Exhibit 10.67

EXECUTION VERSION

SECOND AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

Dated as of December 16, 2019

by and among

PARLEX 15 FINCO, LLC,

as Master Seller,

and

DEUTSCHE BANK AG, CAYMAN ISLANDS BRANCH,

as Buyer

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TABLE OF CONTENTS

 

         Page  

1.

 

APPLICABILITY

     2  

2.

 

DEFINITIONS

     2  

3.

 

INITIATION; CONFIRMATION; TERMINATION; FEES; EXTENSION

     37  

4.

 

MARGIN MAINTENANCE

     48  

5.

 

INCOME PAYMENTS AND PRINCIPAL PAYMENTS

     49  

6.

 

SECURITY INTEREST

     54  

7.

 

PAYMENT, TRANSFER AND CUSTODY

     55  

8.

 

SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED LOANS

     60  

9.

 

REPRESENTATIONS

     61  

10.

 

NEGATIVE COVENANTS OF SELLER

     66  

11.

 

AFFIRMATIVE COVENANTS OF SELLER

     69  

12.

 

SINGLE-PURPOSE ENTITY

     74  

13.

 

EVENTS OF DEFAULT; REMEDIES

     77  

14.

 

LIMITATIONS ON RECOURSE AGAINST SERIES SELLERS

     85  

15.

 

RECORDING OF COMMUNICATIONS

     85  

16.

 

NOTICES AND OTHER COMMUNICATIONS

     86  

17.

 

ENTIRE AGREEMENT; SEVERABILITY

     86  

18.

 

ASSIGNABILITY

     86  

 

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19.

 

GOVERNING LAW

     88  

20.

 

NO WAIVERS, ETC.

     88  

21.

 

USE OF EMPLOYEE PLAN ASSETS

     88  

22.

 

INTENT

     89  

23.

 

DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

     91  

24.

 

CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

     91  

25.

 

NO RELIANCE

     92  

26.

 

INDEMNITY

     94  

27.

 

DUE DILIGENCE

     96  

28.

 

SERVICING

     96  

29.

 

TAXES

     98  

30.

 

MISCELLANEOUS

     101  

 

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ANNEXES, EXHIBITS AND SCHEDULES

 

ANNEX I    Names and Addresses for Communications between Parties EXHIBIT I   
Form of Confirmation EXHIBIT II    Authorized Representatives of Seller EXHIBIT
III    Form of Re-direction Letter EXHIBIT IV    Form of Custodial Delivery
EXHIBIT V    Form of Power of Attorney EXHIBIT VI    Representations and
Warranties Regarding Individual Purchased Loans EXHIBIT VII    Organizational
Chart EXHIBIT VIII    Transaction Procedures EXHIBIT IX    Form of Servicer
Notice and Agreement EXHIBIT X    [Reserved.] EXHIBIT XI    Form of Joinder
Agreement EXHIBIT XII    Form of Bailee Agreement EXHIBIT XIII    Form of
Certificate of Authorized Representative

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THIS SECOND AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT (this “Agreement”)
is dated as of December 16, 2019, by and among PARLEX 15 FINCO, LLC, a Delaware
limited liability company organized in series (“Master Seller”), and DEUTSCHE
BANK AG, CAYMAN ISLANDS BRANCH, a branch of a foreign banking institution
(“Buyer”).

WHEREAS, the limited liability company agreement of the Master Seller provides
for the establishment of one or more designated series of limited liability
company interests and assets of the Master Seller (each, a “Series”, and each
such Series that executes and delivers a Joinder Agreement (as hereinafter
defined) pursuant to Section 3(n), a “Series Seller”) which may have separate
rights, powers or duties with respect to specified property, including rights to
profits and losses associated with such specified property and obligations under
this Agreement with respect to such specified property, with the assets and
obligations of each such Series Seller accounted for separately in the records
of Master Seller and such Series Seller from the other assets of the Master
Seller and the assets of each other Series Seller; and the debts, liabilities,
obligations and expenses incurred, contracted for or otherwise existing with
respect to each Series Seller shall be enforceable solely against the assets of
such Series Seller except to the extent expressly provided for hereunder. Upon
its execution of a Joinder Agreement pursuant to Section 3(n), each such Series
Seller shall be bound by all provisions herein with respect to the assets of
such Series Seller and its related obligations in respect of any Transactions.
As used herein, the term “Seller” shall mean the Master Seller and/or each
Series Seller, individually or collectively, as the context may require.

WHEREAS, Seller and Buyer entered into that certain Master Repurchase Agreement,
dated as of August 2, 2016 (the “Original Repurchase Agreement”).

WHEREAS, Seller and Buyer amended and restated the Original Repurchase Agreement
pursuant to that certain Amended and Restated Master Repurchase Agreement, dated
as of February 9, 2017 (as amended by Amendment No. 1 to Amended and Restated
Master Repurchase Agreement and Guaranty, dated as of March 24, 2017, as further
amended by Amendment No. 2 to Amended and Restated Master Repurchase Agreement
and Omnibus Amendment to Confirmations, dated as of October 17, 2017, as further
amended by Amendment No. 3 to Amended and Restated Master Repurchase Agreement,
dated as of October 30, 2018, as further amended by Amendment No. 4 to Amended
and Restated Master Repurchase Agreement, dated as of November 20, 2018, and as
further amended by Amendment No. 5 to Amended and Restated Master Repurchase
Agreement, dated as of February 22, 2019, the “Existing Repurchase Agreement”).

WHEREAS, Seller and Buyer desire to amend and restate the Existing Repurchase
Agreement on the Second Amendment and Restatement Date (as defined below) on the
terms set forth herein.

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NOW THEREFORE, Seller and Buyer hereby agree that the Existing Repurchase
Agreement is hereby amended and restated in its entirety to read as follows:

1. APPLICABILITY

After the Closing Date the parties hereto entered into a transaction in which
Seller transferred to Buyer the Watchtower A-Note Eligible Loan (as hereinafter
defined) on a servicing released basis against the transfer of funds by Buyer,
with a simultaneous agreement by Buyer to transfer to Seller such Watchtower
A-Note Eligible Loan at a date certain or on demand, against the transfer of
funds by Seller. From time to time the parties hereto may enter into
transactions in which Seller agrees to transfer to Buyer certain Eligible Loans
(as hereinafter defined) against the transfer of funds by Buyer, with a
simultaneous agreement by Buyer to transfer to Seller such Eligible Loans at a
date certain or on demand, against the transfer of funds by Seller. Master
Seller shall designate a Series Seller for each such transaction in accordance
with Section 3(n) of this Agreement. Each such transaction shall be referred to
herein as a “Transaction” and, unless otherwise agreed in writing, shall be
governed by this Agreement, including any supplemental terms or conditions
contained in any exhibits identified herein as applicable hereunder.

2. DEFINITIONS

(a) As used in this Agreement, the following terms shall have the following
meanings:

“1934 Act” shall have the meaning specified in Section 23(a).

“A-Note” shall mean a Mortgage Note evidencing a senior position (or pari passu
senior position) in a Mortgage Loan. Payments with respect to an A-Note shall
not be junior to any other Mortgage Note.

“Accelerated Repurchase Date” shall have the meaning specified in
Section 13(b)(i) of this Agreement.

“Accelerated Transaction Repurchase Date” shall have the meaning specified in
Section 13(c)(i) of this Agreement.

“Accepted Servicing Practices” shall mean with respect to any Purchased Loan,
those customary and usual standards of mortgage servicing practices of prudent
institutional mortgage loan servicers which service mortgage loans and/or
participations in mortgage loans of the same type as such Purchased Loan in the
jurisdiction where the related Mortgaged Property is located and, to the extent
consistent with the foregoing requirements, with the same skill, care and
diligence and in the same manner that the related servicer services and
administers mortgage loans and/or participations in interests in mortgage loans
for its own account or for other third-party entities of mortgage loans and/or
participations of the same type as the Purchased Loans in the jurisdiction where
the related Mortgaged Property is located or, if applicable, as otherwise
defined in the applicable Servicing Agreement.

 

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“Act of Insolvency” shall mean with respect to any party, (i) the commencement
by such party as debtor of any case or proceeding under any Bankruptcy Law, or
such party seeking the appointment or election of a receiver, conservator,
trustee, custodian or similar official for such party or any substantial part of
its property, (ii) the commencement of any such case or proceeding against such
party, seeking such an appointment or election, or the filing against such party
of an application for a protective decree under the provisions of SIPA, which
(A) is consented to or not timely contested by such party, (B) results in the
entry of an order for relief, such an appointment or election, the issuance of
such a protective decree or the entry of an order having a similar effect
against such party, or (C) is not dismissed within sixty (60) days, (iii) the
making by such party of a general assignment for the benefit of its creditors,
or (iv) the admission in writing by such party of such party’s inability to pay
such party’s debts as they become due.

“Actual Original Purchase Percentage” shall mean, with respect to any
Transaction, a percentage equal to the lesser of (x) the Maximum Original
Purchase Percentage for such Transaction and (y) a percentage designated by
Seller in its sole and absolute discretion, and set forth in the Confirmation
for such Transaction.

“Additional Amounts” shall have the meaning specified in Section 29(b) of this
Agreement.

“Affiliate” shall mean, when used with respect to any specified Person, any
other Person directly or indirectly Controlling, Controlled by, or under common
Control with, such Person.

“Agreement” shall mean this Second Amended and Restated Master Repurchase
Agreement, dated as of December 16, 2019 by and among Seller and Deutsche Bank
AG, Cayman Islands Branch, as same may be amended, modified and/or restated from
time to time.

“Allocable Percentage” shall mean, with respect to any Principal Payment on any
Purchased Loan, a fraction (expressed as a percentage) the numerator of which is
the Repurchase Price with respect to such Purchased Loan as in effect
immediately prior to such Principal Payment (net of any accrued Price
Differential and, unless a Facility Event of Default or a Transaction Event of
Default related to such Purchased Loan has occurred and is continuing, excluding
any other amounts then owing to Buyer), and the denominator of which is the
outstanding principal balance of such Purchased Loan immediately prior to such
Principal Payment.

“Alternate Index” shall mean a published floating rate index that Buyer
determines in its sole but good faith discretion (and in connection therewith,
may take into consideration the recommendations of the Alternative Reference
Rates Committee convened by the Federal Reserve Board and the Federal Reserve
Bank of New York) that is then generally used by Buyer in its commercial real
estate repurchase facilities similar to the subject Agreement and/or floating
rate commercial real estate loans as an alternative to LIBOR, as determined by
Buyer in its sole but good faith discretion.

“Alternate Index Rate” shall mean, with respect to each Pricing Rate Period, the
per annum rate of interest of the Alternate Index, determined as of the Pricing
Rate Determination Date immediately preceding the commencement of such Pricing
Rate Period; provided that in no event will the Alternate Index Rate be less
than zero.

 

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“Alternate Pricing Rate” shall mean, with respect to each Pricing Rate Period,
the per annum rate of interest equal to the greater of (i) the sum of (A) the
Alternate Index Rate plus (B) the Alternate Rate Spread, and (ii) the sum of
(A) the LIBOR Floor plus (B) the LIBOR Rate Spread.

“Alternate Rate Spread” shall mean, in connection with any conversion of any
Transaction in accordance with the terms hereof to an Alternate Rate
Transaction, prior to the occurrence and continuance of an Event of Default,
(i) the sum (expressed as the number of basis points and determined at the time
of such conversion) of (a) the LIBOR Rate Spread and (b) the Alternate Rate
Spread Adjustment; provided that in no event will the Alternate Rate Spread be
less than zero, and (ii) after the occurrence and during the continuance of an
Event of Default, the per annum rate of interest for such Transaction set forth
in clause (i) of this definition plus 400 basis points (4.00%).

“Alternate Rate Spread Adjustment” shall mean, in connection with any conversion
of a Transaction in accordance with the terms hereof to an Alternate Rate
Transaction, a spread adjustment as determined by Buyer in its sole but good
faith determination at the time of conversion, (which may be positive, negative
or zero) equal to (1) (x) if the Transaction is being converted from a LIBOR
Transaction to an Alternate Rate Transaction, the daily average of LIBOR (with a
floor of zero percent) or (y) if the Transaction is being converted from a Prime
Rate Transaction to an Alternate Rate Transaction, the daily average of the
Prime Index Rate (with a floor of zero percent), in either case of (x) or (y),
as applicable, over the one hundred eighty (180) day period (excluding days
within such 180 day period that are not Business Days) ending two (2) Business
Days prior to the date of conversion (excluding from such average the five
(5) highest days and the five (5) lowest days during such one hundred eighty
(180) day period), minus (2) the daily average of the Alternate Index (with a
floor of zero percent) over the one hundred eighty (180) day period (or such
shorter period to the extent such historical rates are not available, and
excluding days within such one hundred eighty (180) day or shorter period that
are not Business Days), ending two (2) Business Days prior to the date of
conversion (excluding from such average, if such period of averaging exceeds
thirty (30) days, the five (5) highest days and the five (5) lowest days during
such one hundred eighty (180) day period). Notwithstanding the foregoing, Buyer
may elect, in its sole but good faith discretion, to apply its or any then
customary alternate rate index and/or spread adjustment methodology, applied at
the time of conversion of a Transaction to an Alternate Rate Transaction, then
commonly used by Buyer for commercial real repurchase facilities similar in size
and character to this Agreement and the transactions included therein in lieu of
the actual calculation as provided above.

“Alternate Rate Transaction” shall mean a Transaction at such time as interest
thereon accrues at a per annum rate of interest based on the Alternate Pricing
Rate.

“Amortization Period” shall mean the period from and after the Revolving Period
Expiration Date to and including the Facility Termination Date.

“Anti-Corruption Laws” shall mean the Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations thereunder, the UK Bribery Act of 2010,
as amended, and any other applicable anti-corruption law.

 

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“Amendment and Restatement Date” shall mean February 9, 2017.

“Applicable Servicer Account” shall mean a deposit account established with the
applicable Servicer, Depository or with a bank for which the applicable Servicer
is the bank’s customer and that is acceptable to Buyer in its sole discretion,
which deposit account is in the name of the applicable Servicer, and which may
be for the benefit of Seller, and which shall, in any case, indicate in the name
of such deposit account the security interest of Buyer therein.

“Applicable Spread” shall mean, with respect to any Transaction, if the related
Transaction is a LIBOR Transaction, the LIBOR Rate Spread, (b) if the
Transaction is a Prime Rate Transaction, the Prime Rate Spread, and (c) if the
Transaction is an Alternate Rate Transaction, the Alternate Rate Spread.

“Appraisal” shall mean an appraisal of the related underlying Mortgaged Property
from an Independent Appraiser, complying with the requirements of Title XI of
the Federal Financial Institutions Reform, Recovery and Enforcement Act of 1989,
as amended from time to time, and conducted in accordance with the standards of
the American Appraisal Institute.

“Approved Future Funding Amounts” shall have the meaning specified in
Section 3(o) of this Agreement.

“Assignment of Leases” shall mean, with respect to any Purchased Loan, an
assignment of leases thereunder, notice of transfer or equivalent instrument in
recordable form, sufficient under the laws of the jurisdiction wherein the
Mortgaged Property is located to reflect the assignment of leases.

“Assignment of Mortgage” shall mean, with respect to any Purchased Loan, an
assignment or notice of transfer (or equivalent instrument) of the applicable
Mortgage in recordable form, sufficient under the laws of the jurisdiction
wherein the related Mortgaged Property is located to reflect the assignment and
pledge of the Mortgage, subject to the terms, covenants and provisions of this
Agreement.

“Available Income” shall mean, all Income other than (a) the Underlying
Purchased Loan Reserves, including without limitation Underlying Purchased Loan
Reserves consisting of insurance proceeds and condemnation awards from any
Mortgaged Property that are not applied to amounts due under the applicable
Purchased Loan pursuant to the express terms of the applicable Purchased Loan
Documents (in each case, unless and until such amounts are available under the
related Purchased Loan Documents to be released to or on behalf of the lender
thereunder or to reduce the principal balance of such Purchased Loan), (b)
Qualified Servicing Expenses, (c) insurance proceeds and condemnation awards
from any Mortgaged Property that are not permitted to be applied to amounts due
under the applicable Purchased Loan pursuant to the applicable Purchased Loan
Documents (in each case, unless and until such amounts are available, under the
related Purchased Loan Documents, to be applied to amounts due under the
applicable Purchased Loan or otherwise available to be released to Seller), (d)
origination fees paid by Mortgagors in connection with the origination and
closing of the applicable Purchased Loan, and (e) any reimbursement for third
party out-of-pocket costs and expenses payable by a Mortgagor to Seller in
connection with origination and loan administration (including amendments or
modifications to, and requests for consent and approvals under, the applicable
Purchased Loan).

 

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“Bailee” shall mean Ropes & Gray LLP or any other law firm reasonably acceptable
to Buyer that has delivered a Bailee Letter with respect to a Purchased Loan.

“Bailee Letter” shall mean a letter from Seller and acknowledged by Bailee and
Buyer substantially in the form attached hereto as Exhibit XII.

“Bankruptcy Code” shall mean the United States Bankruptcy Code (11 U.S.C. § 101
et seq.), as amended from time to time or any successor statute or rule
promulgated thereto.

“Bankruptcy Laws” shall mean the Bankruptcy Code or any other United States
bankruptcy, insolvency, reorganization, liquidation, moratorium, dissolution,
delinquency or any similar statute, law, rules, regulations or similar legal
requirements of any other applicable jurisdiction, in each case, as amended from
time to time.

“Beneficial Ownership Certification” shall mean a current certification
regarding beneficial ownership required by 31 C.F.R. § 1010.230.

“Blocked by Operation of Law” shall mean, with respect to OFAC’s SDN List, any
Person that is in the aggregate owned, directly or indirectly, fifty percent
(50%) or greater by a Person or Persons that are either identified on the SDN
List or themselves blocked Persons.

“Business Day” shall mean a day other than (i) a Saturday or Sunday, or (ii) a
day in which the New York Stock Exchange or banks in the State of New York,
Kansas, Pennsylvania or Minnesota are authorized or obligated by law or
executive order to be closed. When used with respect to a Pricing Rate
Determination Date, “Business Day” shall mean any day other than a Saturday, a
Sunday or in connection with the determination of LIBOR in a LIBOR Transaction,
a day on which banks in London, England are closed for interbank or foreign
exchange transactions.

“Business Plan” shall mean, with respect to any Construction Loan, the
construction budget and/or business plan for construction, rehabilitation and/or
renovation of the related Mortgaged Property (as the same may be amended,
supplemented or otherwise modified from time to time in accordance with this
Agreement) prepared by the related Mortgagor, submitted by Seller and approved
in writing by Buyer in its sole discretion as of the related Purchase Date as
evidenced by a Confirmation.

“Buyer” shall mean Deutsche Bank AG, Cayman Islands Branch, or any successor or
assignee thereof.

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

 

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“Cash Flow Deficiency” shall mean, for any Remittance Date, the amount (if any)
by which (i) the total of all amounts due to Buyer, its Affiliates and Custodian
under Sections 5(c)(i)-(iv), 5(d)(i)-(vi) or 5(e)(i)-(iv), as applicable, as of
such Remittance Date exceed (ii) the aggregate amount of Available Income
(including Principal Payments) received by Buyer or Depository in respect of all
of the Purchased Loans during such Collection Period.

“Cash Management Account” shall mean a segregated interest bearing account,
entitled “Parlex 15 Finco, LLC, as Master Seller, for the benefit of Deutsche
Bank AG, Cayman Islands Branch, as Buyer”, established at the Depository,
bearing account number 1029151413.

“Cause” means, with respect to an Independent Manager, (i) acts or omissions by
such Independent Manager that constitute willful disregard of or bad faith or
gross negligence with respect to, such Independent Manager’s duties, (ii) such
Independent Manager has engaged in or has been indicted or convicted for any
crime or crimes of moral turpitude, fraud, or dishonesty or for any violation of
any Requirement of Law, (iii) such Independent Manager no longer satisfies the
requirements set forth in the definition of “Independent Manager”, (iv) the fees
charged for the services of such Independent Manager are materially in excess of
the fees charged by the other providers of Independent Managers listed in the
definition of “Independent Manager”, (v) such Independent Manager is unable to
perform his or her duties due to death, disability or incapacity or (vi) any
other reason for which the prior written consent of Buyer shall have been
obtained.

“Change of Control” shall mean (a) any consummation of a merger, amalgamation,
or consolidation of Sponsor with or into another entity or any other
reorganization occurs and more than fifty percent (50%) of the combined voting
power of the continuing or surviving entity’s stock or other ownership interest
in such entity outstanding immediately after such merger, amalgamation,
consolidation or such other reorganization is not owned directly or indirectly
by Persons who were stockholders or holders of such other ownership interests in
Sponsor immediately prior to such merger, amalgamation, consolidation or other
reorganization; (b) any “person” or “group” (within the meaning of Section 13(d)
or 14(d) of the Securities Exchange Act of 1934, as amended) shall become, or
obtain rights (whether by means of warrants, options or otherwise) to become,
the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities
Exchange Act of 1934, as amended), directly or indirectly, of a percentage of
the total voting power of all stock or other ownership interests in Sponsor
entitled to vote generally in the election of directors, members or partners of
twenty percent (20%) or more other than wholly-owned Affiliates of Sponsor and
related funds of The Blackstone Group L.P., or to the extent such interests are
obtained through a public market offering or secondary market trading;
(c) Sponsor shall cease to own and Control, of record and beneficially, directly
or indirectly, one hundred percent (100%) of each class of outstanding ownership
interests in 42-16 Partners, LLC; (d) 42-16 Partners, LLC shall cease to own and
Control, of record and beneficially, directly or indirectly, one hundred percent
(100%) of each class of outstanding ownership interests in Member; (e) Member
shall cease to own and Control, of record and beneficially, directly, one
hundred percent (100%) of each class of outstanding ownership interests in
Seller; or (f) any transfer of all or substantially all of

 

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Sponsor’s assets (other than any securitization transaction or any repurchase or
other similar transactions in the ordinary course of Sponsor’s business).
Notwithstanding the foregoing, neither Buyer nor any other Person shall be
deemed to approve or to have approved any internalization of management as a
result of this definition or any other provision herein.

“Closing Date” shall mean August 2, 2016.

“Code” shall mean the Internal Revenue Code of 1986, as amended. “Collateral”
shall have the meaning specified in Section 6 of this Agreement. “Collection
Period” shall mean with respect to the Remittance Date in any month, the period
beginning on but excluding the Cut-off Date in the month preceding the month in
which such Remittance Date occurs and continuing to and including the Cut-off
Date immediately preceding such Remittance Date.

“Confirmation” shall have the meaning specified in Section 3(b) of this
Agreement.

“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

“Control” shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise and
“Controlling,” “Controlled” and “under common Control” shall have meanings
correlative thereto. For purposes of this definition, debt securities that are
convertible into common stock will be treated as voting securities only when
converted.

“Controlling Interest” shall mean (a) any whole mortgage loan and (b) any A-Note
or participation interest under a co-lender agreement or participation
agreement, as applicable, with respect to which, in each case, the holder
thereof is entitled to exercise control and direction rights in respect of the
underlying Mortgage Loan (including, but not limited to, the right to direct the
servicer and custodian thereunder and to grant any consents and approvals in
respect thereof) (provided that the granting or possession of major or
fundamental decision rights or similar consent rights in favor of any holder of
a companion A-Note or companion participation interest shall not cause “control
and direction rights” to be deemed absent for the purposes of this definition).

“Construction Loan” means a senior Mortgage Loan secured by land which is
undeveloped, partially developed, or under significant property-wide
rehabilitation, and part or all of the proceeds of such senior Mortgage Loan are
required to be applied by Mortgagor towards the construction or rehabilitation
of commercial real estate.

 

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“Controlled Account Agreement” shall mean that certain Deposit Account Control
Agreement, dated as of August 2, 2016, among Buyer, Master Seller (on behalf of
itself and each Series Seller), Servicer and the Depository, relating to the
Cash Management Account, as the same may be amended, modified and/or restated
from time to time.

“Custodial Agreement” shall mean the Custodial Agreement, dated as of August 2,
2016, by and among the Custodian, Master Seller (on behalf of itself and each
Series Seller) and Buyer, as the same may be amended, modified and/or restated
from time to time.

“Custodial Delivery” shall mean the form executed by Seller in order to deliver
the Purchased Loan Schedule and the Purchased Loan File with respect to any
Purchased Loan to Buyer or its designee (including the Bailee or the Custodian,
as applicable) pursuant to Section 7, a form of which is attached hereto as
Exhibit IV.

“Custodian” shall mean U.S. Bank National Association, or any successor
Custodian appointed by Buyer with, prior to the occurrence or continuance of a
Default or an Event of Default, the prior written consent of Seller (which
consent shall not be unreasonably withheld or delayed).

“Cut-off Date” shall mean the second Business Day preceding each Remittance
Date.

“Default” shall mean a Facility Default or a Transaction Default.

“Depository” shall mean PNC Bank, National Association, a national banking
association, or any successor Depository appointed by Buyer with, prior to the
occurrence or continuance of a Default or an Event of Default, the prior written
consent of Seller (which consent shall not be unreasonably withheld or delayed).

“Diligence Materials” shall mean, collectively, (i) the Preliminary Due
Diligence Package furnished by Seller to Buyer, and (ii) any other diligence
materials delivered by Seller to Buyer in connection with Buyer’s review of any
New Collateral, whether pursuant to a Supplemental Due Diligence List or
otherwise.

“Division/Series Transaction” shall mean, with respect to any Person that is a
limited liability company organized under the laws of the State of Delaware, any
event or transaction where such Person (a) divides into two or more Persons
(whether or not the original Person or Subsidiary thereof survives such
division) or (b) creates, or reorganizes into, one or more series, in each case,
as contemplated under the laws of the State of Delaware, including without
limitation Section 18-217 of the Delaware LLC Act.

“Early Repurchase Date” shall have the meaning specified in Section 3(k) of this
Agreement.

“Eligibility Requirements” shall mean, with respect to any Person, that such
Person has at least $100,000,000 in capital/statutory surplus or shareholders’
equity (except with respect to a pension advisory firm or similar fiduciary) and
at least $500,000,000 in total assets (in name or under management), and is
regularly engaged in the business of making or owning commercial real estate
loans (or interests therein), mezzanine loans (or interests therein) or
commercial loans (or interests therein) similar to the applicable Purchased
Loan.

 

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“Eligible Assignee”: Any of the following Persons designated by Buyer for
purposes of the second sentence of Section 18(b): (i) a bank, financial
institution, pension fund, insurance company or similar Person regularly engaged
in the business of originating, lending against, or owning commercial real
estate loans similar to the Purchased Loans, or any Affiliate of any of the
foregoing that, in each case, has total shareholders’ equity and/or capital
surplus of $400,000,000 or more and (ii) and any Affiliate of Buyer.

“Eligible Loan” shall mean a whole mortgage loan or Senior Interest (including
the Watchtower A-Note Eligible Loan) in a whole mortgage loan secured by a first
mortgage lien or liens on one or more commercial or multifamily properties
(including, without limitation, a leasehold interest therein), as to which each
of the Purchased Loan Representations are true and correct as of the Purchase
Date (except for any exceptions disclosed in an Exceptions Report) and which
mortgage loan or Senior Interest is approved by Buyer as of the Purchase Date,
in its sole and absolute discretion, based upon all facts and circumstances
considered relevant by Buyer. Except as otherwise disclosed to Buyer in an
Exceptions Report on or prior to the Purchase Date, no asset shall be an
Eligible Loan unless it is a Controlling Interest. An “Eligible Loan” that is a
Purchased Loan hereunder may, in Buyer’s sole and absolute discretion, include a
junior Related Interest provided that, and only for so long as, the
corresponding Senior Interest with respect to any such junior Related Interest
also remains subject to the applicable Transaction for such Purchased Loan.

“Environmental Law” shall mean any present or future federal, state or local
law, statute, regulation or ordinance, any judicial or administrative order or
judgment thereunder, pertaining to health, industrial hygiene, hazardous
substances or the environment, including, but not limited to, each of the
following, as enacted as of the date hereof or as hereafter amended: the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. §§ 9601 et seq.; the Resource Conservation and Recovery Act of 1976, 42
U.S.C. §§ 6901 et seq.; the Toxic Substance Control Act, 15 U.S.C. §§ 2601 et
seq.; the Water Pollution Control Act (also known as the Clean Water Act, 22
U.S.C. §§ 1251 et seq.), the Clean Air Act, 42 U.S.C. §§ 7401 et seq. and the
Hazardous Materials Transportation Act, 49 U.S.C. §§ 1801 et seq.

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

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

 

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“ERISA Affiliate” shall mean any corporation or trade or business that is a
member of any group of organizations (i) described in Section 414(b) or (c) of
the Code of which Seller is a member and (ii) solely for purposes of potential
liability under Section 302(b) of ERISA and Section 412(b) of the Code and the
lien created under Section 303(k) of ERISA and Section 430(k)(4) of the Code,
described in Section 414(m) or (o) of the Code of which Seller is a member.

“Event of Default” shall mean a Facility Event of Default or a Transaction Event
of Default.

“Exceptions Report” shall mean, with respect to a Purchased Loan, a written
schedule of exceptions, qualifications or modifications to the related Purchased
Loan Representations furnished by Seller to Buyer, as set forth on Schedule 3 to
the Confirmation for such Eligible Loan, and approved by Buyer on or prior to
the related Purchase Date as evidenced by Buyer’s execution of such
Confirmation.

“Excluded Taxes” shall mean any of the following Taxes imposed on or with
respect to Buyer or required to be withheld or deducted from a payment to Buyer:
(a) Taxes imposed on or measured by net income (however denominated), franchise
Taxes, and branch profits Taxes, in each case, (i) imposed as a result of Buyer
being organized under the laws of, or having its principal office or the office
from which it books the Transactions located in, the jurisdiction imposing such
Taxes (or any political subdivision thereof) or (ii) that are Other Connection
Taxes, (b) U.S. federal withholding Taxes imposed on amounts payable to or for
the account of Buyer with respect to an interest in the Repurchase Obligations
pursuant to a law in effect on the date on which such Buyer (i) acquires such
interest in the Repurchase Obligations or (ii) changes the office from which it
books the Transactions, except in each case to the extent that, pursuant to
Section 29, amounts with respect to such Taxes were payable either to such
Buyer’s assignor immediately before such Buyer became a party hereto or to such
Buyer immediately before it changed the office from which it books the
Transactions, (c) Taxes attributable to Buyer’s failure to comply with
Section 29(f) and (d) any U.S. federal withholding Taxes imposed under FATCA.

“Existing Repurchase Agreement” shall have the meaning specified in the Recitals
to this Agreement.

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

“Extension Conditions” shall have the meaning specified in Section 3(p).

“Extended Purchased Loan Maturity Date” shall mean, for any Purchased Loan, the
date(s) set forth on Schedule 2 to the Letter Agreement for the related
Transaction to which the maturity date of such Purchased Loan may be extended
pursuant to the Purchased Loan Documents.

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

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

 

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“Facility Termination Date” shall mean the latest scheduled Extended Purchased
Loan Maturity Date for all Purchased Loans then subject to a Transaction
hereunder.

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

“FDIA” shall have the meaning specified in Section 22(c).

“FDICIA” shall have the meaning specified in Section 22(d).

“Federal Funds Rate” shall mean, for any day, the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System, as published on the next succeeding Business Day by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for the day of such transactions
received by Buyer from three (3) federal funds brokers of recognized standing
selected by it.

“Filings” shall have the meaning specified in Section 6 of this Agreement.

“Financing Fee” shall mean, with respect to any Transaction as of any date, the
aggregate amount obtained by daily application of the Financing Fee Rate to the
Repurchase Price (excluding Price Differential) for such Transaction (as
adjusted from time to time by reductions in the Repurchase Price pursuant to the
terms of this Agreement including Sections 3(e), 3(k), 4(b), 5(c)(iii),
5(d)(iii), 5(d)(v), 5(d)(vi) and 5(e)(iv) and increases in the Repurchase Price
pursuant to the terms of this Agreement including Sections 3(o) and/or
Section 4(c)) on a 360-day-per-year basis for the actual number of days during
the period commencing on (and including) the Purchase Date for such Transaction
(or, if later, the date of the Omnibus Amendment) and ending on (but excluding)
the date of determination (reduced by any amount of such Financing Fee
previously paid by Seller to Buyer with respect to such Transaction).

“Financing Fee Cap” shall have the meaning specified in Section 3(r).

“Financing Fee Rate” shall have the meaning specified in Section 3(r).

“Foreign Buyer” shall mean a Buyer that is not a U.S. Person.

“Future Funding Amount” shall mean with respect to any Purchased Loan for which
a Future Funding Transaction has been duly requested by Seller pursuant to
Section 3(o), the product of (a) the Maximum Original Purchase Percentage for
such Purchased Loan and (b) the amount of future funding advances made under the
Purchased Loan with respect to which the requested Future Funding Transaction
relates; provided, in no event shall the aggregate amount so requested by Seller
exceed the amount of future funding set forth on the related Confirmation for
the initial Transaction relating to such Purchased Loan, multiplied by the
Maximum Original Purchase Percentage for such Purchased Loan, minus all previous
Future Funding Amounts funded by Buyer relating to such Purchased Loan.

 

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“Future Funding Conditions” shall have the meaning specified in Section 3(o).

“Future Funding Date” shall mean, with respect to any Purchased Loan, each date
on which Seller is required to fund a future funding advance pursuant to the
Purchased Loan Documents relating to such Purchased Loan.

“Future Funding Request Package” shall mean, with respect to one or more Future
Funding Transactions, the following, to the extent applicable and available,
unless any such items were previously delivered to Buyer and have not been
modified since the date of each such delivery: (a) the related request for
advance, executed by the Mortgagor under the related Purchased Loan (which shall
include evidence of Seller’s approval of the related future funding), together
with any advance request package submitted to Seller by the related Mortgagor,
and any other documents that require Seller to fund; (b) the executed fund
control agreement (or the executed escrow agreement, if funding through escrow);
(c) certified copies of all relevant trade contracts; (d) the title policy
endorsement for the advance; (e) copies of any tenant leases; (f) copies of any
service contracts; (g) updated financial statements, operating statements and
rent rolls; (h) evidence of required insurance; (i) engineering reports, updates
to the engineering reports, and any other third-party/consultant reports or
other reporting relevant to Buyer in connection with such request for advance;
(j) an updated Preliminary Due Diligence Package for the related Purchased Loan;
and (k) copies of any additional documentation as required in connection
therewith, or as otherwise reasonably requested by Buyer.

“Future Funding Transaction” shall mean any Transaction approved by Buyer
pursuant to Section 3(o).

“Future Funding Transaction Date” shall have the meaning specified in
Section 3(o).

“Future Funding Transaction Request” shall have the meaning specified in
Section 3(o).

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

“Governmental Authority” shall mean any national or federal government, any
state, regional, local or other political subdivision thereof with jurisdiction
and any Person with jurisdiction or any entity, authority, agency, division or
department exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to a government (including
any supra-national bodies such as the United Nations, European Union or the
European Central Bank) and any group or body charged with setting financial
accounting or regulatory capital rules or standards (including, without
limitation, the Financial Accounting Standards Board, the Bank for International
Settlements or the Basel Committee on Banking Supervision or any successor or
similar authority to any of the foregoing).

 

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“Guaranty” shall mean the Guaranty, dated as of August 2, 2016, from the Sponsor
to Buyer, as the same may be amended, modified and/or restated from time to
time.

“Hazardous Materials” shall mean oil, flammable explosives, asbestos, urea
formaldehyde insulation, radioactive materials, hazardous wastes, toxic or
contaminated substances or similar materials or gases, including any substances
which are “hazardous substances,” “hazardous wastes,” “hazardous materials,”
“toxic substances,” “wastes,” “regulated substances,” “industrial solid wastes,”
or “pollutants” under Environmental Laws and including arsenic, perchlorate,
methane and carbon monoxide.

“Income” shall mean, with respect to any Purchased Loan at any time, the sum of
(x) payments of principal, interest, dividends or other receipts, distributions,
prepayments, recoveries, proceeds (including insurance and condemnation
proceeds), prepayment fees, extension fees, exit fees, defeasance fees, transfer
fees, make whole fees, late charges, late fees and all other fees or charges of
any kind or nature, premiums, yield maintenance charges, penalties, default
interest, dividends, receipts, allocations, rents, interests, payments in kind,
net sale, foreclosure, liquidation, securitization or other disposition
proceeds, insurance payments, settlements and proceeds or collections
(including, without limitation, make-whole prepayment penalties, defaulted
interest and, when released to Seller in accordance with the terms of the
related Purchased Loan Documents, all Underlying Purchased Loan Reserves) and
(y) all net sale proceeds received by Seller or any Affiliate of Seller in
connection with a sale of such Purchased Loan, other than any origination fees
that were earned and paid on or prior to the related Purchase Date.

“Indemnified Amounts” shall have the meaning specified in Section 26.

“Indemnified Parties” shall have the meaning specified in Section 26.

“Indemnified Taxes” shall mean (a) Taxes, other than Excluded Taxes, imposed on
or with respect to any payment made by or on account of any obligation of Seller
under any Transaction Document and (b) to the extent not otherwise described in
(a), Other Taxes.

“Indebtedness” shall mean respect to any Person: (i) obligations created, issued
or incurred by such Person for borrowed money (whether by loan, the issuance and
sale of debt securities or the sale of property to another Person subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
from such Person); (ii) obligations of such Person to pay the deferred purchase
or acquisition price of property or services, other than trade accounts payable
(other than for borrowed money) arising, and accrued expenses incurred, in the
ordinary course of business so long as such trade accounts payable are payable
within ninety (90) days of the date the respective goods are delivered or the
respective services are rendered; (iii) Indebtedness of others secured by a lien
on the property of such Person, whether or not the respective Indebtedness so
secured has been assumed by such Person; (iv) obligations (contingent or
otherwise) of such Person in respect of letters of credit or similar instruments
issued or accepted by banks and other financial institutions for account of such
Person; (v) Capital Lease Obligations of such Person; (vi) obligations of such
Person under repurchase agreements or like arrangements; (vii) Indebtedness of
others guaranteed by such Person to the extent of such guarantee; and (viii) all
obligations of such Person incurred in connection with the

 

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acquisition or carrying of fixed assets by such Person. Notwithstanding the
foregoing, nonrecourse Indebtedness owing pursuant to a securitization
transaction such as a REMIC securitization, a collateralized loan obligation
transaction or other similar securitization shall not be considered Indebtedness
for any person.

“Independent Appraiser” shall mean an independent professional real estate
appraiser who is a member in good standing of the American Appraisal Institute,
and, if the state in which the subject Mortgaged Property is located certifies
or licenses appraisers, is certified or licensed in such state, and in each such
case, who has a minimum of five years experience in the subject property type
and is acceptable to Buyer in its sole and absolute discretion, applied in good
faith.

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

(A) a member, partner, equityholder, manager, director, officer or employee of
Seller or any of its equityholders or Affiliates (other than as an Independent
Manager of Seller or an Affiliate of Seller that does not own a direct or
indirect ownership interest in the Seller and that is required by a creditor to
be a single purpose bankruptcy remote entity, provided that such Independent
Manager is employed by a company that routinely provides professional
Independent Managers or managers in the ordinary course of its business);

(B) a creditor, supplier or service provider (including provider of professional
services) to Seller or any of its equityholders or Affiliates (other than a
nationally-recognized company that routinely provides professional Independent
Managers and other corporate services to Seller or any of its Affiliates in the
ordinary course of its business);

(C) a family member of any such member, partner, equityholder, manager,
director, officer, employee, creditor, supplier or service provider of Seller or
its Affiliates; or

(D) a Person that controls (whether directly, indirectly or otherwise) any of
the entities described in (A), (B) or (C) above.

 

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A natural person who otherwise satisfies the foregoing definition and satisfies
subparagraph (A) by reason of being the Independent Manager of a “single purpose
entity” affiliated with the Seller, that does not own a direct or indirect
ownership interest in the Seller, shall be qualified to serve as an Independent
Manager of Seller, provided that the fees that such individual earns from
serving as an Independent Manager of affiliates of the Seller in any given year
constitute in the aggregate less than five percent (5%) of such individual’s
annual income for that year. For purposes of this paragraph, a “single purpose
entity” is an entity whose organizational documents contain restrictions on its
activities and impose requirements intended to preserve such entity’s
separateness that are substantially similar to those contained in Section 12 of
this Agreement.

“Initial Buyer” shall mean Deutsche Bank AG, Cayman Islands Branch.

“Initial Servicer” shall mean Midland Loan Services, a division of PNC Bank,
National Association, a national banking association.

“Initial Servicing Agreement” shall mean that certain Servicing Agreement, dated
as of August 2, 2016, by and among Initial Servicer, Buyer and Seller.

“Investment Company Act” shall mean the Investment Company Act of 1940, as
amended.

“IRS” shall mean the United States Internal Revenue Service.

“Joinder Agreement” shall have the meaning specified in Section 3(n).

“Knowledge” shall mean, as of any date of determination, the then-current actual
(as distinguished from imputed or constructive) knowledge of (i) Stephen Plavin,
Thomas C. Ruffing, Douglas Armer or Jonathan Pollack, (ii) (A) any asset manager
with responsibility for managing any of the Purchased Assets at The Blackstone
Group L.P., or (B) any employee with a title equivalent or more senior to that
of “principal” within The Blackstone Group L.P., in each case, responsible for
the origination, acquisition and/or management of any Purchased Loan.

“Last Endorsee” shall have the meaning specified in Section 7(b)(i).

“Letter Agreement” shall mean that certain letter agreement, dated as of the
date hereof, by and between Buyer and Master Seller, as the same may be amended,
modified and/or restated from time to time.

“LIBO Rate” shall mean, with respect to any Pricing Rate Period pertaining to a
Transaction, a rate per annum determined for such Pricing Rate Period in
accordance with the following formula (rounded upward to the nearest 1/100th of
1%):

LIBOR

 

1 – Reserve Requirement

“LIBOR” shall mean, with respect to each Pricing Rate Period, the rate
(expressed as a percentage per annum and rounded upward, if necessary, to the
next nearest 1/1000 of 1%) for deposits in U.S. dollars, for a one-month period,
that appears on Reuters Screen LIBOR01 (or the successor thereto) as of 11:00
a.m., London time, on the related Pricing Rate Determination

 

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Date. If such rate does not appear on Reuters Screen LIBOR01 as of 11:00 a.m.,
London time, on such Pricing Rate Determination Date, Buyer shall request the
principal London office of any four major reference banks in the London
interbank market selected by Buyer to provide such bank’s offered quotation
(expressed as a percentage per annum) to prime banks in the London interbank
market for deposits in U.S. dollars for a one-month period as of 11:00 a.m.,
London time, on such Pricing Rate Determination Date for amounts of not less
than the Repurchase Price of the Transaction. If at least two such offered
quotations are so provided, LIBOR shall be the arithmetic mean of such
quotations. If fewer than two such quotations are so provided, Buyer shall
request any three major banks in the City of New York selected by Buyer to
provide such bank’s rate (expressed as a percentage per annum) for loans in U.S.
dollars to leading European banks for a one-month period as of approximately
11:00 a.m., New York City time on the applicable Pricing Rate Determination Date
for amounts of not less than the Repurchase Price of the Transaction. If at
least two such rates are so provided, LIBOR shall be the arithmetic mean of such
rates. LIBOR shall be determined by Buyer or its agent pursuant to the terms of
this Agreement, which determination shall be conclusive absent manifest error.
Notwithstanding the foregoing or any other provision in this Agreement or any
other Transaction Document, in no event shall LIBOR be less than zero.

“LIBOR Floor” shall mean zero percent (0.00%).

“LIBOR Pricing Rate” shall mean, with respect to each Pricing Rate Period, the
per annum rate equal to (i) the greater of the LIBO Rate and the LIBOR Floor
plus (ii) the LIBOR Rate Spread.

“LIBOR Rate Spread” shall mean, with respect to each Transaction:

(A) so long as no Event of Default shall have occurred and be continuing, the
per annum rate designated by Buyer in its sole and absolute discretion as the
“Applicable Spread” for such Purchased Loan as set forth in the Confirmation for
such Purchased Loan; and

(B) after the occurrence and during the continuance of an Event of Default, the
Applicable Spread specified in each Confirmation, plus 400 basis points (4.00%).

“LIBOR Transaction” shall mean any Transaction at such time as interest thereon
accrues at a rate of interest based upon LIBOR.

“LIBOR Unavailability Conditions” shall mean the occurrence of one or more of
the following: (a) Dollar deposits in an amount approximately equal to the
aggregate outstanding Purchase Price for all Transactions are not generally
available at such time in the London interbank Eurodollar market for deposits in
Eurodollars, (b) Buyer shall have determined in its sole but good faith
discretion that by reason of circumstances affecting the interbank Eurodollar
market or otherwise, adequate and reasonable means do not exist for ascertaining
LIBOR in accordance with the definition thereof (including if fewer than two
(2) LIBOR quotations are available), (c) the Pricing Rate for a LIBOR
Transaction would be in excess of the maximum interest rate that Seller may by
law pay, (d) LIBOR does not fairly and accurately reflect the

 

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costs to Buyer of making or maintaining a Transaction, (e) the adoption of any
Requirement of Law or any change therein or in the interpretation or application
thereof, shall hereafter make it unlawful for Buyer to maintain any LIBOR
Transaction as contemplated hereunder, (f) LIBOR is no longer a widely
recognizable benchmark rate for commercial mortgage loans, securitizations of
commercial mortgage loans or repurchase transactions or similar lending
transactions secured or otherwise backed by commercial mortgage loans, (g) the
applicable supervisor or administrator (if any) of LIBOR, or any Governmental
Authority having jurisdiction over Buyer, has made a public statement
identifying a specific date after which LIBOR shall no longer be used for
determining interest rates for commercial mortgage loans, securitizations of
commercial mortgage loans or repurchase transactions or similar lending
transactions secured or otherwise backed by commercial mortgage loans, (h) the
administrator (if any) of LIBOR has made a public statement or publication of
information that it has invoked or will invoke, permanently or indefinitely, its
insufficient submissions policy, (i) the regulatory supervisor for the
administrator of LIBOR or any Governmental Authority having jurisdiction over
Buyer has made a public statement announcing that LIBOR is no longer
representative or may no longer be used, or (j) Buyer in good faith anticipates
that LIBOR will no longer be available within the following six (6) months
and/or, in connection with the exercise of any extension of the Facility
Termination Date, at any time prior to the Facility Termination Date (as same
may be extended hereunder).

“Manager” shall mean BXMT Advisors L.L.C., a Delaware limited liability company.

“Mandatory Early Repurchase” shall have the meaning specified in Section 3(l).

“Mandatory Early Repurchase Date” shall have the meaning specified in
Section 3(l).

“Mandatory Early Repurchase Event” shall mean, with respect to any Purchased
Loan, the occurrence of any of the following:

(i) with respect to any Purchased Loan, any default or event of default on such
Purchased Loan or under the related Purchased Loan Documents which remains
uncured for ten (10) Business Days or longer;

(ii) an Act of Insolvency with respect to the related Mortgagor or guarantor of
such Purchased Loan;

(iii) the occurrence and continuance of any breach of a Purchased Loan
Representation (other than an MTM Representation) relating to such Purchased
Loan; or

(iv) all or any material portion of the Mortgaged Property securing such
Purchased Loan shall be (A) materially damaged or destroyed by fire, flood,
wind, earthquake, decay, environmental condition or other casualty or (B) taken
by any Governmental Authority having jurisdiction over such Mortgaged Property
as the result, in lieu or in anticipation, of the exercise of the right of
condemnation or eminent domain.

 

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Certain additional terms and conditions related to Mandatory Early Repurchase
Events are set forth in the Letter Agreement, which terms are incorporated
herein by reference.

“Margin Deadline” shall mean 4:00 p.m. (New York City time).

“Margin Deficit” shall have the meaning specified in Section 4(a) hereof.

“Margin Excess” shall have the meaning specified in Section 4(a) hereof.

“Margin Notice” shall have the meaning specified in Section 4(b) hereof. “Market
Value” shall mean, with respect to any Eligible Loan or Purchased Loan, as of
any relevant date, the lesser of (i) the price at which such Eligible Loan or
Purchased Loan may be sold in an arm’s length transaction to a third party
(without regard to any unpaid interest which has accrued but is not yet due and
payable), and (ii) the Principal Balance of such Eligible Loan or Purchased
Loan. Buyer shall determine Market Value in its commercially reasonable
discretion. For purposes of Section 4, changes in the Market Value of the
Purchased Loan shall be determined solely in relation to material positive or
negative changes relative to Buyer’s initial underwriting or the most recent
determination of Market Value relating to (I) any breach of a MTM Representation
or (II) the performance or condition of (x) the Mortgaged Property securing the
Purchased Loan or other collateral securing or related to the Purchased Loan,
(y) the Purchased Loan’s borrower (including obligors, guarantors, participants
and sponsors) and the Mortgagor on any Mortgaged Property or other collateral
securing the Purchased Loan, or (z) the commercial real estate market relevant
to the Mortgaged Property, considered in the aggregate.

Certain additional terms and conditions related to the determination of Market
Value are set forth in the Letter Agreement, which terms are incorporated herein
by reference.

“Master Seller” shall mean Parlex 15 Finco, LLC, a Delaware limited liability
company.

“Master Seller LLC Agreement” shall mean the limited liability company agreement
of Master Seller, as same may be amended, modified and/or restated with Buyer’s
prior written consent, and together with each completed Schedule C thereto
hereafter executed with respect to each Series Seller.

“Material Action” shall mean any amendment, consent, waiver or other
modification to the terms of any Purchased Loan or the applicable Purchased Loan
Documents (except to the extent required under the express terms of the related
Purchased Loan Documents and in respect of which the provision of lender’s
consent, waiver, forbearance or approval is not, in and of itself, a condition
precedent), which would have the effect of:

(a) decreasing the principal of, or interest on, the obligations evidenced by
the related Mortgage Note, A-Note or participation certificate, as applicable,
other than with respect to a principal prepayment to the extent such principal
prepayment is distributed pursuant to Section 5;

 

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(b) (i) postponing or extending any scheduled date (other than the Underlying
Loan Maturity Date, for which the provisions of clause (b)(ii) below shall
apply) fixed for any payment of principal of, or interest on, the obligations
evidenced by such Mortgage Note, A-Note or participation certificate, as
applicable (other than postponements or extension required by the terms of the
underlying Purchased Loan Documents and for which no lender consent is
applicable), or (ii) extending the Underlying Loan Maturity Date thereunder to a
date subsequent to the then-applicable Repurchase Date (other than extensions
required by the terms of the underlying Purchased Loan Documents and for which
no lender consent is applicable);

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

(d) releasing any Mortgagor in respect of the Purchased Loan or underlying
mortgage loan (other than any release required by the terms of such underlying
Purchased Loan Document);

(e) waiving a Material Default or any breach of any material representation,
warranty or covenant under such Purchased Loan Documents;

(f) consenting to or approving the termination or appointment of any Servicer in
respect of any Purchased Loan (or underlying Mortgage Loan related thereto);

(g) in the case of any Senior Interest, any consent, modification, waiver,
forbearance, appointment, right or other action to which the Senior Interest
holder has any such right under the related co-lender agreement or intercreditor
agreement (including, without limitation, any right of the Senior Interest
holder to participate in the selection of any appraiser in respect of the
Mortgaged Property);

(h) exercising any consent or approval right of Seller relating to any material
changes to any Business Plan or budget relating to any Construction Loan, but
excluding, for the avoidance of doubt, minor, purely administrative or
ministerial amendments to, or entering into, any contract obligating the related
Mortgagor to pay no more than $250,000 (other than any construction management
agreement, architect’s contract or environmental contract, each of which shall
be deemed to be material); or

(i) exercising any consent or approval right of Seller relating to any material
changes to the scope of the parameters (not including changes to line items in
the project budget) for a project or material changes to the nature of
construction or any changes to the property type (for example, from hospitality
to condominium) from that contemplated, in each case, as of the related Purchase
Date.

“Material Adverse Effect” shall mean a material adverse effect on or material
adverse change in or to (a) the property, assets, business, operations, or
financial condition of Seller and Sponsor taken as a whole, (b) the ability of
Seller or Sponsor to pay or perform its obligations under any of the Transaction
Documents to which it is a party, (c) the validity or enforceability of any of
the Transaction Documents, or (d) the rights and remedies of Buyer under any of
the Transaction Documents.

 

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“Material Default” shall mean the occurrence and continuance of any of the
following defaults under the terms of any Purchased Loan Documents, regardless
of whether the Seller shall have delivered notice to the related Mortgagor in
respect of the applicable Purchased Loan of such default, but taking into
account any cure or grace periods allowed to such Mortgagor in the applicable
Purchased Loan Documents:

(a) payment default;

(b) maturity default;

(c) breach of a material representation or a material covenant of which Sponsor
or Seller has Knowledge;

(d) breach of any material provisions of a related guaranty delivered by a
guarantor of the obligations of a Mortgagor of which Sponsor or Seller has
Knowledge; and

(e) bankruptcy or insolvency of any Mortgagor or any guarantor of the
obligations of any Mortgagor in respect of the related Purchased Loan.

“Maximum Amount” shall mean $1,700,000,000; provided, that from and after the
Revolving Period Expiration Date, the Maximum Amount on any date shall be an
amount equal to the lesser of (A) $1,700,000,000 and (B) (i) the aggregate
Purchase Price of all Purchased Loans, as such amount declines and is
permanently reduced as Purchased Loans are repurchased in whole or in part and
Margin Deficits are paid plus (ii) the amount of any Approved Future Funding
Amounts not drawn by Seller as of the applicable date of determination, all in
accordance with the applicable terms of this Agreement.

“Maximum Original Purchase Percentage” shall mean, with respect to any
Transaction, the percentage specified as the Maximum Original Purchase
Percentage in the Confirmation for such Transaction as determined by Buyer in
its sole and absolute discretion as of the related Purchase Date.

“Member” shall mean Parlex 15 Holdco, LLC, a Delaware limited liability company,
which is the sole member of Master Seller.

“Member Guaranty” shall mean that certain Member Guaranty, dated as of the
Second Amendment and Restatement Date, from Member to Buyer, as the same may be
amended, modified and/or restated from time to time.

“Mezzanine Loan” shall mean a loan made by Seller or its Affiliate secured by
the direct or indirect ownership interest in a Mortgagor in connection with the
origination of a Purchased Loan.

 

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“Mortgage” shall mean a mortgage, deed of trust, deed to secure debt or other
instrument, creating a valid and enforceable first lien on or a first priority
ownership interest in an estate in fee simple or ground leasehold interest in
real property and the improvements thereon, securing a mortgage note or similar
evidence of indebtedness.

“Mortgage Loan” shall mean a loan made by Seller or its Affiliate to a Mortgagor
and secured by a Mortgage.

“Mortgage Note” shall mean a note or other evidence of indebtedness of a
Mortgagor secured by a Mortgage.

“Mortgaged Property” shall mean with respect to any Eligible Loan or Purchased
Loan, the real property encumbered by the Mortgage(s) securing such Eligible
Loan or Purchased Loan.

“Mortgagee” shall mean the record holder of a Mortgage Note secured by a
Mortgage.

“Mortgagor” shall mean the obligor on a Mortgage Note and the mortgagor/grantor
under the related Mortgage.

“MTM Representation” shall mean each of the representations and warranties, set
forth as items 12, 13, 15, 49, 51 (solely with respect to the second sentence
thereof), 53, 62, 64 and 66 (solely with respect to circumstances occurring
after the related Purchase Date) of Exhibit VI attached hereto.

“Multiemployer Plan” shall mean a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been, or were required to
have been, made by Seller or any ERISA Affiliate in the past six (6) years and
which is covered by Title IV of ERISA.

“New Collateral” shall mean an Eligible Loan that Seller proposes to be included
as Collateral.

“OFAC” shall mean the U.S. Department of the Treasury’s Office of Foreign Assets
Control.

“Omnibus Amendment” shall mean that certain Amendment No. 2 to Amended and
Restated Master Repurchase Agreement and Omnibus Amendment to Confirmations,
dated as of October 16, 2017, by and among Master Seller, on behalf of itself
and each Series Seller and Buyer.

“Original Repurchase Agreement” shall have the meaning specified in the Recitals
to this Agreement.

 

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

“Other Taxes” shall mean any and all present or future stamp, court or
documentary, intangible, recording, filing or similar Taxes that arise from any
payment made under any Transaction Document or from the execution, delivery,
performance, or enforcement or registration of, from the receipt or perfection
of a security interest under, or otherwise with respect to, any Transaction
Document, except any such Taxes that are Other Connection Taxes imposed with
respect to an assignment.

“Other Financing Agreement” shall have the meaning set forth in the Guaranty.

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

“Participation Interest” shall mean a participation interest in a Mortgage Loan.

“Person” shall mean an individual, corporation, limited liability company,
business trust, partnership, joint tenant or tenant-in-common, trust,
unincorporated organization, or other entity, or a federal, state or local
government or any agency or political subdivision thereof.

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

“Plan Assets” shall have the meaning specified in Section 21(a).

“Plan Party” shall have the meaning specified in Section 21(a).

“Portfolio Interest Certificate” shall have the meaning specified in
Section 29(c). “Preferred Equity Interest” shall mean a preferred equity
interest or any other subordinate debt or equity interest relating to a
Mortgaged Property or Mortgagor for any Transaction.

“Pledge Agreement” shall mean that certain Pledge Agreement, dated as of the
Second Amendment and Restatement Date, from Member, as pledgor, in favor of
Buyer, as same may be amended, modified and/or restated from time to time.

“Preliminary Due Diligence Package” shall mean with respect to any New
Collateral, Seller’s summary memorandum outlining the proposed transaction,
including, to the best Knowledge of Seller, potential transaction benefits and
all material underwriting risks, all Underwriting Issues and all other
characteristics of the proposed transaction that a reasonable buyer would
consider material, together with the following due diligence information
relating to the New Collateral to be provided by Seller to Buyer pursuant to
this Agreement (in each case, to the extent applicable and in Seller’s
possession):

 

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With respect to each Eligible Loan:

(i) all material documents that relate to such Eligible Loan;

(ii) current rent roll for the related Mortgaged Property, if applicable,
together with the following information: (A) recent leasing activity including
related tenant improvement and leasing commission obligations, (B) a delinquency
report, (C) outstanding rent abatements and concessions and (D) a description of
all percentage rent, additional rent and escalations payable by tenants for
taxes, operating expenses, electricity and other expenses, as applicable;

(iii) (a) most recent audited financial statements, (b) three (3) years of
operating statements, including current trailing twelve (12) month operating
statement, and (c) Seller’s preliminary underwritten cash flow pro-forma for the
related Mortgaged Property, in each case, if available;

(iv) description of the related Mortgaged Property and the ownership structure
of the Mortgagor and the sponsor (including, without limitation, the board of
directors, if applicable);

(v) Seller’s indicative debt service coverage ratios;

(vi) Seller’s indicative debt yield ratios;

(vii) Seller’s indicative loan-to-value ratio;

(viii) term sheet outlining the transaction generally including an abstract of
the final terms of the proposed Eligible Loan (to the extent such information is
not included in other “Preliminary Due Diligence Package” documents);

(ix) final sources and uses schedule for the proceeds of the proposed Eligible
Loan delivered in connection with the closing of the Eligible Loan;

(x) an organizational chart of the Mortgagor showing all direct and indirect
ownership interests in Mortgagor (and disclosing any direct or indirect
ownership interests of Seller or its Affiliates in the Mortgagor, if any);

(xi) an Appraisal of the related Mortgaged Property, dated within six (6) months
of the proposed Purchase Date;

(xii) Seller’s credit memorandum, in a form reasonably acceptable to Buyer;

(xiii) Seller’s underwriting model (in Excel);

 

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(xiv) any exceptions to the Purchased Loan Representations for such Eligible
Loan, which may be contained in an internal memorandum or offering document
prepared by a third party; and

(xv) Seller’s relationship with the Mortgagor, if any;

(xvi) current and, to the extent available, historical real estate tax bills, or
an estimate of expected taxes, for the related Mortgaged Property;

(xvii) any other information reasonably requested by Buyer.

“Price Differential” shall mean, with respect to any Transaction as of any date,
the aggregate amount obtained by daily application of the Pricing Rate to the
Repurchase Price (excluding Price Differential) for such Transaction (as
adjusted from time to time by reductions in the Repurchase Price pursuant to the
terms of this Agreement including Sections 3(e), 3(k), 4(b), 5(c)(iii),
5(d)(iii), 5(d)(v), 5(d)(vi) and 5(e)(iv) and increases in the Repurchase Price
pursuant to the terms of this Agreement including Sections 3(o) and/or
Section 4(c)) on a 360-day-per-year basis for the actual number of days during
the period commencing on (and including) the Purchase Date for such Transaction
and ending on (but excluding) the date of determination (reduced by any amount
of such Price Differential previously paid by Seller to Buyer with respect to
such Transaction).

“Pricing Rate” shall mean, with respect to each Pricing Rate Period an interest
rate per annum equal to (i) for a LIBOR Transaction, the LIBOR Pricing Rate,
determined as of the Pricing Rate Determination Date immediately preceding the
commencement of such Pricing Rate Period, (ii) for a Prime Rate Transaction, the
Prime Pricing Rate, determined as of the Pricing Rate Determination Date
immediately preceding the commencement of such Pricing Rate Period, and
(iii) for an Alternate Rate Transaction, the Alternate Pricing Rate, determined
as of the Pricing Rate Determination Date immediately preceding the commencement
of such Pricing Rate Period.

“Pricing Rate Determination Date” shall mean with respect to any Pricing Rate
Period with respect to any Transaction, the second (2nd) Business Day preceding
the first day of such Pricing Rate Period. So long as when any such Transaction
is a LIBOR Transaction, when used with respect to a Pricing Rate Determination
Date, Business Day shall mean any day on which banks are open for dealing in
foreign currency and exchange in London.

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

“Prime Index” shall mean the rate of interest per annum published in The Wall
Street Journal from time to time as the “Prime Rate”. If more than one “Prime
Rate” is published in The Wall Street Journal for a day, the average of such
“Prime Rates” will be used,

 

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and such average will be rounded up to the nearest 1/1000th of one percent
(0.001%). If The Wall Street Journal ceases to publish the “Prime Rate,” Buyer
will select an equivalent publication that publishes such “Prime Rate,” and if
such “Prime Rates” are no longer generally published or are limited, regulated
or administered by a governmental or quasi-governmental body, then Buyer will
select a comparable interest rate index.

“Prime Index Rate” shall mean, with respect to each Pricing Rate Period, the per
annum rate of interest of the Prime Index, determined as of the Pricing Rate
Determination Date immediately preceding the commencement of such Pricing Rate
Period; provided that in no event will the Prime Index Rate be less than zero.

“Prime Pricing Rate” shall mean, with respect to each Pricing Rate Period, the
per annum rate of interest equal to the greater of (i) the sum of (A) the Prime
Index Rate, plus (B) the Prime Rate Spread, and (ii) the sum of (A) the LIBOR
Floor, plus (B) the LIBOR Rate Spread.

“Prime Rate Spread” shall mean, in connection with the conversion of any
Transaction in accordance with the terms hereof to a Prime Rate Transaction,
(i) prior to the occurrence of any Event of Default, the sum (expressed as the
number of basis points and determined at the time of such conversion) of (a)(x)
if the Transaction is converted from a LIBOR Transaction to a Prime Rate
Transaction, the LIBOR Rate Spread for such Transaction, or (y) if the
Transaction is converted from an Alternate Rate Transaction to a Prime Rate
Transaction, the Alternate Rate Spread for such Transaction, and (b) the Prime
Rate Spread Adjustment; provided that (x) the Prime Rate Spread shall not be
less than a spread resulting in the Pricing Rate immediately after giving effect
to the conversion to a Prime Rate Loan being at least equal to the Pricing Rate
immediately prior to conversion to a Prime Rate Transaction, and (y) in no event
will the Prime Rate Transaction be less than zero, and (ii) after the occurrence
and during the continuance of an Event of Default, the per annum rate of
interest for such Transaction set forth in clause (i) plus 400 basis points
(4.00%).

“Prime Rate Spread Adjustment” shall mean, in connection with any conversion of
a Transaction in accordance with the terms hereof to a Prime Rate Transaction, a
spread adjustment, expressed as the number of basis points and determined at the
time of such conversion (which may be positive, negative or zero) equal to (1)
(x) if the Transaction is being converted from a LIBOR Transaction to a Prime
Rate Transaction, the daily average of LIBOR (with a floor of zero percent) or
(y) if the Transaction is being converted from an Alternate Rate Transaction to
a Prime Rate Transaction, the daily average of the Alternate Index Rate (with a
floor of zero percent), in either case of (x) or (y), as applicable, over the
one hundred eighty (180) day period (or such shorter period to the extent such
historical rates are not available, and excluding days within such one hundred
eighty (180) day or shorter period that are not Business Days) ending two
(2) Business Days prior to the date of conversion, and excluding from such
average, if such period of averaging exceeds thirty (30) days, the five
(5) highest days and the five (5) lowest days of such one hundred eighty
(180) day period), minus (2) the daily average of the Prime Index Rate (with a
floor of zero percent) over the one hundred eighty (180) day period (excluding
days within such one hundred eighty (180) day period that are not Business Days)
ending two (2) Business Days prior to the date of conversion (excluding from
such average the five (5) highest days and the five (5) lowest days of such one
hundred eighty (180) day period).

 

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“Prime Rate Transaction” shall mean, with respect to any Pricing Rate Period,
any Transaction with respect to which the Pricing Rate for such Pricing Rate
Period is determined with reference to the Prime Pricing Rate.

“Principal Balance” shall mean, at any date of determination, the lesser of
(i) the then current outstanding principal balance of an Eligible Loan or a
Purchased Loan and (ii) if Seller intends to acquire or acquires an Eligible
Loan or Purchased Loan at a discount, the purchase price paid or to be paid by
Seller for such Eligible Loan or Purchased Loan less all Principal Payments
received thereon plus all future advances funded by or on behalf of Seller
therefor.

“Principal Payment” shall mean, with respect to any Purchased Loan, any payment
or prepayment of principal received by Seller or Depository in respect thereof
and the proceeds of any sale of such Purchased Loan or any interest therein
received by Seller or Depository, including, without limitation, (i) scheduled
or unscheduled principal payments and prepayments from any source and of any
nature whatsoever, (ii) net insurance or net condemnation proceeds, to the
extent applied to reduce the principal amount of the related Purchased Loan, or
(iii) any net proceeds from any sale, refinancing, liquidation or other
disposition of the underlying real property or interest relating to such
Purchased Loan, to the extent applied to reduce the principal amount of the
related Purchased Loan.

“Prohibited Person” shall mean, at any time, any Person with whom dealings are
restricted or prohibited under the Sanctions Laws, including but not limited to
any Person: (1) identified on any Sanctions Laws-related list of restricted
Persons maintained by the U.S. Government (including, but not limited to OFAC’s
SDN List); (2) Blocked by Operation of Law, or controlled or acting on behalf of
a Person that is either described in clause (1) or Blocked by Operation of Law;
(3) otherwise the target of the Sanctions Laws administered by OFAC (“OFAC
Sanctions”) such that the entry into this Agreement or the performance of the
obligation contemplated hereby would be prohibited under Sanctions Laws; or
(4) the target of the Sanctions Laws administered by any other Governmental
Authority.

“Prohibited Transferees” shall have the meaning specified in the Letter
Agreement.

“Purchase Date” shall mean the date on which a Purchased Loan is to be
transferred by Seller to Buyer.

“Purchase Date Market Value” shall mean, with respect to any Purchased Loan, the
Market Value of such Purchased Loan as of the related Purchase Date, and which
Purchase Date Market Value shall be set forth in the Confirmation for the
related Transaction.

“Purchase Price” shall mean, with respect to any Purchased Loan, (i) as of the
applicable Purchase Date, the price at which such Purchased Loan is transferred
by Seller to Buyer on such Purchase Date, and (ii) as of any other date of
determination, an amount (expressed in dollars) equal to the Purchase Price set
forth in the foregoing clause (i) as increased by any Future Funding Amounts
paid by Buyer and funds remitted by Buyer to or on account of Seller pursuant to
Section 4(c) of this Agreement as of the date of such determination, and

 

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decreased by any payments made to Buyer to be applied in reduction of the
Repurchase Price (other than Price Differential) of such Transaction pursuant to
the terms of this Agreement, including Sections 3(e), 3(k), 4(b), 5(c)(iii),
5(d)(iii), 5(d)(v), 5(d)(vi) and 5(e)(iv) of this Agreement.

“Purchased Loan” or “Purchased Loans” shall mean (a) with respect to any
Transaction, the Eligible Loan or Eligible Loans sold by the applicable Series
Seller to Buyer in such Transaction and (b) with respect to the Transactions in
general, all Eligible Loans sold by Seller to Buyer, in each case, together with
all related (i) Purchased Loan Documents, (ii) Servicing Agreements,
(iii) Servicing Records, (iv) Servicing Rights, (v) Income, (vi) insurance
policies and payments and proceeds thereunder, (vii) collection, escrow,
reserve, collateral, lock-box or other demand or time deposit accounts and all
amounts and property from time to time on deposit therein, (viii) supporting
obligations of any kind, and (ix) proceeds relating to the sale, securitization
or other disposition of such Eligible Loan(s), in the case of clauses
(v) through (ix) (inclusive) until the same are distributed to Seller in
accordance with Section 5.

“Purchased Loan Default” shall mean for any Purchased Loan, any event which,
with (or without) the giving of notice, the passage of time, or both, could give
rise to a Purchased Loan Event of Default.

“Purchased Loan Documents” shall mean, with respect to a Purchased Loan, all
documents, instruments and agreements evidencing and/or securing such Purchased
Loan, as each of same may be amended, modified and/or restated in accordance
with the terms of this Agreement.

“Purchased Loan Event of Default” shall mean for any Purchased Loan, an “Event
of Default” as defined in the Purchased Loan Documents for such Purchased Loan
(or such other term as is used in such documents to describe events the
occurrence of which gives the lender the right to accelerate (or causes the
automatic acceleration of) such Purchased Loan); provided, however, that no
“Event of Default” as defined in the Purchased Loan Documents for such Purchased
Loan shall become a Purchased Loan Event of Default until the expiration of all
grace periods and cure rights related thereto under the Purchased Loan
Documents.

“Purchased Loan File” shall mean the documents specified as the “Purchased Loan
File” in Section 7(b), together with any additional documents and information
required to be delivered to Buyer or its designee (including the Custodian)
pursuant to this Agreement.

“Purchased Loan Representations” shall mean with respect to any Purchased Loan
or prospective Purchased Loan, the representations and warranties set forth on
Exhibit VI attached hereto or, if different, the representations and warranties
applicable to such Purchased Loan as set forth on Schedule 2 to the Confirmation
for such Purchased Loan, in each case, as modified by any exceptions to such
representations and warranties disclosed in an Exceptions Report. It is
acknowledged and agreed that Buyer, in its sole and absolute discretion, may
from time to time, upon delivery of at least three (3) Business Days prior
written notice to Seller, amend the representations and warranties set forth on
Exhibit VI attached hereto applicable to any Purchased Loan prior to the related
Purchase Date therefor. Any such amendment of the representations and warranties
set forth on Exhibit VI shall not be effective with respect to any

 

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Purchased Loan for which the Purchase Date has occurred hereunder prior to the
effective date of such amendment. Buyer may elect, in its sole and absolute
discretion, to require any such amendment of the representations and warranties
set forth on Exhibit VI to apply to all Purchased Loans with Purchase Dates
occurring from and after the effective date of such amendment and, in such
event, Seller and Buyer will each execute and deliver an amendment of this
Agreement substituting the amended version of Exhibit VI for the version of
Exhibit VI then in effect.

“Purchased Loan Schedule” shall mean a schedule of Purchased Loans attached to
each Trust Receipt and Custodial Delivery, which may but is not required to,
contain information substantially similar to the Collateral Information.

“Qualified Institutional Lender” shall mean one or more of the following:

(a) an insurance company, bank, savings and loan association, investment bank,
trust company, commercial credit corporation, pension plan, pension fund,
pension fund advisory firm, mutual fund, real estate investment trust,
governmental entity or plan, in any case, that satisfies the Eligibility
Requirements, or

(b) an investment company, money management firm or a “qualified institutional
buyer” within the meaning of Rule 144A under the Securities Act of 1933, as
amended, or an institutional “accredited investor” within the meaning of
Regulation D under the Securities Act of 1933, as amended, which satisfies the
Eligibility Requirements, or

(c) an investment fund, limited liability company, limited partnership or
general partnership in which a fund manager acceptable to Buyer in its
commercially reasonable discretion acts as the general partner, managing member,
or the fund manager responsible for the day to day management and operation of
such investment vehicle and provided that at least fifty percent (50%) of the
equity interests in such investment vehicle are owned, directly or indirectly,
by one or more entities that are otherwise Qualified Institutional Lenders, or

(d) an institution substantially similar to any of the foregoing in clauses (a),
(b) or (c) above which satisfies the Eligibility Requirements.

(e) any Person Controlled by, Controlling or under common Control with any of
the Persons described in clause (a)-(d) or

(f) of this definition; (f) an investment fund, limited liability company,
limited partnership or general partnership where a fund manager acceptable to
Buyer in its commercially reasonable discretion acts as general partner,
managing member or fund manager and at least fifty percent (50%) of the equity
interests in such investment vehicle are owned, directly or indirectly, by one
or more of the following: a Qualified Transferee, an institutional “accredited
investor”, within the meaning of Regulation D promulgated under the Securities
Act of 1933, as amended, or a “qualified institutional buyer” or both within the
meaning of Rule 144A promulgated under the Securities Exchange Act of 1934, as
amended, provided such institutional “accredited investors” or “qualified
institutional buyers” that are used to satisfy the fifty percent (50%) test set
forth above in this clause (f) satisfy the financial tests set forth in of the
definition of Eligibility Requirements.

 

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“Qualified Servicing Expenses” shall mean any fees and expenses payable to any
third-party Servicer that is not an Affiliate of Seller, which fees and expenses
are netted by such Servicer out of collections pursuant to the Initial Servicing
Agreement or any other Servicing Agreement with respect to which the related
Servicer has entered into a Servicer Notice and Agreement substantially in the
form attached hereto as Exhibit IX attached hereto.

“Rate Conversion” shall mean, if at any time a Transaction is converted from a
LIBOR Transaction to either a Prime Rate Transaction or an Alternate Rate
Transaction or from a Prime Rate Transaction to a LIBOR Transaction or Alternate
Rate Transaction in accordance with Section 3(f) hereof.

“Rate Conversion Conforming Changes” shall mean, with respect to any conversion
of a Transaction to an Alternate Rate Transaction or to a Prime Rate
Transaction, Buyer, after non-binding consultation with Seller, may make any
technical, administrative or operational changes (including changes to the
definition of “Pricing Rate Period”, timing and frequency of determining rates
and making payments of Price Differential and other administrative matters),
that Buyer decides in its sole but good faith discretion may be reasonably
appropriate to reflect the adoption and implementation of such Alternate Index
or the Prime Index in a manner substantially consistent with market practice
(or, if Buyer decides that adoption of any portion of such market practice is
not administratively feasible or if Buyer or its designee determines in its sole
but good faith discretion that no market practice for use of the Alternate Index
or Prime Index exists, in such other manner as Buyer determines (after
non-binding consultation with the Seller) is reasonably necessary).

“Real Estate Settlement Procedures Act” shall mean the Real Estate Settlement
Procedures Act of 1974, 12 U.S.C. §§ 2601 et seq.

“Register” shall have the meaning specified in Section 18(c) of this Agreement.

“Registrar” shall have the meaning specified in Section 18(c) of this Agreement.

“REIT” shall mean a Person satisfying the conditions and limitations set forth
in Sections 856(b) and 856(c) of the Code and qualifying as a “real estate
investment trust,” as defined in Section 856(a) of the Code.

“Related Interest” shall mean (a) a junior or pari passu participation interest
in a commercial mortgage loan, or (b) a “B note” or other subordinate note in an
“A/B” or similar structure or pari passu “A note” in a commercial mortgage loan
with respect to which the Senior Interest is a Purchased Loan or prospective
Purchased Loan hereunder.

“Release Amount” shall mean, with respect to any Purchased Loan, an amount equal
to the lesser of (i) the Release Percentage multiplied by the unpaid Purchase
Price of the related Purchased Loan in the case of repayment in full (or, in the
case of a repayment in part, the amount the amount of Purchase Price repaid in
connection with such partial repayment), and (ii) the aggregate outstanding
Purchase Price of all Purchased Loans.

 

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“Release Percentage” shall mean with respect to any Purchased Loan:

(i) at all times from and after the Second Amendment and Restatement Date to but
excluding the Revolving Period Expiration Date, 0%; and

(ii) at all times from and after the Revolving Period Expiration Date, 10.0%.

“Remittance Date” shall mean the twenty-third (23rd) calendar day of each month,
or the next succeeding Business Day, if such calendar day shall not be a
Business Day, or such other day as is mutually agreed to by Seller and Buyer.

“Repurchase Date” shall mean, for any Purchased Loan, the earliest of (i) the
Facility Termination Date, (ii) the date specified in the Confirmation for such
Purchased Loan as may be extended pursuant to Section 3(p), (iii) if applicable,
Mandatory Early Repurchase Date, Accelerated Repurchase Date or Accelerated
Transaction Repurchase Date, and (iv) the date that is two (2) Business Days
prior to the maturity date or other earlier repayment date (under the related
Purchased Loan Documents) for such Purchased Loan (or, in the case of any Senior
Interest, the underlying mortgage loan), without giving effect to any extension
of such maturity date, whether by modification, waiver, forbearance or otherwise
(other than extensions at the related Mortgagor’s option without requiring
consent of the Seller or for which the Seller’s consent may not be unreasonably
withheld, conditioned or delayed) pursuant to the terms of the Purchased Loan
Documents as such Purchased Loan Documents existed on the related Purchase Date)
that has not been approved by Buyer in writing in its sole discretion; provided,
that, solely with respect to this clause (iv), the settlement date with respect
to such Repurchase Date and Purchased Loan may occur two (2) Business Days after
the related Repurchase Date.

“Repurchase Obligations” shall have the meaning specified in Section 6.

“Repurchase Price” shall mean, with respect to any Purchased Loan as of any
date, the price at which such Purchased Loan is to be transferred from Buyer to
Seller upon termination of the related Transaction; such price will be
determined in each case as the sum of (i) the then outstanding Purchase Price of
such Purchased Loan, (ii) the accrued but unpaid Price Differential with respect
to such Purchased Loan as of the date of such determination, and (iii) unless,
simultaneously with such repurchase, all other amounts otherwise due and payable
under this Agreement are being repaid in full in connection with the termination
of this Agreement, any Release Amounts payable in connection with such Purchased
Loan.

“Repurchase Price Cap” shall mean, with respect to any Purchased Loan, an amount
equal to (i) the product of (x) the then current Market Value of such Purchased
Loan, and (y) the Maximum Original Purchase Percentage of such Purchased Loan,
less (iii) any mandatory reductions of the Repurchase Price for such Purchased
Loan required under the Confirmation therefor.

 

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

“Reserve Requirement” shall mean, with respect to any Pricing Rate Period, the
aggregate (without duplication) of the rates (expressed as a decimal fraction)
of reserve requirements in effect during such Pricing Rate Period (including,
without limitation, basic, supplemental, marginal and emergency reserves under
any regulations of the Board of Governors of the Federal Reserve System or other
governmental authority having jurisdiction with respect thereto) dealing with
reserve requirements prescribed for eurocurrency funding (currently referred to
as “Eurocurrency Liabilities” in Regulation D of such Board of Governors)
maintained by Buyer.

“Revolving Period Expiration Date” shall mean December 16, 2022, or such later
date as may be in effect by an extension thereof pursuant to Section 3(p);
provided that, in the event that Seller requests an extension of the Revolving
Period Expiration Date, such request may be approved or denied by Buyer in
Buyer’s sole and absolute discretion.

“Sanctions Laws” shall mean economic or financial sanctions, trade embargoes, or
other restrictive economic or financial measures enacted, imposed, administered
or enforced from time to time pursuant to statute, executive order, or
regulation by: (1) the U.S. Government, including those administered by OFAC,
the U.S. Department of State, and the U.S. Department of Commerce; (2) the
United Nations Security Council; (3) the European Union or any of its member
states in which Buyer, Seller or Sponsor operates; (4) Her Majesty’s Treasury;
(5) the Swiss Government; (6) the Canadian Government; or (7) Governmental
Authorities of any other country in which Buyer, Seller or Sponsor operates.

“S&P” shall mean Standard & Poor’s Global Ratings.

“SDN List” shall mean OFAC’s List of Specially Designated Nationals and Blocked
Persons.

“SEC” shall have the meaning specified in Section 23(a).

“Second Amendment and Restatement Date” shall mean December 16, 2019.

“Seller” shall have the meaning specified in the introductory paragraph of this
Agreement.

“Senior Interest” shall mean (a) a senior (or pari passu senior) participation
interest, or (b) an A-Note.

“Senior Interest Documents” shall mean, for any Senior Interest, the A-Note or
participation certificate, as applicable, together with any co-lender
agreements, participation agreements and/or other intercreditor agreements or
other documents governing or otherwise relating to the priority, rights or
obligations of such Senior Interest and the applicable Related Interest.

 

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“Senior Interest Side Letter” shall mean, with respect to any Mortgage Loan or
Senior Interest proposed to be included in a Transaction hereunder, if Seller,
Sponsor or an Affiliate of Seller shall hold any other Related Interest related
to such Mortgage Loan or Senior Interest, and such other Related Interest is not
also a Purchased Loan, a letter agreement to be entered into on or before the
Purchase Date of such Mortgage Loan or Senior Interest hereunder (unless Buyer
agrees, in writing, in its sole discretion to waive such requirement with
respect to such Senior Interest) among Seller, Sponsor or any such Affiliate of
Seller that holds the Related Interest (or any portion thereof) and Buyer, in
form and substance reasonably acceptable to Buyer, pursuant to which the parties
shall agree: (a) that any Transfer by such holder of the Related Interest (or
such portion thereof) or any interest therein shall be subject to the provisions
of Section 10(q) of this Agreement; (b) that for so long as the Related Interest
(or such portion thereof) is held by Seller or an Affiliate of Seller,
notwithstanding anything to the contrary contained in the Senior Interest
Documents, upon Buyer’s exercise of any of its remedies with respect to the
applicable Mortgage Loan or Senior Interest pursuant to Sections 13(b)(iii) or
13(c)(iii) hereof after the occurrence and during the continuance of an Event of
Default, such holder of the Related Interest (or portion thereof) shall not be
entitled to (i) appoint or replace, or consent to the appointment or replacement
of, the servicer or special servicer for the related Mortgage Loan, (ii) consent
or approve of any major decisions with respect to the related Mortgage Loan or
exercise any other rights of a “controlling holder” or “operating advisor” under
the Senior Interest Documents, (iii) exercise any additional cure rights with
respect to any Purchased Loan Event of Default or default under any Purchased
Loan Documents that are granted to the holder of the Related Interest pursuant
to the applicable Senior Interest Documents; provided that, unless an Event of
Default has occurred and is continuing, the foregoing shall not restrict Seller
from exercising any of Seller’s cure rights with respect thereto provided under
this Agreement or the other Transaction Documents or (iv) exercise any right to
purchase the related Senior Interest at a purchase price that is less than the
sum of all amounts which would be payable by the Mortgagor to the holder of the
Senior Interest pursuant to the Purchased Loan Documents during the continuance
of a Purchased Loan Event of Default; and (c) to such other matters with respect
to such Mortgage Loan or Senior Interest as Buyer may require in its sole
discretion.

“Series Seller” shall have the meaning specified in the introductory paragraph
of this Agreement.

“Servicer” shall mean the servicer or subservicer under any Servicing Agreement
or the Initial Servicer under the Initial Servicing Agreement, as applicable.

“Servicer Notice and Agreement” shall have the meaning specified in
Section 28(a).

“Servicing Agreement” shall have the meaning specified in Section 28(a) or the
Initial Servicing Agreement, as the case may be.

“Servicing Records” shall have the meaning specified in Section 28(b).

 

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“Servicing Rights” shall mean Seller’s right, title and interest in and to any
and all of the following, in each case as the same may be subject to the terms
of any applicable Servicing Agreements and the provisions of the documentation
for the applicable Purchased Loans: (a) any and all rights of Seller to service
the Purchased Loans or to appoint (or terminate the appointment of) any third
party as servicer of the Purchased Loans; (b) any payments to or monies received
by or payable to Seller (as opposed to any third-party servicer) as compensation
for servicing the Purchased Loans (including, without limitation, workout fees,
consent fees, liquidation fee, late fees, penalties or similar amounts payable
to Seller); (c) all agreements or documents creating, defining or evidencing any
such servicing rights to the extent they relate to such servicing rights and all
rights of Seller (individually or as servicer) thereunder (including all rights
to set the compensation of any third-party servicer); (d) the right, if any, to
appoint a special servicer or liquidator of the Purchased Loans; and (e) all
rights of Seller to give directions with respect to the management and
distribution of any collections, escrow accounts, reserve accounts or other
similar payments or accounts in connection with the Purchased Loans.

“SIPA” shall have the meaning specified in Section 23(a).

“Sponsor” shall mean Blackstone Mortgage Trust, Inc., a Maryland corporation.

“Supplemental Due Diligence List” shall mean, with respect to any New
Collateral, information or deliveries concerning the New Collateral that Buyer
shall reasonably request in addition to the Preliminary Due Diligence Package.

“Survey” shall mean a certified ALTA/ACSM (or applicable state standards for the
state in which the property is located) survey of a Mortgaged Property prepared
by a registered independent surveyor or engineer and in form and content
satisfactory to Buyer and the company issuing the title policy for such
Mortgaged Property.

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

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

“Transaction Conditions Precedent” shall mean, with respect to each proposed
Transaction,

(i) no Default, or Event of Default under this Agreement shall have occurred and
be continuing as of the Purchase Date for such proposed Transaction;

(ii) Seller shall have provided evidence reasonably acceptable to Buyer
substantiating the acquisition cost of such asset (or, in the case of any asset
purchased from an Affiliate, the original acquisition cost of such asset at the
time it was acquired by an Affiliate of Seller from a non-Affiliate) (including
therein reasonable supporting documentation required by Buyer, if any) or if
such loan was originated by Seller, the outstanding principal balance of such
loan;

 

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(iii) Seller shall have delivered to Buyer all information which Seller
reasonably believes to be necessary for Buyer to make an informed business
decision with respect to the purchase of such Purchased Loan and Seller shall
have certified to Buyer that Seller has no Knowledge of any material information
concerning the related Purchased Loan which is not reflected in the related
Diligence Materials or otherwise disclosed to Buyer in writing;

(iv) the representations and warranties made by Seller or Sponsor in any of the
Transaction Documents (including the Purchased Loan Representations with respect
to the Eligible Loans then being transferred, subject to any exceptions to such
representations and warranties disclosed in an Exceptions Report) shall be true
and correct in all material respects as of the Purchase Date for such
Transaction (except to the extent such representations and warranties are made
as of a particular date, in which case such representations and warranties shall
be true and correct in all material respects as of such particular date);

(v) Seller has paid all expenses of Buyer (subject to Section 27 below) then due
and payable (which, upon the agreement of Buyer and Seller, may be held back
from funds remitted to Seller by Buyer);

(vi) Seller has satisfactorily completed its “Know Your Customer” and OFAC
diligence (as to the related Mortgagor, guarantor and all other related parties,
as determined by Buyer) and the results of such diligence shall be acceptable to
Buyer in its sole discretion;

(vii) the Servicer of the related Purchased Loan shall have entered into a
Servicer Notice and Agreement substantially in the form attached hereto as
Exhibit IX;

(viii) Buyer shall have (A) determined, in accordance with the applicable
provisions of Section 3(a) of this Agreement, that the assets proposed to be
sold to Buyer by Seller in the related Transaction are Eligible Loans and
(B) obtained internal credit approval for the inclusion of such Eligible Loan as
a Purchased Loan in a Transaction, and in each case, such approval shall be
evidenced by Buyer’s execution and delivery of the related Confirmation;

(ix) Master Seller shall have established the Series Seller which will be
entering the proposed Transaction and executed and/or delivered to Buyer a
Joinder Agreement with respect to such Series Seller and any organizational
documents and amendments and any other documents and agreements required in
connection with such new Series Seller or the proposed Transaction under
Section 3(n);

(x) Buyer shall have received a Custodial Delivery and a Trust Receipt with
respect to the assets proposed to be sold to Buyer by Seller in the related
Transaction pursuant to Section 7(b) hereof;

(xi) the Amortization Period shall not yet have commenced; and

(xii) any other conditions as may be required by Buyer.

 

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

“Transaction Documents” shall mean, collectively, this Agreement, the Letter
Agreement, the Guaranty, the Member Guaranty, the Custodial Agreement, the
Controlled Account Agreement, the Pledge Agreement, all Confirmations and
Joinder Agreements executed pursuant to this Agreement in connection with
specific Purchased Loans, the Servicing Agreement(s), each Servicer Notice and
Agreement, each Senior Interest Side Letter, and any and all other documents and
agreements executed and delivered by Seller and/or Sponsor as required by this
Agreement or any Transactions hereunder, as each may be amended, modified and/or
restated from time to time.

“Transaction Event of Default” shall have the meaning set forth in
Section 13(a)(II).

“Transfer” shall have the meaning specified in Section 10(b).

“Treasury Regulations” shall mean the income tax regulations, including
temporary regulations, promulgated under the Code, as such regulations are
amended from time to time.

“Trust Receipt” shall mean a trust receipt issued by (i) Custodian to Buyer
confirming the Custodian’s possession of certain Purchased Loan Files which are
the property of and held by Custodian for the benefit of Buyer (or any other
holder of such trust receipt) or (ii) a Bailee pursuant to a bailment
arrangement with counsel or other third party acceptable to Buyer in its sole
discretion.

“Truth in Lending Act” shall mean the Truth in Lending Act of 1968, 15 U.S.C.
§§1601 et seq.

“UCC” shall have the meaning specified in Section 6 of this Agreement.

“Underlying Loan Maturity Date” shall mean, with respect to any Purchased Loan
(including, with respect to a Senior Interest, the related Mortgage Loan), the
maturity date as set forth in the related Purchased Loan Documents as such
Purchased Loan Documents existed on the related Purchase Date, without giving
effect to any extension of such maturity date, whether by modification, waiver,
forbearance or otherwise that have not been approved by Buyer in writing in its
sole discretion (other than any such extensions at the option of the Mortgagor
under the related Purchased Loan that do not require consent of the related
lender or for which the related lender’s consent may not be unreasonably
withheld, conditioned or delayed).

“Underlying Purchased Loan Reserves” shall mean, with respect to any Purchased
Loan, the escrows, reserve funds or other similar amounts properly retained in
accounts maintained by the Servicer of such Purchased Loan unless and until such
funds are, pursuant to and in accordance with the terms of the related Purchased
Loan Documents, either (i) released or otherwise available to Seller (but not if
such funds are used for the purpose for which they were maintained) or
(ii) released to the related Mortgagor.

 

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“Underwriting Issues” shall mean, with respect to any Collateral as to which
Seller intends to request a Transaction, all material information Known by
Seller that, based on the making of reasonable inquiries and the exercise of
reasonable care and diligence under the circumstances, which would be considered
a materially “negative” factor (either separately or in the aggregate with other
information), or a material defect in loan documentation or closing deliveries
(such as any absence of any material Purchased Loan Document(s)), to a reputable
nationally recognized institutional commercial mortgage loan buyer in
determining whether to originate or acquire the Collateral in question.

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

“U.S. Tax Compliance Certificate” shall have the meaning specified in
Section 29(f).

“Watchtower A-Note Eligible Loan” shall mean the Watchtower A-Note(s) specified
in the related Confirmation therefor.

(b) Under this Agreement, all accounting terms not specifically defined herein
shall be construed in accordance with GAAP and all accounting determinations
made and all financial statements prepared hereunder shall be made and prepared
in accordance with GAAP. All terms used in Article 9 of the UCC in the State of
New York, and not specifically defined herein, are used herein as defined in
such Article 9. The words “herein,” “hereof,” and “hereunder” and other words of
similar import refer to this Agreement as a whole, including the exhibits and
schedules hereto, as the same may from time to time be amended or supplemented
and not to any particular paragraph, section, subsection, or clause contained in
this Agreement. Each of the definitions set forth in Section 2 hereof shall be
equally applicable to both the singular and plural forms of the defined terms.
Unless specifically stated otherwise, all references herein to any agreements,
documents or instruments shall be references to the same as amended, restated,
supplemented or otherwise modified from time to time.

3. INITIATION; CONFIRMATION; TERMINATION; FEES; EXTENSION

(a) Subject to the terms and conditions set forth in this Agreement (including,
without limitation, the satisfaction of the Transaction Conditions Precedent set
forth herein), Buyer (x) has entered into certain Transactions specified in
Schedule 2 to the Letter Agreement as of the Second Amendment and Restatement
Date and (y) agrees to consider entering into Transactions from time to time in
its sole and absolute discretion, in each case, pursuant to written request at
the initiation of Master Seller as provided in this Agreement. Seller shall give
Buyer written notice of each proposed Transaction and Buyer shall inform Master
Seller of its determination with respect to any assets proposed to be sold to
Buyer by Seller in accordance with Exhibit VIII attached hereto, which may be
amended from time to time by Buyer in its sole and absolute discretion. Buyer
shall have the right to (x) review all Eligible Loans proposed to be sold to
Buyer in any Transaction and to conduct its own due diligence investigation of
such Eligible Loans as Buyer determines in its sole and absolute discretion and
(y) with respect to Construction Loans, review the related Business Plan and
determine in Buyer’s sole and absolute

 

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discretion any additional terms and conditions and additional representations
and warranties that shall be applicable to such Purchased Loan. Buyer shall be
entitled to make a determination, in its sole and absolute discretion, whether
it shall or shall not purchase any or all of the Eligible Loans proposed to be
sold to Buyer by Seller. In addition, Buyer shall not be required to enter into
any Transaction if an Event of Default has occurred and is continuing with
respect to any Transaction Documents.

(b) Upon agreeing to enter into a Transaction hereunder, provided each of the
Transaction Conditions Precedent shall have been satisfied (or waived in writing
by Buyer), as determined by Buyer in its sole and absolute discretion (and
evidenced by Buyer’s execution of a related Confirmation and funding of the
related Purchase Price), Buyer shall promptly deliver to Master Seller a written
confirmation (which shall also be in electronic form) in the form of Exhibit I
attached hereto of each Transaction (a “Confirmation”). Such Confirmation shall
describe each Purchased Loan to be included in such Transaction, shall identify
Buyer and the applicable Series Seller for such Transaction, and shall set
forth:

(i) the Purchase Date,

(ii) the Principal Balance,

(iii) the Purchase Date Market Value,

(iv) the Actual Original Purchase Percentage,

(v) the Maximum Original Purchase Percentage,

(vi) the Purchase Price, (vii) the Repurchase Date,

(viii) the initial Pricing Rate (including the Applicable Spread) applicable to
the Transaction and the Financing Fee Rate applicable to the Transaction,

(ix) the total future funding obligations of Seller required to be funded
pursuant to the terms of the related Purchased Loan Documents;

(x) if such Purchased Loan is a Construction Loan, the related Business Plan and
such other conditions, documents and representations and warranties applicable
to such Construction Loan, in each case, as Buyer may require in its sole
discretion; and

(xi) any additional terms or conditions not inconsistent with this Agreement.

With respect to any Transaction, the Pricing Rate shall be determined initially
on the Pricing Rate Determination Date applicable to the first Pricing Rate
Period for such Transaction, and shall be reset on each Pricing Rate
Determination Date for the next succeeding Pricing Rate Periods for such
Transaction. Buyer or its agent shall determine the Pricing Rate on each Pricing
Rate Determination Date for the related Pricing Rate Period and notify Seller of
such rate for such period on such Pricing Rate Determination Date.

 

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(c) Each Confirmation, together with this Agreement, shall be conclusive
evidence of the terms of the Transactions covered thereby unless specific
objection is made by Seller no more than five (5) Business Days after the date
thereof (unless such period is waived in writing by Seller). In the event of any
conflict between the terms of such Confirmation and the terms of this Agreement,
the Confirmation shall prevail. An objection sent by Seller with respect to any
Confirmation must state specifically that the writing is an objection, must
specify the provision(s) of such Confirmation being objected to by Seller, must
set forth such provision(s) in the manner that Seller believes such provisions
should be stated, and must be received by Buyer no more than five (5) Business
Days after such Confirmation is received by Seller (unless such period is waived
in writing by Seller).

(d) [Reserved.]

(e) On the applicable Repurchase Date for any Transaction, termination of such
Transaction will be effected by transfer to the applicable Series Seller or its
agent of the applicable Purchased Loan(s) and any Income in respect thereof
received by Buyer (and not previously credited or transferred to, or applied to
the obligations of, Master Seller, such Series Seller or any other Series Seller
pursuant to Section 5 of this Agreement), against the simultaneous transfer of
the Repurchase Price for such Transaction to an account of Buyer including the
Cash Management Account.

(f) (i) Subject to the terms and conditions of this Section 3(f), each
Transaction shall be a LIBOR Transaction and shall bear interest at the LIBOR
Pricing Rate applicable to such Transaction. In the event that Buyer shall have
determined in its sole but good faith discretion (which determination shall be
conclusive and binding upon Seller absent manifest error) that one or more LIBOR
Unavailability Conditions Exists, then Buyer shall have the sole and exclusive
right at its election, to be exercised in its sole but good faith discretion, to
convert any LIBOR Transaction from a LIBOR Transaction to an Alternate Rate
Transaction based on the applicable Alternate Index Rate selected by Buyer as
provided in the definition thereof, provided that such conversion shall be
subject to satisfaction of the following conditions: (A) at the time of
conversion, such applicable Alternate Index Rate is a floating rate index that
is then commonly used by Buyer in its commercial real estate repurchase
facilities as an alternative to the LIBOR Pricing Rate, as determined by Buyer
in its sole but good faith discretion, and (B) such applicable Alternate Index
Rate is administratively and commercially reasonable for Buyer to implement, as
determined by Buyer in its sole but good faith discretion. In the event the
foregoing conditions shall be satisfied and the LIBOR Transaction is to be
converted to an Alternate Rate Transaction as provided above, Buyer shall
provide written notice of the conversion of such LIBOR Transaction to an
Alternate Rate Transaction to Seller in the time period set forth in Section 6
of the Fee Letter prior to implementing such Alternative Rate on the next
succeeding Pricing Rate Determination Date,. If such notice is given, the
Transaction shall be converted, as of the first day of the next succeeding
Pricing Rate Period, at Buyer’s option (in Buyer’s sole and absolute discretion)
to an Alternate Rate Transaction bearing interest at the Alternate Pricing Rate.
Notwithstanding any provision of this Agreement to the contrary, in no event
shall Seller have the right to convert a LIBOR Transaction to a Prime Rate
Transaction or an Alternate Rate Transaction.

 

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(ii) In the event that Buyer shall have determined in its sole but good faith
discretion (which determination shall be conclusive and binding upon Seller
absent manifest error) that one or more LIBOR Unavailability Conditions exists
and the applicable Transaction has not previously been converted to an Alternate
Rate Transaction in accordance with Section 3(f)(i) above, Buyer may, in its
sole and absolute discretion elect to give notice thereof to Seller (which may
be by telephone or e-mail, followed promptly by written notice in accordance
with Section 3(f)(iii)) prior to the next succeeding Pricing Rate Determination
Date. Subject to Section 3(f)(iii) hereof, if such notice is given, the
Transaction shall be converted, as of the first day of the next succeeding
Pricing Rate Period, at Buyer’s option (in Buyer’s sole and absolute
discretion), to a Prime Rate Transaction bearing interest at the Prime Pricing
Rate. Notwithstanding any provision of this Agreement to the contrary, in no
event shall Seller have the right to convert a LIBOR Transaction to a Prime Rate
Transaction or an Alternate Rate Transaction.

(iii) If, pursuant to Section 3(f)(ii) hereof, the Transaction has been
converted to a Prime Rate Transaction and Buyer shall determine in its sole but
good faith discretion (which determination shall be conclusive and binding upon
Seller absent manifest error) that the event(s) or circumstance(s) which
resulted in such conversion shall no longer be applicable (i.e., a LIBOR
Unavailability Condition does not exist) and LIBOR can be determined as provided
in the definition of LIBOR as set forth herein, Buyer shall give notice thereof
to Seller (which may be by telephone or e-mail, followed promptly by written
notice) prior to the next succeeding Pricing Rate Determination Date. Upon the
giving of such notice, the Transaction shall be converted, as of the first day
of the next succeeding Pricing Rate Period, to a LIBOR Transaction.
Notwithstanding any provision of this Agreement to the contrary, in no event
shall Seller have the right to convert a Prime Rate Transaction to a LIBOR
Transaction or a LIBOR Transaction to a Prime Rate Transaction.

(iv) If, pursuant to the terms of Section 3(f)(i) hereof, the Transaction has
been converted to an Alternate Rate Transaction but thereafter Buyer shall
determine in its sole but good faith discretion (which determination shall be
conclusive and binding upon Seller absent manifest error) that the Alternate
Index Rate cannot be ascertained, or that the adoption of any Requirement of Law
or any change therein or in the interpretation or application thereof, shall
make it unlawful for Buyer to maintain an Alternate Rate Transaction as
contemplated hereunder, or the Alternate Rate would be in excess of the maximum
interest rate that Seller may by law pay, Buyer shall give notice thereof to
Seller (which may be by telephone or e-mail, followed promptly by written
notice) prior to the next succeeding Pricing Rate Determination Date. If such
notice is given, such Alternate Rate Transaction shall be converted, as of the
first day of the next Pricing Rate Period, to a Prime Rate Transaction. If,
pursuant to the terms of this Section 3(f), such Transaction has been converted
to a Prime Rate Transaction and thereafter Buyer has determined in its sole but
good faith discretion that LIBOR has been succeeded by an Alternate Index and
such Alternate Index can be determined, then Buyer shall have the sole and
exclusive right, to be exercised in its sole but good faith discretion, to
convert the Transaction from a Prime Rate Transaction to an Alternate Rate
Transaction in accordance with, and subject to satisfaction of the conditions
set forth in, the provisions

 

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of Section 3(f)(i) above, and Buyer shall give notice thereof to Seller (which
may be by telephone or e-mail, followed promptly by written notice) prior to the
next succeeding Pricing Rate Determination Date, and if such notice is given,
the Transaction shall be converted, as of the first day of the next succeeding
Pricing Rate Period, to an Alternate Rate Transaction. Notwithstanding any
provision of this Agreement to the contrary, in no event shall Seller have the
right to elect to convert an Alternate Rate Transaction to a Prime Rate
Transaction or a Prime Rate Transaction to an Alternate Rate Transaction.

(v) If the adoption of any Requirement of Law or any change therein or in the
interpretation or application thereof, shall hereafter make it unlawful for
Buyer to maintain a LIBOR Transaction as contemplated hereunder, without
limiting the rights of Buyer to convert the Transaction to an Alternate Rate
Transaction as set forth above, (a) the obligation of Buyer hereunder to make or
maintain any LIBOR Transaction or to convert any Prime Rate Transaction to a
LIBOR Transaction shall be cancelled forthwith and (b) any outstanding LIBOR
Transaction shall be converted automatically to a Prime Rate Transaction on the
first day of the next succeeding Pricing Rate Period, or upon such earlier date
as may be required by law.

(vi) Seller hereby agrees to promptly pay to Buyer, upon demand, any additional
amounts necessary to compensate Buyer for any actual out-of-pocket costs (not to
include any lost profit or opportunity) incurred by Buyer in making any
conversion to an Alternate Rate Transaction in accordance with this Agreement,
including without limitation, any interest or fees payable by Buyer to lenders
of funds obtained by it in order to make or maintain any LIBOR Transaction (or
Alternate Rate Transaction) hereunder. Buyer’s notice of such costs, as
certified to Seller, shall be conclusive absent manifest error.

(vii) Notwithstanding the foregoing, in connection with any Rate Conversion
and/or the implementation thereof, Buyer shall have the right to make any Rate
Conversion Conforming Changes from time to time as Buyer determines, in Buyer’s
reasonable discretion, are necessary in connection with such conversion and/or
the implementation thereof, and notwithstanding anything to the contrary
contained herein or in any other Transaction Documents, any amendments
implementing such Rate Conversion Conforming Changes will become effective
without any further action or consent of Seller or any other party to this
Agreement.

(viii) If any such conversion of a Transaction occurs on a day which is not the
last day of the then current Pricing Rate Period with respect to such
Transaction, Seller shall pay to Buyer such amounts, if any, as may be required
pursuant to Section 3(i) hereof.

Buyer shall exercise its right to select an Alternative Rate Index as described
in this Section 3(f), in a manner substantially similar to Buyer’s exercise of
similar rights and remedies in commercial real estate repurchase agreements with
similarly situated customers where Buyer has comparable contractual rights.

(g) [Reserved].

 

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(h) Upon written demand by Buyer, Seller shall indemnify Buyer and hold Buyer
harmless from any net actual, out of pocket loss or expense (not to include any
lost profit or opportunity) (including, without limitation, reasonable actual
attorneys’ fees and disbursements) which Buyer may sustain or incur as a
consequence of (i) default by Seller in terminating any Transaction after Seller
has given a notice in accordance with Section 3(d) of a termination of a
Transaction, (i) any payment of the Repurchase Price for any Purchased Loan on
any day other than a Remittance Date or the Repurchase Date for such Purchased
Loan (including, without limitation, any actual breakage costs and similar out
of pocket costs or (iii) conversion of the Transaction to either a Prime Rate
Transaction or an Alternate Rate Transaction pursuant to Section 3(f) of this
Agreement on a day which is not the last day of the then current Pricing Rate
Period. A certificate as to such actual costs, losses, damages and expenses,
setting forth the calculations therefor shall be submitted promptly by Buyer to
Seller and shall be prima facie evidence of the information set forth therein.

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

(i) shall subject Buyer to any Taxes (other than (A) Indemnified Taxes,
(B) Taxes described in clauses (b) through (d) of the definition of “Excluded
Taxes” or (C) Connection Income Taxes) on its loans, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto;

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

(iii) shall impose on Buyer (other than Taxes) any other condition;

and the result of any of the foregoing is to increase the cost to Buyer, by an
amount which Buyer deems, in its sole and absolute discretion, to be material,
of entering into, continuing or maintaining Transactions or to reduce any amount
receivable under the Transaction Documents in respect thereof; then, in any such
case, Seller shall promptly pay Buyer, upon its demand, any additional amounts
necessary to compensate Buyer for such increased cost or reduced amount
receivable. If Buyer becomes entitled to claim any additional amounts pursuant
to this Section 3(i), it shall, within ten (10) Business Days after Buyer has
actual knowledge of such event, notify Seller in writing of the event by reason
of which it has become so entitled. Such notification shall set forth in
reasonable detail the calculation of any additional amounts payable pursuant to
this subsection shall be submitted by Buyer to Seller and shall be prima facie
evidence of such additional amounts. In exercising its rights and remedies under
this Section 3(i), Buyer shall exercise its rights and remedies in a manner
substantially similar to Buyer’s exercise of similar remedies in agreements with
similarly situated customers where Buyer has comparable contractual rights. This
covenant shall survive the termination of this Agreement and the repurchase by
Seller of any or all of the Purchased Loans.

 

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(j) If Buyer shall have determined that the adoption of or any change in any
Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by Buyer or any corporation controlling Buyer
with any request or directive regarding capital adequacy (whether or not having
the force of law) from any Governmental Authority made subsequent to the Closing
Date does or shall have the effect of increasing the amount of capital to be
held by Buyer in respect of any Transaction hereunder or reducing the rate of
return on Buyer’s or such corporation’s capital as a consequence of its
obligations hereunder to a level below that which Buyer or such corporation
could have achieved but for such adoption, change or compliance (taking into
consideration Buyer’s or such corporation’s policies with respect to capital
adequacy) by an amount deemed by Buyer, in the exercise of its reasonable
business judgment, to be material, then from time to time, after submission by
Buyer to Seller of a written request therefor, Seller shall pay to Buyer such
additional amount or amounts as will compensate Buyer for such reduction. Such
notification as to the calculation of any additional amounts payable pursuant to
this subsection shall be submitted by Buyer to Seller and shall be prima facie
evidence of such additional amounts. In exercising its rights and remedies under
this Section 3(j), Buyer shall exercise its rights and remedies in a manner
substantially similar to Buyer’s exercise of similar remedies in agreements with
similarly situated customers where Buyer has comparable contractual rights. This
covenant shall survive the termination of this Agreement and the repurchase by
Seller of any or all of the Purchased Loan.

(k) Master Seller, on behalf of any Series Seller, shall have the right at any
time, upon one (1) Business Day prior notice to Buyer, to transfer cash to Buyer
for the purpose of reducing the Repurchase Price of, but not terminating, the
Transaction to which such Series Seller is a party; provided, that (x) to the
extent that the Purchase Price of any Purchased Loan is reduced by Master Seller
pursuant to this sentence to an amount that is less than fifty percent (50%) of
the Repurchase Price Cap of such Purchased Loan, the Margin Excess with respect
to such Purchased Loan shall thereafter (unless Buyer, in its sole discretion,
determines not to apply the following reduction) be reduced by the amount equal
to the difference between (i) fifty percent (50%) of the Repurchase Price Cap of
such Purchased Loan and (ii) the Purchase Price of such Purchased Loan following
the application of such reduction to the Purchase Price pursuant to this
sentence which causes the Purchase Price to be less than fifty percent (50%) of
the Repurchase Price Cap, and (y) such transfers shall not occur on more than
six (6) Business Days per calendar quarter (it being understood that such
transfers may be made with respect to a single Purchased Loan or multiple
Purchased Loans, at such Series Seller’s election, on any such day). In
addition, Master Seller, on behalf of any Series Seller, shall be entitled to
terminate the Transaction to which such Series Seller is a party on demand and
repurchase a related Purchased Loan in whole on any Business Day prior to
related Repurchase Date provided that (i) Seller notifies Buyer in writing of
its intent to terminate such Transaction no later than one (1) Business Day
prior to the intended repurchase date (an “Early Repurchase Date”) unless such
Early Repurchase Date, is in connection with curing a Margin Deficit or breach
of any representation, warranty or covenant or in connection with any change in
any Requirement of Law or application thereof which makes the Transaction
unlawful in which case advance notice shall not be required, and (ii) on such
Early Repurchase Date, Seller pays to Buyer an amount equal to the

 

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Repurchase Price for the applicable Purchased Loan and any other amounts due and
payable under this Agreement with respect to such Purchased Loan (including,
without limitation, any Exit Fee payable pursuant to the Letter Agreement). In
connection with any reduction of outstanding Purchase Price (other than a
termination of a Transaction) pursuant to this Section 3(k), Buyer and Seller
shall amend and restate the existing Confirmation for the Transaction to set
forth the current outstanding Purchase Price and any other changes related
thereto.

(l) Upon the occurrence of a Mandatory Early Repurchase Event with respect to
any Purchased Loan, Buyer may, upon written notice to the applicable Series
Seller, accelerate the Repurchase Date of such Purchased Loan to the date (the
“Mandatory Early Repurchase Date”) which is three (3) Business Days following
such notice, provided that such notice is sent by 3:00 p.m. (New York City
time), or four (4) Business Days following such notice if such notice is sent
after 3:00 p.m. (New York City time) (or such earlier date as may be required
pursuant to the last sentence of this Section 3(l)), and require that the
applicable Series Seller repurchase such Purchased Loan from Buyer on such
Mandatory Early Repurchase Date (a “Mandatory Early Repurchase”), which
repurchase by the applicable Series Seller shall be conducted pursuant to and in
accordance with Section 3(e).

(m) If Buyer shall exercise its rights under Sections 3(g), 3(i) or 3(j), then
Seller shall have the right, at any time thereafter (unless Buyer has at such
time waived any claims pursuant to such Sections or such Sections no longer
apply) to terminate this Agreement or all Transactions hereunder and, in
connection with any such termination, notwithstanding anything to the contrary
contained herein or in any other Transaction Document, there shall be no Exit
Fee or prepayment fee or premium or similar payment due.

(n) On or before the Purchase Date for any Transaction, Member shall establish,
pursuant to the provisions of the Master Seller LLC Agreement and in accordance
with Delaware law, a new Series Seller to enter into such Transaction pursuant
to the related Confirmation, and deliver copies of the completed Schedule C to
the Master Seller LLC Agreement with respect to such Series Seller and same
shall be reasonably acceptable to Buyer. On or prior to the Purchase Date for
any Transaction, (i) Master Seller and such new Series Seller shall execute and
deliver to Buyer a joinder agreement substantially in form attached hereto as
Exhibit XI (a “Joinder Agreement”) pursuant to which such Series Seller shall be
added as a party hereto and to the other Transaction Documents and any other
documents and agreements as Buyer may reasonably require with respect to such
Series Seller or in connection with such Transaction and (ii) if required by
Buyer in its sole discretion, Buyer shall have filed UCC financing statements in
all applicable filing offices with respect to such new Series Seller, which UCC
financing statements shall be in form and substance satisfactory to Buyer and
may describe the collateral as “All assets of [such new Series Seller], whether
now owned or existing or hereafter acquired or arising and wheresoever located,
and all proceeds and products thereof” or words to that effect, and any
limitations on such collateral description.

(o) Other than with respect to Future Funding Amounts specifically disclosed by
Seller and approved by Buyer either on the related Purchase Date in the
Confirmation or otherwise in writing for the applicable Purchased Loan, Buyer
shall have no obligation to consider entering into any Future Funding
Transaction with respect to any Purchased Loan. With respect to Future Funding
Amounts that were approved by Buyer in the related

 

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Confirmation on the Purchase Date (“Approved Future Funding Amounts”), Buyer’s
agreement to enter into any related Future Funding Transaction is subject to the
satisfaction of the conditions precedent set forth in this Section 3(o), both
immediately prior to entering into such Future Funding Transaction and also
after giving effect to the consummation thereof, and all such Future Funding
Transactions shall be otherwise subject to the following terms and conditions:

(i) With respect to any one or more Purchased Loans with Approved Future Funding
Amounts, on or prior to the first (1st) Business Day of each calendar month
prior to the Facility Termination Date, Seller may submit a request to Buyer
requesting a Future Funding Transaction (a “Future Funding Transaction Request”)
in which, subject to the conditions precedent set forth in this Section 3(o),
Buyer shall remit Future Funding Amounts requested in such Future Funding
Transaction Request to or on account of Seller by no later than the tenth (10th)
Business Day following the date of the related Future Funding Transaction
Request (a “Future Funding Transaction Date”); provided, however, that Buyer
shall only be obligated to fund Future Funding Amounts hereunder to the extent
that future funding advances made by Seller under the related Purchased Loans
from and after the date of the last preceding Future Funding Transaction are
equal to or in excess of $1,000,000. Seller shall notify Buyer at least two
(2) Business Days prior to the requested Future Funding Transaction Date
(x) whether Seller has determined that all related conditions precedent to
future funding advances under the related Purchased Loan Documents have been
satisfied and (y) whether Seller funded, or approved for funding, the related
advance under the Purchased Loan Documents.

(ii) In connection with any Future Funding Transaction, Buyer shall have the
right to conduct an additional due diligence investigation of the Future Funding
Request Package and/or the related Purchased Loan as Buyer reasonably
determines. In addition, each of the following conditions shall have been
satisfied (each such condition, a “Future Funding Condition”) on or before the
related Future Funding Transaction Date: (a) Buyer shall have received a
complete Future Funding Request Package on or prior to the date that Seller has
submitted the related Future Funding Transaction Request, (b) Buyer shall have
determined in its commercially reasonable discretion that all related conditions
precedent to future funding advances under the related Purchased Loan Documents,
as in effect on the related Purchase Date (or as modified thereafter in
accordance with the express terms of this Agreement), have been satisfied
according to the applicable standard of discretion set forth in such Purchased
Loan Documents, (c) unless previously approved by Buyer, Buyer shall have
approved in its commercially reasonable discretion the related Mortgagor’s
budget and capital expenditure plan or any material changes thereto, (d)
[reserved], (e) Buyer shall have received evidence, acceptable to Buyer in its
commercially reasonable discretion, of title and lien searches relating to the
Mortgaged Property performed in connection with the related future funding
advances, (f) no Default or Event of Default under this Agreement, or any
default or event of default (howsoever defined) on the Purchased Loan or under
the related Purchased Loan Documents, shall have occurred and be continuing, no
Margin Deficit under this Agreement shall be outstanding, and (g) the Future
Funding Amount requested of Buyer in connection with such Future Funding
Transaction shall be in an amount of no less than $500,000 (subject in all cases
to the proviso set forth in the preceding clause (i)). Buyer hereby agrees to

 

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act diligently in good faith to confirm the satisfaction of the Future Funding
Conditions set forth in this Section 3(o)(ii) on or prior to the related Future
Funding Transaction Date. Buyer’s determination, in its commercially reasonable
discretion, that the Future Funding Conditions have not been satisfied shall not
affect Seller’s obligations with respect to future advances under a Purchased
Loan as and when required pursuant to the related Purchased Loan Documents.

(iii) With respect to each Future Funding Transaction, Seller and Buyer shall
amend the related Confirmation to reflect the outstanding principal balance and
current Purchase Price of the related Purchased Loan after giving effect to such
Future Funding Transaction.

(iv) Notwithstanding the foregoing, Seller and Buyer may, in Buyer’s sole
discretion, agree from time to time to cause a Future Funding Transaction to
occur on the same day as a Future Funding Date with respect to a Purchased loan,
in which case the Buyer shall remit the related Future Funding Amount on the
related Future Funding Date, as Seller may direct in writing, as follows: (a) if
an escrow agreement has been established in connection with such Future Funding
Transaction, remit the related Future Funding Amount to the related escrow
account, (b) if the terms of the Purchased Loan Documents provide for a reserve
account in connection with future advances, remit the related Future Funding
Amount to the applicable reserve account or (c) otherwise, remit the related
Future Funding Amount directly to the Mortgagor under the related Purchased
Loan.

(p) Notwithstanding anything to the contrary contained in this Agreement or the
other Transaction Documents, upon written request of Seller prior to the then
current Revolving Period Expiration Date, provided all of the Extension
Conditions shall have been satisfied, Buyer may in its sole discretion agree to
extend the current Revolving Period Expiration Date for one or more additional
terms, each for a period not longer than one (1) year, by giving written notice
to Seller of such extension. For purposes of the preceding sentence, with
respect to each extension, the “Extension Conditions” shall be deemed to have
been satisfied if:

(i) Seller shall have given Buyer written notice, not less than fifteen
(15) Business Days prior to the then current Revolving Period Expiration Date of
Seller’s request for such extension, to which Buyer shall respond with its
approval or disapproval within fifteen (15) Business Days of its receipt of such
request, provided that if Buyer has not so responded within such fifteen
(15) Business Day period such request shall be deemed denied;

(ii) no Default or Event of Default under this Agreement shall have occurred and
be continuing as of the then current Revolving Period Expiration Date, and no
due and unpaid Margin Deficit shall exist;

(iii) all other fees and amounts then due from Seller to Buyer hereunder or the
other Transaction Documents shall have been paid, including without limitation
all fees payable pursuant to any Confirmation; and

 

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(iv) the representations and warranties made by Seller and Sponsor in each of
the Transaction Documents shall be true and correct in all material respects as
of the then current Revolving Period Expiration Date (except to the extent that
such representations and warranties are made as of a particular date, in which
case such representations and warranties shall be true and correct in all
material respects as of such particular date), except as disclosed to Buyer in
writing prior to the Purchase Date for any applicable Purchased Loan in an
Exceptions Report.

Notwithstanding anything to the contrary, in connection with any extension of
the Facility Termination Date in accordance with the terms of such definition
(i.e., pursuant to an amendment to Schedule 2 to the Letter Agreement made in
accordance with the Letter Agreement), the Repurchase Date of each Purchased
Loan as set forth in the related Confirmation shall be deemed extended, with
respect to each such Purchased Loan, to the earlier of (x) the applicable
extended Facility Termination Date and (y) the date that is two (2) Business
Days prior to the maturity date or other earlier repayment date (under the
related Purchased Loan Documents) for such Purchased Loan (or, in the case of
any Senior Interest, the underlying mortgage loan), without giving effect to any
extension of such maturity date, whether by modification, waiver, forbearance or
otherwise (other than extensions at the related Mortgagor’s option without
requiring consent of the Seller or for which the Seller’s consent may not be
unreasonably withheld, conditioned or delayed) pursuant to the terms of the
Purchased Loan Documents as such Purchased Loan Documents existed on the related
Purchase Date.

(q) Notwithstanding anything to the contrary contained herein or in the
Repurchase Agreement, Buyer shall not be required to purchase any Eligible Loan
proposed by Seller for sale under this Agreement if, after giving effect to such
Transaction and any Future Funding Amounts requested in connection therewith,
the aggregate Repurchase Price (other than Price Differential) for all
Transactions then outstanding would exceed the Maximum Amount.

(r) Without limiting the provisions hereof or of the other Transaction
Documents, unless otherwise expressly set forth in a Confirmation with respect
to a specific Purchased Loan, Master Seller, on behalf of itself and each Series
Seller that may be a party to a Transaction hereunder, and Buyer hereby agree
that Seller shall be obligated to pay to Buyer, for each Transaction, a
Financing Fee at a rate specified by Buyer in its sole and absolute discretion
(for each Transaction, the “Financing Fee Rate”) as set forth in the
Confirmation related to such Transaction, which Financing Fee Rate shall not
exceed the cap specified in such Confirmation (the “Financing Fee Cap”). The
accrued but unpaid Financing Fee with respect to a Purchased Loan shall be
payable on each Remittance Date and, unless otherwise paid by Seller or its
Affiliates, the accrued Financing Fees shall be remitted by Depository to Buyer
(or to such other party as may be designated by Buyer in the relevant
Confirmation) from the Cash Management Account on each Remittance Date pursuant
to the provisions of Sections 5(c)(iv), 5(d)(iv) or 5(e)(iii), as applicable.
For the avoidance of doubt: (i) if no Financing Fee Rate is specified in the
applicable Confirmation, the amount of corresponding Financing Fee shall be
zero, (ii) if a Financing Fee Rate is specified in the applicable Confirmation
for a Transaction, it shall be expressed as a percentage or as basis points, and
(iii) in no event shall Seller be obligated to pay Financing Fees in excess of
the Financing Fee Cap with respect to any Transaction.

 

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(s) All amounts payable by Seller under the Transaction Documents shall be paid
without notice (other than as required herein), demand (other than as required
herein), counterclaim, set-off, deduction or defense (as to any Person and for
any reason whatsoever) and without abatement, suspension, deferment, diminution
or reduction (as to any Person and for any reason whatsoever), and the
Repurchase Obligations shall not be released, discharged or otherwise affected,
except as expressly provided herein, by reason of: (i) any Act of Insolvency
relating to Seller, any Mortgagor or any other loan participant under a Related
Interest, or any action taken with respect to any Transaction Document,
Purchased Loan Document by any trustee or receiver of Seller, any Mortgagor or
any other loan participant under a Related Interest, or by any court in any such
proceeding, (ii) any claim that Seller has or might have against Buyer under any
Transaction Document or otherwise, (iii) any default or failure on the part of
Buyer to perform or comply with any Transaction Document or other agreement with
Seller, (iv) the invalidity or unenforceability of any Purchased Loan,
Transaction Document or Purchased Loan Document, or (v) any other occurrence
whatsoever, whether or not similar to any of the foregoing, and whether or not
Seller has notice or knowledge of any of the foregoing; provided, however, that
nothing in the foregoing shall in any way (A) limit any notice and cure periods
in favor of Seller set forth in the Transaction Documents or (B) undermine any
requirement that Buyer exercise its remedies hereunder in accordance with the
UCC (to the extent the UCC is applicable to such exercise of remedies) or to
determine Market Value in accordance with the definition thereof. The Repurchase
Obligations shall be full recourse to Seller and recourse to Sponsor and Member
as and to the extent set forth in the Guaranty and Member Guaranty, as
applicable. This Section 3(s) shall survive the termination of the Transaction
Documents and the payment in full of the Repurchase Obligations.

4. MARGIN MAINTENANCE

(a) Buyer shall determine the Repurchase Price Cap of each Purchased Loan on
each Business Day and shall determine (i) the amount, if any, by which such
Repurchase Price Cap is less than the Repurchase Price (excluding Price
Differential) (a “Margin Deficit”) and (ii) the amount, if any, by which the
Repurchase Price Cap exceeds the Repurchase Price (excluding Price Differential)
(“Margin Excess”).

(b) Subject to Section 4(f) hereunder, if at any time an aggregate Margin
Deficit exists with respect to one or more Purchased Loans in an amount greater
than the Margin Call Threshold, then Buyer may by written notice (which notice
shall be given in accordance with Section 16 hereof) (a “Margin Notice”) to
Master Seller on behalf of the applicable Series Seller(s), require the
applicable Series Seller(s) to make a payment to Buyer in the amount of the
Margin Deficit for such Purchased Loan(s) (which, subject to Section 4(c),
Seller may satisfy by requesting in writing that Buyer apply any then-existing
Margin Excess to such Purchased Loan in full or partial satisfaction of such
Margin Deficit), to be applied in reduction of the Repurchase Price of some or
all of the related Purchased Loans, as determined by Buyer, by no later than the
Margin Deadline on the date that is two (2) Business Days following the date of
receipt of such Margin Notice. The applicable Series Seller’s failure to cure
any Margin Deficit as required by this paragraph within the time periods set
forth herein shall constitute a Transaction Event of Default with respect to the
applicable Transaction under the Transaction Documents and shall entitle Buyer
to exercise its remedies under Section 13(c) of this Agreement.

 

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(c) If at any time a Margin Excess exists with respect to a Purchased Loan, then
Master Seller may by notice delivered to Buyer require Buyer to transfer to
Master Seller on behalf of the applicable Series Seller cash in an amount up to
the Margin Excess by no later than the Margin Deadline on the date that is one
(1) Business Day following Buyer’s receipt of such notice from Master Seller,
provided that such notice is received by 6:00 p.m. (New York City time), or two
(2) Business Days following the date of Buyer’s receipt of such notice from
Seller if such notice is received after 6:00 p.m. (New York City time) on such
date; provided, however, that (1) any such transfer of cash shall not be in an
amount less than $100,000, (2) any such transfer of cash shall not cause the
Repurchase Price for the applicable Purchased Loan to exceed the Repurchase
Price Cap for such Transaction, (3) no Default or Event of Default under this
Agreement shall have occurred and be continuing, (4) Seller shall have delivered
to Buyer such information and other reporting with respect to the applicable
Purchased Loan as required to be delivered by Seller hereunder, and (5) Master
Seller shall delivered a certificate of an Authorized Representative of Master
Seller in the form of Exhibit XIII certifying that, to Master Seller’s
Knowledge, no Default or Event of Default, and no Purchased Loan Default or
Purchased Loan Event of Default relating any Purchased Loan subject to such
transfer, has occurred and is continuing as of the date of such transfer which
has not been disclosed to Buyer.

(d) The failure of, or delay by, Buyer or Seller, on any one or more occasions,
to exercise its respective rights under Section 4(b) and 4(c) of this Agreement
shall not (i) change or alter the terms and conditions to which this Agreement
is subject, (ii) limit the right of such party to do so at a later date,
(iii) limit such party’s rights under this Agreement or otherwise existing by
law, or (iv) in any way create additional rights for such party.

(e) If Master Seller and/or any applicable Series Sellers transfer cash to Buyer
on account of Margin Deficits relating to more than one Purchased Loan, but such
cash is insufficient to fully satisfy such Margin Deficits (after giving effect
to any netting pursuant to Section 4(f)), Buyer shall have the right to
designate the Purchased Loan(s) and Margin Deficit(s) to which such payments
shall be applied, in its sole and absolute discretion.

(f) Buyer and Master Seller acknowledge and agree that, so long as no Default or
Event of Default shall have occurred and be continuing, then notwithstanding the
provisions of Sections 4(a) through 4(c) hereof, Margin Excess and Margin
Deficit shall be netted for all the Transactions under this Agreement, and the
aggregate amount of the Margin Excess for all Transactions shall be credited
against the aggregate Margin Deficit owed under Section 4(b) and only the net
amount need be paid; provided, that any net payment to Master Seller shall be
subject to the conditions set forth in Section 4(c).

5. INCOME PAYMENTS AND PRINCIPAL PAYMENTS

(a) On each Remittance Date, each Series Seller shall be obligated to pay to
Buyer (to the extent not paid on such date through the distributions required
pursuant to Sections 5(c), (d), (e) and (f) hereof) the accrued but unpaid Price
Differential for its applicable Transaction(s) due as of such Remittance Date
(along with any other amounts then due and

 

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payable), by wire transfer in immediately available funds. A Cash Management
Account shall be established by Master Seller, on behalf of itself and each
Series Seller, at the Depository. Buyer shall have sole dominion and control
over the Cash Management Account. All Available Income in respect of the
Purchased Loans shall be deposited by Master Seller and each Series Seller or
the applicable Servicer (i) directly into the Cash Management Account without
any further action of Buyer or (ii) directly into the Applicable Servicer
Account for further remittance by the applicable Servicer to the Cash Management
Account, subject in all cases to the terms and conditions of the related
Servicer Notice and Agreement. All such amounts transferred into the Cash
Management Account shall be remitted by the Depository in accordance with the
applicable provisions of Sections 5(b), 5(c), 5(d), 5(e), 13(b)(iii) and
13(c)(iii) of this Agreement.

(b) Seller shall cause the Servicer (other than the Initial Servicer) of each
Purchased Loan to enter into a Servicer Notice and Agreement in the form
attached as Exhibit IX to this Agreement (or in such other form as is acceptable
to Buyer in its sole discretion), which provides, inter alia, that the Servicer
shall deposit, or cause to be deposited, all Available Income with respect to
such Purchased Loan into the Cash Management Account. If a Servicer forwards any
Available Income with respect to a Purchased Loan to Master Seller, any Series
Seller or any other Person, rather than directly to the Cash Management Account
or directly into the Applicable Servicer Account for further remittance by the
applicable Servicer to the Cash Management Account, subject in all cases to the
terms and conditions of the related Servicer Notice and Agreement, Master Seller
shall (i) redeliver an executed copy of the Servicer Notice and Agreement to the
applicable Servicer, and make other commercially reasonable efforts to cause
such Servicer to forward such amounts directly to the Cash Management Account,
(ii) hold such amounts in trust for the benefit of Buyer and (ii) promptly (but
in no event more than one (1) Business Day after receipt) deposit in the Cash
Management Account any such amounts. Contemporaneously with the sale to Buyer of
any Purchased Loan, the applicable Series Seller shall deliver to Custodian an
irrevocable direction letter, each in a form acceptable to Buyer (the
“Re-direction Letter”) undated and signed in blank, instructing, as applicable,
each Mortgagor, issuer of a Participation Interest, servicer, paying agent or
similar Person with respect to such Purchased Loan (as applicable) to pay all
amounts payable under the related Purchased Loan into the Cash Management
Account, instead of into the Applicable Servicer Account or any other account or
to any other Person. If a Mortgagor, issuer of a Participation Interest,
servicer or paying agent with respect to the Purchased Loan or borrower forwards
any Income or other amounts with respect to a Purchased Loan to such Series
Seller, any Affiliate of such Series Seller or any other Person rather than
directly into the Applicable Servicer Account or Cash Management Account, as
applicable pursuant to the requirements of Section 5(a) hereof, such Series
Seller shall, or shall cause such Affiliate to, (i) deliver a separate
Re-direction Letter to the applicable Mortgagor, issuer of a Participation
Interest, servicer, paying agent or similar Person with respect to the Purchased
Loan and make other best efforts to cause such Mortgagor, issuer of a
Participation Interest, servicer, paying agent or similar Person with respect to
the Purchased Loan or borrower to forward such amounts directly to the Cash
Management Account and (ii) deposit in the Applicable Servicer Account or Cash
Management Account, as applicable pursuant to the requirements of Section 5(a)
hereof, any such amounts within one (1) Business Day of such Series Seller’s (or
its Affiliate’s) receipt thereof.

 

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(c) So long as no Event of Default shall have occurred and be continuing, all
Available Income received by the Depository in respect of the Purchased Loans
(other than Principal Payments and net sale proceeds) during each Collection
Period shall be applied by the Depository on the related Remittance Date in the
following order of priority:

(i) first, to remit to (a) the Custodian an amount equal to any accrued and
unpaid custodial fees and expenses due and payable under the Custodial
Agreement, and (b) the Depository an amount equal to any accrued and unpaid fees
and expenses due and payable under the Controlled Account Agreement;

(ii) second, to remit to Buyer an amount equal to the aggregate Price
Differential which is due and payable in respect of all of the Purchased Loans
as of such Remittance Date;

(iii) third, after giving effect to Section 4(f), to make a payment to Buyer on
account of any outstanding and unpaid Margin Deficit;

(iv) fourth, to remit to Buyer on account of any unpaid fees, costs, expenses,
indemnity amounts and any and all other amounts due and payable from Seller
under this Agreement or the other Transaction Documents; and

(v) fifth, to remit to Master Seller, on behalf of all applicable Series
Sellers, the remainder, if any; provided that, if any Default has occurred and
is continuing on such Remittance Date that has not become an Event of Default,
all amounts otherwise payable to Master Seller, on behalf of the applicable
Series Sellers, hereunder shall be retained in the Cash Management Account until
the earlier of (x) the day on which Buyer provides written notice to Depository
that such Default has been cured to the satisfaction of Buyer in its sole
discretion and no other Default or Event of Default has occurred and is
continuing, at which time the Depository shall apply all such amounts pursuant
to this priority fifth; and (y) the expiration of the cure period applicable to
such Default, at which time the Depository shall apply all such amounts pursuant
to Section 5(e).

(d) So long as no Event of Default shall have occurred and be continuing, any
scheduled or unscheduled Principal Payment (including net sale proceeds) in
respect of a Purchased Loan which is a portion of the Available Income received
by the Depository during each Collection Period shall be applied by the
Depository (1) on the Business Day following the day on which such funds are
deposited in the Cash Management Account for funds deposited in the Cash
Management Account by 2:00 p.m. (Central time) or (2) on the second (2nd)
Business Day following the day on which such funds are deposited in the Cash
Management Account for funds deposited in the Cash Management Account after 2:00
p.m. (Central time), in the following order of priority:

(i) first, to remit to (a) the Custodian an amount equal to any accrued and
unpaid custodial fees and expenses due and payable under the Custodial
Agreement, and (b) the Depository an amount equal to any accrued and unpaid fees
and expenses due and payable under the Controlled Account Agreement (in each
case, to the extent not paid pursuant to Section 5(c)(i) above);

 

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(ii) second, to remit to Buyer an amount equal to the aggregate Price
Differential which has accrued and is outstanding in respect of all of the
Purchased Loans as of such Remittance Date (or such other date of application)
(to the extent not paid pursuant to Section 5(c)(ii) above);

(iii) third, after giving effect to Section 4(f), to make a payment to Buyer on
account of any outstanding and unpaid Margin Deficit (to the extent not paid
pursuant to Section 5(c)(iii) above);

(iv) fourth, to remit to Buyer on account of any unpaid fees, costs, expenses,
indemnity amounts and any and all other amounts due and payable from Seller
under this Agreement or the other Transaction Documents (to the extent not paid
pursuant to Section 5(c)(iv) above);

(v) fifth, to make a payment to Buyer on account of the Repurchase Price (other
than Price Differential paid pursuant to Sections 5(c)(ii) or 5(d)(ii) above) of
each of the respective Purchased Loans in respect of which such Principal
Payment(s) and/or net sales proceeds have been received, in an amount equal to
the product of (A) such Principal Payment(s) and/or net sales proceeds
multiplied by (B) the respective Allocable Percentages applicable thereto;

(vi) sixth, to pay to Buyer all Release Amounts, if any, to be applied by Buyer
first to reduce the then-current unpaid Repurchase Price of the Purchased Loan
in respect of which such Release Amount was paid, and second to reduce the
then-current unpaid Repurchase Price of the remaining Purchased Loans on a pro
rata basis; and

(vii) seventh, to remit to Master Seller, on behalf of all applicable Series
Sellers, the remainder of such Principal Payment or net sale proceeds, if any;
provided that, if any Default has occurred and is continuing as of such
disbursement date that has not become an Event of Default, all amounts otherwise
payable to Master Seller, on behalf of the applicable Series Sellers, hereunder
shall be retained in the Cash Management Account until the earlier of (x) the
day on which Buyer provides written notice to Depository that such Default has
been cured to the satisfaction of Buyer in its sole discretion and no other
Default or Event of Default has occurred and is continuing, at which time the
Depository shall apply all such amounts pursuant to this priority seventh; and
(y) the expiration of the cure period applicable to such Default, at which time
the Depository shall apply all such amounts pursuant to Section 5(e).

(e) If an Event of Default shall have occurred and be continuing, all Available
Income (including Principal Payments and net sale proceeds) received by Buyer or
the Depository in respect of the Purchased Loans during each Collection Period
shall be applied by Buyer or the Depository on the Business Day following the
day on which such funds are deposited in the Cash Management Account as follows:

(i) first, to remit to (a) the Custodian in an amount equal to any accrued and
unpaid custodial fees and expenses due and payable under the Custodial
Agreement, and (b) the Depository in an amount equal to any accrued and unpaid
fees and expenses due and payable under the Controlled Account Agreement;

 

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(ii) second, to remit to Buyer an amount equal to the aggregate Price
Differential which is due and payable in respect of all of the Purchased Loans
as of such Business Day;

(iii) third, to remit to Buyer in an amount equal to any unpaid fees, costs,
expenses, indemnity amounts and any and all other amounts due and payable from
Seller under this Agreement or the other Transaction Documents;

(iv) fourth, to make a payment to Buyer in an amount equal to (a) the Repurchase
Price of each of the Purchased Loans if a Facility Event of Default exists
(which amount may be allocated by Buyer to one or more of the Purchased Loans in
such amounts as Buyer may determine in its sole and absolute discretion), or
(b) the Repurchase Price of each of the Purchased Loans with respect to which a
Transaction Event of Default has occurred and is continuing (but no Facility
Event of Default then exists), in each case until the Repurchase Price for each
of such Purchased Loans has been reduced to zero (if a Facility Event of Default
shall exist or Transaction Events of Default shall exist with respect to more
than one Purchased Loan, Buyer may allocate amounts under this Section 5(e)(iv)
to the Repurchase Price(s) of one or more of such Purchased Loans in such
amounts as Buyer may determine in its sole and absolute discretion); and

(v) fifth, to remit to Master Seller the remainder, if any.

(f) Notwithstanding that each Series Seller shall be responsible for its own
Available Income, the distribution and allocation of Available Income in
accordance with the foregoing provisions of this Section 5 may, for
administrative convenience, be accomplished on an aggregate basis for all Series
Sellers. In the event that the amounts remitted pursuant to Sections 5(c), (d)
and (e) above on any Remittance Date are insufficient to pay the accrued Price
Differential due with respect to each of the Transactions at the respective
Pricing Rates as of such Remittance Date (along with any other amounts then due
and payable), then Buyer, in its sole and absolute discretion, shall determine
each Series Seller which had insufficient Available Income to pay all accrued
and unpaid Price Differential at the applicable Pricing Rate as of such
Remittance Date and Margin Deficit payments related to the Transaction(s) to
which such Series Seller is a party (together with such Series Seller’s share of
the custodial fees and any other joint expenses allocated ratably according to
the Available Income received by each of the Series Sellers) and deliver notice
(which may be delivered via email) to Master Seller, on behalf of each of the
Series Sellers, on the Remittance Date of the portion of such Cash Flow
Deficiency payable by the respective Series Sellers. Each applicable Series
Seller shall be required to pay the portion of the Cash Flow Deficiency
allocable to such Series Seller (as set forth in such notice from Buyer) to
Buyer, by wire transfer in immediately available funds within one (1) Business
Day after such Remittance Date. If any Series Seller shall fail to pay the
portion of the Cash Flow Deficiency due from such Series Seller within one
(1) Business Day after such Remittance Date, such failure shall constitute a
Transaction Event of Default with respect to the Transaction(s) to which each
such Series Seller is a party.

 

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(g) All Underlying Purchased Loan Reserves for any Purchased Loan must be held
with the applicable Servicer in accordance with Section 28 in segregated
accounts held for the benefit of Seller or otherwise subject to control
agreements approved by the Buyer. In the event that no Servicer holds any such
Underlying Purchased Loan Reserves for a Purchased Loan and Seller would
otherwise hold the Underlying Purchased Loan Reserves directly, it shall forward
such Underlying Purchased Loan Reserves to the Cash Management Account to be
held and applied in accordance with the applicable Purchased Loan Documents.

6. SECURITY INTEREST

Buyer and Seller intend, for all purposes other than those described in
Section 22(e), that all Transactions hereunder be sales to Buyer of the
Purchased Loans and not loans from Buyer to Seller secured by the Purchased
Loans. However, in the event any such Transaction is deemed to be a loan and as
security for the performance by Seller of all of Seller’s obligations to Buyer
under the Transaction Documents and the Transactions hereunder or in the event
that a transfer of a Purchased Loan is otherwise ineffective to effect an
outright transfer of such Purchased Loan to Buyer, Master Seller, on behalf of
itself and with respect to each Series Seller, hereby pledges all of its right,
title, and interest in, to and under and grants a lien on, and security interest
in (which lien and security interest shall be of first priority), all of its
right, title, and interest in the following property, whether now owned or
hereafter acquired, now existing or hereafter created and wherever located
(collectively, the “Collateral”) to Buyer to secure the payment and performance
of all other amounts or obligations owing to Buyer pursuant to this Agreement
and the other Transaction Documents (the “Repurchase Obligations”) (it being
understood that the grant of security interest in any items described below
which are otherwise sold to Buyer pursuant to any Transaction hereunder is made
to secure Buyer’s interest therein in the event any such Transaction is deemed
to be a loan):

(a) the Purchased Loans, Servicing Agreements, Servicing Records, Servicing
Rights, insurance relating to the Purchased Loans, and collection and escrow
accounts relating to the Purchased Loans;

(b) the Cash Management Account and all monies from time to time on deposit in
the Cash Management Account;

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

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

For purposes of the grant of the security interest pursuant to Section 6 of this
Agreement, this Agreement shall be deemed to constitute a security agreement
under the New York Uniform Commercial Code (the “UCC”). Buyer shall have all of
the rights and may exercise all of the remedies of a secured creditor under the
UCC and the other laws of the State of New York. In furtherance of the
foregoing, (a) Buyer, at Seller’s sole cost and expense, shall cause to be filed
in such locations as may be necessary to perfect and maintain perfection and

 

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priority of the security interest granted hereby, UCC financing statements and
continuation statements (collectively, the “Filings”), and (b) Seller shall from
time to time take such further actions as may be reasonably requested by Buyer
to maintain and continue the perfection and priority of the security interest
granted hereby.

Seller hereby irrevocably authorizes Buyer at any time and from time to time to
file in any filing office in any appropriate jurisdiction any initial financing
statements and amendments thereto that (1) indicate the Collateral (i) as all
Purchased Loans or words of similar effect, regardless of whether the
description of the Purchased Loans in such financing statements includes every
component set forth in the definition, or (ii) as being of an equal or lesser
scope or with greater detail, and (2) contain any other information required by
part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance
of any financing statement or amendment, including whether Seller is an
organization, the type of organization and any organization identification
number issued to Seller. Seller also ratifies its authorization for Buyer to
have filed in any jurisdiction any initial financing statements or amendments
thereto if filed prior to the date hereof. Without limiting the foregoing,
Seller also hereby irrevocably authorizes the Buyer and its counsel to file UCC
financing statements in form and substance satisfactory to the Buyer, describing
the collateral as “All assets of Master Seller and all assets of each series of
interests now or hereafter established by Master Seller or its member, in each
case, whether now owned or existing or hereafter acquired or arising and
wheresoever located, and all proceeds and products thereof” or words to that
effect, and any limitations on such collateral description.

Buyer’s security interest in a Purchased Loan, or the Collateral as a whole,
shall terminate only upon (i) in the case of an individual Purchased Loan, the
repurchase thereof in accordance with this Agreement and (ii) in the case of the
Collateral as a whole, the termination of Seller’s obligations under this
Agreement and the documents delivered in connection herewith and therewith. Upon
any such termination, Buyer shall deliver to Seller such UCC termination
statements and other release documents as may be commercially reasonable to
evidence the release of Buyer’s lien on and security interest in the applicable
Purchased Loan, or the Collateral, as applicable and to return the Purchased
Documents for the applicable Purchased Loan to Seller.

7. PAYMENT, TRANSFER AND CUSTODY

(a) On the Purchase Date for each Transaction, ownership of the Purchased Loans
shall be transferred to Buyer or its designee (including the Custodian) on a
servicing-released basis against the simultaneous transfer to an account of
Seller or as otherwise specified in the Confirmation relating to such
Transaction of the difference between (i) the Purchase Price for the Purchased
Loan(s) minus (ii) any and all fees, costs and expenses including, without
limitation, reasonable attorneys’ fees and disbursements payable to Buyer in
connection with such Transaction (if and to the extent that Buyer requires that
Seller pay such fees, costs and expenses on the Purchase Date for such
Transaction). The Servicing Rights and other servicing provisions under this
Agreement are not severable from or to be separated from the Purchased Loans
under this Agreement; and such Servicing Rights and other servicing provisions
of this Agreement constitute (a) “related terms” under this Agreement within the
meaning of Section 101(47)(A)(i) of the Bankruptcy Code and/or (b) a security
agreement or other arrangement or other credit enhancement related to the
Transaction Documents.

 

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(b) On or before such Purchase Date, Seller shall deliver or cause to be
delivered to Buyer or its designee (including the Bailee or the Custodian) the
Custodial Delivery in the form attached hereto as Exhibit IV. In connection with
each sale, transfer, conveyance and assignment of a Purchased Loan, on or prior
to each Purchase Date with respect to such Purchased Loan, Seller shall deliver
or cause to be delivered and released to the Custodian or Bailee, as applicable,
and shall cause the Custodian or Bailee, as applicable, to deliver a Trust
Receipt on the Purchase Date concerning the receipt of, the following documents
(collectively, the “Purchased Loan File”) pertaining to each of the Purchased
Loans identified in the Custodial Delivery delivered therewith; provided, that
Seller shall deliver a certificate of an Authorized Representative of Seller
certifying that any copies of documents delivered represent true and correct
copies of the originals of such documents:

(i) The original Mortgage Note (or A-Note with respect to any Senior Interest)
(and if applicable, one or more allonges) bearing all intervening endorsements,
endorsed “Pay to the order of _________ without recourse” and signed in the name
of the last endorsee (the “Last Endorsee”) by an authorized Person (in the event
that the Purchased Loan was acquired by the Last Endorsee in a merger, the
signature must be in the following form: “[Last Endorsee], successor by merger
to [name of predecessor]”; in the event that the Purchased Loan was acquired or
originated by the Last Endorsee while doing business under another name, the
signature must be in the following form: “[Last Endorsee], formerly known as
[previous name]”).

(ii) An original (or, in the case of the Watchtower A-Note Eligible Loan, a
copy) of each guarantee executed in connection with the Mortgage Note (if any).

(iii) The original (or, in the case of the Watchtower A-Note Eligible Loan, a
copy) of the loan agreement.

(iv) The original Mortgage with evidence of recording thereon, or a copy thereof
together with an officer’s certificate of Seller certifying that such represents
a true and correct copy of the original and, that such original has been
submitted for recordation in the appropriate governmental recording office of
the jurisdiction where the Mortgaged Property is located.

(v) The originals of all assumption, modification, consolidation or extension of
mortgage agreements (if any) with evidence of recording thereon, or copies
thereof together with an officer’s certificate of Seller certifying that such
represent true and correct copies of the originals and that such originals have
each been submitted for recordation in the appropriate governmental recording
office of the jurisdiction where the Mortgaged Property is located.

(vi) The original Assignment of Mortgage in blank for each Purchased Loan, in
form and substance acceptable for recording in the relevant jurisdiction, and in
form and substance otherwise acceptable to Buyer and signed in the name of the
Last Endorsee (in the event that the Purchased Loan was acquired by the Last
Endorsee in a merger, the signature must be in the following form: “[Last
Endorsee], successor by merger to [name of predecessor]”; in the event that the
Purchased Loan was acquired or originated while doing business under another
name, the signature must be in the following form: “[Last Endorsee], formerly
known as [previous name]”).

 

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(vii) The originals of all intervening assignments of mortgage (if any) with
evidence of recording thereon, or copies thereof together with an officer’s
certificate of Seller certifying that such represent true and correct copies of
the originals and that such originals have each been submitted for recordation
in the appropriate governmental recording office of the jurisdiction where the
Mortgaged Property is located.

(viii) The original (or, in the case of the Watchtower A-Note Eligible Loan, a
copy) of the attorney’s opinion of title and abstract of title or the original
(or, in the case of the Watchtower A-Note Eligible Loan, a copy) of the
mortgagee title insurance policy, or if the mortgagee title insurance policy has
not been issued, the binding pro forma policy or commitment marked effective
attached to the Purchased Loan closing escrow letter.

(ix) The original (or, in the case of the Watchtower A-Note Eligible Loan, a
copy) of any security agreement, chattel mortgage or equivalent document
executed in connection with the Purchased Loan (if any).

(x) The original assignment of leases and rents, if any, with evidence of
recording thereon, or a copy thereof together with an officer’s certificate of
Seller, certifying that such copy represents a true and correct copy of the
original and that such original has been submitted for recordation in the
appropriate governmental recording office of the jurisdiction where the
Mortgaged Property is located.

(xi) The originals of all intervening assignments of assignment of leases and
rents, if any, or copies thereof, with evidence of recordation, or submission
for recordation, from the appropriate governmental recording office of the
jurisdiction where the Mortgaged Property is located (or, in the case of the
Watchtower A-Note Eligible Loan, if applicable, copies thereof together with an
officer’s certificate of Seller, certifying that such copies represent true and
correct copies of the originals and that such originals have been submitted for
recordation in the appropriate governmental recording office of the jurisdiction
where the Mortgaged Property is located).

(xii) A copy of the UCC financing statements and all necessary UCC continuation
statements with evidence of filing thereon, and UCC assignments, which UCC
assignments shall be in form and substance acceptable for filing.

(xiii) An original (or, in the case of the Watchtower A-Note Eligible Loan, a
copy) of the environmental indemnity agreement (if any).

(xiv) The originals (or, in the case of the Watchtower A-Note Eligible Loan,
copies) of all lockbox agreements, cash management agreements, other Loan
Documents and other material documents (including, without limitation, legal
opinions) and agreements relating to such Purchased Loan.

(xv) An omnibus assignment in blank (if any).

 

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(xvi) For any Senior Interest which is a Participation Interest, the original
participation certificate evidencing such Senior Interest endorsed “Pay to the
order of ___________ without recourse” and signed in the name of the Last
Endorsee by an authorized Person (in the event that the Purchased Loan was
acquired by the Last Endorsee in a merger, the signature must be in the
following form: “[Last Endorsee], successor by merger to [name of predecessor]”;
in the event that the Senior Interest was acquired or originated by the Last
Endorsee while doing business under another name, the signature must be in the
following form: “[Last Endorsee], formerly known as [previous name]”).

(xvii) For any Senior Interest, the original or a copy of the participation
agreement or co-lender agreement, as applicable, and all other Senior Interest
Documents executed in connection with the Senior Interest.

(xviii) For any Senior Interest, the original (or, in the case of the Watchtower
A-Note Eligible Loan, a copy) of the Senior Interest Side Letter (if
applicable).

(xix) The original or a copy of the intercreditor or co-lender agreement (if
any) executed in connection with the Purchased Loan to the extent the subject
borrower, or an affiliate thereof, has encumbered its assets with mezzanine or
other subordinate financing in addition to the Purchased Loan.

(xx) Other than in the case of the Watchtower A-Note Eligible Loan, a
Mortgagor’s certificate or title affidavit (if any).

(xxi) A survey of the Mortgaged Property (if any) as accepted by the title
company for issuance of the mortgagee title policy.

(xxii) A copy of the Mortgagor’s, and (if applicable) any guarantor’s, opinion
of counsel.

(xxiii) An original (or, in the case of the Watchtower A-Note Eligible Loan, a
copy) of an assignment of permits, contracts and agreements (if any).

(xxiv) The original of all letters of credit issued and outstanding in
connection with such Purchased Loan, with any modifications, amendments or
endorsements necessary to permit Buyer to draw upon them when and if it is
contractually permitted to do so pursuant to this Agreement (if any).

(c) In addition, with respect to each Purchased Loan, Seller shall deliver an
instruction letter from Seller to the Mortgagor under each Purchased Loan,
instructing the Mortgagor to remit all sums required to be remitted to the
holder of the Purchased Loan under the related Purchased Loan Documents to the
Servicer for deposit in the Applicable Servicer Account or as otherwise directed
in a written notice signed by Seller and Buyer; provided, however, that to the
extent that all sums required to be remitted to Seller under a Purchased Loan
are to be remitted to Seller by a primary Servicer pursuant to the related
Purchased Loan Documents, Seller shall deliver an instruction letter from Seller
to such primary Servicer, instructing such primary Servicer to remit all sums
required to be remitted to the Seller under the

 

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related Purchased Loan Documents, to the Cash Management Account or as otherwise
directed in a written notice signed by Seller and Buyer. If the Mortgagor or the
primary Servicer, as applicable, under any Purchased Loan remits any sums
required to be remitted to the holder of such Purchased Loan under the related
Purchased Loan Documents to Seller or its Affiliate, Seller shall, within two
(2) Business Days after receipt thereof, (i) remit such sums (other than
Underlying Purchased Loan Reserves) to the Depository for deposit in the Cash
Management Account as set forth in Section 5 hereof or as otherwise directed in
the written notice signed by Seller and Buyer, and (ii) deliver (or cause
Servicer to deliver) an additional instruction letter from Seller or Servicer,
as applicable, to the Mortgagor or the primary Servicer, as applicable, under
the applicable Purchased Loan, instructing the Mortgagor or the primary
Servicer, as applicable to remit all sums required to be remitted to the holder
of the Purchased Loan under the related Purchased Loan Documents to the Servicer
for deposit in the Applicable Servicer Account or as otherwise directed in a
written notice signed by Seller and Buyer.

(d) From time to time, Seller shall forward to the Custodian additional original
documents or additional copies of documents evidencing any assumption,
modification, consolidation or extension of a Purchased Loan approved in
accordance with the terms of this Agreement, and upon receipt of any such other
documents, the Custodian shall hold such other documents as Custodian shall
request from time to time. With respect to any documents which have been
delivered or are being delivered to recording offices for recording and have not
been returned to Seller in time to permit their delivery hereunder at the time
required, in lieu of delivering such original documents, Seller shall deliver to
Buyer or its designee (including the Custodian) a true copy thereof with an
officer’s certificate certifying that such copy is a true, correct and complete
copy of the original, which has been transmitted for recordation. Seller shall
deliver such original documents to Buyer or its designee (including the
Custodian) within five (5) Business Days after they are received. With respect
to all of the Purchased Loans delivered by Seller to Buyer or its designee
(including the Custodian), Seller shall execute an omnibus power of attorney
substantially in the form of Exhibit V attached hereto irrevocably appointing
Buyer its attorney-in-fact with full power to, during the continuance of an
Event of Default, (i) complete and record the Assignment of Mortgage,
(ii) complete the endorsement of the Mortgage Note, (iii) request and receive
progress reports, revised, amended or supplemented construction budgets,
construction manager reports and any material notices or other documents with
respect to any Construction Loans and (iv) take such other steps as may be
reasonably necessary or desirable to enforce Buyer’s rights against such
Purchased Loans and the related Purchased Loan Files and the Servicing Records.
Buyer shall deposit the Purchased Loan Files representing the Purchased Loans,
or direct that the Purchased Loan Files be deposited directly, with the
Custodian. The Purchased Loan Files shall be maintained in accordance with the
Custodial Agreement. Any Purchased Loan Files not delivered to Buyer or its
designee (including the Custodian) are and shall be held in trust by Seller or
its designee for the benefit of Buyer as the owner thereof. Seller or its
designee shall maintain a copy of the Purchased Loan File and the originals of
the Purchased Loan Files not delivered to Buyer or its designee. The possession
of the Purchased Loan Files by Seller or its designee is at the will of Buyer
for the sole purpose of servicing the related Purchased Loan, and such retention
and possession by Seller or its designee is in a custodial capacity only. The
books and records (including, without limitation, any computer records or tapes)
of Seller or its designee shall be marked appropriately to reflect clearly the
sale of the related Purchased Loan to Buyer. Seller or its designee (including
the Custodian) shall release its custody of the Purchased Loan Files only in
accordance with written instructions from Buyer and in accordance with the
provisions of the Custodial Agreement, unless such release is required as
incidental to the servicing of the Purchased Loans, is in connection with a
repurchase of any Purchased Loan by Seller or as otherwise required by law.

 

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(e) Unless an Event of Default shall have occurred and be continuing, Buyer
hereby appoints and authorizes Seller to act as Buyer’s agent for purposes
relating to the holder of the Purchased Loan and to take such actions on Buyer’s
behalf under the Purchased Loan Documents and to exercise such powers and
perform such duties as are necessary under the Purchased Loan Documents to
administer the Purchased Loans, including, without limitation, (i) entering into
amendments, modifications and waivers to, under or in connection with the
Purchased Loan Documents, (ii) releasing and otherwise dealing with any
collateral for such Purchased Loan, (iii) receiving all notices and deliveries
delivered by the obligor(s) under the Purchased Loan Documents, (iv) consenting
to or approving any matter which requires “lender’s” or, in the case of any
Senior Interest, “participant’s” or “noteholder’s”, consent or approval under
the Purchased Loan Documents, (v) administering all matters related to
additional advances to be provided under any Purchased Loan Document, including,
if applicable, making out of its own funds, any additional advances pursuant to
the terms of the related Purchased Loan Documents, (vi) enforcement and related
remedies under the Purchased Loan Documents and (vii) exercising all voting,
consent, corporate and decision-making rights with respect to the Purchased
Loans, provided that Seller shall not take, and shall not permit any other
Person to take, any Material Action with respect to any Purchased Loan or
Purchased Loan Document without the prior written consent of Buyer; provided,
further, that with respect to any amendment, modification, waiver or consent in
respect of any Purchased Loan or Purchased Loan Documents, regardless of whether
constituting a Material Action, Seller shall send notice and copies thereof to
Buyer promptly after entering into such amendment, modification, waiver or
consent. Upon the occurrence and during the continuation of an Event of Default,
Buyer shall be entitled to exercise all voting, consent, corporate, and
decision-making rights with respect to the Purchased Loans without regard to
Seller’s instructions. Buyer agrees to exercise the same standard of discretion
required of Seller under the Purchased Loan Documents in determining whether to
consent to any Material Action.

8. SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED LOANS

(a) Title to all Purchased Loans shall pass to Buyer on the applicable Purchase
Date, and Buyer shall have free and unrestricted use of all Purchased Loans,
subject, however, to the terms of this Agreement. Subject to Section 18(b),
nothing in this Agreement or any other Transaction Document shall preclude Buyer
from engaging in repurchase transactions with the Purchased Loans or otherwise
selling, transferring, pledging, repledging, hypothecating, or rehypothecating
the Purchased Loans, but no such transaction shall relieve Buyer of its
obligations to transfer the Purchased Loans to Seller pursuant to Section 3 of
this Agreement or of Buyer’s obligation to credit or pay Available Income to, or
apply Available Income to the obligations of, Seller pursuant to Section 5
hereof.

(b) Nothing contained in this Agreement or any other Transaction Document shall
obligate Buyer to segregate any Purchased Loans delivered to Buyer by Seller.
Notwithstanding anything to the contrary in this Agreement or any other
Transaction Document, no Purchased Loan shall remain in the custody of Seller or
an Affiliate of Seller.

 

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9. REPRESENTATIONS

(a) Buyer represents and warrants to Seller as follows:

(i) Organization. Buyer has the power and authority to execute, deliver, and
perform its obligations under this Agreement and the other Transaction
Documents, and the Transactions contemplated hereunder and thereunder.

(ii) Due Execution; Enforceability. The Transaction Documents have been duly
executed and delivered by Buyer, for good and valuable consideration. The
Transaction Documents constitute the legal, valid and binding obligations of
Buyer, enforceable against Buyer in accordance with their respective terms
subject to bankruptcy, insolvency, and other limitations on creditors’ rights
generally and to equitable principles.

(iii) Non-Contravention. None of the execution and delivery of the Transaction
Documents, the consummation by Buyer of the transactions contemplated by the
Transaction Documents (or any of them), nor compliance by Buyer with the terms,
conditions and provisions of the Transaction Documents (or any of them) will
conflict with or result in a breach of any of the terms, conditions or
provisions of (i) the organizational documents of Buyer, (ii) any contractual
obligation to which Buyer is now a party or by which it is otherwise bound or to
which the assets of Buyer are subject or constitute a default thereunder, or
result thereunder in the creation or imposition of any lien upon any of the
assets of Buyer, (iii) any judgment or order, writ, injunction, decree or demand
of any court applicable to Buyer, or (iv) any applicable Requirement of Law, in
the case of clauses (ii)-(iv) above, to the extent that such conflict or breach
would have a material adverse effect upon Buyer’s ability to perform its
obligations hereunder.

(b) Seller represents and warrants to Buyer that as of the Closing Date, the
Amendment and Restatement Date, the Second Amendment and Restatement Date and as
of each Purchase Date (and, in the case of the representations and warranties
made in Section 9(b)(viii), at all times while this Agreement and any
Transaction is in effect); provided that, for purposes hereof, all references to
the term “Seller” in this Section 9(b) shall be deemed to mean and refer to
Master Seller together with each Series Seller which is a party to this
Agreement as of the date the applicable representation and warranty is made or
deemed made:

(i) Organization. Master Seller is duly formed, validly existing and in good
standing under the laws and regulations of the state of Seller’s formation and
is duly licensed, qualified, and in good standing in every state where such
licensing or qualification is necessary for the transaction of Seller’s
business, except to the extent such failure would not reasonably be expected to
result in a Material Adverse Effect. Seller has the power to own and hold the
assets it purports to own and hold, to carry on its business as now being
conducted and proposed to be conducted, and to execute, deliver, and perform its
obligations under this Agreement and the other Transaction Documents.

 

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(ii) Due Execution; Enforceability. The Transaction Documents have been duly
executed and delivered by Seller, for good and valuable consideration. The
Transaction Documents constitute the legal, valid and binding obligations of
Seller, enforceable against Seller in accordance with their respective terms
subject to bankruptcy, insolvency, and other limitations on creditors’ rights
generally and to equitable principles.

(iii) Non-Contravention. None of the execution and delivery of the Transaction
Documents, the consummation by Seller of the transactions contemplated by the
Transaction Documents (or any of them), nor compliance by Seller with the terms,
conditions and provisions of the Transaction Documents (or any of them) will
conflict with or result in a breach of any of the terms, conditions or
provisions of (i) the organizational documents of Seller, (ii) any contractual
obligation to which Seller is now a party or by which it is otherwise bound or
to which the assets of Seller are subject or constitute a default thereunder, or
result thereunder in the creation or imposition of any lien upon any of the
assets of Seller, other than pursuant to the Transaction Documents, (iii) any
judgment or order, writ, injunction, decree or demand of any court applicable to
Seller, or (iv) any applicable Requirement of Law, in the case of clauses
(ii)-(iv) above, to the extent that such conflict or breach would have a
Material Adverse Effect. Seller has all necessary licenses, permits and other
consents from Governmental Authorities necessary to acquire, own and sell the
Purchased Loans and for the performance of its obligations under the Transaction
Documents, except to the extent the failure to have any such licensees, permits
or consents would not result in a Material Adverse Effect.

(iv) Litigation; Requirements of Law. Except as otherwise disclosed in writing
to Buyer on or prior to the Closing Date, the Amendment and Restatement Date and
the Second Amendment and Restatement Date, there is no material action, suit,
proceeding, investigation, or arbitration pending or, to the Knowledge of
Seller, threatened against Seller, the Sponsor or any of their respective
assets, which is reasonably likely to result in a Material Adverse Effect.
Seller is in compliance in all material respects with all Requirements of Law
applicable to Seller. Neither Seller nor the Sponsor is in default in any
material respect with respect to any judgment, order, writ, injunction, decree,
rule or regulation of any arbitrator or Governmental Authority.

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

(vi) Good Title to Purchased Loans. Immediately prior to the purchase of any
Purchased Loan by Buyer from Seller, Seller owned such Purchased Loan free and
clear of any lien, encumbrance or impediment to transfer (including any “adverse
claim” as defined in Section 8-102(a)(1) of the UCC), and Seller is the record
and beneficial owner of and has good and marketable title to and the right to
sell and transfer such Purchased

 

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Loan to Buyer and, upon transfer of such Purchased Loan to Buyer, Buyer shall be
the owner of such Purchased Loan free of any adverse claim, subject to the
rights of Seller and obligations of Buyer pursuant to the terms of this
Agreement and the Transaction Documents, in each case except for liens to be
released simultaneously with the sale of a Purchased Loan to Buyer hereunder,
and subject to the terms and conditions of any participation agreement,
co-lender agreement, intercreditor agreement or similar agreement with respect
to any Purchased Loan. In the event that any Transaction is characterized as a
secured financing of the related Purchased Loans, the provisions of this
Agreement are effective to create in favor of Buyer a valid “security interest”
(as defined in Section 1-201(b)(37) of the UCC) in all rights, title and
interest of Seller in, to and under the Collateral and Buyer shall have a valid
perfected first priority security interest in such Purchased Loans.

(vii) No Default. No Event of Default or, to Seller’s Knowledge, Default exists
under or with respect to the Transaction Documents unless disclosed to Buyer in
writing on or prior to the Closing Date.

(viii) Representations and Warranties Regarding the Purchased Loans; Delivery of
Preliminary Due Diligence Package and Purchased Loan File. With respect to each
Purchased Loan sold in a Transaction hereunder, each of the Purchased Loan
Representations applicable to such Purchased Loan are true and correct, except
as disclosed to Buyer in writing prior to the Purchase Date for the applicable
Purchased Loan in an Exceptions Report. It is understood and agreed that the
Purchased Loan Representations shall survive delivery of the respective
Purchased Loan File to Buyer or its designee (including the Custodian) and shall
remain true and correct at all times while this Agreement is in effect. With
respect to each Purchased Loan, the Preliminary Due Diligence Package delivered
to Buyer in connection with such Purchased Loan is complete, true and accurate
in all material respects to the best of Seller’s Knowledge (including, but not
limited to, complete, true and accurate in all material respects with respect to
the disclosure of any direct or indirect ownership interests of Seller or its
Affiliates in the Mortgagor). With respect to each Purchased Loan, the Mortgage
Note the Mortgage, the Assignment of Mortgage and any other documents required
to be delivered under this Agreement and the Custodial Agreement for such
Purchased Loan have been delivered to Buyer or its designee (including the
Custodian or a Bailee, as applicable) on its behalf. Seller or its designee is
in possession of a complete, true and accurate Purchased Loan File with respect
to each Purchased Loan, except for such documents the originals of which have
been delivered to the Custodian or a Bailee and except as may otherwise be
approved by Buyer in accordance with this Agreement and the Custodial Agreement.

(ix) Adequate Capitalization; No Fraudulent Transfer. Seller has, as of the
Purchase Date, adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its
contemplated business operations. Seller is generally able to pay, as of the
Closing Date and the Amendment and Restatement Date, and as of the Second
Amendment and Restatement Date is paying, its debts as they come due. Seller is
not insolvent nor will Seller be made insolvent by virtue of Seller’s execution
of or performance under any of the Transaction Documents

 

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within the meaning of the bankruptcy laws or the insolvency laws of the United
States, the State of New York or any other jurisdiction under which Seller is
organized or qualified to do business. Seller has not entered into any
Transaction Document or any Transaction pursuant thereto in contemplation of
insolvency or with intent to hinder, delay or defraud any creditor.

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

(xi) Ownership. The direct, and to the extent depicted, the indirect, ownership
interests in Seller are as set forth on the organizational chart attached hereto
as Exhibit VII hereto.

(xii) Organizational Documents. Seller has delivered to Buyer certified copies
of its organizational documents, together with all amendments thereto, if any.

(xiii) No Encumbrances. Subject to the terms of this Agreement, and subject to
the terms and conditions of any participation agreement, co-lender agreement,
intercreditor agreement with respect to any Purchased Loan, there are (i) no
outstanding rights, options, warrants or agreements on the part of Seller for a
purchase, sale or issuance, in connection with the Purchased Loans, and (ii) no
agreements on the part of Seller to issue, sell or distribute the Purchased
Loans.

(xiv) Federal Regulations. None of Master Seller, any Series Seller, Sponsor or
Member is required to register as an “investment company” under the Investment
Company Act and the basis of each such exemption from the registration
requirements of the Investment Company Act is other than the exemptions set
forth in Section 3(c)(1) or Section 3(c)(7) thereof.

(xv) Taxes. Seller has filed or caused to be filed all federal and other
material Tax returns which would be delinquent if they had not been filed on or
before the date hereof and has paid all Taxes shown to be due and payable on or
before the date hereof on such returns or on any assessments made against it or
any of its property and all other Taxes, fees or other charges imposed on it and
any of its assets by any Governmental Authority except for any such Taxes as are
being appropriately contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves have been
provided in accordance with GAAP; no Tax liens have been filed against any of
Seller’s assets except for any such Tax liens as are being appropriately
contested in good faith by appropriate proceedings diligently conducted and with
respect to which adequate reserves have been provided in accordance with GAAP in
all material respects and, to the Knowledge of Seller, no claims are being
asserted with respect to any such Taxes, fees or other charges.

 

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(xvi) ERISA. Neither Seller nor any of its ERISA Affiliates sponsors, maintains,
contributes to, or has within the immediately preceding five calendar years
sponsored, maintained or contributed to, any Plans or Multiemployer Plans, the
liability for which could reasonably be expected in the aggregate to result in a
Material Adverse Effect.

(xvii) Judgments/Bankruptcy; Liens. Except as disclosed in writing to Buyer
there are no judgments against Seller or Sponsor unsatisfied of record or
docketed in any court located in the United States of America, no Act of
Insolvency has ever occurred with respect to Seller or Sponsor (provided that
any Act of Insolvency occurring pursuant to clause (iv) of the definition
thereof shall for purposes of this clause be limited to such admissions by any
Person described in the definition of “Knowledge”) and Seller has no liens of
any nature against it, except for liens created in favor of Buyer under this
Agreement or the other Transaction Documents.

(xviii) Full and Accurate Disclosure. No information contained in the
Transaction Documents, or any written statement furnished to Buyer by or on
behalf of Seller pursuant to the terms of the Transaction Documents, contains
any untrue statement of a material fact or, to the Knowledge of Seller, omits to
state a material fact necessary to make the statements contained herein or
therein not misleading when taken as a whole and in light of the circumstances
under which they were made.

(xix) Financial Information. All financial data concerning Seller that has been
delivered by or on behalf of Seller to Buyer is true, complete and correct in
all material respects and has been prepared in accordance with GAAP. Since the
delivery of such data, except as otherwise disclosed in writing to Buyer, there
has been no change in the financial position of Seller, or in the results of
operations of Seller, which change is reasonably likely to result in a Material
Adverse Effect.

(xx) Reserved.

(xxi) Notice Address; Jurisdiction of Organization. On the date of this
Agreement, Seller’s address for notices is as set forth on Annex I attached
hereto. Seller’s jurisdiction of formation is Delaware. The location where
Seller keeps its books and records, including all computer tapes and records
relating to the Collateral, is its notice address.

(xxii) Prohibited Person. (a) None of the funds or other assets of Seller or
Sponsor constitute property of, or are beneficially owned, directly or
indirectly, by a Prohibited Person with the result that the investment in Seller
or Sponsor, as applicable (whether directly or indirectly), is prohibited by law
or the entering into this Agreement by Buyer is in violation of law; (b) no
Prohibited Person has any interest of any nature whatsoever in Seller or
Sponsor, as applicable, with the result that the investment in Seller or
Sponsor, as applicable (whether directly or indirectly), is prohibited by law or
the entering into this Agreement is in violation of law; (c) none of the funds
of Seller or Sponsor, as applicable, have been derived from any unlawful
activity with the result that the investment in Seller or Sponsor, as applicable
(whether directly or indirectly), is

 

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prohibited by law or the entering into this Agreement is in violation of law;
(d) neither Seller nor Sponsor has conducted or will conduct any business or has
engaged or will engage in any transaction dealing with any Prohibited Person;
and (e) neither Seller nor Sponsor is a Prohibited Person or has been convicted
of a felony or a crime which if prosecuted under the laws of the United States
of America would be a felony.

(xxiii) Anti-Corruption. Seller, Sponsor, each of their Subsidiaries and their
respective directors, officers and employees and, to the knowledge of Seller or
Sponsor, the agents of Seller, Sponsor and their Subsidiaries, are in compliance
with all applicable Anti-Corruption Laws in all material respects. Seller,
Sponsor and their Subsidiaries have instituted, or remain subject to, policies
and procedures reasonably designed to ensure compliance with applicable
Anti-Corruption Laws.

(xxiv) Obligations. Seller has no material contingent or actual obligations not
related to the Purchased Loans or as permitted under Section 12(i).

(c) On the Purchase Date for any Transaction, Master Seller and each Series
Seller party to any Transaction hereunder (including the Transaction closing on
such Purchase Date) shall be deemed to have made all of the representations set
forth in this Section 9 as of such Purchase Date (except to the extent such
representations and warranties are made solely as of a particular date, in which
case such representations and warranties shall be true and correct in all
material respects as of such particular date).

10. NEGATIVE COVENANTS OF SELLER

During the term of this Agreement and so long as any Transaction is in effect
hereunder, Seller shall not without the prior written consent of Buyer (for
purposes hereof, all references to the term “Seller” in this Section 10 shall be
deemed to mean and refer to Master Seller together with each Series Seller which
is a party to this Agreement as of the applicable date):

(a) take any action which would directly or indirectly impair or adversely
affect Buyer’s title to any of the Purchased Loans;

(b) transfer, assign, convey, grant, bargain, sell, set over, deliver or
otherwise dispose of (including, without limitation, any effective transfer or
other disposition as a result of a division of Seller), or pledge, encumber or
hypothecate, directly or indirectly (any of the foregoing, a “Transfer”), any
interest in the Purchased Loans (or any of them) to any Person other than Buyer,
or engage in repurchase transactions or similar transactions with respect to the
Purchased Loans (or any of them) with any Person other than Buyer, except, in
each case, for the establishment of any new Series Seller in connection with any
Transaction in accordance with the provisions of Section 3(n) hereof;

(c) change its name or its jurisdiction of organization from the jurisdiction
referred to in Section 9(b)(xxi) unless it shall have provided Buyer at least
thirty (30) days’ prior written notice of such change;

 

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(d) create, incur or permit to exist any lien, encumbrance or security interest
in or on any of the Purchased Loans or the other Collateral, except for any
liens created in favor of Buyer under this Agreement or the other Transaction
Documents;

(e) modify or terminate the Master Seller LLC Agreement or any of the
organizational documents of Seller (provided, however, notwithstanding anything
to the contrary in this Agreement, Buyer hereby consents to Member’s execution
of that certain Second Amended and Restated Limited Liability Company Agreement
of Master Seller dated as of February 9, 2017);

(f) enter into, consent or assent to any amendment or supplement to, or
termination of, or waiver of any provision of, any of the Purchased Loan
Documents relating to any Purchased Loan, other than in accordance with
Section 7(e) hereof;

(g) transfer or permit to be transferred any direct or indirect ownership
interests in Seller, or take any action or permit any action to be taken, if any
such transfers and/or actions, individually or in the aggregate, would result in
a Change of Control.

(h) take any action, file any Tax return, or make any election inconsistent with
the treatment of Seller, for purposes of U.S. federal, state and local income
taxes, as a disregarded entity, including making an election under
Section 301.7701-3(a) of the Treasury Regulations to be treated as an
association taxable as a corporation for U.S. federal income tax purposes;

(i) after the occurrence and during the continuation of any Event of Default,
make any distribution, payment on account of, or set apart assets for, a sinking
or other analogous fund for the purchase, redemption, defeasance, retirement or
other acquisition of any direct or indirect equity or ownership interest of
Seller, whether now or hereafter outstanding, or make any other distribution in
respect thereof, either directly or indirectly, whether in cash or property or
in obligations of Seller;

(j) send a payment redirection letter to the Mortgagor of any Purchased Loan, or
otherwise instruct any Mortgagor, to make any payment due on a Purchased Loan to
any account, other than the Applicable Servicer Account or Cash Management
Account;

(k) sponsor or maintain any Plans or make any contributions to, or have any
liability or obligation (direct or contingent) with respect to, any Plan or
permit any ERISA Affiliate to sponsor or maintain any Plans or make any
contributions to, or have any liability or obligation (direct or contingent)
with respect to, any Plan

(l) engage in any transaction that would cause any obligation or action taken or
to be taken hereunder (or the exercise by Buyer of any of its rights under this
Agreement, the Purchased Loans or any Transaction Document) to be a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code;

(m) make any future advances under any Purchased Loan to any underlying obligor
that are not (i) protective advances or (ii) future advances which are
(x) permitted or contemplated by the related Purchased Loan Documents and (y) in
accordance with the budgets and capital expenditure plans approved under the
Purchased Loan Documents (and, if applicable, approved by Buyer under
Section 3(o) hereof);

 

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(n) seek its dissolution, liquidation or winding up, in whole or in part;

(o) incur any Indebtedness except as provided in Section 12(i) or otherwise
cease to be a Single-Purpose Entity.

(p) (x) other than as expressly permitted under the terms of the related
Confirmation, exercise any remedies under the Purchased Loan Documents for any
Purchased Loan as to which a Purchased Loan Event of Default has occurred
including, without limitation, the commencement or prosecution of any
foreclosure proceeding, the exercise of any power of sale, the taking of a
deed-in-lieu of foreclosure or other realization upon the security for any
Purchased Loan or (y) in connection with any foreclosure or exercise of remedies
relating to any Purchased Loan, take title to or otherwise obtain an ownership
interest in any underlying Mortgaged Property, in each case, without Buyer’s
prior written consent; provided, that nothing herein shall prohibit Seller from
sending any notice of a Purchased Loan Default or Purchased Loan Event of
Default to any Mortgagor.

(q) except as otherwise expressly permitted without the Seller’s consent under
the terms of the applicable intercreditor agreement, co-lender agreement or
participation agreement for the applicable Purchased Loan as in effect on the
Purchase Date, or any such similar agreement or amendment thereto entered into
subsequent to the applicable Purchase Date that has been approved by Buyer, or
as otherwise expressly agreed by Buyer pursuant to the terms of the Confirmation
and/or the Senior Interest Side Letter for the applicable Purchased Loan,
Transfer or permit to be Transferred, in whole or in part, any Related Interest,
Mezzanine Loan or Preferred Equity Interest held by Seller or any Affiliate of
Seller or consent to the Transfer, in whole or in part, of any Related Interest,
Mezzanine Loan or Preferred Equity Interest held by any other Person, except to
a Qualified Institutional Lender;

(r) other than as specified in the related Confirmation, consent to, or grant
any waiver with respect to, any incurrence of additional debt by the Mortgagor
or any mezzanine loan by any direct or indirect beneficial owner of the
Mortgagor which is not expressly permitted under the related Purchased Loan
Documents;

(s) following the Purchase Date with respect to the Watchtower A-Note Eligible
Loan, transfer, sell or permit to be transferred or sold any interest in the
Watchtower A-Note Eligible Loan, without Buyer’s prior written consent;

(t) without Buyer’s consent, cause any Purchased Loan to be serviced by any
servicer other than the Initial Servicer or other servicer expressly approved in
writing by Buyer on the related Purchase Date; or

(u) permit Manager to be terminated as Sponsor’s external manager pursuant to
the Second Amended and Restated Management Agreement, dated as of October 23,
2014 (as the same may be further amended, restated, supplemented or otherwise
modified, provided that such amendment, restatement, supplement or other
modification does not terminate or replace Manager as Sponsor’s external
manager), between Sponsor and Manager, unless any replacement external manager
or switch to internal management shall have been approved by Buyer in writing,
such approval not to be unreasonably withheld, conditioned or delayed.

 

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(v) amend, modify or waive in any material respect or terminate any provision of
any Servicing Agreement, without the consent of Buyer in its sole and absolute
discretion;

(w) acquire or maintain any right or interest in any Purchased Loan or Mortgaged
Property that is senior to or pari passu with the rights and interests of Buyer
therein under this Agreement and the other Transaction Documents;

(x) use any part of the proceeds of any Transaction hereunder for any purpose
which violates, or would be inconsistent with, the provisions of Regulations T,
U or X of the Board of Governors of the Federal Reserve System or otherwise for
the purpose of acquiring or purchasing “Margin Stock” as such term is defined in
Regulation U of the Board of Governors of the Federal Reserve System;

(y) take any action, cause, allow, or permit any of Seller, Sponsor or any
Subsidiary of Sponsor that is also a direct or indirect parent of Seller to be
required to register as an “investment company,” or a company “controlled by an
investment company,” within the meaning of the Investment Company Act, or to
violate any provisions of the Investment Company Act, including Section 18
thereof or any rules or regulations promulgated thereunder;

(z) directly or indirectly, use or permit Sponsor to use the proceeds of any
Transaction, or lend, contribute or otherwise make available such proceeds to
any Subsidiary, joint venture partner or other Person in furtherance of an
offer, payment, promise to pay, or authorization of the payment or giving of
money, or anything else of value, to any Person in violation of Anti-Corruption
Laws; or

(aa) notwithstanding anything to the contrary contained in this Agreement or any
other Transaction Document, (i) Seller shall not enter into (or agree to enter
into) any Division/Series Transaction and (ii) none of the provisions in this
Agreement nor any other Transaction Document, shall be deemed to permit any
Division/Series Transaction, except, in each case, for the establishment of any
new Series Seller in connection with any Transaction in accordance with the
provisions of Section 3(n) hereof; or

(bb) fail to comply with Section 5 of the Letter Agreement.

11. AFFIRMATIVE COVENANTS OF SELLER

During the term of this Agreement and so long as any Transaction is in effect
hereunder (for purposes hereof, all references to the term “Seller” in this
Section 11 shall be deemed to mean and refer to Master Seller together with each
Series Seller which is a party to this Agreement as of the applicable date):

(a) Seller shall notify Buyer of any Material Adverse Effect (as determined by
Seller in its commercially reasonable judgment) promptly following Seller’s
Knowledge thereof; provided, however, that nothing in this Section 11 shall
relieve Seller of its obligations under this Agreement.

 

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(b) Seller shall provide Buyer with copies of such documents as Buyer may
reasonably request evidencing the truthfulness of the representations set forth
in Section 9.

(c) Seller (i) shall defend the right, title and interest of Buyer in and to the
Collateral against, and take such other action as is necessary to remove, the
liens, security interests, claims and demands of all Persons (other than
security interests by or through Buyer or liens otherwise permitted under the
Purchased Loan Documents), (ii) to the extent any additional limited liability
company is formed by division of Seller, shall cause any such additional limited
liability company to assign, pledge and grant to Buyer all of its assets, and
shall cause any owner of such additional limited liability company to pledge all
of the Equity Interests and any rights in connection therewith of such
additional limited liability company, to Buyer in support of all Repurchase
Obligations in the same manner and to the same extent as the assignment, pledge
and grant by Seller of all of Seller’s assets hereunder, and in the same manner
and to the same extent as the pledge by each Pledgor of all of each such
Pledgor’s right, title and interest in all of the Equity Interests of the
applicable Seller and any rights in connection therewith, in each case pursuant
to the applicable Pledge Agreement, and (iii) shall, at Buyer’s reasonable
request, take all action necessary to ensure that Buyer will have a first
priority security interest in the Purchased Loans subject to any of the
Transactions in the event such Transactions are recharacterized as secured
financings.

(d) Seller shall notify Buyer of the occurrence of any Default or Event of
Default of which Seller has Knowledge as soon as possible but in no event later
than the second (2nd) Business Day after obtaining Knowledge of such event.

(e) Seller shall give notice to Buyer of the following (except in the case of
clause (i) below, accompanied by an officer’s certificate setting forth details
of the occurrence referred to therein and stating what actions Seller has taken
or proposes to take with respect thereto, as applicable):

(i) with respect to any Purchased Loan subject to a Transaction hereunder,
promptly (and in any event within two (2) Business Days) following receipt of
any unscheduled Principal Payment (in full or in part);

(ii) with respect to any Purchased Loan sold to Buyer hereunder, promptly (and
in any event within two (2) Business Days) following receipt by Seller of notice
or Knowledge that the related Mortgaged Property has been damaged by waste,
fire, earthquake or earth movement, windstorm, flood, tornado or other casualty,
or otherwise damaged so as, in each case, to materially adversely affect the
value of such Mortgaged Property;

(iii) promptly (and in any event within two (2) Business Days) following receipt
of written notice by Seller or Knowledge of (i) the occurrence of any payment
default or other material default under the Purchased Loan Documents for any
Purchased Loan, (ii) any material lien or security interest (other than security
interests created

 

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hereby) on, or claim asserted against, any Purchased Loan or, to the Knowledge
of Seller, the underlying collateral therefor (other than liens expressly
permitted under the Purchased Loan Documents) or (iii) any event or change in
circumstances that has or could reasonably be expected to have a material
adverse effect on the Market Value of a Purchased Loan as determined by Seller
in its commercially reasonable judgment;

(iv) promptly, and in any event within three (3) Business Days after service of
process on any of the following, give to Buyer notice of all litigation,
actions, suits, arbitrations, investigations (including, without limitation, any
of the foregoing which are pending or threatened in writing or of which Seller
or Sponsor otherwise has Knowledge) or other legal or arbitrable proceedings
naming Seller or any of the assets of Seller before any Governmental Authority
that (i) questions or challenges the validity or enforceability of any of the
Transaction Documents or any action to be taken in connection with the
transactions contemplated hereby, or (ii) which, individually or in the
aggregate, if adversely determined could reasonably be likely to have a Material
Adverse Effect; and

(v) promptly (and in any event within two (2) Business Days) following receipt
of written notice by Seller or Seller’s obtaining Knowledge of the occurrence of
(i) any breach of a Purchased Loan Representation or (ii) any breach of any
other representation or warranty contained herein.

(f) Seller shall deliver to Buyer (i) notice of the occurrence of any Purchased
Loan Event of Default promptly (and in any event not later than two (2) Business
Days) after the earlier of the date that Seller receives notice or has Knowledge
thereof and (ii) any other information Known to Seller with respect to any
Purchased Loan as may be reasonably requested by Buyer from time to time.

(g) Seller will permit Buyer or its designated representative to inspect
Seller’s records with respect to the Collateral and the conduct and operation of
its business related thereto upon reasonable prior written notice from Buyer or
its designated representative, at such reasonable times and with reasonable
frequency, and to make copies of extracts of any and all thereof, subject to the
terms of any confidentiality agreement between Buyer and Seller.

(h) At any time from time to time upon the reasonable request of Buyer, at the
sole expense of Seller, Seller will promptly and duly execute and deliver to
Buyer such further instruments and documents and take such further actions as
Buyer may reasonably request for the purposes of obtaining or preserving the
full benefits of this Agreement including the security interests granted
hereunder and of the rights and powers herein granted (including, among other
things, filing such UCC financing statements as Buyer may reasonably request).
If any amount payable under or in connection with any of the Collateral shall be
or become evidenced by any promissory note, other instrument or chattel paper,
such note, instrument or chattel paper shall be immediately delivered to Buyer
or its designee (including the Custodian or a Bailee), duly endorsed in a manner
reasonably satisfactory to Buyer, to be held as Collateral pursuant to this
Agreement, and the documents delivered in connection herewith.

 

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(i) Seller (or Servicer on its behalf) shall provide Buyer with the following
financial and reporting information:

(i) Within 45 days after the last day of each of the first three fiscal
quarters, Sponsor’s consolidated and unaudited and Master Seller’s unaudited
statements of income and statements of changes in cash flow for such quarter and
balance sheets as of the end of such quarter, in each case presented fairly in
accordance with GAAP and certified as being true and correct by an officer’s
certificate;

(ii) Within 90 days after the last day of its fiscal year, Sponsor’s
consolidated and audited, and Master Seller’s unaudited, statements of income
and statements of changes in cash flow for such year and balance sheets as of
the end of such year, in each case presented fairly in accordance with GAAP, and
accompanied, in all cases, by an unqualified report of a nationally recognized
independent certified public accounting firm reasonably acceptable to Buyer;

(iii) Within 45 days after the last day of each calendar month, any and all
property level financial information (including without limitation rent rolls
and operating statements) received with respect to the Purchased Loan by Seller
or an Affiliate during such calendar month; and

(iv) Within 45 days after the last day of each of the first, second and third
quarters and within 90 days after the last day of the fourth quarter in any
fiscal year, an officer’s certificate from Seller addressed to Buyer certifying
that, as of the end of such quarter, (x) Seller is in compliance with all of the
terms, conditions and requirements of this Agreement, (y) no Default or Event of
Default exists and (z) Sponsor is in compliance with the financial covenants set
forth in Section 5 of the Guaranty (including a calculation of each such
financial covenant), and shall set forth the details of any exceptions to the
foregoing stating what actions Seller has taken or proposes to take with respect
thereto, as applicable.

(j) Seller shall at all times comply in all material respects with all laws,
ordinances, rules and regulations of any federal, state, municipal or other
public authority having jurisdiction over Seller or any of its assets and Seller
shall do or cause to be done all things reasonably necessary to preserve and
maintain in full force and effect its legal existence, and all licenses material
to its business.

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

(l) Seller shall observe, perform and satisfy all the terms, provisions,
covenants and conditions required to be observed, performed or satisfied by it,
and shall pay when due all costs, fees and expenses required to be paid by it,
under the Transaction Documents, including, without limitation, fees payable to
Buyer by Seller pursuant to the Letter Agreement and any Confirmation. Seller
shall pay and discharge all Taxes, levies, liens and other charges on its assets
and on the Collateral that, in each case, in any manner would create any lien or
charge upon the Collateral, except for any such Taxes as are being appropriately
contested in good faith by appropriate proceedings diligently conducted and with
respect to which adequate reserves have been provided in accordance with GAAP in
all material respects. Seller shall timely file all Tax returns required to be
filed by it.

 

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(m) Seller shall advise Buyer in writing of the opening of any new chief
executive office or the closing of any such office and of any change in Seller’s
name or organizational structure or the places where the books and records
pertaining to the Purchased Loan are held not less than thirty (30) days prior
to taking any such action.

(n) Seller will maintain records with respect to the Collateral and the conduct
and operation of its business with no less a degree of prudence than if the
Collateral were held by Seller for its own account and will furnish Buyer, upon
reasonable request by Buyer or its designated representative, with reasonable
information reasonably obtainable by Seller with respect to the Collateral and
the conduct and operation of its business.

(o) Seller shall provide Buyer with reasonable access to any operating
statements, any occupancy status and any other property level information, with
respect to the Mortgaged Properties, plus any such additional reports as Buyer
may reasonably request, in each case, to the extent the same is in Seller’s
possession or reasonably obtainable by Seller.

(p) Master Seller, and to the extent applicable, each Series Seller, shall
maintain its existence as a limited liability company, organized solely and in
good standing under the law of the State of Delaware (unless Seller shall have
given Buyer at least thirty (30) days’ prior written notice that Seller intends
to change the jurisdiction of its organization) and shall not dissolve,
liquidate, merge with or into any other Person or otherwise change its
organizational structure or documents or incorporate or organize in any other
jurisdiction, without the prior written approval of Buyer, which approval shall
not be unreasonably withheld, conditioned or delayed.

(q) Seller may propose, and Buyer will consider, but shall be under no
obligation to approve, strategies for the foreclosure or other realization upon
the security for any Purchased Loan with respect to which a Purchased Loan Event
of Default has occurred.

(r) If Seller shall at any time become entitled to receive or shall receive any
rights, whether in addition to, in substitution of, as a conversion of, or in
exchange for a Purchased Loan, or otherwise in respect thereof, Seller shall
accept the same as Buyer’s agent, hold the same in trust for Buyer and deliver
the same forthwith to Buyer (or Custodian, as appropriate) in the exact form
received, duly endorsed by Seller in blank, if required, together with all
related necessary transfer documents, to be held by Custodian hereunder as
additional collateral security for the Transactions. If any sums of money or
property are paid or distributed in respect of the Purchased Loans and received
by Seller (other than amounts distributed to Seller in accordance with Section 5
hereof), Seller shall, until such money or property is paid or delivered to
Buyer, hold such money or property in trust for Buyer, segregated from other
funds of Seller, as additional collateral security for the Transactions.

(s) Seller and Sponsor will maintain, or remain subject to, policies and
procedures reasonably designed to ensure compliance by such party, its
Subsidiaries, and their respective directors, officers, employees and agents
with applicable Anti-Corruption Laws.

 

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(t) Seller shall promptly deliver to Buyer an updated Beneficial Ownership
Certification if any “person” or “group” (within the meaning of Section 13(d) or
14(d) of the 1934 Act) acquires or obtains rights to acquire twenty-five percent
(25%) or more of the total ownership interests of Sponsor, entitled to vote
generally in the election of the directors, which “person” or “group” did not
own twenty-five percent (25%) of such ownership interests immediately prior to
the applicable acquisition.

12. SINGLE-PURPOSE ENTITY

Seller hereby represents and warrants to Buyer, and covenants with Buyer, that
as of the Closing Date, the Amendment and Restatement Date, the Second Amendment
and Restatement Date and so long as this Agreement or any of the Transaction
Documents shall remain in effect (for purposes hereof, all references to the
term “Seller” in this Section 12 shall be deemed to mean and refer to Master
Seller together with each Series Seller which is a party to this Agreement as of
the applicable date): (a) It is and intends to remain solvent and it has paid
and will pay its debts and liabilities (including employment and overhead
expenses) from its own assets as the same shall become due.

(b) It has complied and will comply with the provisions of its organizational
documents.

(c) It has done or caused to be done and will, to the extent under its control,
do all things necessary to observe all material limited liability company
formalities and to preserve its existence.

(d) It has maintained and will maintain all of its books, records, financial
statements and bank accounts separate from those of its Affiliates, its members
and any other Person, and it will file its own Tax returns, if any, which are
required by law (except to the extent consolidation is required or permitted
under GAAP or as a matter of law).

(e) It will, and will at all times hold itself out to the public as, in the case
of Master Seller, a legal entity separate and distinct from any other entity
(including any Affiliate), and, in the case of any Series Seller, distinct from
any other entity (including any Affiliate, Master Seller or any other Series),
it will correct any known misunderstanding regarding such status, it will
conduct business in its own name, it will not identify itself or any of its
Affiliates as a division or part of the other (except any Series Seller may
refer to itself as a “series” of Master Seller), it will maintain and utilize
separate stationery, invoices and checks, and Master Seller or any Series Seller
will pay to any Affiliate that incurs costs for office space and administrative
services that it uses, the amount of such costs allocable to its use of such
office space and administrative services.

(f) It has not owned and will not own any property or any other assets other
than the Purchased Loans, cash and other assets including New Collateral
incidental to the origination, acquisition, ownership, hedging, administering,
financing and disposition of Purchased Loans.

 

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(g) It has not engaged and will not engage in any business other than the
origination, acquisition, ownership, hedging, administering, financing and
disposition of the Purchased Loans or New Collateral in accordance with the
applicable provisions of the Transaction Documents.

(h) Except for capital contributions and capital distributions permitted under
the terms and conditions of its organizational documents and properly reflected
on its books and records, it has not entered into, and will not enter into, any
contract or agreement with any of its Affiliates, except upon terms and
conditions that are substantially similar to those that would be available on an
arm’s-length basis with Persons other than such Affiliate.

(i) It has not incurred and will not incur any indebtedness or obligation,
secured or unsecured, direct or indirect, absolute or contingent (including
guaranteeing any obligation), other than (A) obligations under the Transaction
Documents, (B) unsecured trade payables, in an aggregate amount not to exceed
$250,000 at any one time outstanding, incurred in the ordinary course of
originating, acquiring, owning, financing and disposing of Eligible Loans or New
Collateral, and (C) contingent or future funding obligations under any Purchased
Loan; provided, however, that any such trade payables incurred by Seller shall
be paid within sixty (60) days of the date invoiced.

(j) It has not made and will not make any loans or advances (other than Eligible
Loans) to any other Person, and shall not acquire obligations or securities of
any member or any Affiliate of any member (other than in connection with the
acquisition of the Eligible Loans or New Collateral) or any other Person.

(k) It has maintained and intends to maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character and
in light of its contemplated business operations; provided, that the foregoing
shall not require any member, partner or shareholder of Seller to make any
additional capital contributions to Seller.

(l) It has not commingled and will not commingle its funds and other assets with
those of any of its Affiliates or any other Person (except with Master Seller
and other Series Sellers as contemplated under Section 5 hereof).

(m) It has maintained and will maintain its assets in such a manner that it will
not be costly or difficult to segregate, ascertain or identify its individual
assets from those of any of its Affiliates or any other Person.

(n) Except as contemplated under the Transaction Documents, it has not held and
will not hold itself out to be responsible for the debts or obligations of any
other Person.

(o) It shall not take any of the following actions without the affirmative vote
of the Independent Manager: (i) file any reorganization case or proceeding,
institute any proceeding to be adjudicated as bankrupt or insolvent, or consent
to the institution of bankruptcy or insolvency proceedings against it, or file a
petition or answer or consent seeking reorganization or relief under the
Bankruptcy Laws, or effect any similar procedure under any similar law, or
consent to the filing of any such petition or to the appointment of a receiver,
rehabilitator, conservator, liquidator, assignee, trustee or sequestrator (or
other similar official) of Seller or of any substantial part of its property, or
make an assignment for the benefit of creditors, or admit in an external written
communication to third parties its inability to pay its debts generally as they
become due, or take any action in furtherance of any of the foregoing.

 

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(p) It has no liabilities, contingent or otherwise, other than those normal and
incidental to the origination, acquisition, ownership, hedging, financing and
disposition of the Purchased Loans or New Collateral.

(q) It is an entity disregarded as a separate entity or treated as a partnership
for U.S. federal income tax purposes and has not made any election under
Section 301.7701-3(a) of the Treasury Regulations to be treated as an
association taxable as a corporation for U.S. federal income tax purposes.

(r) It has and shall maintain a sufficient number of employees (if any) (or has
and shall utilize a sufficient number of employees of its Affiliates pursuant to
arm’s length terms) in light of its contemplated business purpose.

(s) Master Seller will have at all times at least one (1) Independent Manager
and will provide Buyer with up-to-date contact information for all Independent
Manager(s) and a copy of the agreement pursuant to which each Independent
Manager consents to and serves as an “Independent Manager” for Master Seller and
each Series Seller.

(t) It has not pledged and will not pledge its assets to secure the obligations
of any other Person (other than as contemplated by this Agreement with respect
to any Master Seller or Series Seller).

(u) It has not and will not guarantee any obligation of any Person, including
any Affiliate or become obligated for the debts of any other Person or hold out
its credit as being available to pay the obligations of any other Person (other
than as contemplated by this Agreement with respect to any Master Seller or
Series Seller).

(v) It will not, to the fullest extent permitted by law, engage in any
dissolution, liquidation, consolidation, merger, division into two (2) or more
limited liability companies or other legal entities, or engage in any sale or
transfer of all or substantially all of its assets, except as expressly
contemplated by this Agreement.

(w) It has maintained and will maintain separate financial statements, showing
its assets and liabilities separate and apart from those of any other Person and
not have its assets listed on any financial statement of any other Person;
provided, however, that the Seller’s assets may have been and may be included in
a consolidated financial statement of its Affiliate provided that
(i) appropriate notation shall be made on such consolidated financial statement
to indicate the separateness of the Seller from such Affiliate and to indicate
that the Seller’s assets and credit are not available to satisfy the debts and
other obligations of such Affiliate or any other Person, and (ii) such assets
shall also be listed on the Seller’s own separate balance sheet.

(x) Master Seller has not established and shall not establish, and has not had
and shall not have, any series of limited liability company interests, except
for series that are intended to be and do become Series Sellers pursuant to this
Agreement.

 

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(y) It has not formed and will not form, acquire or hold any subsidiary (whether
corporate, partnership, limited liability company or other) or own any equity
interest in any other entity (other than the Master Seller with respect to any
Series Seller).

(z) It has not had and will not have any of its obligations guaranteed, other
than as contemplated by the Transaction Documents.

(aa) The Master Seller LLC Agreement shall provide that (i) no Independent
Manager of Seller may be removed or replaced without Cause, (ii) Buyer be given
at least two (2) Business Days prior notice of the removal and/or replacement of
the Independent Manager, together with the name and contact information of the
replacement Independent Manager and evidence of the replacement’s satisfaction
of the definition of Independent Manager and (iii) to the fullest extent
permitted by law, and notwithstanding any duty otherwise existing at law or in
equity, any Independent Manager of Seller shall consider only the interests of
the applicable Seller, including its respective creditors with respect to taking
of, or otherwise voting on, any of the actions contemplated by Section 12(o)
above and, except for duties to the Seller as set forth in the immediately
preceding clause (including duties to the Member and the Seller’s creditors
solely to the extent of their economic interests in the Seller but excluding
(A) all other interests of the Member, (B) the interests of other Affiliates of
the Seller, and (C) the interests of any group of Affiliates of which the Seller
is a part), the Independent Manager shall not have any fiduciary duties to the
Member, any officer of the Seller or any other Person; provided, that the
foregoing shall not eliminate the implied contractual covenant of good faith and
fair dealing.

13. EVENTS OF DEFAULT; REMEDIES

(a) After the occurrence and during the continuance of an Event of Default,
Seller hereby appoints Buyer as attorney-in-fact of Seller for the purpose of
carrying out the provisions of this Agreement and taking any action and
executing or endorsing any instruments that Buyer may deem necessary or
advisable to accomplish the purposes hereof, which appointment as
attorney-in-fact is irrevocable and coupled with an interest.

(I) Each of the following shall constitute a “Facility Event of Default”:

(i) an Act of Insolvency occurs with respect to Seller, Sponsor or Member
(provided that any Act of Insolvency occurring pursuant to clause (iv) of the
definition thereof shall for purposes of this clause (i) be limited to such
admissions by any Person described in the definition of “Knowledge”);

(ii) any Person described in the definition of “Knowledge” shall admit in
writing (or announce in any public manner, including without limitation, on any
earnings call) to any Person in an external communication (whether electronic or
otherwise) the inability of either Seller, Sponsor or Member to, or its
intention not to, perform any of its material obligations hereunder or under any
of the Transaction Documents,

 

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(iii) either (A) the Transaction Documents shall for any reason not cause, or
shall cease to cause, Buyer to be the owner free of any adverse claim (other
than the rights of Seller pursuant to this Agreement) of any of the Purchased
Loans, and such condition is not cured by Seller within three (3) Business Days
after notice thereof from Buyer to Seller, (B) if a Transaction is
recharacterized as a secured financing, the Transaction Documents with respect
to any Transaction shall for any reason cease to create a valid first priority
security interest in favor of Buyer in any of the Purchased Loans or (C) any
provision of the Transaction Documents, any right or remedy of Buyer or
obligation, covenant, agreement or duty of Seller thereunder, or any lien,
security interest or control granted under or in connection with the Transaction
Documents or Purchased Loans terminates, is declared null and void, ceases to be
valid and effective, ceases to be the legal, valid, binding and enforceable
obligation of Seller or any other Person, or the validity, effectiveness,
binding nature or enforceability thereof is contested, challenged, denied or
repudiated by Seller or any Affiliate thereof, in each case directly,
indirectly, in whole or in part;

(iv) failure of Master Seller to make any payment owing to Buyer which has
become due under this Agreement or any other Transaction Document (other than
any monetary Transaction Event of Default by any Series Seller under Sections
13(a)(II)(i)-(iv) of this Agreement), whether by acceleration or otherwise under
the terms of this Agreement or the other Transaction Documents, which failure is
not remedied within five (5) Business Days;

(v) any governmental, regulatory, or self-regulatory authority shall have taken
any action to remove, limit, restrict, suspend or terminate the rights,
privileges, or operations of Seller, which removal, limitation, restriction,
suspension or termination results in a Material Adverse Effect;

(vi) a Change of Control shall have occurred that has not been consented to by
Buyer in writing;

(vii) any representation made by Seller or Sponsor in this Agreement or the
other Transaction Documents shall have been incorrect or untrue in any material
respect when made or repeated or deemed to have been made or repeated, which
incorrect or untrue representation, to the extent such breach is reasonably
susceptible to cure, is not cured within ten (10) Business Days after the
earlier of notice thereof from Buyer or Seller obtaining Knowledge of such
breach; provided, however, that the breach of Section 9(b)(viii) or any
Purchased Loan Representation made by Seller with respect to any Purchased Loan
in any Transaction Document shall not be considered a Facility Event of Default
if incorrect or untrue unless Seller shall have made any such representation
with Knowledge that it was materially incorrect or untrue at the time made, in
which case such breach shall constitute an immediate Facility Event of Default;

(viii) either (A) Sponsor shall fail to observe any of the financial covenants
set forth in the Guaranty or shall have defaulted or failed to perform any other
material covenant under the Guaranty, or Member shall have defaulted or failed
to perform any material covenant under the Member Guaranty; provided, that any
such default or failure to perform shall not constitute an Event of Default if
Sponsor or Member, as applicable, cures such default or failure to perform, as
the case may be, within the grace, notice or cure period, if any, provided under
the applicable agreement, or (B) the Guaranty or the Member Guaranty, as
applicable, shall have been revoked, rescinded or otherwise cease to be in full
force and effect;

 

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(ix) a final non-appealable judgment by any competent court in the United States
of America for the payment of money in an amount greater than $250,000 (in the
case of Seller) or $25,000,000 (in the case of Sponsor) shall have been rendered
against Seller or Sponsor, and remained undischarged or unpaid for a period of
sixty (60) days, during which period execution of such judgment is not
effectively stayed by bonding over or other means acceptable to Buyer;

(x) Sponsor shall have defaulted or failed to perform under any note, indenture,
loan agreement, guaranty, repurchase agreement, short sale, futures contract
(including Eurodollar futures) or options contract or any interest rate swap,
cap or collar agreement or derivatives transaction to which it is a party (other
than a Transaction Document), which default (A) involves the failure to pay a
monetary obligation in an amount greater than or equal to $25,000,000, or
(B) permits the acceleration of the maturity of obligations, or the declaration
of a mandatory early repurchase date or termination date with respect to
indebtedness or obligations in an amount greater than or equal to $25,000,000,
by any other party to or beneficiary of such note, indenture, loan agreement,
guaranty, repurchase agreement, swap agreement or other contract agreement or
transaction due to the failure to observe the financial covenants, if any, set
forth therein; provided, however, that any such default, failure to perform or
breach shall not constitute a Facility Event of Default if Sponsor cures such
default, failure to perform or breach, as the case may be, within the grace
period, if any, provided under the applicable agreement;

(xi) Seller shall have defaulted or failed to perform under any note, indenture,
loan agreement, guaranty, repurchase agreement, short sale, futures contract
(including Eurodollar futures) or options contract or any interest rate swap,
cap or collar agreement or derivatives transaction to which it is a party (other
than a Transaction Document), which default (A) involves the failure to pay a
monetary obligation of $250,000 or more, or (B) permits the acceleration of the
maturity of obligations, or the declaration of a mandatory early repurchase date
or termination date with respect to indebtedness or obligations of $250,000 or
more, by any other party to or beneficiary of such note, indenture, loan
agreement, guaranty, repurchase agreement, swap agreement or other contract
agreement or transaction; provided, however, that any such default, failure to
perform or breach shall not constitute a Facility Event of Default if Sponsor
cures such default, failure to perform or breach, as the case may be, within the
grace period, if any, provided under the applicable agreement;

(xii) any breach under Sections 10(b), (d), (e), (g), (i), (n) through (p), (r),
(u), (x), (y), (z), (aa) or (bb) or Section 11(s);

(xiii) any breach under Section 10(f); provided, however, that any such breach
by Seller under Section 10(f) shall not be considered an Event of Default
hereunder provided Seller terminates the related Transaction and repurchases the
related Purchased Loan(s) pursuant to Section 3(e) no later than two
(2) Business Days after notice from Buyer to Seller of such breach;

 

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(xiv) if Seller or Sponsor or shall breach or fail to perform any of the terms,
covenants, obligations or conditions of this Agreement or any other Transaction
Document, other than as specifically otherwise referred to in this definition of
“Facility Event of Default”, and such breach or failure to perform is not
remedied within ten (10) Business Days after written notice thereof to Seller by
Buyer, or its successors or assigns, or such other (shorter or longer) cure
period (if any) as may be expressly provided herein or in such Transaction
Document (unless this Agreement or such other Transaction Document expressly
provides that such breach or failure constitutes an immediate Facility Event of
Default, in which case no notice or cure period shall apply;

(xv) Seller, Member or Sponsor is required to register as an “investment
company” under the Investment Company Act of 1940, as amended;

(xvi) other than as provided in Section 13(a)(I)(xiii) above, Seller engages in
any conduct or action where Buyer’s prior consent is required by any Transaction
Document and Seller fails to obtain such consent;

(xvii) Seller, any Servicer, any Mortgagor under a Purchased Loan or any other
Person fails to deposit to the Cash Management Account all Available Income and
other amounts as required by Section 5 and other provisions of this Agreement
when due and such failure to deposit to the Cash Management Account, as
applicable, is not cured within five (5) Business Days; or

(xviii) Sponsor fails to qualify as a REIT (after giving effect to any cure or
corrective periods or allowances pursuant to the Code), or Seller becomes
treated as an entity other than a disregarded entity or partnership for U.S.
federal income tax purposes.

(II) Each of the following, as to a Purchased Loan, shall constitute a
“Transaction Event of Default” for such Purchased Loan:

(i) the applicable Series Seller fails to repurchase such Purchased Loan upon
the applicable Repurchase Date therefor;

(ii) the applicable Series Seller fails to pay any Margin Deficit with respect
to such Purchased Loan when required pursuant to Section 4 hereof;

(iii) the applicable Series Seller fails to repurchase such Purchased Loan which
is the subject of a Mandatory Early Repurchase, as and when required pursuant to
Section 3(l); or

(iv) Seller, any Servicer, or any Mortgagor under such Purchased Loan, as
applicable, fails to deposit to the Cash Management Account all Available Income
from such Purchased Loan as required by Section 5 and other provisions of this
Agreement when due and such failure to deposit to the Cash Management Account,
is not cured within five (5) Business Days.

 

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(b) If a Facility Event of Default shall occur and be continuing, the following
rights and remedies shall be available to Buyer:

(i) At the option of Buyer, exercised by written notice to Seller (which option
shall be deemed to have been exercised, even if no written notice is given,
automatically and immediately upon the occurrence of an Act of Insolvency with
respect to Seller or Sponsor), the Repurchase Date for each Transaction
hereunder shall, if it has not already occurred, be deemed immediately to occur
(the date on which such option is exercised or deemed to have been exercised
being referred to hereinafter as the “Accelerated Repurchase Date”).

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

(A) Seller’s obligations hereunder to repurchase all Purchased Loans shall
become immediately due and payable on and as of the Accelerated Repurchase Date;
and

(B) the Repurchase Price with respect to each Transaction (determined as of the
Accelerated Repurchase Date) shall include the accrued and unpaid Price
Differential with respect to each Purchased Loan accrued at the Pricing Rate
applicable upon the occurrence of an Event of Default; and

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

(iii) Upon the occurrence of a Facility Event of Default, Buyer may
(A) immediately sell, at a public or private sale on a servicing released basis
in a commercially reasonable manner and at such price or prices as Buyer may
deem satisfactory in its sole and absolute discretion, in accordance applicable
laws, any or all of the Purchased Loans or (B) in its sole and absolute
discretion, in accordance applicable laws, elect, in lieu of selling all or a
portion of such Purchased Loans, to give Seller credit for such Purchased Loans
in an amount equal to the Market Value of such Purchased Loans against the
aggregate unpaid Repurchase Price for such Purchased Loans and any other amounts
owing by Seller under this Agreement or the Transaction Documents. The proceeds
of any disposition of Purchased Loans effected pursuant to this
Section 13(b)(iii) shall be applied, (v) first, to the costs and expenses
incurred by Buyer in connection with Seller’s default; (w) second, to any and
all amounts due under Section 3(h), including, without limitation, costs of
cover, if any; (x) third, to the aggregate Repurchase Price of the Purchased
Loans; and (y) fourth, to return any excess to Seller.

(iv) The parties acknowledge and agree that (1) the Purchased Loans subject to
Transactions hereunder are not instruments traded in a recognized market, and,
in the absence of a generally recognized source for prices or bid or offer
quotations for any Purchased Loans, Buyer may establish the source therefor in
its sole and absolute

 

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discretion and (2) all prices, bids and offers shall be determined together with
accrued Available Income (except to the extent contrary to market practice with
respect to the relevant Purchased Loans). The parties recognize that it may not
be possible to purchase or sell all of the Purchased Loans on a particular
Business Day, or in a transaction with the same purchaser, or in the same manner
because the market for such Purchased Loans may not be liquid at such time. In
view of the nature of the Purchased Loans, the parties agree that liquidation of
a Transaction or the Purchased Loans pursuant to this Section 13(b) or
Section 13(c) does not require a public purchase or sale and that a good faith
private purchase or sale shall be deemed to have been made in a commercially
reasonable manner. Accordingly, Buyer may elect, in its sole and absolute
discretion, in accordance applicable laws, the time and manner of liquidating
any Purchased Loans pursuant to this Section 13(b) or Section 13(c), and nothing
contained herein shall (A) obligate Buyer to liquidate any Purchased Loans on
the occurrence and during the continuance of an Event of Default or to liquidate
all of the Purchased Loans in the same manner or on the same Business Day or
(B) constitute a waiver of any right or remedy of Buyer.

(v) Seller shall be liable to Buyer for (A) the amount of all expenses,
including reasonable legal fees and expenses, actually incurred by Buyer in
connection with or as a consequence of an Event of Default, (B) all costs
incurred in connection with covering transactions, and (C) any other actual
out-of-pocket loss, damage, cost or expense directly arising or resulting from
the occurrence of an Event of Default.

(vi) Buyer shall have, in addition to its rights and remedies under the
Transaction Documents, all of the rights and remedies provided by applicable
federal, state and local laws (including, without limitation, if the
Transactions are characterized as secured financings, the rights and remedies of
a secured party under the UCC of the State of New York, to the extent that the
UCC is applicable, and the right to offset any mutual debt and claim), in
equity, and under any other agreement between Buyer and Seller. Without limiting
the generality of the foregoing, Buyer shall be entitled to set off the proceeds
of the liquidation of the Purchased Loans against all of Seller’s obligations to
Buyer under this Agreement, whether or not such obligations are then due,
without prejudice to Buyer’s right to recover any deficiency.

(vii) Subject to the notice and grace periods set forth herein, Buyer may
exercise any or all of the remedies available to Buyer immediately upon the
occurrence of an Event of Default and at any time during the continuance
thereof. Except as expressly required herein or in the other Transaction
Documents, Buyer shall not be required, to give notice to Seller or any other
Person prior to exercising any remedy in respect of an Event of Default. All
rights and remedies arising under the Transaction Documents, as amended from
time to time, are cumulative and not exclusive of any other rights or remedies
which Buyer may have.

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

 

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(ix) Upon the designation of any Accelerated Repurchase Date, Buyer may, without
prior notice to Seller, set off any sum or obligation (whether or not arising
under this Agreement, whether matured or unmatured, whether or not contingent
and irrespective of the currency, place of payment or booking office of the sum
or obligation) owed by Seller to Buyer or any Affiliate of Buyer against any sum
or obligation (whether or not arising under this Agreement, whether matured or
unmatured, whether or not contingent and irrespective of the currency, place of
payment or booking office of the sum or obligation) owed by Buyer or any
Affiliate of Buyer to Seller. Buyer will give notice to the other party of any
set off effected under this Section 13(b)(ix). If a sum or obligation is
unascertained, Buyer may estimate that obligation and set-off in respect of the
estimate, subject to the relevant party accounting to the other when the
obligation is ascertained. Nothing in this Section 13(b)(ix) shall be effective
to create a charge or other security interest. This Section 13(b)(ix) shall be
without prejudice and in addition to any right of set-off, combination of
accounts, lien or other rights to which any party is at any time otherwise
entitled (whether by operation of law, contract or otherwise).

(x) Seller shall within two (2) Business Days following Buyer’s written request,
to execute and deliver to Buyer such documents, instruments, certificates,
assignments and other writings, and do such other acts as Buyer may reasonably
request for the purposes of assuring, perfecting and evidencing Buyer’s
ownership of the Purchased Loans, including without limitation: (i) forwarding,
to Buyer or Buyer’s designee (including, if applicable, the Custodian), any
payments Seller may hereafter receive on account of the Purchased Loans, in each
case promptly upon receipt thereof; (ii) delivering to Buyer or such designee
any originals of certificates, instruments, documents, notices or files
evidencing or relating to the Purchased Loans which are in Seller’s possession
or under its control; (iii) delivering to Buyer underwriting summaries, credit
memos, assets summaries, status reports or similar documents relating to the
Purchased Loans and in Sellers possession or under its control.

(xi) During the continuance of an Event of Default and from and after any
Accelerated Repurchase Date, Buyer may complete and record and/or file, as
applicable, any assignments, allonges, endorsements, powers or other documents
or instruments executed in blank with respect to any or all of the Purchased
Loans and otherwise obtain physical possession of all Purchased Loan Documents
and all other instruments, certificates and documents then held by or on behalf
of Custodian under the Custodial Agreement. During the continuance of an Event
of Default and from and after any Accelerated Repurchase Date, Buyer may obtain
physical possession of all Servicing Records, Servicing Agreements and other
files and records of Seller or Servicer. During the continuance of an Event of
Default and from and after any Accelerated Repurchase Date, Seller shall deliver
to Buyer such assignments and other documents with respect thereto as Buyer
shall request. It is acknowledged and agreed that Buyer shall not complete,
record and/or file, as applicable, any assignments, allonges, endorsements,
powers or other documents or instruments executed in blank with respect to any
Purchased Loan unless and until a Facility Event of Default has occurred and is
continuing or a Transaction Event of Default has occurred and is continuing with
respect to such Purchased Loan.

 

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(c) Without limiting Buyer’s rights and remedies under Section 13(b) of this
Agreement or otherwise available under the Transaction Documents, at law or in
equity, if a Transaction Event of Default shall occur and be continuing, the
following rights and remedies shall be available to Buyer:

(i) At the option of Buyer, exercised by written notice to Seller, the
Repurchase Date for the applicable Transaction shall, if it has not already
occurred, be deemed immediately to occur (the “Accelerated Transaction
Repurchase Date”).

(ii) If Buyer exercises or is deemed to have exercised the option referred to in
Section 13(c)(i) of this Agreement:

(A) the applicable Series Seller’s obligations hereunder to repurchase the
applicable Purchased Loan shall become immediately due and payable on and as of
the Accelerated Transaction Repurchase Date; and

(B) the Repurchase Price with respect to such Transaction (determined as of the
Accelerated Transaction Repurchase Date) shall include the accrued and unpaid
Price Differential with respect to such Purchased Loan accrued at the Pricing
Rate applicable upon the occurrence of a Transaction Event of Default; and

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

(iii) Upon the occurrence of a Transaction Event of Default, Buyer may
(A) immediately sell, at a public or private sale in a commercially reasonable
manner and at such price or prices as Buyer may deem satisfactory in its sole
and absolute discretion, in accordance applicable laws, the applicable Purchased
Loan or (B) in its sole and absolute discretion elect, in lieu of selling all or
a portion of such Purchased Loan, to give Seller credit for such Purchased Loan
in an amount equal to the Market Value of such Purchased Loan against the
aggregate unpaid Repurchase Price for such Purchased Loan and any other amounts
owing by Seller under this Agreement or the Transaction Documents. The proceeds
of any disposition of Purchased Loan effected pursuant to this
Section 13(c)(iii) shall be applied, (v) first, to the costs and expenses
incurred by Buyer in connection with Seller’s default; (w) second, to any and
all amounts due under Section 3(h), including, without limitation, costs of
cover, if any; (x) third, to the Repurchase Price; and (y) fourth, to return any
excess to Seller.

 

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(iv) During the continuance of an Event of Default and from and after any
Accelerated Transaction Repurchase Date, Buyer may complete and record and/or
file, as applicable, any assignments, allonges, endorsements, powers or other
documents or instruments executed in blank with respect to the applicable
Purchased Loan and otherwise obtain physical possession of all Purchased Loan
Documents and all other instruments, certificates and documents then held by or
on behalf of Custodian under the Custodial Agreement relating to such Purchased
Loan. During the continuance of an Event of Default and from and after any
Accelerated Transaction Repurchase Date, Buyer may obtain physical possession of
all Servicing Records, Servicing Agreements and other files and records of
Seller or Servicer relating to such Purchased Loan. During the continuance of an
Event of Default and from and after any Accelerated Transaction Repurchase Date,
Seller shall deliver to Buyer such assignments and other documents with respect
to the applicable Purchased Loan as Buyer shall request. It is acknowledged and
agreed that Buyer shall not complete, record and/or file, as applicable, any
assignments, allonges, endorsements, powers or other documents or instruments
executed in blank with respect to any Purchased Loan unless and until a Facility
Event of Default has occurred and is continuing or a Transaction Event of
Default has occurred and is continuing with respect to such Purchased Loan.

14. LIMITATIONS ON RECOURSE AGAINST SERIES SELLERS

Buyer acknowledges that Master Seller is organized as a series limited liability
company under Section 18-215 of the Delaware Limited Liability Company Act.
Notwithstanding that this Agreement and the other Transaction Documents have
been executed on behalf of Seller without reference to any particular Series
Seller, Buyer agrees to treat each Transaction under this Agreement as the
obligation of the particular Series Seller of Master Seller that enters into the
Transaction for the related Purchased Loan(s). Provided that no Facility Event
of Default shall have occurred and be continuing hereunder, the Repurchase
Obligations of any Series Seller relating to or arising from the Transaction(s)
to which such Series Seller is a party shall be enforceable only against such
Series Seller and with respect to the Purchased Loan(s) relating to such
Transaction(s) and not against any other Series Seller or any other Purchased
Loan. Notwithstanding the foregoing or anything to the contrary contained in
this Agreement or any other Transaction Document, Buyer shall be entitled to
exercise any and all remedies available to Buyer under Section 13(b) against
Seller and any and all Purchased Loans subject to Transactions hereunder upon
the occurrence and continuance of a Facility Event of Default.

15. RECORDING OF COMMUNICATIONS

EACH OF BUYER AND SELLER SHALL HAVE THE RIGHT (BUT NOT THE OBLIGATION) FROM TIME
TO TIME TO MAKE OR CAUSE TO BE MADE TAPE RECORDINGS OF COMMUNICATIONS BETWEEN
ITS EMPLOYEES, IF ANY, AND THOSE OF THE OTHER PARTY WITH RESPECT TO
TRANSACTIONS; PROVIDED, HOWEVER, THAT SUCH RIGHT TO RECORD COMMUNICATIONS SHALL
BE LIMITED TO COMMUNICATIONS OF EMPLOYEES TAKING PLACE ON THE TRADING FLOOR OF
THE APPLICABLE PARTY. EACH OF BUYER AND SELLER HEREBY CONSENTS TO THE
ADMISSIBILITY OF SUCH TAPE RECORDINGS IN ANY COURT, ARBITRATION, OR OTHER
PROCEEDINGS, AND AGREE THAT A DULY AUTHENTICATED TRANSCRIPT OF SUCH A TAPE
RECORDING SHALL BE DEEMED TO BE A WRITING CONCLUSIVELY EVIDENCING THE PARTIES’
AGREEMENT.

 

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16. NOTICES AND OTHER COMMUNICATIONS

Unless otherwise provided in this Agreement, all notices, consents, approvals
and requests required or permitted hereunder shall be given in writing and shall
be effective for all purposes if delivered or sent by (a) hand delivery, with
proof of attempted delivery, (b) certified or registered United States mail,
postage prepaid, (c) expedited prepaid delivery service, either commercial or
United States Postal Service, with proof of attempted delivery, or (d) by
telecopy or email provided that such telecopy or email notice must also be
delivered by one of the means set forth in (a), (b) or (c) above, to the address
specified in Annex I hereto or at such other address and person as shall be
designated from time to time by any party hereto, as the case may be, in a
written notice to the other parties hereto in the manner provided for in this
Section 16. A notice shall be deemed to have been given: (a) in the case of hand
delivery, at the time of delivery, (b) in the case of registered or certified
mail, when delivered on a Business Day, (c) in the case of expedited prepaid
delivery upon delivery on a Business Day, or (d) in the case of telecopy or
email, upon delivery; provided that (i) such telecopy or email notice was also
delivered by one of the means set forth in (a), (b) or (c) above (which may
arrive after such telecopy or email), and (ii) the transmitting party did not
receive an electronic notice of a transmission failure. A party receiving a
notice which does not comply with the technical requirements for notice under
this Section 16 may elect to waive any deficiencies and treat the notice as
having been properly given.

17. ENTIRE AGREEMENT; SEVERABILITY

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

18. ASSIGNABILITY

(a) The rights and obligations of Seller under this Agreement and the other
Transaction Documents and under any Transaction shall not be assigned by Seller
without the prior written consent of Buyer, which consent may be granted or
withheld in Buyer’s sole discretion.

(b) Buyer may assign its rights and obligations under this Agreement and the
other Transaction Documents and/or under any Transaction or may issue one or
more participation interests with respect to any or all of the Transactions,
without the consent of, and without prior notice to, Seller, to any other
Person, and, in connection therewith, may bifurcate or allocate (i.e.
senior/subordinate) amounts owed to Buyer; provided, however, that, with respect
to any such participation or assignment, so long as no monetary Default,
material non-monetary Default or Event of Default has occurred and is continuing
(i) unless Buyer has

 

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assigned one hundred percent (100%) of its interests under this Agreement,
Seller shall not be obligated to deal directly with any party other than Buyer
or its Affiliate in connection with such Transactions and Buyer or an Affiliate
thereof shall retain final authority to enforce remedies and provide consents,
waivers or approvals (including, without limitation, approving any Eligible Loan
as a Purchased Loan or any disapproval of extension of the Revolving Period)
under this Agreement and to determine the Market Value for any Purchased Loan
and the occurrence of a Mandatory Early Repurchase Event under this Agreement,
and (ii) Buyer shall not assign or grant participations in its rights and
obligations hereunder to any Prohibited Transferee without Seller’s prior
written consent. In addition to the foregoing, so long as no monetary Default,
material non-monetary Default or Event of Default has occurred and is
continuing, Buyer shall not assign (but, for avoidance of doubt, may sell
participation interests in) its rights and obligations in this Agreement to any
Person without Seller’s prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed, unless such Person is an Eligible
Assignee. Notwithstanding the foregoing, if a monetary Default, material
non-monetary Default or Event of Default has occurred and is continuing, Buyer
may assign and/or grant participations in any and all of its rights and
obligations to any Prohibited Transferee, without notice to or consent of the
Seller. Seller shall reasonably cooperate at Buyer’s sole cost and expense with
Buyer in connection with any assignment or participation, provided Seller’s
obligations under the Transaction Documents are not increased and its rights
under the Transaction Documents are not impaired. Seller agrees that any
assignee or participant shall be entitled to the benefits of Section 3(i) and
Section 29 (subject to the limitations and requirements under Section 29 (it
being understood that the applicable documentation required under Section 29(c)
shall be delivered to the participating Buyer)); provided that, no assignee or
participant will be entitled to any greater payment of Additional Amounts under
Section 3(i) or Section 29, than its assignor or participating Buyer would have
been entitled to receive with respect to the applicable assigned or participated
rights and obligations, except to the extent such entitlement to receive a
greater payment or Additional Amounts results from a change in law that occurs
after the date such assignee or participant acquired its interest in the
Transaction Documents.

(c) Buyer shall, acting for this purpose as a non-fiduciary agent of Seller (the
“Registrar”), maintain a record of ownership (the “Register”) on which is
entered the name and address of all assignees of Buyer and each such assignee’s
interest in the rights and obligations under this Agreement and the other
Transaction Documents. All assignments pursuant to Section 18 hereof shall be
recorded on the Register. This provision is intended to be interpreted so that
the indebtedness (for federal income tax purposes, as set forth in
Section 22(e)) evidenced by the Transaction Documents is treated as being in
registered form in accordance with Section 5f.103-1(c) of the Treasury
Regulations. The Register shall be available for inspection by Seller at any
reasonable time and from time to time upon reasonable prior notice. The entries
in the Register shall be conclusive absent manifest error, and Buyer and Seller
shall treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Buyer hereunder for all purposes of this Agreement. Buyer may,
at any time, designate any other Person, including Seller, to be the successor
Registrar.

(d) Each Buyer that sells a participation shall, acting for this purpose as a
non-fiduciary agent of Seller, maintain a register on which is entered the name
and address of each participant and such participant’s interest in the rights
and obligations under this Agreement and the other Transaction Documents (the
“Participant Register”); provided that, no Buyer shall

 

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have any obligation to disclose all or any portion of the Participant Register
(including the identity of any participant or any information relating to a
participant’s interest in any rights or obligations under this Agreement and the
other Transaction Documents) to any Person except to the extent that such
disclosure is necessary to establish that such rights or obligations are in
registered form in accordance with Section 5f.103-1(c) of the Treasury
Regulations. The entries in each Participant Register shall be conclusive absent
manifest error, and the applicable Buyer shall treat each Person whose name is
recorded in such Participant Register as the owner of the related rights and
obligations for all purposes of this Agreement notwithstanding notice to the
contrary.

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

19. GOVERNING LAW

This Agreement shall be governed by the laws of the State of New York without
giving effect to the conflict of law principles thereof.

20. NO WAIVERS, ETC.

No express or implied waiver of any Default or Event of Default by Buyer shall
constitute a waiver of any other Default or Event of Default and no exercise of
any right or remedy hereunder by Buyer shall constitute a waiver of its right to
exercise any other right or remedy hereunder. No modification or waiver of any
provision of this Agreement and no consent by any party to a departure herefrom
shall be effective unless and until such shall be in writing and duly executed
by both of the parties hereto. Without limitation of the foregoing, the failure
to give a notice pursuant to Section 4(b) or 4(c) hereof will not constitute a
waiver of any right to do so at a later date.

21. USE OF EMPLOYEE PLAN ASSETS

(a) No plan assets within the meaning of 29 C.F.R. § 2510.3-101 as modified in
operation by Section 3(42) of ERISA (“Plan Assets”) of any Plan subject to any
provision of ERISA or Section 4975 of the Code shall be used in connection with
any Transaction. If any such assets are intended to be used by either party
hereto (the “Plan Party”) in the Transaction, the Plan Party shall so notify the
other party prior to the Transaction. The Plan Party shall represent in writing
to the other party that the Transaction does not constitute a prohibited
transaction under ERISA or is otherwise exempt therefrom, and the other party
may proceed in reliance thereon but shall not be required so to proceed.

 

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(b) Subject to the last sentence of subparagraph (a) of this Section 21, if
assets of Seller are deemed to be Plan Assets, any such Transaction shall
proceed only if Seller furnishes or has furnished to Buyer its most recent
available audited statement of its financial condition and its most recent
subsequent unaudited statement of its financial condition.

(c) By entering into a Transaction pursuant to this Section 21, if assets of
Seller are deemed to be Plan Assets, Seller shall be deemed (i) to represent to
Buyer that since the date of Seller’s latest such financial statements, there
has been no material adverse change in Seller’s financial condition which Seller
has not disclosed to Buyer, and (ii) to agree to provide Buyer with future
audited and unaudited statements of its financial condition as they are issued,
so long as it is a Seller in any outstanding Transaction involving a Plan Party.

(d) During the term of this Agreement and so long as any Transaction is in
effect hereunder, the assets of the Sponsor shall not constitute Plan Assets.

22. INTENT

(a) The parties intend, agree and acknowledge that: (i) this Agreement together
with all Transactions, constitutes a single agreement, (ii) this Agreement and
each Transaction involving a Purchased Loan, to the extent that it has a
Repurchase Date less than one year after the Purchase Date or may be repurchased
on demand, qualifies for the safe harbor treatment provided by the Bankruptcy
Code and for Buyer to be entitled to all of the rights, benefits and protections
afforded to Persons under the Bankruptcy Code with respect to a “repurchase
agreement” as defined in Section 101(47) of the Bankruptcy Code, (iii) this
Agreement and each Transaction involving a Purchased Loan qualifies for the safe
harbor treatment provided by the Bankruptcy Code and for Buyer to be entitled to
all of the rights, benefits and protections afforded to Persons under the
Bankruptcy Code with respect to a “securities contract” as that term is defined
in Section 741(7) of the Bankruptcy Code, (iv) certain payments under this
Agreement are deemed “margin payments” or “settlement payments,” as defined in
Section 101 of the Bankruptcy Code, (v) each payment to Buyer under this
Agreement has been made by, to or for the benefit of a financial institution as
defined in section 101(22) of the Bankruptcy Code, a financial participant as
defined in section 101(22A) of the Bankruptcy Code or repo participant as
defined in section 101(46) of the Bankruptcy Code, and thus Buyer (for so long
as Buyer is a “financial institution,” “financial participant” or other entity
listed in Section 555, 559 or 362(b)(6) of the Bankruptcy Code) shall be
entitled to the “safe harbor” benefits and protections afforded under the
Bankruptcy Code with respect to a “repurchase agreement” a “securities
contract,” and a “master netting agreement” including (x) the rights, set forth
in Section 13 and in Sections 555, 559 and 561 of the Bankruptcy Code, to
liquidate the Purchased Loans and terminate this Agreement, and (y) the right to
offset or net out as set forth in Section 13 and in Sections 362(b)(6),
362(b)(7), 362(b)(27), 362(o) and 546 of the Bankruptcy Code, (vi) the grant of
a security interest set forth in Sections 6 and 28(b) hereof to secure the
rights of Buyer hereunder also constitutes a “repurchase agreement” (where
applicable) as contemplated by Section 101(47)(A)(v) of the Bankruptcy Code and
a “securities contract” as contemplated by Section 741(7)(A)(xi) of the
Bankruptcy Code and are a part of this Agreement and (vii) each of the Purchased
Loans shall constitute a “security” as defined in Section 101(49) of the
Bankruptcy Code, a mortgage loan or an interest in a mortgage loan. It is
further understood that this Agreement is intended to constitute a “master
netting agreement” as defined in Section 101(38A) of the Bankruptcy Code, as
amended, with respect to each Transaction so constituting a “repurchase
agreement” (where applicable), or “securities contract”. Each party hereto
hereby further agrees that it shall not challenge the characterization of this
Agreement as a “repurchase agreement,” “securities contract” and/or “master
netting agreement” within the meaning of the Bankruptcy Code.

 

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(b) The parties intend, agree and acknowledge that either party’s right to
accelerate or terminate this Agreement or to liquidate Purchased Loans delivered
to it in connection with the Transaction hereunder or to exercise any other
remedies pursuant to Section 13 hereof is a contractual right to liquidate,
terminate or accelerate such Transaction as described in Sections 555 and 559 of
the Bankruptcy Code. It is further understood and agreed that either party’s
right to cause the termination, liquidation, or acceleration of, or to offset
net termination values, payment amounts or other transfer obligations arising
under or in connection with, this Agreement or any Transaction hereunder is a
contractual right to cause the termination, liquidation, or acceleration of, or
to offset net termination values, payment amounts or other transfer obligations
arising under or in connection with, this Agreement as described in Section 561
of the Bankruptcy Code.

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

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

(e) Each party intends, agrees and acknowledges that it is its intent for U.S.
federal, state and local income and franchise tax purposes to treat the
Transactions as indebtedness of Seller that is secured by the Purchased Loans,
and the Purchased Loans as owned by Seller for such purposes, that each Series
Seller shall be disregarded as a separate entity from the Master Seller and each
other Series Seller for such purposes, and each party agrees to take no action
inconsistent with such treatment, unless required by applicable law, in which
case such party shall promptly notify the other party of such requirement.

(f) In light of the intent set forth above in this Section 22, Seller agrees
that, from time to time upon the written request of Buyer, Seller will execute
and deliver any supplements, modifications, addendums or other documents as may
be necessary, in Buyer’s sole and absolute discretion, in order to cause this
Agreement and the Transactions contemplated hereby to qualify for, comply with
the provisions of, or otherwise satisfy, maintain or preserve the criteria for
safe harbor treatment under the Bankruptcy Code for “repurchase agreements”
(where applicable), “securities contracts” and “master netting agreements”;
provided, however, that Buyer’s failure to request, or Buyer’s or Seller’s
failure to execute, such supplements, modifications, addendums or other
documents does not in any way alter or otherwise change the intention of the
parties hereto that this Agreement and the Transactions hereunder constitute
“repurchase agreements” (where applicable), “securities contracts” and/or a
“master netting agreement” as such terms are defined in the Bankruptcy Code.

 

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23. DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

The parties acknowledge that they have been advised that:

(a) in the case of Transactions in which one of the parties is a broker or
dealer registered with the Securities and Exchange Commission (“SEC”) under
Section 15 of the Securities Exchange Act of 1934 (“1934 Act”), the Securities
Investor Protection Corporation has taken the position that the provisions of
the Securities Investor Protection Act of 1970 (“SIPA”) do not protect the other
party with respect to any Transaction hereunder;

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

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

24. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

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

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

 

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(c) The parties hereby irrevocably waive, to the fullest extent it may
effectively do so, the defense of an inconvenient forum to the maintenance of
such action or proceeding and irrevocably consent to the service of any summons
and complaint and any other process by the mailing of copies of such process to
them at their respective address specified herein. The parties hereby agree that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Section 24 shall affect the right of Buyer to
serve legal process in any other manner permitted by law or affect the right of
Buyer to bring any action or proceeding against Seller or its property in the
courts of other jurisdictions.

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

25. NO RELIANCE

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

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

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

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

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

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

 

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(b) Each determination by Buyer of the Market Value with respect to each
Purchased Loan or the communication to Seller of any information pertaining to
Market Value under this Agreement shall be subject to the following disclaimers;
provided, however, that Buyer hereby agrees that none of the disclaimers
contained in this Section 25(b) shall be construed as expanding or modifying the
method by which Buyer must determine Market Value as set forth in the definition
of Market Value herein:

(i) Buyer has assumed and relied upon, with Seller’s consent and without
independent verification, the accuracy and completeness of the information
provided by Seller and reviewed by Buyer. Buyer has not made any independent
inquiry of any aspect of the New Collateral or Purchased Loans or the underlying
collateral. Buyer’s view is based on economic, market and other conditions as in
effect on, and the information made available to Buyer as of, the date of any
such determination or communication of information, and such view may change at
any time without prior notice to Seller.

(ii) Market Value determinations and other information provided to Seller
constitute a statement of Buyer’s view of the value of one or more loans or
other assets at a particular point in time and neither (A) constitute a bid for
a particular trade, (B) indicate a willingness on the part of Buyer or any
Affiliate thereof to make such a bid, nor (C) reflect a valuation for
substantially similar assets at the same or another point in time, or for the
same assets at another point in time.

(iii) Market Value determinations and other information provided to Seller may
vary significantly from valuation determinations and other information that may
be obtained from other sources.

(iv) Market Value determinations and other information provided to Seller are
communicated to Seller solely for its use and may not be relied upon by any
other person and may not be disclosed or referred to publicly or to any third
party without the prior written consent of Buyer, which consent Buyer may
withhold or delay in its sole and absolute discretion.

(v) Buyer makes no representations or warranties with respect to any Market
Value determinations or other information provided to Seller. Buyer shall not be
liable for any incidental or consequential damages arising out of any inaccuracy
in such valuation determinations and other information provided to Seller,
including as a result of any act of gross negligence or breach of any warranty.

(vi) Market Value determinations and other information provided to Seller in
connection therewith are only indicative of the initial Market Value of the
Purchased Loan submitted to Buyer for consideration hereunder, and may change
without notice to Seller prior to, or subsequent to, the Purchase Date for the
applicable Transaction. No indication is provided as to Buyer’s expectation of
the future value of such Purchased Loan or the underlying collateral.

 

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(vii) Initial Market Value determinations and other information provided to
Seller in connection therewith are to be used by Seller for the sole purpose of
determining whether to proceed in accordance with Section 3 hereof and for no
other purpose.

26. INDEMNITY

(a) Seller hereby agrees to indemnify, defend and hold harmless Buyer, Buyer’s
Affiliates and each of its officers, directors, employees and agents
(“Indemnified Parties”) from and against any and all liabilities, obligations,
actual out-of-pocket losses, actual out-of-pocket damages, actual out-of-pocket
penalties, actions, judgments, suits, actual out-of-pocket fees, actual
out-of-pocket costs, actual out-of-pocket expenses (including reasonable
attorneys fees and disbursements) or disbursements (all of the foregoing,
collectively “Indemnified Amounts”) which may at any time (including, without
limitation, such time as this Agreement shall no longer be in effect and the
Transactions shall have been repaid in full) be imposed on or asserted against
any Indemnified Party in any way whatsoever arising out of or in connection
with, or relating to, this Agreement, the Transaction Documents or any
Transactions hereunder or thereunder or any action taken or omitted to be taken
by any Indemnified Party under or in connection with any of the foregoing;
provided, that Seller shall not be liable for Indemnified Amounts resulting from
the gross negligence or willful misconduct of any Indemnified Party. Without
limiting the generality of the foregoing, Seller agrees to indemnify, defend and
hold Buyer and the other Indemnified Parties harmless from and indemnify Buyer
against all Indemnified Amounts with respect to all Purchased Loans relating to
or arising out of any (A) breach of any representation or warranty relating to
Environmental Law or Hazardous Materials made by Seller hereunder or under any
Transaction Document or any violation or alleged violation of any Environmental
Law arising prior to Buyer or any third party taking title to, or ownership of
(free and clear of any repurchase or redemption rights of Seller, or obligations
of Buyer with respect to such rights under this Agreement) the Purchased Assets
in connection with Buyer’s exercise of remedies following the occurrence of an
Event of Default or (B) any violation or alleged violation of any consumer
credit laws, including without limitation ERISA, the Truth in Lending Act and/or
the Real Estate Settlement Procedures Act, except to the extent such violation
or alleged violation results from Buyer’s bad faith, gross negligence or willful
misconduct. In any suit, proceeding or action brought by Buyer in connection
with any Purchased Loan for any sum owing thereunder, or to enforce any
provisions of any Purchased Loan, Seller will save, indemnify and hold Buyer
harmless from and against all actual out-of-pocket costs and expenses (including
reasonable attorneys’ fees), losses or damages suffered by reason of any
defense, set-off, counterclaim, recoupment or reduction or liability whatsoever
of the account debtor or obligor thereunder, arising out of a breach by Seller
of any obligation thereunder or arising out of any other agreement, indebtedness
or liability at any time owing to or in favor of such account debtor or obligor
or its successors from Seller. Seller also agrees to reimburse Buyer as and when
billed by Buyer for (i) all Buyer’s actual out-of-pocket costs and expenses
incurred in connection with the initial preparation and negotiation of this
Agreement and the Transaction Documents and the closing of the transactions
contemplated hereby and thereby and (ii) all Buyer’s actual out-of-pocket costs
and expenses incurred in connection with Buyer’s due diligence reviews with
respect to the Purchased Loans or any loan which is proposed by Seller as a
Purchased Loan, including without limitation, those incurred under Section 27
and the reasonable fees and disbursements of its counsel, subject in all cases

 

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under this clause (ii), to the terms and conditions of Section 27. Additionally,
Seller also agrees to reimburse Buyer as and when billed by Buyer for all of
Buyer’s actual out-of-pocket costs and expenses incurred in connection with the
enforcement or the preservation of Buyer’s rights under this Agreement and the
Transaction Documents or any Transaction contemplated hereby or thereby,
including, without limitation, the reasonable fees and disbursements of its
counsel. Seller hereby acknowledges that, the obligation of Seller hereunder is
a recourse obligation of Seller. Except as otherwise provided, this Section 26
shall not apply with respect to Taxes other than any Taxes that represent
losses, claims, damages, etc. arising from any non-Tax claim, which shall be as
set forth in Section 29.

(b) In addition to any rights now or hereafter granted under the Transaction
Documents, Requirements of Law, Seller hereby grants to Buyer and each of the
Indemnified Parties, to secure repayment of the Repurchase Obligations, and
Sponsor hereby grants to Buyer and each of the Indemnified Parties, to secure
repayment of the Guaranteed Obligations (as defined in the Guaranty), a right of
set-off during the continuance of an Event of Default upon any and all of the
following: monies, securities, collateral or other property of Seller and
Sponsor and any proceeds from the foregoing, now or hereafter held or received
by Buyer, any Affiliate of Buyer or any Indemnified Party, for the account of
Seller or Sponsor, whether for safekeeping, custody, pledge, transmission,
collection or otherwise, and also upon any and all deposits (general, specified,
special, time, demand, provisional or final) and credits, claims or indebtedness
of Seller or Sponsor at any time existing, and any obligation owed by Buyer or
any Affiliate of Buyer to Seller or Sponsor and to set–off against any
Repurchase Obligations or indebtedness owed by Seller or Sponsor and any
indebtedness owed by Buyer or any Affiliate of Buyer to Seller or Sponsor, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, whether or not arising under the Transaction Documents and
irrespective of the currency, place of payment or booking office of the amount
or obligation and in each case at any time held or owing by Buyer, any Affiliate
of Buyer or any Indemnified Party to or for the credit of Seller or Sponsor,
without prejudice to Buyer’s right to recover any deficiency. Each of Buyer,
each Affiliate of Buyer and each Indemnified Party is hereby authorized during
the continuance of an Event of Default, without notice to Seller or Sponsor, any
such notice being expressly waived by Seller and each such Affiliate to the
extent permitted by any Requirements of Law, to set–off, appropriate, apply and
enforce such right of set–off against any and all items hereinabove referred to
against any amounts owing to Buyer or any Indemnified Party by Seller or Sponsor
under the Transaction Documents and the Repurchase Obligations, irrespective of
whether Buyer, any Affiliate of Buyer or any Indemnified Party shall have made
any demand under the Transaction Documents and regardless of any other
collateral securing such amounts, and in all cases without waiver or prejudice
of Buyer’s rights to recover a deficiency. ANY AND ALL RIGHTS TO REQUIRE BUYER
OR OTHER INDEMNIFIED PARTIES TO EXERCISE THEIR RIGHTS OR REMEDIES WITH RESPECT
TO THE PURCHASED LOANS OR OTHER INDEMNIFIED PARTIES UNDER THE TRANSACTION
DOCUMENTS, PRIOR TO EXERCISING THE FOREGOING RIGHT OF SET–OFF, ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED BY SELLER AND SPONSOR. Buyer shall
give written notice to Seller and Sponsor of any set-off effected under this
Article 15 promptly thereafter, to the extent Buyer is not prohibited from doing
so by applicable law.

 

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27. DUE DILIGENCE

Seller acknowledges that Buyer has the right to perform continuing due diligence
reviews with respect to the Purchased Loans, for purposes of verifying
compliance with the representations, warranties and specifications made
hereunder, or otherwise, and Seller agrees that upon reasonable prior notice to
Seller, Buyer or its authorized representatives will be permitted during normal
business hours to examine, inspect, and make copies and extracts of, the
Purchased Loan Files, Servicing Records and any and all documents, records,
agreements, instruments or information relating to such Purchased Loans in the
possession or under the control of Seller, any other servicer or subservicer
and/or the Custodian. Seller also shall make available to Buyer a knowledgeable
financial or accounting officer for the purpose of answering questions
respecting the Purchased Loan Files and the Purchased Loans. Seller acknowledges
that (A) Buyer has the right to request, at Seller’s expense, one (1) new and
updated Appraisal for each Mortgaged Property securing any Purchased Loan during
any consecutive thirty-six (36) month period, and (B) in addition, upon any
determination by Buyer that a decrease in the Market Value of the Purchased Loan
has occurred, Buyer has the right to request, at Seller’s expense, an additional
Appraisal for any Mortgaged Property securing the Purchased Loan, not more
frequently than once in any calendar year; provided, however, that, with respect
to this clause (B), Buyer shall have the right to request an additional
Appraisal in the same calendar year, and, if such Appraisal results in a
determination by Buyer that a decrease in the Market Value of the Purchased Loan
has occurred, Seller shall reimburse Buyer for the costs and expenses related to
such additional Appraisal. Without limiting the generality of the foregoing,
Seller acknowledges that Buyer may enter into Transactions with Seller based
solely upon the information provided by Seller to Buyer and the representations,
warranties and covenants contained herein, and that Buyer, at its option, has
the right at any time to conduct a partial or complete due diligence review on
some or all of the Purchased Loans. Buyer may underwrite such Purchased Loans
itself or engage a third party underwriter to perform such underwriting. Seller
agrees to reasonably cooperate with Buyer and any third party underwriter
reasonably acceptable to Seller in connection with such underwriting, including,
but not limited to, providing Buyer and any third party underwriter with access
to any and all documents, records, financial models, agreements, instruments or
information relating to such Purchased Loans in the possession, or under the
control, of Seller. Seller further agrees that Seller shall reimburse Buyer for
any and all reasonable out-of-pocket costs and expenses incurred by Buyer in
connection with Buyer’s activities pursuant to this Section 27 on or before the
Purchase Date for any Purchased Loan or within ten (10) days after Buyer shall
reject any prospective New Collateral.

28. SERVICING

(a) Master Seller, on behalf of itself and each Series Seller, and Buyer agree
that ownership of all Servicing Rights with respect to the Purchased Loans will
be transferred hereunder to Buyer on the applicable Purchase Date and such
ownership of Servicing Rights shall be transferred by Buyer to Master Seller or
the applicable Series Seller upon the applicable Series Seller’s payment of the
Repurchase Price for such Purchased Loans, in each case subject to the terms of
the applicable Servicing Agreement. Without limiting the generality of the
foregoing, Buyer shall have the right to hire or engage any Person to service or
subservice all or any portion of the Purchased Loans. Buyer hereby grants to
Master Seller, on behalf of itself and

 

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each Series Seller, prior to the occurrence of an Event of Default, the right to
exercise all discretion with respect to any directions or consents to be given
to the Servicer of the Purchased Loans (other than modifications of the
Purchased Loans) and to appoint a servicer for each Purchased Loan subject to
the prior written consent of Buyer, which consent may be given by Buyer in its
sole and absolute discretion; provided, however, that upon the occurrence and
during the continuance of an Event of Default, Master Seller’s and each Series
Seller’s rights to exercise such discretion with respect to all of the Purchased
Loans shall automatically terminate and be of no further force and effect. Any
amendment, modification or termination, or waiver of any term or provision, of
any Purchased Loan or Purchased Loan Documents shall require Buyer’s prior
written consent to the extent required and in accordance with Section 7(e) of
this Agreement. Buyer hereby agrees that Midland Loan Services, a division of
PNC Bank, National Association, a national banking association, or any other
third party servicer otherwise approved by Buyer in writing (a “Servicer”) may
service the Purchased Loans for the benefit of Buyer in accordance with the
terms and conditions of the servicing agreement in effect for each such
Servicer, provided that each such servicing agreement shall have been approved
in writing by Buyer in its commercially reasonable discretion, exercised in good
faith (each such servicing agreement or subservicing agreement that has been
approved by Buyer (or, if applicable, Buyer’s assigns), a “Servicing Agreement”
and, collectively, the “Servicing Agreements”); and provided, further, that any
such Servicer shall have entered into a Servicer Notice and Agreement
substantially in the form of Exhibit IX attached hereto (a “Servicer Notice and
Agreement”) acknowledging Buyer’s interests in the related Purchased Loans and
its rights to sell such Purchased Loans on a servicing-released basis and to
terminate the term of such Servicing Rights with respect to any Purchased Loans
from and after an Event of Default; provided, however, that Midland Loan
Services, as the initial Servicer, and as a party to the Initial Servicing
Agreement, shall not be required to enter into a Servicer Notice and Agreement.
Master Seller shall cause the Purchased Loans to be serviced in accordance with
Accepted Servicing Practices approved by Buyer in its reasonable discretion and
practiced by other prudent mortgage lenders with respect to mortgage loans
similar to the Purchased Loans; provided, further, that Buyer shall have the
right to hire or engage any Person (whose services shall be, prior to the
occurrence and continuance of an Event of Default, at Buyer’s sole cost and
expense, and following the occurrence and during the continuance of an Event of
Default, at Seller’s sole but reasonable cost and expense) to perform
confirmatory calculations of all amounts determined by Servicer for all or any
portion of the Transactions and to interface with Servicer in connection with
such confirmatory calculations.

(b) Master Seller, on behalf of itself and each Series Seller, agrees that Buyer
is the owner of all servicing records, including but not limited to Seller’s
rights in and to any and all Servicing Agreements, files, documents, records,
data bases, computer tapes, copies of computer tapes, proof of insurance
coverage, insurance policies, appraisals, other closing documentation, payment
history records, and any other records relating to or evidencing the servicing
of Purchased Loans (collectively, the “Servicing Records”) so long as the
Purchased Loans are subject to this Agreement. Master Seller, on behalf of
itself and each Series Seller, grants Buyer a security interest in all of
Seller’s interest (if any) in servicing fees and rights relating to the
Purchased Loans and all Servicing Records to secure the obligation of Seller or
its designee to service in conformity with this Section 28 and any other
obligation of Seller to Buyer. Seller covenants to safeguard such Servicing
Records (if any are in Seller’s possession) and to deliver them promptly to
Buyer or its designee (including the Custodian) upon the occurrence and during
the continuance of an Event of Default.

 

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(c) Upon the occurrence and during the continuance of an Event of Default, Buyer
may, in its sole and absolute discretion, subject to Section 13 and any terms in
the applicable Servicing Agreements approved by Buyer (i) in the case of a
Facility Event of Default, sell its rights to any or all of the Purchased Loans
(or in the case of a Transaction Event of Default, sell its rights to the
affected Purchased Loan(s)) on a servicing released basis or (ii) in the case of
a Facility Event of Default, terminate any Servicer or sub-servicer of any or
all of the Purchased Loans (or in the case of a Transaction Event of Default,
terminate the Servicer and sub-servicer, if any, for the affected Purchased
Loan(s)), with or without cause, in each case without payment of any termination
fee. Seller shall cause each Servicer to cooperate with Buyer in effecting such
termination and transferring all authority to service such Purchased Loans to
the successor servicer, including requiring such Servicer to (i) promptly
transfer all data in its possession relating to the applicable Purchased Loans
to the successor servicer in such electronic format as the successor servicer
may reasonably request, (ii) promptly transfer to the successor servicer, Buyer
or Buyer’s designee, the Purchased Loan File and all other files, records,
correspondence and documents in its possession relating to the applicable
Purchased Loans and (iii) use commercially reasonable efforts to cooperate and
coordinate with the successor servicer and/or Buyer to comply with any
applicable so-called “goodbye” letter requirements or other applicable
requirements of the Real Estate Settlement Procedures Act or other applicable
legal or regulatory requirement associated with the transfer of the servicing of
the applicable Purchased Loans. Seller agrees that if either Seller or any such
Servicer fails to cooperate with Buyer or any successor servicer in effecting
the termination of such Servicer as servicer of any Purchased Loan or the
transfer of all authority to service such Purchased Loan to such successor
servicer in accordance with the terms hereof and the applicable Servicing
Agreement, Buyer shall be entitled to injunctive relief.

(d) If Servicer is an Affiliate of Seller or Sponsor, the payment of servicing
fees shall be subordinate to payment of amounts outstanding under any
Transaction and this Agreement.

29. TAXES

(a) For the avoidance of doubt, for purposes of this Section 29, the term
“applicable law” includes FATCA.

(b) Any and all payments by or on account of any obligation of Seller under any
Transaction Document shall be made without deduction or withholding for any
Taxes, except as required by applicable law. If any applicable law (as
determined in the good faith discretion of the applicable withholding agent)
requires the deduction or withholding of any Tax from any such payment, then
Seller shall make (or cause to be made) such deduction or withholding and shall
timely pay (or cause to be timely paid) the full amount deducted or withheld to
the relevant Governmental Authority in accordance with applicable law and, if
such Tax is an Indemnified Tax, then the sum payable by Seller shall be
increased as necessary so that after such deduction or withholding has been made
(including such deductions and withholdings applicable to additional sums
payable under this Section 29) Buyer receives an amount equal to the sum it
would have received had no such deduction or withholding been made.

 

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(c) Seller shall timely pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.

(d) Seller shall indemnify Buyer, within ten (10) Business Days after written
demand therefor, for the full amount of any Indemnified Taxes (including
Indemnified Taxes imposed or asserted on or attributable to amounts payable
under Section 29) payable or paid by Buyer or required to be withheld or
deducted from a payment to Buyer, and any reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to Seller by
Buyer shall be conclusive absent manifest error.

(e) As soon as practicable after any payment of Taxes by Seller to a
Governmental Authority pursuant to this Section 29, Seller shall deliver to
Buyer the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment
or other evidence of such payment reasonably satisfactory to Buyer.

(f) (i) If Buyer is entitled to an exemption from or reduction of withholding
Tax with respect to payments made under any Transaction Document, Buyer shall
deliver to Seller, at the time or times reasonably requested by Seller, such
properly completed and executed documentation reasonably requested by Seller as
will permit such payments to be made without withholding or at a reduced rate of
withholding. In addition, Buyer, if reasonably requested by Seller, shall
deliver such other documentation prescribed by applicable law or reasonably
requested by Seller as will enable Seller to determine whether or not Buyer is
subject to backup withholding or information reporting requirements.
Notwithstanding anything to the contrary in the preceding two sentences, the
completion, execution and submission of such documentation (other than such
documentation set forth in Section 29(f)(ii)(A), Section 29(f)(ii)(B) and
Section 29(f)(ii)(D) below) shall not be required if in Buyer’s reasonable
judgment such completion, execution or submission would subject Buyer to any
material unreimbursed cost or expense or would materially prejudice the legal or
commercial position of Buyer.

(ii) Without limiting the generality of the foregoing:

(A) if Buyer is a U.S. Person, it shall deliver to Seller on or prior to the
date on which Buyer becomes a party under this Agreement (and from time to time
thereafter upon the reasonable request of Seller), executed copies of IRS Form
W-9 certifying that Buyer is exempt from U.S. federal backup withholding tax;

 

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(B) if Buyer is a Foreign Buyer, it shall, to the extent it is legally entitled
to do so, deliver to Seller (in such number of copies as shall be requested by
Seller) on or prior to the date on which Buyer becomes a party under this
Agreement (and from time to time thereafter upon the reasonable request of
Seller), whichever of the following is applicable:

(I) in the case of a Foreign Buyer claiming the benefits of an income tax treaty
to which the United States is a party, (x) with respect to payments of interest
under any Transaction Document, executed copies of IRS Form W-8BEN or IRS Form
W-8BEN-E (as applicable) establishing an exemption from, or reduction of, U.S.
federal withholding Tax pursuant to the “interest” article of such tax treaty
and (y) with respect to any other applicable payments under any Transaction
Document, IRS Form W-8BEN or IRS Form W-8BEN-E (as applicable) establishing an
exemption from, or reduction of, U.S. federal withholding Tax pursuant to the
“business profits” or “other income” article of such tax treaty;

(II) executed copies of IRS Form W-8ECI;

(III) in the case of a Foreign Buyer claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate to the
effect that such Foreign Buyer is not a “bank” within the meaning of
Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of Seller within
the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign
corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax
Compliance Certificate”) and (y) executed copies of IRS Form W-8BEN or IRS Form
W-8BEN-E (as applicable); or

(IV) to the extent a Foreign Buyer is not the beneficial owner, executed copies
of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, IRS Form
W-8BEN-E, a U.S. Tax Compliance Certificate, IRS Form W-9, and/or other
certification documents from each beneficial owner, as applicable; provided that
if the Foreign Buyer is a partnership and one or more direct or indirect
partners of such Foreign Buyer are claiming the portfolio interest exemption,
such Foreign Buyer may provide a U.S. Tax Compliance Certificate on behalf of
each such direct and indirect partner;

(C) if Buyer is a Foreign Buyer, it shall, to the extent it is legally entitled
to do so, deliver to Seller (in such number of copies as shall be requested by
Seller) on or prior to the date on which Buyer becomes a under this Agreement
(and from time to time thereafter upon the reasonable request of Seller),
executed copies of any other form prescribed by applicable law as a basis for
claiming exemption from or a reduction in U.S. federal withholding Tax, duly
completed, together with such supplementary documentation as may be prescribed
by applicable law to permit Seller to determine the withholding or deduction
required to be made; and

(D) if a payment made to Buyer under any Transaction Document would be subject
to U.S. federal withholding Tax imposed by FATCA if Buyer were to fail to comply
with the applicable reporting requirements of FATCA (including those contained
in Section 1471(b) or 1472(b) of the Code, as applicable), Buyer shall deliver
to Seller at the time or times prescribed by law

 

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and at such time or times reasonably requested by Seller such documentation
prescribed by applicable law (including as prescribed by
Section 1471(b)(3)(C)(i) of the Code) and such additional documentation
reasonably requested by Seller as may be necessary for Seller to comply with its
obligations under FATCA and to determine that Buyer has complied with Buyer’s
obligations under FATCA or to determine the amount to deduct and withhold from
such payment. Solely for purposes of this clause (D), “FATCA” shall include any
amendments made to FATCA after the date of this Agreement.

Buyer agrees that if any form or certification it previously delivered expires
or becomes obsolete or inaccurate in any respect, it shall update such form or
certification, provide such successor form, or promptly notify the Seller in
writing of its legal inability to do so.

(g) If any party determines, in its sole discretion exercised in good faith,
that it has received a refund of any Taxes as to which it has been indemnified
pursuant to this Section 29 (including by the payment of additional amounts
pursuant to this Section 29), it shall pay to the indemnifying party an amount
equal to such refund (but only to the extent of indemnity payments made under
this Section 29 with respect to the Taxes giving rise to such refund), net of
all out of pocket expenses (including Taxes) of such indemnified party and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund). Such indemnifying party, upon the
request of such indemnified party, shall repay to such indemnified party the
amount paid over pursuant to this Section 29(g) (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) in the event that
such indemnified party is required to repay such refund to such Governmental
Authority. Notwithstanding anything to the contrary in this Section 29(g), in no
event will the indemnified party be required to pay any amount to an
indemnifying party pursuant to this Section 29(g) the payment of which would
place the indemnified party in a less favorable net after Tax position than the
indemnified party would have been in if the Tax subject to indemnification and
giving rise to such refund had not been deducted, withheld or otherwise imposed
and the indemnification payments or additional amounts with respect to such Tax
had never been paid. This Section 29(g) shall not be construed to require any
indemnified party to make available its Tax returns (or any other information
relating to its Taxes that it deems confidential) to the indemnifying party or
any other Person.

(h) Each party’s obligations under this Section 29 shall survive any assignment
of rights by, or the replacement of the Buyer, the termination of this Agreement
and the repayment, satisfaction or discharge of all obligations under any
Transaction Document.

30. MISCELLANEOUS

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

 

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(b) This Agreement may be executed in counterparts, each of which so executed
shall be deemed to be an original, but all of such counterparts shall together
constitute but one and the same instrument. Delivery by electronic transmission
(including a pdf e-mail transmission) of an executed counterpart of a signature
page to this Agreement or any other Transaction Document shall be effective as
delivery of an original executed counterpart of such Transaction Document.

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

(d) Without limiting the rights and remedies of Buyer under this Agreement or
the other Transaction Documents, Seller shall pay Buyer’s actual out-of-pocket
costs and expenses, including reasonable fees and expenses of accountants,
attorneys, underwriters, consultants and advisors, incurred in connection with
the preparation, negotiation, execution and consummation of and any amendment,
supplement or modification to, this Agreement and/or the other Transaction
Documents and the Transactions thereunder. Seller agrees to pay Buyer on demand
all actual out-of-pocket costs and expenses (including reasonable attorneys’
fees and disbursements) (i) reasonably incurred in connection with the
consummation and administration of the transactions contemplated hereby and
(ii) of any subsequent enforcement of any of the provisions of this Agreement
and/or the other Transaction Documents, or of the performance by Buyer of any
obligations of Seller in respect of the Purchased Loans, or any actual or
attempted sale, or any exchange, enforcement, collection, compromise or
settlement in respect of the Collateral and for the custody, care or
preservation of the Collateral (including insurance costs) and defending or
asserting rights and claims of Buyer in respect thereof, by litigation or
otherwise. In addition, Seller agrees to pay Buyer on demand all actual
out-of-pocket costs and expenses (including reasonable attorneys’ fees and
disbursements) incurred in connection with the maintenance of the Cash
Management Account. All such expenses shall be recourse obligations of Seller to
Buyer under this Agreement.

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

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

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

 

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

(i) Buyer and Seller hereby agree that neither party shall assert any claims
against the other or against any Affiliate of the other for special, indirect,
consequential or punitive damages under this Agreement, any Transaction Document
or any Transaction, all such damages and claims being hereby waived.

(j) All information regarding the terms set forth in any of the Transaction
Documents or the Transactions shall be kept confidential and shall not be
disclosed by either party hereto to any Person except (i) to the Affiliates of
such Party or its or their respective directors, officers, employees, agents,
advisors, attorneys, accountants and other representatives, (ii) to the extent
requested by any regulatory authority or required by applicable law, including
but not limited to, interrogatories, requests for information or documents,
subpoena or other similar legal process, (iii) to the extent required to be
included in the financial statements of either party hereto or an Affiliate
thereof, (iv) to the extent required to exercise any rights or remedies under
the Transaction Documents, Purchased Loans or related Mortgaged Properties,
(v) to the extent required to consummate and administer a Transaction, (vi) to
any actual or prospective third party service provider in respect of the
Purchased Loans, any investor or potential investor in Sponsor, any participant
or any assignee which, in each case, agrees to comply with this Section 30(j);
provided, that no such disclosure made with respect to any Transaction Document
shall include a copy of such Transaction Document to the extent that a summary
would suffice, but if it is necessary for a copy of any Transaction Document to
be disclosed, all pricing and other economic terms set forth therein shall be
redacted before disclosure.

(k) From and after the date hereof, the Existing Repurchase Agreement is hereby
amended, restated and superseded in its entirety by this Agreement. The parties
hereto acknowledge and agree that the liens and security interests granted under
the Existing Repurchase Agreement are, in each case, continuing in full force
and effect and, upon the amendment and restatement of the Existing Repurchase
Agreement, such liens and security interests secure and continue to secure the
payment of the Repurchase Obligations.

[NO FURTHER TEXT ON THIS PAGE]

 

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

 

MASTER SELLER:

PARLEX 15 FINCO, LLC,

a Delaware limited liability company

By:  

/s/ Douglas N. Armer

Name:   Douglas N. Armer Title:   Executive Vice President, Capital Markets, and
Treasurer

[Signatures Continue on Following Page]

 

Second Amended and Restated Master Repurchase Agreement

BXMT

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

Buyer:

DEUTSCHE BANK AG, CAYMAN

ISLANDS BRANCH

By:  

/s/ Thomas Rugg

  Name:   Thomas Rugg   Title:   Managing Director By:  

/s/ James Rolison

  Name:   James Rolison   Title:   Managing Director

 

Confidential

Second Amended and Restated Master Repurchase Agreement

BXMT

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

ANNEXES, EXHIBITS AND SCHEDULES

 

ANNEX I    Names and Addresses for Communications between Parties EXHIBIT I   
Form of Confirmation EXHIBIT II    Authorized Representatives of Seller EXHIBIT
III    [Reserved] EXHIBIT IV    Form of Custodial Delivery EXHIBIT V    Form of
Power of Attorney EXHIBIT VI    Representations and Warranties Regarding
Individual Purchased Loans EXHIBIT VII    Organizational Chart EXHIBIT VIII   
Transaction Procedures EXHIBIT IX    Form of Servicer Notice and Agreement
EXHIBIT X    [Reserved.] EXHIBIT XI    Form of Joinder Agreement EXHIBIT XII   
Form of Bailee Agreement

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

ANNEX I

Names and Addresses for Communications Between Parties

Buyer:

 

Deutsche Bank AG, Cayman Islands Branch

60 Wall Street

New York, New York 10005

Attention:

   Tom Rugg

Telephone:

   (212) 250-3541

Telecopy:

   (212) 797-5630

Email:

   tom.rugg@db.com

With copies to:

Deutsche Bank AG, Cayman Islands Branch

60 Wall Street

New York, New York 10005

Attention:

   General Counsel

and

Deutsche Bank AG, Cayman Islands Branch

60 Wall Street

New York, New York 10005

Attention:

   Robert W. Pettinato Jr.

Telephone:

   (212) 797-0286

Telecopy:

   (212) 797-5630

Email:

   robert.pettinato@db.com

and

Cadwalader, Wickersham & Taft LLP

One World Financial Center

New York, NY 10281

Attention:

   Y. Jeffrey Rotblat

Telephone:

   (212) 504-6401

Telecopy:

   (212) 504-6666

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

Seller:

 

Parlex 15 Finco, LLC

c/o Blackstone Mortgage Trust, Inc.

345 Park Avenue

New York, New York 10154

Attention:

   Douglas Armer

Telephone:

   (212) 583-5000

Email:

   BXMTDeutscheRepo@blackstone.com

With copies to:

Ropes & Gray LLP

1211 Avenue of the Americas

New York, NY 10036-8704

Attention:

   Daniel L. Stanco

Telephone:

   (212) 841-5758

Email:

   daniel.stanco@ropesgray.com

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

EXHIBIT I

CONFIRMATION STATEMENT

DEUTSCHE BANK AG,

Cayman Islands Branch

Ladies and Gentlemen:

Deutsche Bank AG, Cayman Islands Branch, is pleased to deliver our written
CONFIRMATION of our agreement to enter into the Transaction pursuant to which
Deutsche Bank AG, Cayman Islands Branch shall purchase from you the Purchased
Loans identified on Schedule 1 attached hereto, pursuant to the terms of that
certain Second Amended and Restated Master Repurchase Agreement, dated as of
December 16, 2019 (as amended, modified and/or restated, the “Agreement”),
between Deutsche Bank AG, Cayman Islands Branch (“Buyer”) and Parlex 15 Finco,
LLC, a Delaware limited liability company (“Master Seller”; together with the
Series Seller (as defined in the Agreement) identified below, collectively,
“Seller”). Capitalized terms used herein without definition have the meanings
given in the Agreement.

 

               Series Seller:    [______________________]   Purchase Date:   
[______________________]   Repurchase Date:    [______________________]
(provided, if the Facility Termination Date is extended as described in
Section 3(p) of the Agreement, the Repurchase Date shall be automatically
extended to the date determined in accordance with Section 3(p) of the
Agreement)   Purchased Loan:    [______________________]   Annual Purchased Loan
Fee:    [______________________]   Annual Purchased Loan      Fee Percentage   
[______________________]   Initial Principal Balance of Purchased Loan:   
[______________________]   Purchase Date Market Value:   
[______________________]   Actual Original Purchase      Percentage:   
[______________________]   Maximum Original Purchase      Percentage:   
[______________________]   Purchase Price:    [______________________]  
Recourse Reference Amount:    [______________________]   Extended Purchased Loan
     Maturity Date:    [______________________]

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

               Initial Pricing Rate:    [______________________]   Applicable
Spread:    [______________________]   [Subject to Approved Transaction (Y/N):]
   [______________________]   Financing Fee Rate:    [______________________]  
Financing Fee Cap:    [______________________]   Financing Fee Payee:   
[______________________].   Wiring Instructions of Financing Fee Payee:   
[______________________]   Representations and    See Schedule 2 attached hereto
  Warranties:      Exceptions to Representations    See Schedule 3 attached
hereto   and Warranties:      Name and address for      communications:   

 

     Buyer:       

Deutsche Bank AG, Cayman Islands Branch

    

60 Wall Street

    

New York, New York 10005

    

Attention:

  Tom Rugg     

Telephone:

  (212) 250-3541     

Telecopy:

  (212) 797-5630     

Email:

  tom.rugg@db.com      With copies to:       

Deutsche Bank AG, Cayman Islands Branch

    

60 Wall Street

    

New York, New York 10005

    

Attention: General Counsel

    

and

    

Deutsche Bank AG, Cayman Islands Branch

    

60 Wall Street

    

New York, New York 10005

    

Attention:

  Robert W. Pettinato Jr.     

Telephone:

  (212) 250-5579     

Telecopy:

  (212) 797-0286     

Email: robert.pettinato@db.com

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

    

Seller:

    

Parlex 15 Finco, LLC

    

c/o Blackstone Mortgage Trust, Inc.

    

345 Park Avenue

    

New York, New York 10154

    

Attention:      Douglas Armer

    

Telephone:    (212) 583-5000

    

Email:

      

BXMTDeutscheRepo@blackstone.com

    

With copies to:

    

Ropes & Gray LLP

    

1211 Avenue of the Americas

    

New York, NY 10036-8704

    

Attention:      Daniel L. Stanco

    

Telephone:    (212) 841-5758

    

Email: daniel.stanco@ropesgray.com

[SIGNATURE PAGES FOLLOW]

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

BUYER: DEUTSCHE BANK AG, CAYMAN      ISLANDS BRANCH By:  

 

  Name:   Title: By:  

 

  Name:   Title:

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

AGREED AND ACKNOWLEDGED: MASTER SELLER:

PARLEX 15 FINCO, LLC,

     a Delaware limited liability company

By:  

 

      Name:       Title: SERIES SELLER: [____________________________]

By:  

 

  Name:   Title:

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

SCHEDULE 1 TO CONFIRMATION

(PURCHASED LOAN)

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

SCHEDULE 2 TO CONFIRMATION

(REPRESENTATIONS AND WARRANTIES)

 

Purchased Loan Name:

   Extended Purchased
Loan Maturity Date:

640 Broadway

   1/9/2022

Aston Hotel Waikiki Beach

   4/9/2025

CBS Television City

   2/1/2024

Park Central New York

   12/9/2023

Park Central San Francisco

   12/9/2023

Terminal Stores

   10/23/2021

Uptown Station

   8/9/2022

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

SCHEDULE 3 TO CONFIRMATION

(EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES)

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

EXHIBIT II

AUTHORIZED REPRESENTATIVES OF SELLER

 

Name

  

Office

  

Specimen Signature

Stephen D. Plavin   

Chief Executive Officer

and President

  

/s/ Stephen D. Plavin

Douglas N. Armer   

Executive Vice President,

Capital Markets, and

Treasurer

  

/s/ Douglas N. Armer

Anthony F. Marone, Jr.   

Managing Director and

Chief Financial Officer

  

/s/ Anthony F. Marone, Jr.

Leon Volchyok   

Managing Director,

Secretary and Head of

Legal and Compliance

  

/s/ Leon Volchyok

Thomas C. Ruffing   

Managing Director, Head

of Asset Management

  

/s/ Thomas C. Ruffing

Weston Tucker   

Senior Managing Director,

Head of lnvestor Relations

  

/s/ Weston Tucker

Katharine Keenan   

Executive Vice President,

Investments

  

/s/ Katharine Keenan

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

EXHIBIT III

[Reserved]

Master Repurchase Agreement

 

Exhibit III-1

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

EXHIBIT IV

FORM OF CUSTODIAL DELIVERY CERTIFICATE

On this ______ day of _______, 20__, Parlex 15 Finco, LLC, a Delaware limited
liability company, on behalf of itself and [SERIES SELLER] (collectively,
“Seller”), pursuant to (i) that certain Custodial Agreement, dated as of
August 2, 2016, among Seller, U.S. Bank National Association, as Custodian, and
Deutsche Bank AG, Cayman Islands Branch (“Buyer”) (as amended, modified or
supplemented from time to time, the “Custodial Agreement”) and (ii) that certain
Second Amended and Restated Master Repurchase Agreement, dated as of
December 16, 2019, between Seller and Buyer (as amended, modified or
supplemented from time to time, the “Repurchase Agreement”), does hereby deliver
the documents comprising the Purchased Loan File(s) (and listed on Exhibit B
hereto with respect to the Purchased Loan(s) identified in Exhibit A hereto) to
(a) the Bailee pursuant to that certain Bailee Agreement dated as of
[_______________] by and among Seller, Buyer, and Bailee (the “Bailee
Agreement”), for Bailee to hold and deliver to Custodian as set forth therein,
and (b) the Custodian (through the Bailee aforesaid). Seller hereby instructs
Bailee to comply with the terms of the Bailee Agreement, and hereby instructs
Custodian to comply with the terms of the Custodial Agreement, in each case,
holding the Purchased Loan File(s) for the benefit of Buyer.

With respect to the Purchased Loan File(s) delivered herewith, for purposes of
issuing its Trust Receipt, Custodian shall review the Purchased Loan File(s) to
confirm receipt of each of the documents identified on Exhibit B hereto.

Capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Custodial Agreement.

[Remainder of this page intentionally left blank.]

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

IN WITNESS WHEREOF, Seller has caused this Custodial Delivery Certificate to be
executed and delivered by its duly authorized officer as of the day and year
first above written.

 

PARLEX 15 FINCO, LLC, a Delaware limited liability company By:  

 

  Name:   Title:

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

Exhibit A

PURCHASED LOAN SCHEDULE

For each Purchased Loan set forth below, Seller shall provide, as applicable,
the following information:

 

  (a)

Loan Number

 

  (b)

Obligor Name

 

  (c)

Property Name and Address

 

  (d)

Original Balance

 

  (e)

Loan type

 

  (f)

Maturity Date

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

Exhibit B

PURCHASED LOAN FILE CHECKLIST

 

DOCUMENT NAME

  

REQ’D1

  

DEL’D2

  

STATUS3

  

COMMENTS4

                                               

 

 

1 

Seller to indicate whether the document is required to be delivered.

 

2 

Seller to indicate whether the document is being delivered (applies to this
delivery only – do not mark if documents were previously delivered).

 

3 

Seller to indicate whether the document is an original, certified copy or copy.
For recordable documents, indicate if document is recorded, sent for
recordation, not sent for recordation.

 

4 

Seller may indicate any relevant comments.

 

-2-

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EXHIBIT V

FORM OF POWER OF ATTORNEY

“Know All Men by These Presents, that Parlex 15 Finco, LLC, a Delaware limited
liability company (“Master Seller”), on behalf of itself and each Series Seller
(as defined in the Repurchase Agreement (hereinafter defined)) (Master Seller
together with each Series Seller which may hereafter be a party to the
Repurchase Agreement, collectively, “Seller”) does hereby appoint Deutsche Bank
AG, Cayman Islands Branch (“Buyer”), its attorney-in-fact, during the
continuance of an Event of Default, to act in Seller’s name, place and stead in
any way which Seller could do with respect to (i) the completion of the
endorsements of the Mortgage Notes and the Assignments of Mortgages, (ii) the
recordation of the Assignments of Mortgages and (iii) the enforcement of
Seller’s rights under the Purchased Loans purchased by Buyer pursuant to that
certain Master Repurchase Agreement, dated as of August 2, 2016 (as amended,
modified and/or restated, the “Repurchase Agreement”), between Buyer and Master
Seller, and to take such other steps as may be necessary or desirable to enforce
Buyer’s rights against such Purchased Loans, the related Purchased Loan Files
and the Servicing Records to the extent that Seller is permitted by law to act
through an agent; provided, however, that, in the case of a Transaction Event of
Default, such appointment shall be limited to actions to be taken only with
respect to the applicable Purchased Loan which is the subject of such
Transaction Event of Default. Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed thereto in the Repurchase Agreement.

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

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

IN WITNESS WHEREOF, Master Seller has caused this Power of Attorney to be
executed as of August 2, 2016.

 

PARLEX 15 FINCO, LLC, a Delaware
limited liability company

By:  

 

  Name:   Title:

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

EXHIBIT VI

REPRESENTATIONS AND WARRANTIES

REGARDING INDIVIDUAL PURCHASED LOANS5

With respect to each Purchased Loan, Seller hereby represents and warrants, as
of the date herein specified or, if no such date is specified, as of the
Purchase Date, and in either case at all times while such Purchased Loan is
subject to a Transaction, that:

1. Whole Loan; Ownership of Purchased Loans. Except with respect to any
Purchased Loan that is a Senior Interest, each Purchased Loan is a whole loan
and not a participation interest in a mortgage loan. Each Senior Interest is a
senior or pari passu portion of a whole loan evidenced by a senior or pari passu
note. At the time of the sale, transfer and assignment to Buyer, no Mortgage
Note or Mortgage was subject to any assignment (other than assignments to
Seller), participation (other than with respect to any Purchased Loan that is a
Participation Interest) or pledge, and Seller had good title to, and was the
sole owner of, each Purchased Loan free and clear of any and all liens, charges,
pledges, encumbrances, participations (other than with respect to a Purchased
Loan that is a Participation Interest), any other ownership interests (other
than with respect to a Purchased Loan that is a Senior Interest) on, in or to
such Purchased Loan other than any servicing rights appointment or similar
agreement. Seller has full right and authority to sell, assign and transfer each
Purchased Loan, and, upon the completion of the assignee information therein and
Buyer’s countersignature where applicable, the assignment to Buyer constitutes a
legal, valid and binding assignment of such Purchased Loan free and clear of any
and all liens, pledges, charges or security interests of any nature encumbering
such Purchased Loan.

2. Loan Document Status. Each related Mortgage Note, Mortgage, Assignment of
Leases (if a separate instrument), guaranty and other agreement executed by or
on behalf of the related Mortgagor, guarantor or other obligor in connection
with such Purchased Loan is the legal, valid and binding obligation of the
related Mortgagor, 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) those certain provisions in such Purchased Loan Documents (including,
without limitation, provisions requiring the payment of default interest, late
fees or prepayment/yield maintenance fees, charges and/or premiums) are, or may
be, further limited or rendered unenforceable by or under applicable law, but
(subject to the limitations set forth in clause (i) above) such limitations or
unenforceability will not render such Purchased 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”).

 

 

5 

Comments to reps under review.

 

Master Repurchase Agreement

Exhibit VI-1

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

3. Mortgage Provisions. The Purchased Loan Documents for each Purchased 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 by
written instruments set forth in the related Purchased Loan File or as otherwise
provided in the related Purchased Loan Documents (a) the material terms of such
Mortgage, Mortgage Note, Purchased Loan guaranty, and related Purchased Loan
Documents have not been waived, impaired, modified, altered, satisfied,
canceled, subordinated or rescinded in any respect; (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 Mortgagor nor the related
guarantor has been released from its material obligations under the Purchased
Loan. With respect to each Purchased Loan File, except as contained in a written
document included in the Purchased Loan File, there have been no modifications,
amendments or waivers, that could be reasonably expected to have a material
adverse effect on such Purchased Loan consented to by Seller on or after the
related Purchase Date.

5. Hospitality Provisions. The Purchased Loan Documents for each Purchased Loan
that is secured by a hospitality property operated pursuant to a franchise or
license agreement includes an executed comfort letter or similar agreement
signed by the related Mortgagor and franchisor or licensor of such property
that, subject to the applicable terms of such franchise or license agreement and
comfort letter or similar agreement, is enforceable by the holder of the
Purchased Loan against such franchisor or licensor either (A) directly or as an
assignee of the originator, or (B) upon Seller’s or its designee’s providing
notice of the transfer of the Purchased Loan in accordance with the terms of
such executed comfort letter or similar agreement. The Mortgage or related
security agreement for each Purchased Loan secured by a hospitality property
creates a security interest in the revenues of such Mortgaged Property for which
a UCC financing statement has been filed in the appropriate filing office. For
the avoidance of doubt, no representation is made as to the perfection of any
security interest in revenues to the extent that possession or control of such
items or actions other than the filing of Uniform Commercial Code financing
statements is required to effect such perfection.

 

Master Repurchase Agreement

Exhibit VI-2

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

6. Lien; Valid Assignment. Subject to the Standard Qualifications, each
assignment of Mortgage and assignment of Assignment of Leases from Seller will
constitute a legal, valid and binding assignment from Seller. Each related
Mortgage and Assignment of Leases is freely assignable without the consent of
the related Mortgagor. Each related Mortgage is a legal, valid and enforceable
first lien on the related Mortgagor’s fee or leasehold interest in the Mortgaged
Property in the principal amount of such Purchased Loan or allocated loan amount
(subject only to Permitted Encumbrances (as defined below) and the exceptions to
paragraph (7) (each such exception, a “Title Exception”)), except as the
enforcement thereof may be limited by the Standard Qualifications. Such
Mortgaged Property (subject to and excepting Permitted Encumbrances and the
Title Exceptions) as of origination was, and as of the Purchase Date, to the
Knowledge of Seller, is free and clear of any recorded mechanics’ liens,
recorded materialmen’s liens and other recorded encumbrances which are prior to
or equal with the lien of the related Mortgage, except those which are bonded
over, escrowed for or insured against by a lender’s title insurance policy (as
described below), and, to the Knowledge of Seller and subject to the rights of
tenants (as tenants only) (subject to and excepting Permitted Encumbrances and
the Title Exceptions), no rights exist which under law could give rise to any
such lien or encumbrance that would be prior to or equal with the lien of the
related Mortgage, except those which are bonded over, escrowed for or insured
against by a lender’s title insurance policy (as described below).
Notwithstanding anything herein to the contrary, no representation is made as to
the perfection of any security interest in rents or other personal property to
the extent that possession or control of such items or actions other than the
filing of UCC financing statements is required in order to effect such
perfection.

7. Permitted Liens; Title Insurance. Each Mortgaged Property securing a
Purchased 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 Purchased Loan (or with
respect to a Purchased 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 (a) the lien of current real property taxes, water
charges, sewer rents and assessments due and payable but not yet delinquent;
(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; (f) if the related Purchased Loan is
cross-collateralized and cross-defaulted with another Purchased Loan (each a
“Crossed Mortgage Loan”), the lien of the Mortgage for another Purchased Loan
that is cross-collateralized and cross-defaulted with such Crossed Mortgage
Loan; and (g) if the related

 

Master Repurchase Agreement

Exhibit VI-3

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

Purchased Loan is part of a whole loan, the rights of the holder(s) of any
related whole loan(s) pursuant to the related co-lender agreement, provided that
none of which items (a) through (f), individually or in the aggregate,
materially and adversely interferes with the value or current use of the
Mortgaged Property or the security intended to be provided by such Mortgage or
the Mortgagor’s ability to pay its obligations when they become due
(collectively, the “Permitted Encumbrances”). Except as contemplated by clause
(f) of the preceding sentence, none of the Permitted Encumbrances are mortgage
liens that are senior to or coordinate and co-equal with the lien of the related
Mortgage. Such Title Policy (or, if it has yet to be issued, the coverage to be
provided thereby) is in full force and effect, all premiums thereon have been
paid and no claims have been made by Seller thereunder and no claims have been
paid thereunder. Neither Seller, nor to the Knowledge of Seller, any other
holder of the Purchased Loan, has done, by act or omission, anything that would
materially impair the coverage under such Title Policy.

8. Junior Liens. It being understood that B notes secured by the same Mortgage
as a Purchased Loan are not subordinate mortgages or junior liens, except for
any Crossed Mortgage Loan, there are, as of origination, and to the Knowledge of
Seller, as of the Purchase 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 and materialmen’s liens (which are the subject of the representation
in paragraph (5) above), and equipment and other personal property financing.
Seller has no knowledge of any mezzanine debt secured directly by interests in
the related Mortgagor, other than any applicable Related Interest.

9. Assignment of Leases and Rents. There exists as part of the related Purchased
Loan File an Assignment of Leases (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 creates a valid
first-priority collateral assignment of, or a valid first-priority lien or
security interest in, rents and certain rights under the related lease or
leases, subject only to a license granted to the related Mortgagor to exercise
certain rights and to perform certain obligations of the lessor under such lease
or leases, including the right to operate the related leased property, except as
the enforcement thereof may be limited by the Standard Qualifications. The
related Mortgage or related Assignment of Leases, subject to applicable law,
provides that, upon an event of default under the Purchased 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.

10. UCC Filings. If the related Mortgaged Property is operated as a hospitality
property, Seller has filed and/or recorded or caused to be filed and/or recorded
(or, if not filed and/or recorded, have been submitted in proper form for filing
and/or recording), UCC financing statements in the appropriate public filing
and/or recording offices necessary at the time of the origination of the
Purchased Loan to perfect a valid security interest in all items of physical
personal property reasonably necessary to operate such Mortgaged Property owned
by such Mortgagor and located on the related Mortgaged Property (other than any
non-material personal property, any personal property subject to a purchase
money security interest, a sale and leaseback financing arrangement as permitted
under the terms of the related Purchased Loan

 

Master Repurchase Agreement

Exhibit VI-4

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

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.

11. Condition of Property. Seller or the originator of the Purchased Loan
inspected or caused to be inspected each related Mortgaged Property within six
(6) months of origination of the Purchased Loan and within twelve (12) months of
the Purchase Date.

An engineering report or property condition assessment was prepared in
connection with the origination of each Purchased Loan no more than twelve
(12) months prior to the Purchase Date. To the Knowledge of Seller, based solely
upon due diligence customarily performed in connection with the origination of
comparable mortgage loans, as of the Purchase Date, each related Mortgaged
Property was free and clear of any material damage (other than (i) any damage or
deficiency that is estimated to cost less than $50,000 to repair, (ii) any
deferred maintenance for which escrows were established at origination and
(iii) any damage fully covered by insurance) that would affect materially and
adversely the use or value of such Mortgaged Property as security for the
Purchased Loan.

12. 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 Purchase 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.

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

14. Actions Concerning Purchased Loan. As of the date of origination and to the
Knowledge of Seller as of the Purchase Date, there was no pending or filed
action, suit or proceeding, arbitration or governmental investigation involving
any Mortgagor, guarantor, or Mortgagor’s interest in the Mortgaged Property, an
adverse outcome of which would reasonably be expected to materially and
adversely affect (a) such Mortgagor’s title to the Mortgaged

 

Master Repurchase Agreement

Exhibit VI-5

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

Property, (b) the validity or enforceability of the Mortgage, (c) such
Mortgagor’s ability to perform under the related Purchased Loan, (d) such
guarantor’s ability to perform under the related guaranty, (e) the principal
benefit of the security intended to be provided by the Purchased Loan Documents
or (f) the current principal use of the Mortgaged Property.

15. Escrow Deposits. All escrow deposits and payments required to be escrowed
with lender pursuant to each Purchased Loan are in the possession, or under the
control, of 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 Purchased Loan Documents are being conveyed by
Seller to Buyer or its servicer.

16. No Holdbacks. Except for Purchased Loans identified to Buyer as having
future advances and only to the extent of scheduled future advances in the
related Confirmation, the principal amount of the Purchased Loan stated on the
Purchased Loan Schedule has been fully disbursed as of the Purchase Date and
there is no requirement for future advances thereunder (except in those cases
where the full amount of the Purchased Loan has been disbursed but a portion
thereof is being held in escrow or reserve accounts pending the satisfaction of
certain conditions relating to leasing, repairs or other matters with respect to
the related Mortgaged Property, the Mortgagor or other considerations determined
by Seller to merit such holdback).

17. 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 Purchased Loan Documents and
having a claims-paying or financial strength rating of any one of the following:
(i) at least “A-:VIII” from A.M. Best Company, (ii) at least “A3” (or the
equivalent) from Moody’s or (iii) at least “A-” from S&P (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 Purchased Loan and (2) the full insurable value on a replacement cost basis
of the improvements, furniture, furnishings, fixtures and equipment owned by the
Mortgagor 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 Purchased 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 Purchased Loan on a single
asset with a principal balance of $50 million or more, 18 months).

 

Master Repurchase Agreement

Exhibit VI-6

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

If any material part of the improvements, exclusive of a parking lot, located on
a Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards, the related
Mortgagor is required to maintain insurance in the maximum amount available
under the National Flood Insurance Program, plus such additional excess flood
coverage in an amount as is generally required by Seller for comparable mortgage
loans intended for securitization.

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 Mortgagor is required to maintain coverage for windstorm
and/or windstorm related perils and/or “named storms” issued by an insurer
meeting the Insurance Rating Requirements or endorsement covering damage from
windstorm and/or windstorm related perils and/or named storms, in an amount not
less than the lesser of (1) the original principal balance of the Purchased Loan
and (2) the full insurable value on a replacement cost basis of the improvements
and personalty and fixtures owned by the Mortgagor and included in the related
Mortgaged Property by an insurer meeting the Insurance Rating Requirements.

The Mortgaged Property is covered, and required to be covered pursuant to the
related Purchased 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 Seller for
loans originated for securitization, and in any event not less than $1 million
per occurrence and $2 million in the aggregate.

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

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

 

Master Repurchase Agreement

Exhibit VI-7

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

All premiums on all insurance policies referred to in this section required to
be paid as of the Purchase Date have been paid, and such insurance policies name
the lender under the Purchased Loan and its successors and assigns as a loss
payee under a mortgagee endorsement clause or, in the case of the general
liability insurance policy, as named or additional insured. Such insurance
policies will inure to the benefit of Buyer. Each related Purchased Loan
obligates the related Mortgagor to maintain all such insurance and, at such
Mortgagor’s failure to do so, authorizes the lender to maintain such insurance
at the Mortgagor’s cost and expense and to charge such Mortgagor for related
premiums. All such insurance policies (other than commercial liability policies)
require at least 10 days’ prior notice to the lender of termination or
cancellation arising because of nonpayment of a premium and 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 Seller.

18. 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 Purchased Loan requires the Mortgagor to escrow an amount sufficient to pay
taxes for the existing tax parcel of which the Mortgaged Property is a part
until the separate tax lots are created.

19. No Encroachments. To the Knowledge of Seller 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 Purchased 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
Purchased 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 current
use of such Mortgaged Property or for which insurance or endorsements obtained
with respect to the Title Policy.

20. No Contingent Interest or Equity Participation. No Purchased Loan has a
shared appreciation feature, any other contingent interest feature or a negative
amortization feature (except that an ARD Loan (as defined below) may provide for
the accrual of the portion of interest in excess of the rate in effect prior to
the Anticipated Repayment Date (as defined below)) or an equity participation by
Seller.

 

Master Repurchase Agreement

Exhibit VI-8

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

21. REMIC. The representations in this paragraph 20 are made by Seller only to
the extent that the related Purchased Loan has been identified to Buyer I
writing as being REMIC eligible. The Purchased Loan is a “qualified mortgage”
within the meaning of Code Section 860G(a)(3) (but determined without regard to
the rule in the U.S. Department of Treasury Regulations (the “Treasury
Regulations”) Section 1.860G-2(f)(2) that treats certain defective Purchased
Loans as qualified mortgages), and, accordingly, (A) the issue price of the
Purchased Loan to the related Mortgagor at origination did not exceed the
non-contingent principal amount of the Purchased Loan and (B) either: (a) such
Purchased Loan is secured by an interest in real property (including permanently
affixed buildings and structural components, such as wiring, plumbing systems
and central heating and air conditioning systems, that are integrated into such
buildings, serve such buildings in their passive functions and do not produce or
contribute to the production of income other than consideration for the use or
occupancy of space, but excluding personal property) having a fair market value
(i) at the date the Purchased Loan (or related whole loan, if applicable) was
originated at least equal to 80% of the adjusted issue price of the Purchased
Loan (or related whole loan, as applicable) on such date or (ii) at the Purchase
Date at least equal to 80% of the adjusted issue price of the Purchased Loan (or
whole loan, if applicable) on such date, provided that for purposes hereof, the
fair market value of the real property interest must first be reduced by (A) the
amount of any lien on the real property interest that is senior to the Purchased
Loan and (B) a proportionate amount of any lien on the real property interest
that is in parity with the Purchased Loan (or whole loan, if applicable); or
(b) substantially all of the proceeds of such Purchased Loan were used to
acquire, improve or protect the real property which served as the only security
for such Purchased Loan (other than a recourse feature or other third-party
credit enhancement within the meaning of Section 1.860G-2(a)(1)(ii)) of the
Treasury Regulations. If the Purchased Loan was “significantly modified” prior
to the Purchase Date so as to result in a taxable exchange under Section 1001 of
the Code, it either (x) was modified as a result of the default or reasonably
foreseeable default of such Purchased Loan or (y) satisfies the provisions of
either sub-clause (B)(a)(i) above (substituting the date of the last such
modification for the date the Purchased Loan was originated) or sub-clause
(B)(a)(ii), including the proviso thereto. Any prepayment premium and yield
maintenance charges applicable to the Purchased Loan constitute “customary
prepayment penalties” within the meaning of Section 1.860G-1(b)(2) of the
Treasury Regulations. All terms used in this paragraph shall have the same
meanings as set forth in the related Treasury Regulations.

22. Compliance with Usury Laws. The interest rate (exclusive of any default
interest, late charges, yield maintenance charge, or prepayment premiums) of
such Purchased 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.

23. Authorized to do Business. To the extent required under applicable law, as
of the Purchase Date or as of the date that such entity held the Mortgage Note,
each holder of the Mortgage 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 Purchased Loan by the trust.

 

Master Repurchase Agreement

Exhibit VI-9

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

24. 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 Knowledge of Seller, as of
the Purchase Date, a trustee, duly qualified under applicable law to serve as
such, currently so serves and is named in the deed of trust or has been
substituted in accordance with the Mortgage and applicable law or may be
substituted in accordance with the Mortgage and applicable law by the related
mortgagee.

25. Local Law Compliance. To the Knowledge of Seller, 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 Seller for similar commercial, multifamily or, if
applicable, manufactured housing community mortgage loans intended for
securitization, with respect to the improvements located on or forming part of
each Mortgaged Property securing a Purchased Loan as of the date of origination
of such Purchased Loan and as of the Purchase Date, there are no material
violations of applicable zoning ordinances, building codes and land laws
(collectively “Zoning Regulations”) other than those which (i) constitute a
legal non-conforming use or structure, as to which the Mortgaged Property may be
restored or repaired to the full extent necessary to maintain the use of the
structure immediately prior to a casualty or the inability to restore or repair
to the full extent necessary to maintain the use or structure immediately prior
to the casualty would not materially and adversely affect the use or operation
of the Mortgaged Property, (ii) are insured by the Title Policy or other
insurance policy, (iii) are insured by law and ordinance insurance coverage in
amounts customarily required by Seller for loans originated for securitization
that provides coverage for additional costs to rebuild and/or repair the
property to current Zoning Regulations or (iv) would not have a material adverse
effect on the Purchased Loan. The terms of the Purchased Loan Documents require
the Mortgagor to comply in all material respects with all applicable
governmental regulations, zoning and building laws.

26. Licenses and Permits. Each Mortgagor covenants in the Purchased 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 Knowledge of Seller based upon a
letter from any government authorities or other affirmative investigation of
local law compliance consistent with the investigation conducted by Seller for
similar commercial, multifamily or if applicable, manufactured housing community
mortgage loans intended for securitization, all such material licenses, permits
and applicable governmental authorizations are in effect. The Purchased Loan
requires the related Mortgagor to be qualified to do business in the
jurisdiction in which the related Mortgaged Property is located.

27. Recourse Obligations. The Purchased Loan Documents for each Purchased Loan
provide that (a) the related Mortgagor 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 Mortgagor and/or its principals specified in
the related Purchased 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

 

Master Repurchase Agreement

Exhibit VI-10

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

(provided that the Mortgaged Property generates sufficient cash flow to prevent
such waste), and (iv) any breach of the environmental covenants contained in the
related Purchased Loan Documents, and (b) the Purchased Loan shall become full
recourse to the related Mortgagor and at least one individual or entity, if the
related Mortgagor files a voluntary petition under federal or state bankruptcy
or insolvency law.

28. Mortgage Releases. The terms of the related Mortgage or related Purchased
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 release,
accompanied by principal repayment, or partial Defeasance (as defined in
paragraph (33)), in each case, 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 Purchased Loan, (b) upon payment in full of such Purchased Loan, (c) upon a
Defeasance (as defined in paragraph (33)), (d) releases of out-parcels that are
unimproved or other portions of the Mortgaged Property which will not have a
material adverse effect on the underwritten value of the Mortgaged Property and
which were not afforded any material value in the appraisal obtained at the
origination of the Purchased Loan and are not necessary for physical access to
the Mortgaged Property or compliance with zoning requirements, or (e) as
required pursuant to an order of condemnation or taking by a state or any
political subdivision or authority thereof. To the extent that the Purchased
Loan has been identified to Buyer in writing as being REMIC eligible, with
respect to any partial release (including in connection with any partial
Defeasance) under the preceding clauses (a) or (d), either: (x) such release of
collateral (i) would not constitute a “significant modification” of the subject
Purchased Loan within the meaning of Section 1.860G-2(b)(2) of the Treasury
Regulations and (ii) would not cause the subject Purchased Loan to fail to be a
“qualified mortgage” within the meaning of Code Section 860G(a)(3)(A); or
(y) the mortgagee or servicer can, in accordance with the related Purchased Loan
Documents, condition such release of collateral on the related Mortgagor’s
delivery of an opinion of tax counsel to the effect specified in the immediately
preceding clause (x). To the extent that the Purchased Loan has been identified
to Buyer in writing as being REMIC eligible, for purposes of the preceding
clause (x), if the fair market value of the real property constituting such
Mortgaged Property after the release (reduced by (A) the amount of any lien on
the real property interest that is senior to the Purchased Loan and (B) a
proportionate amount of any lien on the real property interest that is in parity
with the Purchased Loan or whole loan, if applicable) after the release is not
equal to at least 80% of the principal balance of the Purchased Loan (or Senior
Interest) outstanding after the release, the Mortgagor is required to make a
payment of principal in an amount not less than the amount required by the REMIC
Provisions (as defined below).

To the extent that the Purchased Loan has been identified to Buyer in writing as
being REMIC eligible, in the event of a condemnation or taking of any portion of
a Mortgaged Property by a state or any political subdivision or authority
thereof, whether by legal proceeding or by agreement, the Mortgagor can be
required to pay down the principal balance of the Purchased Loan in an amount
not less than the amount required by the REMIC Provisions and, to such extent,
condemnation proceeds may not be required to be applied to the restoration of
the Mortgaged Property or released to the Mortgagor, if, immediately after the
release of such

 

Master Repurchase Agreement

Exhibit VI-11

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

portion of the Mortgaged Property from the lien of the Mortgage (but taking into
account the planned restoration) the fair market value of the real property
constituting the remaining Mortgaged Property (reduced by (A) the amount of any
lien on the real property that is senior to the Purchased Loan and (B) a
proportionate amount of any lien on the real property interest that is in parity
with the Purchased Loan or whole loan, if applicable) not equal to at least 80%
of the remaining principal balance of the Purchased Loan (or Senior Interest).

No Purchased Loan, to the extent that such Purchased Loan has been identified to
Buyer in writing as being REMIC eligible, that is secured by more than one
Mortgaged Property or that is a Crossed Mortgage Loan permits the release of
cross-collateralization of the related Mortgaged Properties or a portion thereof
including due to a partial condemnation, other than in compliance with the
loan-to-value ratio and other requirements of the REMIC Provisions.

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

30. Acts of Terrorism Exclusion. With respect to each Purchased 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, as 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 Purchased 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 Purchased Loan, and, to the Knowledge of Seller, do not,
as of the Purchase Date, specifically exclude Acts of Terrorism, as defined in
TRIA, from coverage, or if such coverage is excluded, it is covered by a
separate terrorism insurance policy. With respect to each Purchased Loan, the
related Purchased 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; provided, however, that if TRIA or a similar or subsequent statute is not
in effect, then, provided that terrorism insurance is commercially available,
the Mortgagor under each Purchased Loan is required to carry terrorism
insurance, but in such event the Mortgagor shall not be required to spend on
terrorism insurance coverage more than two times the amount of the insurance
premium that is payable in respect of the property and business
interruption/rental loss insurance

 

Master Repurchase Agreement

Exhibit VI-12

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

required under the related Purchased Loan Documents (without giving effect to
the cost of terrorism and earthquake components of such casualty and business
interruption/rental loss insurance) at such time, and if the cost of terrorism
insurance exceeds such amount, the Mortgagor is required to purchase the maximum
amount of terrorism insurance available with funds equal to such amount.

31. Due on Sale or Encumbrance. Subject to specific exceptions set forth below,
each Purchased Loan contains a “due on sale” or other such provision for the
acceleration of the payment of the unpaid principal balance of such Purchased
Loan if, without the consent of the holder of the Mortgage (which consent, in
some cases, may not be unreasonably withheld) and/or complying with the
requirements of the related Purchased Loan Documents (which provide for
transfers without the consent of the lender which are customarily acceptable to
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 Purchased Loan Documents), (a) the related Mortgaged
Property, or any equity interest of greater than 50% in the related Mortgagor,
is directly or indirectly pledged, transferred or sold, other than as related to
(i) family and estate planning transfers or transfers upon death or legal
incapacity, (ii) transfers to certain affiliates as defined in the related
Purchased Loan Documents, (iii) transfers of less than, or other than, a
controlling interest in the related Mortgagor, (iv) transfers to another holder
of direct or indirect equity in the Mortgagor, a specific Person designated in
the related Purchased Loan Documents or a Person satisfying specific criteria
identified in the related Purchased 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
paragraphs (28) and (33) herein or (vii) by reason of any mezzanine debt that
existed at the origination of the related Purchased Loan or future permitted
mezzanine debt (and which is disclosed in writing to Buyer and approved by Buyer
in its sole discretion prior to the Purchase Date of such Purchased Loan), or
(b) the related Mortgaged Property is encumbered with a subordinate lien or
security interest against the related Mortgaged Property, other than (i) any
subordinate debt that existed at origination and is permitted under the related
Purchased Loan Documents, (ii) purchase money security interests, (iii) any
Crossed Mortgage Loan, or (iv) Permitted Encumbrances. The Mortgage or other
Purchased 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 Mortgagor is responsible for such payment along with all other
reasonable fees and expenses incurred by the Mortgagee relative to such transfer
or encumbrance.

32. Single-Purpose Entity. Each Purchased Loan requires the Mortgagor to be a
Single-Purpose Entity for at least as long as the Purchased Loan is outstanding.
Both the Purchased Loan Documents and the organizational documents of the
Mortgagor with respect to each Purchased Loan with a Purchase Date Principal
Balance in excess of $5 million provide that the Mortgagor is a Single-Purpose
Entity, and each Purchased Loan with a Purchase Date Principal Balance of
$20 million or more has a counsel’s opinion regarding non-consolidation of the
Mortgagor. For this purpose, a “Single-Purpose Entity” shall mean an entity,
other than an individual, whose organizational documents (or if the Purchased
Loan has a Purchase Date

 

Master Repurchase Agreement

Exhibit VI-13

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

Principal Balance equal to $5 million or less, its organizational documents or
the related Purchased 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 Purchased Loans and prohibit it
from engaging in any business unrelated to such Mortgaged Property or
Properties, and whose organizational documents further provide, or which entity
represented in the related Purchased 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 Purchased Loan
Documents, that it has its own books and records and accounts separate and apart
from those of any other person (other than a Mortgagor for a Crossed Mortgage
Loan), and that it holds itself out as a legal entity, separate and apart from
any other person or entity.

33. Defeasance. With respect to any Purchased Loan that, pursuant to the
Purchased Loan Documents, can be defeased (a “Defeasance”), (i) the Purchased
Loan Documents provide for Defeasance as a unilateral right of the Mortgagor,
subject to satisfaction of conditions specified in the Purchased Loan Documents;
(ii) the Purchased Loan cannot be defeased within two years after the Closing
Date; (iii) the Mortgagor is permitted to pledge only United States “government
securities” within the meaning of Section 1.860G-2(a)(8)(ii) of the Treasury
Regulations, the revenues from which will, in the case of a full Defeasance, be
sufficient to make all scheduled payments under the Purchased Loan when due,
including the entire remaining principal balance on the maturity date or, if the
Purchased Loan is an ARD Loan, the entire principal balance outstanding on the
Anticipated Repayment Date (or on or after the first date on which payment may
be made without payment of a yield maintenance charge or prepayment penalty),
and if the Purchased Loan permits partial releases of real property in
connection with partial Defeasance, the revenues from the collateral will be
sufficient to pay all such scheduled payments calculated on a principal amount
equal to a specified percentage at least equal to the lesser of (a) 110% of the
allocated loan amount for the real property to be released and (b) the
outstanding principal balance of the Purchased Loan; (iv) the Mortgagor is
required to provide a certification from an independent certified public
accountant that the collateral is sufficient to make all scheduled payments
under the Mortgage Note as set forth in clause (iii) above; (v) if the Mortgagor
would continue to own assets in addition to the Defeasance collateral, the
portion of the Purchased Loan secured by Defeasance collateral is required to be
assumed (or the mortgagee may require such assumption) by a Single-Purpose
Entity; (vi) the Mortgagor is required to provide an opinion of counsel that the
mortgagee has a perfected security interest in such collateral prior to any
other claim or interest; and (vii) the Mortgagor is required to pay all rating
agency fees associated with Defeasance (if rating confirmation is a specific
condition precedent thereto) and all other reasonable expenses associated with
Defeasance, including, but not limited to, accountant’s fees and opinions of
counsel.

34. Floating Interest Rates. Each Purchased Loan bears interest at a floating
interest rate in reference to an index rate.

 

Master Repurchase Agreement

Exhibit VI-14

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

35. 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, or with respect to air rights leases, the air, 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.

With respect to any Purchased Loan where the Purchased 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 Seller, its
successors and assigns, Seller represents and warrants that:

 

  (a)

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

 

  (b)

The lessor under such Ground Lease has agreed in a writing included in the
related Purchased Loan 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 no such consent has
been granted by Seller since the origination of the Purchased Loan except as
reflected in any written instruments which are included in the related Purchased
Loan 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 Purchased Loan, or 10
years past the stated maturity if such Purchased Loan fully amortizes by the
stated maturity (or with respect to a Purchased 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;

 

Master Repurchase Agreement

Exhibit VI-15

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

  (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 Purchased 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 Purchased Loan and its successors and assigns without the
consent of the lessor;

 

  (f)

Seller has not received any written notice of material default under or notice
of termination of such Ground Lease. To the Knowledge of Seller, 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 Knowledge of Seller, such Ground Lease
is in full force and effect as of the Purchase Date;

 

  (g)

The Ground Lease or ancillary agreement between the lessor and the lessee
requires the lessor to give to the lender written notice of any 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 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 restoration of
all or part of the related Mortgaged Property with (so long as such proceeds are
in excess of the threshold amount specified in the related Purchased 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 Purchased Loan, together with any
accrued interest;

 

  (k)

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

 

Master Repurchase Agreement

Exhibit VI-16

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

  (l)

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

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

37. Origination and Underwriting. The origination practices of Seller (or the
related originator if Seller was not the originator) with respect to each
Purchased Loan have been, in all material respects, legal and as of the date of
its origination, such Purchased 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 Purchased Loan; provided that
such representation and warranty does not address or otherwise cover any matters
with respect to federal, state or local law otherwise covered in this Exhibit
VI; provided further that this representation shall not be applicable in respect
of any Purchased Loan originated by Buyer or any Affiliate of Buyer.

38. No Material Default; Payment Record. No Purchased 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 Purchased
Loan is more than 30 days delinquent (beyond any applicable grace or cure
period) in making required payments as of the Purchase Date. To the Knowledge of
Seller, there is (a) no material default, breach, violation or event of
acceleration existing under the related Purchased Loan, or (b) no event (other
than payments due but not yet delinquent) which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a
material default, breach, violation or event of acceleration, which default,
breach, violation or event of acceleration, in the case of either clause (a) or
clause (b), materially and adversely affects the value of the Purchased Loan or
the value, use or operation of the related Mortgaged Property, provided,
however, that this representation and warranty does not cover any default,
breach, violation or event of acceleration that specifically pertains to or
arises out of an exception scheduled to any other representation and warranty
made by Seller in this Exhibit VI (including, but not limited to, the prior
sentence). No person other than the holder of such Purchased Loan may declare
any event of default under the Purchased Loan or accelerate any indebtedness
under the Purchased Loan Documents.

39. Bankruptcy. As of the date of origination of the related Purchased Loan and
to the Knowledge of Seller as of the Purchase Date, no Mortgagor, guarantor or
tenant occupying a single-tenant property is a debtor in state or federal
bankruptcy, insolvency or similar proceeding.

 

Master Repurchase Agreement

Exhibit VI-17

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

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

41. 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 Purchased Loans, a Phase II environmental site assessment (collectively,
an “ESA”) meeting ASTM requirements was conducted by a reputable environmental
consultant in connection with such Purchased Loan within 12 months prior to its
origination date (or an update of a previous ESA was prepared), and such ESA
either (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 with respect to any Environmental Condition that was
identified, or (ii) if the existence of an Environmental Condition or need for
further investigation was indicated in any such ESA, then at least one of the
following statements is true: (A) an amount reasonably estimated by a reputable
environmental consultant to be sufficient to cover the estimated cost to cure
any material noncompliance with applicable Environmental Laws or the
Environmental Condition has been escrowed by the related Mortgagor and is held
or controlled by the related lender; (B) if the only Environmental Condition
relates to the presence of asbestos-containing materials, radon in indoor air,
lead based paint or lead in drinking water, and the only recommended action in
the ESA is the institution of such a plan, an operations or maintenance plan has
been required to be instituted by the related Mortgagor that can reasonably be
expected to mitigate the identified risk; (C) the Environmental Condition
identified in the related environmental report was remediated or abated in all
material respects prior to the 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 lender’s
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
Mortgagor 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
Mortgagor having financial resources reasonably estimated to be adequate to
address the situation is required to take action. To the Knowledge of Seller,
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.

 

Master Repurchase Agreement

Exhibit VI-18

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

42. Appraisal. The Servicer File contains an Appraisal of the related Mortgaged
Property with an appraisal date within six (6) months of the Purchased Loan
origination date, and within twelve (12) months of the Purchase 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 Mortgagor or in any loan made on the
security thereof, and its compensation is not affected by the approval or
disapproval of the Purchased Loan.

43. Purchased Loan Schedule. The information pertaining to each Purchased Loan
which is set forth in the Purchased Loan Schedule is true and correct in all
material respects as of the Purchase Date.

44. Cross-Collateralization. Except with respect to a Purchased Loan that is
part of a whole loan, no Purchased Loan is cross-collateralized or
cross-defaulted with any other mortgage loan that is not a Purchased Loan.

45. Advance of Funds by Seller. After origination, no advance of funds has been
made by Seller to the related Mortgagor other than in accordance with the
Purchased Loan Documents, and, to the Knowledge of Seller, no funds have been
received from any person other than the related Mortgagor or an affiliate for,
or on account of, payments due on the Purchased Loan (other than as contemplated
by the Purchased 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
Purchased Loan Documents). Neither Seller nor any affiliate thereof has any
obligation to make any capital contribution to any Mortgagor under a Purchased
Loan, other than contributions made on or prior to the date hereof.

46. Compliance with Anti-Money Laundering Laws. Seller 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 Purchased Loan, the failure to comply with
which would have a material adverse effect on the Purchased Loan.

47. Seller has obtained a copy of the related Mortgagor’s general construction
contract and/or construction management agreement and each construction contract
and/or subcontract, as applicable, sufficient to complete the project consistent
with the Plans and Specifications (as defined below) in compliance with all
restrictive covenants of record applicable to such underlying Mortgaged Property
and all applicable local, state and federal laws, and regulations, including,
without limitation, all applicable zoning laws, and there is a collateral
assignment of the general construction contract and/or construction management
agreement and each construction contract and/or subcontract, as applicable, to
Seller as additional collateral for the Construction Loan.

 

Master Repurchase Agreement

Exhibit VI-19

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

48. Seller has obtained copies of the related Mortgagor’s plans and
specifications for the design and construction of the project (the “Plans and
Specifications”) and the architect, engineering and other applicable contracts
with respect thereto, which Plans and Specifications are in all material
respects in compliance with restrictive covenants of record applicable to such
underlying Mortgaged Property and all applicable local, state and federal laws,
and regulations, including, without limitation, all applicable zoning laws, and
there is a collateral assignment of the Plans and Specifications, and all
applicable contracts with respect thereto, to Seller as additional collateral
for the related Mortgage Loan or Senior Interest, as applicable, and shall have
the right to use the Plans and Specifications upon any transfer of the
underlying Mortgaged Property to Buyer by foreclosure or otherwise.

49. Mortgagor has obtained all material licenses, permits, including, without
limitation, building permits, and approvals required by all applicable local,
state and federal laws, and regulations to be obtained for the construction of
the improvements in accordance with the Plans and Specifications, all such
material licenses and permits for the project are in full force and effect, and
there is a collateral assignment of the licenses, permits and approvals to
Seller as additional collateral for the Construction Loan.

50. Seller has obtained a copy of the related Mortgagor’s development or
construction services agreement related to the development of the project, and
any such service provider has executed an assignment and subordination agreement
with respect thereto.

51. Seller has obtained a project budget which sets forth all hard and soft
costs and expenses (with a specific allocation of the maximum advance for hard
and soft costs and expenses) which will be incurred by Mortgagor in the design
and construction of the project as shown on the Plans and Specifications. The
unfunded principal amount of the Purchased Loan stated on the Purchased Loan
Schedule to be disbursed is equal to or in excess of the remaining budget to
complete the project and on each date of the determination thereof the related
Mortgage Loan, or Senior Interest is “in balance”.

52. Seller has obtained a project completion schedule which sets forth the date
which project is scheduled to be completed, and the related loan documents
require the project to be completed by the project deadline, which deadline
shall be at least one (1) year prior to the maturity date of the Purchased Loan.

53. Adequate sums to pay interest, insurance, taxes and other assessments for
the term of the Construction Loan were reserved in connection with the
origination of the Purchased Loan or included in the project budget.

 

Master Repurchase Agreement

Exhibit VI-20

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

54. All releases for future advance to fund project costs are conditioned upon
(i) no existing defaults, (ii) Mortgagor’s submission of a draw request,
(iii) minimum disbursements of $25,000, (iv) maximum disbursement requests of
once per month, (v) at lender’s option, an inspection and approval of the
improvements by lender’s independent consultant, (vi) Mortgagor’s certification
that there are no existing defaults, that all work covered by the draw request
has been completed in a good and workmanlike manner in accordance with the Plans
and Specifications, and that all such work has been in compliance with all
applicable local, state and federal laws, and regulations, including, without
limitation, all applicable zoning laws, (vii) receipt of lien waivers, sworn
statements and other documentation as lender shall reasonably request,
(viii) Mortgagor causing to be delivered, at Mortgagor’s sole cost and expense,
a “Date-Down Endorsement” to the Title Policy showing no new title exceptions
other than the Permitted Encumbrances, and (ix) evidence that the project is
proceeding on schedule in accordance with the construction timeline, Mortgagor’s
and Sponsor’s representations being true and correct on the date of the advance,
the loan being “in balance”.

55. The final funding of project costs are conditioned upon: (i) Mortgagor’s
certification that there are no existing defaults; (ii) that all work has been
completed in a good and workmanlike manner in accordance with the Plans and
Specifications, and that all such work has been in compliance with all
applicable local, state and federal laws, and regulations, including, without
limitation, all applicable zoning laws; (iii) of a certification by the
contractor, architect or engineer and, at lender’s option, a report from
lender’s architect or engineer that all work (including, without limitation, all
punchlist items) has been completed in a good and workmanlike manner and has
been in compliance with all applicable local, state and federal laws, and
regulations; (iv) lender’s receipt of evidence reasonably satisfactory to lender
that all construction costs associated with the project shall, upon making the
final funding, have been paid in full, (v) final, unconditional lien waivers
from the general contractor and/or construction manager and all trade
contractors; (vi) receipt of “as built” survey; (vii) receipt of “as built”
Plans and Specifications; and (viii) the filing by Mortgagor of a notice of
completion, as applicable.

56. Lender shall not be obligated to fund project costs for (i) deposits or
other payments for materials or services or in respect of labor and materials
that have not yet been incorporated into the project, (ii) any amounts retained
or permitted to be retained by Mortgagor from payments to any contractor or any
subcontractor, (iii) any item in excess of the amount shown for that item on the
project budget, taking into account reasonable permitted reallocations from any
contingency line item in the project budget, or (iv) if after such disbursement
the related Mortgage Loan or Senior Interest, as applicable, would not be “in
balance” (i.e., the unfunded principal amount of the Purchased Loan to be
disbursed is equal to or in excess of the remaining budget to complete the
project). If at any time the Construction Loan is not “in balance” the Mortgagor
is required to deposit additional funds with Buyer in an amount necessary to
cause the Construction Loan to be “in balance”.

57. Each disbursement for hard costs of the construction work whether or not
designated in the project budget as a hard cost of the construction work (but
excluding the general contractor’s “general conditions,” insurance and bonding
costs and other expenses approved in writing by lender) shall be subject to a
holdback (the “Retainage”) of at least five percent (5%) of the amounts due to
the general contractor, construction manager, contractor or any subcontractor
(on a line item basis) until such time as the applicable portion of the project
(i.e. - the particular trade line item or an individual trade subcontractor’s
work on the project) reaches substantial completion, subject to customary
disbursement and release provisions.

 

Master Repurchase Agreement

Exhibit VI-21

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

58. Mortgagor must obtain lender’s prior written approval of (i) any proposed
changes to the Plans and Specifications, (ii) any proposed changes to any
construction contract, architect’s contract or design professional contracts
held by Mortgagor, (ii) any new or additional contract held by Mortgagor related
to the construction or design of the project (each such instance in (i), (ii) or
(iii), a “Project Change”), which Project Change would have the effect of
(a) increasing project budget line items (including line items set forth in the
general construction contract) in the aggregate by more than five percent (5%)
thereof, or (b) decreasing project budget line items (including line items set
forth in the general construction contract) in the aggregate by more than five
percent (5%) thereof, (c) changing in a material way the overall aesthetic
appearance of the project or any significant services or amenities to be
provided in connection with the project, or (v) diminishing the overall quality,
functionality or marketability of the project in any material respect or
(vi) causing the related Mortgage Loan or Senior Interest, as applicable, to be
not “in balance” after taking into account any reallocations of the project
budget which do not require lender’s consent. If as a result of any such Project
Change (whether or not lender’s approval of such Project Change is required or
has been obtained) the Loan will no longer be in balance, then Mortgagor must
also comply with paragraph 56 above.

59. Each Purchased Loan meets the following requirements for exemption from the
definition of a high volatility commercial real estate (“HVCRE”) under the U.S.
Basel III-based regulatory capital rules for banking organizations: (a) the
amount of the Purchased Loan was no greater than 80% of the appraised value of
the underlying Mortgaged Property(ies) at origination; (b) Mortgagor contributed
capital to the project in the form of cash or unencumbered readily marketable
assets (or paid development costs out of pocket) of at least 15% of the
project’s “as completed” appraised value and is required to satisfy such
requirement at all times during the term of the related Mortgage Loan, or Senior
Interest, as applicable, and (c) Mortgagor made its 15% contribution to the
project before Seller advanced any funds under the underlying Mortgage Loan and
the related loan documents provide that all contributed or internally generated
capital must remain in the project and that the Mortgagor has no ability to
withdraw either the capital contribution or the capital generated internally by
the project until the underlying Mortgage Loan is converted to a permanent loan
or paid in full.

60. At all times during which structural construction, repairs, or alterations
are being made with respect to the project, including demolition, the underlying
Mortgaged Property is covered by insurance policies providing the coverage
described below and the Purchased Loan Documents permit the mortgagee to require
the coverage described below:

 

  a.

the comprehensive general liability insurance shall include; (i) XCU coverage
with regard to the contemplated demolition; and (ii) include three (3) years
extended completed operations coverage, after completion of the contemplated
demolition.

 

Master Repurchase Agreement

Exhibit VI-22

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

  b.

Umbrella and excess liability insurance in lender’s customary amounts,
including, but not limited to, supplemental coverage for employer liability and
automobile liability.

 

  c.

Mortgagor’s construction manager or general contractor, and contractors and
sub-contractors are required to maintain similar coverage to that which is
required by Mortgagor.

 

  d.

Builder’s risk “all risk” insurance (i) be written on a completed value form,
(ii) include all the terms required in the required comprehensive general
liability insurance; (iii) include foundations, excavations, underground
machinery or equipment, retaining walls, and all paved surfaces; (iv) limits
equivalent to 100% of the hard costs and soft costs for all recurring expenses
in the event of damage or destruction; (v) maintain customary deductibles; and
(vi) allow for permission to occupy.

 

  e.

Automobile liability coverage for all owned and non-owned vehicles, including
rented and leased vehicles containing minimum limits per occurrence of
$1,000,000.

 

  f.

Such other insurance and in such amounts as lender from time to time may
reasonably request against such other insurable hazards which at the time are
commonly insured against for property similar to the properties located in or
around the region in which the Mortgaged Property is located.

61. A construction consultant report by a reputable construction consultant
relating to each underlying Mortgaged Property was obtained and reviewed by
Seller in connection with the origination of such Purchased Loan and a copy is
included in the Purchased Loan File, including an equity analysis, sources and
uses analysis, and feasibility study.

62. There are no collective bargaining agreements applicable to the construction
of the project.

63. The Purchased Loan Documents for each Purchased Loan provide that at least
one creditworthy individual or entity shall be fully liable for the lien-free
completion of the project in accordance with the Plans and Specifications, the
related loan documents and all applicable local, state and federal laws, and
regulations, including, without limitation, all applicable zoning laws, by the
project deadline and for carrying costs related to the property.

64. Construction of the project has commenced and all construction has proceeded
and continues to proceed in accordance with the schedule set forth in the
related Purchased Loan Documents and the Business Plan in all material respects.

65. Mortgagor is required to cause payment and performance bonds to be issued
with respect to the obligations of the general contractor, construction manager
and all material trade contractors or, in the alternative, has obtained subguard
insurance.

 

Master Repurchase Agreement

Exhibit VI-23

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

66. As of the Purchase Date, there is no payment default, giving effect to any
applicable notice and/or grace period, and there is no other material default
under any of the related Purchased Loan Documents, giving effect to any
applicable notice and/or grace period; no such material default or breach has
been waived by Seller or on its behalf or, by Seller’s predecessors in interest
with respect to the Purchased Loan; and no event has occurred that, with the
passing of time or giving of notice would constitute a material default or
breach under the related Purchased Loan Documents. No Purchased Loan has been
accelerated and no foreclosure or power of sale proceeding has been initiated in
respect of the related Mortgage. Seller has not waived any material claims
against the related Mortgagor under any non-recourse exceptions contained in the
Mortgage Note.

For purposes of this Exhibit VI, the following terms shall have the following
meanings:

“Anticipated Repayment Date”: With respect to any Purchased Loan that is
indicated on the Purchased Loan Schedule as having a Revised Rate, the date upon
which such Purchased Loan commences accruing interest at such Revised Rate.

“ARD Loan”: Any Purchased Loan the terms of which provide that if, after an
Anticipated Repayment Date, Mortgagor has not prepaid such Purchased Loan in
full, any principal outstanding on that date will accrue interest at the Revised
Rate rather than the Initial Rate.

“REMIC Provisions”: Provisions of the federal income tax law relating to real
estate mortgage investment conduits, which appear at Section 860A through 860G
of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations (including any applicable proposed regulations) and rulings
promulgated thereunder, as the foregoing may be in effect from time to time.

“Revised Rate”: With respect to those Purchased Loans on the Purchased Loan File
indicated as having a revised rate, the increased interest rate after the
Anticipated Repayment Date (in the absence of a default) for each applicable
Purchased Loan, as calculated and as set forth in the related Purchased Loan
Documents.

 

Master Repurchase Agreement

Exhibit VI-24

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EXHIBIT VII

ORGANIZATIONAL CHART

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Seller Structure Chart

 

LOGO [g833142dsp0338.jpg]

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EXHIBIT VIII

TRANSACTION PROCEDURES

I. Preliminary Approval of New Collateral Which is an Eligible Loan.

(a) Seller may, from time to time, submit to Buyer a Preliminary Due Diligence
Package for Buyer’s review and approval in

order to enter into discussions regarding a Transaction with respect to any New
Collateral that Seller proposes to be included as Collateral under the
Agreement.

(b) Upon Buyer’s receipt of a complete Preliminary Due Diligence Package, Buyer
shall have the right to request (one or more times), additional diligence
materials and deliveries that Buyer shall specify on a Supplemental Due
Diligence List. Upon Buyer’s receipt of all of the Diligence Materials or
Buyer’s waiver thereof, Buyer shall within ten (10) Business Days, or if later,
following receipt of internal credit approval, either (i) notify Seller of
Buyer’s preliminary determination of Purchase Price and Market Value for the New
Collateral or (ii) deny, in Buyer’s sole and absolute discretion, Seller’s
request for a Transaction. Buyer’s failure to respond to Seller within ten
(10) Business Days shall be deemed to be a denial of Seller’s request to enter
into a Transaction.

II. Final Approval of New Collateral which is an Eligible Loan. Upon Buyer’s
notification to Seller of Buyer’s preliminary determination of Purchase Price
and the Market Value for any New Collateral which is an Eligible Loan, Seller
shall, if Seller desires to enter into a Transaction with respect to such New
Collateral, satisfy the conditions set forth below (in addition to satisfying
the conditions precedent to obtaining each advance, as set forth in Section 3(b)
of this Agreement) as a condition precedent to Buyer’s approval of such New
Collateral as Collateral, all in a manner and pursuant to documentation in form
and substance satisfactory to Buyer in its sole and absolute discretion:

(a) Delivery of Purchased Loan Documents. Buyer shall have received, reviewed
and approved each of the Purchased Loan Documents (including for any Senior
Interest, the Senior Interest Documents), except Purchased Loan Documents that
Seller expressly and specifically disclosed in the Diligence Materials were not
in Seller’s possession;

(b) Environmental and Engineering. Buyer shall have received, reviewed and
approved a “Phase 1” (and, if necessary, “Phase 2”) environmental report, an
asbestos survey and operation and maintenance plan, if applicable, an
engineering report, and a seismic/PML report, if applicable, each in form
reasonably satisfactory to Buyer, by an engineer or environmental consultant as
may be approved by Buyer, in its sole discretion, applied in good faith.

(c) Appraisal. Buyer shall have received, reviewed and approved an Appraisal
from an Independent Appraiser as may be approved by Buyer in its sole
discretion, applied in good faith, dated within three (3) months of the proposed
Purchase Date.

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

(d) Insurance. Buyer shall have received, reviewed and approved certificates or
other evidence of insurance demonstrating insurance coverage in respect of the
Mortgaged Property of types, in amounts, with insurers and otherwise in
compliance with the terms, provisions and conditions set forth in the Purchased
Loan Documents. Such certificates or other evidence shall indicate that Seller
(or its Affiliate) will be named as an additional insured as its interest may
appear and shall contain a loss payee endorsement in favor of such additional
insured with respect to the policies required to be maintained under the
Purchased Loan Documents.

(e) Survey. Buyer shall have received, reviewed and approved all surveys of the
Mortgaged Property that are in Seller’s possession, and which surveys shall
contain flood zone certification.

(f) Lien, Judgment and Litigation Search Reports. Buyer or Buyer’s counsel shall
have received, reviewed and approved, satisfactory reports of UCC, tax lien,
judgment, litigation searches and title updates as Buyer may reasonably require
from Seller conducted by search firms and/or title companies acceptable to Buyer
with respect to the Eligible Loan, Mortgaged Property, and Mortgagor, and their
respective affiliates, such searches to be conducted in each location Buyer
shall reasonably designate.

(g) Credit and “Know Your Client” Searches. Buyer shall have received from
Seller, reviewed and approved a credit agency report, Lexis-Nexis (or similar)
searches and OFAC and “Know Your Client” searches conducted by search firms
and/or title companies acceptable to Buyer with respect to Mortgagor and any
guarantor (if applicable).

(h) Opinions of Counsel. Buyer shall have received copies of all legal opinions
in Seller’s possession with respect to the Eligible Loan which shall be in form
and substance reasonably satisfactory to Buyer.

(i) Additional Real Estate Matters. Seller shall have delivered to Buyer, in
each case to the extent in Seller’s possession, such other real estate related
certificates and documentation as may have been requested by Buyer, such as:
(i) certificates of occupancy issued by the appropriate Governmental Authority
and either letters certifying that the Mortgaged Property is in compliance with
all applicable zoning laws issued by the appropriate Governmental Authority or
evidence that the related title policy includes a zoning endorsement,
(ii) abstracts of any ground leases and all space leases in effect at the
Mortgaged Property (including a description of any co-tenancy/go-dark clauses,
if applicable) and estoppel certificates, in form and substance acceptable to
Buyer, from any ground lessor and from any tenant that occupies 7.5% or more of
the rentable space at the Mortgaged Property, and in any event from tenants
whose occupancies aggregate not less than 70% of the occupied rentable square
footage at the Mortgaged Property, (iii) copies of any management agreements and
service agreements in effect relating to the Mortgaged Property, (iv) a copy of
the title policy (or, if the final printed version of the title policy has not
been issued, the marked pro forma attached to the Purchased Loan closing escrow
letter) together with copies of all reciprocal easement agreements and operating
agreements, if applicable, and all other recorded documents and agreements

 

-2-

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

affecting title to the Mortgaged Property, (v) a copy of the purchase and sale
agreement for the Mortgaged Property in connection with a Purchased Loan used to
acquire a Mortgaged Property, if applicable, (vi) a copy of the marketing and
leasing plan for the Mortgaged Property, if applicable, (vii) copies of tenant
sales reports, if applicable, (viii) a copy of any franchise agreement relating
to the Mortgaged Property, if applicable; and (ix) STR/PACE reports, if
applicable; (x) LIHTL/HUD information, if applicable, and all of the foregoing
documents and information shall be in form and substance satisfactory to Buyer.

(j) Other Documents. Buyer shall have received such other documents as Buyer or
its counsel shall reasonably deem necessary.

Within five (5) Business Days of Seller’s satisfaction of all of the conditions
enumerated in clauses (a) through (j) above, Buyer shall either (i) if the
Purchased Loan Documents with respect to the New Collateral are not satisfactory
in form and substance to Buyer, notify Seller that Buyer has not approved the
New Collateral as Collateral or (ii) notify Seller that Buyer has approved the
New Collateral as Collateral (which notice shall specify any changes in the
Purchase Price resulting from such further review). Buyer’s failure to respond
to Seller within five (5) Business Days shall be deemed to be a denial of
Seller’s request that Buyer approve the New Collateral, unless Buyer and Seller
have agreed otherwise in writing.

 

-3-

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EXHIBIT IX

FORM OF SERVICER NOTICE AND AGREEMENT6

[__________], 20__

[Servicer]

 

  RE:

Second Amended and Restated Master Repurchase Agreement, dated as of
December 16, 2019 (as amended, modified and/or restated, the “Repurchase
Agreement”) between Parlex 15 Finco, LLC, a Delaware limited liability company,
as Master Seller (“Master Seller”), and Deutsche Bank AG, Cayman Islands Branch,
as Buyer (“Buyer”)

Ladies and Gentlemen:

[____________________] (“Servicer”) has entered into that certain Servicing
Agreement, dated as of [__________] (the “Servicing Agreement”), with Master
Seller (together with any Series Seller (as defined in the Repurchase Agreement)
party thereto, collectively, “Seller”) pursuant to which Servicer will be
servicing certain commercial mortgage loans which loans are subject to
Transactions with Buyer under the Repurchase Agreement. Capitalized terms used
but not defined herein shall have the meaning set forth in the Repurchase
Agreement. Servicer is hereby notified of, and agrees to comply with, the
following:

The Purchased Loan Documents of each Purchased Loan provide, or Seller or
Servicer has delivered a notice to the Mortgagor under each Purchased Loan which
provides, that such Mortgagor or other obligor under a Purchased Loan shall pay
all amounts payable under the related Purchased Loan to that certain account of
Servicer more particularly described on Exhibit A hereof (the “Servicer
Account”). Notwithstanding anything contained in the Servicing Agreement to the
contrary, Servicer hereby acknowledges and agrees that Servicer shall cause all
Available Income received by the Servicer on account of the Purchased Loans to
be remitted to that certain account held at PNC Bank, National Association, a
national banking association, entitled “ Parlex 15 Finco, LLC, as Master Seller,
for the benefit of Deutsche Bank AG, Cayman Islands Branch, as Buyer”, which
account is more particularly described on Exhibit A hereof (the “Cash Management
Account”), by no later than two (2) Business Days following the date upon which
such funds are received in the Servicer Account. Servicer acknowledges that all
Income collected on account of the Purchased Loans, whether or not deposited
into the Servicer Account is held for the benefit of Buyer.

 

6 

To be used in connection with third-party Servicers (if applicable) other than
Midland in its capacity as Initial Servicer under the Repurchase Agreement.

Master Repurchase Agreement

[_______]

 

Exhibit IX-1

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

Servicer agrees to deliver directly to Buyer, at the notice address provided
herein, all servicing statements, reports and other information with respect to
the Purchased Loans that Servicer is required to deliver to Seller under the
Servicing Agreement, on the same date such information is required to be
delivered to Seller.

Buyer is the owner of all servicing records, including but not limited to any
and all servicing agreements, files, documents, records, data bases, computer
tapes, copies of computer tapes, proof of insurance coverage, insurance
policies, appraisals, other closing documentation, payment history records, and
any other records relating to or evidencing the servicing of Purchased Loans
(the “Servicing Records”) so long as the Purchased Loans are subject to the
Repurchase Agreement. Pursuant to the Repurchase Agreement, Seller has granted
Buyer a security interest in all servicing fees and rights relating to the
Purchased Loans and all Servicing Records to secure the obligation of Seller or
its designee to service in conformity with the Repurchase Agreement and any
other obligation of Seller to Buyer. Seller has covenanted to safeguard such
Servicing Records and to deliver them promptly to Buyer or its designee at
Buyer’s request.

Upon the occurrence and continuance of a Facility Event of Default (or a
Transaction Event of Default affecting the Purchased Loans under the Servicing
Agreement) under the Repurchase Agreement, Buyer may, in its sole discretion,
(i) sell its right to the Purchased Loans (or for a Transaction Event of
Default, the affected Purchased Loans) on a servicing released basis or
(ii) terminate Servicer as the servicer of the Purchased Loans (or for a
Transaction Event of Default, the affected Purchased Loans), with or without
cause, in each case without payment of any termination fee. Upon receipt of a
notice of a Facility Event of Default or Transaction Event of Default from
Buyer, Servicer shall follow the instructions of Buyer, without any further
consent from Seller or any other Person, with respect to the Purchased Loans (or
affected Purchased Loans) and shall deliver to Buyer any information with
respect to the Purchased Loans requested by Buyer.

Notwithstanding any contrary information or direction which may be delivered to
Servicer by Seller, Servicer may conclusively rely on any information, direction
or notice of an Event of Default delivered by Buyer, and Seller shall indemnify
and hold Servicer harmless for any and all claims asserted against Servicer for
any actions taken in good faith by Servicer in connection with the delivery of
such information or notice of an Event of Default.

No provision of this Servicer Notice and Agreement or the Servicing Agreement
may be amended, countermanded or otherwise modified without the prior written
consent of Buyer. Buyer is an intended third party beneficiary of this letter.

Please acknowledge receipt and your agreement to the terms of this instruction
letter by signing in the signature block below and forwarding an executed copy
to Buyers promptly upon receipt. Any notices should be delivered to the
following address:

(a) if to Buyer:

Master Repurchase Agreement

[_______]

 

Exhibit IX-2

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

   Deutsche Bank AG, Cayman Islands Branch    60 Wall Street    New York, New
York 10005    Attention:    Tom Rugg    Telephone:    (212) 250-3541   
Telecopy:    (212) 797-5630    Email:    tom.rugg@db.com    with a copy to:   
Deutsche Bank AG, Cayman Islands Branch    60 Wall Street    New York, New York
10005    Attention:    Robert W. Pettinato Jr.    Telephone:    (212) 250-5579
   Telecopy:    (212) 797-0286    Email:    robert.pettinato@db.com    and      
Cadwalader, Wickersham & Taft LLP    One World Financial Center    200 Liberty
Street    New York, New York 1010281    Attention:    Y. Jeffrey Rotblat, Esq.
   Telephone:    (212) 504-6401    Email:    jeffrey.rotblat@cwt.com (b)    if
to Servicer:    [____________]    [____________]    [____________]   
[____________] with a copy to:       [____________]    [____________]   
[____________]    [____________]

In the event of a conflict between the terms and conditions of this Servicer
Notice and Agreement and the Servicing Agreement, this Servicer Notice and
Agreement shall prevail. Except as specifically set forth in this Servicer
Notice and Agreement with respect to the Purchased Loans, all terms and
conditions of the Servicing Agreement shall remain in full force and effect.

Master Repurchase Agreement

[_______]

 

Exhibit IX-3

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

This Servicer Notice and Agreement may be executed in counterparts, each of
which so executed shall be deemed to be an original, but all of such
counterparts shall together constitute but one and the same instrument. Delivery
by telecopier or other electronic transmission (including a .pdf e-mail
transmission) of an executed counterpart of a signature page to this Servicer
Notice and Agreement shall be effective as delivery of an original executed
counterpart of this Servicer Notice and Agreement.

This Servicer Notice and Agreement shall be governed by the laws of the State of
New York without giving effect to the conflict of law principles thereof.

[Reminder of page intentionally blank]

Master Repurchase Agreement

[_______]

 

Exhibit IX-4

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

Very truly yours, [_____________]

By:  

 

  Name:   Title:

 

ACKNOWLEDGED AND AGREED TO: [Servicer]

By:  

 

  Name:   Title:

Master Repurchase Agreement

[_______]

 

Exhibit IX-1

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

EXHIBIT A

Description of Accounts

Servicer Account

 

Bank:    [_________________] City/State:    [_________________] ABA:   
[_________________] Account Name:    [_________________] Account #:   
[_________________] Attention:    [_________________]

Cash Management Account

Bank: PNC Bank, National Association

ABA # 043000096

Deposit Acct No.: 1029151413

Deposit Account Name:    Midland Loan Services, a Division of PNC Bank, National
Association on behalf of Parlex 15 Finco, LLC for the benefit of Deutsche Bank
AG, Cayman Islands Branch

Master Repurchase Agreement

[_______]

 

Exhibit A to IX

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EXHIBIT X

[Reserved.]

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EXHIBIT X

[Reserved.]

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EXHIBIT XI

FORM OF JOINDER AGREEMENT

JOINDER AND MODIFICATION AGREEMENT

This JOINDER AND MODIFICATION AGREEMENT (this “Agreement”), dated as of
____________, 20__ by [_____________________] (“New Series Seller”) and Parlex
15 Finco, LLC, a Delaware limited liability company (“Master Seller”).

BACKGROUND

A. Master Seller and Deutsche Bank AG, Cayman Islands Branch, a branch of a
foreign banking institution (“Buyer”), entered into that certain Second Amended
and Restated Master Repurchase Agreement, dated as of December 16, 2019 (as
amended, modified and/or restated from time to time, the “Repurchase
Agreement”), pursuant to which Master Seller, on behalf of each Series Seller
(as defined therein) heretofore or hereafter established thereunder (Master
Seller, together with each such Series Seller, collectively, “Seller”), agreed
to sell to Buyer certain Eligible Loans upon the terms and subject to the
conditions set forth therein (each such transaction, a “Transaction”).
Capitalized terms used but not otherwise defined herein shall have the
respective meanings given to such terms in the Repurchase Agreement.

B. Pursuant to Section 3(n) of the Repurchase Agreement, on or prior to the
Purchase Date for any Transaction, Member is required to establish a new Series
Seller to enter into such Transaction and Master Seller and such new Series
Seller are required to execute and deliver a Joinder Agreement pursuant to which
such new Series Seller shall be added as a party to the Repurchase Agreement and
the other Transaction Documents.

C. On or prior to the date hereof, Member has established New Series Seller in
accordance with the terms of the Master Seller LLC Agreement and applicable
Delaware law for the purpose of entering into a Transaction with Buyer with
respect to the Purchased Loan[s] described on Exhibit A attached hereto and New
Series Seller wishes to execute and deliver this Agreement pursuant to which New
Series Seller shall become a party to and agree to be bound as a Series Seller
for all purposes under the Repurchase Agreement and the other Transaction
Documents.

AGREEMENT

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

1. In consideration of New Series Seller becoming a Series Seller entitled to
enter into a Transaction with Buyer under and subject to the terms and
conditions of the Repurchase Agreement, New Series Seller hereby agrees that,
effective as of the date hereof,

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New Series Seller is, and shall be deemed to be, a Series Seller under the
Repurchase Agreement and each of the other Transaction Documents to which the
Seller is a party, and agrees that from the date hereof and so long as the
Repurchase Obligations remain outstanding, New Series Seller hereby assumes the
obligations of a Series Seller under, and New Series Seller shall perform,
comply with and be subject to and bound by each of the terms, covenants and
conditions of the Repurchase Agreement and each of the other Transaction
Documents which are stated to apply to or are made by a Series Seller. Without
limiting the generality of the foregoing, New Series Seller hereby represents
and warrants that (i) each of the representations and warranties set forth in
Section 9(b) of the Repurchase Agreement are true and correct as to New Series
Seller and its related Purchased Loan on and as of the date hereof and (ii) New
Series Seller has heretofore received true and correct copies of the Repurchase
Agreement and each of the other Transaction Documents as in effect on the date
hereof. Master Seller hereby confirms, on behalf of itself and the New Series
Seller, its pledge and grant of a security interest in the Collateral.

2. Without limiting the foregoing, New Series Seller agrees that it is and shall
be obligated to pay the Repurchase Price applicable to its Purchased Loan on the
Repurchase Date therefor and perform and pay all of the other Repurchase
Obligations applicable to New Series Seller and such Purchased Loan as if it
were an original party to the Repurchase Agreement and agrees to execute and
deliver such documents, instruments and other things as Buyer may reasonably
request in connection with such New Series Seller’s obligations hereunder and
under the Repurchase Agreement and the other Transaction Documents.

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

4. Master Seller, on behalf of itself and each Series Seller that has become a
party to the Repurchase Agreement on or prior to the date hereof, and New Series
Seller acknowledge and agree that, except as modified hereby, the Repurchase
Agreement and each of the other Transaction Documents remains unmodified and in
full force and effect and all of the terms, covenants and conditions thereof are
hereby ratified and confirmed in all respects.

5. This Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to conflicts of
law principles.

[SIGNATURES ON FOLLOWING PAGES]

 

-2-

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IN WITNESS WHEREOF, each of New Seller and Master Seller, on behalf of itself
and each Series Seller that has heretofore become a party to the Repurchase
Agreement, has duly executed this Agreement and delivered the same to the Buyer,
as of the date and year first above written.

 

NEW SERIES SELLER: [_______________] By:  

 

  Name:   Title: MASTER SELLER: PARLEX 15 FINCO, LLC,   a Delaware limited
liability company, on behalf of itself and each Series Seller that has become a
party to the Repurchase Agreement prior to the date hereof By:  

 

  Name:   Title:

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EXHIBIT A

NEW SERIES SELLER/PURCHASED LOAN

 

New Series Seller:                                         
                       Purchased Loan:                                         
                      

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EXHIBIT XII

FORM OF BAILEE AGREEMENT

PARLEX 15 FINCO, LLC

c/o Blackstone Mortgage Trust, Inc.

345 Park Avenue

New York, NY 10154

[_____] [_], 201[_]

U.S. Bank National Association

1133 Rankin Street, Suite 100

St. Paul, Minnesota 55116

Attention: Commercial Review Team

Telecopier No.: (615) 695-5967

Email: stp.cmbs.request@usbank.com

[BAILEE]

[Address]

[City], [State] [Zip]

Attn: [______]

Email: [______]

 

  Re:

Bailee Agreement (the “Bailee Agreement”) in connection with the sale of the
[___] Purchased Loan(s) by Parlex 15 Finco, LLC, a Delaware limited liability
company (“Master Seller”), on behalf of itself and [SERIES SELLER]
(collectively, “Seller”), to Deutsche Bank AG, Cayman Islands Branch, as buyer
(“Buyer”).

Ladies and Gentlemen:

Reference is made to that certain Second Amended and Restated Master Repurchase
Agreement, dated as of December 16, 2019, by and between Buyer and Seller (as
the same may have been, and may hereafter be, amended, restated, extended, or
otherwise modified from time to time, the “Repurchase Agreement”). In
consideration of the mutual promises set forth herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Seller, Buyer and [BAILEE] (the “Bailee”) hereby agree as follows:

(a) Seller shall deliver to the Bailee, in connection with the Purchased Loan
delivered to the Bailee hereunder, the Purchased Loan File Checklist attached
hereto as Attachment 1.

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(b) On or prior to [___], 201[] (the “Funding Date”), Seller shall have
delivered to the Bailee, as bailee for hire, the original documents set forth
thereon (collectively, the “Purchased Loan Documents”) for the Purchased Loan
identified on Exhibit A to the Purchased Loan File Checklist attached hereto as
Attachment 1 (the “Purchased Loan(s)”).

(c) The Bailee shall issue and deliver to Buyer and U.S. Bank National
Association, as custodian (the “Custodian”), on or prior to the Funding Date by
electronic mail, in the name of Buyer, a certification which shall state that
the Bailee has received the Purchased Loan Documents.

(d) On [___], 201[] (the “Purchase Date”), in the event that Buyer fails to
purchase the Purchased Loan(s) from Seller, Buyer shall deliver by electronic
mail to the Bailee to the attention of [BAILEE] at [BAILEE EMAIL], an
authorization (the “Electronic Authorization”) to release the Purchased Loan
File with respect to the Purchased Loan(s) to Seller. Upon receipt of such
Electronic Authorization, the Bailee shall release the Purchased Loan Documents
to Seller in accordance with Seller’s instructions.

(e) Following the Purchase Date and the funding of the Purchase Price, the
Bailee shall forward the Purchased Loan Documents to the Custodian at U.S. Bank
National Association, 1133 Ranking Street, Suite 100, St. Paul, Minnesota 55116,
Attention: Commercial Review Team, by insured overnight courier for receipt by
the Custodian no later than the third (3rd) Business Day following the
applicable Purchase Date (the “Delivery Date”), and in connection therewith,
shall notify Buyer by e-mail of each such delivery as soon as the courier
receives the underlying documents, which notice shall include the appropriate
tracking number.

(f) From and after the applicable Funding Date until the time of receipt of the
Electronic Authorization or the Delivery Date, as applicable, the Bailee
(a) shall maintain continuous custody (and will forward in accordance with
clause (e) above) and control of the related Purchased Loan Documents as bailee
for Buyer and (b) is holding the related Purchased Loan(s) as sole and exclusive
bailee for Buyer unless and until otherwise instructed in writing by Buyer.

(g) Seller agrees to indemnify and hold the Bailee and its partners, directors,
officers, agents and employees harmless against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever, including reasonable
attorneys’ fees, that may be imposed on, incurred by, or asserted against it or
them in any way relating to or arising out of this Bailee Agreement or any
action taken or not taken by it or them hereunder (but excluding special,
indirect, punitive or consequential damages) unless such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements were imposed on, incurred by or asserted against the
Bailee because of the breach by the Bailee of its obligations hereunder, which
breach was caused by gross

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negligence or willful misconduct on the part of the Bailee or any of its
partners, directors, officers, agents or employees. The foregoing
indemnification shall survive any resignation or removal of the Bailee or the
termination or assignment of this Bailee Agreement (h) Seller hereby represents,
warrants and covenants that the Bailee is not an affiliate of or otherwise
controlled by Seller. Notwithstanding the foregoing, the parties hereby
acknowledge that the Bailee hereunder may act as counsel to Seller in connection
with a proposed transaction and Ropes & Gray LLP, has represented Seller in
connection with negotiation, execution and delivery of the Repurchase Agreement.

(i) The agreement set forth in this Bailee Agreement may not be modified,
amended or altered, except by written instrument, executed by all of the parties
hereto.

(j) This Bailee Agreement may not be assigned by Seller or the Bailee without
the prior written consent of Buyer.

(k) For the purpose of facilitating the execution of this Bailee Agreement as
herein provided and for other purposes, this Bailee Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute and be one
and the same instrument. Electronically transmitted signature pages shall be
binding to the same extent.

(l) This Bailee Agreement shall be construed in accordance with the laws of the
State of New York, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.

(m) Capitalized terms used herein and defined herein shall have the meanings
ascribed to them in the Repurchase Agreement.

[SIGNATURES COMMENCE ON FOLLOWING PAGE]

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Very truly yours,

PARLEX 15 FINCO, LLC, a Delaware limited liability company, as Seller

By:  

    

 

Name: Douglas Armer

 

Title:   Managing Director, Head of Capital

 

            Markets and Treasurer

 

[Signature Page – Bailee Agreement]

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ACKNOWLEDGED AND AGREED: [BAILEE], as Bailee

By:  

 

  Name:   Title:

 

[Signature Page – Bailee Agreement]

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DEUTSCHE BANK AG, CAYMAN ISLANDS BRANCH, as Buyer

By:  

    

 

Name:

 

Title:

 

[Signature Page – Bailee Agreement]

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Schedule A to Bailee Agreement

Purchased Loan File Checklist

[see attached]

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FORM OF BAILEE’S TRUST RECEIPT

[______] [__], [____]

Deutsche Bank AG, Cayman Islands Branch

60 Wall Street

New York, New York 10005

Attention: Tom Rugg

Telephone: (212) 250-3541

Telecopy: (212) 797-5630

Email: tom.rugg@db.com

 

  Re:

Bailee Agreement, dated [______] [__], [____] (the “Bailee Agreement”) among
Parlex 15 Finco, LLC, a Delaware limited liability company (“Master Seller”), on
behalf of itself and [SERIES SELLER] (collectively, “Seller”), and Deutsche Bank
AG, Cayman Islands Branch (“Buyer”), and [BAILEE] (“Bailee”)

Ladies and Gentlemen:

In accordance with the provisions of the Bailee Agreement, the undersigned, as
Bailee, hereby certifies that as to the Purchased Loan(s) referred to therein,
it has reviewed the Purchased Loan Documents identified on the Purchased Loan
File Checklist for each of the Purchased Loan(s) referred to therein and has
determined that (i) all documents listed in Schedule A attached to the Bailee
Agreement are in its possession and (ii) such documents have been reviewed by it
and appear regular on their face and relate to the Purchased Loan(s).

Bailee hereby confirms that it is holding the Purchased Loan Documents as agent
and bailee for the exclusive use and benefit of Buyer pursuant to the terms of
the Bailee Agreement. All capitalized terms used herein and not defined herein
shall have the meanings ascribed to them in the Bailee Agreement.

Signature page follows.

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[BAILEE],

Bailee

By:  

    

 

Name:

 

Title:

 

[Signature Page to Bailee Trust Receipt]

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cc:

U.S. Bank National Association

1133 Rankin Street, Suite 100

St. Paul, Minnesota 55116

Attention: Commercial Review Team

Telecopier No.: (615) 695-5967

Email: stp.cmbs.request@usbank.com

Deutsche Bank AG, Cayman Islands Branch

60 Wall Street

New York, New York 10005

Attention: General Counsel

Deutsche Bank AG, Cayman Islands Branch

60 Wall Street

New York, New York 10005

Attention: Robert W. Pettinato Jr.

Cadwalader, Wickersham & Taft LLP

One World Financial Center

New York, New York 10281

Attention: Y. Jeffrey Rotblat

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EXHIBIT XIII

FORM OF CERTIFICATE OF AUTHORIZED REPRESENTATIVE

[Date]

Reference is made to that certain Second Amended and Restated Master Repurchase
Agreement, dated as of December 16, 2019 (as amended, amended and restated,
extended, supplemented or otherwise modified in writing from time to time, the
“Agreement;” the terms defined therein being used herein as therein defined), by
and among Parlex 15 Finco, LLC, as master seller (“Master Seller”), and Deutsche
Bank AG, Cayman Islands Branch, as buyer (“Buyer”). This Certificate is
delivered pursuant to Section 4(c) of the Agreement in connection with the
Purchased Loan commonly known as “[___]”.

The undersigned Authorized Representative of Master Seller hereby certifies as
of the date hereof that he/she is the [___] of Master Seller, and that, as such,
he/she is authorized to execute and deliver this Certificate to Buyer on behalf
of Master Seller and further certifies in such capacity, and not in any personal
capacity, that, to Master Seller’s Knowledge, no Default or Event of Default,
and no Purchased Loan Default or Purchased Loan Event of Default relating to the
Purchased Loan has occurred and is continuing as of the date hereof.

 

[Signature page follows.]

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IN WITNESS WHEREOF, the undersigned has executed this Certificate as of the date
first referenced above.

 

PARLEX 15 FINCO, LLC

By:  

 

Name:   Title:  

 

[Signature Page to Bailee Trust Receipt]