Exhibit 10.1

 

 

 

UNCOMMITTED MASTER REPURCHASE

 

AND

 

SECURITIES CONTRACT AGREEMENT

 

between

 

TERRA MORTGAGE CAPITAL I, LLC,

 

as Seller,

 

and

 

GOLDMAN SACHS BANK USA,

 

as Buyer

 

 

 

Dated: December 12, 2018

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

  Page     Article 1. APPLICABILITY 1     Article 2. DEFINITIONS 1     Article
3. INITIATION; CONFIRMATION; TERMINATION; FEES 26     Article 4. MARGIN
MAINTENANCE 34     Article 5. INCOME PAYMENTS AND PRINCIPAL PAYMENTS 34    
Article 6. SECURITY INTEREST 36     Article 7. PAYMENT, TRANSFER AND CUSTODY 37
    Article 8. SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS 40  
  Article 9. REPRESENTATIONS AND WARRANTIES 40     Article 10. NEGATIVE
COVENANTS OF SELLER 49     Article 11. AFFIRMATIVE COVENANTS OF SELLER 50    
Article 12. SINGLE PURPOSE ENTITY 56     Article 13. EVENTS OF DEFAULT; REMEDIES
58     Article 14. INCREASED COSTS; TAXES 64     Article 15. SINGLE AGREEMENT 70
    Article 16. RECORDING OF COMMUNICATIONS 71     Article 17. NOTICES AND OTHER
COMMUNICATIONS 71     Article 18. ENTIRE AGREEMENT; SEVERABILITY 71     Article
19. NON ASSIGNABILITY 72

 

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Article 20. GOVERNING LAW 73     Article 21. NO WAIVERS, ETC. 73     Article 22.
USE OF EMPLOYEE PLAN ASSETS 73     Article 23. INTENT 74     Article 24.
DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS 75     Article 25. CONSENT TO
JURISDICTION; WAIVERS 76     Article 26. NO RELIANCE 77     Article 27.
INDEMNITY 78     Article 28. DUE DILIGENCE 79     Article 29. SERVICING 79    
Article 30. MISCELLANEOUS 80

  

 

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ANNEXES, EXHIBITS AND SCHEDULES

 

ANNEX I Names and Addresses for Communications between Parties     SCHEDULE I
Prohibited Transferees     SCHEDULE II Purchased Asset File     SCHEDULE III
Organizational Structure Chart     EXHIBIT I Form of Confirmation Statement    
EXHIBIT II Authorized Representatives of Seller     EXHIBIT III-A Monthly
Reporting Package     EXHIBIT III-B Quarterly Reporting Package     EXHIBIT
III-C Annual Reporting Package     EXHIBIT IV Form of Power of Attorney    
EXHIBIT V Representations and Warranties Regarding Individual Purchased Assets  
  EXHIBIT VI Advance Procedures     EXHIBIT VII Form of Margin Deficit Notice  
  EXHIBIT VIII Form of Tax Compliance Certificates     EXHIBIT IX Form of
Covenant Compliance Certificate     EXHIBIT X UCC Filing Jurisdictions    
EXHIBIT XI Form of Servicer Notice     EXHIBIT XII Form of Release Letter    
EXHIBIT XIII Reserved     EXHIBIT XIV Form of Custodial Delivery Certificate    
EXHIBIT XV Form of Bailee Letter     EXHIBIT XVI Underwriting Guidelines    
EXHIBIT XVII Future Funding Advance Procedures

  

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UNCOMMITTED MASTER REPURCHASE AND SECURITIES CONTRACT AGREEMENT

 

THIS UNCOMMITTED MASTER REPURCHASE AND SECURITIES CONTRACT AGREEMENT (this
“Agreement”), dated as of December 12, 2018 by and between GOLDMAN SACHS BANK
USA, a New York state-chartered bank (“Buyer”), and TERRA MORTGAGE CAPITAL I,
LLC, a Delaware limited liability company (“Seller”).

 

Article 1.
APPLICABILITY

 

From time to time the parties hereto may enter into transactions in which Seller
and Buyer agree to the transfer from Seller to Buyer of all of Seller’s rights,
title and interest in certain Eligible Assets (as defined herein) or other
assets and, in each case, the other related Purchased Items (as defined herein)
(collectively, the “Assets”), against the payment of funds by Buyer to Seller,
with a simultaneous agreement by Buyer to transfer back to Seller such Assets at
a date certain or on demand, against the payment of funds by Seller to Buyer.
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. Each individual transfer of an Eligible Asset shall
constitute a distinct Transaction. Notwithstanding any provision or agreement
herein, at no time shall Buyer be obligated or committed to purchase any
Eligible Asset from Seller or to effect the transfer of any Eligible Asset from
Seller to Buyer.

 

Article 2.
DEFINITIONS

 

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

 

“Accelerated Repurchase Date” shall have the meaning set forth in Article
13(b)(i) of this Agreement.

 

“Acceptable Attorney” shall mean an attorney at law that has delivered at
Seller’s request a Bailee Letter, with the exception of an attorney that is not
satisfactory to Buyer, as specified in a written notice from Buyer to Seller.

 

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

 

 1

 

  

“Act of Insolvency” shall mean, with respect to any Person, (i) the filing of a
petition by such Person, commencing, or authorizing the commencement of any case
or proceeding under any bankruptcy, insolvency, reorganization, wind up,
liquidation, dissolution or similar law relating to the protection of creditors
(“Insolvency Law”), or suffering any such petition or proceeding to be commenced
by another which is consented to, not timely contested or results in entry of an
order for relief; (ii) the seeking or consenting to the appointment of a
liquidator, receiver, trustee, custodian or similar official for such Person or
any substantial part of the property of such Person; (iii) the appointment of a
receiver, conservator, or manager for such Person by any governmental agency or
authority having the jurisdiction to do so; (iv) the making of a general
assignment for the benefit of creditors; (v) the admission in writing in a legal
proceeding by such Person of its inability to pay its debts or discharge its
obligations as they become due or mature; (vi) that any Governmental Authority
or agency or any person, agency or entity acting or purporting to act under
Governmental Authority shall have taken any action to condemn, seize or
appropriate, or to assume custody or control of, all or any substantial part of
the property of such Person, or shall have taken any action to displace the
management of such Person or to curtail its authority in the conduct of the
business of such Person; or (vii) the consent by such Person to the entry of an
order for relief in an insolvency case under any Insolvency Law.

 

“Advance Rate” shall mean, with respect to each Transaction, the initial Advance
Rate selected by Buyer for such Transaction on a case by case basis in its sole
discretion as shown in the related Confirmation, as may be adjusted for any
Future Funding Advance, which in any case shall not exceed the Maximum Advance
Rate, unless otherwise agreed to by Buyer and Seller.

 

“Affiliate” shall mean, when used with respect to any specified Person, (i) any
other Person directly or indirectly Controlling, Controlled by, or under common
Control with, such Person, or (ii) any “affiliate” of such Person, as such term
is defined in the Bankruptcy Code.

 

“Agreement” shall mean this Uncommitted Master Repurchase and Securities
Contract Agreement, dated as of the date hereof, by and between Seller and Buyer
as such agreement may be amended, restated, modified or supplemented from time
to time.

 

“Annual Reporting Package” shall mean the reporting package described on Exhibit
III-C.

 

“Anti-Money Laundering Laws” shall have the meaning set forth in Article
9(b)(xxix) of this Agreement.

 

“Applicable Spread” shall mean:

 

(i)       so long as no Event of Default shall have occurred and be continuing,
the amount set forth in the Fee Letter as being the “Applicable Spread”, and

 

(ii)      after the occurrence and during the continuance of an Event of
Default, the (x) applicable incremental percentage described in clause (i) of
this definition, plus (y) five percent (5.0%).

 

“Appraisal” shall mean an appraisal that is compliant with the Financial
Institutions Reform, Recovery, and Enforcement Act and prepared by a third-party
appraiser addressed to, or permitted to be relied upon by, Buyer and reasonably
satisfactory to Buyer of the related Underlying Mortgaged Property from an
Independent Appraiser.

 

“Assets” shall have the meaning set forth in Article 1 of this Agreement. 

 

 2

 

  

“Assignee” shall have the meaning set forth in Article 19(a) of this Agreement.

 

“Assignment of Leases” shall mean, with respect to any Purchased Asset that is a
Senior Mortgage Loan, any assignment of leases, rents and profits or equivalent
instrument, whether contained in the related Mortgage or executed separately,
assigning to the holder or holders of such Mortgage all of the related
Mortgagor’s interest in the leases, rents and profits derived from the
ownership, operation, leasing or disposition of all or a portion of the related
Underlying Mortgaged Property as security for repayment of such Purchased Asset.

 

“Bailee Letter” shall mean a letter substantially in the form as Exhibit XV from
an Acceptable Attorney or a Title Company or another Person acceptable to Buyer
in its sole discretion, in form and substance acceptable to Buyer in its sole
discretion, wherein such Acceptable Attorney, Title Company or other Person
described above in possession of a Purchased Asset File (i) acknowledges receipt
of such Purchased Asset File, (ii) confirms that such Acceptable Attorney, Title
Company or other Person acceptable to Buyer is holding the same as bailee or
agent on behalf of Buyer under such letter and (iii) agrees that such Acceptable
Attorney, Title Company or other Person described above shall deliver such
Purchased Asset File to Custodian, or as otherwise directed by Buyer, by not
later than the third (3rd) Business Day following the Purchase Date for the
related Purchased Asset.

 

“Bankruptcy Code” shall mean Title 11 of the United States Code (11 U.S.C. §
101, et. seq.), as amended, modified or replaced from time to time.

 

“Breakage Costs” shall have the meaning set forth thereto in Article 14(f).

 

“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 are
authorized or obligated by law or executive order to be closed. Notwithstanding
the foregoing sentence, when used with respect to the determination of LIBOR,
“Business Day” shall only be a day on which commercial banks are open for
international business (including dealings in U.S. Dollar deposits) in London,
England.

 

“Buyer” shall mean Goldman Sachs Bank USA, a New York state-chartered bank, or
any successor or assign thereof permitted under Article 19.

 

“Buyer’s LTV” shall mean, on any date, with respect to any Purchased Asset, the
quotient (expressed as a percentage) of (i) the then outstanding Purchase Price
of such Purchased Asset divided by (ii) the “as-is” value of the related
Underlying Mortgaged Property as determined by Buyer in its sole discretion.

 

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

 

 3

 

  

“Capitalized Lease Obligations” shall mean obligations under a lease that are
required to be capitalized for financial reporting purposes in accordance with
GAAP. The amount of a Capitalized Lease Obligation is the capitalized amount of
such obligation as would be required to be reflected on the balance sheet
prepared in accordance with GAAP of the applicable Person as of the applicable
date.

 

“Cause” shall mean, with respect to an Independent Director, (a) acts or
omissions by such Independent Director that constitute willful disregard of, or
bad faith or gross negligence with respect to, the Independent Director’s duties
with respect to Seller’s obligations under this Agreement, (b) such Independent
Director has engaged in or has been charged with, or has been convicted of,
fraud or other acts constituting a crime under any law applicable to such
Independent Director, (c) such Independent Director is unable to perform his or
her duties as Independent Director due to death, disability or incapacity, or
(d) such Independent Director no longer meets the definition of Independent
Director, as that term is defined in this Article 2.

 

“Change of Control” shall mean the occurrence of any of the following events:

 

(a) the consummation of a merger or consolidation of Guarantor with or into
another entity or any other reorganization or transfer of Capital Stock of
Guarantor, if more than twenty-five percent (25%) of the combined voting power
of the continuing or surviving entity’s Capital Stock outstanding immediately
after such merger or consolidation or such other reorganization or transfer is
not owned directly or indirectly by Persons who were stockholders or holders of
such Capital Stock of Guarantor immediately prior to such merger or
consolidation or such other reorganization or transfer, excluding, however, any
transfer or transfers to Axar Terra LLC and/or its Affiliates so long as Axar
Terra LLC and/or the Person or Persons who are directly or indirectly
Controlling Axar Terra LLC on the Closing Date remains or remain in Control of
Guarantor;

 

(b) any “person” or “group” (within the meaning of Section 13(d) or Section
14(d) of the 1934 Act) 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 1934 Act), directly or indirectly, of a
percentage of the total voting power of all classes of Capital Stock of
Guarantor entitled to vote generally in the election of directors, members or
partners of twenty-five percent (25%) or more, provided that current Affiliates
of Seller shall not be counted for this purpose so long as Axar Terra LLC and/or
the Person or Persons who are directly or indirectly Controlling Axar Terra LLC
on the Closing Date remains or remain in Control of Guarantor;

 

(c) Guarantor shall cease to own and Control, of record and beneficially,
directly or indirectly one hundred percent (100%) of each class of outstanding
Capital Stock of Pledgor;

 

(d) Pledgor shall cease to own and Control, of record and beneficially, directly
or indirectly one hundred percent (100%) of each class of outstanding Capital
Stock of Seller;

 

(e) any transfer of all or substantially all of Guarantor’s, Pledgor’s or
Seller’s assets (other than any securitization transaction or any repurchase or
other similar transaction in the ordinary course of Guarantor’s, Pledgor’s or
Seller’s business);

 

 4

 

  

(f) with respect to Manager, the sale, merger, consolidation or reorganization
of Manager with or into any entity that is not an Affiliate of Manager as of the
Closing Date if Axar Terra LLC and/or the Person or Persons who are directly or
indirectly Controlling Axar Terra LLC on the Closing Date does not or do not
remain in Control of Manager;

 

(g) Manager shall cease to be the investment manager for Guarantor other than in
connection with any transaction pursuant to which Manager is not replaced; or

 

(h) any change in Control of Manager from the Person or Persons who are directly
or indirectly Controlling Manager on the Closing Date if Axar Terra LLC and/or
the Person or Persons who are directly or indirectly Controlling Axar Terra LLC
on the Closing Date does not or do not remain in Control of Manager;

 

provided, however, that notwithstanding anything to the contrary contained in
this Agreement, (i) no Change of Control shall be deemed to occur in connection
with, and nothing in this Agreement shall limit or prohibit, any transfer or
other transaction so long as Axar Terra LLC and/or the Person or Persons who are
directly or indirectly Controlling Axar Terra LLC on the Closing Date remains or
remain in Control of Guarantor and Manager, and (ii) no Change of Control shall
be deemed to occur in connection with, and nothing in this Agreement shall limit
or prohibit, any IPO Transaction so long as a management contract with a
Controlled Affiliate, remains in place.

 

“Closing Date” shall mean the date of this Agreement.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated and rulings issued thereunder.

 

“Collection Period” shall mean (i) with respect to the first Remittance Date,
the period beginning on and including the Closing Date and continuing to and
including the calendar day immediately preceding such Remittance Date, and (ii)
with respect to each subsequent Remittance Date, the period beginning on and
including the immediately preceding Remittance Date and continuing to and
including the calendar day immediately preceding the following Remittance Date.

 

“Concentration Limit” shall mean, the following amounts or maximum percentage
concentration limits based, in each case, as of any date of determination, on
the aggregate Purchase Price or individual Purchase Price for the applicable
Purchased Asset(s), as the case may be, as a percentage of the Maximum Facility
Amount as of such date of determination:

 

(i)         for all Purchased Assets for which the Underlying Mortgaged Property
consists of hospitality properties, twenty-five percent (25%);

 

(ii)        for all Purchased Assets for which the Underlying Mortgaged Property
consists of retail properties, twenty percent (20%);

 

(iii)       for any single property type, sixty-five percent (65%); and

 

 5

 

  

(iv)        for any single Purchased Asset, an outstanding Purchase Price of not
less than Ten Million Dollars ($10,000,000) or greater than an amount equal to
the product of (x) fifty percent (50%), multiplied by (y) the Maximum Facility
Amount.

 

“Confirmation” shall mean a written confirmation in the form of Exhibit I, duly
completed, executed and delivered by Buyer and Seller.

 

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

 

“Controlled Affiliate” shall mean any Affiliate of Terra Capital Partners LLC
that (i) is also an Affiliate of Guarantor and (ii) is Controlled by the Person
or Persons who are directly or indirectly Controlling Terra Capital Partners LLC
and Guarantor on the Closing Date.

 

“Covenant Compliance Certificate” shall mean a properly completed and executed
Covenant Compliance Certificate in form and substance of the certificate
attached hereto as Exhibit IX.

 

“Custodial Agreement” shall mean that certain Custodial Agreement, dated as of
the date hereof, by and among Custodian, Seller and Buyer, as amended, modified
and/or restated from time to time.

 

“Custodial Delivery Certificate” shall mean the form executed by Seller in order
to deliver the Purchased Asset Schedule and the Purchased Asset File to Buyer or
its designee (including Custodian) pursuant to Article 7 of this Agreement, a
form of which is attached hereto as Exhibit XIV.

 

“Custodian” shall mean Wells Fargo Bank, National Association, or any successor
Custodian appointed by Buyer.

 

“Default” shall mean any condition or event that, after notice or lapse of time,
would constitute an Event of Default.

 

“Delivery Failure” shall have the meaning set forth in the Bailee Letter.

 

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

 

“Depository Account” shall mean a segregated account, in the name of Seller, in
trust for Buyer, established at Depository in accordance with this Agreement,
and which is subject to the Depository Agreement.

 

 6

 

  

“Depository Agreement” shall mean that certain Deposit Account Control Agreement
(Hard Lockbox – Repurchase Agreement), dated as of the date hereof, among Buyer,
Seller and Depository, as amended, modified and/or restated from time to time.

 

“Draw Fee” shall have the meaning set forth in the Fee Letter, which definition
is incorporated herein by reference.

 

“Due Diligence Package” shall have the meaning set forth in Exhibit VI to this
Agreement.

 

“Early Repurchase Date” shall have the meaning set forth in Article 3(f)(i) of
this Agreement.

 

“Eligible Assets” shall mean any of the following types of assets or loans (a)
that are acceptable to Buyer in its sole discretion; (b) on each day, with
respect to which the representations and warranties set forth in this Agreement
(including the exhibits hereto) are true and correct in all respects except to
the extent disclosed in a Requested Exceptions Report approved by Buyer; (c)
that have been originated (or are being originated) in accordance with the
Underwriting Guidelines; and (d) where the Underlying Mortgaged Property
consists of multi-family (including student housing), office, industrial,
retail, hospitality, or combinations thereof, or such other types of properties
that Buyer may agree to in its sole discretion that are located in the United
States of America, its territories or possessions (or elsewhere, in the sole
discretion of Buyer):

 

(i)        Senior Mortgage Loans;

 

(ii)       Mezzanine Loans; and

 

(iii)      any other asset or loan types or classifications that are acceptable
to Buyer, subject to its consent on all necessary and appropriate modifications
to this Agreement and each of the Transaction Documents, as determined by Buyer
in its sole discretion.

 

Notwithstanding anything to the contrary contained in this Agreement, the
following shall not be Eligible Assets for purposes of this Agreement: (i)
non-performing loans; (ii) any Asset, where payment of the Purchase Price with
respect thereto would cause the aggregate of all Repurchase Prices to exceed the
Maximum Facility Amount; (iii) omitted; (iv) loans for which Buyer is relying on
an Appraisal and the applicable Appraisal is not dated within one-hundred eighty
(180) calendar days of the proposed Purchase Date (or such other time period as
approved by Buyer in Buyer’s sole discretion); (v) loans in which the related
loan agreement or other documents and/or instruments evidencing such loans
contain restrictions on transfer of lender’s interest therein; (vi) ground-up
construction loans or land loans (provided, that, loans allowing for advances
relating to tenant improvements or renovations may be Eligible Assets; provided,
further, that Buyer may, in its sole discretion, on a case-by-case basis,
consider purchasing an otherwise Eligible Asset that is a construction loan or a
land loan); (vii) Assets that, upon becoming a Purchased Asset, have a Mortgaged
Property LTV greater than eighty percent (80%) (provided, that Buyer may, in its
sole discretion, on a case-by-case basis, consider purchasing an otherwise
Eligible Asset with a Mortgaged Property LTV of up to eighty-five percent
(85%)); (viii) loans that are in special servicing; (ix) Assets that are pledged
as collateral to any lender or sold to any buyer in connection with a loan,
repurchase facility or any other financing transaction; (x) unless otherwise
agreed to by Buyer in its sole discretion, Assets that are not originated by
Seller or an Affiliate of Seller; (xi) Assets that, upon becoming a Purchased
Asset, would cause the Purchase Price of the applicable Purchased Asset or the
aggregate Purchase Price of the applicable Purchased Assets to violate the
Concentration Limit; (xii) Mezzanine Loans where the Senior Mortgage Loan on the
Underlying Mortgaged Property associated with such Mezzanine Loan is not a
Purchased Asset; and (xiii) assets secured directly or indirectly by loans
described in the preceding clauses (i) through (xii).

 

 7

 

  

“Environmental Law” shall mean any federal, state, foreign or local statute,
law, rule, regulation, ordinance, code, guideline, written policy and rule of
common law now or hereafter in effect and in each case as amended, and any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
employee health and safety or hazardous materials, including, without
limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C.
§ 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.; the
Clean Air Act, 42 U.S.C. § 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C.
§ 3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq.; the
Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C.
§ 11001 et seq.; the Hazardous Material Transportation Act, 49 U.S.C. § 1801 et
seq. and the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq.; and
any state and local or foreign counterparts or equivalents, in each case as
amended from time to time.

 

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

 

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

 

“Event of Default” shall have the meaning set forth in Article 13 of this
Agreement.

 

“Excluded Taxes” shall mean any of the following Taxes imposed on or with
respect to Buyer or any Transferee, or required to be withheld or deducted from
a payment to Buyer or any Transferee: (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 or such Transferee being organized under
the laws of or having its principal office, or its applicable lending office
located in the jurisdiction imposing such Tax (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 or such
Transferee under this Agreement pursuant to a law in effect on the date on which
(i) Buyer or such Transferee acquires an interest hereunder (other than pursuant
to an assignment request by Seller under Article 14(m)) or (ii) Buyer or such
Transferee changes its lending office, except in each case to the extent that,
pursuant to Article 14(g) and 14(j), amounts with respect to such Taxes were
payable either to Buyer’s or such Transferee’s assignor immediately before Buyer
or such Transferee acquired an interest hereunder or to Buyer or such Transferee
immediately before it changed its lending office; (c) Taxes attributable to
Buyer or such Transferee’s failure to comply with Article 14(k); or (d) any U.S.
federal withholding Taxes imposed under FATCA.

 

 8

 

  

“Exit Fee” shall have the meaning set forth in the Fee Letter, which definition
is incorporated herein by reference.

 

“FATCA” shall mean 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 official practices implementing any
intergovernmental agreement, treaty or convention among Governmental Authorities
entered into in connection thereto.

 

“FATF” shall have the meaning set forth in the definition of “Prohibited
Investor.”

 

“FDIA” shall have the meaning set forth in Article 23(c) of this Agreement.

 

“FDICIA” shall have the meaning set forth in Article 23(e) of this Agreement.

 

“Federal Funds Rate” shall mean, for any day, an interest rate per annum equal
to the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers on
such day, 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 at approximately 10:00 a.m.
(New York time) on such day or such transactions received by Buyer from three
(3) federal funds brokers of recognized standing selected by Buyer in its sole
discretion.

 

“Federal Funds Rate Applicable Spread” shall mean, in connection with the
conversion of any Transaction to a Federal Funds Rate Transaction, an amount
equal to the difference (expressed as a number of basis points) between (a) the
LIBOR Rate plus the Applicable Spread applicable to such Transaction on the date
the LIBOR Rate was last applicable to the outstanding Transactions prior to such
conversion and (b) the Federal Funds Rate on the date that the LIBOR Rate was
last applicable to the outstanding Transactions prior to such conversion;
provided, however, in no event shall such difference be a negative number.

 

“Federal Funds 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 Federal Funds Rate.

 

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

 

 9

 

  

“Filings” shall have the meaning set forth in Article 6(c) of this Agreement.

 

“Financing Lease” shall mean any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.

 

“Fitch” shall mean Fitch Ratings, Inc.

 

“Foreign Buyer” shall mean (a) if the Seller is a U.S. Person, a Buyer that is
not a U.S. Person, and (b) if the Seller is not a U.S. Person, a Buyer that is
resident or organized under the laws of a jurisdiction other than that in which
the Seller is resident for tax purposes.

 

“Future Funding Advance” shall have the meaning set forth in Article 3(j) of
this Agreement.

 

“Future Funding Date” shall mean, with respect to any Purchased Asset, the date
on which Buyer advances any portion of the Future Funding Advance related to
such Purchased Asset in accordance with the terms and provisions of this
Agreement.

 

“Future Funding Due Diligence Package” shall have the meaning set forth in
Exhibit XVI hereto.

 

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

 

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

 

“Guarantee Agreement” shall mean that certain Guarantee Agreement, dated as of
the date hereof, by Guarantor in favor of Buyer, as amended, restated,
supplemented or otherwise modified and in effect from time to time.

 

“Guarantor” shall mean Terra Property Trust, Inc., a Maryland corporation.

 

“Income” shall mean, with respect to any Purchased Asset at any time, (a) any
collections of principal, interest, dividends, receipts or other distributions
or collections (including casualty or condemnation proceeds), and (b) all net
sale proceeds received by Seller or any Affiliate of Seller in connection with a
sale or liquidation of such Purchased Asset; provided, that, Underlying
Purchased Asset Reserves shall not be included in the term “Income” unless and
until, with respect to a particular Purchased Asset, (i) an event of default
exists under the related Purchased Asset Documents, (ii) the holder of such
related Purchased Asset has exercised rights and remedies with respect to such
amounts and (iii) such amounts have been applied by the holder of such Purchased
Asset to all or a portion of the outstanding indebtedness under the related
Purchased Asset Documents.

 

 10

 

  

“Indebtedness” shall mean, for any Person, (a) 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); (b) 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) calendar days of the date the respective goods are delivered
or the respective services are rendered; (c) 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; (d) 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; (e) obligations of such Person under repurchase agreements,
sale/buy-back agreements or like arrangements; (f) Indebtedness of others
guaranteed by such Person; (g) all obligations of such Person incurred in
connection with the acquisition or carrying of fixed assets by such Person; (h)
Indebtedness of general partnerships of which such Person is secondarily or
contingently liable (other than by endorsement of instruments in the course of
collection), whether by reason of any agreement to acquire such indebtedness to
supply or advance sums or otherwise; (i) Capitalized Lease Obligations of such
Person; (j) all net liabilities or obligations under any interest rate, interest
rate swap, interest rate cap, interest rate floor, interest rate collar, or
other agreement; and (k) all obligations of such Person under Financing Leases.

 

“Indemnified Amounts” and “Indemnified Parties” shall have the meaning set forth
in Article 27 of this Agreement.

 

“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
clause (a) of this definition, Other Taxes.

 

“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 Underlying 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 (5) years’ experience in the subject
property type.

 

“Independent Director” shall mean an individual with at least three (3) years of
employment experience serving as an independent director or manager at the time
of appointment who is provided by, and is in good standing with, CT Corporation,
Corporation Service Company, National Registered Agents, Inc., Wilmington Trust
Company, Stewart Management Company, Lord Securities Corporation or, if none of
those companies is then providing professional independent directors or managers
or is not acceptable to the Rating Agencies, another nationally recognized
company reasonably approved by Buyer, in each case that is not an Affiliate of
Seller and that provides professional independent directors or managers and
other corporate services in the ordinary course of its business, and which
individual is duly appointed as an independent director or manager of Seller and
is not, and has never been, and will not while serving as an independent
director or manager of Seller be:

 

 11

 

  

(a)       a member (other than an independent, non-economic “springing” member),
partner, equityholder, manager, director, officer or employee of Seller or
Seller’s equityholders or Affiliates (other than as an independent director or
manager of an Affiliate of Seller that is not in the direct chain of ownership
of Seller and that is required by a creditor to be a Single Purpose Entity,
provided that such independent director or manager is employed by a company that
routinely provides professional independent directors or managers in the
ordinary course of business);

 

(b)       a customer, creditor, supplier or service provider (including provider
of professional services) to Seller or Seller’s equityholders or Affiliates
(other than a nationally-recognized company that routinely provides professional
independent directors or managers and other corporate services to Seller or
Seller’s equityholders or Affiliates in the ordinary course of its business);

 

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

 

(d)       a Person that controls or is under common control with (whether
directly, indirectly or otherwise) any of (a), (b) or (c) above.

 

A natural person who otherwise satisfies the foregoing definition other than
subparagraph (a) by reason of being the independent director or manager of a
single purpose bankruptcy remote entity in the direct chain of ownership of
Seller shall not be disqualified from serving as an independent director or
manager of Seller, provided that the fees that such individual earns from
serving as independent directors or managers of such Affiliates in any given
year constitute in the aggregate less than five percent (5%) of such
individual’s annual income for that year.

 

“Investment Company Act” shall have the meaning set forth in Article 9(b)(xv) of
this Agreement.

 

“IPO Transaction” shall mean any public offering involving the issuance of
direct or indirect common equity interests in Guarantor or any Person to which
the assets of Guarantor are contributed, including pursuant to an “UPREIT”
structure, on a nationally recognized stock exchange in an underwritten primary
public offering (other than a public offering pursuant to a registration
statement on Form S-4, S-8 or any other similar form) pursuant to an
registration statement filed with and declared effective by the Securities and
Exchange Commission in accordance with the Securities Act of 1933 (whether alone
or in connection with a secondary public offering). 

 

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

 

“Knowledge” shall mean, with respect to any Person, the actual knowledge of such
Person, which in turn shall mean, collectively, the actual present knowledge (as
distinguished from implied, imputed or constructive knowledge) of such Person’s
employee or officer that is in charge of asset management of a Purchased Asset
and such Person’s investment committee members. “Known”, “Knowingly” or other
variations of Knowledge shall have meanings correlative thereto.

 

 12

 

  

“LIBOR” shall mean, with respect to each Pricing Rate Period, the offered rate
for thirty (30) day U.S. dollar deposits, as the applicable rate appears on
Reuters Screen LIBOR01 Page (or any successor thereto) as of 11:00 a.m. (London
time) on the Pricing Rate Determination Date (rounded up to the nearest whole
multiple of 1/100%); provided that if the applicable rate does not appear on
Reuters Screen LIBOR01 Page, the rate for such date will be based upon the
offered rates of the Reference Banks for U.S. dollar deposits as of 11:00 a.m.
(London time) on such date. In such event, Buyer will request the principal
London office of each of the Reference Banks to provide a quotation of its rate.
If on such date, two or more Reference Banks provide such offered quotations,
LIBOR shall be the arithmetic mean of all such offered quotations (rounded up to
the nearest whole multiple of 1/100%). If on such date, fewer than two Reference
Banks provide such offered quotations, LIBOR shall be the higher of (i) LIBOR as
determined on the immediately preceding day that LIBOR is available and (ii) the
Reserve Interest Rate. Notwithstanding anything to the contrary, in no event
shall LIBOR ever be less than the greater of: (x) zero percent (0%) and (y) the
minimum rate set forth for “LIBOR,” “LIBO Rate,” or such similar term, pursuant
to the Purchased Asset Documents for the related Purchased Asset. Buyer’s
computation of LIBOR shall be conclusive and binding on Seller for all purposes,
absent manifest error.

 

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

 

LIBOR 1 – Reserve Requirement

 

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

 

“Manager” shall mean Terra REIT Advisors, LLC, or any Affiliate of Terra REIT
Advisors, LLC that is also an Affiliate of Guarantor, in each case in its
capacity as investment manager for Guarantor.

 

“Mandatory Early Repurchase Date” shall have the meaning set forth in Article
3(f)(ii). 

 

 13

 

  

“Mandatory Early Repurchase Event” shall mean, one or more of the following with
respect to any Purchased Asset, in each case as determined by Buyer in its sole
discretion: (a)  a monetary or material non-monetary event of default has
occurred and is continuing beyond any applicable notice and cure period under
the related Purchased Asset Documents, without regard to any waivers or
modifications of, or amendments to, the related loan documents or other asset
documentation, other than those that were (x) disclosed in writing to Buyer
prior to the Purchase Date of the related Purchased Asset, or (y) consented to
in writing by Buyer in accordance with the terms of this Agreement, or (z)
waivers of de minimis fees or costs of less than $25,000 or related to de
minimis reallocations of reserves, (b)  a material breach of the applicable
representations and warranties set forth on Exhibit V hereto (except as
disclosed in a Requested Exceptions Report and as approved by Buyer in writing),
(c) as to which an Act of Insolvency shall have occurred with respect to the
related Mortgagor, sponsor or guarantor with respect to such Purchased Asset,
(d) where any mortgagor, participant or co-lender having an interest in such
Purchased Asset or any related Underlying Mortgaged Property that is senior to,
or pari passu with, in right of payment or priority with the rights of Buyer in
such Purchased Asset shall be delinquent beyond any applicable cure period in
the payment of amounts due under the related loan documents, (e) as to which an
Act of Insolvency has occurred with respect to any mortgagee, participant,
co-lender having an interest in such Purchased Asset or any related Underlying
Mortgaged Property that is senior to, or pari passu with, the rights of Buyer in
such Purchased Asset, (f) the related Purchased Asset File or any portion
thereof is subject to a continuing Delivery Failure or has been released from
the possession of Custodian under the Custodial Agreement to anyone other than
Buyer or any Affiliate of Buyer except in accordance with the terms of the
Custodial Agreement, (g) such Purchased Asset has gone into special servicing,
however so defined in any applicable servicing, or pooling and servicing,
agreement related to a securitization or similar transaction, or (h) such
Purchased Asset fails to qualify for “safe harbor” treatment as described in
Article 23; provided that with respect to any Mezzanine Loan, in addition to the
foregoing, a Mandatory Early Repurchase Event with respect to such Mezzanine
Loan shall be deemed to have occurred to the extent that a Mandatory Early
Repurchase Event would have occurred for the related Senior Mortgage Loan.

 

“Margin Amount” shall mean, with respect to any Purchased Asset, on any date of
determination, (A) the Maximum Advance Rate attributable to such Purchased
Asset, multiplied by (B) the lesser of (i) the Market Value of such Purchased
Asset as of such date, and (ii) the outstanding principal balance of such
Purchased Asset.

 

“Margin Deficit” shall have the meaning set forth in the Fee Letter, which
definition is incorporated herein by reference.

 

“Margin Deficit Event” shall have the meaning set forth in the Fee Letter, which
definition is incorporated herein by reference.

 

“Margin Payment Date” shall have the meaning set forth in Article 4(a).

 

“Margin Deficit Notice” shall have the meaning set forth in Article 4(a).

 

“Market Disruption Event” shall mean either (a) any event or events shall have
occurred in the determination of Buyer made by Buyer with respect to all of its
commercial real estate loan repurchase facilities resulting in the effective
absence of a “repo market” or related “lending market” for purchasing (subject
to repurchase) or financing debt obligations secured by commercial mortgage
loans or securities, or an event or events shall have occurred resulting in
Buyer not being able to finance Eligible Assets through the “repo market” or
“lending market” with traditional counterparties at rates which would have been
reasonable prior to the occurrence of such event or events, or (b) any event or
events shall have occurred resulting in the effective absence of a “securities
market” for securities backed by Eligible Assets, including, but not limited to
the “CMBS/CDO/CLO market”, or an event or events shall have occurred resulting
in Buyer not being able to sell securities backed by Eligible Assets at prices
which would have been reasonable prior to such event or events, in each case as
determined by Buyer.

 

 14

 

  

“Market Value” shall mean, with respect to any Purchased Asset as of any
relevant date, the lesser of (i) the price at which such Purchased Asset may be
sold in an arm’s length transaction to a third party (without regard to any
unpaid Price Differential that has accrued but it not yet due and payable), as
determined by Buyer in its sole discretion, and (ii) the unpaid principal
balance of such Purchased Asset.

 

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

 

“Materials of Environmental Concern” shall mean any toxic mold, any petroleum
(including, without limitation, crude oil or any fraction thereof) or petroleum
products (including, without limitation, gasoline) or any hazardous or toxic
substances, materials or wastes, defined as such in or regulated under any
Environmental Law, including, without limitation, asbestos, polychlorinated
biphenyls, and urea-formaldehyde insulation.

 

“Maximum Advance Rate” shall have the meaning set forth in the Fee Letter, which
definition is incorporated herein by reference.

 

“Maximum Buyer’s LTV” shall have the meaning set forth in the Fee Letter, which
definition is incorporated herein by reference.

 

“Maximum Facility Amount” shall mean One Hundred Fifty Million Dollars
($150,000,000).

 

“Mezzanine Borrower” shall mean the obligor on a Mezzanine Note, including any
Person who has assumed or guaranteed the obligations of the obligor thereunder.

 

“Mezzanine Loans” shall mean performing loans secured by pledges of all of the
equity interests in entities that own, directly or indirectly, commercial
properties that serve as collateral for Senior Mortgage Loans.

 

“Mezzanine Note” shall mean the promissory note, if any, that was executed and
delivered in connection with a Mezzanine Loan.

 

“Minimum Aggregate Draw Fee” shall have the meaning set forth in the Fee Letter,
which definition is incorporated herein by reference.

 

“Minimum Purchase Price Debt Yield” shall have the meaning set forth in the Fee
Letter, which definition is incorporated herein by reference. 

 

 15

 

 

“Monthly Reporting Package” shall mean the reporting package described on
Exhibit III-A.

 

“Moody’s” shall mean Moody’s Investors Service, Inc.

 

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

 

“Mortgage Note” shall mean a note or other evidence of indebtedness of a
Mortgagor with respect to a Senior Mortgage Loan.

 

“Mortgaged Property LTV” shall mean, with respect to any Purchased Asset, the
ratio of the aggregate outstanding principal balance of such Purchased Asset
(which shall include such Purchased Asset and all debt senior to or pari passu
with such Purchased Asset) secured, directly or indirectly, by the related
Underlying Mortgaged Property, to the aggregate “as-is” value of such Underlying
Mortgaged Property as determined by Buyer in its sole discretion based on an
Appraisal provided by Seller.

 

“Mortgagor” shall mean, with respect to a Senior Mortgage Loan, the obligor on a
Mortgage Note and the grantor of the related Mortgage.

 

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

 

“New Asset” shall mean an Eligible Asset that Seller proposes to be included as
a Purchased Item which Eligible Asset has not yet become a Purchased Asset.

 

“OFAC” shall have the meaning specified in the definition of “Prohibited
Investor”.

 

“Originated Asset” shall mean any Eligible Asset originated by Seller or an
Affiliate of Seller.

 

“Other Connection Taxes” shall mean, with respect to Buyer and any Transferee,
Taxes imposed as a result of a present or former connection between Buyer or
such Transferee and the jurisdiction imposing such Tax (other than connections
arising from Buyer or such Transferee 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 Document).

 

“Other Taxes” shall mean all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Transaction Document, except for (i) any such Taxes or
Other Connection Taxes imposed with respect to an assignment, transfer or sale
of participation or other interest in or with respect to the Transaction
Documents (other than an assignment made pursuant to Article 14(m)), and (ii)
for the avoidance of doubt, any Excluded Taxes. 

 

 16

 

  

“Outside Repurchase Date” shall mean December 12, 2020, as such date may be
extended pursuant to Article 3(i).

 

“Outside Repurchase Date Renewal Conditions” shall have the meaning set forth in
Article 3(i) of this Agreement.

 

“Participant Register” shall have the meaning set forth in Article 19(c) of this
Agreement.

 

“Participants” shall have the meaning set forth in Article 19(a) of this
Agreement.

 

“Permitted Encumbrances” shall mean, with respect to each Purchased Asset, (a)
any lien or security interest created by this Agreement and the other
Transaction Documents, (b) all liens, encumbrances and other matters disclosed
in the applicable Title Policy, (c) liens, if any, for Taxes imposed by any
Governmental Authority not yet due or delinquent, (d) leases, equipment leases,
or other similar instruments entered into in accordance with the Purchased Asset
Documents, (e) mechanics’ liens, materialmen’s liens and other recorded
encumbrances which are being contested in accordance with the Purchased Asset
Documents, bonded over, escrowed for or insured against by the applicable Title
Policy, and (f) liens and encumbrances incurred in accordance with the terms of
the Purchased Asset Documents.

 

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

 

“Plan” shall mean an employee pension benefit plan (within the meaning of
Section 3(2) of ERISA) 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
Article 302 of ERISA or Article 412 of the Code, other than a Multiemployer
Plan.

 

“Plan Asset Regulations” shall mean the regulations promulgated at 29 C.F.R.
Section 2510.3-101, as modified by Section 3(42) of ERISA.

 

“Plan Party” shall have the meaning set forth in Article 22(a) of this
Agreement.

 

“Pledge and Security Agreement” shall mean that certain Pledge and Security
Agreement, dated as of the date hereof, by Pledgor in favor of Buyer, as the
same may be amended, restated, supplemented, replaced or otherwise modified from
time to time, pledging all of Pledgor’s interest in the Capital Stock of Seller
to Buyer.

 

 17

 

  

“Pledgor” shall mean Terra Mortgage Portfolio I, LLC, a Delaware limited
liability company.

 

“Pre-Existing Asset” shall mean any Eligible Asset that is not an Originated
Asset.

 

“Pre-Purchase Due Diligence” shall have the meaning set forth in Article 3(b)
hereof.

 

“Pre-Purchase Legal Expenses” shall mean all of the reasonable and necessary out
of pocket legal fees, costs and expenses incurred by Buyer in connection with
the Pre-Purchase Due Diligence associated with Buyer’s decision as to whether or
not to enter into a particular Transaction.

 

“Prescribed Laws” shall mean, collectively, (a) the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (Public Law 107-56) (the “USA Patriot Act”), (b) Executive
Order 13224 on Terrorist Financing, effective September 24, 2001, and relating
to Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism, (c) the International Emergency
Economic Power Act, 50 U.S.C. §1701 et. seq., (d) the Bank Secrecy Act (31
U.S.C. Sections 5311 et seq.) as amended and (e) all other Requirements of Law
relating to money laundering or terrorism, including without limitation, the USA
Patriot Act and all regulations and executive orders promulgated with respect to
money laundering or terrorism, including, without limitation, those promulgated
by the Office of Foreign Assets Control of the United States Department of the
Treasury.

 

“Price Differential” shall mean, with respect to any Purchased Asset as of any
date, the aggregate amount obtained by daily application of the applicable
Pricing Rate for such Purchased Asset to the outstanding Purchase Price of such
Purchased Asset on a 360-day-per-year basis for the actual number of days during
each Pricing Rate Period commencing on (and including) the Purchase Date for
such Purchased Asset 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 Purchased Asset).

 

“Pricing Rate” shall mean, for any Pricing Rate Period with respect to a
Purchased Asset, an annual rate equal to (a) with respect to a LIBOR
Transaction, the sum of (i) LIBOR Rate (or such other period based upon the
applicable Purchased Asset) and (ii) the relevant Applicable Spread, (b) with
respect to a Federal Funds Rate Transaction, the sum of (i) the Federal Funds
Rate plus (ii) the relevant Federal Funds Rate Applicable Spread and (c) with
respect to a Substitute Rate Transaction, the sum of (i) the Substitute Rate
plus (ii) the relevant Substitute Rate Applicable Spread, provided that in no
event shall such rate be less than the Applicable Spread for the related
Purchased Asset. The Pricing Rate shall be subject to adjustment and/or
conversion as provided in the Transaction Documents or the related Confirmation.

 

“Pricing Rate Determination Date” shall mean with respect to any Transaction (i)
with respect to the first Pricing Rate Period, the related Purchase Date for
such Purchased Asset and (ii) with respect to any subsequent Pricing Rate
Period, the date that is two (2) Business Days prior to the first (1st) day of
such Pricing Rate Period.

 

 18

 

  

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

 

“Primary Servicer” shall mean Trimont Real Estate Advisors, LLC, or any other
primary servicer approved by, or in the case of a termination of Primary
Servicer pursuant to Article 29(c), appointed by Buyer, in each case in Buyer’s
sole discretion.

 

“Primary Servicing Agreement” shall mean the Servicing Agreement by and among
Buyer, Seller, and Primary Servicer dated as of the date hereof and, if any
other Primary Servicer is approved by Buyer in its sole discretion, any
servicing agreement with such other Primary Servicer in respect of the Purchased
Assets, which agreement is approved by Buyer in its sole discretion.

 

“Principal Payment” shall mean, with respect to any Purchased Asset, any
scheduled or unscheduled payment or prepayment of principal received in respect
thereof (including net sale proceeds or casualty or condemnation proceeds to the
extent that such proceeds are not required under the related Purchased Asset
Documents to be reserved, escrowed, readvanced or applied for the benefit of the
Mortgagor or the related Underlying Mortgaged Property).

 

“Prohibited Investor” shall mean (1) a Person whose name appears on the list of
Specially Designated Nationals and Blocked Persons by the Office of Foreign
Asset Control (“OFAC”), (2) any Person whose name appears on any list of
terrorists, terrorist organizations or narcotics traffickers maintained pursuant
to and of the Rules and Regulations of OFAC that Buyer has notified Seller in
writing is now included in such list, (3) any Person whose name appears on any
list similar to those described in clauses (1) and (2) of this definition
maintained by the United States Department of State, the United States
Department of Commerce or any other government authority or pursuant to any
Executive Order of the President of the United States that Buyer has notified
Seller in writing is now included on such list, (4) any foreign shell bank, and
(5) any person or entity resident in or whose subscription funds are transferred
from or through an account in a jurisdiction that has been designated as a
non-cooperative with international anti-money laundering principles or
procedures by an intergovernmental group or organization, such as the Financial
Action Task Force on Money Laundering (“FATF”), of which the U.S. is a member
and with which designation the U.S. representative to the group or organization
continues to concur. See http://www.fatf-gati.org for FATF’s list of
Non-Cooperative Countries and Territories.

 

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

 

“Purchase Agreement” shall mean any purchase agreement between Seller and any
Transferor pursuant to which Seller purchased or acquired an Asset that is
subsequently sold to Buyer hereunder, which Purchase Agreement shall contain
general market terms.

 

 19

 

  

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

 

“Purchase Price” shall mean, with respect to any Purchased Asset, the price at
which such Purchased Asset is transferred by Seller to Buyer on the applicable
Purchase Date, adjusted after the Purchase Date as set forth below. The Purchase
Price as of the Purchase Date for any Purchased Asset shall be an amount
(expressed in dollars) equal to the product obtained by multiplying (i) the
Market Value of such Purchased Asset by (ii) the Advance Rate for such Purchased
Asset, as set forth on the related Confirmation. The Purchase Price of any
Purchased Asset shall be (a) decreased by (x) any amount of Margin Deficit
transferred by Seller to Buyer pursuant to Article 4(a) and applied to the
Purchase Price of such Purchased Asset, (y) the portion of any Principal
Payments on such Purchased Asset that are applied pursuant to Article 5 hereof
to reduce such Purchase Price and (z) any other amounts paid to Buyer by Seller
to reduce such Purchase Price and (b) increased by any Future Funding Advance or
by any other amounts disbursed by Buyer to Seller or to the related borrower on
behalf of Seller with respect to such Purchased Asset to the related borrower on
behalf of Seller with respect to such Purchased Asset; provided, however, that
notwithstanding the foregoing, the Purchase Price with respect to any Mezzanine
Loan shall not exceed Zero Dollars and No/100 ($0).

 

“Purchase Price Debt Yield” shall mean, on any date with respect to any
Purchased Asset, a fraction (expressed as a percentage) (A) the numerator of
which is the Underwritten Net Operating Income of the Underlying Mortgaged
Property for such Purchased Asset, as determined by Buyer in its sole
discretion, and (B) the denominator of which is the outstanding Purchase Price
of such Purchased Asset on such date.

 

“Purchased Asset” shall mean (i) with respect to any Transaction, the Eligible
Asset sold by Seller to Buyer in such Transaction and (ii) with respect to the
Transactions in general, all Eligible Assets sold by Seller to Buyer (other than
Purchased Assets that have been repurchased by Seller).

 

“Purchased Asset Documents” shall mean, with respect to a Purchased Asset, the
documents specified in Schedule II.

 

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

 

“Purchased Asset Schedule” shall mean a schedule of Purchased Assets attached to
each Trust Receipt and Custodial Delivery Certificate delivered in accordance
with the Custodial Agreement.

 

“Purchased Items” shall have the meaning set forth in Article 6(a) of this
Agreement.

 

“Quarterly Reporting Package” shall mean the reporting package described on
Exhibit III-B.

 

“Rating Agency” shall mean any of Fitch, Moody’s, S&P, DBRS, Inc. and Kroll Bond
Rating Agency Inc.

 

 20

 

  

“Register” shall have the meaning set forth in Article 19(b) of this Agreement.

 

“REIT” means a “real estate investment trust” as defined in Sections 856 through
860 of the Code.

 

“Release Letter” shall mean a letter substantially in the form of Exhibit XII
hereto (or such other form as may be acceptable to Buyer).

 

“Remittance Date” shall mean the twentieth (20th) calendar day of each calendar
month, or the immediately succeeding Business Day, if such calendar day shall
not be a Business Day, or such other day as is mutually agreed to by Seller and
Buyer.

 

“Renewal Fee” shall have the meaning set forth in the Fee Letter, which
definition is incorporated herein by reference.

 

“Renewal Period” shall have the meaning set forth in Article 3(i)(i) of this
Agreement.

 

“Repurchase Date” shall mean, with respect to a Purchased Asset, the earliest to
occur of (i) the Outside Repurchase Date, (ii) the date set forth in the
applicable Confirmation or if such Transaction is extended, the date to which it
is extended provided, that the Repurchase Date shall not be extended beyond the
Outside Repurchase Date; (iii) any Early Repurchase Date for such Transaction;
(iv) the Accelerated Repurchase Date, (v) any Mandatory Early Repurchase Date
for such Transaction; and (vi) the date that is two (2) Business Days prior to
the maturity date of such Purchased Asset (subject to extension, if applicable,
in accordance with the related Purchased Asset Documents).

 

“Repurchase Obligations” shall have the meaning set forth thereto in Article
6(a).

 

“Repurchase Price” shall mean, with respect to any Purchased Asset as of any
Repurchase Date or any date on which the Repurchase Price is required to be
determined hereunder, the price at which such Purchased Asset is to be
transferred from Buyer to Seller; such price will be determined in each case as
the sum of the (i) outstanding Purchase Price of such Purchased Asset; (ii) the
accreted and unpaid Price Differential with respect to such Purchased Asset as
of the date of such determination (other than, with respect to calculations in
connection with the determination of a Margin Deficit, accreted and unpaid Price
Differential for the current Pricing Rate Period); (iii) any other amounts due
and owing by Seller to Buyer and its Affiliates pursuant to the terms of this
Agreement with respect to such Purchased Asset as of such date; and (iv) if such
Repurchase Date is not a Remittance Date, any Breakage Costs payable in
connection with such repurchase other than with respect to the determination of
a Margin Deficit.

 

“Requested Exceptions Report” shall have the meaning set forth thereto in
Article 3(c)(vii).

 

“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.

 

 21

 

  

“Reserve Interest Rate” shall mean, with respect to any LIBOR determination
date, the rate per annum that Buyer determines to be either (i) the arithmetic
mean (rounded to the nearest whole multiple of 1/100%) of the one-month or
overnight U.S. dollar lending rates (as applicable) which New York City banks
selected by Buyer are quoting on the relevant LIBOR determination date to the
principal London offices of leading banks in the London interbank market or (ii)
in the event that Buyer can determine no such arithmetic mean, the lowest
one-month or overnight U.S. dollar lending rate (as applicable) which New York
City banks selected by Buyer are quoting on such LIBOR determination date to
leading European banks.

 

“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.

 

“Responsible Officer” shall mean any executive officer of Seller or Guarantor,
as the context may require.

 

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

 

“Sanctions” shall have the meaning set forth in Article 9(b)(xxvii).

 

“SEC” shall have the meaning set forth in Article 24(a) of this Agreement.

 

“Seller” shall mean the entity identified as “Seller” in the Recitals hereto and
such other sellers as may be approved by Buyer in its sole discretion from time
to time.

 

“Senior Mortgage Loans” shall mean whole, performing senior commercial floating
rate mortgage loans.

 

“Servicing Agreement” shall have the meaning set forth in Article 29(b).

 

“Servicing Records” shall have the meaning set forth in Article 29(b).

 

“Servicing Rights” shall mean contractual, possessory or other rights of any
Person to administer, service or subservice any Purchased Assets (or to possess
any Servicing Records relating thereto), including: (i) the rights to service
and/or sub-service the Purchased Assets; (ii) the right to receive compensation
(whether direct or indirect) for such servicing and/or sub-servicing, including
the right to receive and retain the related servicing fee and all other fees
with respect to such Purchased Assets; and (iii) all rights, powers and
privileges incidental to the foregoing, together with all Servicing Records
relating thereto.

 

“Servicing Tape” shall have the meaning specified in Exhibit III-B hereto.

 

 22

 

  

“Significant Modification” shall mean (a) any extension (other than contracted
for extensions in accordance with the terms of any Purchased Asset Documents),
amendment, waiver, termination, rescission, cancellation, release, subordination
or other modification to the monetary (other than waivers of de minimis fees or
costs of less than $25,000 or de minimis reallocations of reserves) or material
non-monetary terms of, or any collateral, guaranty or indemnity for, any
Purchased Asset or Purchased Asset Document (including, without limitation, any
provision related to the amount or timing of any scheduled payment of interest
or principal, the validity, perfection or priority of any security interest, or
the release of any collateral or obligor except with respect to partial releases
of collateral expressly permitted by any Purchased Asset Documents without
lender consent), (b) any sale, transfer, disposition or any similar action with
respect to any collateral for any Purchased Asset (except to the extent required
under the Purchased Asset Documents) or (c) the foreclosure or exercise of any
material right or remedy by the holder of any Purchased Asset or Purchased Asset
Document.

 

With respect to any Purchased Asset that is a Mezzanine Loan, any action that
constitutes a Significant Modification with respect to the related Senior
Mortgage Loan shall constitute a Significant Modification with respect to such
Purchased Asset.

 

“Single Purpose Entity” shall mean any corporation, limited partnership or
limited liability company that, since the date of its formation and at all times
on and after the date hereof, has complied with and shall at all times comply
with the provisions of Article 12 of this Agreement.

 

“SIPA” shall have the meaning set forth in Article 24(a) of this Agreement.

 

“Standby Fee” shall have the meaning set forth in the Fee Letter, which
definition is incorporated herein by reference.

 

“Subsidiary” shall mean, as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise qualified, all references to a “Subsidiary” or
to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries
of Seller and/or Guarantor.

 

“Substitute Rate” shall mean any published index now or hereafter generally
adopted by Buyer as a replacement for LIBOR for variable rate loans or
repurchase facilities, as determined by Buyer in its sole discretion and applied
by Buyer to other similarly situated sellers under similar repurchase facilities
with Buyer, provided that in no event shall such Substitute Rate ever be less
than zero percent.

 

“Substitute Rate Applicable Spread” shall mean, in connection with the
conversion of any Transaction to a Substitute Rate Transaction, an amount equal
to the difference (expressed as a number of basis points) between (a) the LIBOR
Rate plus the Applicable Spread on the date the LIBOR Rate was last applicable
to the outstanding Transactions prior to such conversion and (b) the Substitute
Rate on the date that the LIBOR Rate was last applicable to the outstanding
Transactions prior to such conversion; provided, however, in no event shall such
difference be a negative number.

 

 23

 

  

“Substitute 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 Substitute Rate.

 

“Supplemental Price Differential” shall have the meaning set forth in the Fee
Letter, which definition is incorporated herein by reference.

 

“Table Funded Purchased Asset” shall mean a Purchased Asset which is sold to
Buyer simultaneously with the origination or acquisition thereof, which
origination or acquisition is financed with the Purchase Price, pursuant to
Seller’s request, paid directly to a Title Company or other settlement agent, in
each case, approved by Buyer, for disbursement in connection with such
origination or acquisition. A Purchased Asset shall cease to be a Table Funded
Purchased Asset after Custodian has delivered a Trust Receipt to Buyer
certifying its receipt of the Purchased Asset File therefor.

 

“Table Funding Fee” shall have the meaning set forth in the Fee Letter, which
definition is incorporated herein by reference.

 

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

 

“Title Company” shall mean a nationally-recognized title insurance company
acceptable to Buyer.

 

“Title Policy” shall mean an American Land Title Association (ALTA) lender’s
title insurance policy or a comparable form of lender’s title insurance policy
(or escrow instructions binding on the Title Company and irrevocably obligating
the Title Company to issue such title insurance policy, a title policy
commitment or pro-forma “marked up” at the closing of the related Purchased
Asset and countersigned by the Title Company or its authorized agent) as adopted
in the applicable jurisdiction.

 

“Transaction” shall mean a Transaction, as specified in Article 1 of this
Agreement.

 

“Transaction Documents” shall mean, collectively, this Agreement, any applicable
Schedules, Exhibits and Annexes to this Agreement, the Guarantee Agreement, the
Custodial Agreement, each Servicing Agreement, the Depository Agreement, the
Pledge and Security Agreement, the Fee Letter, all Confirmations and assignment
documentation executed pursuant to this Agreement in connection with specific
Transactions, each of the foregoing as may be amended, restated, supplemented or
modified from time-to-time.

 

“Transferee” shall have the meaning set forth in Article 19(a) hereof. 

 

 24

 

  

“Transferor” shall mean the seller of an Asset under a Purchase Agreement that
is not an Affiliate of Seller.

 

“Trust Receipt” shall mean a trust receipt issued by Custodian, or, in the case
of a Table Funded Purchased Asset, Bailee, to Buyer substantially in the form
required under the Custodial Agreement or the Bailee Agreement.

 

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

 

“Underlying Mortgaged Property” shall mean: (i) in the case of a Senior Mortgage
Loan, the real property securing such Senior Mortgage Loan; and (ii) in the case
of a Mezzanine Loan, the real property that is owned by the Person the equity of
which is pledged as collateral security for such Mezzanine Loan.

 

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

 

“Underwriting Guidelines” shall mean the underwriting guidelines attached as
Exhibit XVI hereto.

 

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

 

“Underwritten Net Operating Income” shall mean, on any date with respect to any
Purchased Asset, the underwritten net operating income from the Underlying
Mortgaged Property securing such Purchased Asset as of such date, as determined
by Buyer in its sole discretion based on information provided by Seller.

 

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

 

“USA Patriot Act” shall have the meaning ascribed to such term in the definition
of “Prescribed Laws”.

 

“U.S. Tax Compliance Certificate” shall have the meaning set forth in Article
14(k)(B)(3) of this Agreement. 

 

 25

 

  

All references to articles, schedules and exhibits are to articles, schedules
and exhibits in or to this Agreement unless otherwise specified. The words
“hereof,” “herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles. References to “good faith” in this Agreement shall mean “honesty in
fact in the conduct or transaction concerned”.

 

Article 3.
INITIATION; CONFIRMATION; TERMINATION; FEES

 

(a)          Conditions Precedent to Initial Transaction. Buyer’s agreement to
enter into the initial Transaction hereunder is subject to the satisfaction,
immediately prior to or concurrently with the making of such Transaction, of the
condition precedent that Buyer has received from Seller all of the following
documents, each of which shall be satisfactory in form and substance to Buyer
and its counsel:

 

(i)        Transaction Documents. The Transaction Documents duly executed by the
parties thereto (including all exhibits thereto).

 

(ii)       Power of Attorney. The power of attorney, duly executed by Seller,
substantially in the form set forth on Exhibit IV hereto.

 

(iii)      Consents. Any and all consents and waivers of Seller applicable to
Seller or to the Purchased Assets;

 

(iv)      Security Interest. UCC financing statements for filing in each of the
UCC filing jurisdictions described on Exhibit X hereto, each naming Seller or
Pledgor as applicable as “Debtor” and Buyer as “Secured Party” and adequately
describing as “Collateral”, with respect to Seller, as “all assets of Seller,
whether now owned or existing or hereafter acquired or arising” and, with
respect to Pledgor, all of the items set forth in the definition of Collateral
in the Pledge and Security Agreement, together with any other documents
necessary or requested by Buyer to perfect the security interests granted by
Seller in favor of Buyer under this Agreement or any other Transaction Document.

 

(v)       Underwriting Guidelines. A certified copy of the Underwriting
Guidelines, which shall be in form and substance satisfactory to Buyer.

 

(vi)      Opinions of Counsel. Opinions of outside counsel to Seller, Pledgor
and Guarantor, reasonably acceptable to Buyer (including, but not limited to,
those relating to enforceability, bankruptcy safe harbor, corporate matters,
applicability of the Investment Company Act of 1940 to Seller, Pledgor or
Guarantor, and security interests).

 

(vii)     Organizational Documents. Good standing certificates and certified
copies of the certificate of incorporation, memorandum and articles of
association, charters and by-laws (or equivalent documents) of Seller, Pledgor
and Guarantor and of all corporate or other authority for Seller and Guarantor
with respect to the execution, delivery and performance of the Transaction
Documents and each other document to be delivered by Seller and Guarantor from
time to time in connection herewith (and Buyer may conclusively rely on such
certificate until it receives notice in writing from Seller to the contrary).

 

 26

 

  

(viii)    Fees and Expenses. Buyer shall have received payment from Seller of an
amount equal to the amount of actual costs and expenses, including, without
limitation, the reasonable fees and expenses of counsel to Buyer, incurred by
Buyer in connection with the development, preparation and execution of this
Agreement, the other Transaction Documents and any other documents prepared in
connection herewith or therewith.

 

(ix)      Other Documents. Such other documents, documentation and legal
opinions as Buyer may reasonably require.

 

(b)          Due Diligence Review. Buyer shall have the right to review, as
described in Exhibit VI hereto, the Eligible Assets that Seller proposes to sell
to Buyer in any Transaction and to conduct its own due diligence investigation
of such Eligible Assets as Buyer determines (“Pre-Purchase Due Diligence”).
Buyer shall be entitled to make a determination, in the exercise of its sole
discretion, that, in the case of a Transaction, it shall or shall not purchase
any or all of the assets proposed to be sold to Buyer by Seller. Buyer shall
inform Seller of its approval of the deliverables required in accordance with
Exhibit VI attached hereto. On the Purchase Date for the Transaction, which
shall occur upon Buyer’s and Seller’s execution of a Confirmation with respect
to an Eligible Asset, the Eligible Assets shall be transferred to Buyer against
the transfer of the Purchase Price to an account of Seller. Upon the approval by
Buyer of a particular proposed Transaction, Buyer shall deliver to Seller a
signed copy of the related Confirmation described in clause 3(c)(v) below, on or
before the scheduled Purchase Date of the underlying proposed Transaction, which
shall serve as evidence that all conditions relating to the proposed
Transactions (as set forth in Article 3(a) or 3(c) or Exhibit VI, or elsewhere,
as applicable) have been satisfied or waived by Buyer.

 

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

 

(i)        Seller shall give Buyer no less than ten (10) Business Days’ prior
written notice of each Transaction (including the initial Transaction), which
notice shall describe the terms of the Transaction and the Purchased Assets;

 

(ii)       The sum of (A) the unpaid Purchase Price for all prior outstanding
Transactions and (B) the requested Purchase Price for the pending Transaction,
in each case, shall not exceed the Maximum Facility Amount;

 

(iii)      No Market Disruption Event has occurred and is continuing, no Margin
Deficit shall exist, and no default or Event of Default has occurred and is
continuing under this Agreement or any other Transaction Document;

 

 27

 

  

(iv)     No circumstance shall exist or event have occurred resulting in a
Material Adverse Effect with respect to Seller, Pledgor, or Guarantor;

 

(v)      Seller and Buyer shall have executed a Confirmation for such proposed
Transaction;

 

(vi)     Buyer shall have (i) determined, in its sole discretion, that the Asset
proposed to be sold to Buyer by Seller in such Transaction is an Eligible Asset,
(ii) satisfactorily completed its “Know Your Customer” and OFAC diligence (as to
the related Mortgagor, guarantor and all other related parties, as determined by
Buyer), (iii) determined conformity to the terms of the Transaction Documents
and Buyer’s internal credit and underwriting criteria, and (iv) obtained
internal credit approval, to be granted or denied in Buyer’s sole discretion,
for the inclusion of such Eligible Asset as a Purchased Asset in a Transaction,
without regard for any prior credit decisions by Buyer or any Affiliate of
Buyer, and with the understanding that Buyer shall have the absolute right to
change any or all of its internal underwriting criteria at any time, without
notice of any kind to Seller;

 

(vii)    Seller shall have delivered to Buyer a list of all exceptions to the
representations and warranties relating to the Eligible Asset and any other
eligibility criteria for such Eligible Asset (the “Requested Exceptions
Report”);

 

(viii)   both immediately prior to the requested Transaction and also after
giving effect thereto and to the intended use thereof, the representations and
warranties made by Seller in each of Exhibit V and Article 9 shall be true,
correct and complete on and as of such Purchase Date in all respects with the
same force and effect as if made on and as of such date (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date), subject to such exceptions specified
in any Requested Exceptions Report that has been approved by Buyer;

 

(ix)      subject to Buyer’s right to perform one or more due diligence reviews
pursuant to Article 28, Buyer shall have completed its due diligence review of
the Purchased Asset File, and such other documents, records, agreements,
instruments, mortgaged properties or information relating to such Purchased
Asset as Buyer in its sole discretion deems appropriate to review, including,
without limitation, all external legal due diligence any due diligence relating
to lending licensing requirements which may impact Buyer, and such review shall
be satisfactory to Buyer in its sole discretion;

 

(x)       with respect to any Eligible Asset to be purchased hereunder on the
related Purchase Date that is not primarily serviced by the Primary Servicer,
Seller shall have provided to Buyer a copy of the related Servicing Agreement,
certified as a true, correct and complete copy of the original, fully executed
by Seller and the servicer named in the related Servicing Agreement;

 

(xi)      Seller shall have directed Servicer to remit all payments into the
Depository Account and to service such payments in accordance with the
provisions of this Agreement;

 

 28

 

  

(xii)     Seller shall have paid to Buyer all amounts that are due and payable
under this Agreement at the time of such Transaction, including, without
limitation, any increased costs that are imposed on Seller pursuant to Article
14, all reasonable legal fees and expenses of outside counsel and the reasonable
out-of-pocket costs and expenses actually incurred by Buyer in connection with
the entering into of any Transaction hereunder, including, without limitation,
costs associated with due diligence, recording or other administrative expenses
necessary or incidental to the execution of any Transaction hereunder, which
amounts, at Buyer’s option, may be withheld from the sale proceeds of any
Transaction hereunder;

 

(xiii)    Buyer shall have reasonably determined that the introduction of, or a
change in, any Requirement of Law or in the interpretation or administration of
any Requirement of Law including without limitation changes in any Reserve
Requirements and any other increase in cost to Buyer applicable to Buyer has not
made it unlawful or impracticable, and no Governmental Authority shall have
asserted that it is unlawful, for Buyer to enter into the Transaction;

 

(xiv)    Seller shall have taken such other action as Buyer shall have
reasonably requested in order to transfer the Purchased Assets pursuant to this
Agreement and to perfect all security interests granted under this Agreement or
any other Transaction Document in favor of Buyer with respect to the Purchased
Assets;

 

(xv)     If such Eligible Asset was acquired by Seller from a Person that is not
an Affiliate of Seller, Seller shall have disclosed to Buyer the acquisition
cost of such Eligible Asset (including therein reasonable supporting
documentation required by Buyer, if any);

 

(xvi)    Buyer shall have received all such other and further documents,
documentation and legal opinions as Buyer in its reasonable discretion shall
reasonably require;

 

(xvii)   Buyer shall have received (i) other than with respect to a Table Funded
Purchased Asset, from Custodian on each Purchase Date an Asset Schedule and
Exception Report (as defined in the Custodial Agreement) with respect to each
Purchased Asset, dated the Purchase Date, duly completed and with exceptions
acceptable to Buyer in its sole discretion in respect of Eligible Assets to be
purchased hereunder on such Business Day; or (ii) a Bailee Letter from an
Acceptable Attorney identifying the applicable Release Letter being held on
behalf of Buyer;

 

(xviii)  Unless waived by Buyer in its sole discretion, as of the applicable
Purchase Date for such Eligible Asset, the Transaction would not cause the
Purchase Price of the applicable Eligible Asset or the aggregate Purchase Price
of all Purchased Assets after giving effect to the applicable Transaction, in
either such case, to violate any Concentration Limit;

 

(xix)     Unless waived by Buyer in its sole discretion, the Advance Rate
relating to such Eligible Asset shall not exceed the Maximum Advance Rate and
the Buyer’s LTV for such Eligible Asset shall be no greater than fifty-five
(55%) as of the applicable Purchase Date;

 

 29

 

  

(xx)      Buyer shall have received from Seller the Draw Fee related to such
Eligible Asset in accordance with the terms and provisions of the Fee Letter;
and

 

(xxi)     With respect to any Eligible Asset to be purchased hereunder on the
related Purchase Date that is a Mezzanine Loan, where the servicer of the Senior
Mortgage Loan is not the Primary Servicer, Seller shall have provided to Buyer a
copy of the related Servicing Agreement, certified as a true, correct and
complete copy of the original, together with a Servicer Notice, fully executed
by Seller and such servicer.

 

(d)         Transfer of Purchased Assets; Servicing Rights. Upon the
satisfaction of all conditions set forth in Articles 3(a), 3(b) and 3(c), Seller
shall sell, transfer, convey and assign to Buyer on a servicing released basis
all of Seller’s right, title and interest in and to each Purchased Asset,
together with all related Servicing Rights, and Buyer shall pay the Purchase
Price to an account of Seller. To the extent any additional limited liability
company is formed by division of Seller (and without prejudice to Article
10(b)), Seller shall cause any such additional limited liability company to
sell, transfer, convey and assign to Buyer on a servicing released basis all of
such additional limited liability company’s right, title and interest in and to
the Purchased Asset, together with all related Servicing Rights in the same
manner and to the same extent as the sale, transfer, conveyance and assignment
by Seller on the Closing Date of all of Seller’s right, title and interest in
and to the Purchased Asset, together with all related Servicing Rights. 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 the Pricing Rate Determination Date
for each of the next succeeding Pricing Rate Periods for such Transaction. Buyer
or its agent shall determine in accordance with the terms of this Agreement the
Pricing Rate on each Pricing Rate Determination Date for the related Pricing
Rate Period in Buyer’s sole discretion, and notify Seller of such rate for such
period each such Pricing Rate Determination Date.

 

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

 

(f)           Early Repurchase Date; Mandatory Repurchases.

 

(i)          Seller shall be entitled to terminate a Transaction on demand and
repurchase the Purchased Asset subject to a Transaction on any Business Day
prior to the Repurchase Date (an “Early Repurchase Date”) upon satisfaction of
the following conditions:

 

(A)         No later than two (2) Business Days prior to the proposed Early
Repurchase Date, Seller notifies Buyer in writing of its intent to terminate
such Transaction and repurchase such Purchased Asset, setting forth the proposed
Early Repurchase Date and identifying with particularity the Purchased Asset to
be repurchased on such Early Repurchase Date,

 

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(B)         on such Early Repurchase Date, Seller pays to Buyer an amount equal
to the sum of (x) the Repurchase Price for the applicable Purchased Asset, (y)
any other amounts due and payable under this Agreement (including, without
limitation, Article 14(f) of this Agreement) with respect to such Purchased
Asset against transfer to Seller or its agent of the Purchased Assets,

 

(C)         no Default, Event of Default or Margin Deficit (unless cured by the
related repurchase in accordance with the terms and provisions of the
Transaction Documents) shall be continuing or would occur or result from such
early repurchase;

 

(D)         on such Early Repurchase Date, Seller pays any Exit Fee which may be
due and payable in connection with the repurchase of such Purchased Asset in
accordance with the terms and conditions of the Fee Letter.

 

(ii)          No repurchase in whole or in part, and no partial reduction of the
Purchase Price of any Purchased Asset that is a Senior Mortgage Loan may be made
unless the Purchased Asset that is the related Mezzanine Loan (if any) is also
repurchased in whole. If any repurchase of a Purchased Asset that is a Senior
Mortgage Loan is required pursuant to this Article 3(f), Seller shall also
repurchase the related Mezzanine Loan (if any) in full.

 

(iii)         In addition to any other rights and remedies of Buyer under any
Transaction Document, upon the occurrence of a Mandatory Early Repurchase Event,
Seller shall, in accordance with the procedures set forth in Article
3(f)(i)(B)-(D), and Article 3(h), repurchase the applicable Purchased Asset on
the applicable date described in the following sentence. Seller shall perform
its repurchase obligations under this Article 3(f)(iii) as follows: (A) within
two (2) Business Days after Seller’s Knowledge of the occurrence of such
Mandatory Early Repurchase Event, Seller shall notify Buyer of such Mandatory
Early Repurchase Event, and (B) within two (2) Business Days after Buyer’s
receipt of Seller’s notice in accordance with the preceding clause (A) (the
“Mandatory Early Repurchase Date”), Seller shall make a payment to Buyer of all
of Seller’s available cash on hand, up to a maximum payment amount equal to the
total amount required to complete the repurchase of the applicable Purchased
Asset, provided that, if Seller does not have sufficient available cash on hand
to complete the repurchase of the applicable Purchased Asset as required
hereunder, then Seller shall: (1) make a payment to Buyer of all available cash
on hand, (2) on or before the Mandatory Early Repurchase Date, communicate to
Buyer Seller’s plan for funding the balance required to complete the repurchase
of the applicable Purchased Asset, which plan shall be subject to Buyer’s
approval in its sole discretion, and (3) provided that Buyer has approved of
Seller’s plan for funding the balance, fund the balance on or before the date
that is three (3) Business Days after the Mandatory Early Repurchase Date.

 

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(g)          Indemnification. Seller shall indemnify Buyer and hold Buyer
harmless from any actual out-of-pocket loss, cost or expense (including, without
limitation, attorneys’ fees and disbursements of outside counsel) that Buyer may
sustain or incur as a consequence of (i) default by Seller in repurchasing any
Purchased Asset on the proposed Early Repurchase Date, after Seller has given
written notice in accordance with Article 3(f), (ii) any payment of the
Repurchase Price on any day other than a Remittance Date, including Breakage
Costs, (iii) a default by Seller in selling Eligible Assets after Seller has
notified Buyer of a proposed Transaction and Buyer has agreed in writing to
purchase such Eligible Assets in accordance with the provisions of this
Agreement, (iv) Buyer’s enforcement of the terms of any of the Transaction
Documents, (v) any actions taken to perfect or continue any Lien created under
any Transaction Documents, and/or (vi) Buyer entering into any of the
Transaction Documents or owning any Purchased Item. A certificate as to such
costs, losses, damages and expenses, setting forth the calculations therefor
shall be submitted promptly by Buyer to Seller in writing and shall be prima
facie evidence of the information set forth therein, absent manifest error.

 

(h)          Repurchase. On the Repurchase Date for any Transaction, termination
of the Transaction will be effected by transfer to Seller or its agent of the
Purchased Assets being repurchased and any Income in respect thereof received by
Buyer (and not previously credited or transferred to, or applied to the
obligations of, Seller pursuant to Article 5 of this Agreement) against the
simultaneous payment of the Repurchase Price to an account of Buyer.

 

(i)           Outside Repurchase Date. This Agreement shall terminate on the
Outside Repurchase Date.

 

(i)          Notwithstanding the definition of Outside Repurchase Date herein,
upon written request of Seller prior to the then current Outside Repurchase
Date, provided that all of the conditions listed in clause (ii) below
(collectively, the “Outside Repurchase Date Renewal Conditions”) shall have been
satisfied, Seller may extend the Outside Repurchase Date for one (1) additional
one-year period (a “Renewal Period”) by giving notice to Buyer of such
extension.

 

(ii)          For purposes of this Article 3(i), the Outside Repurchase Date
Renewal Conditions shall have been satisfied if:

 

(A)         Seller shall have given Buyer written notice of Seller’s request to
extend the Outside Repurchase Date not less than thirty (30) calendar days
prior, and no more than one hundred eighty (180) calendar days prior to the
Outside Repurchase Date;

 

(B)         Seller shall have paid to Buyer the Renewal Fee in accordance with
the terms and provisions of the Fee Letter;

 

(C)         no Material Adverse Effect, Margin Deficit, monetary Default,
material non-monetary Default, or Event of Default under this Agreement shall
have occurred and be continuing as of the date notice is given and as of the
date of the originally scheduled Outside Repurchase Date;

 

(D)         Seller shall have paid to Buyer the Minimum Aggregate Draw Fee.

 

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(j)           Future Funding Advance. (i) Subject to Article 4, at any time
prior to the Repurchase Date, in the event a future funding is made or is to be
made by Seller pursuant to the Purchased Asset Documents for a Purchased Asset,
Seller may submit to Buyer a request that Buyer transfer cash to Seller in an
amount not to exceed the Maximum Advance Rate multiplied by the amount of such
future funding (a “Future Funding Advance”), which Future Funding Advance shall
increase the outstanding Purchase Price for such Purchased Asset; provided,
however, that Seller may only submit a request for a Future Funding Advance one
(1) time per calendar month per Purchased Asset. Buyer’s agreement to make any
Future Funding Advance shall be in Buyer’s sole discretion and in any case is
subject to the satisfaction of the following conditions precedent, both
immediately prior to making such Future Funding Advance and also after giving
effect to the consummation thereof:

 

(A)         no Margin Deficit, Default, or Event of Default has occurred and is
continuing or would result from the funding of such Future Funding Advance;

 

(B)         the funding of the Future Funding Advance would not cause the
aggregate outstanding Purchase Price for all Purchased Assets to exceed the
Maximum Facility Amount;

 

(C)         the Future Funding Advance would not cause the Purchase Price of the
applicable Purchased Asset or the aggregate Purchase Price of all Purchased
Assets, in either such case, to violate any Concentration Limit;

 

(D)         the amount of the Future Funding Advance is no less than $1,000,000
(except the final advance with respect to a subject Purchased Asset);

 

(E)         Seller shall have demonstrated to Buyer’s satisfaction that all
conditions to the future funding under the Purchased Asset Documents have been
satisfied; and

 

(F)         Buyer shall have satisfactorily completed all applicable credit
approval requirements and the Future Funding Due Diligence.

 

(ii)          Buyer shall have the right, as described in Exhibit XVI, to
conduct an additional due diligence investigation of the related Purchased Asset
as Buyer determines in its sole discretion (“Future Funding Due Diligence”).

 

(iii)         On the Future Funding Date, which shall occur following the final
approval of the Future Funding Advance, Buyer shall transfer cash to Seller as
provided in this Article 3(j) (and in accordance with the wire instructions
provided by Seller in such request). Upon approval by Buyer of a particular
Future Funding Advance pursuant to this Article 3(j), Buyer and Seller shall
modify the existing Confirmation for the applicable Transaction to set forth the
Future Funding Date, the new Advance Rate, the outstanding Purchase Price and
Buyer’s LTV for such Purchased Asset and any other modifications to the terms
set forth on the existing Confirmation.

 

(iv)         Notwithstanding anything to the contrary herein, Buyer shall not be
obligated to make any Future Funding Advance.

 

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Article 4.
MARGIN MAINTENANCE

 

(a)        Buyer may, at its option in its sole discretion in accordance with
the last sentence of this Article 4(a), determine if a Margin Deficit Event has
occurred, at any time and from time to time. If a Margin Deficit Event then
exists that results in a Margin Deficit, then Buyer may by notice to Seller in
the form of Exhibit VII (a “Margin Deficit Notice”) require Seller to make a
cash payment in reduction of the outstanding Purchase Price for such Purchased
Asset such that, after giving effect to such payment, no Margin Deficit shall
exist with respect to the related Purchased Asset. Seller shall perform its
payment obligations under this Article 4(a) as follows: within two (2) Business
Days after Seller’s receipt of the Margin Deficit Notice from Buyer (the “Margin
Payment Date”), Seller shall make a payment to Buyer of all of Seller’s
available cash on hand, up to a maximum payment amount equal to the total amount
required to be paid by Seller to cure the Margin Deficit with respect to the
applicable Purchased Asset, provided that, if Seller does not have sufficient
available cash on hand to completely cure such Margin Deficit as required under
the second sentence of this Article 4(a), then Seller shall: (A) make a payment
to Buyer of all available cash on hand, (B) on or before the Margin Payment
Date, communicate to Buyer Seller’s plan for funding the balance required to
completely cure such Margin Deficit as required under the second sentence of
this Article 4(a), which plan shall be subject to Buyer’s approval in its sole
discretion, and (C) provided that Buyer has approved of Seller’s plan for
funding the balance, fund the balance on or before the date that is three (3)
Business Days after the Margin Payment Date. In making any determination that a
Margin Deficit Event has occurred, Buyer shall utilize substantially similar
methodologies to those that Buyer utilizes under similar repurchase facilities
with similarly-situated sellers and the purchased assets under such repurchase
facilities.

 

(b)       The failure of Buyer, on any one or more occasions, to exercise its
rights hereunder, shall not change or alter the terms and conditions to which
this Agreement is subject or limit the right of Buyer to do so at a later date.
Seller and Buyer each agree that a failure or delay by Buyer to exercise its
rights hereunder shall not limit or waive Buyer’s rights under this Agreement or
otherwise existing by law or in any way create additional rights for Seller.

 

Article 5.
INCOME PAYMENTS AND PRINCIPAL PAYMENTS

 

(a)       The Depository Account shall be established at the Depository and
shall be subject to the Depository Agreement which shall be executed and
delivered concurrently with the execution and delivery of this Agreement.
Pursuant to the Depository Agreement, Buyer shall have sole dominion and control
over the Depository Account. Seller shall cause all Income in respect of the
Purchased Assets, as well as any interest received from the reinvestment of such
Income, to be deposited into the Depository Account. In furtherance of the
foregoing, Seller shall cause Primary Servicer to remit to the Depository
Account all Income received in respect of the Purchased Assets within two (2)
Business Days of receipt of properly identified and available funds. All Income
in respect of the Purchased Assets shall be deposited directly into, or, if
applicable, remitted directly from the applicable underlying collection account
to, the Depository Account.

 

 34

 

  

(i)       If a Mortgagor, servicer, paying agent, or similar Person with respect
to the Purchased Asset remits any Income or other amounts with respect to a
Purchased Asset to Seller or any Affiliate of Seller rather than directly to
Primary Servicer, Seller shall, or shall cause such Affiliate to, (A) deliver a
re-direction letter in form and substance reasonably acceptable to Buyer to the
applicable Mortgagor, servicer, paying agent, or similar Person with respect to
the Purchased Asset and make other commercially reasonable efforts to cause such
Mortgagor, servicer, paying agent, or similar Person with respect to the
Purchased Asset to remit such amounts directly to the Primary Servicer and (B)
deposit in the Depository Account any such amounts within one (1) Business Day
of Seller’s (or its Affiliate’s) receipt thereof.

 

(b)          So long as no Event of Default shall have occurred and be
continuing, all Income on deposit in the Depository Account in respect of the
Purchased Assets during each Collection Period shall be applied on the related
Remittance Date as follows, and all unscheduled Principal Payments on deposit in
the Depository Account at any time shall be applied on or before the second
(2nd) day immediately following the date any such unscheduled Principal Payment
was deposited in the Depository Account as follows:

 

(i)         first, (a) to Custodian for the payment of the fees payable to
Custodian pursuant to the Custodial Agreement, then (b) to the Depository
pursuant to the Depository Agreement and then (c) to the Servicer for payment of
the fees payable and other amounts owing to Servicer pursuant to the Servicing
Agreement (to the extent not withheld from Income deposited into the Depository
Account);

 

(ii)       second, to Buyer, an amount equal to any other amounts then due and
payable to Buyer or its Affiliates under any Transaction Document (including any
accrued and unpaid Price Differential with respect to the Purchased Assets, and
outstanding Margin Deficits); and

 

(iii)      third, if a Principal Payment in respect of any Purchased Asset was
received, to Buyer an amount equal to the product of the amount of such
Principal Payment, multiplied by the applicable Advance Rate, to be paid to
Buyer and applied by Buyer to reduce the Purchase Price of such Purchased Asset;
and

 

(iv)      fourth, to Seller, the remainder, if any.

 

If, on any Remittance Date, the amounts deposited in the Depository Account
shall be insufficient to make the payments required under (i) through (iii)
above of this Article 5(b), and Seller does not otherwise make such payments on
such Remittance Date, the same shall constitute an Event of Default hereunder.

 

(c)          If an Event of Default shall have occurred and be continuing, all
Income (including, without limitation, any Principal Payments or any other
amounts received, without regard to their source) on deposit in the Depository
Account in respect of the Purchased Assets shall be applied as determined in
Buyer’s sole discretion pursuant to Article 13(b)(iii).

 

(d)          If the amounts remitted to Buyer as provided in Articles 5(b) and
5(c) are insufficient to pay all amounts due and payable from Seller to Buyer
under this Agreement or any Transaction Document, whether due to the occurrence
of an Event of Default or otherwise, Seller shall remain liable to Buyer for
payment of all such amounts and shall pay such amounts when due.

 

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Article 6.
SECURITY INTEREST

 

(a)          Buyer and Seller intend that the Transactions hereunder be sales to
Buyer of the Purchased Assets and not loans from Buyer to Seller secured by the
Purchased Assets. However, in order to preserve Buyer’s rights under this
Agreement in the event that a court or other forum recharacterizes the
Transactions hereunder as loans and as security for the performance by Seller of
all of Seller’s obligations to Buyer under the Transaction Documents and the
Transactions entered into hereunder, or in the event that a transfer of a
Purchased Asset is otherwise ineffective to effect an outright transfer of such
Purchased Asset to Buyer, Seller hereby assigns, pledges and grants a security
interest in all of its right, title and interest in, to and under the Purchased
Items (as defined below) to Buyer to secure the payment of the Repurchase Price
on all Transactions to which Seller is a party and all other amounts owing by
Seller to Buyer hereunder, including, without limitation, amounts owing pursuant
to Article 27, and under the other Transaction Documents, and to secure the
obligation of Seller or its designee to service the Purchased Assets in
conformity with Article 29 and any other obligation of Seller to Buyer under the
Transaction Documents and the Transactions entered into hereunder (collectively,
the “Repurchase Obligations”). Seller hereby acknowledges and agrees that each
Purchased Asset serves as collateral for Buyer under this Agreement and that
Buyer has the right, upon the occurrence and continuance of an Event of Default,
to realize on any or all of the Purchased Assets in order to satisfy the
Seller’s obligations hereunder. Seller agrees to update internal registers,
books and records (including, without limitation, to mark its computer records
and tapes) to reflect and evidence the interests granted to Buyer hereunder. All
of Seller’s right, title and interest in, to and under each of the following
items of property, whether now owned or hereafter acquired, now existing or
hereafter created and wherever located, is hereinafter referred to as the
“Purchased Items”:

 

(i)        the Purchased Assets and all “securities accounts” (as defined in
Section 8-501(a) of the UCC) to which any or all of the Purchased Assets are
credited;

 

(ii)       any cash or cash equivalents delivered to Buyer in accordance with
Article 4(a).

 

(iii)      the Purchased Asset Documents, Servicing Agreements, Servicing
Records, Servicing Rights, all servicing fees relating to the Purchased Assets,
insurance policies relating to the Purchased Assets, and collection and escrow
accounts and letters of credit relating to the Purchased Assets;

 

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

 

 36

 

  

(v)       any other items, amounts, rights or properties transferred or pledged
by Seller to Buyer under any of the Transaction Documents; and

 

(vi)      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.

 

(b)          Intentionally omitted.

 

(c)          The security interest of Buyer in the Purchased Items shall
terminate only upon termination of Seller’s obligations under this Agreement,
and the documents delivered in connection herewith and therewith and the other
Transaction Documents, including, for the avoidance of doubt, Seller
repurchasing each Purchased Asset. For the avoidance of doubt, Buyer’s security
interest in the Purchased Items shall not terminate upon Buyer’s determination
of the Market Value of any Purchased Asset to be zero. Upon such termination,
Buyer shall (i) deliver to Seller such UCC termination statements and other
release documents as may be commercially reasonable, (ii) return the Purchased
Assets to Seller and reconvey the Purchased Items to Seller, and (iii) release
its security interest in the Purchased Items. For purposes of the grant of the
security interest pursuant to this Article 6, this Agreement shall be deemed to
constitute a security agreement under the New York Uniform Commercial Code (the
“UCC”). Buyer shall have all of the rights and may exercise all of the remedies
of a secured creditor under the UCC. In furtherance of the foregoing, (A) Buyer,
at Seller’s sole cost and expense, as applicable, shall cause to be filed in
such locations as may be necessary to perfect and maintain perfection and
priority of the security interest granted hereby, UCC financing statements and
continuation statements (collectively, “Filings”), and shall forward copies of
such Filings to Seller upon completion thereof, 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 (including marking its records and files to evidence the
interests granted to Buyer hereunder). Seller hereby authorizes Buyer to file a
UCC financing statement naming Seller as debtor and Buyer as secured party and
describing the collateral covered thereby as “all Purchased Items, as defined
under that certain Uncommitted Master Repurchase and Securities Contract
Agreement dated as of December 12, 2018 by and between Debtor and Secured Party,
now owned or hereafter acquired”.

 

(d)          Seller hereby pledges to Buyer as security for the performance by
Seller of the Repurchase Obligations and hereby grants to Buyer a first priority
security interest in all of Seller’s right, title and interest in and to the
Depository Account and all amounts and property from time to time on deposit
therein and all replacements, substitutions or distributions on or proceeds,
payments and profits of, and records and files relating to, the Depository
Account.

 

Article 7.
PAYMENT, TRANSFER AND CUSTODY

 

(a)          On the Purchase Date for each Transaction, (i) ownership of the
Purchased Asset shall be transferred to Buyer or its designee (including any
Custodian) against the simultaneous payment of the Purchase Price in immediately
available funds to an account of Seller or an Acceptable Attorney pursuant to an
escrow letter or other undertaking approved by Buyer, in its sole discretion
specified in the Confirmation relating to such Transaction and (ii) Seller
hereby sells, transfers, conveys and assigns to Buyer on a servicing-released
basis all of Seller’s right, title and interest in and to such Purchased Asset,
together with all related Servicing Rights. Subject to this Agreement, Seller
may sell to Buyer, repurchase from Buyer and re-sell Eligible Assets to Buyer,
but may not substitute other Eligible Assets for Purchased Assets.

 

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(b)          Seller shall:

 

(i)        with respect to each Purchased Asset that is not a Table Funded
Purchased Asset, (A) not later than 1:00 p.m. (New York time) on the Business
Day prior to the related Purchase Date, deliver and release to Custodian (with a
copy to Buyer), the Purchased Asset Documents together with any other
documentation in respect of such Purchased Asset requested by Buyer, in Buyer’s
sole discretion, and (B) on the Purchase Date, cause Custodian to deliver a
Trust Receipt confirming receipt of such Purchased Asset Documents; and

 

(ii)       with respect to each Table Funded Purchased Asset, (A) not later than
1:00 p.m. (New York time) on the Purchase Date, deliver or cause Bailee to
deliver to Buyer, by electronic transmission, a true and complete copy of the
related Mortgage Note with assignment in blank, loan agreement, Mortgage, Title
Policy and executed Bailee Agreement, (B) not later than 1:00 p.m. (New York
time) on the third (3rd) Business Day following the Purchase Date, deliver or
cause Bailee to deliver and release to Custodian (with a copy to Buyer), the
Purchased Asset Documents and any other documentation in respect of such
Purchased Asset requested by Buyer, in its sole discretion, (C) not later than
two (2) Business Days following receipt of such Purchased Asset Documents by
Custodian, cause Custodian to deliver a Trust Receipt confirming such receipt,
and (D) on or prior to the Purchase Date, pay to Buyer the Table Funding Fee;

 

provided that if Seller cannot deliver, or cause to be delivered, any of the
original Purchased Asset Documents required to be delivered as originals
(excluding the Mortgage Note and the Assignment of Mortgage, originals of which
must be delivered at the time required under the provisions above), Seller shall
deliver a photocopy thereof and an officer’s certificate of Seller certifying
that such copy represents a true and correct copy of the original and shall use
its best efforts to obtain and deliver such original document within one hundred
eighty (180) days after the related Purchase Date (or such longer period after
the related Purchase Date to which Buyer may consent in its sole discretion, so
long as Seller is, as certified in writing to Buyer not less frequently than
monthly, using its best efforts to obtain the original). After the expiration of
such best efforts period, Seller shall deliver to Buyer a certification that
states, despite Seller’s best efforts, Seller was unable to obtain such original
document, and thereafter Seller shall have no further obligation to deliver the
related original document.

 

 38

 

  

(c)          From time to time, Seller shall forward to Buyer and to Custodian
additional copies of, originals of, documents evidencing any assumption,
modification, consolidation or extension of a Purchased Asset approved in
accordance with the terms of this Agreement, and upon receipt of any such other
documents, Custodian shall hold such other documents in accordance with the
Custodial Agreement. With respect to all of the Purchased Assets delivered by
Seller to Buyer, its designee (including Custodian), or the Acceptable Attorney,
as the case may be, Seller shall have executed and delivered to Buyer the
omnibus power of attorney substantially in the form of Exhibit IV attached
hereto irrevocably appointing Buyer its attorney in fact with full power, if an
Event of Default has occurred and is continuing, to (i) complete the
endorsements of the Purchased Assets, including without limitation the Mortgage
Notes, Assignments of Mortgages, and any transfer documents related thereto,
(ii) record the Assignments of Mortgages, (iii) prepare and file and record each
assignment of mortgage, (iv) take any action (including exercising voting and/or
consent rights) with respect to intercreditor agreements, co-lender agreements,
recognition agreements or participation agreements, (v) complete the preparation
and filing, in form and substance satisfactory to Buyer, of such financing
statements, continuation statements, and other UCC forms, as Buyer may from time
to time, reasonably consider necessary to create, perfect, and preserve Buyer’s
security interest in the Purchased Assets, (vi) enforce Seller’s rights under
the Purchased Assets purchased by Buyer pursuant to this Agreement and to, and
(vii) take such other steps as may be necessary or desirable to enforce Buyer’s
rights against, under or with respect to such Purchased Assets and the related
Purchased Asset Files and the Servicing Records. Buyer shall deposit the
Purchased Asset Files representing the Purchased Assets, or direct that the
Purchased Asset Files be deposited directly, with Custodian, and the Purchased
Asset Files shall be maintained in accordance with the Custodial Agreement. If a
Purchased Asset File is not delivered to Buyer or its designee (including
Custodian), such Purchased Asset File shall be held in trust by Seller or its
designee for the benefit of Buyer as the owner thereof. Seller or its designee
shall maintain a copy of the Purchased Asset File and the originals of the
Purchased Asset File not delivered to Buyer or its designee. The possession of
the Purchased Asset File by Seller or its designee is at the will of Buyer for
the sole purpose of servicing the related Purchased Asset, and such retention
and possession by Seller or its designee is in a custodial capacity only. The
books and records (including, without limitation, any computer records or tapes)
of Seller or its designee shall be marked appropriately to reflect clearly the
sale of the related Purchased Asset to Buyer. Seller or its designee (including
Custodian) shall release its custody of the Purchased Asset File only in
accordance with written instructions from Buyer, unless such release is required
as incidental to the servicing of the Purchased Assets, is in connection with a
repurchase of any Purchased Asset by Seller or as otherwise required by law or
set forth in the Custodial Agreement.

 

(d)          Buyer hereby grants to Seller a revocable option to direct Buyer
with respect to the exercise of all voting and corporate rights with respect to
the Purchased Assets (each, a “Revocable Option”) and to vote, take corporate
actions and exercise any rights in connection with the Purchased Assets, so long
as no monetary Default, material non-monetary Default, or Event of Default has
occurred and is continuing. Such Revocable Option is not evidence of any
ownership or other interest or right of Seller in any Purchased Asset. Upon the
occurrence and during the continuation of a monetary Default, material
non-monetary Default, or an Event of Default, and in each case subject to the
provisions of the Purchased Asset Documents, the Revocable Option discussed
above shall terminate following written notice from Buyer to Seller and
thereafter Buyer shall be entitled to exercise all voting and corporate rights
with respect to the Purchased Assets without regard to Seller’s instructions
(including, but not limited to, if an Act of Insolvency shall occur with respect
to Seller, to the extent Seller controls or is entitled to control selection of
any servicer, Buyer may transfer any or all of such servicing to an entity
satisfactory to Buyer).

 

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Article 8.
SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS

 

(a)          Title to all Purchased Items shall pass to Buyer on the applicable
Purchase Date, and Buyer shall have free and unrestricted use of all Purchased
Items, subject, however, to the terms of this Agreement, the Servicing
Agreement, the Custodial Agreement and the other Transaction Documents. Subject
to the provisions of Article 19, nothing in this Agreement or any other
Transaction Document shall preclude Buyer from engaging in repurchase
transactions with the Purchased Assets or otherwise selling, transferring,
pledging, repledging, hypothecating, or rehypothecating the Purchased Items to
any Person, other than, prior the occurrence of an Event of Default, a
Prohibited Transferee; provided that no such transaction shall relieve Buyer of
its obligations to transfer the Purchased Items to Seller pursuant to Article 3
of this Agreement or of Buyer’s obligation to credit or pay Income to, or apply
Income to the obligations of, Seller pursuant to Article 5 hereof, or of Buyer’s
obligations pursuant to Article 19 hereof.

 

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

 

Article 9.
REPRESENTATIONS AND WARRANTIES

 

(a)          Each of Buyer and Seller represents and warrants to the other that
(i) it is duly authorized to execute and deliver this Agreement, to enter into
Transactions contemplated hereunder and to perform its obligations hereunder and
has taken all necessary action to authorize such execution, delivery and
performance, (ii) it will engage in such Transactions as principal (or, if
agreed in writing, in the form of an annex hereto or otherwise, in advance of
any Transaction by the other party hereto, as agent for a disclosed principal),
(iii) the person signing this Agreement on its behalf is duly authorized to do
so on its behalf (or on behalf of any such disclosed principal), (iv) it has
obtained all authorizations of any Governmental Authority required in connection
with this Agreement and the Transactions hereunder and such authorizations are
in full force and effect and (v) the execution, delivery and performance of this
Agreement and the Transactions hereunder will not violate any Requirement of Law
applicable to it or its organizational documents or any agreement by which it is
bound or by which any of its assets are affected. On the Purchase Date for any
Transaction for the purchase of any Purchased Assets by Buyer from Seller, and
at all times while this Agreement and any Transaction hereunder is in effect,
Buyer and Seller shall each be deemed to repeat all the foregoing
representations made by it.

 

(b)          In addition to the representations and warranties in Article 9(a)
above, Seller represents and warrants to Buyer as of the date of this Agreement,
and will be deemed to represent and warrant to Buyer as of the Purchase Date for
any Transaction for the purchase of any Purchased Assets by Buyer from Seller,
and at all times while this Agreement and any Transaction hereunder is in
effect, unless otherwise stated herein, that:

 

 40

 

  

(i)       Organization. Seller is duly organized, validly existing and in good
standing under the laws and regulations of the jurisdiction of Seller’s
incorporation or organization, as the case may be, 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
where failure to so qualify would not be reasonably expected to have a Material
Adverse Effect. Seller has the power to own and hold the assets it purports to
own and hold, and to carry on its business as now being conducted and proposed
to be conducted, and has the power to execute, deliver, and perform its
obligations under this Agreement and the other Transaction Documents to which
Seller is a party.

 

(ii)       Due Execution; Enforceability. The Transaction Documents to which
Seller is a party have been or will be duly executed and delivered by Seller,
for good and valuable consideration. The Transaction Documents to which Seller
is a party 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)      Ability to Perform. Seller does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every covenant
applicable to it contained in the Transaction Documents to which it is a party.

 

(iv)      Non-Contravention. Neither the execution and delivery by Seller of the
Transaction Documents, nor consummation by Seller of the transactions
contemplated by the Transaction Documents (or any of them), nor compliance by
Seller with the terms, conditions and provisions of the Transaction Documents
(or any of them) will (A) conflict with or result in a breach of any of the
terms, conditions or provisions of the organizational documents of Seller, (B)
violate or conflict with any contractual provisions of, or cause a default or
event of default under, any indenture, loan agreement, mortgage or other
material contract or agreement to which Seller is a party or by which Seller may
be bound, to the extent such conflict or breach would have a Material Adverse
Effect upon Seller’s ability to perform its obligations hereunder, (C) result in
the creation or imposition of any Lien upon any of the assets of Seller, other
than pursuant to the Transaction Documents, to the extent such creation or
imposition would have a Material Adverse Effect upon Seller’s ability to perform
its obligations hereunder, (D) conflict with any judgment or order, writ,
injunction, decree or demand of any Governmental Authority applicable to Seller,
or (E) conflict with any applicable Requirement of Law.

 

(v)       Litigation; Requirements of Law. As of the Closing Date, any Purchase
Date for any Transaction hereunder, any Future Funding Date, or on the first day
of any Renewal Period, except as previously disclosed to Buyer in writing on or
prior to such date, there is no action, suit, proceeding, investigation, or
arbitration pending or, to the Knowledge of Seller, threatened in writing
against Seller, Pledgor, or Guarantor, or any of their respective assets, nor is
there any action, suit, proceeding, investigation, or arbitration pending or, to
the Knowledge of Seller, threatened in writing against Seller, Pledgor, or
Guarantor that (A) would reasonably be expected to, individually or in the
aggregate, result in any Material Adverse Effect, (B) would reasonably be
expected to have an adverse effect on the validity of the Transaction Documents
or any action taken or to be taken in connection with the obligations of Seller
under any of the Transaction Documents or (C) requires filing with the SEC in
accordance with the 1934 Act or any rules thereunder. Seller is in compliance in
all material respects with all Requirements of Law. Seller is not in default in
any material respect with respect to any judgment, order, writ, injunction,
decree, rule or regulation of any arbitrator or Governmental Authority.

 

 41

 

  

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

 

(vii)       Good Title to Purchased Assets. Immediately prior to the purchase of
any Purchased Assets by Buyer from Seller hereunder, such Purchased Assets are
free and clear of any Lien or impediment to transfer (including any “adverse
claim” as defined in Section 8-102(a)(1) of the UCC), in each case except for
Liens to be released simultaneously with such purchase by Buyer, and Seller is
the record and beneficial owner of, and has good and marketable title to and the
right to sell and transfer to Buyer, such Purchased Assets and, upon transfer of
such Purchased Assets to Buyer, Buyer shall be the equitable owner of such
Purchased Assets free of any adverse claim. In the event the related Transaction
is recharacterized as a secured financing of the Purchased Assets, the
provisions of this Agreement are effective to create in favor of Buyer a valid
security interest in all rights, title and interest of Seller in, to and under
the Purchased Assets and Buyer shall have a valid, perfected first priority
security interest in the Purchased Assets (and, without limitation on the
foregoing, Buyer, as entitlement holder, shall have a “security entitlement” to
the Purchased Assets).

 

(viii)      No Material Adverse Effect; No Defaults. As of the Closing Date, any
Purchase Date for any Transaction hereunder with respect to the subject
Purchased Asset only, any Future Funding Date with respect to the subject
Purchased Asset only, or on the first day of any Renewal Period, except as
previously disclosed to Buyer in writing on or prior to such date, to Seller’s
Knowledge, there are no post-Transaction facts or circumstances that have a
Material Adverse Effect on any Purchased Asset that Seller has not notified
Buyer of in writing; and no Default or Event of Default exists under or with
respect to the Transaction Documents.

 

(ix)         Authorized Representatives. The duly authorized representatives of
Seller are listed on, and true signatures of such authorized representatives are
set forth on, Exhibit II attached to this Agreement.

 

(x)          Representations and Warranties Regarding Purchased Assets; Delivery
of Purchased Asset File.

 

(A)         As of the date hereof, Seller has not assigned, pledged or conveyed
to any other Person, or otherwise encumbered, any Purchased Asset, and
immediately prior to the sale of such Purchased Asset to Buyer hereunder, Seller
was the sole owner of such Purchased Asset and had good and marketable title
thereto, free and clear of all Liens, and any impediment to transfer (including
any “adverse claim” as defined in Section 8-102(a)(1) of the UCC), in each case
except for Liens to be released simultaneously with such sale to Buyer.

 

 42

 

  

(B)         The provisions of this Agreement and the related Confirmation are
effective to either (1) constitute a sale of Purchased Items to Buyer or (2) in
the event the related Transaction is recharacterized as a secured financing of
the Purchased Assets, to create in favor of Buyer a legal, valid and enforceable
security interest in all right, title and interest of Seller in, to and under
the Purchased Items, and in such event, Buyer shall have a valid, perfected
first priority security interest in the Purchased Items (and without limitation
on the foregoing, Buyer, as entitlement holder, shall have a “security
entitlement” to the Purchased Items).

 

(C)         Upon receipt by Custodian of each Mortgage Note endorsed in blank by
a duly authorized officer of Seller, either a purchase shall have been completed
by Buyer of such Mortgage Note or Buyer shall have a valid and fully perfected
first priority security interest in all right, title and interest of Seller in
the Purchased Items described therein.

 

(D)         Each of the representations and warranties made in respect of the
Purchased Assets pursuant to Exhibit V are true, complete and correct, except to
the extent disclosed in a Requested Exceptions Report.

 

(E)         Upon the filing of financing statements on Form UCC-1 naming Buyer
as “Secured Party”, Seller as “Debtor” and describing the Purchased Items, in
the jurisdiction and recording office listed on Exhibit X attached hereto, the
security interests granted hereunder in that portion of the Purchased Items
which can be perfected by filing under the UCC will constitute fully perfected
security interests under the UCC in all right, title and interest of Seller in,
to and under such Purchased Items.

 

(F)         Upon execution and delivery of the Depository Agreement, Buyer shall
have a valid and fully perfected first priority security interest in the
Depository Account and all amounts at any time on deposit therein.

 

(G)         Upon execution and delivery of the Depository Agreement, Buyer shall
have a valid and fully perfected first priority security interest in the
“investment property” and all “deposit accounts” (each as defined in the UCC)
comprising Purchased Items or any after-acquired property related to such
Purchased Items.

 

 43

 

  

(H)        With respect to each Purchased Asset purchased by Seller or an
Affiliate of Seller from a Transferor, (a) such Purchased Asset was acquired and
transferred pursuant to a Purchase Agreement, (b) such Transferor received
reasonably equivalent value in consideration for the transfer of such Purchased
Asset, (c) no such transfer was made for or on account of an antecedent debt
owed by such Transferor to Seller or an Affiliate of Seller, (d) no such
transfer is or may be voidable or subject to avoidance under the Bankruptcy
Code, and (e) the representations and warranties made by such Transferor to
Seller or such Affiliate of Seller in such Purchase Agreement are hereby
incorporated herein mutatis mutandis and are hereby remade by Seller to Buyer on
each date as of which they speak in such Purchase Agreement. Seller or such
Affiliate of Seller has been granted a security interest in each such Purchased
Asset, filed one or more UCC financing statements against such Transferor to
perfect such security interest, and assigned such financing statements in blank
and delivered such assignments to Buyer or Custodian.

 

(I)          Seller has complied with all material requirements of the Custodial
Agreement with respect to each Purchased Asset, including delivery to Custodian
of all required Purchased Asset Documents. Except to the extent disclosed in a
Requested Exceptions Report, Seller or its designee is in possession of a
complete, true and accurate Purchased Asset File with respect to each Purchased
Asset, except for such documents the originals of which have been delivered to
Custodian.

 

(J)          The Purchased Assets constitute the following, as applicable, as
defined in the UCC: a general intangible, instrument, investment property,
security, deposit account, financial asset, uncertificated security, securities
account, or security entitlement. Seller has not authorized the filing of, and
does not have Knowledge of, any UCC financing statements filed against Seller as
debtor that include the Purchased Assets, other than any financing statement
that has been terminated or filed pursuant to this Agreement.

 

(xi)          Adequate Capitalization; No Fraudulent Transfer; Solvency. Seller
has, as of each Purchase Date, adequate capital for the normal obligations
foreseeable in a business of its size and character and in light of its
contemplated business operations. Neither the Transaction Documents nor any
Transaction thereunder are entered into by Seller in contemplation of insolvency
or with the intent to hinder, delay or defraud any of Seller’s creditors. The
transfer by Seller of the Purchased Assets pursuant hereto and the obligation of
Seller to repurchase such Purchased Assets is not undertaken by Seller with the
intent to hinder, delay or defraud any of Seller’s creditors. As of the Purchase
Date, Seller is not insolvent within the meaning of Section 101(32) of the
Bankruptcy Code or any successor provision thereof, is generally able to pay,
and as of the date hereof is paying, its debts as they become due, and the
transfer and sale by Seller of the Purchased Assets pursuant hereto and the
obligation of Seller to repurchase such Purchased Assets (A) will not cause the
liabilities of Seller to exceed the assets of Seller, (B) will not result in
Seller having unreasonably small capital, and (C) will not result in debts that
would be beyond Seller’s ability to pay as the same mature. Seller received
reasonably equivalent value in exchange for the transfer and sale by Seller of
the Purchased Assets and the Purchased Items pursuant hereto. No petition in
bankruptcy has been filed against Seller, Pledgor, or Guarantor in the last ten
(10) years, and Seller has not in the last ten (10) years made an assignment on
behalf of creditors or taken advantage of any debtor’s relief laws. Seller has
only entered into agreements on terms that would be considered arm’s length and
otherwise on terms consistent with other similar agreements with other similarly
situated entities.

 

 44

 

  

(xii)        Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration by Seller
with, or exemption by, any Governmental Authority is required to authorize, or
is required in connection with, (A) the execution, delivery and performance by
Seller of any Transaction Document to which Seller is or will be a party, (B)
the legality, validity, binding effect or enforceability of any such Transaction
Document against Seller or (C) the consummation of the transactions contemplated
by this Agreement (other than consents, approvals and filings that have been
obtained or made as applicable, and the filing of certain financing statements
in respect of certain security interests).

 

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

 

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

 

(xv)        Federal Regulations. None of Seller, Pledgor or Guarantor is
required to register as an “investment company,” or a company “controlled by an
investment company,” within the meaning of the Investment Company Act of 1940,
as amended (the “Investment Company Act”).

 

(xvi)       Taxes. Seller, Pledgor, and Guarantor have timely filed all required
federal income tax returns and all other material tax returns, domestic and
foreign, required to be filed by them and have paid all Taxes (whether or not
shown on a return), which have become due, except for Taxes that are being
contested in good faith by appropriate proceedings diligently conducted and for
which appropriate reserves have been established in accordance with GAAP. Seller
and each Affiliate of Seller have satisfied all of their withholding tax
obligations. No tax Liens have been filed against any assets of Seller,
Guarantor or Pledgor and no claims are currently being asserted in writing
against Seller, Guarantor or Pledgor with respect to Taxes (except for liens and
with respect to Taxes not yet due and payable or liens or claims with respect to
Taxes that are being contested in good faith and for which adequate reserves
have been established in accordance with GAAP).

 

(xvii)      Judgments/Bankruptcy. Except as disclosed in writing to Buyer, there
are no judgments against Seller unsatisfied of record or docketed in any court
located in the United States of America that would reasonably be expected to
have a Material Adverse Effect and no Act of Insolvency has ever occurred with
respect to Seller.

 

 45

 

  

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

 

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

 

(xx)         Financial Information. All financial data concerning Seller and the
Purchased Assets that has been delivered by or on behalf of Seller to Buyer is
true, complete and correct in all material respects. All financial data
concerning Seller and Guarantor has been prepared fairly in accordance with
GAAP. As of the Closing Date and as of the first day of the Renewal Period,
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 the
Purchased Assets, or in the results of operations of Seller, which change is
reasonably likely to have a Material Adverse Effect on Seller.

 

(xxi)        Intentionally omitted.

 

(xxii)       Servicing Agreements. Seller has delivered to Buyer copies of all
Servicing Agreements pertaining to the Purchased Assets and to the Knowledge of
Seller, as of the date of this Agreement and as of the Purchase Date for the
purchase of any Purchased Assets subject to a Servicing Agreement, each such
Servicing Agreement is in full force and effect in accordance with its terms and
no default or event of default exists thereunder.

 

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

 

 46

 

  

(xxiv)     Patriot Act.

 

(a)       Seller is in compliance with the (A) the Trading with the Enemy Act,
as amended, and each of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any
other applicable enabling legislation or executive order relating thereto,
(B) the USA Patriot Act, and (C) the United States Foreign Corrupt Practices Act
of 1977, as amended, and any other applicable anti-bribery laws and regulations.
No part of the proceeds of any Transaction will be used, directly or indirectly,
for any payments to any governmental official or employee, political party,
official of a political party, candidate for political office, or anyone else
acting in an official capacity, in order to obtain, retain or direct business or
obtain any improper advantage, in violation of the United States Foreign Corrupt
Practices Act of 1977, as amended.

 

(b)       Seller agrees that, from time to time upon the prior written request
of Buyer, it shall (A) execute and deliver such further documents, provide such
additional information and reports and perform such other acts as Buyer may
reasonably request in order to insure compliance with the provisions hereof
(including, without limitation, compliance with the USA Patriot Act and to fully
effectuate the purposes of this Agreement) and (B) provide such opinions of
counsel concerning matters relating to this Agreement as Buyer may reasonably
request; provided, however, that nothing in this Article 9(b)(xxiv) shall be
construed as requiring Buyer to conduct any inquiry or decreasing Seller’s
responsibility for its statements, representations, warranties or covenants
hereunder. In order to enable Buyer and its Affiliates to comply with any
anti-money laundering program and related responsibilities including, but not
limited to, any obligations under the USA Patriot Act and regulations
thereunder, Seller on behalf of itself and its Affiliates makes the foregoing
representations and covenants to Buyer and its Affiliates, that neither Seller,
nor, any of its Affiliates, is a Prohibited Investor and Seller is not acting on
behalf of or for the benefit of any Prohibited Investor. Seller agrees to
promptly notify Buyer or a person appointed by Buyer to administer their
anti-money laundering program, if applicable, of any change in information
affecting this representation.

 

(xxv)       Seller neither owns nor leases any properties.

 

(xxvi)      Insider. Seller is not an “executive officer,” “director,” or
“person who directly or indirectly or acting through or in concert with one or
more persons owns, controls, or has the power to vote more than 10% of any class
of voting securities” (as those terms are defined in 12 U.S.C. § 375(b) or in
regulations promulgated pursuant thereto) of Buyer, of a bank holding company of
which Buyer is a Subsidiary, or of any Subsidiary, of a bank holding company of
which Buyer is a Subsidiary, of any bank at which Buyer maintains a
correspondent account or of any lender which maintains a correspondent account
with Buyer.

 

 47

 

  

(xxvii)    Office of Foreign Assets Control. Seller warrants, represents and
covenants that neither Seller nor any of its Affiliates are or will be an entity
or Person that is or is owned or controlled by a Person that is the subject of
any sanctions administered or enforced by the U.S. Department of Treasury’s
Office of Foreign Asset Control, the United Nations Security Council, the
European Union or Her Majesty’s Treasury (collectively, “Sanctions”). Seller
covenants and agrees that, with respect to the Transactions under this
Agreement, none of Seller or, to the best of Seller’s knowledge after due
inquiry, any of its Affiliates will conduct any business, nor engage in any
transaction, Assets or dealings, with any Person who is the subject of
Sanctions. Seller further covenants and agrees that it will not, directly or
indirectly, use the proceeds of the facility, or lend, contribute or otherwise
make available such proceeds to any subsidiary, joint venture partner or other
Person to fund or facilitate any activities or business of or with any Person or
in any country or territory that, at the time of such funding or facilitation,
is the subject of Sanctions.

 

(xxviii)   Notice Address; Jurisdiction of Organization. On the date of this
Agreement, Seller’s address for notices is as specified on Annex I. Seller’s
jurisdiction of organization is Delaware. The location where Seller keeps its
books and records, including all computer tapes and records relating to the
Purchased Items, is its notice address. Seller may change its address for
notices and for the location of its books and records by giving Buyer written
notice of such change.

 

(xxix)     Anti-Money Laundering Laws. Seller either (1) is entirely exempt from
or (2) has otherwise fully complied with all applicable anti-money laundering
laws and regulations (collectively, the “Anti-Money Laundering Laws”), by (A)
establishing an adequate anti-money laundering compliance program as required by
the Anti-Money Laundering Laws, (B) conducting the requisite due diligence in
connection with the origination of each Purchased Asset for purposes of the
Anti-Money Laundering Laws, including with respect to the legitimacy of the
related obligor (if applicable) and the origin of the assets used by such
obligor to purchase the property in question, and (C) maintaining sufficient
information to identify the related obligor (if applicable) for purposes of the
Anti-Money Laundering Laws.

 

(xxx)      Ownership of Property. Seller does not own, and has not ever owned,
any assets other than (A) the Purchased Assets, and (B) such incidental personal
property related thereto; provided, however, that Seller shall not be in breach
of this representation to the extent Seller acquires or originates a New Asset
under its good faith belief that such New Asset would become a Purchased Asset.

 

(xxxi)     Ownership. Seller is and shall remain at all times a wholly owned
direct or indirect subsidiary of Guarantor. The direct, and to the extent
depicted, the indirect, ownership interests in Seller, Pledgor and Guarantor are
as set forth on the organizational structure chart attached hereto as Schedule
III.

 

(xxxii)    Compliance with ERISA. (a) Neither Seller nor Guarantor has any
employees as of the date of this Agreement; (b) each of Seller and Guarantor
complies with an exception set forth in the Plan Asset Regulations such that
such Person is not deemed to hold “plan assets” within the meaning of the Plan
Asset Regulations; and (c) assuming that no portion of the Purchased Assets are
funded by Buyer with “plan assets” within the meaning of the Plan Asset
Regulations, none of the transactions contemplated by the Transaction Documents
will constitute a nonexempt prohibited transaction (as such term is defined in
Section 4975(c)(1)(A)-(D) of the Code or Section 406(a) of ERISA) that could
subject Buyer to any tax or penalty imposed under Section 4975 of the Code or
Section 502(i) of ERISA.

 

 48

 

  

(xxxiii)    Intentionally omitted.

 

(xxxiv)    Servicing Agreements. Any Servicing Agreement related to a Purchased
Asset, including without limitation, the Primary Servicing Agreement, may be
terminated at will by Seller without payment of any penalty or fee.

 

Article 10.
NEGATIVE COVENANTS OF SELLER

 

On and as of the date hereof and each Purchase Date and until this Agreement is
no longer in force with respect to any Transaction, Seller shall not without the
prior written consent of Buyer:

 

(a)         subject to Seller’s right to repurchase any Purchased Asset in
accordance with the terms and provisions of this Agreement, take any action that
would directly or indirectly impair or adversely affect Buyer’s title to the
Purchased Assets;

 

(b)         transfer, assign, convey, grant, bargain, sell, set over, deliver or
otherwise dispose of, including, without limitation, any effective transfer or
other disposition as a result of a division of Seller, or pledge or hypothecate,
directly or indirectly, any interest in the Purchased Assets (or any of them) to
any Person other than Buyer, or engage in repurchase transactions or similar
transactions with respect to the Purchased Assets (or any of them) with any
Person other than Buyer, unless and until such Purchased Asset is repurchased by
Seller in accordance with this Agreement;

 

(c)         modify in any material respect any Servicing Agreements to which it
is a party;

 

(d)         create, incur or permit to exist any Lien in or on any of its
property, assets, revenue, the Purchased Assets, the other Purchased Items,
whether now owned or hereafter acquired, other than the Liens granted by Seller
pursuant to Article 6 of this Agreement and the Lien granted by Pledgor under
the Pledge and Security Agreement or unless and until such Purchased Asset
relating to such Purchased Items is repurchased by Seller in accordance with
this Agreement;

 

(e)         take any action or permit such action to be taken which would result
in a Change of Control;

 

(f)         consent or assent to, or permit the Primary Servicer or servicer to
make, any Significant Modification relating to the Purchased Assets without the
prior written consent of Buyer, which shall be granted or denied in Buyer’s sole
but reasonable discretion;

 

(g)         without the prior written consent of Buyer in its sole discretion,
except as permitted by the Transaction Documents, either (i) permit the
organizational documents of Seller to be amended or (ii) permit the
organizational structure of Seller to be changed from a limited liability
company to another form of ownership;

 

(h)         acquire or maintain any right or interest in any Purchased Asset or
Underlying Mortgaged Property that is senior to, junior to or pari passu with
the rights and interests of Buyer therein under this Agreement and the other
Transaction Documents unless such right or interest becomes a Purchased Asset
hereunder or unless such right or interest exists as of the Purchase Date for
such Purchased Asset and is approved by Buyer in writing;

 

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

 

(j)       either (i) incur any Indebtedness except as provided in Article 12(i)
or (ii) otherwise cease to be a Single-Purpose Entity;

 

(k)       amend or otherwise modify the Underwriting Guidelines or originate
mortgage loans in a manner inconsistent with the Underwriting Guidelines.
Notwithstanding the preceding sentence, in the event that Seller makes any
amendment or modification to the Underwriting Guidelines, Seller shall
immediately notify Buyer of such change and shall promptly deliver to Buyer a
complete copy of the amended or modified Underwriting Guidelines;

 

(l)        take any action, cause, allow, or permit any of Seller, Pledgor or
Guarantor 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 promulgated thereunder;

 

(m)      after the occurrence and during the continuance of any Default or 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 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; provided, however, that so long as no monetary Default or
Event of Default shall have occurred and be continuing, Seller may distribute
the minimum amount of cash necessary for Guarantor to maintain its status as a
REIT and avoid the payment of any income or excise taxes by Guarantor, provided
that such distributions are further distributed by Guarantor to maintain its
status as a REIT or avoid the payment of income or excise taxes by Guarantor;

 

(n)       make any future advances under any Purchased Asset to any underlying
obligor that are not permitted by the related Purchased Asset Documents; or

 

(o)       seek its dissolution, liquidation or winding up, in whole or in part.

 

Article 11.
AFFIRMATIVE COVENANTS OF SELLER

 

On and as of the date hereof and each Purchase Date and until this Agreement is
no longer in force with respect to any Transaction:

 

(a)       Seller shall promptly notify Buyer of any material adverse change (i)
in the business operations and/or financial condition of Seller, Pledgor or
Guarantor or (ii) impacting any Purchased Asset, including, without limitation
any adverse impact on maintaining regulatory compliance (including licensing)
with respect to any such Purchased Asset; provided, however, that nothing in
this Article 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 Article 9.

 

(c)       Seller shall (i) defend the right, title and interest of Buyer in and
to the Purchased Items against, and take such other action as is necessary to
remove, the Liens, security interests, claims and demands of all Persons (other
than Liens created in favor of Buyer pursuant to the Transaction Documents),
(ii) to the extent any additional limited liability company is formed by
division of Seller (and without prejudice to Article 10(b)), 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 Capital Stock 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
Capital Stock of the applicable Seller and any rights in connection therewith,
in each case pursuant to the applicable Pledge Agreement, and (iii) at Buyer’s
reasonable request, take all action necessary to ensure that Buyer will have a
first priority security interest in the Purchased Assets subject to any of the
Transactions in the event such Transactions are recharacterized as secured
financings.

 

(d)       Seller will permit Buyer or its designated representative to inspect
Seller’s records with respect to the Purchased Items 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.
Buyer shall act in a commercially reasonable manner in requesting and conducting
any inspection relating to the conduct and operation of Seller’s business.

 

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

 

(f)        At any time from time to time upon the reasonable request of Buyer,
at the sole expense of Seller, Seller will (i) promptly and duly execute and
deliver 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 perfected, first priority security
interest required hereunder, (ii) ensure that such security interest remains
fully perfected at all times and remains at all times first in priority as
against all other creditors of such Seller (whether or not existing as of the
Closing Date, any Purchase Date or in the future) and (iii) obtain or preserve
the rights and powers herein granted (including, among other things, filing such
UCC financing statements as Buyer may request). If any amount payable under or
in connection with any of the Purchased Items shall be or become evidenced by
any promissory note, other instrument or certificated security, such note,
instrument or certificated security shall be promptly delivered to Buyer, duly
endorsed in a manner satisfactory to Buyer, to be itself held as a Purchased
Item pursuant to this Agreement, and the documents delivered in connection
herewith.

 

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(g)          Seller shall provide, or cause to be provided, to Buyer the
following financial and reporting information:

 

(i)           Within twenty (20) calendar days after each month-end (or, if the
last day of such 20-day period is not a Business Day, then by the next
succeeding Business Day after the end of such 20-day period), a Monthly
Reporting Package substantially in the form of Exhibit III-A attached hereto;

 

(ii)          Within forty-five (45) calendar days after the last day of each of
the first three fiscal quarters in any fiscal year, a Quarterly Reporting
Package substantially in the form of Exhibit III-B attached hereto;

 

(iii)         Within one hundred twenty (120) calendar days after the last day
of its fiscal year, an Annual Reporting Package substantially in the form of
Exhibit III-C attached hereto; and

 

(iv)         Upon Buyer’s request, such other information regarding the
financial condition, operations or business of Seller, Guarantor or any
Mortgagor in respect of a Purchased Asset as Buyer may reasonably request.

 

(h)          Seller shall promptly acknowledge and respond to communications
from Buyer relating to the Transaction Documents or Transactions, and, within
one (1) Business Day of Buyer’s request therefor, shall make a representative
available to Buyer by telephone or in person to discuss any matters relating to
the Transaction Documents or Transactions that Buyer wishes to discuss with
Seller.

 

(i)           Seller shall to at all times (i) comply in all respects with all
laws, ordinances, rules, regulations and orders (including, without limitation,
Environmental Laws) of any Governmental Authority or any other 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 necessary to
preserve and maintain in full force and effect its legal existence, and all
licenses material to its business and (ii) maintain and preserve its legal
existence and all of its material rights, privileges, licenses and franchises
necessary for the operation of its business (including, without limitation,
preservation of all lending licenses held by Seller and of Seller’s status as a
“qualified transferee” (however denominated) under all documents which govern
the Purchased Assets).

 

 52

 

  

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

 

(k)       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, but not limited to, the fees and
expenses of Custodian and the Acceptable Attorney, Depository and each servicer
(including, without limitation, the Primary Servicer) of any or all of the
Purchased Assets.

 

(l)        Seller will continue to be a U.S. Person that is a disregarded entity
of a U.S. Person for U.S. federal income tax purposes. Seller shall pay and
discharge all Taxes, levies, liens and other charges on its assets and on the
Purchased Items that, in each case, in any manner would create any Lien upon the
Purchased Items, other than (A) Taxes that are not yet due and payable and (B)
any such Taxes that 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; provided that such contest
operates to suspend collection of the contested Tax and enforcement of a Lien.

 

(m)      Seller shall advise Buyer in writing of the opening of any new chief
executive office or the closing of any such office of Seller, Pledgor or
Guarantor and of any change in Seller’s, Pledgor’s or Guarantor’s name or the
places where the books and records pertaining to the Purchased Assets are held
not less than fifteen (15) Business Days prior to taking any such action.

 

(n)       Seller will maintain records with respect to the Purchased Items and
the conduct and operation of its business with no less a degree of prudence than
if the Purchased Items were held by Seller for its own account.

 

(o)       Upon reasonable prior notice (unless an Event of Default shall have
occurred and is continuing, in which case no prior notice shall be required),
during normal business hours, Seller shall allow Buyer to (i) review any
operating statements, occupancy status and other property level information with
respect to the underlying real estate directly or indirectly securing or
supporting the Purchased Assets that either is in Seller’s possession or is
available to Seller, (ii) examine, copy (at Buyer’s expense) and make extracts
from its books and records, to inspect any of its Properties, and (iii) discuss
Seller’s business and affairs with its Responsible Officers.

 

(p)       Intentionally omitted.

 

(q)       Intentionally omitted.

 

(r)        Seller shall continue to engage in business of the same general type
as now conducted by it or otherwise as approved by Buyer prior to the date
hereof and maintain and preserve its legal existence and all of its material
rights, privileges, licenses and franchises necessary for the operation of its
business (including, without limitation, preservation of all lending licenses
(if any) held by Seller and of Seller’s status as a “qualified transferee”
(however denominated) under all documents which govern the Purchased Assets).

 

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(s)          Seller shall cause each servicer of a Purchased Asset to provide to
Buyer via electronic transmission, promptly upon request by Buyer a Servicing
Tape for the most recently ended month (or any portion thereof).

 

(t)           With respect to each Eligible Asset to be purchased hereunder,
Seller shall notify Buyer in writing of the creation of any right or interest in
such Eligible Asset or related Underlying Mortgaged Property that is senior to
or pari passu with the rights and interests that are to be transferred to Buyer
under this Agreement and the other Transaction Documents, and whether any such
right or interest will be held or obtained by Seller or an Affiliate of Seller.

 

(u)          With respect to each Purchased Asset, Seller shall take all action
necessary or required by the Transaction Documents, Purchased Asset Documents
and each and every Requirement of Law, or reasonably requested by Buyer, to
perfect, protect and evidence Buyer’s ownership of and first priority perfected
security interest in such Purchased Asset and related Purchased Asset Documents,
including executing or causing to be executed such other instruments or notices
as may be necessary or appropriate and filing and maintaining effective UCC
financing statements, continuation statements and assignments and amendments
thereto. Seller shall not take any action to cause any Purchased Asset that is
not evidenced by an instrument or chattel paper (as defined in the UCC) to be so
evidenced. If a Purchased Asset becomes evidenced by an instrument or chattel
paper, the same shall be immediately delivered to Buyer or to Custodian on
behalf of Buyer, together with endorsements required by Buyer.

 

(v)          No later than thirty (30) calendar days after Buyer’s request (made
not more than one (1) time per calendar year), Seller shall procure and deliver
to Buyer an Appraisal relating to any Purchased Asset at Seller’s sole cost and
expense. Notwithstanding anything herein to the contrary, Buyer shall have the
unlimited right, at any time and from time to time, to obtain an Appraisal
relating to any Purchased Asset at Buyer’s own cost and expense.

 

(w)         Seller shall provide notice to Buyer in writing of any of the
following, together with a certificate of a Responsible Officer of Seller
setting forth details of such occurrence and any action Seller has taken or
proposes to take with respect thereto:

 

(i)           promptly upon receipt by Seller of notice or Knowledge of the
occurrence of any Default or Event of Default, but in no event later than the
immediately succeeding Business Day after the earlier of obtaining notice or
Knowledge of any such occurrence;

 

(ii)          with respect to any Purchased Asset, promptly following receipt of
any unscheduled Principal Payment (in full or in part);

 

(iii)         promptly upon receipt by Seller of notice or Knowledge of the
occurrence of any of the following: (A) with respect to any Purchased Asset or
related Underlying Mortgaged Property, material loss or damage, regulatory
issues, material licensing or permit issues, violation of any Requirement of
Law, violation of any material Environmental Law or any other actual or expected
event or change in circumstances that would reasonably be expected to result in
a default under the related Purchased Asset Documents or material decline in
value or cash flow, and (B) with respect to Seller, Pledgor and Guarantor, a
violation of any Requirement of Law or other event or circumstance that would
reasonably be expected to have a Material Adverse Effect;

 

 54

 

  

(iv)         promptly upon the establishment of a rating by any nationally
recognized rating agency applicable to Guarantor and any downgrade in or
withdrawal of such rating once established;

 

(v)          promptly upon the occurrence of any event or circumstance that
could reasonably be determined to cause Guarantor to breach any of the covenants
contained in Section 9 of the Guarantee Agreement;

 

(vi)         promptly, and in any event within ten (10) days after service of
process on any of the following, give Buyer notice of all litigation, action,
suit, arbitration, investigation or other legal or arbitration proceedings
(including, without limitation, any of the following which are pending or
threatened) or other legal or arbitrable proceedings affecting Seller, Pledgor
or Guarantor, any Purchased Asset (or obligor or guarantor thereunder) or
affecting any of the assets of Seller before any Governmental Authority that (A)
questions or challenges the validity or enforceability of any Transaction,
Purchased Asset or Purchased Asset Document, (B) makes a claim or claims in an
aggregate amount greater than (1) $250,000 with respect to Seller and (2)
$5,000,000 with respect to Guarantor, (C) individually or in the aggregate, if
adversely determined, would reasonably be likely to have a Material Adverse
Effect, (D) requires filing with the SEC in accordance with the 1934 Act and any
rules thereunder or (E) raises any lender licensee issues with respect to any
Purchased Asset;

 

(vii)        promptly following, and in any event within one (1) Business Day of
receipt by Seller of notice or Knowledge, of: (A) any event that would result in
any Purchased Asset becoming subject to a Mandatory Early Repurchase Event, (B)
any unpermitted lien or security interest (other than security interests created
hereby) on, or claim asserted against, any Purchased Asset or, to Seller’s
Knowledge, the underlying collateral therefor, (C) any event or change in
circumstances that has or would reasonably be expected to have an adverse effect
on the Market Value of a Purchased Asset, or (D) the resignation or termination
of any servicer under any Servicing Agreement with respect to any Purchased
Asset;

 

(viii)       promptly upon receipt by Seller of notice or Knowledge of the
occurrence of any breach of any representation contained in Article 9(b)(x), but
in no event later than the immediately succeeding Business Day after the earlier
of obtaining notice or Knowledge of any such occurrence; and

 

(ix)         promptly upon any transfer of any Underlying Mortgaged Property or
any direct or indirect equity interest in any Mortgagor of which Seller has
Knowledge, whether or not consent to such transfer is required under the
applicable Purchased Asset Documents.

 

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(x)        Seller shall comply with the USA Patriot Act and all applicable
requirements of Governmental Authorities having jurisdiction over Seller and the
Purchased Items, including those relating to money laundering and terrorism.
Seller agrees that Buyer shall have the right to audit Seller’s compliance with
the USA Patriot Act and all applicable requirements of Governmental Authorities
having jurisdiction over Seller and the Purchased Items, including those
relating to money laundering and terrorism. Seller agrees that, in the event
Seller fails to comply with the USA Patriot Act or any such applicable
requirements of Governmental Authorities, then Buyer may, at its option, cause
Seller to comply therewith, and any and all reasonable costs and expenses
incurred by Buyer in connection therewith shall be immediately due and payable
by Seller.

 

(y)       Seller shall provide Buyer with written notice of any amendment,
modification or waiver with respect to a Purchased Asset (including such
amendments, modifications or waivers that do not constitute a Significant
Modification).

 

(z)       With respect to each Mezzanine Loan for which the related Senior
Mortgage Loan is not primarily serviced by Primary Servicer pursuant to a
Primary Servicing Agreement that has been approved by Buyer: (a) the related
Senior Mortgage Loan shall at all times be serviced pursuant to a servicing
agreement in form and substance acceptable to Buyer, and (b) the servicer
thereunder shall have signed and delivered a Servicer Notice in form and
substance acceptable to Buyer. If any such servicing agreement with respect to
any Senior Mortgage Loan is terminated, then Seller shall, prior to or
simultaneously with such termination, cause a new servicer acceptable to Buyer
in its sole discretion to be approved and a new servicing agreement to be
entered into with respect to such Senior Mortgage Loan in form and substance
acceptable to Buyer in its sole discretion.

 

Article 12.
SINGLE PURPOSE ENTITY

 

Seller hereby represents and warrants to Buyer and covenants with Buyer that, on
and as of the date of this Agreement and each Purchase Date and at all times
while this Agreement and any Transaction hereunder is in effect or any
Repurchase Obligations remain outstanding:

 

(a)       it is and intends to remain solvent, and it has paid and intends to
pay its debts and liabilities (including overhead expenses) from its own assets
as the same shall become due;

 

(b)       it has complied and will comply with the provisions of its certificate
of formation and its limited liability company agreement;

 

(c)       it has done or caused to be done and will do all things necessary to
observe limited liability company formalities and to preserve its existence as
an entity duly organized, validly existing and in good standing under the
applicable laws of the jurisdiction of its organization or formation;

 

(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 (except
to the extent consolidation is required or permitted under GAAP or as a matter
of law); 

 

 56

 

 

(e)       it has been, is and will be, and at all times will hold itself out to
the public as, a legal entity separate and distinct from any other entity
(including any Affiliate of Seller), it shall correct any known misunderstanding
regarding its status as a separate entity, it shall conduct business in its own
name, it shall not identify itself or any of its Affiliates as a division or
part of the other and it shall maintain and utilize separate stationery,
invoices and checks;

 

(f)        it has not owned and will not own any property or any other assets
other than the Purchased Assets and rights ancillary thereto;

 

(g)       it has not engaged and will not engage in any business other than the
origination, acquisition, ownership, administration, financing and disposition
of the Purchased Assets in accordance with the applicable provisions of the
Transaction Documents;

 

(h)       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
intrinsically fair and 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 (i) obligations under the
Transaction Documents, (ii) obligations under the documents evidencing the
Purchased Assets, and (iii) unsecured trade payables, in an aggregate amount not
to exceed $400,000 at any one time outstanding, incurred in the ordinary course
of acquiring, owning, financing and disposing of the Purchased Assets; provided,
however, that any such trade payables incurred by Seller shall be paid within
sixty (60) days of the date incurred;

 

(j)        it has not made and will not make any loans or advances to any other
Person, and shall not acquire obligations or securities of any member or
affiliate of any member or any other Person (other than in connection with the
origination, acquisition, ownership or financing of Purchased Assets);

 

(k)       it 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;

 

(l)        it will not seek the dissolution, liquidation or winding up, in whole
or in part of Seller;

 

(m)      it will not commingle its funds and other assets with those of any of
its Affiliates or any other Person;

 

(n)       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;

 

(o)       it has not held and will not hold itself out to be responsible for the
debts or obligations of any other Person;

 

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(p)          it will (i) have at all times at least one (1) Independent Director
and (ii) provide Buyer with up-to-date contact information for all Independent
Directors and a copy of the agreement pursuant to which each Independent
Director consents to and serves as an Independent Director for Seller;

 

(q)          its organizational documents shall provide that (i) no Independent
Director of Seller may be removed or replaced without Cause, (ii) Buyer be given
at least five (5) Business Days prior notice of the removal and/or replacement
of any Independent Director, together with the name and contact information of
the replacement Independent Director and evidence of the replacement’s
satisfaction of the definition of Independent Director and (iii) any Independent
Director of Seller shall not have any fiduciary duty to anyone including the
holders of the equity interests in Seller and any Affiliates of Seller except
Seller and the creditors of Seller with respect to taking of, or otherwise
voting on, any Act of Insolvency with respect to Seller; provided that the
foregoing shall not eliminate the implied contractual covenant of good faith and
fair dealing;

 

(r)          it shall not, without the consent of its Independent Directors,
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 Code 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 it or of any substantial
part of its property, or ordering the winding up or liquidation of its affairs,
or make an assignment for the benefit of creditors, or admit in writing its
inability to pay its debts generally as they become due, or take any action in
furtherance of any of the foregoing; and

 

(s)          it shall not have any employees.

 

Article 13.
EVENTS OF DEFAULT; REMEDIES

 

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

 

(i)           Seller shall fail to repurchase any Purchased Asset on the
applicable Repurchase Date;

 

(ii)          (A) Buyer shall fail to receive any amounts when due in accordance
with Article 5 of this Agreement (including, without limitation, accrued and
unpaid Price Differential and Principal Payments), or (B) Seller shall fail to
make any payments or apply any Income when due in accordance with Article 5 of
this Agreement;

 

(iii)        Seller shall fail to cure any Margin Deficit in accordance with
Article 4 of this Agreement;

 

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(iv)         Seller, Pledgor or Guarantor shall fail to make any payment not
otherwise addressed under this Article 13(a) owing to Buyer that has become due,
whether by acceleration or otherwise under the terms of this Agreement or the
terms of the Pledge and Security Agreement, or the Guarantee Agreement, the Fee
Letter or any other Transaction Document, which failure is not remedied within
three (3) Business Days of written notice thereof by Buyer to Seller;

 

(v)          Seller shall (i) except as set forth in the following clause (ii),
default in the observance or performance of its obligation in any agreement
contained in Article 10 of this Agreement, or (ii) default in the observance or
performance of its obligation in any agreement contained in Articles 10(d),
10(j), 10(h) or 10(k) of this Agreement and, if such default is capable of being
cured, such default is not cured within ten (10) days after the earlier of
obtaining notice or Knowledge of any such occurrence;

 

(vi)         an Act of Insolvency occurs with respect to Seller, Pledgor or
Guarantor;

 

(vii)        a Change of Control shall have occurred;

 

(viii)       an officer of Seller, Pledgor or Guarantor shall admit to any
Person in writing its inability to, or its intention not to, perform any of its
obligations hereunder;

 

(ix)          the Custodial Agreement, the Depository Agreement, the Pledge and
Security Agreement, the Guarantee Agreement, the Servicing Agreement, the Fee
Letter or any other Transaction Document shall for whatever reason be terminated
(except with Buyer’s prior written consent) or cease to be in full force and
effect, or the enforceability thereof shall be contested by Seller, Pledgor or
Guarantor;

 

(x)           Seller or Guarantor shall be in default beyond all applicable
notice and cure periods under (A) any Indebtedness of Seller or Guarantor, as
applicable, which default (1) involves the failure to pay a matured obligation
in excess of $250,000, with respect to Seller or $5,000,000, with respect to
Guarantor or (2) permits the acceleration of the maturity of obligations by any
other party to or beneficiary with respect to such Indebtedness, if the
aggregate amount of the Indebtedness in respect of which such default or
defaults shall have occurred is at least $250,000, with respect to Seller or
$5,000,000, with respect to Guarantor; or (B) any other material contract to
which Seller or Guarantor is a party which default (1) involves the failure to
pay a matured obligation or (2) permits the acceleration of the maturity of
obligations by any other party to or beneficiary of such contract if the
aggregate amount of such obligations is $250,000, with respect to Seller or
$5,000,000, with respect to Guarantor;

 

(xi)          Seller or Guarantor or any of their present or future Affiliates
shall be in default under any repurchase facility, loan facility or hedging
transaction entered into by Seller or Guarantor or any of their present or
future Affiliates, as applicable, to Buyer or any of its present or future
Affiliates, which default (A) involves the failure to pay a matured obligation,
or (B) permits the acceleration of the maturity of obligations by any other
party to or beneficiary with respect to such repurchase facility, loan facility
or hedging transaction;

 

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(xii)         (A) Seller or an ERISA Affiliate shall engage in any “prohibited
transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan that is not exempt from such Sections of ERISA and the Code,
(B) any material “accumulated funding deficiency” (as defined in Section 302 of
ERISA), whether or not waived, shall exist with respect to any Plan or any Lien
in favor of the Pension Benefit Guaranty Corporation or a Plan shall arise on
the assets of Seller or any ERISA Affiliate, (C) a Reportable Event (as
referenced in Section 4043(b)(3) of ERISA), the reporting of which has not been
waived by regulations, shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Plan, which Reportable Event (as so defined) or
commencement of proceedings or appointment of a trustee is, in the reasonable
opinion of Buyer, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (D) any Plan shall terminate for purposes of Title IV of
ERISA, (E) Seller or any ERISA Affiliate shall, or in the reasonable opinion of
Buyer is likely to, incur any liability in connection with a withdrawal from, or
the insolvency or reorganization of, a Multiemployer Plan or (F) any other event
or condition shall occur or exist with respect to a Plan; and in each case in
clauses (A) through (F) above, such event or condition, together with all other
such events or conditions, if any, could reasonably be expected to have a
Material Adverse Effect;

 

(xiii)       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
of any of the Purchased Assets, and such condition is not cured by Seller within
five (5) Business Days after notice thereof from Buyer to Seller or after Seller
otherwise has Knowledge thereof, or (B) if a Transaction is recharacterized as a
secured financing, and the Transaction Documents with respect to any Transaction
shall for any reason cease to create and maintain a valid first priority
security interest in favor of Buyer in any of the Purchased Assets and such
condition is not cured by Seller within five (5) Business Days after notice
thereof from Buyer to Seller or after Seller otherwise has Knowledge thereof;

 

(xiv)       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, Pledgor or Guarantor, which
suspension or termination has a Material Adverse Effect in the determination of
Buyer;

 

(xv)        Reserved.

 

(xvi)       the breach by Pledgor of any term or condition set forth in the
Pledge and Security Agreement or of any representation, warranty, certification
or covenant made or deemed made in the Pledge and Security Agreement by Pledgor,
and such breach is not cured within ten (10) days following written notice from
Buyer to Pledgor thereof; provided that if such breach is susceptible of cure
but cannot reasonably be cured within such 10-day period, and if Pledgor has
diligently and expeditiously proceeded to cure such breach, then such 10-day
period shall be extended for such time as is reasonably necessary for Pledgor,
in the exercise of due diligence, to cure such breach, and in no event shall
such cure period exceed thirty (30) days from the earlier of Pledgor’s receipt
of Buyer’s notice of such breach or Pledgor’s Knowledge of such breach;
provided, further, however, that if Pledgor shall have made any such
representation with Knowledge that it was materially incorrect or untrue at the
time made, such misrepresentation shall constitute an Event of Default;

 

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(xvii)      any representation (other than the representations and warranties of
Seller set forth in Exhibit V and Article 9(b)(x)(D)) made by Seller to Buyer
shall have been incorrect or untrue in any respect when made or repeated or
deemed to have been made or repeated, and such breach is not cured within ten
(10) days following written notice from Buyer to Seller thereof; provided that
if such breach is susceptible of cure but cannot reasonably be cured within such
10-day period, and if Seller has diligently and expeditiously proceeded to cure
such breach, then such 10-day period shall be extended for such time as is
reasonably necessary for Seller, in the exercise of due diligence, to cure such
breach, and in no event shall such cure period exceed thirty (30) days from the
earlier of Seller’s receipt of Buyer’s notice of such breach or Seller’s
Knowledge of such breach; provided, further, however, that if Seller shall have
made any such representation with Knowledge that it was materially incorrect or
untrue at the time made, such misrepresentation shall constitute an Event of
Default;

 

(xviii)     a final judgment by any court of competent jurisdiction for the
payment of money (a) rendered against Seller in an amount greater than $250,000
or (b) rendered against Guarantor in an amount greater than $5,000,000, and
remains undischarged or unpaid for a period of sixty (60) calendar days, unless
such judgment is effectively stayed by fully bonding over or other means
acceptable to Buyer;

 

(xix)        if Seller shall breach or fail to perform any of the covenants or
conditions contained in this Agreement or any Transaction Document, other than
those specifically otherwise referred to in this Article 13, and such breach or
failure is not cured within ten (10) days following written notice from Buyer to
Seller thereof; provided that if such breach or failure is non-monetary in
nature and is susceptible of cure but cannot reasonably be cured within such
10-day period, and if Seller has diligently and expeditiously proceeded to cure
such breach or failure, then such 10-day period shall be extended for such time
as is reasonably necessary for Seller, in the exercise of due diligence, to cure
such breach or failure, and in no event shall such cure period exceed sixty (60)
days from the earlier of Seller’s receipt of Buyer’s notice of such breach or
failure or Seller’s Knowledge of such breach or failure;

 

(xx)       the breach, subject to applicable grace and cure periods, by
Guarantor of any term, covenant (financial or otherwise) or condition set forth
in the Guarantee Agreement or of any representation, warranty, certification or
covenant made or deemed made in the Guarantee Agreement by Guarantor or if any
certificate furnished by Guarantor to Buyer pursuant to the Guarantee Agreement
or any information with respect to the Purchased Assets furnished in writing on
behalf of Guarantor shall prove to have been false or misleading in any respect
as of the time made or furnished;

 

(xxi)       intentionally omitted;

 

(xxii)      Seller, Pledgor or Guarantor are required to register as an
“investment company” (as defined in the Investment Company Act), or any of the
terms of this Agreement violate any requirement of the Investment Company Act,
including without limitation Section 18 thereof or any rules or regulations
promulgated thereunder;

 

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(xxiii)     Any servicer fails to deposit all Income or other amounts as
required by the provisions of this Agreement when due, or an event of default
has occurred under any servicing agreement (including the Servicing Agreement);
provided that no Event of Default under this clause (xxiii) shall occur if (a)
such failure to deposit all Income or any other amounts as required by the
provisions of this Agreement is cured within two (2) Business Days of written
notice to Seller or Seller otherwise becoming aware thereof, and (b) the related
servicer is removed and replaced with a replacement servicer satisfactory to
Buyer in its sole good faith discretion within sixty (60) days of such date; or

 

(xxiv)     Guarantor’s audited annual financial statements or the notes thereto
or other opinions or conclusions stated therein are qualified or limited by
reference to the status of Guarantor as a “going concern” or a reference of
similar import.

 

Notwithstanding anything to the contrary contained herein, if failure to apply
Income in accordance with Article 5 is solely as a result of Depository failing
to remit funds on deposit in the Depository Account and sufficient funds are
actually on deposit in the Depository Account, then, so long as Seller causes
such funds to be remitted to Buyer within one (1) Business Day of such failure,
such failure shall not be an Event of Default.

 

(b)          After the occurrence and during the continuance of an Event of
Default, Seller shall have no ability to enter into any further Transactions
hereunder. If an Event of Default shall occur and be continuing with respect to
Seller, 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 notice is
given, immediately upon the occurrence of an Act of Insolvency with respect to
Seller, Pledgor or Guarantor), 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 Article 13(b)(i) of this Agreement:

 

(A)         Seller’s obligations hereunder to repurchase all Purchased Assets
shall become immediately due and payable on and as of the Accelerated Repurchase
Date without presentment or demand of any kind, which are hereby expressly
waived, and all Income (including, without limitation, any Principal Payments or
any other amounts received, without regard to their source) deposited in the
Depository Account shall be retained by Buyer and applied in accordance with
Article 5(c);

 

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(B)         to the extent permitted by applicable law, the Repurchase Price with
respect to each Transaction (determined as of the Accelerated Repurchase Date)
shall be increased by the aggregate amount obtained by daily application of, on
a 360-day-per-year basis for the actual number of days during the period from
and including the Accelerated Repurchase Date to but excluding the date of
payment of the Repurchase Price (as so increased), (x) the Pricing Rate for such
Transaction multiplied by (y) the Purchase Price for such Transaction (decreased
by (I) any amounts actually remitted to Buyer by the Depository or Seller from
time to time pursuant to Article 5 of this Agreement and applied to such
Repurchase Price, and (II) any amounts applied to the Repurchase Price pursuant
to Article 13(b)(iii) of this Agreement); and

 

(C)         Buyer may terminate this Agreement.

 

(iii)         Upon the occurrence and during the continuance of an Event of
Default with respect to Seller, 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 any or all of the Purchased Assets, and/or (B) in
its sole discretion elect, in lieu of selling all or a portion of such Purchased
Assets, to give Seller credit for such Purchased Assets in an amount equal to
the Market Value of such Purchased Assets against the aggregate unpaid
Repurchase Price for such Purchased Assets and any other amounts owing by Seller
under the Transaction Documents. The proceeds of any disposition of Purchased
Assets effected pursuant to this Article 13(b)(iii) shall be applied, (v) first,
to the costs and expenses incurred by Buyer in connection with Seller’s default,
including without limitation, all costs of collection associated with the
interpretation and enforcement of Buyer’s rights and remedies under this
Agreement and all of the other Transaction Documents; (w) second, to actual,
out-of-pocket damages incurred by Buyer in connection with Seller’s default, (x)
third, to the Repurchase Prices; (y) fourth, to any Breakage Costs; and (z)
fifth, to return any excess to Seller.

 

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

 

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

 

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(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, foreign (where relevant), and local laws (including, without
limitation, if the Transactions are recharacterized as secured financings, the
rights and remedies of a secured party under the UCC 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 Assets
against all of Seller’s obligations to Buyer under this Agreement, without
prejudice to Buyer’s right to recover any deficiency.

 

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

 

(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, to the extent permitted by law, any defense Seller
might otherwise have arising from the use of non-judicial process, disposition
of any or all of the Purchased Assets, or from any other election of remedies.
Seller recognizes that non-judicial 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.

 

Article 14.
INCREASED COSTS; TAXES

 

(a)          Market Disruption. If prior to the first (1st) day of any Pricing
Rate Period with respect to any Transaction, (i) Buyer shall have determined
(which determination shall be conclusive and binding upon Seller absent manifest
error) that LIBOR is unobtainable in accordance in the definition of LIBOR in
Article 2, (ii) LIBOR determined or to be determined for such Pricing Rate
Period will not adequately and fairly reflect the cost to Buyer (as determined
and certified by Buyer) of making or maintaining Transactions during such
Pricing Rate Period, or (iii) Buyer shall have determined (which determination
shall be conclusive and binding upon Seller absent manifest error) that there
has been or there is likely to be an alternative index or interest rate to
replace the actual or potential phase out of LIBOR, then Buyer shall, by written
notice to Seller, which notice shall set forth in reasonable detail such
circumstances, establish the Pricing Rate for such Pricing Rate Period and all
subsequent Pricing Rate Periods until such notice is withdrawn by Buyer, as a
per annum rate equal to, in Buyer’s sole discretion, either the sum of (x) (1)
Federal Funds Rate plus (2) the Federal Funds Rate Applicable Spread or (y) (1)
the Substitute Rate plus (2) the Substitute Rate Applicable Spread.

 

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(b)          Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for Buyer to enter into or maintain
Transactions as contemplated by the Transaction Documents, (a) the commitment of
Buyer hereunder to enter into new Transactions or, if such adoption of or change
in Requirement of Law makes it unlawful for Buyer to continue to maintain
Transactions as contemplated by this Agreement, to continue Transactions as such
shall forthwith be canceled, and (b) the Transactions then outstanding shall be
converted automatically, at Buyer’s election, to either Federal Funds Rate
Transactions or Substitute Rate Transactions, on the last day of the then
current Pricing Rate Period or within such earlier period as may be required by
law. If any such conversion of a Transaction occurs on a day that 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 Article 14(f) of this Agreement.

 

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

 

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

 

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

 

(iii)         shall impose on Buyer any other condition;

 

and the result of any of the foregoing is to increase the cost to Buyer, by an
amount that Buyer deems, in the exercise of its reasonable business judgment, 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, within ten (10)
Business Days of Buyer’s demand therefor, any additional amounts necessary to
compensate Buyer for such increased cost or reduced amount receivable; provided,
however, that any such determination by Buyer and imposition of such increased
costs shall not be applied to Seller unless and until such determination by
Buyer and imposition of such increased costs are applied by Buyer to other
similarly situated sellers under similar repurchase facilities with Buyer;
provided, further, that Seller shall not be required to compensate Buyer
pursuant to this Article 14(c) for any increased cost or reduced amount
receivable suffered more than 180 days prior to the date that Buyer notifies
Seller of the change in Requirement of Law or other event giving rise to such
increased cost or reduced amount receivable and of Buyer’s intention to claim
compensation therefor. 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. This
covenant shall survive the termination of this Agreement and the repurchase by
Seller of any or all of the Purchased Assets.

 

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(d)       Capital Adequacy. If Buyer shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by Buyer or any corporation
controlling Buyer with any request or directive regarding capital adequacy
(whether or not having the force of law) from any Governmental Authority made
subsequent to the date hereof does or shall have the effect of reducing the rate
of return on Buyer’s or such corporation’s capital as a consequence of its
obligations hereunder to a level below that which Buyer or such corporation
could have achieved but for such adoption, change or compliance (taking into
consideration Buyer’s or such corporation’s policies with respect to capital
adequacy) by an amount deemed by Buyer, to be material, then from time to time,
after submission by Buyer to Seller of a written request therefor (provided,
however, that any such determination by Buyer and imposition of such increased
costs shall not be applied to Seller unless and until such determination by
Buyer and imposition of such increased costs are applied by Buyer to other
similarly situated sellers under similar repurchase facilities with Buyer),
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.
This covenant shall survive the termination of this Agreement and the repurchase
by Seller of any or all of the Purchased Assets.

 

(e)       Dodd-Frank; Basel III. Notwithstanding any provision herein to the
contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all rules, regulations, guidelines or directives promulgated in connection
therewith or in implementation thereof, and (ii) all requests, rules,
guidelines, requirements and directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or by United States or foreign regulatory
authorities pursuant to Basel III, in each case are deemed to be an adoption of
or change in a Requirement of Law made subsequent to the date of this Agreement,
regardless of the date enacted, adopted or issued.

 

(f)       Breakage Costs. If Seller repurchases Purchased Assets on a day other
than the last day of a Pricing Rate Period, Seller shall indemnify Buyer and
hold Buyer harmless from any actual out-of-pocket losses, costs and/or expenses
which Buyer sustains as a direct consequence thereof (“Breakage Costs”), in each
case for the remainder of the applicable Pricing Rate Period. Buyer shall
deliver to Seller a statement setting forth the amount and basis of
determination of any Breakage Costs in reasonable detail, it being agreed that
such statement and the method of its calculation shall be conclusive and binding
upon Seller absent manifest error. This Article 14(f) shall survive termination
of this Agreement and the repurchase of all Purchased Assets subject to
Transactions hereunder.

 

(g)       Payments Free of Taxes. Any and all payments by or on account of any
obligation of Seller under this Agreement or any Transaction Document shall be
made without deduction or withholding for any Taxes, except as required by
applicable law (including FATCA). If any applicable law (as determined in the
good faith discretion of Seller) requires the deduction or withholding of any
Tax from any such payment by Seller, then Seller shall be entitled to make such
deduction or withholding and shall timely pay 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 Article 14) the applicable Buyer or Transferee receives an
amount equal to the sum it would have received had no such deduction or
withholding been made.

 

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(h)          Payment of Other Taxes by Seller. Seller shall timely pay, without
duplication, (i) any Other Taxes imposed on such Seller to the relevant
Governmental Authority in accordance with applicable law, and (ii) any Other
Taxes imposed on Buyer or Transferee upon written notice from such Person
setting forth in reasonable detail the calculation of such Other Taxes.

 

(i)           Evidence of Payments. As soon as practicable after any payment of
Taxes by Seller to a Governmental Authority pursuant to this Article 14, Seller
shall deliver to Buyer or Transferee 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 or Transferee.

 

(j)           Indemnification by Seller. Without duplication of any other
obligation under this Article 14, Seller shall indemnify Buyer and each
Transferee, within ten (10) calendar days after demand therefor, for the full
amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted
on or attributable to amounts payable under this Article 14) payable or paid by
Buyer or such Transferee or required to be withheld or deducted from a payment
to Buyer or such Transferee 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 or such Transferee shall be conclusive absent manifest error.

 

(k)          Status of Buyer and Assignees. Any Buyer or Assignee that is
entitled to an exemption from or reduction of withholding Tax with respect to
payments made under any Transaction Document 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 or Assignee, 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 or Assignee 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 Articles 14(k)(A), 14(k)(B) and 14(k)(D) below) shall
not be required if in Buyer’s or Assignee’s reasonable judgment such completion,
execution or submission would subject Buyer or such Assignee to any material
unreimbursed cost or expense or would materially prejudice the legal or
commercial position of Buyer or such Assignee.

 

Without limiting the generality of the foregoing:

 

(A)         Buyer or any Transferee that is a U.S. Person shall deliver to
Seller on or prior to the date on which Buyer or such Assignee acquires an
interest under any Transaction Document (and from time to time thereafter upon
the reasonable request of Seller), executed copies of IRS Form W 9 certifying
that Buyer or Assignee is exempt from U.S. federal backup withholding tax;

 

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

 

(1)         in the case of a Foreign Buyer or foreign Transferee claiming the
benefits of an income tax treaty to which the United States is a party (x) with
respect to payments of interest under this Agreement, executed copies of IRS
Form W 8BEN or IRS Form W-8BEN-E 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 this
Agreement, IRS Form W-8BEN or IRS Form W-8BEN-E 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;

 

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

 

(3)         in the case of a Foreign Buyer or foreign Transferee claiming the
benefits of the exemption for portfolio interest under Section 881(c) of the
Code, (x) a certificate substantially in the form of Exhibit VIII to the effect
that such Foreign Buyer or foreign Transferee 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; or

 

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

 

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(C)         any Foreign Buyer or foreign Transferee shall, to the extent it is
legally entitled to do so, deliver to Seller (in such number of copies as shall
be requested by the recipient) on or prior to the date on which such Foreign
Buyer or foreign Transferee acquires an interest 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 or Transferee under any Transaction
Document would be subject to U.S. federal withholding Tax imposed by FATCA if
Buyer or Transferee 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), such Buyer or Transferee shall deliver to Seller at
the time or times prescribed by law and at such time or times reasonably
requested by Seller such documentation prescribed by applicable law (including
as prescribed by Section 1471(b)(3)(C)(i) of the 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 or
Transferee has complied with Buyer’s or Transferee’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 and each Assignee 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 Seller in writing of its legal inability to do so.

 

(l)           Treatment of Certain Refunds. 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 Article 14 (including by
the payment of additional amounts pursuant to this Article 14), it shall pay to
the indemnifying party an amount equal to such refund (but only to the extent of
indemnity payments made under this Article 14 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 Article 14(l) (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this Article 14(l), in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this Article 14(l) 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 paragraph shall not be construed
to require any indemnified party to make available its Tax returns (or any other
information relating to its Taxes that it deems confidential) to the
indemnifying party or any other Person.

 

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(m)         Assignment of Certain Rights. If any Buyer or Assignee requests
compensation under this Article 14 or, if Seller is required to pay any
Indemnified Taxes or additional amounts to any Buyer or any Assignee or any
Governmental Authority for the account of any Buyer or Assignee pursuant to
Article 14(d), or if any Buyer or Assignee defaults in its obligations under
this Agreement, then Seller may, at its sole expense and effort, upon notice to
such Buyer or Assignee, require such Buyer or Assignee to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in Article 18), all its interests, rights (other than its existing rights to
payments pursuant to Article 3(g) or Article 14(c)) and obligations under this
Agreement and the related Transaction Documents to an assignee that shall assume
such obligations (which assignee may be another Buyer, if a Buyer accepts such
assignment); provided that (i) such Buyer or Assignee shall have received
payment of an amount equal to the Repurchase Price for all Transactions, Price
Differential accreted with respect thereto, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
Repurchase Price principal and accreted Price Differential and fees) or Seller
(in the case of all other amounts) and (ii) in the case of any such assignment
resulting from a claim for compensation under Article 14(c) or payments required
to be made pursuant to Article 3(g), such assignment will result in a reduction
in such compensation or payments. A Buyer or Assignee shall not be required to
make any such assignment and delegation if, prior thereto, as a result of a
waiver by such Buyer or Assignee or otherwise, the circumstances entitling
Seller to require such assignment and delegation cease to apply.

 

(n)          Survival of Obligations. Each party’s obligations under this
Article 14 shall survive any assignment of rights by, or the replacement of,
Buyer or Assignee, the termination of the Agreement and the repayment,
satisfaction or discharge of all obligations under this Agreement.

 

Article 15.
SINGLE AGREEMENT

 

Buyer and Seller acknowledge that, and have entered hereinto and will enter into
each Transaction hereunder in consideration of, and in reliance upon, the fact
that, all Transactions hereunder constitute a single business and contractual
relationship and have been made in consideration of each other. Accordingly,
each of Buyer and Seller agrees (i) to perform all of its obligations in respect
of each Transaction hereunder, and that a default in the performance of any such
obligations shall constitute a default by it in respect of all Transactions
hereunder, (ii) that each of them shall be entitled to set off claims and apply
property held by them in respect of any Transaction against obligations owing to
them in respect of any other Transactions hereunder and (iii) that payments,
deliveries and other transfers made by either of them in respect of any
Transaction shall be deemed to have been made in consideration of payments,
deliveries and other transfers in respect of any other Transactions hereunder,
and the obligations to make any such payments, deliveries and other transfers
may be applied against each other and netted.

 

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Article 16.
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. EACH OF BUYER AND SELLER HEREBY CONSENTS TO THE ADMISSIBILITY OF
SUCH TAPE RECORDINGS IN ANY COURT, ARBITRATION, OR OTHER PROCEEDINGS, AND AGREES
THAT A DULY AUTHENTICATED TRANSCRIPT OF SUCH A TAPE RECORDING SHALL BE DEEMED TO
BE A WRITING CONCLUSIVELY EVIDENCING THE PARTIES’ AGREEMENT.

 

Article 17.
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 hand delivered or sent by (a) hand delivery,
with proof of delivery, (b) certified or registered United States mail, postage
prepaid, (c) expedited prepaid delivery service, either commercial or United
States Postal Service, with proof of delivery or (d) by telecopier (with
answerback acknowledged) provided that such telecopied notice must also be
delivered by one of the means set forth above, or (e) by e-mail with
confirmation of delivery, to the address specified in Annex I attached 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 write notice to the other parties hereto
in the manner provided for in this Article 17. A notice shall be deemed to have
been given: (v) in the case of hand delivery, at the time of delivery, (w) in
the case of registered or certified mail, when delivered or the first attempted
delivery on a Business Day, (x) in the case of expedited prepaid delivery upon
the first attempted delivery on a Business Day, (y) in the case of telecopier,
upon receipt of answerback confirmation, provided that such telecopied notice
was also delivered as required in this Article 17, or (z) in the case of e-mail,
upon confirmation of delivery. A party receiving a notice that does not comply
with the technical requirements for notice under this Article 17 may elect to
waive in writing any deficiencies and treat the notice as having been properly
given.

 

Article 18.
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.

 

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Article 19.
NON ASSIGNABILITY

 

(a)       Seller may not assign any of its rights or obligations under this
Agreement without the prior written consent of Buyer and any attempt by Seller
to assign any of its rights or obligations under this Agreement without the
prior written consent of Buyer shall be null and void ab initio.

 

(b)       Buyer may, without consent of Seller, sell to one or more banks,
financial institutions or other entities (“Participants”) participating
interests in any Transaction, its interest in the Purchased Assets, or any other
interest of Buyer under this Agreement. Buyer may, at any time and from time to
time, assign to any Person (an “Assignee” and together with Participants, each a
“Transferee” and collectively, the “Transferees”) all or any part of its rights
or interests in the Purchased Assets, or any other interest of Buyer under this
Agreement; provided that, so long as no Event of Default has occurred and is
continuing, and whether an assignment or a participation, (x) any such
Transferee or Participant is not a Prohibited Transferee, (y) Seller shall
continue to deal solely and directly with Buyer in connection with Buyer’s
rights and obligations under the Transaction Documents, and (z) Buyer shall
retain sole decision making authority under the Transaction Documents. Seller
agrees to cooperate with Buyer, at Buyer’s cost, in connection with any such
assignment, transfer or sale of participating interest and to enter into such
restatements of, and amendments, supplements and other modifications to, this
Agreement and all other Transaction Documents in order to give effect to such
assignment, transfer or sale.

 

(c)       Buyer, acting solely for this purpose as an agent of Seller, shall
maintain, either at its offices at the address set forth on Annex I attached
hereto or electronically, a copy of each assignment and a register for the
recordation of the names and addresses of the Assignees, and ownership rights in
the Transactions, Purchased Assets or in any other interests under this
Agreement of any Assignee pursuant to the terms hereof from time to time (the
“Register”). The entries in the Register shall be conclusive absent manifest
error, and Seller, Buyer and the Assignees shall treat each Person whose name is
recorded in the Register pursuant to the terms hereof as the beneficial owner of
the interests in the Transactions, Purchased Assets or in any other interests
under this Agreement for all purposes of this Agreement. The Register shall be
available for inspection by Seller, Buyer and any Assignee, at any reasonable
time and from time to time upon reasonable prior notice during normal banking
business hours. The parties intend that the Transactions and the Purchased
Assets shall at all times be treated as being in “registered form” within the
meaning of Section 163(f), Section 871(h)(2) and Section 881(c)(2) of the Code
and any related Treasury regulations (or any other relevant or successor
provisions of the Code or of such Treasury regulations).

 

(d)       If Buyer sells a participation it shall, acting solely for this
purpose as an agent of Seller, maintain a register on which it enters the name
and address of each Participant and the ownership rights in the Transactions,
Purchased Assets or any other interests under this Agreement of each Participant
(the “Participant Register”); provided that Buyer shall have no 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 ownership
rights in the Transactions, Purchased Assets or any other interests under this
Agreement) to any Person except to the extent (i) disclosing the portion of the
Participant Register relating to a Participant with respect to which a claim for
additional amounts is made under Articles 14(a), 14(b), 14(c), 14(d) or 14(f),
or (ii) otherwise to the extent such disclosure is reasonably expected to be
necessary to establish that such ownership rights in the Transactions or any
other interests under this Agreement are in registered form under Section
5f.103-1(c) of the United States Treasury Regulations. The entries in the
Participant Register shall be conclusive absent manifest error, and Buyer shall
treat each Person whose name is recorded in the Participant Register as the
owner of such participation for all purposes of this Agreement notwithstanding
any notice to the contrary. For the avoidance of doubt, no sale, assignment,
transfer or participation pursuant to this Article 19 shall be effective unless
and until reflected in the Register or Participant Register, as applicable.

 

 

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(e)       Nothing in this Agreement shall prevent or prohibit any Buyer from
pledging any of its Purchased Assets hereunder to a Federal Reserve Bank in
support of borrowings made by such Buyer from such Federal Reserve Bank;
provided, however, no such pledge shall release a Buyer from any of its
obligations hereunder or substitute any such pledgee for such Buyer as a party
hereto.

 

Article 20.
GOVERNING LAW

 

THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO
THIS AGREEMENT, THE RELATIONSHIP OF THE PARTIES TO THIS AGREEMENT, AND/OR THE
INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES TO THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW
RULES THEREOF. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT.

 

Article 21.
NO WAIVERS, ETC.

 

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

 

Article 22.
USE OF EMPLOYEE PLAN ASSETS

 

(a)       If “plan assets” within meaning of the Plan Asset Regulations are
intended to be used by either party hereto (the “Plan Party”) in a 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 non-exempt prohibited transaction under Section 406(a) of
ERISA or Section 4975(c)(1)(A)-(D) of the Code, 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 Article 22,
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 Article 22, 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 that 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 Seller in any outstanding
Transaction involving a Plan Party.

 

Article 23.
INTENT

 

(a)       The parties intend and recognize that each Transaction is a
“repurchase agreement” as that term is defined in Section 101(47) of the
Bankruptcy Code (except insofar as the type of Assets subject to such
Transaction or the term of such Transaction would render such definition
inapplicable), and a “securities contract” as that term is defined in Section
741 of the Bankruptcy Code (except insofar as the type of assets subject to such
Transaction would render such definition inapplicable). The parties hereto
intend (i) for each Transaction to qualify for the “safe harbor” treatment
provided by the Bankruptcy Code and for Buyer to be entitled to all of the
rights, benefits and protections afforded to Persons under the Bankruptcy Code
with respect to a “repurchase agreement” as defined in Section 101(47) of the
Bankruptcy Code and a “securities contract” as defined in Section 741(7) of the
Bankruptcy Code and that payments under this Agreement are deemed “margin
payments” or “settlement payments,” as defined in Section 101 of the Bankruptcy
Code, (ii) for the grant of a security interest set forth in Article 6 to also
be a “securities contract” as defined in Section 741(7)(A)(xi) of the Bankruptcy
Code and a “repurchase agreement” as that term is defined in Section
101(47)(A)(v) of the Bankruptcy Code, and (iii) that Buyer (for so long as each
party is either a “financial institution,” “financial participant,” “repo
participant,” “master netting participant” or other entity listed in Sections
546, 555, 559, 561, 362(b)(6) or 362(b)(7) of the Bankruptcy Code) shall be
entitled to the “safe harbor” benefits and protections afforded under the
Bankruptcy Code with respect to a “repurchase agreement” and a “securities
contract,” and a “master netting agreement” including (x) the rights, set forth
in Article 13 and in Section 555, 559 and 561 of the Bankruptcy Code, to
liquidate the Purchased Assets and terminate this Agreement, and (y) the right
to offset or net out as set forth in Article 13 and in Sections 362(b)(6),
362(b)(7), 362(o) and 546 of the Bankruptcy Code.

 

(b)       It is understood that either party’s right to accelerate or terminate
this Agreement or to liquidate Assets delivered to it in connection with the
Transactions hereunder or to exercise any other remedies pursuant to Article 13
hereof is a contractual right to accelerate or terminate this Agreement or to
liquidate Assets 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 the Transactions 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.

 

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(c)       The parties 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 the FDIA and any
rules, orders or policy statements thereunder (except insofar as the type of
assets subject to such Transaction would render such definition inapplicable).

 

(d)       Each party hereto further agrees that it shall not challenge the
characterization of this Agreement or any Transaction as a “repurchase
agreement,” “securities contract,” and/or “master netting agreement,” or each
party as a “repo participant” within the meaning of the Bankruptcy Code except
in so far as the type of Purchased Assets subject to the Transactions or, in the
case of a “repurchase agreement,” the term of the Transactions, would render
such definition inapplicable.

 

(e)       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).

 

(f)        It is understood that this Agreement constitutes a “master netting
agreement” as defined in Section 101(38A) of the Bankruptcy Code, and as used in
Section 561 of the Bankruptcy Code.

 

(g)       Each party to this Agreement acknowledges that it is its intent for
purposes of U.S. federal, state and local income and franchise taxes (a) to
treat each Transaction as indebtedness of Seller that is secured by the
Purchased Assets and (b) that the Purchased Assets are owned by Seller in the
absence of an Event of Default by Seller. All parties to this Agreement agree to
such treatment and agree to take no action inconsistent with this treatment,
unless required by law.

 

(h)       The parties agree that the 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.

 

Article 24.
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 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;

 

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(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;

 

(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; and

 

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

 

Article 25.
CONSENT TO JURISDICTION; WAIVERS

 

(a)       Pursuant to, and in accordance with, Section 5-1402 of the New York
State General ObligationS Law, 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 each may
effectively do so, the defense of an inconvenient forum to the maintenance of
such action or proceeding and irrevocably consent to the service of any summons
and complaint and any other process by the mailing of copies of such process to
them at their respective address specified herein. The parties hereby agree that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Article 25 shall affect the right of EITHER
PARTY to serve legal process in any other manner permitted by law or affect the
right of such party to bring any action or proceeding against the other party or
its property in the courts of other jurisdictions.

 

(d)       SELLER 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.

 

Article 26.
NO RELIANCE

 

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

 

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

 

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

 

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

 

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

 

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

 

Article 27.
INDEMNITY

 

Seller hereby agrees to indemnify Buyer, Buyer’s Affiliates, and each of its
officers, directors, and employees (collectively, “Indemnified Parties”) from
and against any and all actual out-of-pocket liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, fees, costs, expenses (including,
without limitation, reasonable attorneys’ fees and disbursements of outside
counsel) or disbursements (all of the foregoing, collectively “Indemnified
Amounts”) that may at any time (including, without limitation, such time as this
Agreement shall no longer be in effect and the Transactions shall have been
repaid in full) be imposed on, incurred and paid by or asserted against any
Indemnified Party in any way whatsoever arising out of, or in connection with,
or relating to the Transaction Documents including this Agreement or any
Transactions hereunder 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 liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, fees, costs, expenses or disbursements
resulting from the gross negligence or willful misconduct of Buyer or any
Indemnified Party. Without limiting the generality of the foregoing, Seller
agrees to hold Buyer harmless from and indemnify Buyer against all Indemnified
Amounts with respect to all Purchased Assets relating to, or arising out of, any
violation or alleged violation of any Environmental Law, rule or regulation or
any consumer credit laws, including, without limitation, ERISA, the Truth in
Lending Act and/or the Real Estate Settlement Procedures Act; provided, that
Seller shall not be liable for liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, fees, costs, expenses or disbursements
resulting from the gross negligence or willful misconduct of Buyer or any
Indemnified Party. In any suit, proceeding or action brought by Buyer in
connection with any Purchased Asset for any sum owing thereunder, or to enforce
any provisions of any Purchased Asset, Seller will save, indemnify and hold
Buyer harmless from and against all actual out-of-pocket expense (including,
without limitation, reasonable attorneys’ fees and disbursements of outside
counsel), loss or damage 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 all Buyer’s reasonable out-of-pocket costs and expenses
incurred in connection with Buyer’s due diligence reviews with respect to the
Purchased Assets (including, without limitation, those incurred pursuant to
Article 28 and Article 3 (including, without limitation, all Pre-Purchase Legal
Expenses, even if the underlying prospective Transaction for which they were
incurred does not take place for any reason)) and the enforcement or the
preservation of Buyer’s rights under this Agreement, any Transaction Documents
or Transaction contemplated hereby, including, without limitation, the
reasonable fees and disbursements of its outside counsel. Seller hereby
acknowledges that the obligation of Seller hereunder is a recourse obligation of
Seller and this Article 27 shall survive the termination of this Agreement and
the Transactions contemplated hereby. For the avoidance of doubt, this Article
27 shall not apply with respect to Taxes other than any Taxes that represent
losses, claims, damages, etc. arising from any non-Tax claim.

 

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Article 28.
DUE DILIGENCE

 

Seller acknowledges that Buyer has the right to perform continuing due diligence
reviews with respect to the Purchased Assets, 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 Asset Files, Servicing Records and any and all documents, records,
agreements, instruments or information relating to such Purchased Assets in the
possession or under the control of Seller, Primary Servicer and any other
servicer or sub-servicer and/or Custodian. Seller agrees to reimburse Buyer for
any and all reasonable out of pocket costs and expenses incurred by Buyer with
respect to continuing due diligence on the Purchased Assets, which shall be paid
by Seller to Buyer within thirty (30) calendar days after receipt of an invoice
therefor. Seller also shall make available to Buyer a knowledgeable financial or
accounting officer for the purpose of answering questions respecting the
Purchased Asset Files and the Purchased Assets. Without limiting the generality
of the foregoing, Seller acknowledges that Buyer may enter into Transactions
with Seller based solely upon the information provided by Seller to Buyer and
the representations, warranties and covenants contained herein, and that Buyer,
at its option, has the right at any time to conduct a partial or complete due
diligence review on some or all of the Purchased Assets. Buyer may underwrite
such Purchased Assets itself or engage a third party underwriter to perform such
underwriting. Seller agrees to cooperate with Buyer and any third party
underwriter in connection with such underwriting, including, but not limited to,
providing Buyer and any third party underwriter with access to any and all
documents, records, agreements, instruments or information relating to such
Purchased Assets in the possession, or under the control, of Seller. Upon a
written demand therefor by Buyer to Seller, Seller further agrees that Seller
shall promptly (but in no event later than ten (10) Business Days after such a
demand) reimburse Buyer for any and all reasonable attorneys’ fees, costs and
expenses of outside counsel reasonably incurred by Buyer in connection with
continuing due diligence on Eligible Assets and Purchased Assets.

 

Article 29.
SERVICING

 

(a)       Each servicer of any Purchased Asset (including the Primary Servicer)
shall service the Assets for the benefit of Buyer and Buyer’s successors and
assigns. The appointment of each servicer of any Purchased Asset (including the
Primary Servicer) shall be subject to the prior written approval of Buyer.
Seller shall cause each such servicer (including the Primary Servicer) to
service the Purchased Assets at Seller’s sole cost and for the benefit of Buyer
in accordance with Accepted Servicing Practices; provided that, without prior
written consent of Buyer in its sole discretion as required by Article 7(d) no
servicer (including the Primary Servicer) of any of the Purchased Assets shall
take any action with respect to any Purchased Asset described in Article 7(d)
other than pursuant to a Revocable Option.

 

 79

 

  

(b)       Seller agrees that Buyer is the owner of all servicing records,
including, but not limited to, any and all servicing agreements (including,
without limitation, the Primary Servicing Agreement or any other servicing
agreement relating to the servicing of any or all of the Purchased Assets)
(collectively, the “Servicing Agreements”), files, documents, records, data
bases, computer tapes, copies of computer tapes, proof of insurance coverage,
insurance policies, valuations, other closing documentation, payment history
records, and any other records relating to or evidencing the servicing of
Purchased Assets (the “Servicing Records”), so long as the Purchased Assets are
subject to this Agreement. Seller covenants to safeguard such Servicing Records
and to deliver them promptly to Buyer or its designee at Buyer’s request.

 

(c)       Upon the occurrence and during the continuance of an Event of Default,
Buyer may, in its sole discretion, (i) sell its right to the Purchased Assets on
a servicing released basis and/or (ii) terminate Seller (as the servicer),
Primary Servicer or any other servicer or sub-servicer of the Purchased Assets
with or without cause, in each case without payment of any termination fee.

 

(d)       Seller shall not employ sub-servicers or any other servicer other than
Primary Servicer pursuant to the Primary Servicing Agreement to service the
Purchased Assets without the prior written approval of Buyer, in Buyer’s sole
discretion. If the Purchased Assets are serviced by such a Buyer approved
sub-servicer or any other servicer, Seller shall, irrevocably assign all rights,
title and interest (if any) in the servicing agreements in the Purchased Assets
to Buyer. Seller shall cause all servicers and sub-servicers engaged by Seller
to execute a direct agreement with Buyer acknowledging Buyer’s security interest
and agreeing that each servicer and/or sub-servicer shall transfer all Income
with respect to the Purchased Assets in accordance with the applicable Servicing
Agreement and so long as any Purchased Asset is owned by Buyer hereunder,
following notice from Buyer to Seller and each such servicer of an Event of
Default under this Agreement, each such servicer (including Primary Servicer) or
sub-servicer shall take no action with regard to such Purchased Asset other than
as specifically directed by Buyer.

 

(e)       The payment of servicing fees shall be subordinate to payment of
amounts outstanding under any Transaction and this Agreement.

 

(f)        For the avoidance of doubt, Seller retains no economic rights to the
servicing, other than Seller’s rights under the Primary Servicing Agreement or
any other servicing agreement related to the Purchased Assets. As such, Seller
expressly acknowledges that the Purchased Assets are sold to Buyer on a
“servicing released” basis with such servicing retained by the Servicer.

 

Article 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. 

 

 80

 

 

(b)       The Transaction Documents may be executed in counterparts, each of
which so executed shall be deemed to be an original, but all of such
counterparts shall together constitute but one and the same instrument.

 

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

 

(d)       Without limiting the rights and remedies of Buyer under the
Transaction Documents, Seller shall pay on demand Buyer’s reasonable actual
out-of-pocket costs and expenses, including reasonable fees and expenses of
accountants, attorneys and advisors, incurred in connection with the
preparation, negotiation, execution, consummation and administration of, and any
amendment, supplement or modification to, the Transaction Documents and the
Transactions thereunder (except as expressly set forth herein), whether or not
such Transaction Document (or amendment thereto) or Transaction is ultimately
consummated. Seller agrees to pay Buyer promptly on demand (but in no event
later than ten (10) Business Days after such a demand) all costs and expenses
(including, without limitation, reasonable expenses for legal services of every
kind) of any subsequent enforcement of any of the provisions hereof, or of the
performance by Buyer of any obligations of Seller in respect of the Purchased
Assets, or any actual or attempted sale, or any exchange, enforcement,
collection, compromise or settlement in respect of any of the Purchased Items
and for the custody, care or preservation of the Purchased Items (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 reasonable costs and expenses (including, without
limitation, reasonable expenses for legal services of every kind) incurred in
connection with the maintenance of the Depository Account and registering the
Purchased Items in the name of Buyer or its nominee. All such expenses shall be
recourse obligations of Seller to Buyer under this Agreement and shall survive
the termination of this Agreement.

 

(e)       In addition to any rights now or hereafter granted under applicable
law or otherwise, and not by way of limitation of such rights, Seller hereby
grants to Buyer and its Affiliates a right of offset, to secure repayment of all
amounts owing to Buyer or its Affiliates by Seller under the Transaction
Documents, upon any and all monies, securities, collateral or other property of
Seller and the proceeds therefrom, now or hereafter held or received by Buyer or
its Affiliates or any entity under the control of Buyer or its Affiliates and
its respective successors and assigns (including, without limitation, branches
and agencies of Buyer, wherever located), for the account of Seller, whether for
safekeeping, custody, pledge, transmission, collection, or otherwise, and also
upon any and all deposits (general or specified) and credits of Seller at any
time existing. Buyer and its Affiliates are hereby authorized at any time and
from time to time upon the occurrence and during the continuance of an Event of
Default, without notice to Seller, any such notice being expressly waived, to
offset, appropriate, apply and enforce such right of offset against any and all
items herein above referred to against any amounts owing to Buyer or its
Affiliates by Seller under the Transaction, irrespective of whether Buyer or its
Affiliates shall have made any demand hereunder and although such amounts, or
any of them, shall be contingent or unmatured and regardless of any other
collateral securing such amounts. Seller shall be deemed directly indebted to
Buyer and its Affiliates in the full amount of all amounts owing to Buyer and
its Affiliates by Seller under the Transaction Documents, and Buyer and its
Affiliates shall be entitled to exercise the rights of offset provided for
above. ANY AND ALL RIGHTS TO REQUIRE BUYER OR ITS AFFILIATES TO EXERCISE THEIR
RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL OR PURCHASED ITEMS THAT
SECURE THE AMOUNTS OWING TO BUYER OR ITS AFFILIATES BY SELLER UNDER THE
TRANSACTION DOCUMENTS PRIOR TO EXERCISING THEIR RIGHT OF OFFSET WITH RESPECT TO
SUCH MONIES, SECURITIES, COLLATERAL, DEPOSITS, CREDITS OR OTHER PROPERTY OF
SELLER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED BY SELLER.

 

 81

 

  

(f)       Each party agrees that it shall not assert any claims against the
other for special, indirect, consequential or punitive damages for the actual
use or purported use of proceeds hereunder.

 

(g)       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.

 

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

 

(i)        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.

 

(j)        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.

 

(k)       Wherever pursuant to this Agreement, Buyer exercises any right given
to it to consent or not consent, or to approve or disapprove, or any arrangement
or term is to be satisfactory to, Buyer in its sole discretion, Buyer shall
decide to consent or not consent, or to approve or disapprove or to decide that
arrangements or terms are satisfactory or not satisfactory, in its sole
discretion and such decision by Buyer shall be final and conclusive.

 

[REMAINDER OF PAGE LEFT BLANK] 

 

 82

 

 

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

 

  BUYER:       GOLDMAN SACHS BANK USA, a New York state-chartered bank        
By: /s/ Jeffrey Dawkins     Name: Jeffrey Dawkins     Title:  Authorized Person

 

Signature Page to Uncommitted Master Repurchase and Securities Contract
Agreement

  

 83

 

  

  SELLER:       TERRA MORTGAGE CAPITAL I, LLC, a Delaware limited liability
company         By: /s/ Vikram Uppal     Name: Vikram Uppal     Title: Chief
Executive Officer

  

Signature Page to Uncommitted Master Repurchase and Securities Contract
Agreement

 

 84

 

 

 

ANNEXES, EXHIBITS AND SCHEDULES

 

ANNEX I Names and Addresses for Communications between Parties     SCHEDULE I
Prohibited Transferees     SCHEDULE II Purchased Asset File     SCHEDULE III
Organizational Structure Chart     EXHIBIT I Form of Confirmation Statement    
EXHIBIT II Authorized Representatives of Seller     EXHIBIT III-A Monthly
Reporting Package     EXHIBIT III-B Quarterly Reporting Package     EXHIBIT
III-C Annual Reporting Package     EXHIBIT IV Form of Power of Attorney    
EXHIBIT V Representations and Warranties Regarding Individual Purchased Assets  
  EXHIBIT VI Advance Procedures     EXHIBIT VII Form of Margin Deficit Notice  
  EXHIBIT VIII Form of Tax Compliance Certificates     EXHIBIT IX Form of
Covenant Compliance Certificate     EXHIBIT X UCC Filing Jurisdictions    
EXHIBIT XI Form of Servicer Notice     EXHIBIT XII Form of Release Letter    
EXHIBIT XIII Reserved     EXHIBIT XIV Form of Custodial Delivery Certificate    
EXHIBIT XV Form of Bailee Letter     EXHIBIT XVI Underwriting Guidelines    
EXHIBIT XVII Future Funding Advance Procedures

  

 85

 

 

ANNEX I

NAMES AND ADDRESSES FOR COMMUNICATIONS BETWEEN PARTIES

Buyer:

GOLDMAN SACHS BANK USA

200 West Street

New York, New York 10282

Attention:Mr. Jeffrey Dawkins

Telephone:#####

Telecopy:#####

Email:#####

 

Email: #####

Email: #####

Email: #####

 

With copies to:

 

GOLDMAN SACHS BANK USA

2001 Ross Avenue, Suite 2800

Dallas, Texas 75201

Attention: Brian A. Bolton – Mortgages Legal

Telephone:  #####

Telecopy: #####

Email: #####

 

and

 

Paul Hastings LLP

200 Park Avenue

New York, New York 10166

Attention:Lisa A. Chaney, Esq.

Telephone:#####

Facsimile:#####

Email:#####

 

Seller:

TERRA MORTGAGE CAPITAL I, LLC
Terra Mortgage Capital I, LLC

805 Third Avenue, 8th Floor

New York, New York 10022

Attn: Michael Muscat

Telephone: #####

Email: #####

 

 

 

  

With copies to:

 

TERRA MORTGAGE CAPITAL I, LLC

805 Third Avenue, 8th Floor

New York, New York 10022

Attn: Vik Uppal

Telephone: #####

Email: #####

 

and:

 

TERRA MORTGAGE CAPITAL I, LLC

805 Third Avenue, 8th Floor

New York, New York 10022

Attn: Greg Pinkus

Telephone: #####

Email: #####

 

-2-

 

  

SCHEDULE I

 

Prohibited Transferees

 

Reserved.

  

-3-

 

  

Schedule II

 

With respect to each Purchased Asset, the following documents, as applicable:

 

(A)The original Mortgage Note 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 of the Last Endorsee
(in the event that the Purchased Asset 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 Asset 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] or [doing business] as [previous name]”) or a lost note affidavit in a
form reasonably approved by Buyer, with a copy of the applicable Mortgage Note
attached thereto.

 

(B)The original or a copy of the loan agreement and the guarantee, if any,
executed in connection with the Purchased Asset.

 

(C)The original Mortgage with evidence of recording thereon, or a copy thereof
together with an officer’s certificate of Seller or certification of the named
bailee 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
Underlying Mortgaged Property is located.

 

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

 

(E)The original Assignment of Mortgage in blank for each Purchased Asset, in
form and substance acceptable for recording and signed in the name of the Last
Endorsee (in the event that the Purchased Asset 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 Asset was acquired or originated while doing business under another
name, the signature must be in the following form: “[Last Endorsee], [formerly
known] or [doing business] as [previous name]”).

 

(F)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 or certification of the named bailee certifying that such
copies 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 Underlying Mortgaged
Property is located.

 

 

 

  

(G)The original or a copy of the title policy or, if the original title policy
has not been issued, the original or a copy of the irrevocable marked commitment
to issue the same or pro-forma title policy.

 

(H)The original or a copy of any security agreement, chattel mortgage or
equivalent document executed in connection with the Purchased Asset.

 

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

 

(J)The originals of all intervening assignments of Assignment of Leases and
rents, if any, or copies thereof, with evidence of recording thereon, or copies
thereof together with an officer’s certificate of Seller or certification of the
named bailee certifying that such copies 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
Underlying Mortgaged Property is located.

 

(K)A copy of the UCC financing statements, certified as true and correct by
Seller, and all necessary UCC continuation statements with evidence of filing
thereon or copies thereof together with evidence that such UCC financing or
continuation statements have been sent for filing, and UCC assignments in blank,
which UCC assignments shall be in form and substance acceptable for filing in
the applicable jurisdictions.

 

(L)The original or a copy of any environmental indemnity agreement or similar
guaranty or indemnity, whether stand-alone or incorporated into the applicable
loan documents (if any).

 

(M)Mortgagor’s certificate or title affidavit (if any).

 

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

 

(O)A copy of all servicing agreements and Servicing Records related to such
Purchased Asset, which Seller shall deliver to Servicer (with a copy to Buyer).

 

(P)A copy of the Mortgagor’s opinions of counsel.

 

-2-

 

  

(Q)An assignment of any management agreements, permits, contracts and other
material agreements (if any).

 

(R)If reasonably requested by Buyer, reports of UCC, tax lien, judgment and
litigation searches, conducted by search firms reasonably acceptable to Buyer
with respect to the Purchased Asset, Seller and the related underlying obligor
and such reports reasonably satisfactory to Buyer.

 

(S)Copies of all documents relating to the formation and organization of the
related obligor under such Purchased Asset, together with all consents and
resolutions delivered in connection with such obligor’s obtaining such Purchased
Asset.

 

(T)The original omnibus assignment in blank or such other documents necessary
and sufficient to transfer to Buyer all of Seller’s right, title and interest in
and to the Purchased Asset.

 

(U)The original or a copy of any participation agreement and an original or copy
of any intercreditor, co-lender agreement, and/or servicing agreement executed
in connection with the Purchased Asset.

 

(V)Copies of all other material documents and instruments evidencing,
guaranteeing, insuring, securing or modifying such Purchased Asset, executed and
delivered to Seller in connection with, or otherwise relating to, such Purchased
Asset, including all documents establishing or implementing any lockbox pursuant
to which Seller is entitled to receive any payments from cash flow of the
underlying real property.

 

-3-

 

 

Schedule III

 

ORGANIZATIONAL STRUCTURE CHART

 

Reserved.

 

 

1

 

 

Exhibit I

 

CONFIRMATION STATEMENT
GOLDMAN SACHS BANK USA

 

Ladies and Gentlemen:

 

Seller is pleased to deliver our written CONFIRMATION of our agreement to enter
into the Transaction pursuant to which GOLDMAN SACHS BANK USA, a New York
state-chartered bank, shall purchase from us the Purchased Assets identified on
the attached Schedule 1 pursuant to the Uncommitted Master Repurchase and
Securities Contract Agreement, dated as of December 12, 2018 (the “Master
Repurchase and Securities Contract Agreement”), between GOLDMAN SACHS BANK USA,
a New York state-chartered bank (“Buyer”) and TERRA MORTGAGE CAPITAL I, LLC, a
Delaware limited liability company (“Seller”), on the following terms.
Capitalized terms used herein without definition have the meanings given in the
Master Repurchase and Securities Contract Agreement.

 

Purchase Date: __________, 20__     Purchased Assets: [____Name]:  As identified
on attached Schedule 1     Principal Amount of Purchased Asset as of Purchase
Date: [$    ]     Available Future Funding as of Purchase Date:      
Fully-funded Principal Amount of Purchased Asset:       Repurchase Date:      
Advance Rate:       Purchase Price: [$    ]     Change in Purchase Price [$    ]
    Pricing Rate: LIBOR Rate plus ______%     Governing Agreements: As
identified on attached Schedule 1     Requested Fund Date:       As-Is Value of
Underlying Mortgaged Property:       Buyer’s LTV:       Maximum Buyer’s LTV:    
  Purchase Price Debt Yield   Underwritten Net
Operating Income Purchase Price Debt
Yield       Year 1           Year 2           Year 3           Year 4          
Year 5    

 

1

 

 

Draw Fee:       Requested Wire Amount (net of Draw Fee):       Type of Funding:
[Table/Non-table]     Wiring Instructions: See Schedule 2     Name and address
for communications: Buyer:

GOLDMAN SACHS BANK USA

200 West Street

New York, New York 10282

Attention:         Mr. Jeffrey Dawkins

Telephone:       #####

Email:                #####

 

Email: #####

Email: #####

Email: #####

 

With copies to:

 

GOLDMAN SACHS BANK USA

2001 Ross Avenue, Suite 2800

Dallas, Texas 75201

Attention:        Brian A. Bolton – Mortgages Legal

Telephone:      #####

Telecopy:        #####

Email:              #####

 

Paul Hastings LLP

200 Park Avenue

New York, New York 10166

Attention:         Lisa A. Chaney, Esq.

Telephone:       #####

Facsimile:         #####

Email:               #####

        Seller: TERRA MORTGAGE CAPITAL I, LLC    

805 Third Avenue, 8th Floor

New York, New York 10022

Attn: Michael Muscat

Telephone: #####

Email: ##### 

 

2

 

 

  With copies to:

TERRA MORTGAGE CAPITAL I, LLC

805 Third Avenue, 8th Floor

New York, New York 10022

Attn: Vik Uppal

Telephone: #####

Email: #####

 

   

TERRA MORTGAGE CAPITAL I, LLC

805 Third Avenue, 8th Floor

New York, New York 10022

Attn: Greg Pinkus

Telephone: #####

Email: #####

  

3

 

 

 

  TERRA MORTGAGE CAPITAL I, LLC, a Delaware limited liability company        
By:       Name:     Title:

 

 

4

 

  

AGREED AND ACKNOWLEDGED:       GOLDMAN SACHS BANK USA,   a New York
state-chartered bank         By:       Name:     Title:  

   

5

 

 

Schedule 1 to Confirmation Statement

 

Purchased Asset:   [Asset Type] dated as of [______] in the original principal
amount of $[_________], made by [____] to [____] under and pursuant to that
certain [loan agreement]/[applicable document] (the “Governing Agreement”).    
  Aggregate Principal Amount:   $[_________] [(plus up to $[______] of future
advances under Section [____] of the Governing Agreement).  Buyer’s obligation
to fund any future advances is contingent on (a) Seller’s satisfaction of the
conditions captained in Article 3(j) of the Uncommitted Master Repurchase and
Securities Contract Agreement and (b) a bringdown by Seller of all
representations and warranties made on the date hereof with regard to the
Purchased Asset pursuant to Article 9 of the Uncommitted Master Repurchase and
Securities Contract Agreement.]       Representations:   Seller acknowledges and
agrees that upon funding by Buyer of the Purchase Price for the Purchased Asset
[and, in connection with any subsequent funding of the Advance Rate of a future
advance under the Purchased Asset, (i)] Seller shall be deemed to have confirmed
that all of the representations and warranties set forth in Article 9 of the
Uncommitted Master Repurchase and Securities Contract Agreement are true and
correct as of the Purchase Date with respect to all Purchased Assets [or the
applicable funding date, as the case may be,], except such representations and
warranties which by their terms speak as of a specified date and except as set
forth in the Requested Exception Report attached as Schedule 3 hereto or in the
Requested Exception Report delivered with respect to any other Purchased Asset
[and (ii) with respect to the funding of a Future Funding Advance, Seller shall
be deemed to have represented and warranted that all of the conditions to
funding of such advance set forth in Section [___] of the Governing Agreement
have been satisfied (and no conditions have been waived, except as has been
previously disclosed by Seller to Buyer in writing)].

 

 

 

 

Fixed/Floating:   Floating       Coupon:   [___]%       Term of Loan including
Extension Options:   [__________],[_______]       Amortization (e.g., IO, full
amortization, etc.):   [__]-year amortization[, with [__]-month IO.]

  

 

 

 

 

Schedule 2 to Confirmation Statement

 

Wiring Instructions

 

[to be attached]

 

 

 

  

Schedule 3 to Confirmation Statement

 

Requested Exceptions Report

 

[to be attached]

 

 

 

 

Exhibit II

 

AUTHORIZED REPRESENTATIVES OF SELLER

 

[SELLER TO PROVIDE]

Name   Specimen Signature       Vikram Uppal   /s/ Vikram Uppal       Gregory
Pinkus   /s/ Gregory Pinkus

  

 

 

 

Exhibit III-A

 

MONTHLY REPORTING PACKAGE

 

The Monthly Reporting Package shall include, inter alia, the following:

 

·A listing of all Purchased Assets reflecting (i) the payment status of each
Purchased Asset and any material changes in the financial or other condition of
each Purchased Asset, including, without limitation any new or ongoing
litigation; and (ii) any representation and/or warranty breaches under the
Purchased Asset Documents.

 

·Any and all financial statements, rent rolls, leasing status reports for the
immediately preceding twelve (12) month period, copies of any newly executed
leases, any other financial reports or certificates, or other material
information received from the borrowers related to each Purchased Asset.

 

·A listing of any existing Defaults.

 

·A remittance report containing servicing information, including, without
limitation, the beginning and ending balances of the Purchased Assets for such
period (listing the dates and amounts of any activity impacting the outstanding
principal balances of the Purchased Assets), the amount of each periodic payment
due, the amount of each periodic payment received, the date of receipt, the date
due, and whether there has been any material adverse change to the real
property, on a loan by loan basis and in the aggregate, with respect to the
Purchased Assets serviced by any servicer (such remittance report, a “Servicing
Tape”), or to the extent any servicer does not provide any such Servicing Tape,
a remittance report containing the servicing information that would otherwise be
set forth in the Servicing Tape or in the Servicer’s standard format.

 

·All other information as Buyer, from time to time, may reasonably request with
respect to Seller or any Purchased Asset, obligor or Underlying Mortgaged
Property.

  

 

 

 

 

Exhibit III-B

 

QUARTERLY REPORTING PACKAGE

 

The Quarterly Reporting Package shall include, inter alia, the following:

 

·Consolidated unaudited financial statements of Guarantor presented fairly in
accordance with GAAP or, if such financial statements being delivered have been
filed with the SEC pursuant to the requirements of the 1934 Act, or similar
state securities laws, presented in accordance with applicable statutory and/or
regulatory requirements and delivered to Buyer within the same time frame as are
required to be filed in accordance with such applicable statutory or regulatory
requirements, in either case accompanied by a Covenant Compliance Certificate,
including a statement of operations and a statement of changes in cash flows for
such quarter and statement of net assets as of the end of such quarter, and
certified as being true and correct by a Covenant Compliance Certificate.

 

·Quarterly asset management reports.

 

·A business plan update, monthly and year-to-date operating statements, rent
rolls, comparison of budget and actual income and expenses, ARGUS (or similar)
cash flow projections model, and a leasing status report for the Purchased
Assets, to the extent available.

  

 

 

 

Exhibit III-C

 

ANNUAL REPORTING PACKAGE

 

The Annual Reporting Package shall include, inter alia, the following:

 

·Guarantor’s consolidated audited financial statements, prepared by a nationally
recognized independent certified public accounting firm and presented fairly in
accordance with GAAP or, if such financial statements being delivered have been
filed with the SEC pursuant to the requirements of the 1934 Act, or similar
state securities laws, presented in accordance with applicable statutory and/or
regulatory requirements and delivered to Buyer within the same time frame as are
required to be filed in accordance with such applicable statutory and/or
regulatory requirements, in either case accompanied by a Covenant Compliance
Certificate, including a statement of operations and a statement of changes in
cash flows for such year and statement of net assets as of the end of such year
accompanied by an unqualified report of the nationally recognized independent
certified public accounting firm that prepared them.

  

 

 

 

Exhibit IV

 

FORM OF POWER OF ATTORNEY

 

Know All Men by These Presents, that TERRA MORTGAGE CAPITAL I, LLC, a Delaware
limited liability company (“Seller”), does hereby appoint GOLDMAN SACHS BANK
USA, a New York state-chartered bank (“Buyer”), its attorney in fact to act in
Seller’s name, place and stead in any way that Seller could do with respect to
(i) the completion of any endorsements of documents or instruments relating to
the Purchased Assets, including, without limitation, any transfer documents
related thereto and any written notices to underlying obligors to effectuate a
legal transfer of the Purchased Assets, (ii) the recordation of any instruments
relating to such Purchased Assets, (iii) the preparation and filing, in form and
substance satisfactory to Buyer, of such financing statements, continuation
statements, and other uniform commercial code forms, as Buyer may from time to
time, reasonably consider necessary to create, perfect, and preserve Buyer’s
security interest in the Purchased Assets, and (iv) the enforcement of Seller’s
rights under the Purchased Assets purchased by Buyer pursuant to the Uncommitted
Master Repurchase and Securities Contract Agreement, dated as of December 12,
2018 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the “Master Repurchase and Securities Contract Agreement”),
between Buyer and Seller, and to take such other steps as may be necessary or
desirable to enforce Buyer’s rights against such Purchased Assets, the related
Purchased Asset Files and the Servicing Records to the extent that Seller is
permitted by law to act through an agent.

 

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.

 

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.

 

IN WITNESS WHEREOF, Seller has caused this Power of Attorney to be executed as a
deed this [ ] day of [_______], 2018.

 

[SIGNATURES ON THE FOLLOWING PAGE] 

 

 

 

  

  TERRA MORTGAGE CAPITAL I, LLC         By:       Name:     Title:

  

 

 

 

Exhibit V

 

eXHIBIT v-a

 

Representations and Warranties
Regarding the Purchased Assets

 

With respect to each Purchased Asset and the related Underlying Mortgaged
Property or Underlying Mortgaged Properties, on the related Purchase Date and at
all times while this Agreement and any Transaction contemplated hereunder is in
effect, Seller shall be deemed to make the following representations and
warranties to Buyer as of such date; provided, however, that, with respect to
any Purchased Asset, such representations and warranties shall be deemed to be
modified by any Requested Exceptions Report delivered by Seller to Buyer prior
to the issuance of a Confirmation with respect thereto.

 

(1)Whole Loan; Ownership of Purchased Assets. Each Purchased Asset is an
Eligible Asset. 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 or pledge, and Seller had good title to, and was the
sole owner of, each Purchased Asset free and clear of any and all liens,
charges, pledges, encumbrances, participations, any other ownership interests
on, in or to such Purchased Asset. Seller has full right and authority to sell,
assign and transfer each Purchased Asset, and the assignment to Buyer
constitutes a legal, valid and binding assignment of such Purchased Asset free
and clear of any and all liens, pledges, charges or security interests of any
nature encumbering such Purchased Asset.

 

(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 Asset 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, one-action or market value limit deficiency legislation), as
applicable, and is enforceable in accordance with its terms, except (a) as such
enforcement may be limited by (i) bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and (ii) general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law) and
(b) that certain provisions in such Purchased Asset Documents (including,
without limitation, provisions requiring the payment of default interest, late
fees or prepayment/yield maintenance or prepayment fees, charges and/or
premiums) are, or may be, further limited or rendered unenforceable by or under
applicable law, but (subject to the limitations set forth in clause (a) above)
such limitations or unenforceability will not render such Purchased Asset
Documents invalid as a whole or materially interfere with the mortgagee’s
realization of the principal benefits and/or security provided thereby (clauses
(a) and (b) collectively, the “Standard Qualifications”). Except as set forth in
the immediately preceding sentences, there is no valid offset, defense,
counterclaim or right of rescission available to the related borrower with
respect to any of the related Mortgage Notes, Mortgages or other Purchased Asset
Documents, including, without limitation, any such valid offset, defense,
counterclaim or right based on intentional fraud by Seller in connection with
the origination of the Purchased Asset, that would deny the mortgagee the
principal benefits intended to be provided by the Mortgage Note, Mortgage or
other Purchased Asset Documents.

 

 

 

  

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

 

(4)Hospitality Provisions. The Purchased Asset Documents for each Purchased
Asset that is secured by a hospitality property operated pursuant to a franchise
agreement includes an executed comfort letter or similar agreement signed by the
Mortgagor and franchisor of such property enforceable against such franchisor,
either directly or as an assignee of the originator. The Mortgage or related
security agreement for each Purchased Asset secured by a hospitality property
creates a security interest in the revenues of such property for which a UCC
financing statement has been filed in the appropriate filing office.

 

(5)Mortgage Status; Waivers and Modifications. Since origination and except by
written instruments set forth in the related Purchased Asset File or as
otherwise provided in the related Purchased Asset Documents (a) the material
terms of such Mortgage, Mortgage Note, guaranty, participation agreement, if
applicable, and related Purchased Asset Documents have not been waived,
impaired, modified, altered, satisfied, canceled, subordinated or rescinded in
any respect that could have a material adverse effect on Purchased Asset; (b) no
related Underlying 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 Underlying Mortgaged Property; and
(c) neither the related borrower nor the related guarantor nor the related
participating Person has been released from its material obligations under the
Purchased Asset Documents. With respect to each Purchased Asset, except as
contained in a written document included in the Purchased Asset File, there have
been no modifications, amendments or waivers, that could be reasonably expected
to have a material adverse effect on such Purchased Asset consented to by
Seller.

 

(6)Lien; Valid Assignment. Subject to the Standard Qualifications, each
assignment of Mortgage and assignment of Assignment of Leases to Buyer
constitutes a legal, valid and binding assignment to Buyer. 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
Underlying Mortgaged Property in the principal amount of such Purchased Asset or
allocated loan amount (subject only to Permitted Encumbrances, except as the
enforcement thereof may be limited by the Standard Qualifications. Such
Underlying Mortgaged Property (subject to and excepting Permitted Encumbrances)
is free and clear of any recorded mechanics’ liens, recorded materialmen’s liens
and other recorded encumbrances, and no rights exist which under law could give
rise to any such lien or encumbrance that would be prior to or equal with the
lien of the related Mortgage, except those which are bonded over, escrowed for
or insured against by a lender’s title insurance policy (as described below).
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Purchased Asset establishes and creates a valid
and enforceable lien on property described therein, except as such enforcement
may be limited by Standard Qualifications subject to the limitations described
in Paragraph (9) 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 Underlying Mortgaged Property securing
a Purchased Asset is covered by a Title Policy in the original principal amount
of such Purchased Asset (or with respect to a Purchased Asset 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 Permitted
Encumbrances. 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 Seller’s knowledge, any other holder of the
Purchased Asset, has done, by act or omission, anything that would materially
impair the coverage under such Title Policy. Each Title Policy contains no
exclusion for, or affirmatively insures (except for any Underlying Mortgaged
Property located in a jurisdiction where such affirmative insurance is not
available in which case such exclusion may exist), (a) that the area shown on
the survey is the same as the property legally described in the Mortgage and (b)
to the extent that the Underlying Mortgaged Property consists of two or more
adjoining parcels, such parcels are contiguous.

 

(8)Junior Liens. There are no subordinate mortgages or junior liens securing the
payment of money encumbering the related Underlying Mortgaged Property (other
than Permitted Encumbrances). Seller has no knowledge of any mezzanine debt
secured directly by interests in the related Mortgagor.

 

(9)Assignment of Leases. There exists as part of the related Purchased Asset
File an Assignment of Leases (either as a separate instrument or incorporated
into the related Mortgage). Subject to the Permitted Encumbrances, 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. No Person other than the related Mortgagor owns any
interest in any payments due under such lease or leases that is superior to or
of equal priority with the lender’s interest therein. The related Mortgage or
related Assignment of Leases, subject to applicable law, provides that, upon an
event of default under the Purchased Asset, 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. 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-1 financing statements in the appropriate
public filing and/or recording offices necessary at the time of the origination
of the Purchased Asset to perfect a valid security interest in all items of
physical personal property reasonably necessary to operate such Underlying
Mortgaged Property owned by such Mortgagor and located on the related Underlying
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
Asset 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-1 financing
statements are required in order to effect such perfection. Each UCC-1 financing
statement, if any, filed with respect to personal property constituting a part
of the related Underlying Mortgaged Property and each UCC-2 or UCC-3 assignment,
if any, of such financing statement to Seller was in suitable form for filing in
the filing office in which such financing statement was filed.

 

(11)Condition of Property. Seller or the originator of the Purchased Asset
inspected or caused to be inspected each related Underlying Mortgaged Property
within six months of origination of the Purchased Asset and within twelve months
of the Purchase Date. An engineering report or property condition assessment was
prepared in connection with the origination of each Purchased Asset no more than
twelve months prior to the Purchase Date. To Seller’s knowledge, based solely
upon due diligence customarily performed in connection with the origination of
comparable mortgage loans, each related Underlying Mortgaged Property was (a)
free and clear of any material damage, (b) in good repair and condition and (c)
is free of structural defects, except in each case (i) for any damage or
deficiencies that would not materially and adversely affect the use, operation
or value of such Underlying Mortgaged Property as security for the Purchased
Asset, (ii) if such repairs have been completed or (iii) if escrows in an
aggregate amount consistent with the standards utilized by Seller with respect
to similar loans its holds for its own account have been established, which
escrows will in all events be in an aggregate amount not less than the estimated
cost of such repairs. Seller has no knowledge of any material issues with the
physical condition of the Underlying Mortgaged Property that Seller believes
would have a material adverse effect on the use, operation or value of the
Underlying Mortgaged Property other than those disclosed in the engineering
report and those addressed in clauses (i), (ii) and (iii) above.

 

 

 

  

(12)Taxes and Assessments. All real estate taxes, governmental assessments and
other similar outstanding governmental charges (including, without limitation,
water and sewage charges), or installments thereof, that could be a lien on the
related Underlying 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 Underlying Mortgaged Property have
been paid, or, if the appropriate amount of such taxes or charges is being
appealed or is otherwise in dispute, 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 Paragraph (12), 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 Seller’s knowledge as of
the Purchase Date, there is no proceeding pending, and, to Seller’s knowledge 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 Underlying Mortgaged
Property that would have a material adverse effect on the value, use or
operation of the Underlying Mortgaged Property.

 

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

 

(15)Escrow Deposits. All escrow deposits and payments required to be escrowed
with lender pursuant to the Purchased Asset Documents 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 Asset Documents are being
conveyed by Seller to Buyer or its servicer. Any and all requirements under the
Purchased Asset Documents as to completion of any material improvements and as
to disbursements of any funds escrowed for such purpose, which requirements were
to have been complied with on or before the Purchase Date, have been complied
with in all material respects or the funds so escrowed have not been released.
No other escrow amounts have been released except in accordance with the terms
and conditions of the Purchased Asset Documents.

 

 

 

  

(16)No Holdbacks. The principal balance of the Purchased Asset set forth on the
Purchased Asset 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 Asset 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 Underlying Mortgaged Property, the Mortgagor or other considerations
determined by Seller to merit such holdback), and any requirements or conditions
to disbursements of any loan proceeds held in escrow have been satisfied with
respect to any disbursements of any such escrow fund made on or prior to the
date hereof.

 

(17)Insurance. Each related Underlying 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 Asset
Documents and having a claims-paying or financial strength rating of any one of
the following: (i) at least “A-:VII” from A.M. Best Company, Inc., (ii) at least
“A3” (or the equivalent) from Moody’s or (iii) at least “A-” from Standard &
Poor’s (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 Asset 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 Underlying 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
Underlying Mortgaged Property.

 

Each related Underlying Mortgaged Property is also covered, and required to be
covered pursuant to the related Loan Documents, by business interruption or
rental loss insurance which (subject to a customary deductible) (i) covers a
period of not less than 12 months (or with respect to each Purchased Asset on a
single asset with a principal balance of $50 million or more, 18 months); (ii)
for a Purchased Asset with a principal balance of $50 million or more, contains
a 180 day “extended period of indemnity”; and (iii) covers the actual loss
sustained during restoration.

 

If any material part of the improvements, exclusive of a parking lot, located on
a Underlying 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 prudent
institutional commercial mortgage lenders originating mortgage loans for
securitization.

 

 

 

  

If windstorm and/or windstorm related perils and/or “named storms” are excluded
from the primary property damage insurance policy, the Underlying Mortgaged
Property is insured by a separate windstorm insurance policy 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
at least equal to 100% of the full insurable value on a replacement cost basis
of the improvements and personalty and fixtures included in the related
Underlying Mortgaged Property by an insurer meeting the Insurance Rating
Requirement.

 

The Underlying Mortgaged Property is covered, and required to be covered
pursuant to the related Purchased Asset Documents, by a commercial general
liability insurance policy issued by an insurer meeting the Insurance Rating
Requirements including coverage for property damage, contractual damage and
personal injury (including bodily injury and death) in amounts as are generally
required by a prudent institutional commercial mortgage lender 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 Underlying 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 (the “SEL”) or the
probable maximum loss (the “PML”) for the Underlying 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 Underlying Mortgaged Property was
obtained by an insurer rated at least “A:VII” by A.M. Best Company, Inc. or “A3”
(or the equivalent) from Moody’s or “A-” by Standard & Poor’s in an amount not
less than 150% of the SEL or PML, as applicable.

 

The Purchased Asset Documents require insurance proceeds in respect of a
property loss to be applied either (a) to the repair or restoration of all or
part of the related Underlying Mortgaged Property, with respect to all property
losses in excess of 5% of the then outstanding principal amount of the related
Purchased Asset, 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 reduction of the outstanding principal balance of such Purchased Asset
together with any accrued interest thereon.

 

All premiums on all insurance policies referred to in this Paragraph (17)
required to be paid as of the Purchase Date have been paid, and such insurance
policies name the lender under the Purchased Asset 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
Asset 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 and other related expenses, including reasonable attorney’s
fees. 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 Underlying 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 Underlying Mortgaged Property, and (c) constitutes one or more
separate tax parcels which do not include any property which is not part of the
Underlying Mortgaged Property or is subject to an endorsement under the related
Title Policy insuring the Underlying 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 Asset Documents
require the Mortgagor to escrow an amount sufficient to pay taxes for the
existing tax parcel of which the Underlying Mortgaged Property is a part until
the separate tax lots are created or the non-recourse carveout guarantor under
the Purchased Asset Documents has indemnified the mortgagee for any loss
suffered in connection therewith.

 

(19)No Encroachments. To Seller’s knowledge based solely on surveys obtained in
connection with origination (which may have been a previously existing “as
built” survey) 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 Asset, all material improvements that were
included for the purpose of determining the appraised value of the related
Underlying Mortgaged Property at the time of the origination of such Purchased
Asset are within the boundaries of the related Underlying Mortgaged Property,
except encroachments that do not materially and adversely affect the value or
current use of such Underlying Mortgaged Property or for which insurance or
endorsements were obtained under the Title Policy. No improvements on adjoining
parcels encroach onto the related Underlying Mortgaged Property except for
encroachments that do not materially and adversely affect the value or current
use of such Underlying Mortgaged Property or for which insurance or endorsements
were obtained under the Title Policy. No material 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 Underlying Mortgaged Property
or for which insurance or endorsements have been obtained under the Title
Policy.

 

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

 

 

 

  

(21)REMIC. The Purchased Asset is a “qualified mortgage” within the meaning of
Section 860G(a)(3) of the Code (but determined without regard to the rule in
Treasury Regulations Section 1.860G-2(f)(2) that treats certain defective
mortgage loans as qualified mortgages), and, accordingly, (a) the issue price of
the Purchased Asset to the related Mortgagor at origination did not exceed the
non-contingent principal amount of the Purchased Asset and (b) either: (i) such
Purchased Asset is secured by an interest in real property (including buildings
and structural components thereof, but excluding personal property) having a
fair market value (A) at the date the Purchased Asset was originated at least
equal to 80% of the adjusted issue price of the Purchased Asset on such date or
(B) at the Purchase Date at least equal to 80% of the adjusted issue price of
the Purchased Asset on such date, provided that, for purposes hereof, the fair
market value of the real property interest must first be reduced by (1) the
amount of any lien on the real property interest that is senior to the Purchased
Asset and (2) a proportionate amount of any lien that is in parity with the
Purchased Asset; or (ii) substantially all of the proceeds of such Purchased
Asset were used to acquire, improve or protect the real property which served as
the only security for such Purchased Asset (other than a recourse feature or
other third-party credit enhancement within the meaning of Treasury Regulations
Section 1.860G-2(a)(1)(ii)). If the Purchased Asset was “significantly modified”
prior to the Purchase Date so as to result in a taxable exchange under Section
1001 of the Code, it either (i) was modified as a result of the default or
reasonably foreseeable default of such Purchased Asset or (ii) satisfies the
provisions of either clause (b)(i)(A) above (substituting the date of the last
such modification for the date the Purchased Asset was originated) or clause
(b)(i)(B), including the proviso thereto. Any prepayment premium and yield
maintenance charges applicable to the Purchased Asset constitute “customary
prepayment penalties” within the meaning of Treasury Regulations Section
1.860G-(b)(2). All terms used in this Paragraph (21) 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 charges, exit fees, or prepayment
premiums) of such Purchased Asset 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 and as of each 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 Underlying Mortgaged Property
is located, or the failure to be so authorized does not materially and adversely
affect the enforceability of such Purchased Asset by Buyer.

 

(24)Trustee under Deed of Trust. With respect to each Mortgage which is a deed
of trust, 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, and
except in connection with a trustee’s sale after a default by the related
Mortgagor or in connection with any full or partial release of the related
Underlying Mortgaged Property or related security for such Purchased Asset, and
except in connection with a trustee’s sale after a default by the related
Mortgagor, no fees are payable to such trustee except for de minimis fees paid.

 

 

 

  

(25)Local Law Compliance. To Seller’s knowledge, based upon any of a letter from
any governmental authorities, a legal opinion, an architect’s letter, a zoning
consultant’s report, an endorsement to the related Title Policy, or other
affirmative investigation of local law compliance consistent with the
investigation conducted by Seller for similar commercial, multifamily and
manufactured housing community mortgage loans intended for securitization, with
respect to the improvements located on or forming part of each Underlying
Mortgaged Property securing a Purchased Asset, there are no material violations
of applicable laws, zoning ordinances, rules, covenants, building codes,
restrictions and land laws (collectively, “Zoning Regulations”) other than those
which (i) constitute a legal non-conforming use or structure, as to which the
Underlying 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 Underlying 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 prudent
commercial mortgage lenders 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 Asset. The terms of the Purchased Asset Documents require the
Mortgagor to comply in all material respects with all applicable governmental
regulations, zoning and building laws.

 

(26)Licenses and Permits. Each Mortgagor covenants in the Purchased Asset
Documents that it shall keep all material licenses, permits, franchises,
certificates of occupancy, consents and applicable governmental authorizations
necessary for its operation of the Underlying Mortgaged Property in full force
and effect, and to Seller’s knowledge based upon a letter from any government
authorities or other affirmative investigation of local law compliance
consistent with the investigation conducted by Seller for similar commercial,
multifamily and manufactured housing community mortgage loans intended for
securitization, all such material licenses, permits and applicable governmental
authorizations are in effect. The Purchased Asset Documents require the related
Mortgagor to be qualified to do business in the jurisdiction in which the
related Underlying Mortgaged Property is located and for the Mortgagor and the
Underlying Mortgaged Property to be in compliance in all material respects with
all regulations, zoning and building laws.

 

 

 

  

(27)Recourse Obligations. The Purchased Asset Documents for each Purchased Asset
provide that such Purchased Asset is non-recourse to the related parties thereto
except that: (a) the related Mortgagor and a guarantor (which is a natural
person or persons, or an entity distinct from the Mortgagor (but may be
affiliated with Mortgagor) that has assets other than equity in the related
Underlying Mortgaged Property that are not de minimis) shall be fully liable for
losses, liabilities, costs and damages arising from certain acts of the related
Mortgagor and/or its principals specified in the related Purchased Asset
Documents, which acts generally include the following: (i) acts of fraud or
intentional material misrepresentation, (ii) misappropriation of rents
(following an event of default), insurance proceeds or condemnation awards,
(iii) intentional material physical waste of the Underlying Mortgaged Property,
(iv) intentional misconduct and (v) any breach of the environmental covenants
contained in the related Loan Documents, and (b) the Purchased Asset shall
become full recourse to the related Mortgagor and a guarantor (which is a
natural person or persons, or an entity distinct from the Mortgagor (but may be
affiliated with Mortgagor) that has assets other than equity in the related
Underlying Mortgaged Property that are not de minimis), upon any of the
following events: (i) if any petition for bankruptcy, insolvency, dissolution or
liquidation pursuant to federal bankruptcy law, or nay similar federal or state
law, shall be filed, consented to, or acquiesced in by the Mortgagor, (ii)
Mortgagor and/or its principals shall have colluded with other creditors to
cause an involuntary bankruptcy filing with respect to the Mortgagor or (iii)
upon the transfer of either the Underlying Mortgaged Property or equity
interests in Mortgagor made in violation of the Purchased Asset Documents.

 

(28)Mortgage Releases. The terms of the related Mortgage or related Purchased
Asset Documents do not provide for release of any material portion of the
Underlying Mortgaged Property from the lien of the Mortgage except (a) a partial
release, accompanied by principal repayment of not less than a specified
percentage at least equal to the lesser of (i) 115% of the related allocated
loan amount of such portion of the Underlying Mortgaged Property and (ii) the
outstanding principal balance of the Purchased Asset, (b) upon payment in full
of such Purchased Asset, (c) releases of out-parcels that are unimproved or
other portions of the Underlying Mortgaged Property which will not have a
material adverse effect on the underwritten value of the Underlying Mortgaged
Property and which were not afforded any material value in the appraisal
obtained at the origination of the Purchased Asset and are not necessary for
physical access to the Underlying Mortgaged Property or compliance with zoning
requirements, or (d) as required pursuant to an order of condemnation. With
respect to any partial release under the preceding clause (a) or (d), either:
(i) such release of collateral (A) would not constitute a “significant
modification” of the subject Purchased Asset within the meaning of Treasury
Regulations Section 1.860G-2(b)(2) and (B) would not cause the subject Purchased
Asset to fail to be a “qualified mortgage” within the meaning of Section
860G(a)(3)(A) of the Code; or (ii) the mortgagee or servicer can, in accordance
with the related Purchased Asset Documents, condition such release of collateral
on the related Mortgagor’s delivery of an opinion of tax counsel to the effect
specified in the immediately preceding clause (i). For purposes of the preceding
clause (i), if the fair market value of the real property constituting such
Underlying Mortgaged Property after the release is not equal to at least 80% of
the principal balance of the Purchased Asset outstanding after the release, the
Mortgagor is required to make a payment of principal in an amount not less than
the amount required by the provisions governing a “real estate mortgage
investment conduit” as defined in Section 860D of the Code (the “REMIC
Provisions”).

 

 

 

  

In the event of a taking of any portion of a Underlying 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 Asset in an amount not less than the amount
required by the REMIC Provisions and, to such extent, awards are not required to
be applied to the restoration of the Underlying Mortgaged Property or to be
released to the Mortgagor, if, immediately after the release of such portion of
the Underlying 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 Underlying Mortgaged Property is not equal to at
least 80% of the remaining principal balance of the Purchased Asset.

 

No such Purchased Asset that is secured by more than one Underlying Mortgaged
Property or that is cross-collateralized with another Purchased Asset permits
the release of cross-collateralization of the related Underlying Mortgaged
Properties, other than in compliance with the REMIC Provisions.

 

(29)Financial Reporting and Rent Rolls. The Purchased Asset Documents for each
Purchased Asset 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 Asset 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 Underlying Mortgaged Properties on a combined basis.

 

(30)Acts of Terrorism Exclusion. With respect to each Purchased Asset over $20
million, the related special-form all-risk insurance policy and business
interruption policy (issued by an insurer meeting the Insurance Rating
Requirements) do not specifically exclude Acts of Terrorism, as defined in the
Terrorism Risk Insurance Act of 2002, as amended by the Terrorism Risk Insurance
Program Reauthorization Act of 2007 (collectively, the “TRIA”), from coverage,
or if such coverage is excluded, it is covered by a separate terrorism insurance
policy. With respect to each other Purchased Asset, the related special-form
all-risk insurance policy and business interruption policy (issued by an insurer
meeting the Insurance Rating Requirements) does not 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 Asset, the related Purchased Asset Documents do not expressly waive or
prohibit the mortgagee from requiring coverage for Acts of Terrorism, as defined
in the 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 the TRIA or a similar or subsequent
statute is not in effect, then, provided that terrorism insurance is
commercially available, the Mortgagor under each Purchased Asset 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 required under the related Purchased Asset
Documents (without giving effect to the cost of terrorism and earthquake
components of such casualty and business interruption/rental loss insurance) at
the time of the origination of the Purchased Asset, and if the cost of terrorism
insurance exceeds such amount, the borrower is required to purchase the maximum
amount of terrorism insurance available with funds equal to such amount.

 

 

 

  

(31)Due on Sale or Encumbrance. Subject to specific exceptions set forth below,
each Purchased Asset contains a “due on sale” or other such provision for the
acceleration of the payment of the unpaid principal balance of such Purchased
Asset if, without the consent of the holder of the Mortgage (which consent, in
some cases, may not be unreasonably withheld) and/or complying with the
requirements of the related Purchased Asset Documents (which provide for
transfers without the consent of the lender which are customarily acceptable to
prudent commercial and multifamily mortgage lending institutions on the security
of property comparable to the related Underlying Mortgaged Property, including,
without limitation, transfers of worn-out or obsolete furnishings, fixtures, or
equipment promptly replaced with property of equivalent value and functionality
and transfers by leases entered into in accordance with the Purchased Asset
Documents), (a) the related Underlying 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 Asset Documents, (iii)
transfers that do not result in a change of Control of the related Mortgagor or
transfers of passive interests so long as the guarantor retains Control, (iv)
transfers to another holder of direct or indirect equity in the Mortgagor, a
specific Person designated in the related Purchased Asset Documents or a Person
satisfying specific criteria identified in the related Purchased Asset
Documents, such as a qualified equityholder, (v) transfers of stock or similar
equity units in publicly traded companies or (vi) a substitution or release of
collateral within the parameters of Paragraph (28) herein, or (vii) to the
extent set forth in any Exception Report, by reason of any mezzanine debt that
existed at the origination of the related Purchased Asset, or future permitted
mezzanine debt in each case as set forth in any Exception Report or (b) the
related Underlying Mortgaged Property is encumbered with a subordinate lien or
security interest against the related Underlying Mortgaged Property, other than
any Permitted Encumbrances. The Mortgage or other Purchased Asset Documents
provide that to the extent any rating agency fees are incurred in connection
with the review of and consent to any transfer or encumbrance, the Mortgagor is
responsible for such payment along with all other reasonable fees and expenses
incurred by the Mortgagee relative to such transfer or encumbrance. For purposes
of the foregoing representation, “Control” means the power to direct the
management and policies of an entity, directly or indirectly, whether through
the ownership of voting securities or other beneficial interests, by contract or
otherwise.

 

(32)Single-Purpose Entity. Each Purchased Asset requires the borrower to be a
Single-Purpose Entity for at least as long as the Purchased Asset is
outstanding. Both the Purchased Asset Documents and the organizational documents
of the Mortgagor with respect to each Purchased Asset with a principal amount on
the Purchase Date of $5 million or more provide that the borrower is a
Single-Purpose Entity, and each Purchased Asset with a principal amount on the
Purchase Date of $20 million or more has a counsel’s opinion regarding
non-consolidation of the Mortgagor. For purposes of this Paragraph (32), a
“Single-Purpose Entity” shall mean an entity, other than an individual, whose
organizational 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
Underlying Mortgaged Properties securing the Purchased Assets and prohibit it
from engaging in any business unrelated to such Underlying Mortgaged Property or
Properties, and whose organizational documents further provide, or which entity
represented in the related Purchased Asset Documents, substantially to the
effect that it does not have any assets other than those related to its interest
in and operation of such Underlying Mortgaged Property or Properties, or any
indebtedness other than as permitted by the related Mortgage(s) or the other
related Purchased Asset Documents, that it has its own books and records and
accounts separate and apart from those of any other person, 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 fixed rate Purchased Asset that, pursuant to
the Purchased Asset Documents, can be defeased, (i) the Purchased Asset
Documents provide for defeasance as a unilateral right of the Mortgagor, subject
to satisfaction of conditions specified in the Purchased Asset Documents; (ii)
the Purchased Asset cannot be defeased within two years after the closing date
of a securitization of such Purchased Asset; (iii) the Mortgagor is permitted to
pledge only United States “government securities” within the meaning of Treasury
Regulations Section 1.860G-2(a)(8)(ii), the revenues from which will be
sufficient to make all scheduled payments under the Purchased Asset when due,
including the entire remaining principal balance on the maturity 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 Asset 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 115% of the allocated loan amount for the real property to be
released; (iv) the defeasance collateral is not permitted to be subject to
prepayment, call, or early redemption; (v) 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 (iii) above; (vi) if the Mortgagor would continue to own assets
in addition to the defeasance collateral, the portion of the Purchased Asset
secured by defeasance collateral is required to be assumed by a Single-Purpose
Entity; (vii) 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 (viii) 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)Ground Leases. For purposes of this Exhibit VIII, a “Ground Lease” shall
mean a lease creating a leasehold estate in real property where the fee owner as
the ground lessor conveys for a term or terms of years its entire interest in
the land and buildings and other improvements, if any, comprising the premises
demised under such lease to the ground lessee (who may, in certain
circumstances, own the building and improvements on the land), subject to the
reversionary interest of the ground lessor as fee owner and does not include
industrial development agency (IDA) or similar leases for purposes of conferring
a tax abatement or other benefit.

 

 

 

  

With respect to any Purchased Asset where the Purchased Asset 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
Underlying 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)(i) 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; (ii) 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 Underlying Mortgaged Property by such lessee, its successors or
assigns in a manner that would materially adversely affect the security provided
by the related Mortgage and (iii) no material change in the terms of the Ground
Lease had occurred since its recordation, except by any written instrument which
are included in the related Purchased Asset File;

 

(b)the lessor under such Ground Lease has agreed in a writing included in the
related Purchased Asset File (or in such Ground Lease) that the Ground Lease may
not be amended or modified, or canceled or terminated, without the prior written
consent of the lender (except termination or cancellation if (i) notice of a
default under the Ground Lease is provided to lender and (ii) such default is
curable by lender as provided in the Ground Lease but remains uncured beyond the
applicable cure period), and no such consent has been granted by Seller since
the origination of the Purchased Asset except as reflected in any written
instruments which are included in the related Purchased Asset File;

 

(c)the Ground Lease has an original term (or an original term plus one or more
optional renewal terms, which, under all circumstances, may be exercised, and
will be enforceable, by either Mortgagor or the mortgagee) that extends not less
than 20 years beyond the stated maturity of the related Purchased Asset, or 10
years past the stated maturity if such Purchased Asset fully amortizes by the
stated maturity (or with respect to a Purchased Asset 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 Underlying Mortgaged Property is
subject;

 

(e)the Ground Lease does not place commercially unreasonable restrictions on the
identity of the mortgagee and the Ground Lease is assignable to the holder of
the Purchased Asset 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 Asset 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 and, to Seller’s knowledge, there is
no material default under such Ground Lease and no condition that, but for the
passage of time or giving of notice, would result in a material default under
the terms of such Ground Lease and, to Seller’s knowledge, such Ground Lease is
in full force and effect;

 

(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 a prudent commercial mortgage lender;

 

(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 Paragraph (34)(k) below) will be applied either to the repair or to
restoration of all or part of the related Underlying Mortgaged Property with (so
long as such proceeds are in excess of the threshold amount specified in the
related Purchased Asset Documents) the lender or a trustee appointed by it
having the right to hold and disburse such proceeds as repair or restoration
progresses, or to the payment of the outstanding principal balance of the
Purchased Asset, 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 Underlying Mortgaged Property
to the extent not applied to restoration, will be applied first to the payment
of the outstanding principal balance of the Purchased Asset, together with any
accrued interest; and

 

 

 

  

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

 

(35)Servicing. The servicing and collection practices used by Seller with
respect to the Purchased Asset have been, in all material respects, legal and
have met customary industry standards for servicing of similar commercial loans.

 

(36)Origination and Underwriting. The origination practices of Seller (or the
related originator if Seller was not the originator) with respect to each
Purchased Asset have been, in all material respects, legal and as of the date of
its origination, such Purchased Asset and the origination thereof complied in
all material respects with, or was exempt from, all requirements of federal,
state or local laws and regulations relating to the origination of such
Purchased Asset. At the time of origination of such Purchased Asset, the
origination, due diligence and underwriting performed by or on behalf of Seller
in connection with each Purchased Asset complied in all material respects with
the terms, conditions and requirements of Seller’s origination, due diligence,
underwriting procedures, guidelines and standards for similar commercial and
multifamily loans.

 

(37)Rent Rolls; Operating Histories. Seller has obtained a rent roll (other than
with respect to hospitality properties) certified by the related Mortgagor or
the related guarantor(s) as accurate and complete in all material respects as of
a date within 180 days of the date of origination of the related Purchased
Asset. Seller has obtained operating histories (the “Certified Operating
Histories”) with respect to each Underlying Mortgaged Property certified by the
related Mortgagor or the related guarantor(s) as accurate and complete in all
material respects as of a date within 180 days of the date of origination of the
related Purchased Asset. The Certified Operating Histories collectively report
on operations for a period equal to (a) at least a continuous three-year period
or (b) in the event the Underlying Mortgaged Property was owned, operated or
constructed by the Mortgagor or an affiliate for less than three years then for
such shorter period of time.

 

(38)No Material Default; Payment Record. No Purchased Asset 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 Purchase Date, no Purchased
Asset is delinquent (beyond any applicable grace or cure period) in making
required payments. To Seller’s knowledge, there is (a) no, and since origination
there has been no, material default, breach, violation or event of acceleration
existing under the related Purchased Asset Documents, 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
(b), materially and adversely affects the value of the Purchased Asset, or the
value, use or operation of the related Underlying Mortgaged Property, provided,
however, that this Paragraph (38) 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
any Exception Report. No person other than the holder of such Purchased Asset
may declare any event of default under the Purchased Asset or accelerate any
indebtedness under the Purchased Asset Documents.

 

 

 

  

(39)Bankruptcy. As of the date of origination of the related Purchased Asset and
to Seller’s knowledge as of the Purchase Date, neither the Underlying Mortgaged
Property nor any portion thereof is the subject of, and no Mortgagor, guarantor
or tenant occupying a single-tenant property is a debtor in state or federal
bankruptcy, insolvency or similar proceeding.

 

(40)Organization of Mortgagor. With respect to each Purchased Asset, in reliance
on certified copies of the organizational documents of the Mortgagor delivered
by the Mortgagor in connection with the origination of such Purchased Asset, 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. No
Purchased Asset has a Mortgagor that is an Affiliate of another borrower.

 

Seller has obtained an organizational chart or other description of each
Mortgagor which identifies all beneficial controlling owners of the Mortgagor
(i.e., managing members, general partners or similar controlling person for such
Mortgagor) (the “Controlling Owner”) and all owners that hold a 20% or greater
direct ownership share (the “Major Sponsors”). Seller (a) required
questionnaires to be completed by each Controlling Owner and guarantor or
performed other processes designed to elicit information from each Controlling
Owner and guarantor regarding such Controlling Owner’s or guarantor’s prior
history regarding any bankruptcies or other insolvencies, any felony
convictions, and (b) performed or caused to be performed searches of the public
records or services such as Lexis/Nexis, or a similar service designed to elicit
information about each Controlling Owner, Major Sponsor and guarantor regarding
such Controlling Owner’s, Major Sponsor’s or guarantor’s prior history regarding
any bankruptcies or other insolvencies, any felony convictions, and provided,
however, that manual public records searches were limited to the last 10 years
(clauses (a) and (b) collectively, the “Sponsor Diligence”). Based solely on the
Sponsor Diligence, to the knowledge of Seller, no Major Sponsor or guarantor (i)
was in a state or federal bankruptcy or insolvency proceeding, (ii) had a prior
record of having been in a state of federal bankruptcy or insolvency, or (iii)
had been convicted of a felony.

 

(41)Environmental Conditions. At origination, each Mortgagor represented and
warranted that to its knowledge no hazardous materials or any other substances
or materials which are included under or regulated by Environmental Laws are
located on, or have been handled, manufactured, generated, stored, processed, or
disposed of on or released or discharged from the Underlying Mortgaged Property,
except for those substances commonly used in the operation and maintenance of
properties of kind and nature similar to those of the Underlying Mortgaged
Property in compliance with all Environmental Laws and in a manner that does not
result in contamination of the Underlying Mortgaged Property or in a material
adverse effect on the value, use or operations of the Underlying Mortgaged
Property.

 

 

 

  

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 Assets, a Phase
II environmental site assessment (collectively, an “ESA”) meeting ASTM
requirements was conducted by a reputable environmental consultant in connection
with such Purchased Asset 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 (the “Environmental Conditions”) at the
related Underlying 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 Underlying Mortgaged Property
was otherwise listed by such governmental authority as “closed” or a reputable
environmental consultant has concluded that no further action is required); (D)
a secured creditor environmental policy or a pollution legal liability insurance
policy that covers liability for the Environmental Condition was obtained from
an insurer rated no less than “A-” (or the equivalent) by Moody’s, Standard &
Poor’s and/or Fitch, Inc.; (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 Seller’s knowledge, except as set forth in the ESA,
there is no Environmental Condition (as such term is defined in ASTM E1527-05 or
its successor) at the related Underlying Mortgaged Property.

 

 

 

  

In the case of each Purchased Asset with respect to which there is an
environmental insurance policy (the “Environmental Insurance Policy”), (i) such
Environmental Insurance Policy has been issued by the issuer set forth in the
related Exception Report (the “Policy Issuer”) and is effective as of the
Purchase Date, (ii) as of origination and to Seller’s knowledge as of the
Purchase Date the Environmental Insurance Policy is in full force and effect,
there is no deductible and Seller is a named insured under such policy, (iii)
(A) a property condition or engineering report was prepared, if the related
Underlying Mortgaged Property was constructed prior to 1985, with respect to
asbestos-containing materials (“ACM”) and, if the related Underlying Mortgaged
Property is a multifamily property, with respect to radon gas (“RG”) and
lead-based paint (“LBP”), and (B) if such report disclosed the existence of a
material and adverse LBP, ACM or RG environmental condition or circumstance
affecting the related Underlying Mortgaged Property, the related Mortgagor (1)
was required to remediate the identified condition prior to closing the
Purchased Asset or provide additional security or establish with the mortgagee a
reserve in an amount deemed to be sufficient by Seller, for the remediation of
the problem, and/or (2) agreed in the Purchased Asset Documents to establish an
operations and maintenance plan after the closing of the Purchased Asset that
should reasonably be expected to mitigate the environmental risk related to the
identified LBP, ACM or RG condition, (iv) on the effective date of the
Environmental Insurance Policy, Seller as originator had no knowledge of any
material and adverse environmental condition or circumstance affecting the
Underlying Mortgaged Property (other than the existence of LBP, ACM or RG) that
was not disclosed to the Policy Issuer in one or more of the following: (A) the
application for insurance, (B) a Mortgagor questionnaire that was provided to
the Policy Issuer, or (C) an engineering or other report provided to the Policy
Issuer, and (v) the premium of any Environmental Insurance Policy has been paid
through the maturity of the policy’s term and the term of such policy extends at
least five years beyond the maturity of the Purchased Asset.

 

(42)Lease Estoppels. With respect to each Purchased Asset secured by retail,
office or industrial properties, Seller requested the related Mortgagor to
obtain estoppels from each commercial tenant with respect to the rent roll
delivered as of the origination date. With respect to each Purchased Asset
predominantly secured by a retail, office or industrial property leased to a
single tenant, Seller reviewed such estoppel obtained from such tenant no
earlier than 90 days prior to the origination date of the related Purchased
Asset, and to Seller’s knowledge, (i) the related lease is in full force and
effect and (ii) there exists no default under such lease, either by the lessee
thereunder or by the lessor subject, in each case, to customary reservations of
tenant’s rights, such as with respect to common area maintenance (“CAM”) and
pass-through audits and verification of landlord’s compliance with co-tenancy
provisions. With respect to each Purchased Asset predominantly secured by a
retail, office or industrial property, Seller has received lease estoppels
executed within 90 days of the origination date of the related Purchased Asset
that collectively account for at least 65% of the in-place base rent for the
Underlying Mortgaged Property that secure a Purchased Asset that is represented
as of the origination date. To Seller’s knowledge, (i) each lease represented on
the rent roll delivered as of the origination date is in full force and effect
and (ii) there exists no material default under any such related lease that
represents 20% or more of the in-place base rent for the Underlying Mortgaged
Property either by the lessee thereunder or by the related Mortgagor, subject,
in each case, to customary reservations of tenant’s rights, such as with respect
to CAM and pass-through audits and verification of landlord’s compliance with
co-tenancy provisions.

 

(43)Appraisal. The Purchased Asset File contains an appraisal of the related
Underlying Mortgaged Property with an appraisal date within six months of the
Purchased Asset origination date, and within 12 months of the Purchase Date. The
appraisal is signed by an appraiser who is a Member of the Appraisal Institute.
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 Underlying Mortgaged Property or the borrower or in
any loan made on the security thereof, and its compensation is not affected by
the approval or disapproval of the Purchased Asset.

 

 

 

  

(44)Purchased Asset Schedule. The information pertaining to each Purchased Asset
which is set forth in the Purchased Asset Schedule is true and correct in all
material respects as of the Purchase Date and contains all information required
by the Repurchase Agreement to be contained therein.

 

(45)Cross-Collateralization. No Purchased Asset is cross-collateralized or
cross-defaulted with any other mortgage loan.

 

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

 

(47)Compliance with Anti-Money Laundering Laws. Seller has complied in all
material respects with the Prescribed Laws. Seller has established an anti-money
laundering compliance program as required by the Prescribed Laws, has conducted
the requisite due diligence in connection with the origination of the Purchased
Asset for purposes of the Prescribed Laws, including with respect to the
legitimacy of the applicable Mortgagor and the origin of the assets used by the
said Mortgagor to purchase the property in question, and maintains, and will
maintain, sufficient information to identify the applicable Mortgagor for
purposes of the Prescribed Laws.

 

(48)OFAC. (a) No Purchased Asset is (i) subject to nullification pursuant to
Executive Order 13224 or the regulations promulgated by OFAC (the “OFAC
Regulations”) or (ii) in violation of Executive Order 13224 or the OFAC
Regulations, and (b) no Mortgagor is (i) subject to the provisions of Executive
Order 13224 or the OFAC Regulations or (ii) listed as a “blocked person” for
purposes of the OFAC Regulations.

 

(49)Floating Interest Rates. Each Purchased Asset bears interest at a floating
rate of interest that is based on LIBOR plus a margin (which interest rate may
be subject to a minimum or “floor” rate).

 

(50)Prior Asset Pledges/Sales. No Purchased Asset has been pledged as collateral
to any lender in connection with any loan or sold to any buyer in connection
with a repurchase or other facility.

  

 

 

 

EXHIBIT V-B

 

REPRESENTATIONS AND WARRANTIES
REGARDING EACH INDIVIDUAL PURCHASED ASSET THAT IS
A MEZZANINE LOAN

 

1.The representations and warranties set forth in this Exhibit V regarding
Senior Mortgage Loans shall be deemed incorporated herein in respect of each
Senior Mortgage Loan related to the Purchased Asset.

 

2.The Mezzanine Loan is a performing mezzanine loan secured by a pledge of all
of the capital stock of a Mortgagor that owns income producing commercial real
estate (a “Property Owner”).

 

3.As of the Purchase Date, such Mezzanine Loan and the Senior Mortgage Loan
related thereto complies in all material respects with, or is exempt from, all
requirements of federal, state or local law relating to such Mezzanine Loan and
Senior Mortgage Loan.

 

4.Immediately prior to the sale, transfer and assignment to Buyer thereof, (i)
Seller had good and marketable title to, and was the sole owner and holder of,
such Mezzanine Loan, (ii) Seller had full right, power and authority to
transfer, and is transferring, such Mezzanine Loan free and clear of any and all
liens, pledges, encumbrances, charges, security interests or any other ownership
interests of any nature encumbering such Mezzanine Loan, and (iii) other than
consents and approvals obtained as of the related Purchase Date or those already
granted in the documentation governing such Mezzanine Loan, no consent, approval
or authorization of any Person is required for any such transfer or assignment
by the holder of such Mezzanine Loan. No third party holds any “right of first
refusal”, “right of first negotiation”, “right of first offer”, purchase option,
or other similar rights of any kind, and no other impediment exists to any such
transfer or exercise of rights or remedies. Upon consummation of the purchase
contemplated to occur in respect of such Mezzanine Loan on the Purchase Date
therefor, Seller will have validly and effectively conveyed to Buyer all legal
and beneficial interest in and to such Mezzanine Loan free and clear of any
pledge, lien, encumbrance or security interest.

 

5.No fraudulent acts were committed by Seller in connection with its acquisition
or origination of such Mezzanine Loan nor were any fraudulent acts committed by
any Person in connection with the origination of such Mezzanine Loan.

 

6.All information contained in the related Due Diligence Package (or as
otherwise provided to Buyer) and set forth on the Purchased Asset Schedule in
respect of such Mezzanine Loan and the Senior Mortgage Loan related thereto is
accurate and complete in all material respects. Seller has delivered to Buyer a
true, correct and complete copy of all related Purchased Asset Documents, which
have not been amended, modified, supplemented or restated since the related date
of origination.

 

 

 

 

 

7.Except as included in the Purchased Asset File, Seller is not a party to any
document, instrument or agreement, and there is no document, that by its terms
modifies or affects the rights and obligations of any holder of such Mezzanine
Loan or the related Senior Mortgage Loan and Seller has not consented to any
material change or waiver to any term or provision of any such document,
instrument or agreement and no such change or waiver exists.

 

8.Such Mezzanine Loan and the related Senior Mortgage Loan is presently
outstanding, the proceeds thereof have been fully and properly disbursed and,
except for amounts held in escrow by Seller, there is no requirement for any
future advances thereunder.

 

9.The Mezzanine Loan is secured by a pledge of equity ownership interests in the
related borrower under the Senior Mortgage Loan or a direct or indirect owner of
the related borrower and the security interest created thereby has been fully
perfected in favor of Seller as mezzanine lender under the Mezzanine Loan.

 

10.As of the origination date, the Underlying Obligor has been duly organized
and is validly existing and in good standing under the laws of its jurisdiction
of organization, with requisite power and authority to own its assets and to
transact the business in which it is now engaged, the sole purpose of the
Underlying Obligor under its organizational documents is to own, finance, sell
or otherwise manage the related Underlying Mortgaged Property and to engage in
any and all activities related or incidental thereto, and the Underlying
Mortgaged Property (or the capital stock of the Property Owner) and assets
related thereto constitute the sole assets of the Underlying Obligor.

 

11.The Underlying Obligor has good and marketable title to the related
Underlying Mortgaged Property, subject to any Permitted Exceptions; no claims
under the title policies insuring the Underlying Obligor’s title to the
Properties have been made.

 

12.The Mezzanine Loan Documents provide for the acceleration of the payment of
the unpaid principal balance of the Mezzanine Loan if (i) the Mezzanine Borrower
voluntarily transfers or encumbers all or any portion of any related Mezzanine
Collateral (as hereinafter defined), or (ii) any direct or indirect interest in
the Mezzanine Borrower is voluntarily transferred or assigned, other than, in
each case, as permitted under the terms and conditions of the related loan
documents.

 

13.Pursuant to the terms of the Mezzanine Loan Documents: (a) no material terms
of any related Senior Mortgage Loan may be waived, canceled, subordinated or
modified in any material respect and no material portion of such Mortgage or the
Underlying Mortgaged Property may be released without the consent of the holder
of the Mezzanine Loan; (b) no material action may be taken by the Underlying
Obligor with respect to the Underlying Obligor without the consent of the holder
of the Mezzanine Loan; (c) the holder of the Mezzanine Loan is entitled to
approve the budget of the Underlying Obligor as it relates to the Underlying
Mortgaged Property; and (d) the holder of the Mezzanine Loan’s consent is
required prior to the Underlying Obligor incurring any additional indebtedness.

 

 

 

 

 

14.There is no default with respect to the payment of principal and/or interest
that has existed for more than ten (10) days. There is no other material default
under any of the related Purchased Asset Documents, after giving effect to any
applicable notice and/or grace period; no such material default or breach has
been waived in writing by Seller or on its behalf or, by Seller’s predecessors
in interest with respect to the Purchased Asset. No event has occurred that,
with the passing of time or giving of notice would constitute a material default
under the related Purchased Asset Documents. No Purchased Asset has been
accelerated and no foreclosure or power of sale proceeding has been initiated in
respect of the related pledge agreement or similar security agreement entered
into in connection with such Mezzanine Loan. Seller has not waived in writing
any material claims against the related Mezzanine Borrower under any
non-recourse exceptions contained in the related Mezzanine Note.

 

15.Seller’s security interest in the Mezzanine Loan is covered by a UCC-9
insurance policy (the “UCC-9 Policy”) in the maximum principal amount of the
Mezzanine Loan insuring that the related pledge is a valid first priority lien
on the collateral pledged in respect of such Mezzanine Loan (the “Mezzanine
Collateral”), subject only to the exceptions stated therein (or a pro forma
title policy or marked up title insurance commitment on which the required
premium has been paid exists which evidences that such UCC-9 Policy will be
issued), then such UCC-9 Policy (or, if it has yet to be issued, the coverage to
be provided thereby) is in full force and effect, Seller has not done, by act or
omission, anything that would materially impair the coverage under the UCC-9
Policy and as of the Purchase Date, the UCC-9 Policy (or, if it has yet to be
issued, the coverage to be provided thereby) will inure to the benefit of Seller
and its successors and assigns without the consent of (but upon notice to) the
insurer.

 

16.Seller has delivered to Buyer or its designee the original promissory note
made in respect of such Mezzanine Loan, together with an original assignment
thereof executed by Seller in blank.

 

17.Seller has not received any written notice of any setoff, right of
recoupment, defense, counterclaim or impairment of any kind from the Mezzanine
Borrower.

 

18.The servicing and collection practices used by the servicer of the Mezzanine
Loan have complied with applicable law in all material respects and are
consistent with those employed by prudent institutional commercial mezzanine
lenders.

 

 

 

 

 

19.All real estate taxes and governmental assessments, or installments thereof,
which would be a lien on any related Underlying Mortgaged Property and that
prior to the Purchase Date for the related Purchased Asset have become
delinquent in respect of such Underlying Mortgaged Property have been paid, or
an escrow of funds in an amount sufficient to cover such payments has been
established with the mortgagee. For purposes of this representation and
warranty, real estate taxes and governmental assessments and installments
thereof shall not be considered delinquent until the earlier of (a) the date on
which interest and/or penalties would first be payable thereon and (b) the date
on which enforcement action is entitled to be taken by the related taxing
authority.

 

20.Seller inspected or caused to be inspected each related Underlying Mortgaged
Property within twelve (12) months of the related Purchase Date. An engineering
report or property condition assessment was prepared in connection with the
origination of the related Senior Mortgage Loan and, if applicable, Junior
Mortgage Loan in connection each Purchased Asset no more than twelve (12) months
prior to the related Purchase Date. There exists no material damage to any
related Underlying Mortgaged Property that would have a material adverse effect
on the value of such Underlying Mortgaged Property as security for the related
Purchased Asset other than those disclosed in the engineering report or property
condition assessment.

 

21.The fire and casualty insurance policy covering the related Underlying
Mortgaged Property (i) affords (and will afford) sufficient insurance against
fire and other risks as are usually insured against in the broad form of
extended coverage insurance from time-to-time available, as well as insurance
against flood hazards if the related Underlying Mortgaged Property is located in
an area identified by FEMA as having special flood hazards, (ii) is a standard
policy of insurance for the locale where the related Underlying Mortgaged
Property is located, is in full force and effect, and the amount of the
insurance is in the amount of the full insurable value of the related Underlying
Mortgaged Property on a replacement cost basis or the unpaid balance of the
related Senior Mortgage Loan and, if applicable, Junior Mortgage Loan, whichever
is less, (iii) names (and will name) the present owner of the related Underlying
Mortgaged Property as the insured, and (iv) contains a standard mortgagee loss
payable clause in favor of Seller.

 

22.An Environmental Site Assessment relating to each related Underlying
Mortgaged Property and prepared no earlier than 12 months prior to the Purchase
Date was obtained and reviewed by Seller in connection with the origination of
such Purchased Asset and a copy is included in the Purchased Asset File.

 

 

 

 

 

23.Except as may be set forth in the Environmental Site Assessment in connection
with the related Underlying Mortgaged Property, there are no adverse
circumstances or conditions with respect to or affecting the Underlying
Mortgaged Property that would constitute or result in a material violation of
any Environmental Laws, other than with respect to an Underlying Mortgaged
Property (i) for which environmental insurance is maintained, or (ii) that would
require (x) any expenditure less than or equal to 5% of the outstanding
principal balance of the Mortgage Loan to achieve or maintain compliance in all
material respects with any Environmental Laws or (y) any expenditure greater
than 5% of the outstanding principal balance of such Purchased Asset to achieve
or maintain compliance in all material respects with any Environmental Laws for
which, in connection with this clause (y), adequate sums, but in no event less
than 125% of the estimated cost as set forth in the Environmental Site
Assessment, were reserved in connection with the origination of the Purchased
Asset and for which the related Mortgagor has covenanted to perform, or (iii) as
to which the related Mortgagor or one of its affiliates is currently taking or
required to take such actions, if any, with respect to such conditions or
circumstances as have been recommended by the Environmental Site Assessment or
required by the applicable Governmental Authority, or (iv) as to which another
responsible party not related to the Mortgagor with assets reasonably estimated
by Seller at the time of origination to be sufficient to effect all necessary or
required remediation identified in a notice or other action from the applicable
Governmental Authority is currently taking or required to take such actions, if
any, with respect to such regulatory authority’s order or directive, or (v) as
to which the conditions or circumstances identified in the Environmental Site
Assessment were investigated further and based upon such additional
investigation, an environmental consultant recommended no further investigation
or remediation, or (vi) as to which a party with financial resources reasonably
estimated to be adequate to cure the condition or circumstance that would give
rise to such material violation provided a guarantee or indemnity to the related
Mortgagor or to the mortgagee to cover the costs of any required investigation,
testing, monitoring or remediation, or (vii) as to which the related Mortgagor
or other responsible party obtained a “No Further Action” letter or other
evidence reasonably acceptable to a prudent commercial mortgage lender that
applicable federal, state, or local Governmental Authorities had no current
intention of taking any action, and are not requiring any action, in respect of
such condition or circumstance, or (viii) that would not require substantial
cleanup, remedial action or other extraordinary response under any Environmental
Laws reasonably estimated to cost in excess of 5% of the outstanding principal
balance of such Purchased Asset.

 

24.No borrower under the Mezzanine Loan nor any Mortgagor under any Mortgage
Loan is a debtor in any state or federal bankruptcy or insolvency proceeding.

 

25.The related Underlying Mortgaged Property is in compliance with, and is used
and occupied in accordance with, all restrictive covenants of record applicable
to such Underlying Mortgaged Property and applicable zoning laws and all
inspections, licenses, permits and certificates of occupancy required by law,
ordinance or regulation to be made or issued with regard to the Underlying
Mortgaged Property have been obtained and are in full force and effect, except
to the extent (a) any material non-compliance with applicable zoning laws is
insured by an ALTA lender’s title insurance policy (or binding commitment
therefor), or the equivalent as adopted in the applicable jurisdiction, or a law
and ordinance insurance policy, or (b) the failure to obtain or maintain such
inspections, licenses, permits or certificates of occupancy does not materially
impair or materially and adversely affect the use and/or operation of the
Underlying Mortgaged Property as it was used and operated as of the date of
origination of the Purchased Asset or the rights of a holder of the related
Purchased Asset. The Mezzanine Loan Documents and the Mortgage Loan documents
require the related Underlying Mortgaged Property to comply with all applicable
laws and ordinances.

 

 

 

 

 

26.As of the Purchase Date for the related Purchased Asset, there was no pending
action, suit or proceeding, or governmental investigation against Seller, the
Mezzanine Borrower, Underlying Obligor or the related Underlying Mortgaged
Property the adverse outcome of which could reasonably be expected to materially
and adversely affect the Mezzanine Loan or the Underlying Mortgaged Property.

 

27.Except for Mortgagors under a Senior Mortgage Loan or Junior Mortgage Loan,
the Underlying Mortgaged Property with respect to which includes a Ground Lease,
the related Mortgagor (or its affiliate) has title in the fee simple interest in
each related Underlying Mortgaged Property.

 

28.The related Underlying Mortgaged Property is not encumbered, and none of the
Mezzanine Loan Documents or any Mortgage Loan documents permits the related
Underlying Mortgaged Property to be encumbered subsequent to the Purchase Date
of the related Purchased Asset without the prior written consent of the holder
thereof, by any lien securing the payment of money junior to or of equal
priority with, or superior to, the lien of the related Mortgage (other than
Permitted Encumbrances).

 

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

 

30.An appraisal of the related Underlying Mortgaged Property was conducted in
connection with the origination of the Mezzanine Loan; and such appraisal
satisfied either (A) the requirements of the “Uniform Standards of Professional
Appraisal Practice” as adopted by the Appraisal Standards Board of the Appraisal
Foundation, or (B) the guidelines in Title XI of the Financial Institutions
Reform, Recovery and Enforcement Act or 1989, in either case as in effect on the
date such Mezzanine Loan was originated.

 

31.With respect to each related Underlying Mortgaged Property consisting of a
Ground Lease, Seller represents and warrants the following with respect to the
related Ground Lease:

 

 

 

  

(i)           Such Ground Lease or a memorandum thereof has been or will be duly
recorded no later than thirty (30) days after the Purchase Date of the related
Purchased Asset and such Ground Lease permits the interest of the lessee
thereunder to be encumbered by the related Mortgage or, if consent of the lessor
thereunder is required, it has been obtained prior to the Purchase Date.

 

(ii)          Upon the foreclosure of the Senior Mortgage Loan (or acceptance of
a deed in lieu thereof), the Mortgagor’s interest in such Ground Lease is
assignable to the Mortgagee under the leasehold estate and its assigns without
the consent of the lessor thereunder (or, if any such consent is required, it
has been obtained prior to the Purchase Date).

 

(iii)         Such Ground Lease may not be amended, modified, canceled or
terminated without the prior written consent of the Mortgagee and any such
action without such consent is not binding on the Mortgagee, its successors or
assigns, except termination or cancellation if (i) an event of default occurs
under the Ground Lease, (ii) notice thereof is provided to the Mortgagee and
(iii) such default is curable by the Mortgagee as provided in the Ground Lease
but remains uncured beyond the applicable cure period.

 

(iv)         Such Ground Lease is in full force and effect, there is no material
default under such Ground Lease, and there is no event which, with the passage
of time or with notice and the expiration of any grace or cure period, would
constitute a material default under such Ground Lease.

 

(v)         The Ground Lease or ancillary agreement between the lessor and the
lessee requires the lessor to give notice of any default by the lessee to the
Mortgagee. The Ground Lease or ancillary agreement further provides that no
notice given is effective against the Mortgagee unless a copy has been given to
the Mortgagee in a manner described in the Ground Lease or ancillary agreement.

 

(vi)        The Ground Lease (i) is not subject to any liens or encumbrances
superior to, or of equal priority with, the Mortgage, subject, however, to only
the Title Exceptions or (ii) is subject to a subordination, non-disturbance and
attornment agreement to which the Mortgagee on the lessor’s fee interest in the
Underlying Mortgaged Property is subject.

 

(vii)        A Mortgagee is permitted a reasonable opportunity (including, where
necessary, sufficient time to gain possession of the interest of the lessee
under the Ground Lease) to cure any curable default under such Ground Lease
before the lessor thereunder may terminate such Ground Lease.

 

(viii)       Such Ground Lease has an original term (together with any extension
options, whether or not currently exercised, set forth therein all of which can
be exercised by the Mortgagee if the Mortgagee acquires the lessee’s rights
under the Ground Lease) that extends not less than 20 years beyond the stated
maturity date.

 

 

 

  

(ix)          Under the terms of such Ground Lease, any estoppel or consent
letter received by the Mortgagee from the lessor, and the related Mortgage,
taken together, any related insurance proceeds or condemnation award (other than
in respect of a total or substantially total loss or taking) will be applied
either to the repair or restoration of all or part of the related Underlying
Mortgaged Property, with the Mortgagee or a trustee appointed by it having the
right to hold and disburse such proceeds as repair or restoration progresses, or
to the payment or defeasance of the outstanding principal balance of the Senior
Mortgage Loan, together with any accrued interest (except in cases where a
different allocation would not be viewed as commercially unreasonable by any
commercial mortgage lender, taking into account the relative duration of the
Ground Lease and the related Mortgage and the ratio of the market value of the
related Underlying Mortgaged Property to the outstanding principal balance of
such Senior Mortgage Loan).

 

(x)           The ground lessor under such Ground Lease is required to enter
into a new lease upon termination of the Ground Lease for any reason, including
the rejection of the Ground Lease in bankruptcy.

 

32.The Senior Mortgage Loan to which the Purchased Asset relates is also a
Purchased Asset.

 

 

 

 

Exhibit VI

 

ADVANCE PROCEDURES

 

(a)            Submission of Due Diligence Package. Seller shall deliver to
Buyer a due diligence package for Buyer’s review and approval, which shall
contain the following items (the “Due Diligence Package”):

 

1.Delivery of Purchased Asset Documents. With respect to a New Asset that is a
Pre-Existing Asset, each of the Purchased Asset Documents.

 

2.Transaction-Specific Due Diligence Materials. With respect to any New Asset, a
summary memorandum outlining the proposed transaction, including potential
transaction benefits and all material underwriting risks, all Underwriting
Issues and all other characteristics of the proposed transaction that a
reasonable lender would consider material, together with the following due
diligence information relating to the New Asset:

 

A.With respect to each Eligible Asset:

 

(i)           a current rent roll and roll over schedule, if applicable;

 

(ii)          a cash flow pro forma, plus historical operating statements, if
available;

 

(iii)         flood certification (or the equivalent in the applicable
jurisdiction);

 

(iv)         if available, maps and photos;

 

(v)          copies of valuation, environmental, engineering, insurance and any
other third party reports; provided, that, if same are not available to Seller
at the time of Seller’s submission of the Due Diligence Package to Buyer, Seller
shall deliver such items to Buyer promptly upon Seller’s receipt of such items;

 

(vi)         a description of the underlying real estate directly or indirectly
securing or supporting such Purchased Asset and the ownership structure of the
borrower and the sponsor;

 

(vii)        indicative debt service coverage ratios;

 

(viii)       indicative loan-to-value ratios;

 

(ix)          indicative debt yield ratios;

 

(x)           a term sheet outlining the transaction generally;

 

 

 

  

(xi)         a description of the Mortgagor, including experience with other
projects (real estate owned), its ownership structure and financial statements;

 

(xii)        a description of Seller’s relationship with the Mortgagor, if any;

 

(xiii)       copies of documents evidencing such New Asset, or current drafts
thereof, including, without limitation, underlying debt and security documents,
guaranties, the underlying borrower’s and guarantor’s organizational documents,
warrant agreements, and loan and collateral pledge agreements, as applicable,
provided that, if same are not available to Seller at the time of Seller’s
submission of the Due Diligence Package to Buyer, Seller shall deliver such
items to Buyer promptly upon Seller’s receipt of such items;

 

(xiv)       any exceptions to the representations and warranties set forth in
Exhibit V to this Agreement.

 

3.Environmental and Engineering. A “Phase 1” (and, if applicable, “Phase 2”)
environmental report, an asbestos survey, if applicable, and an engineering
report, each in form reasonably satisfactory to Buyer, by an engineer or
environmental consultant reasonably approved by Buyer.

 

4.Credit Memorandum. Copies of all internal credit analysis, including, without
limitation, investment committee memoranda, credit memoranda, asset summaries or
other similar documents that detail, among other things, cash flow,
underwriting, historical operating numbers, underwriting footnotes, rent roll
and lease rollover schedule.

 

5.Appraisal. An Appraisal acceptable to Buyer, which Appraisal shall be dated
less than one hundred eighty (180) days prior to the proposed Purchase Date.

 

6.Opinions of Counsel. Opinion letters to Seller and its successors and assigns
from counsels to Seller and the underlying obligor, as applicable, on the
underlying loan transaction, as to enforceability of the loan documents
governing such transaction and such other matters as Buyer shall require
(including, without limitation, opinions as to due formation, authority, choice
of law, and perfection of security interests).

 

7.Additional Real Estate Matters. To the extent obtained by Seller from the
Mortgagor relating to any Eligible Asset at the origination of the Eligible
Asset, such other real estate related certificates and documentation as may have
been requested by Buyer.

 

8.Other Documents. Any other documents as Buyer or its counsel shall reasonably
deem necessary.

 

(b)           Submission of Legal Documents. With respect to a New Asset that is
an Originated Asset, no less than seven (7) calendar days (or such other time as
may be mutually acceptable to Buyer and Seller) prior to the proposed Purchase
Date, Seller shall deliver, or cause to be delivered, to counsel for Buyer the
following items, where applicable:

 

 

 

  

1.Copies of all draft Purchased Asset Documents in substantially final form,
blacklined against the approved form Purchased Asset Documents.

 

2.Certificates or other evidence of insurance demonstrating insurance coverage
in respect of the underlying real estate directly or indirectly securing or
supporting such Purchased Asset, if applicable, of types, in amounts, with
insurers and otherwise in compliance with the terms, provisions and conditions
set forth in the Purchased Asset Documents, in each case satisfactory to Buyer.

 

3.All surveys of the underlying real estate directly or indirectly securing or
supporting such Purchased Asset that are in Seller’s possession.

 

4.As reasonably requested by Buyer, satisfactory reports of tax lien, judgment
and litigation searches and other searches customarily required in the relevant
jurisdiction, conducted by search firms which are reasonably acceptable to Buyer
with respect to the Eligible Asset, underlying real estate directly or
indirectly securing or supporting such Eligible Asset, Seller and Mortgagor,
such searches to be conducted in each location Buyer shall reasonably designate.

 

5.Certifications that the property is in compliance with all applicable
licensing and zoning laws, each issued by the appropriate Governmental
Authority.

 

(c)           Approval of Eligible Asset. Conditioned upon the timely and
satisfactory completion of Seller’s requirements in clauses (a) and (b) above,
Buyer shall (1) notify Seller in writing (which may take the form of electronic
mail format) that Buyer has not approved the proposed Eligible Asset as a
Purchased Asset or (2) notify Seller in writing (which may take the form of
electronic mail format) that Buyer has approved the proposed Eligible Asset as a
Purchased Asset.

 

(d)           Assignment Documents. Seller shall have executed and delivered to
Buyer, in form and substance reasonably satisfactory to Buyer and its counsel,
all applicable assignment documents executed in blank with respect to the
proposed Eligible Asset that shall be subject to no liens except as expressly
permitted by Buyer. Each of the assignment documents shall contain such
representations and warranties in writing concerning the proposed Eligible Asset
and such other terms as shall be satisfactory to Buyer in its sole discretion,
and shall include blacklined copies of each document, showing all changes made
to the forms of assignment documents that have been approved in advance by
Buyer.

 

 

 

 

 

Exhibit VII

 

FORM OF MARGIN DEFICIT NOTICE 

[DATE]

 

VIA ELECTRONIC TRANSMISSION

 

TERRA MORTGAGE CAPITAL I, LLC
[_________________]
[_________________]
[_________________]
Attention: [___________]

Re:Uncommitted Master Repurchase and Securities Contract Agreement, dated as of
December 12, 2018 (as amended, restated, supplemented, or otherwise modified and
in effect from time to time, the “Master Repurchase and Securities Contract
Agreement”; capitalized terms used but not otherwise defined herein shall have
the meanings assigned thereto in the Master Repurchase and Securities Contract
Agreement) by and between GOLDMAN SACHS BANK USA, a New York state-chartered
bank (“Buyer”), and TERRA MORTGAGE CAPITAL I, LLC, a Delaware limited liability
company (“Seller”).

 

Pursuant to Article 4(a) of the Master Repurchase and Securities Contract
Agreement, Buyer hereby notifies Seller of the existence of a Margin Deficit as
of the date hereof as follows:

 

Purchase Price for certain Purchased Asset: $__________     Margin Deficit Event
(check as applicable):   ¨    Decline in Market Value by fifteen percent (15%)
or more from par (related Purchased Asset and calculation as follows):      
¨   Purchase Price Debt Yield is less than Minimum Purchase Price Debt Yield
(related Purchased Asset and calculation as follows):       ¨   Buyer’s LTV is
equal to or greater than the Maximum Buyer’s LTV (related Purchased Asset and
calculation as follows):       MARGIN DEFICIT: $__________ Accrued Price
Differential from [    ] to [    ]: $__________     TOTAL WIRE DUE: $__________

  

X-1

 

 

 

SELLER IS REQUIRED TO CURE THE MARGIN DEFICIT SPECIFIED ABOVE IN ACCORDANCE WITH
THE UNCOMMITTED MASTER REPURCHASE AND SECURITIES CONTRACT AGREEMENT AND WITHIN
THE TIME PERIOD SPECIFIED ARTICLE 4(A) THEREOF.

 

X-2

 

  

  GOLDMAN SACHS BANK USA, a New York state-chartered bank         By:      
Name:     Title:

 

X-3

 

  

Exhibit VIII

 

EXHIBIT VIII-A

 

FORM OF
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Assignees That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to Article 14(k) of the Uncommitted Master Repurchase
and Securities Contract Agreement, dated as of December 12, 2018 (as the same
may be amended, restated, supplemented or otherwise modified from time to time,
the “Master Repurchase and Securities Contract Agreement”), by and between
GOLDMAN SACHS BANK USA, a New York state-chartered bank, as Buyer, and TERRA
MORTGAGE CAPITAL I, LLC, a Delaware limited liability company, as Seller.
Capitalized terms used and not otherwise defined herein shall have the
respective meanings assigned to such terms in the Master Repurchase and
Securities Contract Agreement.

 

The undersigned hereby certifies that (i) it is the sole record and beneficial
owner of the ownership interest in the Transaction(s) in respect of which it is
providing this certificate, (ii) it is not a bank within the meaning of Section
881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the
applicable Seller(s) within the meaning of Section 871(h)(3)(B) of the Code and
(iv) it is not a controlled foreign corporation related to the applicable
Seller(s) as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the applicable Seller(s) with a correct, complete,
and accurate executed IRS Form W-8BEN or W-8BEN-E. By executing this
certificate, the undersigned agrees that (1) if the information provided on this
certificate changes, the undersigned shall promptly so inform the applicable
Seller(s), and (2) the undersigned shall have at all times furnished the
applicable Seller(s) with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

[NAME OF ASSIGNEE]

By:       Name:     Title:  

 

Date: ________ __, 201[____]

 

X-4

 

 

Exhibit VIII -B

 

FORM OF
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to Article 14(k) of the Uncommitted Master Repurchase
and Securities Contract Agreement, dated as of December 12, 2018 (as the same
may be amended, restated, supplemented or otherwise modified from time to time,
the “Master Repurchase and Securities Contract Agreement”), by and between
GOLDMAN SACHS BANK USA, a New York state-chartered bank, as Buyer, and TERRA
MORTGAGE CAPITAL I, LLC, a Delaware limited liability company, as Seller.
Capitalized terms used and not otherwise defined herein shall have the
respective meanings assigned to such terms in the Master Repurchase and
Securities Contract Agreement.

 

The undersigned hereby certifies that (i) it is the sole record and beneficial
owner of the ownership interest in the Transaction(s) in respect of which it is
providing this certificate, (ii) it is not a bank within the meaning of Section
881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the
applicable Seller(s) within the meaning of Section 871(h)(3)(B) of the Code, and
(iv) it is not a controlled foreign corporation related to the applicable
Seller(s) as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the applicable Buyer or Assignee with a correct,
complete, and accurate executed IRS Form W-8BEN or W-8BEN-E. By executing this
certificate, the undersigned agrees that (1) if the information provided on this
certificate changes, the undersigned shall promptly so inform such Buyer or
Assignee in writing, and (2) the undersigned shall have at all times furnished
such Buyer or Assignee with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

[NAME OF PARTICIPANT]

By:       Name:     Title:  

Date: ________ __, 201[____]

 

X-5

 

 

Exhibit VIII-C

 

FORM OF
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to Article 14(k) of the Uncommitted Master Repurchase
and Securities Contract Agreement, dated as of December 12, 2018 (as the same
may be amended, restated, supplemented or otherwise modified from time to time,
the “Master Repurchase and Securities Agreement”), by and between GOLDMAN SACHS
BANK USA, a New York state-chartered bank, as Buyer, and TERRA MORTGAGE CAPITAL
I, LLC, a Delaware limited liability company, as Seller. Capitalized terms used
and not otherwise defined herein shall have the respective meanings assigned to
such terms in the Master Repurchase and Securities Contract Agreement.

 

The undersigned hereby certifies that (i) it is the sole record owner of the
ownership interest in the Transaction(s) in respect of which it is providing
this certificate, (ii) its direct or indirect partners/members are the sole
beneficial owners of such interest, (iii) with respect such interest, neither
the undersigned nor any of its direct or indirect partners/members is a bank
extending credit pursuant to a loan agreement entered into in the ordinary
course of its trade or business within the meaning of Section 881(c)(3)(A) of
the Code, (iv) none of its direct or indirect partners/members is a ten percent
shareholder of the applicable Seller(s) within the meaning of Section
871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members
is a controlled foreign corporation related to the applicable Seller(s) as
described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the applicable Buyer or Assignee with a correct,
complete, and accurate executed IRS Form W-8IMY accompanied by one of the
following forms from each of its partners/members that is claiming the portfolio
interest exemption: (i) an IRS Form W-8BEN or W-8BEN-E or (ii) an IRS Form
W-8IMY accompanied by an IRS Form W-8BEN or W-8BEN-E from each of such
partner’s/member’s beneficial owners that is claiming the portfolio interest
exemption. By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly
so inform such Buyer or Assignee and (2) the undersigned shall have at all times
furnished such Buyer or Assignee with a properly completed and currently
effective certificate in either the calendar year in which each payment is to be
made to the undersigned, or in either of the two calendar years preceding such
payments.

[NAME OF PARTICIPANT]

By:       Name:     Title:  

Date: ________ __, 201[____]

 

X-6

 

 

Exhibit VIII-D

 

FORM OF
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Assignees That Are Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to Article 14(k) of the Uncommitted Master Repurchase
and Securities Contract Agreement, dated as of December 12, 2018 (as the same
may be amended, restated, supplemented or otherwise modified from time to time,
the “Master Repurchase and Securities Contract Agreement”), by and between
GOLDMAN SACHS BANK USA, a New York state-chartered bank, as Buyer, and TERRA
MORTGAGE CAPITAL I, LLC, a Delaware limited liability company, as Seller.
Capitalized terms used and not otherwise defined herein shall have the
respective meanings assigned to such terms in the Master Repurchase and
Securities Contract Agreement.

 

The undersigned hereby certifies that (i) it is the sole record owner of the
ownership interest in the Transaction(s) in respect of which it is providing
this certificate, (ii) its direct or indirect partners/members are the sole
beneficial owners of such interest, (iii) with respect to such interest, neither
the undersigned nor any of its direct or indirect partners/members is a bank
extending credit pursuant to a loan agreement entered into in the ordinary
course of its trade or business within the meaning of Section 881(c)(3)(A) of
the Code, (iv) none of its direct or indirect partners/members is a ten percent
shareholder of the applicable Seller(s) within the meaning of Section
871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members
is a controlled foreign corporation related to the applicable Seller(s) as
described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the applicable Seller(s) with a correct, complete,
and accurate executed IRS Form W-8IMY accompanied by one of the following forms
from each of its partners/members that is claiming the portfolio interest
exemption: (i) an IRS Form W-8BEN or W-8BEN-E or (ii) an IRS Form W-8IMY
accompanied by an IRS Form W-8BEN or W-8BEN-E from each of such
partner’s/member’s beneficial owners that is claiming the portfolio interest
exemption. By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly
so inform the applicable Seller(s), and (2) the undersigned shall have at all
times furnished the applicable Seller(s) with a properly completed and currently
effective certificate in either the calendar year in which each payment is to be
made to the undersigned, or in either of the two calendar years preceding such
payments.

 
[NAME OF ASSIGNEE]

By:       Name:     Title:  

Date: ________ __, 201[____]

 

X-7

 

  

Exhibit IX

 

FORM OF COVENANT COMPLIANCE CERTIFICATE

 

[    ] [  ], 20[ ]

 

GOLDMAN SACHS BANK USA
200 West Street
New York, New York 10282
Attention: Mr. Jeffrey Dawkins

This Covenant Compliance Certificate is furnished pursuant to that certain
Uncommitted Master Repurchase and Securities Contract Agreement, dated as of
December 12, 2018, by and between GOLDMAN SACHS BANK USA, a New York
state-chartered bank (“Buyer”), and TERRA MORTGAGE CAPITAL I, LLC, a Delaware
limited liability company (“Seller”) (as amended, restated, supplemented, or
otherwise modified and in effect from time to time, the “Master Repurchase and
Securities Contract Agreement”). Unless otherwise defined herein, capitalized
terms used in this Covenant Compliance Certificate have the respective meanings
ascribed thereto in the Master Repurchase and Securities Contract Agreement.

 

THE UNDERSIGNED HEREBY CERTIFIES THAT:

 

1.I am a duly elected Responsible Officer.

 

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

 

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

 

4.I am not aware of any facts, or pending developments that have caused, or may
in the future cause the Market Value of any Purchased Asset to decline at any
time within the reasonably foreseeable future.

 

5.As of the date hereof, and since the date of the certificate most recently
delivered pursuant to Article 11(x) of the Master Repurchase and Securities
Contract Agreement, Seller has observed or performed in all material respects
all of its covenants and other agreements, and satisfied in all material
respects, every condition, contained in the Master Repurchase and Securities
Contract Agreement and the related documents to be observed, performed or
satisfied by it.

 

 

 

  

6.The examinations described in Paragraph 3 above did not disclose, and I have
no knowledge of, the existence of any condition or event which constitutes an
Event of Default or Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this Covenant
Compliance Certificate (including after giving effect to any pending
Transactions requested to be entered into), except as set forth below.

 

7.As of the date hereof, each of the representations and warranties made by
Seller in the Master Repurchase and Securities Contract Agreement is true,
correct and complete in all material respects with the same force and effect as
if made on and as of the date hereof, except to the extent disclosed in a
Requested Exceptions Report and except to the extent made as of a certain date.

 

8.Attached as Exhibit 1 hereto is a description of all interests of Affiliates
of Seller in any Underlying Mortgaged Property (including without limitation,
any lien, encumbrance or other debt or equity position or other interest in the
Underlying Mortgaged Property that is senior or junior to, or pari passu with, a
Senior Mortgage Loan in right of payment or priority).

 

9.Attached as Exhibit 2 hereto are the financial statements required to be
delivered pursuant to Article 11 of the Master Repurchase and Securities
Contract Agreement (or, if none are required to be delivered as of the date of
this Covenant Compliance Certificate, the financial statements most recently
delivered pursuant to Article 11 of the Master Repurchase and Securities
Contract Agreement), which financial statements, to the best of my knowledge
after due inquiry, fairly and accurately present in all material respects, the
financial condition and operations of Seller as of the date or with respect to
the period therein specified, determined in accordance with the requirements set
forth in Article 11.

 

10.Attached as Exhibit 3 hereto are the calculations demonstrating compliance
with the financial covenants set forth in the Guarantee Agreement.

 

11.As of the date hereof, all representations and warranties made on the
applicable Purchase Date with respect to each Purchased Asset and as set forth
on Exhibit V of the Master Repurchase and Securities Agreement remain true,
complete and correct in all material respects except to the extent disclosed in
a Requested Exceptions Report.

 

To the extent that Financial Statements are being delivered in connection with
this Covenant Compliance Certificate, Seller hereby makes the following
representations and warranties: (i) it is in compliance with all of the terms
and conditions of the Master Repurchase and Securities Contract Agreement and
(ii) it has no claim or offset against Buyer under the Transaction Documents.

 

To the best of my knowledge, Seller has, during the period since the delivery of
the immediately preceding Covenant Compliance Certificate, observed or performed
in all material respects all of its covenants and other agreements, and
satisfied in all material respects every condition, contained in the Master
Repurchase and Securities Contract Agreement and the related documents to be
observed, performed or satisfied by it, and I have no knowledge of the
occurrence during such period, or present existence, of any condition or event
which constitutes an Event of Default or Default (including after giving effect
to any pending Transactions requested to be entered into), except as set forth
below.

 

 

 

  

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

 

         

 

The foregoing certifications, together with the financial statements, updates,
reports, materials, calculations and other information set forth in any exhibit
or other attachment hereto, or otherwise covered by this Covenant Compliance
Certificate, are made and delivered this [ ] day of [    ], 20[  ].

 

TERRA MORTGAGE CAPITAL I, LLC,   a Delaware limited liability company        
By:       Name:     Title:         TERRA PROPERTY TRUST, INC.,   a Maryland
corporation         By:       Name:     Title:  

 

 

 

  

Exhibit X

 

UCC FILING JURISDICTIONS

 

Delaware

 

 

 

 

Exhibit XI

 

Form of Servicer Notice

 

[DATE], 2018

 

[SERVICER]
[ADDRESS]
Attention: ___________

 

Re:Uncommitted Master Repurchase and Securities Contract Agreement, dated as of
December 12, 2018 by and between GOLDMAN SACHS BANK USA, a New York
state-chartered bank (“Buyer”), TERRA MORTGAGE CAPITAL I, LLC, a Delaware
limited liability company (“Seller”) (as amended, restated, supplemented, or
otherwise modified and in effect from time to time, the “Master Repurchase and
Securities Contract Agreement”); (capitalized terms used but not otherwise
defined herein shall have the meanings assigned thereto in the Master Repurchase
and Securities Contract Agreement).

 

Ladies and Gentlemen:

 

[___________] (the “Servicer”) is servicing certain mortgage assets sold by
Seller to Buyer pursuant to the Master Repurchase and Securities Contract
Agreement (the “Purchased Assets”) pursuant to a servicing agreement dated as of
December 12, 2018 between Servicer and Seller (the “Servicing Agreement”).
Servicer is hereby notified that, pursuant to the Master Repurchase and
Securities Contract Agreement, Seller has sold the Purchased Assets to Buyer on
a servicing-released basis, and has granted a security interest to Buyer in the
Purchased Assets.

 

In accordance with Seller’s requirements under the Master Repurchase and
Securities Contract Agreement, Seller hereby notifies and instructs Servicer,
and Servicer hereby agrees that Servicer shall (a) segregate all amounts
collected on account of the Purchased Assets, (b) hold the Purchased Assets in
trust for Buyer, (c) immediately following the receipt thereof by Servicer,
deposit all collections of income to the collection account at [___________],
ABA # [___________], Account # [___________] and (d) in accordance with the
terms of the Servicing Agreement, remit all such income (net of any deductions
permitted under Section [___________] of the Servicing Agreement), to the
Depository Account at [___________], ABA # [___________], Account
# [___________]. Upon receipt of a notice of Event of Default under the Master
Repurchase and Securities Contract Agreement from Buyer, Servicer shall only
follow the instructions of Buyer with respect to the Purchased Assets, and shall
deliver to Buyer any information with respect to the Purchased Assets reasonably
requested by Buyer.

 

 

 

  

Servicer hereby agrees that, notwithstanding any provision to the contrary in
the Servicing Agreement or in any other agreement which exists between Servicer
and Seller in respect of any Purchased Asset, (i) Servicer is servicing the
Purchased Assets for the joint benefit of Seller and Buyer, (ii) Buyer is
expressly intended to be a third-party beneficiary under the Servicing
Agreement, and (iii) Buyer may, at any time after the occurrence and during the
continuance of an Event of Default under the Master Repurchase and Securities
Contract Agreement, terminate the Servicing Agreement and any other such
agreement immediately upon the delivery of written notice thereof to Servicer
and/or in any event transfer servicing to Buyer’s designee, at no cost or
expense to Buyer, it being agreed that Seller will pay any and all fees required
to terminate the Servicing Agreement and any other such agreement and to
effectuate the transfer of servicing to the designee of Buyer in accordance with
this Servicer Notice.

 

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 under the Master Repurchase and Securities
Contract Agreement delivered by Buyer, and, so long as an Event of Default under
the Master Repurchase and Securities Contract Agreement exists at such time,
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, direction or notice of any
such Event of Default.

 

No provision of this letter or any 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 Buyer promptly upon receipt. Any notices to Buyer should be delivered to the
following address: [___________]. 

 

  Very truly yours,       GOLDMAN SACHS BANK USA, a New York state-chartered
bank         By:       Name:     Title:

 

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

 

 

 

ACKNOWLEDGED AND AGREED TO:

 

TERRA MORTGAGE CAPITAL I, LLC

 

By:     Name:     Title:    

 

 

 

  

Exhibit XII

 

FORM OF RELEASE LETTER

 

[Date]

 

GOLDMAN SACHS BANK USA
200 West Street
New York, New York 10282
Attention: Mr. Jeffrey Dawkins

Re:Uncommitted Master Repurchase and Securities Contract Agreement, dated as of
December 12, 2018 by and between GOLDMAN SACHS BANK USA, a New York
state-chartered bank (“Buyer”) and TERRA MORTGAGE CAPITAL I, LLC, a Delaware
limited liability company (“Seller”) (as amended, restated, supplemented, or
otherwise modified and in effect from time to time, the “Master Repurchase and
Securities Contract Agreement”); (capitalized terms used but not otherwise
defined herein shall have the meanings assigned thereto in the Master Repurchase
and Securities Contract Agreement).

 

Ladies and Gentlemen:

 

With respect to the Purchased Assets described in the attached Schedule A (the
“Purchased Assets”) (a) we hereby certify to you that the Purchased Assets are
not subject to a lien of any third party, and (b) we hereby release all right,
interest or claim of any kind other than any rights under the Master Repurchase
and Securities Contract Agreement with respect to such Purchased Assets, such
release to be effective automatically without further action by any party upon
payment by Buyer of the amount of the Purchase Price contemplated under the
Master Repurchase and Securities Contract Agreement (calculated in accordance
with the terms thereof) in accordance with the wiring instructions set forth in
the Master Repurchase and Securities Contract Agreement.

 

  Very truly yours,       TERRA MORTGAGE CAPITAL I, LLC         By:       Name:
    Title:

  

 

 

 

Schedule A

[List of Purchased Asset Documents]

 

 

 

 

Exhibit XIII

 

Reserved.

 

 

 

 

Exhibit XIV

 

FORM OF CUSTODIAL DELIVERY CERTIFICATE

 

On this ______ of ________, 201__, , a Delaware limited liability company
(“Seller”) under that certain Uncommitted Master Repurchase and Securities
Contract Agreement, dated as of December 12, 2018 (the “Repurchase Agreement”)
between GOLDMAN SACHS BANK USA, a New York state-chartered bank (“Buyer”) and
Seller, does hereby deliver to [ ] (“Custodian”), as custodian under that
certain Custodial Agreement, dated as of [                ] (the “Custodial
Agreement”), among Buyer, Custodian and Seller, the Purchased Asset Files with
respect to the Purchased Assets to be purchased by Buyer pursuant to the
Repurchase Agreement, which Purchased Assets are listed on the Purchased Asset
Schedule attached hereto and which Purchased Assets shall be subject to the
terms of the Custodial Agreement on the date hereof.

 

With respect to the Purchased Asset Files delivered hereby, for the purposes of
issuing the Trust Receipt, Custodian shall review the Purchased Asset Files to
ascertain delivery of the documents listed in Section [ ] to the Custodial
Agreement.

 

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

 

IN WITNESS WHEREOF, Seller has caused its name to be signed hereto by its
officer thereunto duly authorized as of the day and year first above written.

 

  TERRA MORTGAGE CAPITAL I, LLC         By:       Name:     Title:

  

 

 

 

 

Purchased Asset Schedule to Custodial Delivery Certificate

 

Purchased Assets

 

 

 

  

Exhibit XV

 

FORM OF BAILEE LETTER

 

_______________ __, 20__

 

____________________

____________________

____________________

 

Ladies and Gentlemen:

 

Reference is made to that certain Uncommitted Master Repurchase and Securities
Contract Agreement, dated as of December 12, 2018 (as amended, restated,
supplemented, or otherwise modified and in effect from time to time, the “Master
Repurchase and Securities Contract Agreement”; capitalized terms used but not
otherwise defined herein shall have the meanings assigned thereto in the Master
Repurchase and Securities Contract Agreement) by and between GOLDMAN SACHS BANK
USA, a New York state-chartered bank (“Buyer”), and TERRA MORTGAGE CAPITAL I,
LLC, a Delaware limited liability company (“Seller”). 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
[                ] (the “Bailee”) hereby agree as follows:

 

(a)Seller shall deliver to the Bailee in connection with any Purchased Assets
delivered to the Bailee hereunder, the Custodial Identification Certificate
attached hereto as Attachment 1.

 

(b)On or prior to the date indicated on the Custodial Identification Certificate
delivered by Seller (the “Funding Date”), Seller shall have delivered to the
Bailee, as bailee for hire, the original documents set forth on Schedule A
attached hereto (collectively, the “Purchased Asset File”) for each of the
Purchased Assets (each a “Purchased Asset” and collectively, the “Purchased
Assets”) listed in Exhibit A to Attachment attached thereto.

 

(c)The Bailee shall issue and deliver to Buyer and [                ] (the
“Custodian”) on or prior to the Funding Date by electronic mail (a) in the name
of Buyer, an initial trust receipt and certification in the form of Attachment 2
attached hereto (the “Bailee’s Trust Receipt and Certification”) which Bailee’s
Trust Receipt and Certification shall state that the Bailee has received the
documents comprising the Purchased Asset File as set forth in the Custodial
Delivery Certificate.

 

(d)On the applicable Funding Date, in the event that Buyer fails to purchase
from Seller the Purchased Assets identified in the related Custodial
Identification Certificate, Buyer shall deliver by electronic mail to the Bailee
to the attention of [                                ] at [                 ],
an authorization (the “Electronic Authorization”) to release the Purchased Asset
Files with respect to the Purchased Assets identified therein to Seller. Upon
receipt of such Electronic Authorization, the Bailee shall release the Purchased
Asset Files to Seller in accordance with Seller’s instructions.

 

 

 

  

(e)Following the Funding Date and the funding of the Purchase Price, the Bailee
shall forward the Purchased Asset Files to Custodian at [                 ], by
insured overnight courier for receipt by Custodian no later than 1:00 p.m. on
the third (3rd) Business Day following the applicable Funding Date (the
“Delivery Date”).

 

(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 Asset Files as bailee for Buyer
and (b) is holding the related Purchased Assets 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 Letter or any action
taken or not taken by it or them hereunder unless such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements (other than special, indirect, punitive or consequential damages,
which shall in no event be paid by the Bailee) 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 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 Letter.

 

(h)In the event that the Bailee fails to produce any document in a Purchased
Asset File related to a Purchased Asset that is (or was required to be) then in
its possession within ten (10) business days after required or requested by
Seller or Buyer (a “Delivery Failure”), the Bailee shall indemnify and hold
Buyer, on behalf of Buyers, harmless against actual out of pocket 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 in
any way relating to or arising out of such Delivery Failure (but excluding
special, indirect, punitive or consequential damages).

 

(i)Seller agrees to indemnify and hold Buyer and its respective affiliates and
designees 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 a Custodial Delivery Failure (as defined in the Custodial
Agreement) or the Bailee’s negligence, lack of good faith or wilful misconduct.
The foregoing indemnification shall survive any termination or assignment of
this Bailee Letter.

 

 

 

  

(j)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 [                ], has
represented Seller in connection with negotiation, execution and delivery of the
Master Repurchase and Securities Contract Agreement.

 

(k)The agreement set forth in this Bailee Letter may not be modified, amended or
altered, except by written instrument, executed by all of the parties hereto.

 

(l)This Bailee Letter may not be assigned by Seller or the Bailee without the
prior written consent of Buyer.

 

(m)For the purpose of facilitating the execution of this Bailee Letter as herein
provided and for other purposes, this Bailee Letter 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.

 

(n)This Bailee Letter 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.

 

(o)Capitalized terms used herein and defined herein shall have the meanings
ascribed to them in the Repurchase Agreement.

 

[SIGNATURES COMMENCE ON FOLLOWING PAGE]

 

 

 

 

  Very truly yours,       [             ], as Seller         By:       Name:    
Title:

 

ACCEPTED AND AGREED:

[                ], as Bailee

 

By:       Name:     Title:  

 

ACCEPTED AND AGREED:

 

GOLDMAN SACHS BANK USA,

a New York state-chartered bank, as Buyer

 

By:       Name:     Title:  

  

 

 

 

 

Schedule A

[List of Purchased Asset Documents]

 

 

 

  

Attachment 1

 

CUSTODIAL IDENTIFICATION CERTIFICATE

 

On this [___] day of [____], 201[_],TERRA MORTGAGE CAPITAL I, LLC (“Seller”),
under that certain Bailee Agreement of even date herewith (the “Bailee
Agreement”), among Seller, [____] (the “Bailee”), and GOLDMAN SACHS BANK USA, a
New York state-chartered bank, as Buyer, does hereby instruct the Bailee to
hold, in its capacity as Bailee, the Purchased Asset Files with respect to the
Purchased Assets listed on Exhibit A to Attachment 1 hereto, which Purchased
Assets shall be subject to the terms of the Bailee Agreement as of the date
hereof.

 

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

 

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

  TERRA MORTGAGE CAPITAL I, LLC         By:     Name:     Title:  

  

 

 

 

 

Exhibit A to Attachment 1

PURCHASED ASSET SCHEDULE

 

 

 

 

Attachment 2

 

FORM OF BAILEE’S TRUST RECEIPT AND CERTIFICATION

 

[_______], 201         

 

GOLDMAN SACHS BANK USA

[*]

[*]

[*]

 

Re:Bailee Letter, dated as of [________] (the “Bailee Letter”) by and among
TERRA MORTGAGE CAPITAL I, LLC, a Delaware limited liability company (“Seller”),
GOLDMAN SACHS BANK USA, a New York state-chartered bank (“Buyer”) and [________]
(the “Bailee”)

 

Ladies and Gentlemen:

 

In accordance with the provisions of Paragraph (c) of the above-referenced
Bailee Letter, the undersigned, as the Bailee, hereby certifies that as to each
Purchased Asset described in the Purchased Asset Schedule (Exhibit A to
Attachment 1), a copy of which is attached hereto, it has reviewed the Purchased
Asset File (Exhibit B to Attachment 1) and has determined that (i) all documents
listed in the Purchased Asset File are in its possession and (ii) such documents
have been reviewed by it and appear regular on their face and relate to such
Purchased Asset.

 

The Bailee hereby confirms that it is holding each such Purchased Asset File as
agent and bailee for the exclusive use and benefit of Buyer pursuant to the
terms of the Bailee Letter.

 

All initially capitalized terms used herein shall have the meanings ascribed to
them in the above-referenced Bailee Letter. 

 

  [                ], BAILEE         By:       Name:       Title:

 

cc: [Custodian]

 

 

 

 

Exhibit XVI

 

UNDERWRITING GUIDELINES

 

Reserved.

 

 

 

 

Exhibit XVII

 

FUTURE FUNDING ADVANCE PROCEDURES

 

(a)           Submission of Future Funding Due Diligence Package. Seller shall
deliver to Buyer a due diligence package (the “Future Funding Due Diligence
Package”) for Buyer’s review and approval, which shall contain the following
items, to the extent applicable under the subject Purchased Asset Documents:

 

1.The executed request for advance (which shall include Seller’s approval of
such Future Funding Advance);

 

2.The executed borrower’s affidavit;

 

3.The fund control agreement (or escrow agreement, if funding through escrow);

 

4.Certified copies of all relevant trade contracts, invoices, and lien wavers,
if applicable

 

5.The title policy endorsement for the advance;

 

6.Certified copies of any tenant leases;

 

7.Certified copies of any service contracts;

 

8.Updated financial statements, operating statements and rent rolls, if
applicable;

 

9.Evidence of required insurance; and

 

10.Updates to the engineering report, inspection report, and budget, if
required.

 

(b)          Approval of Future Funding Advance. Conditioned upon the timely and
satisfactory completion of Seller’s requirements in clause (a) above, Buyer
shall, no less than three (3) Business Days prior to the proposed Future Funding
Date (1) notify Seller in writing (which may take the form of electronic mail
format) that Buyer has not approved the proposed Future Funding Advance or (2)
notify Seller in writing (which may take the form of electronic mail format)
that Buyer has approved the proposed Future Funding Advance.  Buyer’s failure to
respond to Seller on or prior to three (3) Business Days prior to the proposed
Future Funding Date shall be deemed to be a denial of Seller’s request that
Buyer approve the proposed Future Funding Advance, unless Buyer and Seller has
agreed otherwise in writing.