All information contained in documents which are
part of or required to be part of a Collateral File shall be deemed to be within
the knowledge and the actual knowledge of the Seller.  Wherever there is a
reference to receipt by, or possession of, the Seller of any information or
documents, or to any action taken by the Seller or not taken by the Seller, such
reference shall include the receipt or possession of such information or
documents by, or the taking of such action or the failure to take such action
by, the Seller or any servicer acting on its behalf.

 

(e)           If the Seller receives written notice of a breach of a
representation or a warranty pursuant to this Agreement relating to any Mortgage
Asset, which breach materially and adversely affects the value of such Mortgage
Asset, the value of the related Mortgaged Property or the interests of the
Trustee or any Noteholder therein, then the Seller shall (1) not later than 90
days from receipt of such notice or discovery by the Seller, cure such breach
(to the extent such breach is capable of being cured), (2) subject to the
consent of a Majority of each Class of Notes (excluding any Note held by the
Seller or any of its affiliates), make a Cash payment to the Issuer in an amount
that the Collateral Manager, on behalf of the Issuer, subject to the consent of
a Majority of each Class of Notes (excluding any Note held by the Seller or any
of its affiliates), determines is sufficient to compensate the Issuer for such
breach of representation or warranty (such payment, a “Loss Value Payment”),
which Loss Value Payment will be deemed to cure such breach of representation or
warranty, or (3) if such breach cannot be cured within such 90-day period,
repurchase the affected Mortgage Asset not later than the end of such 90-day
period at the Repurchase Price (as defined in Section 16.3(c) of the Indenture)

 

(f)            The Seller hereby acknowledges and consents to the collateral
assignment by the Issuer of this Agreement and all right, title and interest
thereto to the Trustee, for the benefit of the Noteholders, as required in
Sections 15.1(f)(i) and (ii) of the Indenture.

 

(g)           The Seller hereby covenants and agrees that it shall perform any
provisions of the Indenture made expressly applicable to the Seller by the
Indenture, as required by Section 15.1(f)(i) of the Indenture.

 

(h)           The Seller hereby covenants and agrees that all of the
representations, covenants and agreements made by or otherwise entered into by
it in this Agreement shall also be for the benefit of the Trustee and the
Noteholders, as required by Section 15.1(f)(ii) of the Indenture and agrees that
enforcement of any rights hereunder by the Trustee shall have the same force and
effect as if the right or remedy had been enforced or executed by the Issuer but
that such rights and remedies shall not be any greater than the rights and
remedies of the Issuer under Section 4(e) above.

 

(i)            On or prior to the Closing Date, the Seller shall deliver the
Underlying Instruments to the Issuer or, at the direction of the Issuer, to the
Trustee, with respect to each Mortgage Asset sold to the Issuer hereunder.  The
Seller hereby covenants and agrees, as required by Section 15.1(f)(iii) of the
Indenture, that it shall deliver to the Trustee duplicate original copies of all
notices, statements, communications and instruments delivered or required to be
delivered to the Issuer by each party pursuant to this Agreement.

 

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(j)            The Seller hereby covenants and agrees, as required by
Section 15.1(f)(iv) of the Indenture, that it shall not enter into any agreement
amending, modifying or terminating this Agreement (other than in respect of an
amendment or modification to cure any inconsistency, ambiguity or manifest
error), without notifying the Rating Agencies.

 

(k)           The Seller hereby covenants, that at all times (1) Seller will
qualify as a REIT for federal income tax purposes and the Issuer will qualify as
a Qualified REIT Subsidiary (or other disregarded entity) of Seller for federal
income tax purposes, (2) based on an Opinion of Counsel, the Issuer will be
treated as a Qualified REIT Subsidiary (or other disregarded entity) of a REIT
other than Seller, or (3) based on an Opinion of Counsel, the Issuer will be
treated as a foreign corporation that will not be treated as engaged in a trade
or business in the United States for U.S. federal income tax purposes.

 

(l)            Except for the agreed-upon procedures report obtained from a
nationally recognized accounting firm for due diligence services with respect to
certain information regarding the Mortgage Assets to be conveyed to the Issuer
(such report, the “Accountants’ Due Diligence Report”), the Seller has not
obtained and shall not obtain any “third party due diligence report” (as defined
in Rule 15Ga-2 under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) in connection with the securitization transaction contemplated
by the recitals hereto.

 

(m)          The Purchaser (A) prepared or caused to be prepared a report on
Form ABS-15G (the “Form 15G”) containing the findings and conclusions of the
Accountants’ Due Diligence Report and meeting all other requirements of that
Rule 15Ga-2 under the Exchange Act, any other rules and regulations of the
Securities and Exchange Commission and the Exchange Act; (B) provided a copy of
the final draft of the Form 15G to the Placement Agent at least seven Business
Days before the first sale of any Notes; and (C) furnished the Form 15G to the
Securities and Exchange Commission on Electronic Data Gathering, Analysis and
Retrieval System (EDGAR) at least five Business Days before the first sale of
any Notes as required by Rule 15Ga-2 under the Exchange Act.

 

5.             Sale.

 

It is the intention of the parties hereto that the transfer and assignment
contemplated by this Agreement shall constitute a sale of the Mortgage Assets
from the Seller to the Issuer and the beneficial interest in and title to the
Mortgage Assets shall not be part of the Seller’s estate in the event of the
filing of a bankruptcy petition by or against the Seller under any bankruptcy
law. In the event that, notwithstanding the intent of the parties hereto, the
transfer and assignment contemplated hereby is held not to be a sale (for
non-tax purposes), this Agreement shall constitute a security agreement under
applicable law, and, in such event, the Seller shall be deemed to have granted,
and the Seller hereby grants, to the Issuer a security interest in the Mortgage
Assets for the benefit of the Secured Parties and its assignees as security for
the Seller’s obligations hereunder and the Seller consents to the pledge of the
Mortgage Assets to the Trustee.

 

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6.             Non-Petition.

 

The Seller agrees not to institute against, or join any other Person in
instituting against the Issuer any bankruptcy, reorganization, arrangement,
insolvency, moratorium or liquidation proceedings or other proceedings under
U.S. federal or state bankruptcy or similar laws in any jurisdiction until at
least one year and one day or, if longer, the applicable preference period then
in effect after the payment in full of all Notes issued under the Indenture. 
This Section 6 shall survive the termination of this Agreement for any reason
whatsoever.

 

7.             Amendments.

 

This Agreement may not be modified, amended, altered or supplemented, except
upon the execution and delivery of a written agreement by the parties hereto and
receipt by the parties hereto of prior written confirmation of each Rating
Agency that such amendment or modification shall not cause the rating of the
Notes to be reduced.

 

8.             Communications.

 

Except as may be otherwise agreed between the parties, all communications
hereunder shall be made in writing to the relevant party by personal delivery or
by courier or first-class registered mail, or the closest local equivalent
thereto, or by facsimile transmission confirmed by personal delivery or by
courier or first-class registered mail as follows:

 

To the
Seller:                                                                        
Arbor Realty SR, Inc.
333 Earle Ovington Boulevard, 9th Floor
Uniondale, New York 11553
Attention:  Executive Vice President — Structured Securitization
Telephone Number:  (212) 389-6546
Facsimile Number:  (212) 389-6573

 

To the
Issuer:                                                                     
Arbor Realty Commercial Real Estate Notes 2018-FL1, Ltd.

c/o MaplesFS Limited
P.O. Box 1093
Boundary Hall, Cricket Square
Grand Cayman, KY1-1102 Cayman Islands
Attention:  The Directors
Telephone Number:  (345) 945-7099
Facsimile Number:  (345) 945-7100

 

with a copy to the Collateral Manager (as addressed above);

 

or to such other address, telephone number or facsimile number as either party
may notify to the other in accordance with the terms hereof from time to time.
Any communications hereunder shall be effective upon receipt.

 

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9.             Governing Law and Consent to Jurisdiction.

 

(a)           THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAW
PROVISIONS THEREOF (OTHER THAN TITLE 14 OF ARTICLE 5 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).

 

(b)           The parties hereto hereby irrevocably submit to the non-exclusive
jurisdiction of the United States District Court for the Southern District of
New York and any court in the State of New York located in the City and County
of New York, and any appellate court hearing appeals from the Courts mentioned
above, in any action, suit or proceeding brought against it and to or in
connection with this Agreement or the transaction contemplated hereunder or for
recognition or enforcement of any judgment, and the parties hereto hereby
irrevocably and unconditionally agree that all claims in respect of any such
action or proceeding may be heard or determined in such New York State court or,
to the extent permitted by law, in such federal court. The parties hereto agree
that a final judgment in any such action, suit 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. To the extent permitted by applicable law, the
parties hereto hereby waive and agree not to assert by way of motion, as a
defense or otherwise in any such suit, action or proceeding, any claim that it
is not personally subject to the jurisdiction of such courts, that the suit,
action or proceeding is brought in any inconvenient forum, that the venue of the
suit, action or proceeding is improper or that the subject matter thereof may
not be litigated in or by such courts.

 

(c)           To the extent permitted by applicable law, the parties hereto
shall not seek and hereby waive the right to any review of the judgment of any
such court by any court of any other nation or jurisdiction which may be called
upon to grant an enforcement of such judgment.

 

(d)           The Issuer appoints CT Corporation System, 111 8th Avenue, 13th
Floor, New York, New York 10011, as its agent for service of process in New York
in respect of any such suit, action or proceeding. The Issuer agrees that
service of such process upon such agent shall constitute personal service of
such process upon it.

 

(e)           The Seller irrevocably consents to the service of any and all
process in any action or proceeding by the mailing by certified mail, return
receipt requested, or delivery requiring proof of delivery of copies of such
process to it at the address set forth in Section 8 hereof.

 

10.          Counterparts.

 

This Agreement may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one and the
same agreement.

 

11.          Limited Recourse Agreement.

 

All obligations of the Issuer arising hereunder or in connection herewith are
limited in recourse to the Pledged Mortgage Assets and to the extent the
proceeds of the Pledged Mortgage Assets, when applied in accordance with the
Priority of Payments, are insufficient to

 

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meet the obligations of the Issuer hereunder in full, the Issuer shall have no
further liability in respect of any such outstanding obligations and any
obligations of, and claims against, the Issuer, arising hereunder or in
connection herewith, shall be extinguished and shall not thereafter revive.  The
obligations of the Issuer hereunder or in connection herewith will be solely the
corporate obligations of the Issuer and the Seller will not have recourse to any
of the directors, officers, employees, shareholders or affiliates of the Issuer
with respect to any claims, losses, damages, liabilities, indemnities or other
obligations in connection with any transactions contemplated hereby or in
connection herewith.  This Section 11 shall survive the termination of this
Agreement for any reason whatsoever.

 

12.          Assignment and Assumption

 

With respect to the Mortgage Assets that are subject to a Participation
Agreement, the parties hereto intend that the provisions of this Section 12
serve as an assignment and assumption agreement between the Seller, as the
assignor, and the Issuer, as the assignee.  Accordingly, the Seller hereby (and
in accordance with and subject to all other applicable provisions of this
Agreement) assigns, grants, sells, transfers, delivers, sets over, and conveys
to the Issuer all right, title and interest of the Seller in, to and arising out
of the related Participation Agreement and the Issuer hereby accepts (subject to
applicable provisions of this Agreement) the foregoing assignment and assumes
all of the rights and obligations of the Seller with respect to related
Participation Agreement from and after the Closing Date.

 

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Mortgage
Assets Purchase Agreement as of the day and year first above written.

 

 

ARBOR REALTY SR, INC.

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

ARBOR REALTY COMMERCIAL REAL ESTATE NOTES 2018-FL1, LTD.

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

Mortgage Asset Purchase
Agreement

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Exhibit A

 

LIST OF INITIAL MORTGAGE ASSETS

 

Mortgage Asset

 

Unpaid Principal 
Balance(1)

 

Planet Self Storage Portfolio

 

$

48,000,000.00

 

Central West End

 

$

48,000,000.00

(2)

Georgia Portfolio

 

$

34,000,000.00

 

The Redford

 

$

32,350,000.00

 

Preston Hollow

 

$

29,000,000.00

 

The Katy Apartments

 

$

29,000,000.00

 

Oaks at Park South

 

$

28,789,132.98

 

Maystone at Wakefield

 

$

20,000,000.00

 

Blue Lake Villas

 

$

18,500,000.00

 

Landmark at Mountain View

 

$

18,000,000.00

 

St. Moritz Apartments

 

$

17,150,000.00

 

Willow Point Apartments

 

$

16,500,000.00

 

Captain’s Quarters I

 

$

16,000,000.00

 

Wilshire Victoria Apartments

 

$

14,873,607.19

 

Hudson Valley Portfolio

 

$

13,100,000.00

 

Carrington Park I

 

$

13,080,090.94

 

Campus Commons

 

$

13,000,000.00

 

King Arthur - Draper

 

$

13,000,000.00

 

The Mark Apartments

 

$

13,000,000.00

 

Cypress Village Apartments

 

$

12,600,000.00

 

309 East 75th Street

 

$

12,910,000.00

 

160 Van Brunt Street

 

$

12,151,000.00

 

Raintree Apartments

 

$

6,200,000.00

 

King Arthur — West Valley City

 

$

5,800,000.00

 

528 East 85th Street

 

$

5,060,000.00

 

Grancare

 

$

4,625,000.00

 

Carrington Park II

 

$

4,000,136.30

 

Housing Investors Portfolio Alabama II

 

$

3,400,000.00

 

Total

 

$

502,088,967.41

 

 

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

(1) For each Initial Mortgage Asset, as of the Reference Date.

(2) Including all RDD Funding Advances in connection with Central West End, in
an aggregate amount of $7,664,744.00.

 

Ex. A-1

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

 

SCHEDULE 1

 

REPRESENTATIONS AND WARRANTIES
REGARDING MORTGAGE ASSETS

 

(1)                                 Whole Loan; Ownership of Mortgage Assets. 
Except for the Mortgage Assets identified that are Senior Participations, each
Closing Date Mortgage Asset is a whole loan and not a participation interest in
a Mortgage Loan.  Each Ramp-Up Mortgage Asset and Reinvestment Mortgage Asset
that is a Senior Participation is a senior portion (or a pari passu interest in
a senior portion) of a whole mortgage loan.  At the time of the sale, transfer
and assignment to Purchaser, no Note, Mortgage or Senior Participation was
subject to any assignment (other than assignments to the Seller), participation
(other than with respect to the Senior Participations) or pledge, and the Seller
had good title to, and was the sole owner of, each Mortgage Asset free and clear
of any and all liens, charges, pledges, encumbrances, participations (other than
with respect to the Senior Participations), any other ownership interests on, in
or to such Mortgage Asset other than any servicing rights appointment or similar
agreement.  The Seller has full right and authority to sell, assign and transfer
each Mortgage Asset, and the assignment to Purchaser constitutes a legal, valid
and binding assignment of such Mortgage Asset free and clear of any and all
liens, charges, pledges, encumbrances, participations (other than with respect
to the Senior Participations), any other ownership interests on, in or to such
Mortgage Asset other than any servicing rights appointment or similar agreement.

 

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

 

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

 

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

 

(4)                                 Mortgage Status; Waivers and Modifications. 
Since origination and except prior to the Reference Date by written instruments
set forth in the related Mortgage File (a) the material terms of such Mortgage,
Note, Mortgage Loan guaranty, participation agreement, if applicable, and
related Loan Documents have not

 

Sch. 1-1

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

 

been waived, impaired, modified, altered, satisfied, canceled, subordinated or
rescinded in any respect which materially interferes with the security intended
to be provided by such Mortgage; (b) no related Mortgaged Property or any
portion thereof has been released from the lien of the related Mortgage in any
manner which materially interferes with the security intended to be provided by
such Mortgage or the use or operation of the remaining portion of such Mortgaged
Property; and (c) neither the related borrower nor the related guarantor nor the
related Participating Institution has been released from its material
obligations under the Mortgage Loan or participation agreement, if applicable.

 

(5)                                 Lien; Valid Assignment.  Subject to the
Standard Qualifications, each assignment of Mortgage and assignment of
Assignment of Leases, Rents and Profits from the Seller constitutes a legal,
valid and binding assignment from the Seller.  Each related Mortgage is a legal,
valid and enforceable first lien on the related borrower’s fee or leasehold
interest in the Mortgaged Property in the principal amount of such Mortgage Loan
or allocated loan amount subject to the Title Exceptions, Permitted Encumbrances
and Standard Qualifications (each as defined herein).  Each related Assignment
of Mortgage and Assignment of Leases, Rents and Profits from the Seller to the
Purchaser constitutes the legal, valid and binding first priority assignment
from the Seller, except as such enforcement may be limited by the Standard
Qualifications, any Permitted Encumbrances and any Title Exceptions (as defined
herein).  Each Mortgage and Assignment of Leases, Rents and Profits is freely
assignable.  Notwithstanding anything herein to the contrary, no representation
is made as to the perfection of any security interest in rents or other personal
property to the extent that possession or control of such items or actions other
than the filing of Uniform Commercial Code (“UCC”) financing statements is
required in order to effect such perfection.

 

(6)                                 Permitted Liens; Title Insurance.  Each
Mortgaged Property securing a Mortgage Loan is covered by an American Land Title
Association loan title insurance policy or a comparable form of loan title
insurance policy approved for use in the applicable jurisdiction (or, if such
policy is yet to be issued, by a pro forma policy, a preliminary title policy
with escrow instructions or a “marked up” commitment, in each case binding on
the title insurer) (the “Title Policy”) in the original principal amount of such
Mortgage Loan (or with respect to a Mortgage Loan secured by multiple
properties, an amount equal to at least the allocated loan amount with respect
to the Title Policy for each such property) after all advances of principal
(including any advances held in escrow or reserves), that insures for the
benefit of the owner of the indebtedness secured by the Mortgage, the first
priority lien of the Mortgage, which lien is subject only to the following title
exceptions (each such title exception, including any exceptions set forth on
Schedule 1(a) hereto, a “Title Exception” and collectively, the “Title
Exceptions”):  (a) the lien of current real property taxes, water charges, sewer
rents and assessments not yet due and payable; (b) covenants, conditions and
restrictions, rights of way, easements and other matters of public record;
(c) the exceptions (general and specific) and exclusions set forth in such Title
Policy; (d) other matters to which like properties are commonly subject; (e) the
rights of tenants (as tenants only) under leases (including subleases)
pertaining to the related Mortgaged Property and condominium declarations; and
(f) if the related Mortgage Loan is cross-collateralized and cross-defaulted
with another Mortgage Loan (each a “Crossed Mortgage Loan”), the lien of the
Mortgage for another Mortgage Loan that is cross-collateralized and
cross-defaulted with such Crossed Mortgage Loan; provided that none of items
(a) through (f), individually or in the aggregate, materially and adversely
interferes with the value or current use of the Mortgaged Property or the
security intended to be provided by such Mortgage or the borrower’s ability to
pay its obligations when they become due (collectively, the “Permitted
Encumbrances”).  Except as contemplated by clause (f) of the preceding sentence,
none of the Permitted Encumbrances are mortgage liens that are senior to or
coordinate and co-equal with the lien of the related Mortgage.  Such Title
Policy (or, if it has yet to be issued, the coverage to be provided thereby) is
in full force and effect, all premiums thereon have been paid and no claims have
been made by the Seller thereunder and no claims have been paid thereunder. 
Neither the Seller, nor to the Seller’s knowledge, any other holder of the
Mortgage Loan, has done, by act or omission, anything that would materially
impair the coverage under such Title Policy.

 

(7)                                 Junior Liens.  It being understood that B
notes and junior participation interests secured by the same Mortgage as a
Mortgage Loan are not subordinate mortgages or junior liens, except for any
Crossed Mortgage Loan, there are, as of origination, and to the Seller’s
knowledge, as of the Reference Date, no subordinate mortgages or junior liens
securing the payment of money encumbering the related Mortgaged Property (other
than Permitted Encumbrances and the Title Exceptions, taxes and assessments,
mechanics

 

Sch. 1-2

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

 

and materialmen’s liens (which are the subject of the representation in
paragraph (5) above), and equipment and other personal property financing). 
Except as set forth in Schedule 1(b) to this Schedule 1, the Seller has no
knowledge of any mezzanine debt secured directly by interests in the related
borrower.

 

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

 

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

 

(10)                          Condition of Property.  The Seller or the
originator of the Mortgage Loan (i) inspected or caused to be inspected each
related Mortgaged Property at least six months prior to origination of the
Mortgage Loan and, (ii) if the term of the Mortgage Loan has already continued
for at least twelve months, inspected or caused to be inspected each related
Mortgaged Property at least once during the past twelve months.

 

An engineering report (or if the mortgaged property is a ground-up development,
a Construction Cost to Complete report in lieu thereof, as applicable) or
property condition assessment was prepared in connection with the origination of
each Mortgage Loan not more than twelve months prior to the origination of such
Mortgage Loan.  To the Seller’s knowledge, based solely upon due diligence
customarily performed in connection with the origination of comparable mortgage
loans, as of the Closing Date, each related Mortgaged Property was free and
clear of any material damage (other than (i) deferred maintenance or repairs for
which escrows were established at origination and (ii) any damage fully covered
by insurance) that would affect materially and adversely the use or value of
such Mortgaged Property as security for the Mortgage Loan.

 

(11)                          Taxes and Assessments.  All taxes, governmental
assessments and other outstanding governmental charges (including, without
limitation, water and sewage charges), or installments thereof, that could be a
lien on the related Mortgaged Property that would be of equal or superior
priority to the lien of the Mortgage and that prior to the Reference Date have
become delinquent in respect of each related Mortgaged Property have been paid,
or an escrow of funds has been established in an amount sufficient to cover such
payments and reasonably estimated interest and penalties, if any, thereon.  For
purposes of this representation and warranty, real estate taxes and governmental
assessments and other outstanding governmental charges and installments thereof
shall not be considered delinquent until the earlier of (a) the date on which
interest and/or penalties would first be payable thereon and (b) the date on
which enforcement action is entitled to be taken by the related taxing
authority.

 

Sch. 1-3

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

 

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

 

(13)                          Actions Concerning Mortgage Loan.  As of the date
of origination and to the Seller’s knowledge as of the Reference Date, there was
no pending or filed action, suit or proceeding, arbitration or governmental
investigation involving any borrower, guarantor, or borrower’s interest in the
Mortgaged Property that would materially and adversely affect (a) such
borrower’s title to the Mortgaged Property, (b) the validity or enforceability
of the Mortgage, (c) such borrower’s ability to perform under the related
Mortgage Loan, (d) such guarantor’s ability to perform under the related
guaranty, (e) the principal benefit of the security intended to be provided by
the Mortgage Loan documents or (f) the current principal use of the Mortgaged
Property.

 

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

 

(15)                          No Holdbacks.  The Stated Principal Balance as of
the Reference Date of the Mortgage Loan set forth on the mortgage loan schedule
attached as Exhibit A to this Agreement has been fully disbursed as of the
Closing Date and there is no requirement for future advances thereunder (except
in those cases where the full amount of the Mortgage Loan has been disbursed but
a portion thereof is being held in escrow or reserve accounts pending the
satisfaction of certain conditions relating to leasing, repairs or other matters
with respect to the related Mortgaged Property, the borrower or other
considerations determined by the Seller to merit such holdback).

 

(16)                          Insurance.  Each related Mortgaged Property is,
and is required pursuant to the related Mortgage to be, insured by a property
insurance policy providing coverage for loss in accordance with coverage found
under a “special cause of loss form” or “all risk form” that includes
replacement cost valuation issued by an insurer meeting the requirements of the
related Loan Documents and having a claims-paying or financial strength rating
of at least A or better and a financial class of VIII or better by A.M. Best
Company, Inc. (collectively the “Insurance Rating Requirements”), in an amount
(subject to a customary deductible) not less than the lesser of (1) the original
principal balance of the Mortgage Loan and (2) the full insurable value on a
replacement cost basis of the improvements, furniture, furnishings, fixtures and
equipment owned by the borrower and included in the Mortgaged Property (with no
deduction for physical depreciation), but, in any event, not less than the
amount necessary or containing such endorsements as are necessary to avoid the
operation of any coinsurance provisions with respect to the related Mortgaged
Property.

 

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

 

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

 

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

 

Sch. 1-4

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

 

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

 

An architectural or engineering consultant has performed an analysis of each of
the Mortgaged Properties located in seismic zones 3 or 4 in order to evaluate
the structural and seismic condition of such property, for the sole purpose of
assessing the scenario expected limit (“SEL”) for the Mortgaged Property in the
event of an earthquake.  In such instance, the SEL was based on a 475-year
return period, an exposure period of 50 years and a 10% probability of
exceedance.  If the resulting report concluded that the SEL would exceed 20% of
the amount of the replacement costs of the improvements, earthquake insurance on
such Mortgaged Property was obtained by an insurer rated least “A:VIII” by
A.M. Best Company, Inc. or “A3” (or the equivalent) from Moody’s Investors
Service, Inc. or “A-” by Standard & Poor’s Financial Services, LLC in an amount
not less than 100% of the SEL.

 

The Loan Documents provide that if a specified percentage (which is in no event
greater than 20%) of the reasonably estimated aggregate fair market value of the
Mortgaged Property is damaged or destroyed, the lender shall have the option, in
its sole discretion, to apply the net casualty insurance proceeds received to
the payment of the Mortgage Loan or to allow such proceeds to be used for the
repair or restoration of the Mortgaged Property.

 

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

 

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

 

(18)                          No Encroachments.  To the Seller’s knowledge based
solely on surveys obtained in connection with origination and the lender’s Title
Policy (or, if such policy is not yet issued, a pro forma title policy, a
preliminary title policy with escrow instructions or a “marked up” commitment)
obtained in connection with the origination of each Mortgage Loan, all material
improvements that were included for the purpose of determining the appraised
value of the related Mortgaged Property at the time of the origination of such
Mortgage Loan are within the boundaries of the related Mortgaged Property,
except encroachments that do not materially and adversely affect the value or
current use of such Mortgaged Property or for which insurance or endorsements
were obtained under the Title Policy.  No improvements on adjoining parcels
encroach onto the related Mortgaged Property except for encroachments that do
not materially and adversely affect the value or current use of such Mortgaged
Property or for which insurance or endorsements were obtained under the Title
Policy.  No improvements encroach upon any easements except for encroachments
the removal of which would not materially and adversely affect the value or

 

Sch. 1-5

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

 

current use of such Mortgaged Property or for which insurance or endorsements
were obtained with respect to the Title Policy.

 

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

 

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

 

(21)                          Authorized to Do Business.  To the extent required
under applicable law, as of the Reference Date or as of the date that such
entity held the Note, each holder of the Note was authorized to transact and do
business in the jurisdiction in which each related Mortgaged Property is
located, or the failure to be so authorized does not materially and adversely
affect the enforceability of such Mortgage Loan.

 

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

 

(23)                          Local Law Compliance.  To the Seller’s knowledge,
based upon any of a letter from any governmental authorities, a legal opinion,
an architect’s letter, a zoning consultant’s report, an endorsement to the
related Title Policy, or other affirmative investigation of local law compliance
consistent with the investigation conducted by the Seller for similar
commercial, healthcare and multi-family mortgage loans intended for
securitization, with respect to the improvements located on or forming part of
each Mortgaged Property securing a Mortgage Loan as of the date of origination
of such Mortgage Loan and as of the Reference Date, there are no material
violations of applicable zoning ordinances, building codes and land laws
(collectively “Zoning Regulations”) other than those which (i) are insured by
the Title Policy or a law and ordinance or other insurance policy or (ii) would
not have a material adverse effect on the Mortgage Loan.  The terms of the Loan
Documents require the borrower to comply in all material respects with all
applicable governmental regulations, zoning and building laws

 

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

 

(25)                          Recourse Obligations.  The Loan Documents for each
Mortgage Loan provide that such Mortgage Loan is non-recourse to the related
parties thereto except for certain carve-outs, including but not limited to the
following:  (a) the related borrower and at least one individual or entity shall
be fully liable for actual losses, liabilities, costs and damages arising from
certain acts of the related borrower and/or its principals specified in the
related Loan Documents, which acts generally include the following:  (i) acts of
fraud or intentional material misrepresentation, (ii) misapplication or
misappropriation of rents, insurance proceeds or condemnation awards,
(iii) intentional material physical waste of the Mortgaged Property, and
(iv) any breach of the environmental covenants contained in the related Loan
Documents, and (b) the Mortgage Loan shall become full recourse to the related
borrower and at least one individual or entity, if the related borrower files a
voluntary petition under federal or state bankruptcy or insolvency law.

 

(26)                          Mortgage Releases.  The terms of the related
Mortgage or related Loan Documents do not provide for release of any material
portion of the Mortgaged Property from the lien of the Mortgage except (a) a
partial

 

Sch. 1-6

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

 

release, accompanied by principal repayment of not less than a specified
percentage at least equal to the lesser of (i) 110% of the related allocated
loan amount of such portion of the Mortgaged Property and (ii) the outstanding
principal balance of the Mortgage Loan, (b) upon repayment in full of such
Mortgage Loan, (c) releases of out-parcels that are unimproved or other portions
of the Mortgaged Property which will not have a material adverse effect on the
underwritten value of the Mortgaged Property and which were not afforded any
value in the appraisal obtained at the origination of the Mortgage Loan and are
not necessary for physical access to the Mortgaged Property or compliance with
zoning requirements, or (d) as required pursuant to an order of condemnation.

 

(27)                          Financial Reporting and Rent Rolls.  Each Mortgage
requires the borrower to provide the owner or holder of the Mortgage with
quarterly and annual operating statements, and quarterly rent rolls for
properties and annual financial statements, which annual financial statements
with respect to each Mortgage Loan with more than one borrower are in the form
of an annual combined balance sheet of the borrower entities (and no other
entities), together with the related combined statements of operations, members’
capital and cash flows, including a combining balance sheet and statement of
income for the Mortgaged Properties on a combined basis.

 

(28)                          Acts of Terrorism Exclusion.  With respect to each
Mortgage Loan over $20 million, the related special-form all-risk insurance
policy and business interruption policy (issued by an insurer meeting the
Insurance Rating Requirements) do not specifically exclude Acts of Terrorism, as
defined in the Terrorism Risk Insurance Act of 2002, as amended by the Terrorism
Risk Insurance Program Reauthorization Act of 2007 and further amended by the
Terrorism Risk Insurance Program Reauthorization Act of 2015 (collectively
referred to as “TRIA”), from coverage, or if such coverage is excluded, it is
covered by a separate terrorism insurance policy.  With respect to each other
Mortgage Loan, the related special-form all-risk insurance policy and business
interruption policy (issued by an insurer meeting the Insurance Rating
Requirements) did not, as of the date of origination of the Mortgage Loan, and,
to the Seller’s knowledge, do not, as of the Reference Date, specifically
exclude Acts of Terrorism, as defined in TRIA, from coverage, or if such
coverage is excluded, it is covered by a separate terrorism insurance policy. 
With respect to each Mortgage Loan, the related Loan Documents do not expressly
waive or prohibit the mortgagee from requiring coverage for Acts of Terrorism,
as defined in TRIA, or damages related thereto except to the extent that any
right to require such coverage may be limited by commercial availability on
commercially reasonable terms, or as otherwise indicated in Schedule 1(a) to
this Schedule 1; provided, however, that if TRIA or a similar or subsequent
statute is not in effect, then; provided that terrorism insurance is
commercially available, the borrower under each Mortgage Loan is required to
carry terrorism insurance, but in such event the borrower shall not be required
to spend on terrorism insurance coverage more than two times the amount of the
insurance premium that is payable in respect of the property and business
interruption/rental loss insurance required under the related Loan Documents
(without giving effect to the cost of terrorism and earthquake components of
such casualty and business interruption/rental loss insurance) at the time of
the origination of the Mortgage Loan, and if the cost of terrorism insurance
exceeds such amount, the borrower is required to purchase the maximum amount of
terrorism insurance available with funds equal to such amount.

 

(29)                          Due on Sale or Encumbrance.  Subject to specific
exceptions set forth below, each Mortgage Loan contains a “due on sale” or other
such provision for the acceleration of the payment of the unpaid principal
balance of such Mortgage Loan if, without the consent of the holder of the
Mortgage (which consent, in some cases, may not be unreasonably withheld) and/or
complying with the requirements of the related Loan Documents (which provide for
transfers without the consent of the lender which are customarily acceptable to
the Seller lending on the security of property comparable to the related
Mortgaged Property, including, without limitation, transfers of worn-out or
obsolete furnishings, fixtures, or equipment promptly replaced with property of
equivalent value and functionality and transfers by leases entered into in
accordance with the Loan Documents), (a) the related Mortgaged Property, or any
equity interest of greater than 50% in the related borrower, is directly or
indirectly pledged, transferred or sold, other than as related to (i) family and
estate planning transfers or transfers upon death or legal incapacity,
(ii) transfers to certain affiliates as defined in the related Loan Documents,
(iii) transfers of less than, or other than, a controlling interest in the
related borrower, (iv) transfers to another holder of direct or indirect equity
in the borrower, a specific Person designated in the related Loan Documents or a
Person satisfying specific criteria identified

 

Sch. 1-7

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in the related Loan Documents, such as a qualified equityholder, (v) transfers
of stock or similar equity units in publicly traded companies, (vi) a
substitution or release of collateral within the parameters of paragraph (26)
herein or the exceptions thereto set forth in Schedule 1(a) to this Schedule 1
or (vii) as set forth in Schedule 1(b) to this Schedule 1 by reason of any
mezzanine debt that existed at the origination of the related Mortgage Loan, or
future permitted mezzanine debt as set forth in Schedule 1(c) to this Schedule 1
or (b) the related Mortgaged Property is encumbered with a subordinate lien or
security interest against the related Mortgaged Property, other than (i) any
Companion Loan or any subordinate debt that existed at origination and is
permitted under the related Loan Documents, (ii) purchase money security
interests, (iii) any Crossed Mortgage Loan as set forth in Schedule 1(d) hereto,
or (iv) Permitted Encumbrances.  The Mortgage or other Loan Documents provide
that to the extent any Rating Agency fees are incurred in connection with the
review of and consent to any transfer or encumbrance, the borrower is
responsible for such payment along with all other reasonable fees and expenses
incurred by the Mortgagee relative to such transfer or encumbrance.

 

(30)                          Single-Purpose Entity.  Each Mortgage Loan
requires the borrower to be a Single-Purpose Entity for at least as long as the
Mortgage Loan is outstanding.  Both the Loan Documents and the organizational
documents of the borrower with respect to each Mortgage Loan with a Reference
Date Stated Principal Balance in excess of $5 million provide that the borrower
is a Single-Purpose Entity, and each Mortgage Loan with a Reference Date Stated
Principal Balance of $20 million or more has a counsel’s opinion regarding
non-consolidation of the borrower.  For this purpose, a “Single-Purpose Entity”
shall mean an entity, other than an individual, whose organizational documents
(or if the Mortgage Loan has a Reference Date Stated Principal Balance equal to
$5 million or less, its organizational documents or the related Loan Documents)
provide substantially to the effect that it was formed or organized solely for
the purpose of owning and operating one or more of the Mortgaged Properties
securing the Mortgage Loans and prohibit it from engaging in any business
unrelated to such Mortgaged Property or Properties, and whose organizational
documents further provide, or which entity represented in the related Loan
Documents, substantially to the effect that it does not have any assets other
than those related to its interest in and operation of such Mortgaged Property
or Properties, or any indebtedness other than as permitted by the related
Mortgage(s) or the other related Loan Documents, that it has its own books and
records and accounts separate and apart from those of any other person (other
than a borrower for a Crossed Mortgage Loan), and that it holds itself out as a
legal entity, separate and apart from any other person or entity.

 

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

 

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

 

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

 

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

 

Sch. 1-8

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no such consent has been granted by the Seller since the origination of the
Mortgage Loan except as reflected in any written instruments which are included
in the related Mortgage File;

 

(c)                                  The Ground Lease has an original term (or
an original term plus one or more optional renewal terms, which, under all
circumstances, may be exercised, and will be enforceable, by either borrower or
the mortgagee) that extends not less than 20 years beyond the stated maturity of
the related Mortgage Loan, or 10 years past the stated maturity if such Mortgage
Loan fully amortizes by the stated maturity (or with respect to a Mortgage Loan
that accrues on an actual 360 basis, substantially amortizes);

 

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

 

(e)                                  The Ground Lease does not place
commercially unreasonable restrictions on the identity of the Mortgagee and the
Ground Lease is assignable to the holder of the Mortgage Loan and its successors
and assigns without the consent of the lessor thereunder, and in the event it is
so assigned, it is further assignable by the holder of the Mortgage Loan and its
successors and assigns without the consent of the lessor;

 

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

 

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

 

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

 

(i)                                     The Ground Lease does not impose any
restrictions on subletting that would be viewed as commercially unreasonable by
the Seller in connection with loans originated for securitization;

 

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

 

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

 

Sch. 1-9

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

 

(32)                          Servicing.  The servicing and collection practices
used by the Seller with respect to the Mortgage Loan have been, in all respects,
legal and have met customary industry standards for servicing of commercial
loans for conduit loan programs.

 

(33)                          Origination and Underwriting.  The origination
practices of the Seller (or the related originator if the Seller was not the
originator) with respect to each Mortgage Loan have been, in all material
respects, legal and as of the date of its origination, such Mortgage Loan and
the origination thereof complied in all material respects with, or was exempt
from, all requirements of federal, state or local law relating to the
origination of such Mortgage Loan; provided that such representation and
warranty does not address or otherwise cover any matters with respect to
federal, state or local law otherwise covered in this Schedule 1.

 

(34)                          No Material Default; Payment Record.  No Mortgage
Loan has been more than 30 days delinquent, without giving effect to any grace
or cure period, in making required payments since origination, and as of the
date hereof, no Mortgage Loan is more than 30 days delinquent (beyond any
applicable grace or cure period) in making required payments as of the Closing
Date.  To the Seller’s knowledge, there is (a) no material default, breach,
violation or event of acceleration existing under the related Mortgage Loan or
participation agreement, if applicable, or (b) no event (other than payments due
but not yet delinquent) which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a material default,
breach, violation or event of acceleration, which default, breach, violation or
event of acceleration, in the case of either clause (a) or clause (b),
materially and adversely affects the value of the Mortgage Loan or participation
agreement, if applicable, or the value, use or operation of the related
Mortgaged Property; provided, however, that this representation and warranty
does not cover any default, breach, violation or event of acceleration that
specifically pertains to or arises out of an exception scheduled to any other
representation and warranty made by the Seller in this Schedule 1.  No person
other than the holder of such Mortgage Loan may declare any event of default
under the Mortgage Loan or accelerate any indebtedness under the Loan Documents.

 

(35)                          Bankruptcy.  As of the date of origination of the
related Mortgage Loan and to the Seller’s knowledge as of the Reference Date, no
borrower, guarantor or tenant occupying a single-tenant property is a debtor in
any state or federal bankruptcy, insolvency or similar proceeding.

 

(36)                          Organization of Borrower.  With respect to each
Mortgage Loan, in reliance on certified copies of the organizational documents
of the borrower delivered by the borrower in connection with the origination of
such Mortgage Loan, the borrower is an entity organized under the laws of a
state of the United States of America, the District of Columbia or the
Commonwealth of Puerto Rico.  Except with respect to any Crossed Mortgage Loan,
no Mortgage Loan has a borrower that is an Affiliate of another borrower. (An
“Affiliate” for purposes of this paragraph (36) means, a borrower that is under
direct or indirect common ownership and control with another borrower.)

 

(37)                          Environmental Conditions.  A Phase I environmental
site assessment (or update of a previous Phase I and or Phase II site
assessment) and, with respect to certain Mortgage Loans, a Phase II
environmental site assessment (collectively, an “ESA”) meeting ASTM requirements
conducted by a reputable environmental consultant in connection with such
Mortgage Loan was delivered to the Seller within 12 months prior to the
origination date of each Mortgage Loan (or an update of a previous ESA was
prepared), and such ESA (i) did not identify the existence of recognized
environmental conditions (as such term is defined in ASTM E1527-05 or its
successor, hereinafter “Environmental Condition”) at the related Mortgaged
Property or the need for further investigation, or (ii) if the existence of an
Environmental Condition or need for further investigation was indicated in any
such ESA, then at least one of the following statements is true:  (A) an amount
reasonably estimated by a reputable environmental consultant to be sufficient to
cover the estimated cost to cure any material noncompliance with applicable
environmental laws or the Environmental Condition has been escrowed by the
related borrower and is held or controlled by the related lender; (B) if the
only Environmental Condition relates to the presence of asbestos-containing
materials, radon in indoor air, lead-based paint or lead in drinking water, and
the only recommended action

 

Sch. 1-10

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in the ESA is the institution of such a plan, an operations or maintenance plan
has been required to be instituted by the related borrower that can reasonably
be expected to mitigate the identified risk; (C) the Environmental Condition
identified in the related environmental report was remediated or abated in all
material respects prior to the date hereof, and, if and as appropriate, a
no-further-action or closure letter was obtained from the applicable
governmental regulatory authority (or the Environmental Condition affecting the
related Mortgaged Property was otherwise listed by such governmental authority
as “closed” or a reputable environmental consultant has concluded that no
further action is required); (D) a secured creditor environmental policy or a
pollution legal liability insurance policy that covers liability for the
Environmental Condition was obtained from an insurer rated no less than [A-] (or
the equivalent) by Moody’s, S&P and/or Fitch; (E) a party not related to the
borrower was identified as the responsible party for such Environmental
Condition and such responsible party has financial resources reasonably
estimated to be adequate to address the situation; or (F) a party related to the
borrower having financial resources reasonably estimated to be adequate to
address the situation is required to take action.  To the Seller’s knowledge,
except as set forth in the ESA, there is no Environmental Condition (as such
term is defined in ASTM E1527-05 or its successor) at the related Mortgaged
Property.

 

(38)                          Appraisal.  The Servicing File contains an
appraisal of the related Mortgaged Property with an appraisal date within six
months of the Mortgage Loan origination date.  The appraisal is signed by an
appraiser who is either a Member of the Appraisal Institute (“MAI”) and/or has
been licensed and certified to prepare appraisals in the state where the
Mortgaged Property is located.  Each appraiser has represented in such appraisal
or in a supplemental letter that the appraisal satisfies the requirements of the
“Uniform Standards of Professional Appraisal Practice” as adopted by the
Appraisal Standards Board of the Appraisal Foundation and has certified that
such appraiser had no interest, direct or indirect, in the Mortgaged Property or
the borrower or in any loan made on the security thereof, and its compensation
is not affected by the approval or disapproval of the Mortgage Loan.

 

(39)                          Mortgage Asset Schedule.  The information
pertaining to each Mortgage Asset that is set forth in the schedule attached as
Exhibit A to the Mortgage Asset Purchase Agreement is true and correct in all
material respects as of the Reference Date and contains all information required
by the Mortgage Asset Purchase Agreement to be contained therein.

 

(40)                          Cross-Collateralization.  No Mortgage Loan is
cross-collateralized or cross-defaulted with any mortgage loan that is not owned
by the Issuer, except as set forth in Schedule 1(d) to this Schedule 1.

 

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

 

(42)                          Compliance with Anti-Money Laundering Laws.  The
Seller (or the related originator if the Seller was not the originator) has
complied in all material respects with all applicable anti-money laundering laws
and regulations, including without limitation the USA PATRIOT Act of 2001 with
respect to the origination of the Mortgage Loan, the failure to comply with
which would have a material adverse effect on the Mortgage Loan.

 

(43)                          Floating Interest Rates.  Each Mortgage Loan bears
interest at a floating rate based on LIBOR.

 

(44)                          Participations.  With respect to each Mortgage
Asset that is a Participation:

 

(i)                                     Either (A) the Participation is treated
as a real estate asset for purposes of Section 856(c) of the Code, and the
interest payable pursuant to such Participation is treated as interest on an
obligation secured by a mortgage on real property or on an interest in real
property for purposes of Section 856(c) of the Code, or (B) the Participation
qualifies as a security that would not otherwise cause

 

Sch. 1-11

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ARMS Equity to fail to qualify as a REIT under the Code (including after the
sale, transfer and assignment to the Issuer of such Senior Participation);

 

(ii)                                  To the actual knowledge of the Seller, as
of the Closing Date, the related Participating Institution was not a debtor in
any outstanding proceeding pursuant to the federal bankruptcy code;

 

(iii)                               The Seller has not received written notice
of any outstanding liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind for
which the holder of such Participation is or may become obligated;

 

(iv)                              The participation agreement is legal, valid
and enforceable as between its parties, and provides that (other than any
Non-Controlling Participations) the lead and control participant or participants
(the “Lead Participant”) have full power, authority and discretion to service
the Mortgage Asset, modify and amend the terms thereof, pursue remedies and
enforcement actions, including foreclosure or other legal action, without
consent or approval of any other participant (each, a “Third-Party
Participant”);

 

(v)                                 Each Third-Party Participant is required to
pay its pro rata share of any expenses, costs and fees associated with servicing
and enforcing rights and remedies under the related Mortgage Asset upon request
therefor by the related servicer or Lead Participant;

 

(vi)                              Each participation agreement is effective to
convey the participation interest to the related participants and is not
intended to be, or to be effective as, a loan or other financing secured by the
Mortgage Asset or the underlying Whole Loan.  If the Issuer will be the Lead
Participant, the Lead Participant owes no fiduciary duty or obligation to any
Third-Party Participant under any participation agreement;

 

(vii)                           All amounts due and owing to any Third-Party
Participant pursuant to each participation agreement have been duly and timely
paid.  There is no default by the Lead Participant, or to the Seller’s
knowledge, by any Third-Party Participant under any participation agreement;

 

(viii)                        The participation interest and, if being
transferred to the Issuer, the Lead Participant role, rights and
responsibilities are assignable by the Seller without consent or approval other
than those that have been obtained;

 

(ix)                              If the Issuer will be the Lead Participant,
the terms of the participation agreement do not require or obligate the Lead
Participant or its successor or assigns to repurchase the participation interest
under any circumstances; and

 

(x)                                 The Seller, in selling any other
participation interest to a Third-Party Participant, made no misrepresentation,
fraud or omission of information necessary for such Third-Party Participant to
make an informed decision to purchase its participation interest.

 

(45)                          Health Care Mortgage Loans.  To the Seller’s
knowledge, with respect to each Mortgage Loan that is secured by healthcare
property as of the date of origination and as of the Reference Date:

 

(i)                                     All Medicare and Medicaid provider
agreements, certificates of need (if required), certifications, governmental
licenses, permits and regulatory agreements, including certificates of
operation, completion and occupancy, and state Skilled Nursing Facility
licenses, Assisted Living Facility licenses, Independent Living Facility
licenses or other licenses required by Health Care Authorities for the legal
use, occupancy and operation of each Facility that are necessary to operate each
Facility have been obtained and are in full force and effect, including approved
provider status in any third-party payor program, including of a governmental
authority in which a Facility participates (or if the tenant, operator, manager
and/or UPL Counterparty, as applicable, is seeking approved provider status in
any such third-party payor program, the continued approved provider status of
the prior tenant, operator, manager and/or UPL Counterparty, as applicable,
during the interim period pending such approval), and a valid certificate of
need or similar

 

Sch. 1-12

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certificate or license of the applicable state department of health or
equivalent (or any subdivision), or the state licensing agency, as applicable,
for the requisite number of beds (collectively, the “Health Care Licenses”),
except where the failure to obtain and maintain such Health Care Licenses would
not reasonably be expected to have a Material Adverse Effect. Each tenant,
operator, manager and/or UPL Counterparty, as applicable, owns and/or possesses,
and holds free from restrictions or conflicts with the rights of others, all
such respective Health Care Licenses applicable to the operation of each
applicable Facility, and will operate or cause each Facility to be operated in
such a manner that the Health Care Licenses shall remain in full force and
effect;

 

(ii)                                  Each Facility is duly licensed, as and if
required under the applicable laws of the State in which such Facility is
located. The licensed bed capacity of each Facility is as set forth in the
applicable Underlying Instruments and the available bed count at each Facility
is as set forth in the applicable Underlying Instruments. Neither the borrowers
nor any tenant, operator, manager and/or UPL Counterparty, as applicable, has
applied to reduce the licensed bed capacity at any Facility below that set forth
in the Underlying Instruments or to move or transfer the right to any and all of
the licensed or certified beds of any Facility to any other location or to amend
or otherwise change any Facility, and there are no proceedings or actions
pending or contemplated to reduce the licensed bed capacity of any Facility
below that set forth in the Underlying Instruments;

 

(iii)                               Each Health Care License with respect to a
Facility (i) has not been (A) transferred to any location other than the
applicable Facility or (B) pledged as collateral security, (ii) is held free
from restrictions or known conflicts that would reasonably be expected to have
or Material Adverse Effect and (iii) is not provisional, probationary or
restricted in any way, except where (A) it is customary in the state or locality
where such Facility is located for such Health Care License to be initially
granted on a probationary or conditional basis and (B) such tenant, operator,
manager and/or UPL Counterparty, as applicable, is in the process of, and has
made good-faith efforts towards, removing such probation or condition or
applying for such Health Care License without such probation or condition, in
each case pursuant to established procedures, and expects in good faith to
succeed in removing such probation or condition or receiving such Health Care
License without such probation or condition in the foreseeable future;

 

(iv)                              No tenant, operator, manager and/or UPL
Counterparty, as applicable, or Facility has taken any action to rescind,
withdraw, revoke, materially amend, modify or supplement or otherwise materially
alter the nature, tenor or scope of any Health Care License or applicable
participation or provider agreement with any third-party payor program,
including with a governmental authority, except as the same may increase the
tenor, scope or value of such Health Care License or third-party payor program
participation;

 

(v)                                 Except as otherwise provided in clause
(vi) below, each tenant, operator, manager and/or UPL Counterparty, as
applicable (and the operation of each Facility), is in compliance in all
material respects with all applicable provisions of Health Care Requirements,
including, (i) staffing requirements, (ii) health, fire and life safety codes,
including quality and safety standards, (iii) federal, state or local laws,
rules, regulations or published interpretations or policies relating to the
prevention of fraud and abuse, (iv) insurance, reimbursement and cost reporting
requirements, (v) government payment program requirements and disclosure of
ownership requirements; (vi) requirements of applicable Health Care Authorities,
including those relating to each Facility’s physical structure and environment,
licensing, quality and adequacy of medical care, distributions of
pharmaceuticals, rate setting, equipment, personnel, operating policies, and fee
splitting, and (vii) any other applicable laws, regulations or agreements for
reimbursement for the type of care or services provided by such tenant,
operator, manager and/or UPL Counterparty, as applicable, with respect to each
Facility.  As used in this clause (v), “compliance in all material respects”
means a level of compliance that would keep the borrowers and any tenant,
operator, manager and/or UPL Counterparty, as applicable (and the operation of
each Facility in the ordinary course of business), free from any material
proceedings or sanctions by any governmental authority or Health Care

 

Sch. 1-13

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Authority having jurisdiction over the operation of any Facility that would
reasonably be expected to have a Material Adverse Effect;

 

(vi)                              Except as otherwise set forth on Schedule
1(a) to this Schedule 1, each tenant, operator, manager and/or UPL Counterparty,
as applicable, (i) is in compliance in all material respects with the
requirements for participation in the Medicare and Medicaid programs with
respect to each Facility that currently participates in such programs, and
(ii) has a current provider agreement under Title XVIII and/or XIX of the Social
Security Act, which is in full force and effect. Other than as set forth on
Schedule 1(a) to this Schedule 1, no tenant, operator and/or manager, as
applicable, has had any deficiencies on its most recent Facility Survey that has
been posted online and is available for public inspection (standard or
complaint) that did result in a denial of payment for new admissions and/or no
opportunity to correct prior to termination, and no material penalty enforcement
action, except as would not have a Material Adverse Effect, has been taken under
the last Facility Survey cycle. Except as otherwise set forth on Schedule
1(a) to this Schedule 1, no tenant, operator, manager and/or UPL Counterparty,
as applicable, had any deficiencies at “level G” or above on its most recent
Facility Survey that has been posted online and is available for public
inspection (standard or complaint), nor has any tenant, operator, manager and/or
UPL Counterparty, as applicable, been cited with any substandard quality of care
deficiencies (as that term is defined in Part 488 of 42 C.F.R.) for the past two
consecutive Facility Surveys. Except as set forth on Schedule 1(a) to this
Schedule 1, no Facility has been the subject of a “double G” determination for
the last three (3) years;

 

(vii)                           Except as otherwise set forth on Schedule
1(a) to this Schedule 1, neither the borrowers, nor any tenant, operator,
manager and/or UPL Counterparty, as applicable, are known to the Seller, based
upon due diligence customarily performed in connection with the origination of a
Mortgage Loan secured by healthcare property, to be a target of, participant in
or subject to, (A) any action, proceeding, suit, audit, investigation or
sanction by any Health Care Authority or any other administrative or
investigative body or entity or (B) any non-frivolous whistleblower suits or
other suits by patients or residents that the Seller in good faith does not
believe are frivolous or suits brought pursuant to federal or state False Claims
Acts or Medicaid/Medicare/State fraud/abuse laws, which may result, directly or
indirectly or with the passage of time, in the imposition of a material fine,
penalty, alternative, interim or final sanction, a lower rate certification,
recoupment, recovery, suspension or discontinuance of all or part of
reimbursement from any Health Care Authority, third-party payor, insurance
carrier or private payor, a lower reimbursement rate for services rendered to
eligible patients, or any other civil or criminal remedy, and which would
reasonably be expected to have a Material Adverse Effect, including any
Facility’s ability to accept or retain residents, or which could reasonably be
expected to result in the appointment of a receiver or manager, or in the
modification, limitation, annulment, revocation, termination, non-renewal,
transfer, surrender, suspension or other impairment of a Health Care License or
affect any tenant’s, operator’s and/or manager’s (as applicable) participation
in the Medicare, Medicaid, or third-party payor program, as applicable, or any
successor program thereto, provided that an attorney’s request for resident
records, in and of itself, may not be considered as such a threat for the
purpose of this clause (vii);

 

(viii)                        There are no agreements with residents of any
Facility, or with any other Persons, which deviate in any material adverse
respect from, or which conflict with, any Health Care Requirements. The format
of residents records complies in all material respects with all applicable
Health Care Requirements and legal requirements and each Facility has policies
and procedures to ensure that all resident records at each Facility, including
patient and/or resident accounts records, are true, complete, and correct in all
material respects;

 

(ix)                              The execution and delivery of the Underlying
Instruments, the respective borrowers’ performances thereunder, and the
recordation of the applicable mortgages will not (i) adversely affect in any
material respect, any tenant’s, operator’s, manager’s and/or UPL Counterparty’s
right to receive Medicaid, Medicare, insurance company, managed care company, or
other third-party insurance payments or reimbursements or to receive private
payor payments or reimbursements, (ii)

 

Sch. 1-14

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materially reduce the Medicaid, Medicare, insurance company, managed care
company, or other third- party insurance payments or reimbursements or
materially reduce private payor payments or reimbursements that any tenant,
operator, manager and/or UPL Counterparty, as applicable, is receiving as of the
date of origination, or (iii) materially adversely affect the Health Care
Licenses;

 

(x)                                 Other than the Medicare and Medicaid
programs, no borrowers and no tenants, operators, managers and/or UPL
Counterparties, as applicable, is a participant in any federal, state or local
program (other than small local programs, if any) whereby any Health Care
Authority may have the right to recover funds with respect to the related
Mortgaged Property by reason of the advance of federal, state or local funds,
including those authorized under the Hill Burton Act (42 U.S.C. 291, et seq.).
The borrowers have received no notice, and are not aware of any violation of
applicable antitrust laws;

 

(xi)                              Each tenant, operator, manager and/or UPL
Counterparty, as applicable, each have instituted, and each Facility is operated
in compliance in all material respects with, policies and plans for complying
with applicable legal requirements and Health Care Requirements;

 

(xii)                           Each tenant, operator, manager and/or UPL
Counterparty, as applicable, is in compliance in all material respects with the
Healthcare Insurance Portability and Accountability Act of 1996 and the
regulations promulgated thereunder and Pub. L No. 104-191, as amended by the
Health Information Technology for Economic and Clinical Health Act, Title XIII
of the American Recovery and Reinvestment Act of 2009 and related regulations
promulgated by the Secretary of Health and Human Services, to the extent
applicable;

 

(xiii)                        Except as set forth on Schedule 1(a) to this
Schedule 1, or as would not have or reasonably be expected to have a Material
Adverse Effect, there is no threatened or pending revocation, suspension,
termination, probation, restriction, limitation, or non-renewal affecting any
tenant, operator, manager and/or UPL Counterparty, as applicable, or any
Facility, or provider agreement with any third-party payor, Medicare or
Medicaid;

 

(xiv)                       All Medicare, Medicaid, and private insurance cost
reports and financial reports submitted by or on behalf of each Facility are
materially accurate and complete and have not been misleading in any material
respect. Except as would not have or reasonably be expected to have a Material
Adverse Effect and except as provided in Schedule 1(a) to this Schedule 1, and
except in the ordinary course of business, (i) there are no current, pending or
outstanding Medicare, Medicaid, or third-party payor programs reimbursement
audits or appeals pending at any of the Facilities, (ii) there are no cost
report years that are subject to audits, no cost reports remain “open” or
unsettled, and (iii) there are no current or pending material Medicare,
Medicaid, or third-party payor programs recoupment efforts at any Facility;

 

(xv)                          Except as otherwise set forth in Schedule 1(a) to
this Schedule 1 and except as would not reasonably be expected to have a
Material Adverse Effect and except to the extent a waiver has been granted by
the applicable governmental authority, each Facility and the use thereof
complies in all material respects with all applicable local, state, and federal
building codes and fire and life safety codes applicable to such Facility;

 

(xvi)                       Any existing agreement relating to the management,
administration or operation of each Facility is in full force and effect and
there is no default thereunder by any party thereto and no event has occurred
that with the passage of time and/or the giving of notice would constitute a
default thereunder. Any existing agreement relating to the management,
administration or operation of each Facility has received all necessary
approvals from the applicable Health Care Authority;

 

(xvii)                    Borrowers have delivered an occupancy report for each
related Mortgaged Property; and

 

(xviii)                 Each operating lease and all other existing agreements
relating to the operation and/or management of each Facility have received all
necessary approvals from the applicable Health Care Authority.

 

Sch. 1-15

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As used in paragraph (45) of this Schedule 1, the following terms shall have the
respective meanings specified below:

 

“Assisted Living Facility” means, a facility licensed by a state Healthcare
Authority to provide supervision or assistance with activities of daily living,
coordination of services by healthcare providers and monitoring of resident
activities to help ensure their health, safety and well-being.

 

“Facility” means, an Assisted Living Facility, an Independent Living Facility
and/or a Skilled Nursing Facility, in each case, related to a Mortgaged
Property.

 

“Facility Survey” means, an on-site inspection of a Facility by a Healthcare
Authority with jurisdiction over such Facility to determine if the tenant,
operator and/or manager, as applicable, is meeting minimum quality and
performance standards.

 

“Healthcare Authorities” means any governmental authority or quasi-governmental
authority or any agency, intermediary, board, authority or entity concerned with
the ownership, operation, use or occupancy of any Mortgaged Property as a
Skilled Nursing Facility or an Assisted Living Facility or an Independent Living
Facility.

 

“Healthcare Requirements” means, with respect to each Mortgaged Property, all
federal, state, county, municipal and other governmental statutes, laws, rules,
orders, regulations, ordinances, judgments, decrees and injunctions or
agreements, in each case, pertaining to or concerned with the establishment,
construction, ownership, operation, use or occupancy of such Mortgaged Property
or any part thereof in accordance with its Healthcare License and all material
permits, licenses and authorizations and regulations relating thereto, including
all material rules, orders, regulations and decrees of and agreements with
Healthcare Authorities as pertaining to such Mortgaged Property.

 

“Independent Living Facility” means, a facility that is not required to be
licensed by a state Health Care Authority and that provides residents with
private living accommodations, and common areas for dining, social and
recreational activities and other amenities within the same facility or within
conjoined or contiguous structures.

 

“Lien” means any mortgage, deed of trust, lien (statutory or otherwise), pledge,
hypothecation, easement, restrictive covenant, preference, assignment, security
interest, PACE Loan or any other encumbrance, charge or transfer of, or any
agreement to enter into or create any of the foregoing, on or affecting all or
any portion of any Mortgaged Property or any interest therein, or any direct or
indirect interest in any of the borrowers, including any conditional sale or
other title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing, the filing of any financing
statement, and mechanic’s, materialmen’s and other similar liens and
encumbrances.

 

“Material Adverse Effect” means, any event, action (or failure to take action)
or condition relating to (a) the business, operations, economic performance,
assets or condition (financial or otherwise) of (i) any of the borrowers,
(ii) any of the guarantors, (iii) any tenant, operator and/or manager, as
applicable, (iv) any Mortgaged Property lease, (v) any operating lease or
(vi) any Mortgaged Property or any Facility thereon; (b) the ability of any
borrower or guarantor to perform, in all material respects, its obligations
under each of the Underlying Instruments to which it is a party; (c) the ability
of any tenant, operator and/or manager, as applicable, to perform, in all
material respects, its obligations under any applicable lease; (d) the
enforceability or validity of (i) any Mortgaged Property lease, (ii) any
operating lease, (iii) any Underlying Instrument or the perfection or priority
of any Lien created under any Underlying Instrument; (e) the value of, or cash
flow from, each Mortgaged Property or the operations thereof; or (f) the rights,
interests and remedies of any lender under any of the Underlying Instruments,
which, in each case, either individually or cumulatively, would have a material
adverse effect on the value of the related Mortgage Loan or the ability of the
borrower(s) to make interest or principal payments when due pursuant to the
related Underlying Instruments.

 

“NSGO” means non-state government owned or operated.

 

“UPL Counterparty” means individually and/or collectively (as the context may
require), as applicable, the person listed, with respect to each applicable
Mortgaged Property, as NSGO under the applicable Underlying Instrument, and/or
the applicable tenant, operator and/or manager, as applicable, then managing
such Mortgaged Property

 

Sch. 1-16

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

 

pursuant to any applicable management agreement between such tenant, operator
and/or manager, as applicable, and such person listed as NSGO under the
applicable Underlying Instrument.

 

“Skilled Nursing Facility” means, a facility licensed by a state Healthcare
Authority to provide short-term and long-term custodial care, skilled nursing
and rehabilitation services.

 

For purposes of these representations and warranties, the phrases “the Seller’s
knowledge” and other words and phrases of like import shall mean, except where
otherwise expressly set forth herein, the actual state of knowledge of the
Seller, its officers and employees directly responsible for the underwriting,
origination, servicing or sale of the Mortgage Loans regarding the matters
expressly set forth herein, based upon due diligence customarily performed in
connection with the origination of a Mortgage Loan secured by healthcare
property.

 

Sch. 1-17

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SCHEDULE 1(a)

 

EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES

 

Representation numbers referred to below relate to the corresponding Closing
Date Mortgage Asset representations and warranties set forth in Schedule 1 to
this Agreement.

 

Mortgage Asset

 

Representation

 

Exception

Planet Self Storage Portfolio

 

#36

 

The borrower under the Planet Self Storage Portfolio loan is owned, in part, and
controlled by Robert Moser, who also owns, in part, and controls the borrowers
under the King Arthur - West Valley City loan and the King Arthur - Draper loan.

Central West End

 

#12 & 13

 

The city of St. Louis has issued a notice and list of building violations at the
property which must be cured by August 9, 2018. The current seller and borrower
are in the process of curing these violations, and ART has reserved sufficient
funds from loan proceeds, with a contingency amount, to fully satisfy and cure
all building violations.

 

 

#15

 

Interest shall not accrue on certain funds in the renovation
reserve—$7,664,744—until the earlier of (i) the date on which any funds are
first disbursed to the borrower and (ii) October 16, 2018. Thus, if the borrower
does not draw on such funds, interest will start accruing on the full $7,664,744
from and after October 16, 2018. If the borrower draws any amount prior to
October 16, 2018, interest starts accruing on such funds drawn as of the date of
that draw.

 

 

#31(e)

 

One of the buildings under the Central West End loan has a ground lease for
surface parking. The lessee is not to “transfer” (which includes granting a
mortgage) this ground lease without the lessor’s prior written consent, which
consent shall not be unreasonably withheld. Although the lessee is entitled to
encumber its leasehold interest to any lender holding a deed of trust on another
building under the Central West End loan, an estoppel obtained in connection
with the closing contains a consent to the granting of such deed of trust in
favor of the Arbor Parent.

 

 

#31(i)

 

No subletting is permitted without the lessor’s prior written consent; however,
the leased premises is a surface parking lot which is used by building residents
and is not separately sublet to any party.

 

 

#31(j)

 

The property is unimproved so that the representations regarding insurance for
casualties are not applicable to the leased premises. The ground lease has been
in existence for more than 20 years, so the risk of any condemnation was deemed
to be minimal.

 

 

#31(k)

 

The property is unimproved so that the representations regarding insurance for
casualties are not applicable to the leased premises. The ground lease has been
in existence for more than 20 years, so the risk of any condemnation was deemed
to be minimal.

 

 

#36

 

The borrowers under the Central West End participation are owned, in part, and
controlled by the same sponsors who also own, in part, and control the borrower
under the Landmark at Mountain View participation.

The Redford

 

#16

 

The 2018 insurance policy has a layered program including 19 carriers on
property coverage, 3 of which are either not S & P rated or below requirements,
however their A.M. Best rating meets or exceeds requirements.

Preston Hollow

 

#36

 

The borrower under the Preston Hollow participation is owned, in part, and
controlled by the same sponsors who also own, in part, and control the borrower
under The Katy Apartments participation.

 

Sch. 1(a)-1

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

 

Mortgage Asset

 

Representation

 

Exception

The Katy Apartments

 

#36

 

The borrower under The Katy Apartments participation is owned, in part, and
controlled by the same sponsors who also own, in part, and control the borrower
under the Preston Hollow participation.

Landmark at Mountain View

 

#26

 

A partial release price to be paid in connection with any partial release shall
be all sale or refinance proceeds (as applicable) are to be paid to the lender
(to be applied as set forth in the related loan agreement), provided that the
unreleased property has a loan-to-value (“LTV”) of no greater than 70% and a
debt service coverage ratio of no less than 1.35x.

 

 

#36

 

The borrowers under the Landmark at Mountain View participation are owned, in
part, and controlled by the same sponsors who also own, in part, and control the
borrower under the Central West End participation.

Willow Point Apartments

 

#36

 

The borrower under the Willow Point Apartments loan is owned, in part, and
controlled by Pinchos Shemano, who also owns, in part, and controls the borrower
under the Cypress Village Apartments loan.

Campus Commons

 

#36

 

The borrower under the Campus Commons participation is owned, in part, and
controlled by the same sponsors who also own, in part, and control the borrowers
under The Mark Apartments.

Wilshire Victoria Apartments

 

#25

 

Loan is full recourse.

 

 

#30

 

A non-consolidation opinion was received at closing; however, the loan is full
recourse.

Carrington Park I

 

#36

 

Carrington Park I and Carrington Park II have common sponsors.

King Arthur - Draper

 

#36

 

The borrower under the King Arthur - Draper loan is owned, in part, and
controlled by Robert Moser, who also owns, in part, and controls the borrowers
under the Planet Self Storage Portfolio loan and the King Arthur - West Valley
City loan.

The Mark Apartments

 

#36

 

The borrowers under The Mark Apartments are owned, in part, and controlled by
the same sponsors who also own, in part, and control the borrower under the
Campus Commons participation.

309 East 75th Street

 

#36

 

The 309 East 75th Street borrower is an affiliate of the 528 East 85th Street
borrower.

Cypress Village Apartments

 

#36

 

The borrower under the Cypress Village Apartments loan is owned, in part, and
controlled by Pinchos Shemano, who also owns, in part, and controls the borrower
under the Willow Point Apartments loan.

King Arthur - West Valley City

 

#36

 

The borrower under the King Arthur - West Valley City loan is owned, in part,
and controlled by Robert Moser, who also owns, in part, and controls the
borrowers under the Planet Self Storage Portfolio loan and the King Arthur -
Draper loan.

528 East 85th Street

 

#36

 

The 528 East 85th Street borrower is an affiliate of the 309 East 75th Street
borrower.

Carrington Park II

 

#36

 

Carrington Park I and Carrington Park II have common sponsors.

 

Sch. 1(a)-2

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SCHEDULE 1(b)

 

Existing Mezzanine Debt

 

None

 

Sch. 1(b)-1

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

 

SCHEDULE 1(c)

 

Future Mezzanine Debt

 

None

 

Sch. 1(c)-1

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

 

SCHEDULE 1(d)

 

Crossed Mortgage Assets

 

·                  Cross-collateralized

 

·                  None

 

·                  Cross-defaulted

 

·                  Carrington Park I and Carrington Park II(1)

 

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(1)  These Mortgage Assets are not currently cross-defaulted but are expected to
become cross-defaulted as of the Closing Date.

 

Sch. 1(d)-1

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