Exhibit 10.1

 

UNCOMMITTED

 

MASTER REPURCHASE AGREEMENT

 

Dated as of December 10, 2015

 

between

 

STARWOOD PROPERTY MORTGAGE SUB-14, L.L.C.,

 

STARWOOD PROPERTY MORTGAGE SUB-14-A, L.L.C.,

 

as Sellers,

 

and

 

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,

 

as Buyer

 

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TABLE OF CONTENTS

 

 

Page

 

 

ARTICLE 1. APPLICABILITY

1

 

 

ARTICLE 2. DEFINITIONS

1

 

 

ARTICLE 3. INITIATION; CONFIRMATION; TERMINATION; FEES; EXTENSION OF MATURITY
DATE; EXTENSION OF REPURCHASE DATE

31

 

 

ARTICLE 4. MARGIN MAINTENANCE

51

 

 

ARTICLE 5. INCOME PAYMENTS AND PRINCIPAL PROCEEDS

53

 

 

ARTICLE 6. SECURITY INTEREST

55

 

 

ARTICLE 7. PAYMENT, TRANSFER AND CUSTODY

57

 

 

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

60

 

 

ARTICLE 9. REPRESENTATIONS AND WARRANTIES

61

 

 

ARTICLE 10. NEGATIVE COVENANTS OF SELLER

72

 

 

ARTICLE 11. AFFIRMATIVE COVENANTS OF SELLERS

73

 

 

ARTICLE 12. EVENTS OF DEFAULT; REMEDIES

84

 

 

ARTICLE 13. SINGLE AGREEMENT

90

 

 

ARTICLE 14. RECORDING OF COMMUNICATIONS

91

 

 

ARTICLE 15. NOTICES AND OTHER COMMUNICATIONS

91

 

 

ARTICLE 16. ENTIRE AGREEMENT; SEVERABILITY

91

 

 

ARTICLE 17. NON-ASSIGNABILITY

92

 

 

ARTICLE 18. GOVERNING LAW

94

 

 

ARTICLE 19. NO WAIVERS, ETC.

94

 

 

ARTICLE 20. USE OF EMPLOYEE PLAN ASSETS

94

 

 

ARTICLE 21. INTENT

95

 

 

ARTICLE 22. DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

96

 

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ARTICLE 23. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

97

 

 

ARTICLE 24. NO RELIANCE

97

 

 

ARTICLE 25. INDEMNITY

98

 

 

ARTICLE 26. DUE DILIGENCE

99

 

 

ARTICLE 27. SERVICING

100

 

 

ARTICLE 28. MISCELLANEOUS

101

 

 

ARTICLE 29. JOINT AND SEVERAL LIABILITY

105

 

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ANNEXES, EXHIBITS AND SCHEDULES

 

ANNEX I

Names and Addresses for Communications between Parties

 

 

EXHIBIT I

Form of Confirmation

 

 

EXHIBIT II

Authorized Representatives of Sellers

 

 

EXHIBIT III-A

Monthly Reporting Package

 

 

EXHIBIT III-B

Quarterly Reporting Package

 

 

EXHIBIT III-C

Annual Reporting Package

 

 

EXHIBIT IV

Form of Custodial Delivery Certificate

 

 

EXHIBIT V

Form of Power of Attorney

 

 

EXHIBIT VI

Representations and Warranties Regarding Individual Purchased Assets

 

 

EXHIBIT VII

Asset Information

 

 

EXHIBIT VIII

Purchase and Additional Advance Procedures

 

 

EXHIBIT IX

Form of Bailee Letter

 

 

EXHIBIT X

Form of Margin Deficit Notice

 

 

EXHIBIT XI

Form of U.S. Tax Compliance Certificates

 

 

EXHIBIT XII

UCC Filing Jurisdictions

 

 

EXHIBIT XIII

[Reserved.]

 

 

EXHIBIT XIV

Form of Servicer Notice

 

 

EXHIBIT XV

Form of Release Letter

 

 

EXHIBIT XVI

Form of Covenant Compliance Certificate

 

 

EXHIBIT XVII

Form of Re-direction Letter

 

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UNCOMMITTED MASTER REPURCHASE AGREEMENT

 

UNCOMMITTED MASTER REPURCHASE AGREEMENT, dated as of December 10, 2015, by and
between JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a national banking
association organized under the laws of the United States (“Buyer”) and STARWOOD
PROPERTY MORTGAGE SUB-14, L.L.C. and STARWOOD PROPERTY MORTGAGE SUB-14-A,
L.L.C., each a Delaware limited liability company (“Seller”).

 

ARTICLE 1.
APPLICABILITY

 

From time to time the parties hereto may enter into transactions in which the
applicable Seller and Buyer agree to the transfer from such Seller to Buyer all
of its rights, title and interest to 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 transfer of funds by Buyer to
such Seller, with a simultaneous agreement by Buyer to transfer back to such
Seller such Assets at a date certain or on demand, against the transfer of funds
by such 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 to purchase
or effect the transfer of any Eligible Asset from any Seller to Buyer.

 

ARTICLE 2.
DEFINITIONS

 

“A-Note” shall mean the original promissory note, if any, that was executed and
delivered in connection with the senior or pari passu senior position of a
Senior Mortgage Loan.

 

“Accelerated Repurchase Date” shall have the meaning specified in
Article 12(b)(i) of this Agreement.

 

“Acceptable Attorney” means an attorney-at-law that has delivered at the
applicable Seller’s request a Bailee Letter, with the exception of an attorney
that is not satisfactory to Buyer.

 

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

 

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“Act of Insolvency” shall mean, with respect to any Person, (i) the filing of a
petition, commencing, or authorizing the commencement of any case or proceeding
under any Insolvency Law, or suffering any such petition or proceeding to be
commenced by another which is consented to, not timely contested or results in
entry of an order for relief; (ii) the seeking or consenting to the appointment
of a 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 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; (vii) the consent by such Person to the entry of an order for relief in
an insolvency case under any Insolvency Law; or (viii) the taking of action by
any such Person in furtherance of any of the foregoing.

 

“Additional Advance” shall mean, for any Purchased Asset with Margin Excess, an
advance of additional funds on such Purchased Asset by Buyer to the applicable
Seller in accordance with Article 3(z).  For the avoidance of doubt, an
Additional Advance made with respect to a Purchased Asset shall be deemed to be
a part of the related Transaction.

 

“Additional Advance Conditions” shall have the meaning specified in
Article 3(z) of this Agreement.

 

“Additional Advance Date” shall mean any date upon which an Additional Advance
(up to the Margin Excess with respect to the related Purchased Asset) is made by
Buyer to the applicable Seller on the related Purchased Asset.

 

“Additional Facility Capacity” shall mean $400,000,000.

 

“Additional Facility Capacity Draw Conditions” shall mean all of the following
conditions, as determined by Buyer in its sole discretion: (i) Buyer shall have
received payment from Seller of that portion of the Structuring Fee due and
payable on the Additional Facility Capacity Draw Date pursuant to clause (b) of
the Structuring Fee definition set forth in the Fee Letter and, if the
Additional Facility Capacity Draw Date occurs on the first anniversary of the
Closing Date, Buyer shall have also received payment from Seller of any unpaid
portion of the Structuring Fee payable pursuant to clause (c) of the Structuring
Fee definition set forth in the Fee Letter, and (ii) no Force Majeure Event,
Event of Default or Margin Deficit shall have occurred and be continuing.

 

“Additional Facility Capacity Draw Date” shall have the meaning assigned thereto
in Article 3(dd).

 

“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

 

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the related Confirmation, as same may be (i) increased (as set forth in an
amended Confirmation) in connection with any Additional Advance or Future
Funding Transaction (but which shall in no case exceed the Maximum Advance Rate
for the related Purchased Asset unless otherwise agreed to by Buyer and the
applicable Seller, as specified in the related Confirmation) and (ii) decreased
(as set forth in an amended Confirmation) in connection with any partial
repurchase pursuant to Article 3(aa).

 

“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.  Control shall mean the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise and “controlling” and “controlled” shall have meanings
correlative thereto, or (ii) any “affiliate” of such Person, as such term is
defined in the Bankruptcy Code.

 

“Affiliated Hedge Counterparty” shall mean JPMorgan Chase Bank, National
Association, or any Affiliate thereof, in its capacity as a party to any Hedging
Transaction with the applicable Seller.

 

“Agreement” shall mean this Uncommitted Master Repurchase Agreement, dated as of
December 10, 2015, by and among Sellers and Buyer as such agreement may be
modified or supplemented from time to time.

 

“Alternative Rate” shall have the meaning specified in Article 3(h) of this
Agreement.

 

“Alternative 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 Alternative Rate.

 

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

 

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

 

“Applicable Spread” shall mean, with respect to a Transaction involving a
Purchased Asset:

 

(i)            with respect to any Purchased Asset and any Pricing Rate Period,
so long as no Event of Default shall have occurred and be continuing, the
incremental per annum rate (expressed as a number of “basis points”, each basis
point being equivalent to 1/100 of 1%) specified in Schedule I attached to the
Fee Letter as being the “Applicable Spread” for such Purchased Asset for the
applicable LTV (as determined by Buyer in its sole discretion) shown in
Schedule I attached to the Fee Letter, or such other rate as may be agreed upon
between the applicable Seller and Buyer and as set forth in the related
Confirmation, and

 

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(ii)           after the occurrence and during the continuance of an Event of
Default, the applicable incremental per annum rate described in clause (i) of
this definition, plus 500 basis points (5.0%).

 

“Appraisal” shall mean, with respect to each Underlying Mortgaged Property, an
appraisal of the related Underlying Mortgaged Property conducted by an
Independent Appraiser in accordance with the Financial Institutions Reform,
Recovery and Enforcement Act of 1989 and the Interagency Appraisal and
Evaluation Guidelines, as amended, and, in addition, certified by such
Independent Appraiser as having been prepared in accordance with the
requirements of the Uniform Standards of Professional Appraisal Practice of the
Appraisal Foundation, addressed to (either directly or pursuant to a reliance
letter in favor of Buyer or reliance language in such Appraisal running to the
benefit of Buyer as a successor and/or assign) and reasonably satisfactory to
Buyer.

 

“Asset Due Diligence” shall have the meaning set forth in
Article 3(b)(iv) hereof.

 

“Asset Information” shall mean, with respect to each Purchased Asset, the
information set forth in Exhibit VII attached hereto.

 

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

 

“Assignee” shall have the meaning set forth in Article 17(a) hereof.

 

“B-Note” shall mean the original promissory note, if any, that was executed and
delivered in connection with a Junior Mortgage Loan.

 

“Bailee Letter” shall mean a letter from an Acceptable Attorney or from a Title
Company, or another Person acceptable to Buyer in its sole and absolute
discretion, in the form attached to this Agreement as Exhibit IX, 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 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 the Custodian by not
later than the third (3rd) Business Day following the Purchase Date for the
related Purchased Asset.

 

“Bankruptcy Code” shall mean the United States Bankruptcy Code of 1978, as
amended from time to time.

 

“Breakage Costs” shall have the meaning assigned thereto in Article 3(m).

 

“Business Day” shall mean any day other than (i) a Saturday or Sunday, (ii) a
day on which the New York Stock Exchange or the Federal Reserve Bank of New York
is authorized or obligated by law or executive order to be closed and (iii) a
day on which banks in the State of New York, Pennsylvania, Kansas or Minnesota
are authorized or obligated by law or executive order to be closed or, with
respect to a “London Business Day” for the determination of LIBOR, any day other
than a day on which banks in London, England are authorized or obligated by law
or executive order to be closed.

 

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“Buyer” shall mean JPMorgan Chase Bank, National Association, or any successor
or permitted assign thereof.

 

“Buyer Compliance Policy” shall have the meaning specified in the Fee Letter.

 

“Buyer Funding Costs” shall mean the actual funding costs of Buyer or of any
corporate entity controlling Buyer associated with any one or more of the
Transactions (including any related Additional Advance or Future Funding
Transaction) or otherwise with Buyer’s obligations under the Transaction
Documents.

 

“Buyer’s Margin Amount” shall mean with respect to any Transaction and any
Purchased Asset on any date of determination, the applicable Maximum Advance
Rate for such Purchased Asset, multiplied by the Market Value of such Purchased
Asset as of such date of determination.

 

“Capital Stock” shall mean any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent equity ownership interests in a Person which is not a
corporation, including, without limitation, any and all member or other
equivalent interests 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.

 

“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.

 

“Cash Equivalents” shall mean, as of any date of determination, (a) marketable
securities issued or directly and unconditionally guaranteed as to interest and
principal by the United States Government, and (b) the market value (as
determined by Buyer in its sole discretion) of publicly traded debt and equity
securities of entities listed on the New York Stock Exchange, NASDAQ stock
exchange or any other nationally-recognized U.S., European, Hong Kong, Singapore
or Tokyo stock exchange, in each case which are rated at least AAA by S&P (or
the equivalent thereof by Moody’s) and, in each case, without any restrictions
on the transferability or exchange of such assets.

 

“Change of Control” shall mean: (a) at any time prior to an internalization of
management by Guarantor, if (i) Manager or an Affiliate of Manager or Guarantor
is no longer the manager of Guarantor, or (ii) there is a change in Control of
Manager from the Person or Persons who are directly or indirectly Controlling
Manager as of the Closing Date, (b) any “person” or “group” (within the meaning
of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange 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 Exchange Act), directly or indirectly, of a
percentage of the total voting power of all Capital Stock of Guarantor entitled
to vote generally in the election of directors, members or partners of 20% or
more, (c) Guarantor shall cease to own and Control, of record and beneficially,
directly or indirectly 100% of each class of outstanding Capital Stock of

 

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each of SPM and SPM BC, (d) SPM shall cease to own and Control, of record and
beneficially, directly 100% of each class of outstanding Capital Stock of
Starwood Property Mortgage Sub-14-A, L.L.C., or (e) SPM BC shall cease to own
and Control, of record and beneficially, directly 100% of each class of
outstanding Capital Stock of Starwood Property Mortgage Sub-14, L.L.C.

 

“Closing Date” shall mean December 10, 2015.

 

“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 Remittance Date in the month preceding the month in which such
Remittance Date occurs and continuing to and including the calendar day
immediately preceding the following Remittance Date.

 

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

 

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

 

“Control” shall mean the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise and
“Control,” “Controlling” and “Controlled” shall have meanings correlative
thereto.

 

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

 

“Custodial Agreement” shall mean the Custodial Agreement, dated as of the date
hereof, by and among the Custodian, Sellers and Buyer, or any successor
agreement thereto approved in writing by Sellers and Buyer, as same may be
amended, modified and/or restated from time to time in accordance therewith.

 

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

 

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

 

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

 

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“Defaulted Asset” shall mean any Purchased Asset (a) that is thirty (30) days or
more (or, in the case of payments due at maturity, one (1) Business Day)
delinquent in the payment of principal, interest, fees or other amounts payable
under the terms of the related Purchased Asset Documents, (b) for which there is
a breach of the applicable representations and warranties set forth on
Exhibit VI hereto that materially and adversely affects the value of such
Purchased Asset, the Underlying Mortgaged Property related thereto or the
interests of the Buyer in such Purchased Asset, except to the extent
specifically disclosed in writing in a Requested Exceptions Report previously
approved by Buyer, (c) as to which an Act of Insolvency shall have occurred with
respect to the related borrower or guarantor of any of the obligations of such
borrower, (d) as to which any material non-monetary default or event of default
(howsoever defined in the related Purchased Asset Documents) shall have occurred
and be continuing with respect to the Purchased Asset beyond any applicable
notice and/or cure periods under the related Purchased Asset Documents, (e) with
respect to which there has been a Significant Modification that has a material
adverse effect on such Purchased Asset, as determined by Buyer in its sole
discretion, except to the extent Buyer has consented thereto in writing, or
(f) for which foreclosure proceedings have commenced or notice of proposed
foreclosure has been delivered with respect to any lien on any related
Underlying Mortgaged Property; provided that with respect to any Junior Mortgage
Loan, Participation Interest or Mezzanine Loan, in addition to the foregoing,
such Junior Mortgage Loan, Participation Interest or Mezzanine Loan shall also
be considered a Defaulted Asset to the extent that the related Senior Mortgage
Loan or Underlying Mortgage Loan, as applicable, would be considered a Defaulted
Asset as described in this definition.

 

“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 interest bearing account, in the
name of Buyer, established on the books and records of the Depository pursuant
to the Depository Agreement.

 

“Depository Agreement” shall mean the Depository Agreement among Buyer, Sellers
and Depository to be entered into on or prior to the first Purchase Date in
connection with the initial Transaction, or any successor agreement thereto
approved in writing by Sellers and Buyer, as same may be amended, modified
and/or restated from time to time.

 

“Draft Appraisal” shall mean a short form appraisal, “letter opinion of value,”
or any other form of draft appraisal acceptable to Buyer.

 

“Due Diligence Package” shall have the meaning specified in Exhibit VIII to this
Agreement.

 

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

 

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

 

“Eligible Assets” shall mean any of the following types of assets or loans
(1) that are acceptable to Buyer in its sole and absolute discretion as of the
Purchase Date for the related

 

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Purchased Asset, (2) on each day, with respect to which there is no breach of
the applicable representations and warranties set forth in this Agreement
(including the exhibits hereto) that materially and adversely affects the value
of such Asset, the Underlying Mortgaged Property related thereto or the
interests of Buyer in such Asset, except to the extent specifically disclosed in
writing in a Requested Exceptions Report approved by Buyer, and (3) that are
secured directly or indirectly by properties that are multi-family, mixed use,
industrial, office building or hospitality or such other types of commercial
properties that Buyer may agree to in its sole discretion, and are properties
located in the United States of America, its territories or possessions (or
elsewhere, in the sole discretion of Buyer):

 

(i)            Senior Mortgage Loans, including Senior Mortgage Loans evidenced
by an A-Note; provided that, to the extent that any A-Note that is a Purchased
Asset represents a Senior Pari Passu Interest that does not have control over
servicing and other decisions pursuant to the related participation agreement or
co-lender agreement, such Senior Pari Passu Interest shall only be an Eligible
Asset hereunder to the extent that it, together with all other such Senior Pari
Passu Interests that are Purchased Assets, do not exceed, in the aggregate,
twenty-five percent (25%) of the Maximum Facility Amount;

 

(ii)           Junior Mortgage Loans, including Junior Mortgage Loans evidenced
by a B-Note, but only to the extent that the Senior Mortgage Loan or A-Note, as
applicable, to which such Junior Mortgage Loan or B-Note relates is also a
Purchased Asset;

 

(iii)          Participation Interests; provided, that to the extent that any
Senior Pari Passu Interest that is a Purchased Asset does not have control over
servicing and other decisions pursuant to the related participation agreement or
co-lender agreement, such Senior Pari Passu Interest shall only be an Eligible
Asset hereunder to the extent that it, together with all other such Senior Pari
Passu Interests without such control rights, do not exceed, in the aggregate,
twenty-five percent (25%) of the Maximum Facility Amount;

 

(iv)          Mezzanine Loans, which may be either stand-alone Mezzanine Loans
or Related Mezzanine Loans (as specified in the related Confirmation); provided
that, in the case of any such Asset identified in the related Confirmation as a
Related Mezzanine Loan, such Asset shall be not be an Eligible Asset at any time
that the related Underlying Mortgage Loan is not also a Purchased Asset; and

 

(v)           any other asset 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 and absolute 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) loans that are Defaulted Assets;
(iii) construction loans or land loans, (iv) any Asset, where the purchase
thereof would cause the aggregate of all Repurchase Prices to exceed the Maximum
Facility Amount; (v) loans for which the applicable Appraisal is (a) not dated
within three hundred sixty-four (364) days of the proposed Purchase Date or
(b) not ordered by a “Financial Services Institution” as defined in the
Interagency Appraisal and Evaluation Guidelines, or (vi) 

 

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any Asset, which may not be a Purchased Asset pursuant to any Requirement of Law
due to a change in any Requirement of Law that affects the legal, regulatory or
capital treatment of such Purchased Asset (other than any change in a
Requirement of Law which permits such Purchased Asset to remain a Purchased
Asset hereunder, so long as Sellers pay to Buyer such additional amounts as
required pursuant to Articles 3(h), (i), (k) or (l), as applicable).

 

“Eligible Loans” shall mean any Senior Mortgage Loans, Junior Mortgage Loans,
Participation Interests and Mezzanine Loans that are also Eligible Assets.

 

“Eligible Transferee” shall mean any insurance company, financial institution,
bank, savings and loan association, investment bank, trust company, commercial
credit corporation, pension plan, pension fund, pension fund advisory firm,
mutual fund, federal reserve bank, federal home loan bank, governmental entity
or plan, or any Affiliate of Buyer.

 

“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.

 

“Environmental Site Assessment” shall have the meaning specified in Exhibit VI.

 

“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 any 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 any Seller is a member.

 

“Event of Default” shall have the meaning specified in Article 12 of this
Agreement.

 

“Exchange Act” shall have the meaning specified in the definition of “Change of
Control”.

 

“Excluded Taxes” means 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 or for the account of

 

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Buyer or 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 Transferee being organized under the laws
of, or having its principal office or the office from which it books the
Transactions located in the jurisdiction imposing such 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 such Buyer
or Transferee with respect to an interest under this Agreement pursuant to a law
in effect on the date on which (i) such Buyer or Transferee acquires such
interest hereunder (other than pursuant to an assignment request by a Seller
under Article 3(w)) or (ii) Buyer or Transferee changes the office from which it
books the Transactions, except in each case to the extent that, pursuant to
Article 3(p) or Article 3(s), amounts with respect to such Taxes were payable
either to Buyer or Transferee’s assignor immediately before such Buyer or
Transferee acquired an interest hereunder or to such Buyer or Transferee
immediately before it changed the office from which it books the Transactions,
(c) Taxes attributable to Buyer’s or such Transferee’s failure to comply with
Article 3(t) and Article 21(g) and (d) any U.S. federal withholding Taxes
imposed under FATCA.

 

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

 

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

 

“Extension Period” shall have the meaning specified in Article 3(n)(i) of this
Agreement.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof, and any agreements entered into
with a Governmental Authority pursuant thereto (including pursuant to
Section 1471(b)(1) of the Code).

 

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

 

“Fee Letter” the Fee and Pricing Letter among Sellers and Buyer dated as of
December 10, 2015, or any successor agreement thereto approved in writing by
Sellers and Buyer, as same may be amended, modified and/or restated from time to
time in accordance therewith.

 

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

 

“Final Maturity Date” shall have the meaning specified in the definition of
“Maturity Date”.

 

“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.

 

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“Fitch” shall mean Fitch, Inc., and its successors-in-interest.

 

“Force Majeure Event” shall have the meaning specified in the Fee Letter.

 

“Foreign Buyer” shall mean (a) if the applicable Seller is a U.S. Person, a
Buyer that is not a U.S. Person, and (b) if the applicable 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 such Seller is resident for tax purposes.

 

“Future Funding Amount” shall mean, with respect to any Purchased Asset as of
any Future Funding Date, the product of (a) the lesser of (x) the amount of
additional funding obligations that were expressly identified to and approved by
Buyer in connection with the initial Transaction as set forth in the
Confirmation for such Purchased Asset and (y) the amount of additional funding
obligations actually funded by or on behalf of Seller in connection with such
future funding obligation, and (b) the Advance Rate for such Purchased Asset as
of such Future Funding Date; provided, that the sum of the Purchase Price (prior
to the funding of such Future Funding Amount) and Future Funding Amount shall in
no event exceed the product of (i) the pro forma Market Value of such Purchased
Asset (after giving effect to the proposed Future Funding Transaction) as of the
related Future Funding Date and (ii) the Advance Rate of such Eligible Asset as
of such Future Funding Date.

 

“Future Funding Conditions” shall have the meaning set forth in
Article 3(c)(ii) hereof.

 

“Future Funding Date” shall mean, with respect to any Eligible Asset, the date
on which Buyer advances any portion of the Future Funding Amount related to such
Eligible Asset.

 

“Future Funding Due Diligence” shall have the meaning set forth in
Article 3(c)(ii) hereof.

 

“Future Funding Transaction” shall mean an additional Transaction requested with
respect to any Eligible Asset to provide for the advance of additional funds
that were expressly identified to and approved by Buyer in connection with the
initial Transaction entered into in respect of such Eligible Asset.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Hedge-Required Asset” shall mean any Eligible Asset that is a fixed rate
Eligible Asset.

 

“Hedging Transactions” shall mean, with respect to any or all of the Purchased
Assets, any short sale of U.S. Treasury Securities or mortgage-related
securities, futures contract (including Eurodollar futures) or options contract
or any interest rate swap, cap or collar agreement or similar arrangements
providing for protection against fluctuations in interest rates or the exchange
of nominal interest obligations, entered into by any Affiliated Hedge
Counterparty or Qualified Hedge Counterparty with the applicable Seller,
Guarantor or its Affiliate, either generally or under specific contingencies
that is required by Buyer, or otherwise pursuant to this Agreement, to hedge the
financing of a Hedge-Required Asset, or that the applicable Seller has elected
to pledge or transfer to Buyer pursuant to this Agreement.

 

“Income” shall mean, with respect to any Purchased Asset at any time, (a) any
collections or receipts of principal, interest, dividends, receipts or other
distributions or collections or any other amounts related to such Purchased
Asset, (b) all net sale proceeds received by any Seller or any Affiliate of any
Seller in connection with a sale or liquidation of such Purchased Asset and
(c) all payments actually received by Buyer on account of Hedging Transactions;
provided, that Qualified Servicing Expenses and Underlying Purchased Asset
Reserves shall not be included in the term “Income”.

 

“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) 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 hedging instrument or agreement; and (k) all obligations of such Person
under Financing Leases.

 

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“Indemnified Amounts” shall have the meaning specified in Article 25 of this
Agreement.

 

“Indemnified Parties” shall have the meaning specified in Article 25 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 any
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 a professional real estate appraiser that
(i) is approved by Buyer in its sole discretion; (ii) was not selected or
identified by the Mortgagor; (iii) is not affiliated with the lender under the
mortgage or the Mortgagor; (iv) is a member in good standing of the American
Appraisal Institute; (v) such appraiser is certified or licensed in the state
where the subject Underlying Mortgaged Property is located and (vi) in each such
case, has a minimum of five years’ experience in the subject property type.  If
such Independent Appraiser was selected or engaged directly by any Seller or an
Affiliate thereof, each Seller further represents and warrants to Buyer that
such Seller or related Affiliate is a “Financial Services Institution” as
defined in the Interagency Appraisal and Evaluation Guidelines.

 

“Independent Director” shall mean an individual with at least three (3) years of
employment experience serving as an independent director 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
any 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 a member of the board of directors or board of
managers of the applicable Seller and is not, and has never been, and will not
while serving as independent director or manager be:

 

(a)           a member (other than an independent, non-economic “springing”
member), partner, equityholder, manager, director, officer or employee of any
Seller or any of its equityholders or Affiliates (other than as an independent
director or manager of an Affiliate of a Seller that does not own a direct or
indirect interest in any Seller and that is required by a creditor to be a
single purpose bankruptcy remote 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 any Seller or any of its equityholders or
Affiliates (other than a nationally recognized company that routinely provides
professional independent directors or managers and other corporate services to
any Seller or any of its equityholders or Affiliates in the ordinary course of
business);

 

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(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 affiliated with a Seller that does not
own a direct or indirect interest in any Seller shall not be disqualified from
serving as an independent director or manager of any 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.

 

“Initial Facility Capacity” shall mean $600,000,000.

 

“Initial Maturity Date” shall have the meaning specified in the definition of
“Maturity Date”.

 

“Insolvency Law” shall mean any bankruptcy, insolvency, reorganization,
liquidation, dissolution or similar law relating to the protection of creditors.

 

“Interim Servicer” shall mean Situs Asset Management LLC, or any other interim
servicer approved by Buyer in its sole and absolute discretion.

 

“Interim Servicing Agreement” shall mean the Interim Servicing Agreement between
Sellers, Buyer and Interim Servicer to be entered into on or prior to the first
Purchase Date in connection with the initial Transaction, or any successor
agreement thereto approved in writing by Sellers and Buyer, as may be amended
from time to time in accordance therewith.

 

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

 

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

 

“Junior Mortgage Loan” shall mean a performing commercial or multifamily fixed
or floating rate mortgage loan evidenced by one or more junior promissory notes,
or B-Notes related to a performing commercial or multifamily fixed or floating
rate mortgage loan, in each case secured by a first lien on multifamily or
commercial properties.

 

“Knowledge” shall mean, as of any date of determination, the then-current actual
(as distinguished from imputed or constructive) knowledge of (i) Cary Carpenter,
Andrew J. Sossen, Rina Paniry or Mark Cagley (or, if following the Closing Date
any such individual ceases to be an officer of, or in the employ of, Seller
and/or Guarantor then such other individual or individuals employed in such
capacity or in comparable capacity, or (ii) any asset manager of Manager or
Guarantor that is responsible for the management of any applicable Purchased
Asset.

 

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“LIBOR” shall mean, with respect to each Pricing Rate Period, the rate
determined by Buyer to be (i) the per annum rate for deposits in U.S. dollars
for a period equal to the applicable Pricing Rate Period that appears on the
Thomson Reuters ICE LIBOR# Rates - LIBOR01 Page (or any successor thereto) as
the London Interbank Offering Rate as of 11:00 a.m., London time, on the Pricing
Rate Determination Date (rounded upwards, if necessary, to the nearest 1/1000 of
1%); (ii) if such rate does not appear on said Thomson Reuters ICE LIBOR# Rates
- LIBOR01 Page, the arithmetic mean (rounded as aforesaid) of the offered
quotations of rates obtained by Buyer from the Reference Banks for deposits in
U.S. dollars for a period equal to the applicable Pricing Rate Period to prime
banks in the London Interbank market as of approximately 11:00 a.m., London
time, on the Pricing Rate Determination Date and in an amount that is
representative for a single transaction in the relevant market at the relevant
time; or (iii) if fewer than two (2) Reference Banks provide Buyer with such
quotations, the rate per annum which Buyer determines to be the arithmetic mean
(rounded as aforesaid) of the offered quotations of rates which major banks in
New York, New York selected by Buyer are quoting at approximately 11:00 a.m.,
New York City time, on the Pricing Rate Determination Date for loans in U.S.
dollars to leading European banks for a period equal to the applicable Pricing
Rate Period in amounts of not less than U.S. $1,000,000.00; provided that, in
each of clauses (i), (ii) and (iii) above, if such rate shall be less than zero,
such rate shall be deemed to be zero for purposes of this Agreement.  Buyer’s
determination of LIBOR shall be binding and conclusive on Sellers absent
manifest error.  LIBOR may or may not be the lowest rate based upon the market
for U.S. Dollar deposits in the London Interbank Eurodollar Market at which
Buyer prices loans on the date which LIBOR is determined by Buyer as set forth
above; provided, that any such determination by Buyer shall be made in the same
manner as determinations made by Buyer for all similarly-situated counterparties
in similar repurchase facilities.

 

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

 

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

 

“LTV” shall mean, with respect to any Purchased Asset, the loan-to-value ratio
for such Purchased Asset, as determined by Buyer in its sole discretion.

 

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

 

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

 

“Margin Deficit Extension Period” shall have the meaning specified in the Fee
Letter.

 

“Margin Deficit Extension Requirements” shall have the meaning specified in the
Fee Letter.

 

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“Margin Deficit Extension Threshold” shall have the meaning specified in the Fee
Letter.

 

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

 

“Margin Deficit Payment Date” shall have the meaning specified in Article 4(d).

 

“Margin Excess” shall mean, for any Purchased Asset, as of the applicable date
of determination, the extent to which an amount equal to (a) the product of
(i) the Maximum Advance Rate for such Purchased Asset or such lesser percentage
as set forth in the related Confirmation and (ii) the Market Value of such
Purchased Asset on such date of determination exceeds (b) the outstanding
Repurchase Price of such Purchased Asset; provided that, the Market Value
(expressed as a percentage of par) on such date of determination shall not
exceed the Market Value (expressed as a percentage of par) as of the related
Purchase Date.

 

“Margin Excess Requirements” shall mean requirements that will be satisfied as
of any date of determination if Buyer has determined in its sole and absolute
discretion applied in good faith that: (a) no Event of Default has occurred and
is continuing or will result from any application of Margin Excess, and (b) the
request for Margin Excess will not cause, after giving effect to such request
for Margin Excess, the outstanding Purchase Price of the related Purchased Asset
to exceed the Maximum Purchase Price for such Purchased Asset as of such date of
determination.

 

“Market Value” shall have the meaning specified in the Fee Letter.

 

“Material Adverse Effect” shall mean a material adverse effect on (a) the
property, business, operations, financial condition or prospects of any Seller
or Guarantor, (b) the ability of any Seller or Guarantor to perform its
obligations under any of the Transaction Documents, (c) the validity or
enforceability of any of the Transaction Documents, (d) the rights and remedies
of Buyer under any of the Transaction Documents, (e) the timely payment of any
amounts payable under the Transaction Documents, (f) the timely payment of any
amounts payable under this Agreement or any other Transaction Document, or
(g) the Market Value of all of the Purchased Assets in the aggregate.

 

“Material Default” shall have the meaning specified in the Fee Letter.

 

“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.

 

“Maturity Date” shall mean December 10, 2018 or the immediately succeeding
Business Day, if such day shall not be a Business Day (the “Initial Maturity
Date”), as such date may be extended subject to, and in accordance with,
Article 3(n) hereof.  For the sake of clarity, the Maturity Date shall not be
any date beyond five (5) years from the Closing Date (the “Final Maturity
Date”).

 

“Maturity Date Extension Conditions” shall have the meaning set forth in
Article 3(n)(ii).

 

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“Maximum Advance Rate” shall mean, with respect to each Purchased Asset, the
maximum amount, expressed as a percentage of par, as specified in the
appropriate row for such Purchased Asset under the “Maximum Advance Rate”
specified in Schedule I attached to the Fee Letter for the related loan-to-value
ratios shown in Schedule I, or if not shown in Schedule I or if otherwise agreed
to by the applicable Seller and Buyer, in the related Confirmation for such
Purchased Asset; provided, however, that with respect to any Eligible Asset to
be purchased hereunder, the Advance Rates shown in Schedule I attached to the
Fee Letter are only indicative of the maximum advance rate available to Sellers,
and Buyer is not obligated to purchase any Eligible Asset at such Maximum
Advance Rates.

 

“Maximum Facility Amount” shall mean the Initial Facility Capacity, plus, if and
when the Additional Facility Capacity is made available pursuant to
Article 3(dd), the Additional Facility Capacity.

 

“Maximum Purchase Price” shall mean, with respect to any Purchased Asset, the
amount set forth in the Confirmation related thereto, which shall be equal to
the product of the Maximum Advance Rate and the Market Value of such Purchased
Asset as of the Purchase Date, as such amount shall be (a) increased by Future
Funding Amounts actually funded in respect of such Purchased Asset by Buyer
pursuant to this Agreement and (b) decreased by any principal repayments made by
or on behalf of the related borrower, to the extent of the amount of such
principal repayment actually paid to Buyer as a return of Purchase Price
pursuant to Article 5 hereof.

 

“Mezzanine Loan” shall mean a performing loan evidenced by a note and primarily
secured by pledges of all the equity interests in entities (the “Mezzanine Loan
Collateral”) that own, directly or indirectly, multifamily or commercial
properties that serve as collateral for Senior Mortgage Loans.

 

“Mezzanine Loan Collateral” shall have the meaning specified in the definition
of “Mezzanine Loan”.

 

“Mezzanine Loan Documents” shall mean, with respect to any Mezzanine Loan, the
Mezzanine Note, all other documents executed in connection with, evidencing or
governing such Mezzanine Loan and copies of the Mortgage Loan Documents for the
related Underlying Mortgage Loan, including, without limitation, those documents
which are required to be delivered to Custodian under the Custodial Agreement.

 

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

 

“Minimum Purchased Asset Fee” shall have the meaning specified in Article 3(bb).

 

“Minimum Purchased Asset Requirement” shall have the meaning specified in
Article 3(bb).

 

“Minimum Transfer Amount” shall mean, with respect to any Purchased Asset as of
any date of determination, an amount equal to seven and one half percent (7.5%)
of the outstanding principal balance of such Purchased Asset, as of such date of
determination; provided, however,

 

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that if an Event of Default has occurred and is continuing hereunder, the
Minimum Transfer Amount shall be U.S. $0.

 

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

 

“Moody’s” shall mean Moody’s Investors Service, Inc., and its
successors-in-interest.

 

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

 

“Mortgage Loan Documents” shall mean, with respect to any Senior Mortgage Loan
(including any Senior Mortgage Loan evidenced by an A-Note) or Junior Mortgage
Loan (including any Junior Mortgage Loan evidenced by a B-Note), as applicable,
the Mortgage Note, Mortgage and all other documents executed in connection with
and/or evidencing or governing such Senior Mortgage Loan or Junior Mortgage
Loan, as applicable, including, without limitation (a) those documents that are
required to be delivered to Custodian under the Custodial Agreement and (b) in
the case of any Purchased Asset that is an A-Note where the original Purchased
Asset Documents are not held by or on behalf of the applicable Seller or a
Junior Mortgage Loan, copies of the Mortgage Loan Documents for the Senior
Mortgage Loan to which such Purchased Asset relates.

 

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

 

“Mortgagor” shall mean (a) with respect to a Senior Mortgage Loan, the obligor
on a Mortgage Note and the grantor of the related Mortgage, (b) with respect to
a Participation Interest, the obligor on a Mortgage Note and the grantor of the
related Mortgage on the Underlying Mortgage Loan related to such Participation
Interest and (c) with respect to a Mezzanine Loan, the obligor on a Mezzanine
Note and the grantor of the related security instrument related to such
Mezzanine Loan.

 

“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 any Seller or any ERISA Affiliate and that is covered by
Title IV of ERISA.

 

“New Asset” shall mean an Eligible Asset that the applicable Seller proposes to
be included as a Purchased Item.

 

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

 

“Originated Asset” shall mean any Eligible Asset originated by the applicable
Seller.

 

“Other Connection Taxes” shall mean Taxes imposed as a result of a present or
former connection between such Buyer or Transferee and the jurisdiction imposing
such Tax (other than connections arising from such Buyer or Transferee having
executed, delivered, become a party

 

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to, performed its obligations under, received payments under, received or
perfected a security interest under, engaged in any other Transaction pursuant
to or enforced any Transaction Document, or sold or assigned an interest in any
Transaction or 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, Purchased Asset, or Purchased Item
except for any such Taxes (x) that are 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 3(w) hereof), or (y) that are imposed with respect to a
Secondary Market Transaction effected pursuant to Article 28(a).

 

“Participation Certificate” shall mean the original participation certificate,
if any, that was executed and delivered in connection with a Participation
Interest.

 

“Participation Interest” shall mean a Senior A/B Participation Interest or a
Senior Pari Passu Interest.

 

“Participation Interest Documents” shall mean, with respect to any Participation
Interest, the Participation Certificate, any co-lender agreements, participation
agreements and/or intercreditor agreements, all other documents governing or
otherwise relating to such Participation Interest, and copies of the Mortgage
Loan Documents for the related Underlying Mortgage Loan, and including, without
limitation, those documents which are required to be delivered to Custodian
under the Custodial Agreement.

 

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

 

“Plan” shall mean an employee benefit or other plan established or maintained by
any Seller or any ERISA Affiliate during the five year period ended prior to the
date of this Agreement or to which any 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 20(a) of this
Agreement.

 

“Pledge Agreement” shall mean each Pledge Agreement, dated as of the date
hereof, made by the applicable Pledgor in favor of Buyer, pledging all of the
related Seller’s Capital Stock to Buyer, in each case, as same may be amended,
modified and/or restated from time to time in accordance therewith.

 

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“Pledgor” shall mean (a) with respect to Starwood Property Mortgage Sub-14-A,
L.L.C., SPM and (b) with respect to Starwood Property Mortgage Sub-14, L.L.C.,
SPM BC.

 

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

 

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

 

“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 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 the applicable
Seller to Buyer with respect to such Purchased Asset).

 

“Pricing Rate” shall mean, for any Pricing Rate Period and any Purchased Asset,
an annual rate equal to the sum of (i) LIBOR, (ii) the relevant Applicable
Spread with respect to such Purchased Asset and (iii) until such time as that
portion of the Structuring Fee payable pursuant to clause (c) of the definition
thereof has been paid to Buyer by Sellers in full, the Structuring Fee Spread,
in each case, for the applicable Pricing Rate Period 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 Pricing Rate
Period with respect to any Transaction, the second (2nd) London Business Day
preceding the first day of such Pricing Rate Period.

 

“Pricing Rate Period” shall mean, with respect to any Transaction, Remittance
Date or Repurchase Date (a) in the case of the first Pricing Rate Period with
respect to any Transaction, 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 Wells Fargo Bank, National Association, and/or any
other primary servicer approved by, or in the case of a termination of Primary
Servicer pursuant to Article 27(c), appointed by Buyer, in each case in Buyer’s
sole and absolute discretion.  Notwithstanding any provision to the contrary set
forth elsewhere in this Agreement, immediately upon the termination of the
Primary Servicing Agreement, all references in this Agreement to the term
“Primary Servicer” shall automatically be changed to the term “Interim
Servicer”.

 

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“Primary Servicing Agreement” shall mean the Servicing Agreement by and between
Sellers and Primary Servicer to be entered into on or prior to the first
Purchase Date in connection with the initial Transaction, as same may be
amended, modified and/or restated from time to time in accordance with the terms
of this Agreement, and, if any other Primary Servicer is approved by Buyer in
its sole and absolute discretion, any servicing agreement with such other
Primary Servicer in respect of the Purchased Assets, which agreement is approved
by Sellers and Buyer in their reasonable discretion, as same may be amended,
modified and/or restated from time to time in accordance with the terms of this
Agreement.

 

“Principal Proceeds” shall mean, with respect to any Purchased Asset, any
scheduled or unscheduled payment or prepayment of principal (including net sale
proceeds) received by the Depository or allocated as principal in respect of any
such Purchased Asset.

 

“Prohibited Investor” shall mean (1) a person or entity whose name appears on
the list of Specially Designated Nationals and Blocked Persons by OFAC, (2) any
foreign shell bank, and (3) 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 Person” shall have the meaning set forth in Article 9(b)(xxxi).

 

“Properties” shall have the meaning set forth in Article 9(b)(xxix)(a).

 

“Purchase Agreement” shall mean any purchase agreement between the applicable
Seller and any Transferor pursuant to which such Seller purchased or acquired an
Asset that is subsequently sold to Buyer hereunder.

 

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

 

“Purchase Price” shall mean, with respect to any Purchased Asset, the price at
which such Purchased Asset is transferred by the applicable 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 as of the Purchase Date (or the par
amount of such Purchased Asset, if lower than Market Value) by (ii) the Advance
Rate for such Purchased Asset, as determined by Buyer in its sole and absolute
discretion and as set forth on the related Confirmation.  The Purchase Price of
any Purchased Asset shall be (x) increased by any Additional Advance, any Future
Funding Amount actually funded by Buyer or any amount of Margin Excess in
respect of such Purchased Asset applied pursuant to Article 4 to a Margin
Deficit relating to any other Purchased Asset, and any other additional amounts
advanced by Buyer to the applicable Seller or to the related Mortgagor on behalf
of such Seller or otherwise with respect to such Purchased Asset and
(y) decreased by (A) the portion of any Principal

 

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Proceeds on such Purchased Asset that are applied pursuant to Article 5 hereof
to reduce such Purchase Price, (B) any amount of cash or Margin Excess
transferred to Buyer by the applicable Seller and applied pursuant to Article 4
to any Margin Deficit relating to such Purchased Asset, (C) any amounts
transferred by Seller to Buyer in partial repurchase of the Purchase Price
pursuant to Article 3(aa), and (D) any other amounts paid to Buyer by the
applicable Seller specifically to reduce such Purchase Price or that are
otherwise applied pursuant to Article 5 hereof to reduce such Purchase Price.

 

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

 

“Purchased Asset Documents” shall mean the Mortgage Loan Documents,
Participation Interest Documents and/or Mezzanine Loan Documents, as applicable.

 

“Purchased Asset File” shall mean the documents specified as the “Purchased
Asset File” in Article 7(b), together with any additional documents and
information required to be delivered to Buyer or its designee (including the
Custodian) pursuant to this Agreement; provided that to the extent that Buyer
waives, including pursuant to Article 7(c), receipt of any document in
connection with the purchase of an Eligible Asset (but not if Buyer merely
agrees to accept delivery of such document after the Purchase Date), such
document shall not be a required component of the Purchased Asset File until
such time as Buyer determines in good faith that such document is necessary or
appropriate for the servicing of the applicable Purchased Asset.

 

“Purchased Asset Schedule” shall mean a schedule of Purchased Assets attached to
each Trust Receipt and Custodial Delivery Certificate containing information
substantially similar to the Asset Information.

 

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

 

“Qualified Hedge Counterparty” shall mean, with respect to any Hedging
Transaction, any entity, other than an Affiliated Hedge Counterparty, that
(a) qualifies as an “eligible contract participant” as such term is defined in
the Commodity Exchange Act (as amended by the Commodity Futures Modernization
Act of 2000), (b) the long-term unsecured debt of which is rated no less than
“A+” by S&P and “A1” by Moody’s and (c) is reasonably acceptable to Buyer;
provided, that with respect to clause (c), if Buyer has approved an entity as a
counterparty, it may not thereafter deem such counterparty unacceptable with
respect to any previously outstanding Transaction unless clause (a) or clause
(b) no longer applies with respect to such counterparty.

 

“Qualified Servicing Expenses” shall mean any fees and expenses payable to any
third-party servicer pursuant to any Servicing Agreement in respect of the
Purchased Assets, and which fees and expenses are netted by such servicer out of
collections pursuant to the related Servicing Agreement.

 

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

 

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

 

“Re-direction Letter” shall mean a letter in the form of Exhibit XVII hereto.

 

“Reference Banks” shall mean banks each of which shall (i) be a leading bank
engaged in transactions in Eurodollar deposits in the international Eurocurrency
market and (ii) have an established place of business in London.  Initially, the
Reference Banks shall be JPMorgan Chase Bank, National Association, Barclays
Bank, Plc and Deutsche Bank AG.  If any such Reference Bank should be unwilling
or unable to act as such or if Buyer shall terminate the appointment of any such
Reference Bank or if any of the Reference Banks should be removed from the
Reuters Monitor Money Rates Service or in any other way fail to meet the
qualifications of a Reference Bank, Buyer, in its sole discretion exercised in
good faith, may designate alternative banks meeting the criteria specified in
clauses (i) and (ii) above.

 

“Register” shall have the meaning assigned in Article 17(b).

 

“Related Mezzanine Loan” shall mean any Mezzanine Loan that is identified as
such pursuant to the terms of the related Confirmation and that satisfies the
definition of Eligible Asset.

 

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

 

“REMIC” shall mean a real estate mortgage investment conduit, within the meaning
of Section 860D(a) of the Code.

 

“Remittance Date” shall mean the fifteenth (15th) calendar day of each month, or
the immediately succeeding Business Day, if such calendar day shall not be a
Business Day, or such other day as is mutually agreed to by Sellers and Buyer.

 

“REOC” shall mean a Real Estate Operating Company within the meaning of
Regulation Section 2510.3-101(e) of the Plan Asset Regulations.

 

“Repurchase Date” shall mean, with respect to a Purchased Asset, the earliest to
occur of (i) any Early Repurchase Date for such Transaction; (ii) the date set
forth in the applicable Confirmation; (iii) the Accelerated Repurchase Date;
(iv) the Maturity Date and (v) 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); provided, that,
solely with respect to clause (v), the settlement with respect to such
Repurchase Date and Purchased Asset may occur two (2) Business Days later.

 

“Repurchase Notice” shall have the meaning assigned thereto in Article 17(a).

 

“Repurchase Obligations” shall have the meaning assigned 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

 

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hereunder, the price at which such Purchased Asset is to be transferred from
Buyer to the applicable Seller; such price will be determined by Buyer in each
case as the sum of (i) the currently 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 Sellers to Buyer and its
Affiliates pursuant to the terms of this Agreement as of such date; and (iv) if
such Repurchase Date is not a Remittance Date, except as otherwise expressly set
forth in this Agreement, 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 assigned thereto in
Article 3(b)(iv)(E).

 

“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.

 

“Responsible Officer” shall mean any executive officer of the applicable Seller.

 

“S&P” shall mean Standard and Poor’s Ratings Services, a Standard and Poor’s
Financial Services LLC business, and its successors-in-interest.

 

“Sanctions Laws and Regulations” shall mean any sanctions, prohibitions or
requirements imposed by any executive order or by any sanctions program
administered by OFAC.

 

“Secondary Market Transaction” shall have the meaning set forth in
Article 28(a).

 

“Seller” or “Sellers” shall mean, individually or collectively as the context
may require, the entities identified as “Sellers” in the Recitals hereto and
such other sellers as may be approved by Buyer in its sole discretion from time
to time.

 

“Senior A/B Participation Interest” shall mean the most senior participation
interest representing the single most senior interest in a performing Senior
Mortgage Loan that is evidenced by a Participation Certificate.

 

“Senior Mortgage Loan”  shall mean a performing senior commercial or multifamily
fixed or floating rate mortgage loan or A-Note related to a performing senior
commercial or multifamily fixed or floating rate mortgage loan, in each case
secured by a first lien on multifamily or commercial properties.

 

“Senior Pari Passu Interest” shall mean an A-Note in an A/B structure or a pari
passu structure or a pari passu participation interest, in each case,
representing one pari passu portion of the most senior interests in a performing
Senior Mortgage Loan that is evidenced by an A-Note or a Participation
Certificate, respectively.

 

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“Servicer Notice” shall mean the agreement between Buyer, the applicable Seller
and Primary Servicer, substantially in the form of Exhibit XIV hereto, as
amended, supplemented or otherwise modified from time to time.

 

“Servicing Agreement” shall have the meaning specified in Article 27(b).

 

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

 

“Servicing Rights” shall mean all right, title and interest of Sellers, Pledgor,
Guarantor, or any Affiliate of any Seller, Pledgor or Guarantor, or any other
Person, in and to any and all of the following:  (a) rights to service and/or
sub-service, and collect and make all decisions with respect to, the Purchased
Assets and/or any related Underlying Mortgage Loans, (b) amounts received by
Seller, Pledgor, Guarantor or any Affiliate of any Seller, Pledgor or Guarantor,
or any other Person, for servicing and/or sub-servicing the Purchased Assets
and/or any related Underlying Mortgage Loans, (c) late fees, penalties or
similar payments with respect to the Purchased Assets and/or any related Senior
Mortgage Loans, (d) agreements and documents creating or evidencing any such
rights to service and/or sub-service (including, without limitation, all
Servicing Agreements), together with all Servicing Records, and rights of any
Seller, Pledgor, Guarantor or any Affiliate of any Seller, Pledgor, or
Guarantor, or any other Person, thereunder, (e) escrow, reserve and similar
amounts with respect to the Purchased Assets and/or any related Underlying
Mortgage Loans, (f) rights to appoint, designate and retain any other servicers,
sub-servicers, special servicers, agents, custodians, trustees and liquidators
with respect to the Purchased Assets and/or any related Underlying Mortgage
Loans, and (g) accounts and other rights to payment related to the Purchased
Assets and/or any related Underlying Mortgage Loans.

 

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

 

“Significant Modification” shall have the meaning specified in the Fee Letter.

 

“SPM” shall mean Starwood Property Mortgage, L.L.C., a Delaware limited
liability company.

 

“SPM BC” shall mean Starwood Property Mortgage BC, L.L.C., a Delaware limited
liability company.

 

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

 

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

 

“Subordinate Eligible Assets” shall mean Junior Mortgage Loans (including
B-Notes) or Mezzanine Loans.

 

“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

 

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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 the applicable Seller.

 

“Survey” shall mean a certified ALTA/ACSM (or applicable state standards for the
state in which the collateral is located) survey of the underlying real estate
directly or indirectly securing or supporting such Purchased Asset prepared by a
registered independent surveyor or engineer and in form and content satisfactory
to Buyer and the company issuing the Title Policy for such Underlying Mortgaged
Property.

 

“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 have the meaning specified in Exhibit VI.

 

“Transaction” shall mean a Transaction, as specified in Article 1 of this
Agreement and shall include any related Additional Advance and any related
Future Funding Transaction.

 

“Transaction Documents” shall mean, collectively, this Agreement, any applicable
Schedules, Exhibits and Annexes to this Agreement, the Guarantee Agreement, the
Custodial Agreement, the Interim Servicing Agreement, the Depository Agreement,
the Pledge Agreements, the Fee Letter, the Primary Servicing Agreement and
related Servicer Notice, and all Confirmations and assignment documentation
executed pursuant to this Agreement in connection with specific Transactions.

 

“Transferee” shall have the meaning set forth in Article 17(a) hereof.

 

“Transferor” shall mean the seller of an Asset under a Purchase Agreement.

 

“Trust Receipt” shall mean a trust receipt issued by Custodian to Buyer
confirming the Custodian’s possession of certain Purchased Asset Files that are
the property of and held by Custodian for the benefit of Buyer (or any other
holder of such trust receipt) or a Bailee Letter.

 

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

 

“Underlying Mortgage Loan” shall mean, in the case of (a) a Participation
Interest, the mortgage loan in which the applicable Seller owns such
Participation Interest, and (b) a Mezzanine Loan, the mortgage loan made to the
borrower whose Capital Stock comprises the security for such Mezzanine Loan.

 

“Underlying Mortgaged Property” shall mean, in the case of:

 

(a)           a Senior Mortgage Loan, the real property securing such Senior
Mortgage Loan;

 

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(b)           a Junior Mortgage Loan, the real property securing such Junior
Mortgage Loan;

 

(c)           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;
and

 

(d)           a Participation Interest, the real property securing the related
Underlying Mortgage Loan.

 

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

 

“Underwriting Issues” shall mean, with respect to any Purchased Asset as to
which the applicable Seller intends to request a Transaction, Additional Advance
or Future Funding Transaction all material information that has come to such
Seller’s attention 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.

 

“U.S. Person” means a “United States person” within the meaning of
Section 7701(a)(30) of the Code.

 

“U.S. Tax Compliance Certificate” shall have the meaning assigned to such term
in Article 3(t)(ii)(B)(3).

 

“VCOC” shall mean a “venture capital operating company” within the meaning of
Section 2510.3-101(d) of the Plan Asset Regulations.

 

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”.

 

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ARTICLE 3.
INITIATION; CONFIRMATION; TERMINATION; FEES; EXTENSION OF MATURITY DATE;
EXTENSION OF REPURCHASE DATE

 

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 shall have received from
Sellers payment of an amount equal to all fees and expenses payable hereunder,
and all of the following items, each of which shall be satisfactory in form and
substance to Buyer and its counsel and the satisfaction of the other conditions
precedent in clause (a) below:

 

(a)           The following documents, delivered to Buyer on the Closing Date
unless otherwise specified below, and the consents and payment of all amounts
specified below:

 

(i)            this Agreement, duly completed and executed by each of the
parties hereto (including all exhibits hereto);

 

(ii)           a Custodial Agreement, duly executed and delivered by each of the
parties thereto;

 

(iii)          a Depository Agreement, duly completed and executed by each of
the parties thereto and delivered to Buyer on or prior to the first Purchase
Date in connection with the initial Transaction, along with an enforceability
opinion covering such Depository Agreement and an opinion as to perfection of
the security interest in the related Depository Account and amounts from time to
time credited thereto;

 

(iv)          a Guarantee Agreement, duly completed and executed by each of the
parties thereto;

 

(v)           the Pledge Agreements, in each case, duly completed and executed
by the applicable Pledgor in favor of Buyer and acknowledged by the related
Seller;

 

(vi)          the Primary Servicing Agreement, the related Servicer Notice and
the Interim Servicing Agreement, each duly completed and executed by each of the
parties thereto and delivered to Buyer on or prior to the first Purchase Date in
connection with the initial Transaction, along with an enforceability opinion
covering such Primary Servicing Agreement, Servicer Notice and Interim Servicing
Agreement, and Sellers shall make commercially reasonable efforts to deliver a
legal opinion to Buyer as to perfection of Buyer’s security interest in the
Servicer Account established under the Primary Servicing Agreement and amounts
from time to time credited thereto;

 

(vii)         any and all consents and waivers applicable to Sellers or to the
Purchased Assets;

 

(viii)        UCC financing statements for filing in each of the UCC filing
jurisdictions described on Exhibit XII hereto, (x) in the case of each Seller,
naming such Seller as “Debtor” and Buyer as “Secured Party” and adequately
describing as “Collateral” all of the items set forth in the definition of
Purchased Items in this Agreement, together with

 

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any other documents necessary or requested by Buyer to perfect the security
interests granted by each Seller in favor of Buyer under this Agreement or any
other Transaction Document such that the lien created in favor of Buyer is a
perfected, first priority security interest senior to the claim of any other
creditor of any Seller and (y) in the case of each Pledgor, naming such Pledgor
as “Debtor” and Buyer as “Secured Party” and adequately describing as
“Collateral” all of the items set forth in the definition of “Pledged
Collateral” under the related Pledge Agreement such that the lien created in
favor of Buyer is a perfected, first priority security interest senior to the
claim of any other creditor of such Pledgor;

 

(ix)          any documents relating to any Hedging Transactions;

 

(x)           opinions of outside counsel to Sellers reasonably acceptable to
Buyer (including, but not limited to, those relating to bankruptcy safe harbor,
enforceability, corporate matters, applicability of the Investment Company Act
of 1940 to Sellers or any Affiliate of any Seller, and security interests);

 

(xi)          good standing certificates and certified copies of the charters
and by-laws (or equivalent documents) of Sellers and Guarantor and of all
corporate or other authority for Sellers and Guarantor with respect to the
execution, delivery and performance of the Transaction Documents and each other
document to be delivered by Sellers and Guarantor from time to time in
connection herewith (and Buyer may conclusively rely on such certificate until
it receives notice in writing from Sellers to the contrary);

 

(xii)         with respect to any Eligible Asset to be purchased hereunder on
the related Purchase Date that is serviced by any servicer other than Primary
Servicer (or is serviced pursuant to any servicing agreement other than the
Primary Servicing Agreement), the applicable 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 the applicable Seller(s) and such servicer;

 

(xiii)        Buyer shall have received payment from Sellers of an amount equal
to the amount of actual out-of-pocket costs and expenses, including, without
limitation, the reasonable fees and expenses of outside 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;

 

(xiv)        Buyer shall have received payment from Sellers, as consideration
for Buyer’s agreement to enter into this Agreement, the initial installment of
the Structuring Fee on January 4, 2016, as set forth in the Fee Letter;

 

(xv)         the Depository Account shall have been established on the books and
records of the Depository on or prior to the first Purchase Date in connection
with the initial Transaction; and

 

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

 

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

 

(i)            the sum of (A) the unpaid Repurchase Price for all prior
outstanding Transactions and (B) the requested Purchase Price for the pending
Transaction, in each case, including any Future Funding Amount, shall not exceed
the Maximum Facility Amount;

 

(ii)           no Force Majeure Event has occurred and is continuing, no Margin
Deficit equal to or greater than the Minimum Transfer Amount exists, and no
Default or Event of Default has occurred and is continuing under this Agreement
or any other Transaction Document;

 

(iii)          the applicable Seller shall give Buyer no less than two
(2) Business Days prior written notice of each Transaction (including the
initial Transaction), together with a signed, written confirmation in the form
of Exhibit I attached hereto prior to each Transaction (a “Confirmation”).  Each
Confirmation shall describe the Purchased Assets, shall identify Buyer and the
applicable Seller and shall be executed by both Buyer and the applicable Seller;
provided, however, that Buyer shall not be liable to any Seller if it
inadvertently acts on a Confirmation that has not been signed by a Responsible
Officer of the applicable Seller, and shall set forth (among other things):

 

(A)          the Purchase Date for the Purchased Assets included in the
Transaction;

 

(B)          the Purchase Price and Maximum Purchase Price for the Purchased
Assets included in the Transaction;

 

(C)          the Repurchase Date for the Purchased Assets included in the
Transaction;

 

(D)          the requested Advance Rate and Maximum Advance Rate for the
Purchased Assets included in the Transaction;

 

(E)           the total future funding obligations of Seller with respect to
each Purchased Asset included in the Transaction;

 

(F)           the amount of any Future Funding Amount required to be funded
pursuant to the terms of the applicable Purchased Asset Documents, together with
a description of the anticipated Future Funding Date with respect to the funding
of such Future Funding Amount;

 

(G)          the Applicable Spread; and

 

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

 

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(iv)          Buyer shall have the right to review, as described in Exhibit VIII
hereto, the Eligible Assets the applicable Seller proposes to sell to Buyer in
any Transaction and to conduct its own due diligence investigation of such
Eligible Assets as Buyer determines (each, “Asset 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 the applicable Seller.  On the
Purchase Date for the Transaction, which shall be not less than one (1) Business
Day following the final approval of an Eligible Asset by Buyer in accordance
with Exhibit VIII hereto, the Eligible Assets shall be transferred to Buyer or
the Custodian on Buyer’s behalf against the transfer of the Purchase Price to an
account of the applicable Seller.  Buyer shall inform the applicable Seller of
its determination with respect to any such proposed Transaction solely in
accordance with Exhibit VIII attached hereto.  Upon the approval by Buyer of a
particular proposed Transaction, Buyer shall deliver to the applicable Seller a
signed copy of the related Confirmation described in clause (iii) above, on or
before the scheduled date of the underlying proposed Transaction.  Prior to the
approval of each proposed Transaction:

 

(A)          Buyer shall have (i) determined, in its sole and absolute
discretion, that the asset proposed to be sold to Buyer by the applicable Seller
in such Transaction is an Eligible Asset, (ii) determined conformity to the
terms of the Transaction Documents, Buyer’s internal credit and underwriting
criteria and conformity with all Buyer’s predicted requirements of a qualifying
securitization offering, and (iii) obtained internal credit approval, to be
granted or denied in Buyer’s sole and absolute 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
such Seller;

 

(B)          Buyer shall have fully completed all external legal due diligence;

 

(C)          Buyer shall have determined the Pricing Rate applicable to the
Transaction (including the Applicable Spread);

 

(D)          no Default or Event of Default shall have occurred or Force Majeure
Event shall have occurred and be continuing under this Agreement or any other
Transaction Document and no event shall have occurred that has, or would
reasonably be expected to have, a Material Adverse Effect;

 

(E)           the applicable 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”);

 

(F)           Buyer shall have approved in writing all exceptions in the
Requested Exceptions Report (it being acknowledged that wherever in this
Agreement or in any Transaction Document Buyer’s approval of any exceptions

 

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to the representations and warranties disclosed in any Requested Exceptions
Report or otherwise disclosed in writing by the applicable Seller shall be
required, other than as specified in the related Confirmation, Buyer’s execution
of the Confirmation shall be deemed evidence of such approval of exceptions
contained in any Requested Exception Reports delivered to Buyer prior to the
Purchase Date);

 

(G)          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 the applicable Seller in each of Exhibit VI and Article 9
shall be true, complete and correct 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;

 

(H)          subject to Buyer’s right to perform one or more due diligence
reviews pursuant to Article 26, 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
Eligible Asset as Buyer in its sole discretion deems appropriate to review and
such review shall be satisfactory to Buyer in its sole discretion and Buyer has
consented in writing to the Eligible Asset becoming a Purchased Asset;

 

(I)            with respect to any Eligible Loan to be purchased hereunder on
the related Purchase Date that is not primarily serviced by Interim Servicer or
Primary Servicer or an Affiliate thereof, the applicable 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 such Seller and the servicer named in the related
Servicing Agreement;

 

(J)            Sellers shall have paid to Buyer all reasonable legal fees and
expenses and the reasonable out-of-pocket costs and expenses incurred by Buyer
in connection with the entering into of any Transaction hereunder, including,
without limitation, out-of-pocket costs associated with due diligence or other
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;

 

(K)          Buyer shall have determined, in its sole and absolute discretion,
that no Margin Deficit equal to or greater than the Minimum Transfer Amount
shall exist (regardless of whether the amount of such Margin Deficit is due and
payable), either immediately prior to or after giving effect to the requested
Transaction;

 

(L)           Buyer shall have received from Custodian on each Purchase Date an
Asset Schedule and Exception Report (as defined in the Custodial Agreement)

 

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 with respect to each Eligible 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;

 

(M)         Buyer shall have received from the applicable Seller a Release
Letter covering each related Eligible Asset to be sold to Buyer;

 

(N)          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 applicable to Buyer has not made it unlawful, and no
Governmental Authority shall have asserted that it is unlawful, for Buyer to
enter into Transactions;

 

(O)          the Repurchase Date for such Transaction is not later than the
Maturity Date;

 

(P)           each 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;

 

(Q)          with respect to any Eligible Asset to be purchased hereunder, if
such Eligible Asset was acquired by the applicable Seller, such Seller shall
have disclosed to Buyer the acquisition cost of such Eligible Asset (including
therein reasonable supporting documentation required by Buyer, if any);

 

(R)          Buyer shall have received all such other and further documents,
documentation and legal opinions regarding the perfection of Buyer’s security
interests if required due to any change in Requirements of Law and, if the
applicable Seller acquired the applicable Purchased Asset from an Affiliate
(other than any Affiliate that is a direct or indirect Subsidiary of Guarantor),
opinions regarding the true sale of such Asset, as Buyer in its reasonable
discretion shall reasonably require; and

 

(S)           Buyer shall have received a copy of any documents relating to any
Hedging Transaction, and the applicable Seller shall have pledged and assigned
to Buyer, pursuant to Article 6 hereunder, all of such Seller’s rights under
each Hedging Transaction included within a Purchased Asset, if any.

 

(v)           After giving effect to such Transaction, the initial amount funded
by Buyer shall be such that the Purchase Price of the applicable Purchased Asset
shall be equal to or greater than ten percent (10%) of the Maximum Purchase
Price of such Purchased Asset as of the related Purchase Date.

 

(c)           Buyer’s agreement to enter into each Future Funding Transaction is
subject to the satisfaction of the following conditions precedent, both
immediately prior to entering into such Future Funding Transaction and also
after giving effect to the consummation thereof:

 

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(i)            the applicable Seller shall request each Future Funding
Transaction by written notice to Buyer at least five (5) Business Days prior to
such proposed Future Funding Transaction, together with an amended Confirmation,
signed by a Responsible Officer of the applicable Seller.  Each such
Confirmation shall identify the related Purchased Asset, shall identify Buyer
and the applicable Seller and shall be executed by both Buyer and such Seller;
provided, however, that Buyer shall not be liable to any Seller if it
inadvertently acts on a Confirmation that has not been signed by a Responsible
Officer of the applicable Seller, and shall set forth:

 

(A)          the Future Funding Date;

 

(B)          the Future Funding Amount to be funded in the Future Funding
Transaction;

 

(C)          the remaining future funding obligations of the applicable Seller,
related to the applicable Asset after giving effect to the Future Funding Amount
to be funded in connection with such Future Funding Transaction;

 

(D)          the Repurchase Date of the related Purchased Asset;

 

(E)           any additional terms or conditions proposed by the applicable
Seller which are not inconsistent with this Agreement; and

 

(F)           the applicable Advance Rate.

 

(ii)           Buyer shall have the right to conduct an additional due diligence
investigation of the related Purchased Asset as Buyer determines (including,
without limitation, Buyer’s review of any documents, records, agreements,
instruments, mortgaged properties or information relating to such Purchased
Asset as Buyer in its commercially reasonable discretion deems appropriate to
review, the results of which review shall be satisfactory to Buyer in its
commercially reasonable discretion) (“Future Funding Due Diligence”) in order
for Buyer to determine whether the related borrower has satisfied in all
material respects all conditions required under the related Purchased Asset
Documents to be entitled to the advance of the Future Funding Amount (the
“Future Funding Conditions”).  In connection with any request for a proposed
Future Funding Transaction, the applicable Seller shall provide to Buyer
(x) copies of all items delivered to Seller by the related borrower in
connection with such proposed advance, and (y) any additional documents or
information requested by Buyer that the related borrower is required to provide
pursuant to the related Purchased Asset Documents.  The related borrower on such
Purchased Asset shall have satisfied the Future Funding Conditions, and Buyer
shall be entitled to make a determination in the exercise of its commercially
reasonable discretion that the Future Funding Conditions have been satisfied in
all material respects.  On the Future Funding Date for the Future Funding
Transaction, which shall occur following the final determination by Buyer in its
commercially reasonable discretion that (A) the related borrower has satisfied
in all material respects all of the Future Funding Conditions and (B) the
proposed Future Funding Transaction satisfies, and the applicable Seller has
satisfied, all of the terms and

 

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conditions set forth in this Article 3(c), the Future Funding Amount shall be
transferred by Buyer to the applicable Seller or, at such Seller’s direction, to
the related Mortgagor; provided that, notwithstanding the Future Funding Amount
set forth in the related Confirmation on the Purchase Date, no Future Funding
Amount shall (a) exceed the product of (I) the Advance Rate for such Purchased
Asset as of such Future Funding Date, multiplied by (II) the amount of
additional funding obligations actually funded by or on behalf of Seller in
connection with such future funding obligation, or (b) be in an amount that
would cause the outstanding Purchase Price of the related Purchased Asset, after
giving effect to such Future Funding Transaction (together with all other Future
Funding Amounts previously funded by Buyer with respect to such Purchased Asset
in the aggregate), to exceed the Maximum Purchase Price for such Purchased Asset
as of the related Future Funding Date.  In connection with any Future Funding
Transaction that complies with the terms of this Article 3(c), Buyer shall
deliver to the applicable Seller on or before the scheduled date of the
underlying proposed Future Funding Transaction a signed copy of the amended
Confirmation described in clause (i) above.  Notwithstanding anything to the
contrary herein, Buyer shall not be obligated to fund any Future Funding Amount
unless the applicable Seller has previously or simultaneously with Buyer’s
funding of the related Future Funding Amount funded or caused to be funded to
the underlying Mortgagor (or to an escrow agent or as otherwise directed by the
underlying Mortgagor) the related future funding amount required pursuant to the
terms of the related Purchased Asset Documents.  Prior to any proposed Future
Funding Transaction by Buyer:

 

(A)          Buyer shall have (i) determined, in its sole and absolute
discretion, that the related Senior Mortgage Loan, Junior Mortgage Loan,
Mezzanine Loan or Participation Interest is not a Defaulted Asset, and
(ii) fully completed all Future Funding Due Diligence;

 

(B)          no Default or Event of Default shall have occurred and be
continuing under this Agreement or any other Transaction Document and no event
shall have occurred that has, or would reasonably be expected to have, a
Material Adverse Effect;

 

(C)          both immediately prior to the requested Future Funding Transaction
and also after giving effect thereto and to the intended use thereof, the
representations and warranties made by the applicable Seller in each of
Exhibit VI and Article 9 of this Agreement, as applicable, (subject to such
exceptions specified in the Requested Exceptions Report that have been approved
by Buyer) shall be true, correct and complete on and as of such Future Funding
Date 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);

 

(D)          Sellers shall have paid to Buyer reasonable out-of-pocket costs and
expenses (including reasonable out-of-pocket legal fees and expenses) incurred
by Buyer in connection with the entering into of any Future Funding Transaction
hereunder, including, without limitation, reasonable costs associated with due

 

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diligence or other expenses necessary or incidental to the execution of any
Future Funding Transaction hereunder;

 

(E)           Buyer shall have determined, in its commercially reasonable
discretion, that no Margin Deficit equal to or greater than the Minimum Transfer
Amount shall exist (regardless of whether the amount of such Margin Deficit is
due), either immediately prior to or after giving effect to the requested Future
Funding Transaction;

 

(F)           Buyer shall have determined in its commercially reasonable
discretion that no introduction of, or a change in, any Requirement of Law or in
the interpretation or administration of any Requirement of Law applicable to
Buyer has made it unlawful, and no Governmental Authority shall have asserted
that it is unlawful, for Buyer to enter into Transactions;

 

(G)          Sellers shall have taken any other action as Buyer shall have
reasonably requested in connection with any change in Requirements of Law
relating to the perfection of all security interests granted under this
Agreement or any other Transaction Document in favor of Buyer with respect to
the funds to be advanced; and

 

(H)          the applicable Seller shall have delivered to Buyer a certificate
of a Responsible Officer of such Seller, certifying that the related borrower
has met all conditions (except for any conditions that have been expressly
waived in writing by Buyer and the applicable Seller) required under the related
Purchased Asset Documents to be entitled to receive from Seller the future
funding advances under the Purchased Asset Documents to which the Future Funding
Amount relates.

 

(d)           Upon the satisfaction of all conditions set forth in Articles
3(a) and (b), the applicable Seller shall sell, transfer, convey and assign to
Buyer on a servicing released basis all of such Seller’s right, title and
interest in and to each Purchased Asset, together with all related Servicing
Rights against the transfer of the Purchase Price to an account of the
applicable Seller.  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 and
absolute discretion, and notify Sellers of such rate for such period each such
Pricing Rate Determination Date.

 

(e)           Each Confirmation, together with this Agreement, shall be
conclusive evidence of the terms of the Transaction (including any Additional
Advance) or Future Funding Transaction, as applicable, covered thereby.  In the
event of any conflict between the terms of such Confirmation and the terms of
this Agreement, other than with respect to the Advance Rate or the applicable
Pricing Rate set forth in the related Confirmation, this Agreement shall
prevail.

 

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(f)            Sellers 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”); provided, however,
that:

 

(i)            the applicable Seller uses commercially reasonable efforts to
notify Buyer in writing of its intent to terminate such Transaction and
repurchase such Purchased Asset, setting forth the Early Repurchase Date and
identifying with particularity the Purchased Asset to be repurchased on such
Early Repurchase Date, no later than thirty (30) calendar days prior to such
Early Repurchase Date (but in no event shall the applicable Seller notify Buyer
of such repurchase later than five (5) Business Days prior to such Early
Repurchase Date),

 

(ii)           on such Early Repurchase Date, the applicable Seller pays to
Buyer an amount equal to the sum of (x) the Repurchase Price for the Purchased
Assets, (y) any Exit Fee payable in connection with the repurchase of such
Purchased Asset and (z) any other amounts payable under this Agreement
(including, without limitation, Article 3(j) of this Agreement) with respect to
the Purchased Assets against transfer to the applicable Seller or its agent of
the Purchased Assets, and

 

(iii)          on such Early Repurchase Date, after giving effect to such Early
Repurchase, the aggregate Repurchase Price of all Purchased Assets shall not
exceed the sum of the Buyer’s Margin Amount for all Purchased Assets in the
aggregate.

 

(g)           On the Repurchase Date for any Transaction, termination of the
Transaction will be effected by transfer to the applicable 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, Sellers pursuant to Article 5 of this Agreement) against the
simultaneous transfer of the Repurchase Price to an account of Buyer. 
Notwithstanding the foregoing and any provision of this Agreement to the
contrary, in the case of any Purchased Asset that has a Related Mezzanine Loan,
Junior Mortgage Loan or B-Note, (i) no Seller may repurchase in whole or in part
such Purchased Asset without simultaneously repurchasing in whole the Related
Mezzanine Loan, Junior Mortgage Loan or B-Note, as applicable, and (ii) if such
Purchased Asset is required to be repurchased by the applicable Seller pursuant
to the terms of this Agreement, such Seller shall also simultaneously repurchase
in whole the Related Mezzanine Loan, Junior Mortgage Loan or B-Note, as
applicable.

 

(h)           The terms and provisions governing LIBOR and the Alternative Rate
under Article 3(h) are set forth in the Fee Letter, and are hereby incorporated
by reference.

 

(i)            The terms and provisions governing Requirements of Law or Buyer
Compliance Policy under Article 3(i) are set forth in the Fee Letter, and are
hereby incorporated by reference.

 

(j)            Upon demand by Buyer, Sellers shall indemnify Buyer and hold
Buyer harmless from any out-of-pocket loss, cost or expense (including, without
limitation, reasonable attorneys’ fees and disbursements) that Buyer may sustain
or incur as a consequence of (i) default by any Seller repurchasing any
Purchased Asset after such Seller has given a notice in accordance with
Article 3(f) of an Early Repurchase, (ii) any payment of the Repurchase Price on
any day other

 

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than a Remittance Date, including Breakage Costs, (iii) a default by any Seller
in selling Eligible Assets after such Seller has notified Buyer of a proposed
Transaction and Buyer has agreed to purchase such Eligible Assets in accordance
with the provisions of this Agreement, (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 Sellers and shall
be prima facie evidence of the information set forth therein.

 

(k)           The terms and provisions governing Requirements of Law or Buyer
Compliance Policy under Article 3(k) are set forth in the Fee Letter, and are
hereby incorporated by reference.

 

(l)            The terms and provisions governing Requirements of Law or Buyer
Compliance Policy under Article 3(l) are set forth in the Fee Letter, and are
hereby incorporated by reference.

 

(m)          If any Seller repurchases Purchased Assets or reduces the Purchase
Price of a Purchased Asset on a day other than the last day of a Pricing Rate
Period, Sellers 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 Sellers 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 Sellers absent manifest error. 
This Article 3(m) shall survive termination of this Agreement and the repurchase
of all Purchased Assets subject to Transactions hereunder.

 

(n)           (i)  Notwithstanding the definition of Maturity Date herein, upon
written request of Sellers prior to the then current Maturity Date (which
request may be delivered by Sellers to Buyer no earlier than twelve (12) months
following the Closing Date with respect to the initial Extension Period (as
defined below), if any, and no earlier than twenty-four (24) months following
the Closing Date with respect to the second Extension Period, if any; and, in
each case, no later than 60 days prior to the then-current Maturity Date), and
provided that Buyer determines in its sole discretion that all of the Maturity
Date Extension Conditions (as defined below) are satisfied as of the
then-current Maturity Date, Buyer may, in its sole and absolute discretion,
agree on no more than two (2) occasions to extend the Maturity Date for three
hundred sixty-four (364) additional days (each such extension, an “Extension
Period”) by, in each case, giving notice to Sellers of the granting of such
extension of the then-current Maturity Date; provided, that any failure by Buyer
to deliver a notice granting any such extension or the then-current Maturity
Date within thirty (30) days from the date of Buyer’s receipt of Sellers’
request therefor shall be deemed a denial of Sellers’ request.  Notwithstanding
anything to the contrary in this Article 3(n)(i) hereof, in no event shall the
Maturity Date be extended for more than two (2) Extension Periods and in no
event shall the Final Maturity Date occur after December 10, 2020; provided,
that Sellers may request that this Agreement be amended by Buyer and Sellers to
provide for an additional extension of the final Maturity Date, which request
Buyer may grant or deny in its sole discretion and which extension, if granted,
may be subject to such terms and conditions as Buyer may require.  For the
avoidance of doubt, if the Initial

 

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Maturity Date is not extended pursuant to this Article 3(n), no second Extension
Period shall be available.

 

(ii)           For purposes of this Article 3(n), the following conditions (the
“Maturity Date Extension Conditions”) shall be deemed to have been satisfied if,
with respect to the applicable Extension Period:

 

(A)          Within five (5) Business Days after Sellers’ receipt of Buyer’s
written notice granting Sellers’ request for an extension of the then-current
Maturity Date, Buyer shall have received payment from Sellers, as consideration
for Buyer’s granting of such extension, the related Extension Fee, such amount
to be paid to Buyer in U.S. Dollars, in immediately available funds, without
deduction, set-off or counterclaim;

 

(B)          no Margin Deficit (regardless of whether the amount of such Margin
Deficit is due and payable and whether or not such Margin Deficit is equal to or
greater than the Minimum Transfer Amount), Material Default or Event of Default
under this Agreement shall have occurred and be continuing as of the date such
extension is granted by Buyer or the then-current Maturity Date; and

 

(C)          all representations and warranties are true, correct, complete and
accurate in all respects as of the existing Maturity Date.

 

Upon extension of the Maturity Date pursuant to this Article 3(n), except as
otherwise specified in the related Confirmation, the reference to the Maturity
Date as set forth in clause (iv) of the definition of “Repurchase Date” shall be
deemed to be the new Maturity Date as so extended hereunder.

 

(o)           [Reserved.]

 

(p)           Any and all payments by or on account of any obligation of Sellers
under this Agreement or any other 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 an applicable withholding agent) requires the deduction or
withholding of any Tax from any such payment by a withholding agent, then the
applicable withholding agent 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 Sellers 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 3) the applicable Buyer or Transferee receives an amount equal to
the sum it would have received had no such deduction or withholding been made.

 

(q)           Sellers shall timely pay (i) any Other Taxes imposed on Sellers to
the relevant Governmental Authority in accordance with Requirements of Law, and
(ii) any Other Taxes imposed on the Buyer or Transferee upon written notice from
such Person setting forth in reasonable detail the calculation of such Other
Taxes.

 

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(r)            As soon as practicable after any payment of Taxes by any Seller
to a Governmental Authority pursuant to Article 3(p), Article 3(q) or
Article 3(s), the applicable Seller shall deliver to Buyer or Transferee, as
applicable, 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, as applicable.

 

(s)            Sellers shall indemnify Buyer and each Transferee, within ten
(10) 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 Article 3(q) or this Article 3(s)) payable or paid by Buyer or
such Transferee or required to be withheld or deducted from a payment to such
Person 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 Sellers by Buyer or such Transferee
shall be conclusive absent manifest error.

 

(t)            (i) Any Buyer or any Transferee that is entitled to an exemption
from or reduction of withholding Tax with respect to payments made under any
Transaction Document shall deliver to Sellers, at the time or times reasonably
requested by Sellers, such properly completed and executed documentation
reasonably requested by Sellers as will permit such payments to be made without
withholding or at a reduced rate of withholding.  In addition, Buyer or
Transferee, if reasonably requested by Sellers, shall deliver such other
documentation prescribed by applicable law or reasonably requested by Sellers as
will enable Sellers to determine whether or not Buyer or Transferee 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 3(t)(ii)(A), (ii)(B) and (ii)(D) below) shall not be
required if in Buyer or Transferee’s reasonable judgment such completion,
execution or submission would subject Buyer or such Transferee to any material
unreimbursed cost or expense or would materially prejudice the legal or
commercial position of Buyer or such Transferee.

 

(ii)           Without limiting the generality of the foregoing:

 

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

 

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

 

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

 

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

 

(3)           in the case of a Foreign Buyer claiming the benefits of the
exemption for portfolio interest under Section 881(c) of the Code, (x) a
certificate substantially in the form of Exhibit XI-1 to the effect that such
Foreign Buyer is not a “bank” within the meaning of Section 881(c)(3)(A) of the
Code, a “10 percent shareholder” of any 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 originals of IRS Form W-8BEN or IRS
Form W-8BEN-E, as applicable; or

 

(4)           to the extent a Foreign Buyer is not the beneficial owner,
executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS
Form W-8BEN or IRS Form W-8BEN-E, as applicable, a U.S. Tax Compliance
Certificate substantially in the form of Exhibit XI-2 or Exhibit XI-3, IRS
Form W-9, and/or other certification documents from each beneficial owner, as
applicable; provided that if the Foreign Buyer is a partnership and one or more
direct or indirect partners of such Foreign Buyer are claiming the portfolio
interest exemption, such Foreign Buyer may provide a U.S. Tax Compliance
Certificate substantially in the form of Exhibit XI-4 on behalf of each such
direct and indirect partner;

 

(C)          any Foreign Buyer shall, to the extent it is legally entitled to do
so, deliver to Sellers (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Foreign Buyer acquires an
interest under this Agreement (and from time to time thereafter upon the
reasonable request of Sellers), executed originals 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 Sellers 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

 

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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), Buyer or such Transferee shall deliver to
Sellers at the time or times prescribed by law and at such time or times
reasonably requested by Sellers 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 Sellers as may be necessary for
Sellers to comply with its obligations under FATCA and to determine that Buyer
or Transferee has complied with Buyer 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 Transferee agrees that if any form or certification described in
items (A), (B), (C) or (D) above it previously delivered expires or becomes
obsolete or inaccurate in any respect, it shall update such form or
certification or promptly notify Sellers in writing of its legal inability to do
so.

 

(u)           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 3 (including by the payment of additional
amounts pursuant to this Article 3), 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 3 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 3(u) (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 3(u), in no
event will the indemnified party be required to pay any amount to an
indemnifying party pursuant to this Article 3(u) 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 indemnification payments or
additional amounts giving rise to such refund 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.

 

(v)           Each party’s obligations under this Article 3 shall survive any
assignment of rights by, or the replacement of, Buyer or Assignee, the
termination of this Agreement and the repayment, satisfaction or discharge of
all obligations under this Agreement.

 

(w)          If any Buyer or Assignee requests compensation under Article 3 or,
if any 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 3(k), or if any Buyer or Assignee defaults
in its obligations under this Agreement, then Sellers may, at their 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

 

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restrictions contained in Article 17), all its interests, rights (other than its
existing rights to payments pursuant to Articles 3(k) or (l)) and obligations
under this Agreement 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 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 Sellers (in the case of all other
amounts), (ii) in the case of any such assignment resulting from a claim for
compensation under Article 3(k) or payments required to be made pursuant to
Article 3(g), such assignment will result in a reduction in such compensation or
payments, and (iii) such assignment or delegation would not subject such Buyer
or Assignee to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Buyer or Assignee.  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 Sellers to require such assignment and delegation cease to apply.

 

(x)           The terms and provisions governing non-use fees or other similar
charges under Article 3(x) are set forth in the Fee Letter, and are hereby
incorporated by reference.

 

(y)           [Reserved].

 

(z)           (i) If at any time Buyer determines that Margin Excess exists for
a related Purchased Asset, the applicable Seller may request that an Additional
Advance be made in a specified amount up to such Margin Excess for such
Purchased Asset; provided that Buyer has determined in its commercially
reasonable discretion that all of the following conditions have been satisfied
(collectively, the “Additional Advance Conditions”): (i) no Margin Deficit equal
to or greater than the Minimum Transfer Amount shall exist, no Force Majeure
Event, Default or Event of Default exists or would result from such Additional
Advance, and no event shall have occurred that has, or would reasonably be
expected to have, a Material Adverse Effect, and (ii) Seller has satisfied the
conditions and obligations with respect to entering into a new Transaction set
forth in clauses (G) and (J) of Article 3(b)(iv).  Provided that the Additional
Advance Conditions are satisfied, Buyer shall pay to the applicable Seller the
additional Purchase Price requested by such Seller with respect to such
Purchased Asset up to an amount not to exceed the available Margin Excess for
such Purchased Asset on such Additional Advance Date within three (3) Business
Days after the applicable Seller’s request therefor.  Upon funding of any such
Additional Advance, the Margin Excess (if any remains) shall be recalculated
taking into account such increase in Purchase Price.  Notwithstanding the
foregoing, in no event shall the amount of any Additional Advance transferred to
a Seller be in an amount that would cause (a) the outstanding Purchase Price of
the related Purchased Asset, after giving effect to such Additional Advance, to
exceed the Maximum Purchase Price for such Purchased Asset as of the related
Additional Advance Date or (b) the aggregate Repurchase Price of all Purchased
Assets to exceed the Maximum Facility Amount.  In connection with any such
Additional Advance, prior to the Additional Advance Date, the applicable Seller
shall prepare and deliver to Buyer an amended and restated Confirmation
reflecting such Additional Advance, and Buyer and the applicable Seller shall
execute and deliver to each other an updated Confirmation setting forth the new
outstanding Purchase Price and Advance Rate with respect to such Transaction.

 

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(aa)         On any Business Day prior to the Repurchase Date for the applicable
Purchased Asset, Sellers shall have the right, from time to time, to transfer
cash to Buyer for the purpose of reducing the outstanding Purchase Price of such
Purchased Asset, but not terminating, the related Transaction and without the
release of any Purchased Items; provided, that (i) any such reduction in
outstanding Purchase Price occurring on a date other than a Remittance Date
shall be required to be accompanied by payment of all unpaid accrued Price
Differential and other amounts payable in connection therewith (including
amounts payable pursuant to Article 3(m)) as of the applicable Business Day on
the amount of such reduction, (ii) such transfer of cash to Buyer shall be in an
amount no less than $500,000, (iii) the Purchase Price of such Purchased Asset
immediately after giving effect to such partial repurchase shall be no less than
ten percent (10%) of the Maximum Purchase Price of such Purchased Asset as of
the related Purchase Date thereof, and (iv) the applicable Seller shall provide
Buyer with three (3) Business Days’ prior notice of any such partial
repurchase.  Notwithstanding the foregoing, no Seller may transfer cash to Buyer
for the purpose of reducing the outstanding Purchase Price of any Purchased
Asset that is a Junior Mortgage Loan or B-Note, without making a simultaneous,
pro-rata reduction of the Purchase Price of the related Senior Mortgage Loan or
A-Note, as applicable.  In connection with any such reduction of outstanding
Purchase Price pursuant to this Article 3(aa), Buyer and the applicable Seller
shall execute and deliver to each other an updated Confirmation setting forth
the new outstanding Purchase Price and related Advance Rate with respect to such
Transaction.

 

(bb)         The terms and provisions governing the Minimum Purchased Asset
Requirement and the Minimum Purchased Asset Fee under Article 3(bb) are set
forth in the Fee Letter, and are hereby incorporated by reference.

 

(cc)         At any time following (i) Buyer’s exercise of its right to convert
the Transactions hereunder to Alternative Rate Transactions pursuant to
Article 3(i) or (ii) Buyer’s initial demand for, and Sellers’ payment to Buyer
of, any non-use fee, Minimum Purchased Asset Fee or any other additional amounts
pursuant to Articles 3(k), 3(l), 3(x) or 3(bb), as applicable, Sellers shall
have the option to notify Buyer in writing of their intent to terminate this
Agreement and all, but not less than all, of the Transactions and repurchase the
related Purchased Assets pursuant to and in accordance with Article 3(f) upon
payment in full of the Repurchase Price of all Purchased Assets.  Any such
notification by Sellers shall be irrevocable.  The election by Sellers to
terminate the Transactions in accordance with this Article 3(cc) shall not
relieve Sellers of any liability with respect to any Price Differential, non-use
fee, Minimum Purchased Asset Fee or any other additional amounts owed pursuant
to this Agreement, as applicable, incurred by Buyer (or any Transferee) prior to
the actual repurchase of all Purchased Assets; provided that, if Sellers elect
to terminate the Transactions and repurchase all Purchased Assets in accordance
with this Article 3(cc) within one hundred and eighty (180) calendar days
following Buyer’s initial demand for payment of any fees or amounts pursuant to
Articles 3(k), 3(l), 3(x) or 3(bb), then Buyer shall, at Buyer’s option, either
reimburse or credit Sellers for any and all such fees and amounts incurred and
paid by Sellers during such one hundred and eighty (180) day period; provided,
further that if Buyer is exercising its rights and remedies pursuant to Articles
3(k), 3(l), 3(x) or 3(bb), as applicable, in the same manner under similar
agreements with all similarly situated counterparties, the first proviso of this
clause (cc) shall not apply.

 

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(dd)         If a Seller submits a Transaction request with a proposed Purchase
Date on or prior to the first anniversary of the Closing Date, and the proposed
Purchase Price for the Purchased Asset(s) that are the subject of such proposed
Transaction would, if such Purchased Asset(s) were purchased by Buyer hereunder,
cause the aggregate Purchase Prices of all Purchased Assets (including the
Purchased Assets subject to such Transaction) to equal or exceed the Initial
Facility Capacity, then, so long as all of the Additional Facility Capacity Draw
Conditions are satisfied, the Maximum Facility Amount shall be increased by the
amount of the Additional Facility Capacity on the Purchase Date for the
Purchased Assets subject to such proposed Transaction (such date, the
“Additional Facility Capacity Draw Date”).

 

(ee)         The terms and provisions governing Price Differential under
Article 3(ee) are set forth in the Fee Letter, and are hereby incorporated by
reference.

 

ARTICLE 4.
MARGIN MAINTENANCE

 

(a)           If at any time on any date the Buyer’s Margin Amount for any
Purchased Asset is less than the Repurchase Price for such Purchased Asset (a
“Margin Deficit”), then, to the extent such Margin Deficit equals or exceeds the
Minimum Transfer Amount for such Purchased Asset,  Buyer may, by notice to
Sellers in the form of Exhibit X, which notice shall also include a calculation
of available Margin Excess (a “Margin Deficit Notice”), require Sellers to,
within the time limits set forth in Article 4(d) below, at Sellers’ option no
later than the Margin Deficit Payment Date, (i) repurchase the Purchased Asset
giving rise to such Margin Deficit at its respective Repurchase Price, (ii) make
a payment in reduction of the Purchase Price of such Purchased Asset, or in lieu
of a payment in reduction such Purchase Price, deliver Cash Equivalents, subject
to Buyer’s determination of the market value of such Cash Equivalents and
Buyer’s reasonable satisfaction with such Cash Equivalents as additional posted
collateral, (iii) subject to the provisions of Article 4(c) below, apply
available Margin Excess, or (iv) choose any combination of the foregoing, such
that, after giving effect to such transfers, repurchases, payments and/or
applications of Margin Excess, Buyer’s Margin Amount for each Purchased Asset,
considered individually, shall be equal to or greater than the related
Repurchase Price for each such Purchased Asset.  In connection with the delivery
of Cash Equivalents in accordance with clause (ii) above, Sellers shall deliver
to Buyer any additional documents (including, without limitation, to the extent
not covered by any previously delivered legal opinions, one or more opinions of
counsel reasonably satisfactory to Buyer as to safe harbor treatment and
enforceability of security interests in connection with such Cash Equivalents)
and take any actions reasonably necessary in Buyer’s discretion for Buyer to
have a first priority, perfected security interest in such Cash Equivalents. 
Buyer and the applicable Seller shall amend the related Confirmation relating to
any Purchased Asset with respect to which the related Purchase Price has been
reduced pursuant to this Article 4(a), as well as that of any related Purchased
Asset where the Purchase Price has been increased due to Margin Excess pursuant
to Article 4(c), and, if applicable, shall amend the related Confirmation to
reflect the corresponding revised Advance Rate of any Purchased Asset with
respect to which the applicable Seller has made payments in reduction of the
related Purchase Price to satisfy the Margin Deficit Extension Threshold.

 

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(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.  Sellers 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 Sellers.

 

(c)           If Buyer issues a Margin Deficit Notice pursuant to
Article 4(a) and if Margin Excess exists with respect to any other Purchased
Asset as determined by Buyer in its sole and absolute discretion, applied in
good faith, Buyer shall include with such Margin Deficit Notice a notice to
Sellers of the amount of any Margin Excess determined by Buyer to be then
available (if any) and, provided that each of the Margin Excess Requirements
have been met as determined by Buyer in its sole discretion, Buyer shall, in
response to the applicable Seller’s written request, apply such Margin Excess to
all or a portion of the related Margin Deficit, and, solely to the extent so
applied, the amount of such Margin Deficit shall be reduced by the application
of such Margin Excess and the Purchase Price of the Purchased Asset from which
such Margin Excess was applied shall be increased by the amount of such Margin
Excess, and the parties shall amend the related Confirmation to reflect the
revised Advance Rate corresponding to such increase in Purchase Price; provided,
that no request by any Seller to apply Margin Excess to any Margin Deficit shall
in any way relieve Sellers of their obligations under this Agreement to cause
such Margin Deficit to be cured within the time limits set forth in
Article 4(a).

 

(d)           Upon delivery by Buyer of a Margin Deficit Notice pursuant to
Article 4(a), Sellers shall cure the related Margin Deficit on the second
Business Day following receipt of such Margin Deficit Notice; provided that, if
the Margin Deficit Extension Requirements are satisfied, then such Margin
Deficit shall not be required to be cured during the Margin Deficit Extension
Period (such date on which the related Margin Deficit is required to be cured
pursuant to this sentence, the “Margin Deficit Payment Date”).  At all times
that a Margin Deficit Extension Period is in effect, (i) Seller shall provide
notice to Buyer within one (1) Business Day of any applicable Person’s obtaining
Knowledge of Guarantor failing the Guarantor Liquidity Test and (ii) Guarantor
shall, within one (1) Business Day after Buyer’s request, provide an updated
Guarantor Liquidity Certification.

 

ARTICLE 5.
INCOME PAYMENTS AND PRINCIPAL PROCEEDS

 

(a)           The Depository Account shall be established at the Depository and
shall be subject to the Depository Agreement concurrently with the execution and
delivery of this Agreement by Sellers and Buyer.  Pursuant to the Depository
Agreement, Buyer shall have sole dominion and control (including “control”
within the meaning of the UCC (as defined in Article 6(b) below) over the
Depository Account.  The Depository Account shall, at all times, be subject to
the Depository Agreement.  All Income shall be deposited directly by the
applicable servicer into the Depository Account in accordance with the
applicable Servicer Notice.  Depository shall then apply such Income in
accordance with the applicable provisions of Articles 5(c) through 5(e) of this
Agreement.

 

(b)           Contemporaneously with the sale to Buyer of any Purchased Asset,
Sellers shall cause the servicer with respect to each Purchased Asset to enter
into a Servicer Notice with

 

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respect to such Purchased Asset (if the applicable Servicer has not already
executed and delivered a Servicer Notice) pursuant to which such Servicer shall
agree to pay all Income payable under the related Purchased Asset into the
Depository Account.  If a Servicer or borrower with respect to a Purchased Asset
forwards any Income with respect to a Purchased Asset to Sellers or any
Affiliate of Sellers rather than directly into the Depository Account, Sellers
shall, or shall cause such Affiliate to, deposit in the Depository Account any
such amounts within one (1) Business Day of the applicable Seller’s (or its
Affiliate’s) receipt thereof.

 

(c)           So long as no Event of Default shall have occurred and be
continuing, all Income or other amounts received by the Depository in respect of
any Purchased Asset (other than Principal Proceeds) during each Collection
Period shall be applied by the Depository on the related Remittance Date in the
following order of priority:

 

(i)            first, (i) to the Custodian for payment of the document custodian
fees payable to Custodian pursuant to the Custodian Agreement, then (ii) to the
Depository for payment of fees payable to the Depository in connection with the
Depository Account and then (iii) to the Interim Servicer for payment of the
loan servicing fees payable monthly to the Interim Servicer plus reasonable
out-of-pocket costs and expenses, in each case, as required under the Interim
Servicing Agreement as in effect from time to time;

 

(ii)           second, to Buyer, an amount equal to the Price Differential that
has accreted and is outstanding as of such Remittance Date;

 

(iii)          third, to Buyer, an amount equal to any other amounts then due
and payable to Buyer under any Transaction Document (including any outstanding
Margin Deficit which is then due and payable); and

 

(iv)          fourth, to Sellers, the remainder, if any; provided that, if a
Material Default has occurred and is continuing on such Remittance Date, all
amounts otherwise payable to Sellers hereunder shall be retained in the
Depository Account until the earlier of (x) the day on which Buyer provides
written notice to the Depository that such Material Default has been cured to
the satisfaction of Buyer in its sole discretion and no other Material Default
or Event of Default has occurred and is continuing, at which time the Depository
shall apply all such amounts pursuant to this priority fourth; and (y) the day
that the related Material Default becomes an Event of Default, at which time the
Depository shall apply all such amounts pursuant to Article 5(e).

 

(d)           So long as no Event of Default shall have occurred and be
continuing, (i) any scheduled payment of Principal Proceeds shall be applied by
the Depository on the related Remittance Date, and (ii) any unscheduled
prepayment in full of Principal Proceeds or prepayment in part of Principal
Proceeds in an amount equal to or greater than $1,000,000 shall be applied by
the Depository on the second Business Day following written request by Buyer or
written requested by Seller (and countersigned by Buyer) following receipt of
such Principal Proceeds, in each case, in the following order of priority:

 

(i)            first, to Buyer, an amount equal to (1) in the case of any
scheduled or unscheduled (x) repayment in part of the related Purchased Asset
made in connection

 

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with any release of any of the Underlying Mortgaged Property or other collateral
for the related Purchased Asset, unless otherwise specified in the related
Confirmation, or (y) repayment in whole of the related Purchased Asset, 100% of
such Principal Proceeds until the Repurchase Price is reduced to zero, and
(2) in all other cases, the product of (A) the amount of such payment of
Principal Proceeds and (B) the Advance Rate for such Purchased Asset as of the
date of such payment;

 

(ii)           second, to Buyer, an amount equal to any other amounts due and
owing to Buyer under any Transaction Document (including any outstanding Margin
Deficits then due and payable) (without duplication of any amount paid under
Article 5(c)(iii) above); and

 

(iii)          third, to Sellers, any remainder; provided that, if any Material
Default has occurred and is continuing on such Remittance Date, all amounts
otherwise payable to the applicable Seller hereunder shall be retained in the
Depository Account until the earlier of (x) the day on which Buyer provides
written notice to the Depository that such Material Default has been cured to
the satisfaction of Buyer in its sole discretion and no other Material Default
or Event of Default has occurred and is continuing, at which time the Depository
shall apply all such amounts pursuant to this priority third; and (y) the day
that the related Material Default becomes an Event of Default, at which time the
Depository shall apply all such amounts pursuant to Article 5(e).

 

(e)           If an Event of Default shall have occurred and be continuing, all
Income (including, without limitation, any Principal Proceeds or any other
amounts received, without regard to their source) or any other amounts received
by the Depository in respect of a Purchased Asset shall be applied by the
Depository on the Business Day next following the Business Day on which such
funds are deposited in the Depository Account in the following order of
priority:

 

(i)            first, (i) to the Custodian for payment of the document custodian
fees payable to Custodian pursuant to the Custodian Agreement, then (ii) to the
Depository for payment of fees payable to the Depository in connection with the
Depository Account and then (iii) to the Interim Servicer for payment of the
loan servicing fees payable monthly to the Interim Servicer pursuant plus the
reasonable out-of-pocket costs and expenses, in each case, as required under the
Interim Servicing Agreement as in effect from time to time;

 

(ii)           second, to Buyer, an amount equal to the Price Differential that
has accreted and is outstanding in respect of all of the Purchased Assets as of
such Business Day;

 

(iii)          third, to Buyer, on account of the Repurchase Price of such
Purchased Asset until the Repurchase Price for such Purchased Asset has been
reduced to zero;

 

(iv)          fourth, to Buyer, on account of the Repurchase Price of all other
Purchased Assets until the Repurchase Prices for all such other Purchased Assets
have been reduced to zero;

 

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

 

(vi)          sixth, to Sellers, any remainder.

 

ARTICLE 6.
SECURITY INTEREST

 

(a)           Buyer and Sellers intend that the Transactions hereunder be sales
to Buyer of the Purchased Assets and not loans from Buyer to Sellers 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 Sellers
of all of Sellers’ 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, each 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 it is a party and all other
amounts owing by Sellers or Sellers’ Affiliates to Buyer and any of Buyer’s
present or future Affiliates hereunder, including, without limitation, amounts
owing pursuant to Article 25, and under the other Transaction Documents,
including to secure the obligation of Sellers or their designees to service the
Purchased Assets in conformity with Article 27 and any other obligation of
Sellers to Buyer (collectively, the “Repurchase Obligations”).  Each Seller
hereby acknowledges and agrees that each Purchased Asset serves as collateral
for the Buyer under this Agreement and that, upon the occurrence and during the
continuance of an Event of Default, Buyer has the right, subject to and in
accordance with the terms of this Agreement, to realize on any or all of the
Purchased Assets in order to satisfy the Sellers’ obligations hereunder.  Each
Seller agrees to mark its computer records and tapes to evidence the interests
granted to Buyer hereunder.  All of each 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
Article 8-501(a) of the UCC) to which any or all of the Purchased Assets are
credited;

 

(ii)           any and all interests of Sellers in, to and under the Depository
Account and all monies from time to time on deposit in the Depository Account;

 

(iii)          any cash or Cash Equivalents delivered to Buyer in accordance
with Article 4(a);

 

(iv)          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;

 

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(v)           each Seller’s right under each Hedging Transaction, if any,
relating to the Purchased Assets to secure the Repurchase Obligations;

 

(vi)          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;

 

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

 

(viii)        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)           Buyer’s security interest in the Purchased Items shall terminate
only upon termination of all of Sellers’ obligations under this Agreement and
the other Transaction Documents, and the documents delivered in connection
herewith and therewith.  Upon such termination, Buyer shall deliver to Sellers
such UCC termination statements and other release documents as may be
commercially reasonable and return the Purchased Assets to the applicable Seller
and reconvey the Purchased Items to the applicable Seller and 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 and the other laws of the State of New
York.  In furtherance of the foregoing, (a) Buyer, at Sellers’ 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, the “Filings”), and shall forward copies of such Filings to
Sellers upon the filing thereof, and (b) Sellers 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).  For the avoidance of doubt, Buyer’s security interest in any
particular Purchased Asset or Purchased Item shall not terminate until the
applicable Seller has fully paid the related Repurchase Price.  In connection
with the security interests granted pursuant to this Agreement, each Seller
authorizes the filing of UCC financing statements describing the collateral as
“all assets of Seller, whether now owned or existing or hereafter acquired or
arising and wheresoever located, and all proceeds and products thereof” or other
similar language to that effect.

 

(c)           Each Seller acknowledges that neither it nor Guarantor has any
rights to service the Purchased Assets but, subject to Articles 7(d) and 27,
only has rights as a party to the Primary Servicing Agreement, the Interim
Servicing Agreement or any other servicing agreement with respect to the
Purchased Assets.  Without limiting the generality of the foregoing and in the
event that any Seller or Guarantor is deemed to retain any residual Servicing
Rights, and for the avoidance of doubt, each of each Seller and Guarantor
grants, assigns and pledges to Buyer a security interest in the Servicing Rights
and proceeds related thereto and in all instances, whether now owned or
hereafter acquired, now existing or hereafter created.  The foregoing

 

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provision is intended to constitute a security agreement or other arrangement or
other credit enhancement related to the Agreement and Transactions hereunder as
defined under Sections 101(47)(v) and 741(7)(x) of the Bankruptcy Code.

 

ARTICLE 7.
PAYMENT, TRANSFER AND CUSTODY

 

(a)           On the Purchase Date for each Transaction, (i) ownership of and
title to the Purchased Asset shall be transferred to Buyer or its designee
(including the Custodian) against the simultaneous transfer of the Purchase
Price in immediately available funds to an account of the applicable Seller
specified in the Confirmation relating to such Transaction, (ii) in connection
with the purchase by Buyer of any Purchased Asset relating to a Related
Mezzanine Loan, the applicable Seller shall also convey, transfer and assign to
Buyer, for no additional consideration from Buyer, each such Related Mezzanine
Loan in form and substance satisfactory to Buyer, together with all other
documents necessary or desirable to effect such collateral assignment, in each
case as determined by Buyer and its counsel in their discretion and (iii) the
applicable Seller hereby sells, transfers, conveys and assigns to Buyer on a
servicing-released basis all of such Seller’s right, title and interest in and
to such Purchased Asset, together with all related Servicing Rights.  For the
avoidance of doubt, the Purchase Price of each Related Mezzanine Loan shall be
zero.  Subject to this Agreement, Sellers may sell to Buyer, repurchase from
Buyer and re-sell Eligible Assets to Buyer, but may not substitute other
Eligible Assets for Purchased Assets.  Buyer has the right to designate each
Servicer of the Purchased Assets; provided, that the servicer of any Purchased
Asset as of the Purchase Date of such Purchased Asset shall be deemed approved
by Buyer. The Servicing Rights and other servicing provisions under this
Agreement are not severable from or to be separated from the Purchased Assets
under this Agreement; and, such Servicing Rights and other servicing provisions
of this Agreement constitute (a) “related terms” under this Agreement within the
meaning of Section 101(47)(A)(i) of the Bankruptcy Code and/or (b) a security
agreement or other arrangement or other credit enhancement related to the
Transaction Documents.

 

(b)           (i) With respect to each Transaction, the applicable Seller shall
deliver or cause to be delivered to Buyer or its designee the Custodial Delivery
Certificate in the form attached hereto as Exhibit IV, provided, that
notwithstanding the foregoing, upon request of the applicable Seller, Seller may
in accordance with the terms of the Custodial Agreement make such delivery by
not later than the third (3rd) Business Day after the related Purchase Date, so
long as such Seller causes an Acceptable Attorney, Title Company or other Person
acceptable to Buyer to deliver to Buyer and the Custodian a Bailee Letter on or
prior to such Purchase Date.  Subject to Article 7(c), in connection with each
sale, transfer, conveyance and assignment of a Purchased Asset, on or prior to
each Purchase Date with respect to such Purchased Asset, the applicable Seller
shall deliver or cause to be delivered and released to the Custodian a copy or
original of each document as specified in the Purchased Asset File (as defined
in the Custodial Agreement, and collectively, the “Purchased Asset File”),
pertaining to each of the Purchased Assets identified in the Custodial Delivery
Certificate delivered therewith, together with any other documentation in
respect of such Purchased Asset requested by Buyer, in Buyer’s sole but good
faith discretion.

 

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(ii)           With respect to each Additional Advance and/or Future Funding
Transaction, the applicable Seller shall deliver or cause to be delivered to
Buyer or its designee an updated Custodial Delivery Certificate that includes
any additional documents delivered and/or executed in connection with any such
Additional Advance or Future Funding Transaction, as applicable, provided, that
notwithstanding the foregoing, upon request of such Seller, such Seller may in
accordance with the terms of the Custodial Agreement make such delivery by not
later than the third (3rd) Business Day after the Additional Advance Date or
Future Funding Date, as applicable, so long as the applicable Seller causes an
Acceptable Attorney, Title Company or other Person acceptable to Buyer to
deliver to Buyer and the Custodian a Bailee Letter on or prior to such date. 
Subject to Article 7(c), on or prior to that date of an Additional Advance or
Future Funding Transaction, as applicable, the applicable Seller shall deliver
or cause to be delivered and released to the Custodian a copy or original of
each additional document delivered and/or executed in connection with each such
Additional Advance or Future Funding Transaction, as applicable, as specified in
the Purchased Asset File (as defined in the Custodial Agreement), pertaining to
each of the Purchased Assets identified in the Custodial Delivery Certificate
delivered therewith, together with any other documentation in respect of such
Purchased Asset requested by Buyer, in Buyer’s sole but good faith discretion.

 

(c)           From time to time, the applicable Seller shall forward to the
Custodian additional original documents or additional documents evidencing any
assumption, modification, consolidation or extension of a Purchased Asset
approved in accordance with the terms of this Agreement (including without
limitation in connection with an Additional Advance or Future Funding
Transaction), and upon receipt of any such other documents, the Custodian shall
hold such other documents as Buyer shall request from time to time.  With
respect to any documents that have been delivered or are being delivered to
recording offices for recording and have not been returned to the applicable
Seller in time to permit their delivery hereunder at the time required, in lieu
of delivering such original documents, such Seller shall deliver to Buyer a true
copy thereof with an officer’s certificate certifying that such copy is a true,
correct and complete copy of the original, which has been transmitted for
recordation.  The applicable Seller shall deliver such original documents to the
Custodian promptly when they are received.  With respect to all of the Purchased
Assets delivered by Sellers to Buyer or its designee (including the Custodian),
the applicable Seller shall execute an omnibus power of attorney substantially
in the form of Exhibit V attached hereto irrevocably appointing Buyer its
attorney-in-fact with full power, upon the occurrence and during the continuance
of an Event of Default hereunder or under the other Transaction Documents, to
(i) complete the endorsements of the Purchased Assets, including without
limitation the Mortgage Notes and Assignments of Mortgages, Mezzanine Notes,
Participation Certificates and assignments of participation interests 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
Participation Interests, Mezzanine Loans, or intercreditor 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 such Seller’s rights under the Purchased Assets
purchased by Buyer pursuant to this Agreement and (vii) to take such other

 

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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 the Custodian.  The Purchased Asset Files shall be
maintained in accordance with the Custodial Agreement.  If a Purchased Asset
File is not delivered to Buyer or its designee (including the Custodian), such
Purchased Asset File shall be held in trust by the applicable Seller or its
designee for the benefit of Buyer as the owner thereof.  The applicable 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 such 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 such Seller or its designee is in a
custodial capacity only.  The books and records (including, without limitation,
any computer records or tapes) of the applicable Seller or its designee shall be
marked appropriately to reflect clearly the sale of the related Purchased Asset
to Buyer.  Each Seller or its designee (including the 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 the applicable Seller or as otherwise required by law.

 

(d)           Subject to clause (f) below, Buyer hereby grants to the applicable
Seller a revocable option to exercise all voting and corporate rights with
respect to the related Purchased Assets and to vote, take corporate actions and
exercise any rights in connection with such Purchased Assets, so long as no
Event of Default has occurred and is continuing.  Such revocable option is not
evidence of any ownership or other interest or right of any Seller in any
Purchased Asset.  Upon (i) the occurrence and during the continuation of an
Event of Default, (ii) the occurrence of any Significant Modification without
the prior written consent of Buyer, the revocable option discussed above shall
be deemed to automatically terminate and Buyer shall be entitled to exercise all
voting and corporate rights with respect to the Purchased Assets without regard
to any Seller’s instructions (including, but not limited to, if an Act of
Insolvency shall occur with respect to any Seller, to the extent any 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).

 

(e)           Notwithstanding the provisions of Article 7(b) above requiring the
execution of the Custodial Delivery Certificate and corresponding delivery of
the Purchased Asset File to the Custodian on or prior to the related Purchase
Date, with respect to each Transaction involving a Purchased Asset that is
identified in the related Confirmation as a “Table Funded” Transaction, the
applicable Seller shall, in lieu of effectuating the delivery of all or a
portion of the Purchased Asset File on or prior to the related Purchase Date,
(i) deliver to the Custodian by facsimile or email on or before the related
Purchase Date for the Transaction (A) the promissory note(s), original stock
certificate or Participation Certificate in favor of such Seller evidencing the
making of the Purchased Asset, with such Seller’s endorsement of such instrument
to Buyer, (B) the mortgage, security agreement or similar item creating the
security interest in the related collateral and the applicable assignment
document evidencing the transfer to Buyer, (C) such other components of the
Purchased Asset File as Buyer may require on a case by case basis with respect
to the particular Transaction, and (D) evidence satisfactory to Buyer that all
documents necessary to perfect such Seller’s (and, by means of assignment in
blank on the Purchase Date,

 

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Buyer’s or its designees’) interest in the Purchased Items for the Purchased
Asset, (ii) deliver to Buyer and Custodian a Bailee Letter from an Acceptable
Attorney, Title Company or other Person acceptable to Buyer on or prior to such
Purchase Date and (iii) not later than the third (3rd) Business Day following
the Purchase Date, deliver to Buyer the Custodial Delivery Certificate and to
the Custodian the entire Purchased Asset File.

 

(f)            Notwithstanding the rights granted to the applicable Seller
pursuant to clause (d) above, Sellers shall not, and shall not permit Interim
Servicer, Primary Servicer or any other servicer of any Purchased Asset to make,
permit or consent to any Significant Modification relating in any way to any
Purchased Asset without the prior written consent of Buyer.

 

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

 

(a)           Title to all Purchased Assets and Purchased Items shall pass to
Buyer on the applicable Purchase Date, and Buyer shall have free and
unrestricted use of all Purchased Assets and Purchased Items, subject, however,
to the terms of this Agreement.  Nothing in this Agreement or any other
Transaction Document shall preclude Buyer from engaging in repurchase
transactions with the Purchased Assets or Purchased Items or otherwise selling,
transferring, pledging, repledging, hypothecating, or rehypothecating the
Purchased Assets and Purchased Items on terms and conditions that shall be in
Buyer’s discretion, but no such transaction shall relieve Buyer of its
obligations to transfer the applicable Purchased Assets to the applicable 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, Sellers pursuant to
Article 5 hereof.  Notwithstanding the foregoing, Buyer shall not engage in
repurchase transactions or otherwise sell, transfer, pledge, repledge,
hypothecate or re-hypothecate the Purchased Assets or Purchased Items with any
Person other than an Eligible Transferee without the prior consent of the
applicable Seller, such consent not to be unreasonably withheld, conditioned or
delayed, unless a Material Default or an Event of Default has occurred and is
continuing, in which case such Seller’s consent shall not be required.

 

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

 

ARTICLE 9.
REPRESENTATIONS AND WARRANTIES

 

(a)           Each of Buyer and each 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

 

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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,
(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 and (vi) it has not dealt with any broker,
investment banker, agent, or other Person (other than Buyer or an Affiliate of
Buyer in the case of a Seller) who may be entitled to any commission or
compensation in connection with the sale of Purchased Assets pursuant to any of
the Transaction Documents.  On the Purchase Date for any Transaction for the
purchase of any Purchased Assets by Buyer from any Seller and any Transaction
hereunder and at all times while this Agreement and any Transaction thereunder
is in effect, Buyer and each 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, each 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 the purchase of any Purchased Assets by Buyer from such Seller
and any Transaction thereunder and covenants that at all times while this
Agreement and any Transaction thereunder is in effect, unless otherwise stated
herein:

 

(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 could not be reasonably likely 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.

 

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

 

(iii)          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
contained in the Transaction Documents applicable to it to which it is a party.

 

(iv)          Non-Contravention.  Neither the execution and delivery of the
Transaction Documents, nor consummation by Seller of the transactions
contemplated by the Transaction Documents (or any of them), nor compliance by
Seller with the terms, conditions and provisions of the Transaction Documents
(or any of them) will conflict with or result in a breach of any of the terms,
conditions or provisions of (A) the organizational documents of Seller, (B) any
contractual obligation to which Seller is now

 

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a party or the rights under which have been assigned to Seller or the
obligations under which have been assumed by Seller or to which the assets of
Seller are subject or constitute a default thereunder, or result thereunder in
the creation or imposition of any lien upon any of the assets of Seller, other
than pursuant to the Transaction Documents, (C) any judgment or order, writ,
injunction, decree or demand of any court applicable to Seller, (D) any
Purchased Asset Document, or (E) any applicable Requirement of Law, in the case
of clauses (B) or (C) above, to the extent that such conflict or breach would
have a Material Adverse Effect upon Seller’s ability to perform its obligations
hereunder.

 

(v)           Litigation; Requirements of Law.  As of the date hereof and as of
the Purchase Date for any Transaction hereunder, there is no action, suit,
proceeding, investigation, or arbitration pending or, to the Knowledge of
Seller, threatened against any Seller, any Pledgor or Guarantor or any of their
respective assets that could reasonably be expected to result in any Material
Adverse Effect.  As of the date hereof, each Purchase Date, each Future Funding
Date and each Additional Advance Date, except as previously disclosed to Buyer
in writing, Seller and Guarantor are each in compliance in all material respects
with all Requirements of Law, and to the Knowledge of Seller, no Purchased Asset
contravenes any Requirements of Law.  As of the date hereof, each Purchase Date,
each Future Funding Date and each Additional Advance Date, except as previously
disclosed to Buyer in writing, none of any Seller, any Pledgor or Guarantor is
in default in any material respect with respect to any judgment, order, writ,
injunction, decree, rule or regulation of any arbitrator or Governmental
Authority.

 

(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, such Purchased Assets are free and
clear of any lien, encumbrance or impediment to transfer (including any “adverse
claim” as defined in Article 8-102(a)(1) of the UCC), and Seller is the record
and beneficial owner of and has good and marketable title to and the right to
sell and transfer such Purchased Assets to Buyer and, upon transfer of such
Purchased Assets to Buyer, Buyer shall be the 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.

 

(viii)        No Decline in Market Value; No Margin Deficit; No Defaults.  As of
the date hereof, each Purchase Date, each Future Funding Date and each
Additional Advance Date, except as previously disclosed to Buyer in writing,
Seller has no Knowledge of any post-Transaction facts or circumstances that are
reasonably likely to cause or have caused the Market Value of any Purchased
Asset to decline in any material respect.  As of the date hereof, each Purchase
Date, each Future Funding Date and each Additional Advance Date, no Margin
Deficit exists (other than any Margin Deficit for which the related Margin
Deficit Payment Date has not yet occurred), no Event of Default or, to Seller’s

 

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Knowledge, Default has occurred or exists under or with respect to the
Transaction Documents.  As of the date hereof, each Purchase Date, each Future
Funding Date and each Additional Advance Date, no event of default (however
defined) beyond applicable notice and grace periods on the part of Guarantor
exists under any credit facility, repurchase facility or substantially similar
facility that is presently in effect, to which Guarantor is a party.

 

(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
otherwise conveyed or encumbered any Purchased Asset to any other Person, and
immediately prior to the sale of such Purchased Asset to Buyer, Seller was the
sole owner of such Purchased Asset and had good and marketable title thereto,
free and clear of all liens, in each case except for (1) liens to be released
simultaneously with the sale to Buyer hereunder and (2) liens granted by Seller
in favor of the counterparty to any Hedging Transaction, solely to the extent
such liens are expressly subordinate to the rights and interests of Buyer
hereunder.

 

(B)          The provisions of this Agreement and the related Confirmation are
effective to either constitute a sale of Purchased Items to Buyer or 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.

 

(C)          Upon receipt by the Custodian of each Mortgage Note, Mezzanine
Note, or Participation Certificate, endorsed in blank by a duly authorized
officer of Seller, either a purchase shall have been completed by Buyer of such
Mortgage Note, Mezzanine Note or Participation Certificate, as applicable, 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 VI are true and correct, except to the
extent disclosed in writing in a Requested Exceptions Report approved by Buyer.

 

(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 XII 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.

 

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(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.  Except to the extent disclosed in writing in a Requested
Exceptions Report approved by Buyer, 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 the Custodian.

 

(H)          [Reserved.]

 

(I)            With respect to each Purchased Asset purchased by Seller or an
Affiliate of Seller from a Transferor, (a) such Purchased Asset (other than any
Purchased Asset acquired from an Affiliate of the applicable Seller) 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, (e) if Seller acquired the Purchased Asset from an Affiliate
(other than any Affiliate that is a direct or indirect Subsidiary of Guarantor),
Seller has delivered to Buyer an opinion of counsel regarding the true sale of
the purchase of such Asset by Seller and, if such Asset was acquired by Seller’s
Affiliate from another Affiliate, the true sale of the purchase of the Asset by
the Affiliate of Seller from the Transferor Affiliate, which opinions shall be
in form and substance satisfactory to Buyer, and (f) the representations and
warranties made by such Transferor to Seller or such Affiliate in such Purchase
Agreement are hereby incorporated herein mutatis mutandis and are hereby remade
by Seller to Buyer as of each Purchase Date, each Future Funding Date and each
Additional Advance Date.

 

(J)            Except as set forth in any Trust Receipt approved by Buyer for
any Purchased Asset, Seller has complied in all material respects with all
requirements of the Custodial Agreement with respect to each Purchased Asset,
including delivery to Custodian of all required Purchased Asset Documents.  As
of the date hereof, each Purchase Date, each Future Funding Date and each
Additional Advance Date, Seller has no Knowledge of any fact that could
reasonably lead it to expect that any Purchased Asset will not be paid in full.

 

(K)          The Purchased Assets constitute the following, 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 is not aware
of any UCC

 

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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.  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.  Seller is generally able to pay, and as of the date hereof
is paying, its debts as they come due.  Seller has not become, or is not
presently, financially insolvent nor will Seller be made insolvent by virtue of
Seller’s execution of or performance under any of the Transaction Documents
within the meaning of the bankruptcy laws or the insolvency laws of any
jurisdiction.  Seller has not entered into any Transaction Document or any
Transaction pursuant thereto in contemplation of insolvency or with intent to
hinder, delay or defraud any creditor.

 

(xii)         No Conflicts or Consents.  Neither the execution and delivery of
this Agreement and the other Transaction Documents by Seller, nor the
consummation of any of the transactions by it herein or therein contemplated,
nor compliance with the terms and provisions hereof or with the terms and
provisions thereof, will contravene or conflict with or result in the creation
or imposition of (or the obligation to create or impose) any lien upon any of
the property or assets of Seller pursuant to the terms of any indenture,
mortgage, deed of trust, or other agreement or instrument to which Seller is a
party or by which Seller may be bound, or to which Seller may be subject, other
than liens created pursuant to the Transaction Documents.  No consent, approval,
authorization, or order of any third party is required in connection with the
execution and delivery by Seller of the Transaction Documents to which it is a
party or to consummate the transactions contemplated hereby or thereby which has
not already been obtained (other than consents, approvals and filings that have
been obtained or made, as applicable, or that, if not obtained or made, are not
reasonably likely to have a Material Adverse Effect).

 

(xiii)        Governmental Approvals.  No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
exemption by, any Governmental Authority is required to authorize, or is
required in connection with, (A) the execution, delivery and performance 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 the filing of certain financing statements in respect of
certain security interests).

 

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

 

(xv)         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.

 

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(xvi)        Federal Regulations.  (A) None of any Seller, any Pledgor or
Guarantor is required to register as an “investment company” under the
Investment Company Act or is a company “controlled” by an “investment company”
within the meaning of the Investment Company Act and (B) none of any Seller, any
Pledgor or Guarantor is a “holding company,” or a “subsidiary company of a
holding company,” or an “affiliate” of either a “holding company” or a
“subsidiary company of a holding company,” as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended.

 

(xvii)       Taxes.  Each Seller is either a U.S. Person that is a partnership
for U.S. federal income tax purposes, or a disregarded entity of a U.S. Person
for U.S. federal income tax purposes.  Each of Seller and Guarantor has timely
filed or caused to be filed all required federal and other material tax returns
and has paid all U.S. federal and other material Taxes imposed on it and any of
its assets by any Governmental Authority except for any such Taxes as are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been provided in accordance with GAAP.  No liens for
material amounts of Taxes have been filed against any of Seller’s assets and no
claims are being asserted in writing with respect to any such 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).

 

(xviii)      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 and no Act of Insolvency has ever
occurred with respect to Seller which would be reasonably expected to result in
a Material Adverse Effect.

 

(xix)        Solvency.  Neither the Transaction Documents nor any Transaction,
Additional Advance or Future Funding Transaction thereunder are entered into in
contemplation of insolvency or with intent to hinder, delay or defraud any
creditor of any Seller, Guarantor or an Affiliate of any Seller or Guarantor. 
The transfer of the Purchased Assets subject hereto and the obligation to
repurchase such Purchased Assets is not undertaken with the intent to hinder,
delay or defraud any creditor of any Seller, Guarantor or an Affiliate of any
Seller or Guarantor.  As of the Purchase Date, Seller is not insolvent within
the meaning of 11 U.S.C. Section 101(32) or any successor provision thereof and
the transfer and sale of the Purchased Assets pursuant hereto and the obligation
to repurchase such Purchased Asset (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 of the Purchased Assets
and the Purchased Items subject hereto.  No petition in bankruptcy has been
filed against Seller in the last ten (10) years, and Seller has not in the last
ten (10) years made an assignment for the benefit of creditors or taken
advantage of any debtors 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.

 

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

 

(xxi)        Full and Accurate Disclosure.  No information contained in any
Confirmation or assignment documents for any Purchased Asset or any other
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 which they were
made.  All written information furnished after the date hereof by or on behalf
of Seller to Buyer in connection with the Transaction Documents and the
Transactions shall be true, correct and complete in all material respects, or in
the case of projections shall be based on reasonable estimates prepared and
presented in good faith, on the date as of which such information is stated or
certified.

 

(xxii)       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 (other than information
relating to specific Purchased Assets that was prepared by third parties that
are not Affiliates of Seller or Guarantor, which information is, to Sellers’
Knowledge, true, complete and correct in all material respects).  All financial
data concerning Seller has been prepared fairly in accordance with GAAP.  Since
the delivery of such data, except as otherwise disclosed in writing to Buyer,
there has been no change in the financial position of Seller or the Purchased
Assets, or in the results of operations of Seller, which change is reasonably
likely to have a Material Adverse Effect on Seller.

 

(xxiii)      Hedging Transactions.  To the actual knowledge of Seller, as of the
Purchase Date for any Purchased Asset that is subject to a Hedging Transaction,
each such Hedging Transaction is in full force and effect in accordance with its
terms, each counterparty thereto is an Affiliated Hedge Counterparty or a
Qualified Hedge Counterparty, and no “Termination Event”, “Event of Default”,
“Potential Event of Default” or any similar event, however denominated, has
occurred and is continuing with respect thereto.

 

(xxiv)     [Reserved].

 

(xxv)      Servicing Agreements.  Seller has delivered to Buyer all Servicing
Agreements pertaining to the Purchased Assets and to the actual 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.

 

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(xxvi)     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.

 

(xxvii)    PATRIOT Act.

 

(x)           Seller is in compliance, in all material respects, 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, and (B) the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
Patriot Act of 2001).  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.

 

(y)           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 of
2001 and to fully effectuate the purposes of this Agreement and (B) provide such
opinions of counsel as Buyer shall reasonably request due to any change in
Requirements of Law or Buyer Compliance Policy concerning matters described in
this Article 9(b)(xxvii), Article 9(b)(xxxi) or Article 9(b)(xxxiii); provided,
however, that nothing in this Article 9(b)(xxvii) 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 of 2001 and regulations thereunder, Seller on behalf
of itself and its Affiliates makes the following representations and covenants
to Buyer and its Affiliates (for purposes of this Article 9(b)(xxvii), the
“Seller Entities”) that neither Seller, nor, to Seller’s Knowledge, 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

 

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Buyer to administer their anti-money laundering program, if applicable, of any
change in information affecting this representation and covenant.

 

(xxviii)   Ownership of Property.  Seller does not own, and has not ever owned,
any assets other than (A) the Purchased Assets (or assets which were previously
Purchased Assets) and (B) such incidental personal property related thereto.

 

(xxix)     Environmental Matters.

 

(a)           As of the date of this Agreement, each Purchase Date, each Future
Funding Date and each Additional Advance Date, no properties owned or leased by
Seller and no properties formerly owned or leased by Seller (the “Properties”),
contain, or have previously contained, any Materials of Environmental Concern in
amounts or concentrations which constitute or constituted a violation of, or
reasonably could be expected to give rise to liability under, Environmental
Laws;

 

(b)           As of the date of this Agreement, each Purchase Date, each Future
Funding Date and each Additional Advance Date, Seller is in compliance with all
applicable Environmental Laws, and there is no violation of any Environmental
Laws which reasonably would be expected to interfere with the continued
operations of Seller;

 

(c)           As of the date of this Agreement, each Purchase Date, each Future
Funding Date and each Additional Advance Date, Seller has not received any
notice of violation, alleged violation, non-compliance, liability or potential
liability under any Environmental Law, nor does Seller have knowledge that any
such notice will be received or is being threatened;

 

(d)           As of the date of this Agreement, each Purchase Date, each Future
Funding Date and each Additional Advance Date, Materials of Environmental
Concern have not been transported or disposed by Seller in violation of, or in a
manner or to a location which reasonably would be expected to give rise to
liability under, any applicable Environmental Law, nor has Seller generated,
treated, stored or disposed of at, on or under any of the Properties in
violation of, or in a manner that reasonably would be expected to give rise to
liability under, any applicable Environmental Law;

 

(e)           As of the date of this Agreement, each Purchase Date, each Future
Funding Date and each Additional Advance Date, no judicial proceedings or
governmental or administrative action is pending, or, to the Knowledge of
Seller, threatened, under any Environmental Law which Seller is or will be named
as a party, nor are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or judicial
requirements arising out of judicial proceedings or governmental or
administrative actions, outstanding under any Environmental Law to which Seller
is a party;

 

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(f)            As of the date of this Agreement, each Purchase Date, each Future
Funding Date and each Additional Advance Date, there has been no release or
threat of release of Materials of Environmental Concern in violation of or in
amounts or in a manner that reasonably would be expected to give rise to
liability under any Environmental Law for which Seller may become liable; and

 

(g)           As of the date of this Agreement, each Purchase Date, each Future
Funding Date and each Additional Advance Date, each of the representations and
warranties set forth in the preceding clauses (a) through (f) is true and
correct with respect to each parcel of real property owned or operated by
Seller.

 

(xxx)      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.

 

(xxxi)     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 (A) that is listed in the Annex to, or is otherwise subject to the
provisions of, Executive Order 13224 issued on September 24, 2001 (“EO13224”);
(B) whose name appears on OFAC’s most current list of “Specifically Designed
National and Blocked Persons,” (C) who commits, threatens to commit or supports
“terrorism”, as that term is defined in EO 13224; or (D) who is otherwise
affiliated with any entity or person listed above (any and all parties or
persons described in (A) through (D) above are herein referred to as a
“Prohibited Person”).  Seller covenants and agrees that none of Seller or any of
its Affiliates will knowingly (1) conduct any business, nor engage in any
transaction or dealing, with any Prohibited Person or (2) engage in or conspire
to engage in any transaction that evades or avoids or that the purpose of
evading or avoiding any of the prohibitions of EO 13224.  Seller further
covenants and agrees that (i) it shall not, directly or indirectly, use the
proceeds of any Transaction, or lend, contribute or otherwise make available
such proceeds to any subsidiary, joint venture partner or other Person or entity
(x) to fund any activities or business of or with any Prohibited Person, or in
any country or territory, that at the time of such funding is the subject of any
sanctions under any Sanctions Laws and Regulations, or (y) in any other manner
that would result in a violation of any Sanction Laws and Regulations by any
party to this Agreement and (ii) none of the funds or the assets of Seller that
are used to pay any amount due pursuant to this Agreement or any other
Transaction Document shall constitute funds obtained from transactions with or
relating to Prohibited Persons or countries or territories that are the subject
of sanctions under any Sanctions Laws and Regulations.  Seller further covenants
and agrees to deliver to Buyer any such certification or other evidence as may
be requested by Buyer in its sole and absolute discretion, confirming that none
of Seller or any of the its Affiliates is a Prohibited Person and none of
Seller, or any of its

 

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Affiliates has engaged in any business transaction or dealings with a Prohibited
Person, including, but not limited to, the making or receiving of any
contribution of funds, goods or services to or for the benefit of a Prohibited
Person.

 

(xxxii)    Notice Address; Jurisdiction of Organization.  On the date of this
Agreement, Seller’s location (within the meaning of Article 9 of the UCC) and
address for notices is as specified on Annex I.  Each Seller’s legal name is,
and has at all times been, STARWOOD PROPERTY MORTGAGE SUB-14, L.L.C. and
STARWOOD PROPERTY MORTGAGE SUB-14-A, L.L.C., respectively.  Each Seller’s sole
jurisdiction of organization is, and at all times has been, Delaware.  The
location where each Seller keeps its books and records (within the meaning of
Article 9 of the UCC), including all computer tapes and records relating to the
Purchased Items, is its notice address.  Neither Seller has changed its name or
location within the past twelve (12) months.  STARWOOD PROPERTY MORTGAGE SUB-14,
L.L.C.’s organizational identification number is 5868454 and its tax
identification number is 90-0619025.  STARWOOD PROPERTY MORTGAGE SUB-14-A,
L.L.C.’s organizational identification number is 5868462 and its tax
identification number is 27-0247747.  The fiscal year of each Seller is the
calendar year.

 

(xxxiii)   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.

 

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

 

(xxxv)    Compliance with ERISA.  (a)  Neither Seller nor Guarantor has any
employees as of the date of this Agreement; (b) each of Seller and Guarantor
either (i) qualifies as a VCOC or a REOC, (ii) complies with an exception set
forth in the Plan Asset Regulations such that the assets of such Person would
not be subject to Title I of ERISA and/or Section 4975 of the Code, or
(iii) does not hold any “plan assets” within the meaning of the Plan Asset
Regulations that are subject to ERISA; 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 of the Code or Section 406 of ERISA) that
could subject the Buyer to any tax or penalty or prohibited transactions imposed
under Section 4975 of the Code or Section 502(i) of ERISA.

 

(xxxvi)   Reserved.

 

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(xxxvii)  Chief Executive Office; Jurisdiction of Organization.  As of the date
hereof, Seller’s chief executive office, is, and has been, located at 591 West
Putnam Avenue, Greenwich, Connecticut 06830.  As of the date hereof, Seller’s
jurisdiction of organization is Delaware.

 

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, neither Seller shall without
the prior written consent of Buyer:

 

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

 

(b)           transfer, assign, convey, grant, bargain, sell, set over, deliver
or otherwise dispose of, or pledge or hypothecate, directly or indirectly, any
interest in the Purchased Items (or any of them) to any Person other than Buyer,
or engage in repurchase transactions or similar transactions with respect to the
Purchased Items (or any of them) with any Person other than Buyer;

 

(c)           modify in any material respect or terminate any Servicing
Agreements to which it is a party, without the consent of Buyer, such consent
not to be unreasonably withheld, conditioned or delayed; provided that if a
Material Default or Event of Default has occurred and is continuing, Buyer’s
consent shall be in Buyer’s sole and absolute discretion;

 

(d)           create, incur or permit to exist any lien, encumbrance or security
interest 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 and security interest granted by any Seller pursuant to Article 6 of
this Agreement and the lien and security interest granted by each Pledgor under
the related Pledge Agreement;

 

(e)           enter into any transaction of merger or consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation, winding up or dissolution), sell all or substantially all of its
assets (except in the ordinary course of business) without the consent of Buyer
in its sole and absolute discretion;

 

(f)            consent or assent to any Significant Modification with respect to
any note, loan agreement, mortgage or guarantee relating to the Purchased Assets
or other agreement or instrument relating to the Purchased Assets other than in
accordance with Article 27;

 

(g)           permit the organizational documents or organizational structure of
any Seller to be amended without the prior written consent of Buyer in its sole
and absolute discretion (provided that Sellers may make immaterial ministerial,
noneconomic amendments to their respective organizational documents without
Buyer’s prior written consent);

 

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

 

(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; or

 

(j)            take any action, cause, allow, or permit any of any 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 or regulations promulgated
thereunder.

 

ARTICLE 11.
AFFIRMATIVE COVENANTS OF SELLERS

 

The following covenants shall be given independent effect (so that if a
particular action or condition is prohibited by any covenant, the fact that it
would be permitted by an exception to or be otherwise within the limitations of
another covenant shall not avoid the occurrence of a Default or an Event of
Default if such action is taken or condition exists.  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)           Sellers shall promptly notify Buyer of any material adverse change
in its business operations and/or financial condition; provided, however, that
nothing in this Article 11 shall relieve Sellers of their obligations under this
Agreement.

 

(b)           Sellers 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)           Each Seller shall (1) 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 security interests by or through Buyer) and (2) 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)           Sellers shall notify Buyer of the occurrence of any Default or
Event of Default with respect to any Seller as soon as possible but in no event
later than the immediately succeeding Business Day after obtaining Knowledge of
such event.

 

(e)           [Reserved.]

 

(f)            Sellers shall promptly (and in any event not later than two
(2) Business Days following receipt) deliver to Buyer (i) any notice of transfer
of servicing under the Purchased

 

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Asset Documents and (ii) any other information with respect to the Purchased
Assets that may be reasonably requested by Buyer from time to time to the extent
such information is in Sellers’ possession; provided that Sellers shall not be
in breach of their obligations under this Article 11(f) so long as Sellers have
made commercially reasonable efforts to obtain and deliver to Buyer any such
information that is not in Sellers’ possession.  In the event that (i) Sellers
shall be unable to obtain and deliver any information reasonably requested by
Buyer with respect to a Purchased Asset as a result of the failure of the
related Mortgagor to deliver such information when required under the related
Purchased Asset Documents; (ii) such failure by the related Mortgagor
constitutes an event of default by such Mortgagor beyond applicable notice and
grace periods under the related Purchased Asset Documents and (iii) Buyer has
reasonably determined that such failure has a material adverse effect on Buyer’s
ability to determine the Market Value of the related Purchased Asset, then Buyer
may deliver written notice to Sellers requiring Sellers to repurchase the
related Purchased Asset within seven (7) days after receipt by Sellers of such
written notice from Buyer and/or may, in connection with Buyer’s determination
of Market Value with respect to the related Purchased Asset, draw any adverse
inference from any such missing information as Buyer may determine in its sole
discretion.

 

(g)           Sellers will permit Buyer, its Affiliates or its designated
representative to inspect each 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 (unless a Default or an
Event of Default shall have occurred and is continuing, in which case, no prior
notice shall be required), and to make copies of extracts of any and all
thereof, subject to the terms of any confidentiality agreement between Buyer and
the applicable Seller.  In connection therewith, each Seller shall provide Buyer
the opportunity 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 such Seller’s possession or is available to such 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 such Seller’s business and
affairs with its officers.  Prior to the occurrence and continuance of a Default
or an Event of Default, Buyer shall act in a commercially reasonable manner in
requesting and conducting any inspection relating to the conduct and operation
of any Seller’s business.

 

(h)           If any 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, such Seller shall accept the same as Buyer’s agent, hold the same in
trust for Buyer and deliver the same forthwith to Buyer (or the Custodian, as
appropriate) in the exact form received, duly endorsed by such Seller to Buyer,
if required, together with all related necessary transfer documents, to be held
by Buyer hereunder as additional collateral security for the Transactions.  If
any sums of money or property are paid or distributed in respect of the
Purchased Assets and received by any Seller, such 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 such Seller, as additional collateral
security for the Transactions.

 

(i)            At any time from time to time upon the reasonable request of
Buyer, at the sole expense of Sellers, Sellers shall (i) promptly and duly
execute and deliver such further

 

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instruments and documents and take such further actions as Buyer may 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 Sellers
(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 immediately delivered to Custodian pursuant to the Custodial
Agreement, duly endorsed in blank, to be itself held as a Purchased Item
pursuant to this Agreement, and the documents delivered in connection herewith.

 

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

 

(i)            Within fifteen (15) calendar days after each month-end, a monthly
reporting package substantially in the form of Exhibit III-A attached hereto
(the “Monthly Reporting Package”);

 

(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 (the
“Quarterly Reporting Package”);

 

(iii)          Within ninety (90) calendar days after the last day of its fiscal
year, an annual reporting package substantially in the form of Exhibit III-C
attached hereto (the “Annual Reporting Package”); and

 

(iv)          Upon Buyer’s request:

 

(A)          a listing of any changes in Hedging Transactions with Qualified
Hedge Counterparties, the names of the Qualified Hedge Counterparties and the
material terms of such Hedging Transactions, delivered within ten (10) days
after Buyer’s request;

 

(B)          copies of Sellers’ (if applicable) and Guarantor’s Federal Income
Tax returns, if any, delivered within thirty (30) days after the filing thereof;
and

 

(C)          such other information regarding the financial condition,
operations or business of Sellers, Guarantor or any Mortgagor in respect of a
Purchased Asset as Buyer may reasonably request; provided that Sellers shall not
be in breach of their obligations under this Article 11(j)(iv)(C) so long as
Sellers have made commercially reasonable efforts to obtain and deliver to Buyer
any such information that is not in Sellers’ possession.  In the event that
(i) Sellers shall be unable to obtain and deliver any information reasonably
requested by Buyer with respect to a Purchased Asset as a result of the failure
of the related Mortgagor to deliver such information when required under the
related Purchased Asset Documents, (ii) such failure by the related Mortgagor
constitutes an event

 

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of default by such Mortgagor beyond applicable notice and grace periods under
the related Purchased Asset Documents and (iii) Buyer has reasonably determined
that such failure has a material adverse effect on Buyer’s ability to determine
the Market Value of the related Purchased Asset, then Buyer may deliver written
notice to Sellers requiring Sellers to repurchase the related Purchased Asset
within seven (7) days after receipt by Sellers of such written notice from Buyer
and/or may, in connection with Buyer’s determination of Market Value with
respect to the related Purchased Asset, draw any adverse inference from any such
missing information as Buyer may determine in its sole discretion.

 

In the event that (i) Sellers fail to deliver the complete Monthly Reporting
Package described in clause (j)(i) above as a result of the failure of any
Mortgagor to deliver any information for the related time period as required by
the related Purchased Asset Documents, and (ii) such failure by the related
Mortgagor constitutes an event of default by such Mortgagor beyond applicable
notice and grace periods under the related Purchased Asset Documents, then Buyer
may deliver written notice to Sellers requiring Sellers to repurchase the
related Purchased Asset at the Repurchase Price therefor within seven (7) days
after receipt by Sellers of such written notice from Buyer and/or may, in
connection with Buyer’s determination of Market Value with respect to the
related Purchased Asset, draw any adverse inference from any such missing
information as Buyer may determine in its sole discretion.

 

(k)           Sellers shall make a representative available to Buyer every month
for attendance at a telephone conference, the date of which to be mutually
agreed upon by Buyer and Sellers, regarding the status of each Purchased Asset,
Sellers’ compliance with the requirements of Articles 11 and 12, and any other
matters relating to the Transaction Documents or Transactions that Buyer wishes
to discuss with Sellers.

 

(l)            Sellers shall and shall cause Guarantor to at all times
(i) comply in all material respects with all contractual obligations,
(ii) comply in all material respects with all Requirements of Law, 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 Sellers and
Guarantor or any of their assets and (iii) do or cause to be done all things
necessary to preserve and maintain in full force and effect 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 Sellers and of Sellers’ status as a “qualified
transferee” (however denominated) under all documents that govern the Purchased
Assets), except to the extent that, solely with respect to Guarantor, such
failure to comply or maintain and preserve would not reasonably be likely to
cause a Material Adverse Effect.

 

(m)          Sellers shall and 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.  Each 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 such Seller for its own account.

 

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(n)           Sellers 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
Structuring Fees, Extension Fees and Exit Fees.  Each Seller will continue to be
a U.S. Person that is a partnership for U.S. federal income tax purposes, or a
disregarded entity of a U.S. Person for U.S. federal income tax purposes.  Each
Seller shall pay and discharge all Taxes on its assets and on the Purchased
Items that, in each case, in any manner would create any Lien upon the Purchased
Items, except for Liens created pursuant to the Transaction Documents and other
than any Liens with respect to Taxes, 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 or
Taxes that are not yet due and payable.

 

(o)           Sellers shall advise Buyer in writing of the opening of any new
chief executive office, principal office or place of business or of the closing
of any such office of Sellers, Pledgor or Guarantor and of any change in
Sellers’, Pledgor’s or Guarantor’s name or jurisdiction of organization not less
than thirty (30) days prior to taking any such action.  No Seller shall
(A) change its organizational number, tax identification number, fiscal year,
method of accounting, identity, structure or jurisdiction of organization (or
have more than one such jurisdiction), move the location of its principal place
of business and chief executive office (as defined in the UCC) from its location
as of the Purchase Date 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, or (B) move, or consent to Custodian moving, the
Purchased Asset Documents from the location thereof on the applicable Purchase
Date for the related Purchased Asset, unless in each case such Seller has given
at least thirty (30) days’ prior notice to Buyer and has taken all actions
required under the UCC to continue the first priority perfected security
interest of Buyer in the Purchased Assets.

 

(p)           [Reserved.]

 

(q)           [Reserved.]

 

(r)            Each Seller shall enter into Hedging Transactions with respect to
each of the Hedge-Required Assets to the extent necessary to hedge interest rate
risk associated with the Purchase Price on such Hedge-Required Assets, in a
manner reasonably acceptable to Buyer.  Each Seller shall take such actions as
Buyer deems necessary to perfect the security interest granted in each Hedging
Transaction, and shall assign to Buyer, which assignment shall be consented to
in writing by each Affiliated Hedge Counterparty or Qualified Hedge
Counterparty, all of such Seller’s rights (but none of the obligations) in, to
and under each Hedging Transaction.

 

(s)            Each Seller shall provide the Custodian with copies of all
documentation relating to Hedging Transactions promptly after entering into
same.

 

(t)            No Seller shall cause or permit any Change of Control without the
prior written consent of Buyer in its sole and absolute discretion.

 

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(u)           Sellers shall cause each servicer of a Purchased Asset to provide
to Buyer and to the Custodian via electronic transmission, promptly upon request
by Buyer a Servicing Tape for the month (or any portion thereof) prior to the
date of Buyer’s request; provided that, to the extent any servicer does not
provide any such Servicing Tape, Sellers shall prepare and provide to Buyer and
the Custodian via electronic transmission a remittance report containing the
servicing information that would otherwise be set forth in the Servicing Tape;
provided, further, that regardless of whether Sellers at any time deliver any
such remittance report, Sellers shall at all times use commercially reasonable
efforts to cause each servicer to provide each Servicing Tape in accordance with
this Article 11(u).

 

(v)           Each Seller’s organizational documents shall at all times include
the following provisions: (a) at all times there shall be, and Seller shall
cause there to be, at least one (1) Independent Director; (b) Seller shall not,
without the unanimous written consent of its board of directors including the
Independent Director, commence or consent or acquiesce to the commencement of
any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar
proceeding with respect to Seller; (c) no Independent Director may be removed or
replaced without Cause and unless Seller provides Buyer with not less than five
(5) Business Days’ prior written notice of (i) any proposed removal of an
Independent Director, together with a statement as to the reasons for such
removal, and (ii) the identity of the proposed replacement Independent Director,
together with a certification that such replacement satisfies the requirements
set forth in the organizational documents for an Independent Director; and
provided further, that any removal or replacement shall not be effective until
the replacement Independent Director has accepted his or her appointment; (d) to
the fullest extent permitted by applicable law, including Section 18-1101(c) of
the Bankruptcy Code and notwithstanding any duty otherwise existing at law or in
equity, the Independent Director shall consider only the interests of Seller,
including its creditors in acting or otherwise voting with respect to a material
action; (e) except for duties to Seller as set forth in clause (d) above
(including duties to its equity owners and its creditors solely to the extent of
their respective economic interests in Seller but excluding (i) all other
interests of the equity owners, (ii) the interests of other Affiliates of
Sellers, and (iii) the interests of any group of Affiliates of which Seller is a
part), the Independent Director shall not have any fiduciary duties to any
Person bound by its organizational documents; (f) the foregoing shall not
eliminate the implied contractual covenant of good faith and fair dealing under
applicable law; and (g) to the fullest extent permitted by applicable law,
including Section 18-1101(e) of the Bankruptcy Code, an Independent Director
shall not be liable to Seller or any other Person for breach of contract or
breach of duties (including fiduciary duties), unless the Independent Director
acted in bad faith or engaged in willful misconduct.  “Cause” means, with
respect to an Independent Director, (i) acts or omissions by such Independent
Director that constitute willful disregard of such Independent Director’s duties
as set forth in Seller’s organizational documents, (ii) that 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, (iii) that such Independent Director is unable to perform
his or her duties as Independent Director due to death, disability or
incapacity, or (iv) that such Independent Director no longer meets the
definition of Independent Director.

 

(w)          No Seller has and each Seller will not, except in connection with
the obligations contemplated under the Transaction Documents:

 

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(i)            engage in any business or activity other than the entering into
and performing its obligations under the Transaction Documents, and activities
incidental thereto;

 

(ii)           acquire or own any assets other than (A) the Purchased Assets,
and (B) such incidental personal property related thereto;

 

(iii)          merge into or consolidate with any Person, or dissolve,
terminate, liquidate in whole or in part, transfer or otherwise dispose of all
or substantially all of its assets (except in the ordinary course of its
business) or change its legal structure;

 

(iv)          (A) fail to observe all organizational formalities, or fail to
preserve its existence as an entity duly organized, validly existing and in good
standing (if applicable) under the applicable laws of the jurisdiction of its
organization or formation, or (B) amend, modify, terminate or fail to comply
with the provisions of its organizational documents, in each case without the
prior written consent of Buyer;

 

(v)           own any subsidiary, or make any investment in, any Person;

 

(vi)          commingle its assets with the assets of any other Person, or
permit any Affiliate or constituent party independent access to its bank
accounts;

 

(vii)         incur any debt, secured or unsecured, direct or contingent
(including guaranteeing any obligation), other than the debt incurred pursuant
to this Agreement and the other Transaction Documents and unsecured trade debt
in an unpaid amount less than $200,000 in the aggregate at any time outstanding;

 

(viii)        fail to maintain its records and books of account (in which
complete entries will be made in accordance with GAAP consistently applied),
bank accounts, financial statements, accounting records and other entity
documents separate and apart from those of any other Person; except that a
Seller’s financial position, assets, liabilities, net worth and operating
results may be included in the consolidated financial statements of an
Affiliate, provided that (A) appropriate notation shall be made on such
consolidated financial statements to indicate the separate identity of each
Seller from such Affiliate and that each Seller’s assets and credit are not
available to satisfy the debts and other obligations of such Affiliate or any
other Person, and (B) each Seller’s assets, liabilities and net worth shall also
be listed on each Seller’s own separate balance sheet;

 

(ix)          except for capital contributions or capital distributions
permitted under the terms and conditions of each Seller’s organizational
documents and properly reflected on its books and records, enter into any
transaction, contract or agreement with any general partner, member,
shareholder, principal, guarantor of the obligations of any Seller, or any
Affiliate of the foregoing, except upon terms and conditions that are
intrinsically fair, commercially reasonable and substantially similar to those
that would be available on an arm’s-length basis with unaffiliated third
parties;

 

(x)           maintain its assets in such a manner that it will be costly or
difficult to segregate, ascertain or identify its individual assets from those
of any other Person and

 

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not maintain its properties, assets and accounts separate from those of any
Affiliate or any other Person;

 

(xi)          assume or guaranty the debts of any other Person, hold itself out
to be responsible for the debts of any other Person, or otherwise pledge its
assets to secure the obligations of any other Person or hold out its credit or
assets as being available to satisfy the obligations of any other Person or
enter into any transaction with an Affiliate of Seller except on commercially
reasonable terms similar to those available to unaffiliated parties in an arm’s
length transaction;

 

(xii)         make any loans or advances to any Person, or own any stock or
securities of, any Person;

 

(xiii)        fail to (A) file its own tax returns separate from those of any
other Person, except to the extent a Seller is treated as a “disregarded entity”
for tax purposes and is not required to file tax returns under applicable
Requirements of Law, and (B) pay any taxes required to be paid under applicable
law; provided, however, that no Seller shall have any obligation to reimburse
its equityholders or their Affiliates for any taxes that such equityholders or
their Affiliates may incur as a result of any profits or losses of such Seller;

 

(xiv)        fail to (A) hold itself out to the public as a legal entity
separate and distinct from any other Person, (B) conduct its business solely in
its own name or (C) correct any known misunderstanding regarding its separate
identity;

 

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

 

(xvi)        if it is a partnership or limited liability company, without the
unanimous written consent of all of its partners or members, as applicable, and
the written consent of one hundred percent (100%) of all directors or managers
of the applicable Seller, including, without limitation, the Independent
Director, commence any bankruptcy, insolvency, reorganization, liquidation,
dissolution or similar proceeding with respect to Seller;

 

(xvii)       fail to allocate shared expenses (including, without limitation,
shared office space and services performed by an employee of an Affiliate) among
the Persons sharing such expenses;

 

(xviii)      fail to remain solvent or pay its own liabilities only from its own
funds; provided that the foregoing shall not require any member, partner or
shareholder of any Seller to make any additional capital contributions to any
Seller;

 

(xix)        acquire obligations or securities of its partners, members,
shareholders or other Affiliates, as applicable;

 

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(xx)         have any employees;

 

(xxi)        fail to maintain and use separate stationery, invoices and checks
bearing its own name;

 

(xxii)       have any of its obligations guaranteed by an Affiliate, other than
Guarantor;

 

(xxiii)      identify itself as a department or division of any other Person;

 

(xxiv)     acquire obligations or securities of its members or any Affiliates;
or

 

(xxv)      buy or hold evidence of indebtedness issued by any other Person
(other than cash or investment-grade securities).

 

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

 

(y)           [Reserved].

 

(z)           Sellers shall be solely responsible for the fees and expenses of
the Custodian, Depository and each servicer (including, without limitation, the
Primary Servicer and the Interim Servicer) of any or all of the Purchased
Assets.

 

(aa)         [Reserved].

 

(bb)         With respect to each Purchased Asset, Sellers shall take all action
reasonably 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 more fully 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, if
applicable such other instruments or notices as may be reasonably necessary or
appropriate and filing and maintaining effective UCC financing statements,
continuation statements and assignments and amendments thereto.  Sellers shall
not materially amend, modify, waive or terminate any provision of any Purchase
Agreement or Servicing Agreement without Buyer’s consent.  Each Seller shall
mark its computer records and tapes to evidence the interests granted to Buyer
hereunder.  No Seller shall 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 promptly delivered to Custodian on behalf of Buyer,
together with endorsements required by Buyer in accordance with the provisions
of the Custodial Agreement.

 

(cc)         Upon the occurrence and during the continuance of an Event of
Default, or at any time that a Mortgagor is not required to remit Income to
Primary Servicer or to any other servicer approved by Buyer which has signed a
Servicer Notice acceptable to Buyer, Sellers

 

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shall, pursuant to Re-direction Letters delivered by the applicable Seller or by
Custodian on behalf of the applicable Seller and Buyer, cause the Mortgagors
under the Purchased Assets and all other applicable Persons to, deposit all
Income in respect of the Purchased Assets into the Depository Account on the day
the related payments are due.  Sellers (a) shall, and shall cause Primary
Servicer and Interim Servicer to, comply with and enforce each Re-direction
Letter, (b) shall not amend, modify, waive, terminate or revoke any Re-direction
Letter without Buyer’s consent, and (c) shall take all reasonable steps to
enforce each Re-direction Letter.  In connection with each principal payment or
prepayment under a Purchased Asset, Sellers shall provide or cause to be
provided to Buyer sufficient detail to enable Buyer to identify the Purchased
Asset to which such payment applies.  If any Seller receives any rights, whether
in addition to, in substitution of, as a conversion of, or in exchange for any
Purchased Assets, or otherwise in respect thereof, such Seller shall accept the
same as Buyer’s agent, hold the same in trust for Buyer and immediately deliver
the same to Buyer or its designee in the exact form received, together with duly
executed instruments of transfer, stock powers or assignment in blank and such
other documentation as Buyer shall reasonably request.

 

(dd)         Sellers shall promptly (and in no event later than two (2) Business
Days from the date that Seller has Knowledge of each such occurrence, except as
otherwise provided below) notify Buyer of the occurrence of any of the following
of which any Seller has Knowledge, together with a certificate of a Responsible
Officer of Sellers setting forth details of such occurrence and any action
Sellers have taken or propose to take with respect thereto:

 

(i)            a breach of any representation contained herein;

 

(ii)           any of the following:  (A) with respect to any Purchased Asset or
related Underlying Mortgaged Property, a material change in Market Value,
material loss or damage, material licensing or permit issues, violation of any
Requirement of Law, violation of any Environmental Law or any other actual or
expected event or change in circumstances that could reasonably be expected to
result in a default or material decline in value or cash flow, and (B) with
respect to any Seller, a violation of any Requirement of Law or other event or
circumstance that could reasonably be expected to have a Material Adverse
Effect;

 

(iii)          the existence of any Default, Event of Default, any event of
default beyond applicable notice and grace periods under the Purchased Asset
Documents for any Purchased Asset or any written notice of any material default
received or provided by or on behalf of any Seller pursuant to the Purchased
Asset Documents for any Purchased Asset;

 

(iv)          the resignation or termination of any servicer under any Servicing
Agreement with respect to any Purchased Asset;

 

(v)           the establishment of a rating by any Rating Agency applicable to
Guarantor and any downgrade in or withdrawal of such rating once established;

 

(vi)          Seller shall promptly, and in any event no less than ten (10) days
after service of process on any Seller, any Pledgor or Guarantor on any of the
following,

 

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provide Buyer written notice of the commencement of, settlement of or material
judgment in any litigation, action, suit, arbitration, investigation or other
legal or arbitration proceedings before any Governmental Authority that
(i) affects any Seller, any Pledgor or Guarantor, a Purchased Asset or an
Underlying Mortgaged Property, or questions or challenges the validity or
enforceability of any Transaction Document, and (ii) either (A) makes a claim or
claims (x) in any amount with respect to any Seller, any Pledgor, a Purchased
Asset, an Underlying Mortgaged Property, or any Transaction Document and (y) in
an aggregate amount greater than $25,000,000 with respect to any Pledgor or
Guarantor, or (B) individually or in the aggregate, if adversely determined,
could reasonably be likely to have a Material Adverse Effect;

 

(vii)         within one (1) Business Day of any applicable Person obtaining
Knowledge thereof, any failure of Guarantor to satisfy the Guarantor Liquidity
Test during any Margin Deficit Extension Period;

 

(viii)        any event or occurrence that could be reasonably determined to
cause Guarantor to breach any of the covenants contained in paragraph 9 of the
Guarantee Agreement; and

 

(ix)          upon obtaining any Knowledge that any financial data or other
information prepared by a third party relating to any Purchased Asset is untrue,
incomplete or incorrect in any material respect.

 

(ee)         If the aggregate outstanding Purchase Price of all Purchased Assets
as of any date of determination exceeds the Maximum Facility Amount, Sellers
shall immediately pay to Buyer an amount necessary to reduce such aggregate
outstanding Purchase Price to an amount equal to or less than the Maximum
Facility Amount.

 

ARTICLE 12.
EVENTS OF DEFAULT; REMEDIES

 

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

 

(i)            any Seller or Guarantor shall fail to repurchase (A) Purchased
Assets upon the applicable Repurchase Date (including, without limitation, any
failure to repurchase all Purchased Assets after Sellers deliver a Repurchase
Notice in accordance with Article 17(a) or Article 28(a)) or (B) a Purchased
Asset that is no longer an Eligible Asset in accordance with Article 12(c);

 

(ii)           Buyer shall fail to receive on any Remittance Date the accreted
value of the Price Differential (less any amount of such Price Differential
previously paid by Sellers to Buyer) (including, without limitation, in the
event the Income paid or distributed on or in respect of the Purchased Assets is
insufficient to make such payment and Sellers do not make such payment or cause
such payment to be made);

 

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(iii)          any Seller or Guarantor shall fail to cure any Margin Deficit, to
the extent such Margin Deficit equals or exceeds the Minimum Transfer Amount, in
accordance with Article 4 of this Agreement;

 

(iv)          any Seller or Guarantor shall fail to make any payment not
otherwise addressed under this Article 12(a) owing to Buyer that has become due,
whether by acceleration or otherwise under the terms of this Agreement or the
terms of any Pledge Agreement, or the Guarantee Agreement or any other
Transaction Document, which failure is not remedied within three (3) Business
Days of notice thereof;

 

(v)           any Seller shall default in the observance or performance of its
obligation in Article 7(e) hereof or any agreement contained in Article 10 of
this Agreement and, such default shall not be cured within five (5) Business
Days after notice by Buyer to Sellers thereof;

 

(vi)          an Act of Insolvency occurs with respect to any Seller, Guarantor
or any direct or indirect parent of either Seller that is also a Subsidiary of
Guarantor;

 

(vii)         a Change of Control occurs without Buyer’s prior written consent;

 

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

 

(ix)          the Custodial Agreement, the Depository Agreement, any Pledge
Agreement, the Guarantee Agreement, the Fee Letter, any Servicer Notice 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 any Seller, any Pledgor, or
Guarantor, as applicable;

 

(x)           any Seller or Guarantor shall be in default under (i) any
Indebtedness of any Seller or Guarantor, as applicable, which default
(1) involves the failure to pay a matured obligation in excess of $500,000 in
the aggregate, with respect to Sellers or $25,000,000, 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 $500,000 in the aggregate, with respect to Sellers or
$25,000,000, with respect to Guarantor; or (ii) any other material contract to
which any 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 $500,000 in the aggregate, with respect
to Sellers or $25,000,000, with respect to Guarantor;

 

(xi)          any Seller or Guarantor or any Subsidiary of Guarantor shall be in
default under any Indebtedness of any Seller, Guarantor or any Subsidiary of
Guarantor, as applicable, to Buyer or any of its present or future Affiliates,
which default (A) involves the failure to pay a matured obligation in excess of
$10,000,000 in the aggregate, or (B) permits the acceleration of the maturity of
obligations in excess of $10,000,000 in the aggregate by any other party to or
beneficiary with respect to such Indebtedness;

 

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(xii)         (A) any 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 any Seller or any ERISA Affiliate, (C) a Reportable
Event (as referenced in Section 4043(b)(3) of ERISA) 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) any 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 Sellers
within five (5) Business Days after notice thereof from Buyer to Sellers, 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 Sellers fail to cure same within three
(3) Business Days after notice from Buyer;

 

(xiv)        an “Event of Default” or “Termination Event” occurs on the part of
any Seller or Guarantor under any Hedging Transaction with an Affiliated Hedge
Counterparty that involves the failure to pay a matured obligation in excess of
$500,000 in the aggregate, with respect to Sellers or $25,000,000, with respect
to Guarantor and which is not cured within any applicable cure period thereunder
or, if no cure period exists thereunder, which is not cured by Sellers or
Guarantor, as applicable, within three (3) Business Days after notice thereof;

 

(xv)         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 any Seller or Guarantor, which suspension
has a Material Adverse Effect in the determination of Buyer;

 

(xvi)        any representation (other than the representations and warranties
of Sellers set forth in Exhibit VI and Article 9(b)(x)(D)) made by any Seller to
Buyer pursuant to the Transaction Documents shall have been incorrect or untrue
in any material respect when made or repeated or deemed to have been made or
repeated and, to the extent that such incorrect or untrue representation is
capable of being cured by Sellers, as determined by Buyer in its discretion,
such breach is not cured by Sellers within five (5) Business

 

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Days of the earlier of (A) Knowledge on the part of any Seller of such incorrect
or untrue representation or (B) delivery of notice thereof to Sellers by Buyer;

 

(xvii)       any final non-appealable judgment(s) by any competent court in the
United States of America for the payment of money (a) rendered against one or
both Sellers in an amount greater than $500,000 in the aggregate or (b) rendered
against Guarantor in an amount greater than $25,000,000, and remained
undischarged or unpaid for a period of thirty (30) days, during which period
execution of such judgment is not effectively stayed by bonding over or other
means acceptable to Buyer;

 

(xviii)      if any Seller shall breach or fail to perform any of the terms,
covenants, obligations or conditions of this Agreement, other than as
specifically otherwise referred to in this Article 12(a), and such breach or
failure to perform is not remedied no later than five (5) Business Days after
(A) delivery of notice thereof to Sellers by Buyer, or (B) Knowledge on the part
of any Seller of any material breach or failure to perform; provided, however,
if (A) such breach or failure to perform is susceptible of cure but cannot
reasonably be cured within such five (5) Business Day period and (B) Sellers
shall have commenced to cure such breach or failure to perform within such five
(5) Business Day period, then such five (5) Business Day period shall be
extended for so long as Sellers diligently and expeditiously continue to pursue
a cure of such breach or failure to perform, as determined by Buyer in its
discretion, which extended period shall in no event exceed thirty (30) days in
the aggregate;

 

(xix)        [Reserved];

 

(xx)         the breach by Guarantor of (a) any of the covenants under Section 9
of the Guarantee Agreement, (b) any payment obligation set forth in the
Guarantee Agreement or (c) any other term, covenant or condition set forth in
the Guarantee Agreement or if any representation or warranty made in the
Guarantee Agreement by Guarantor or in any Covenant Compliance Certificate
furnished by Guarantor to Buyer pursuant to the provisions hereof or thereof
shall prove to have been false or misleading in any material respect as of the
time made; provided, however, that any such default or breach under clause
(c) shall not constitute an Event of Default if Guarantor cures such default or
breach, as the case may be, within five (5) Business Days after written notice
thereof from Buyer;

 

(xxi)        the breach by Interim Servicer of any term or condition set forth
in the Interim Servicing Agreement beyond any applicable grace and/or cure
periods following which breach the applicable Seller has not within thirty (30)
calendar days (or such longer period as may be reasonably required with
diligence, not to exceed sixty (60) calendar days in the aggregate), replaced
the Interim Servicer and related Interim Servicing Agreement with a new Interim
Servicer and a new Interim Servicing Agreement, in each case, acceptable to
Buyer in its reasonable discretion;

 

(xxii)       notwithstanding any other provision of this Article 12(a), if any
Seller engages in any conduct or action where Buyer’s prior consent is required
by any Transaction Document and such Seller fails to obtain such consent;

 

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(xxiii)                                                any Seller, Guarantor or
any Subsidiary of Guarantor that is also a direct or indirect parent of any
Seller is required to register as an “investment company” (as defined in the
Investment Company Act) or the arrangements contemplated by the Transaction
Documents shall require registration of such Seller or Guarantor as an
“investment company”;

 

(xxiv)                                               any Seller fails to pay any
Minimum Purchased Asset Fee when due and payable pursuant to Article 3(bb);

 

(xxv)                                                  any Seller or any
servicer fails to deposit all Income and other amounts as required by the
provisions of this Agreement when due (or, in the case of any third-party
servicer that is not an Affiliate of Guarantor, Manager, any Pledgor or any
Seller, within two (2) Business Days of when due), and, following the occurrence
of any event of default under any Servicing Agreement the applicable Seller has
not replaced the related servicer and related Servicing Agreement with a new
servicer and a new Servicing Agreement, in each case, acceptable to Buyer in its
reasonable discretion within thirty (30) days (or such longer period as may be
reasonably required with diligence, not to exceed sixty (60) calendar days in
the aggregate);

 

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

 

(xxvii)                                            any failure of Sellers to
notify Buyer of Guarantor’s failure to satisfy the Guarantor Liquidity Test
during any Margin Deficit Extension Period as required pursuant to Article 4(c);
and

 

(xxviii)                                         any failure of Sellers to pay
any fee when due and payable pursuant to Article 3(ee).

 

(b)                                 After the occurrence and during the
continuance of an Event of Default, each Seller hereby appoints Buyer as
attorney-in-fact of such Seller for the purpose of carrying out the provisions
of this Agreement and taking any action and executing or endorsing any
instruments that Buyer may deem necessary or advisable to accomplish the
purposes hereof, which appointment as attorney-in-fact is irrevocable and
coupled with an interest.  If an Event of Default shall occur and be continuing
with respect to any Seller, the following rights and remedies shall be available
to Buyer:

 

(i)                    At the option of Buyer, exercised by written notice to
Sellers (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 any Seller 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 12(b)(i) of this Agreement:

 

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

 

(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 Repurchase Price for
such Transaction (decreased by (I) any amounts actually remitted to Buyer by the
Depository or Sellers 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 12(b)(iii) of this Agreement); and

 

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

 

(iii)                               Upon the occurrence and during the
continuance of an Event of Default with respect to any Seller, Buyer may
(A) immediately sell on a servicing released basis, 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 Sellers credit for such Purchased Assets in an amount equal to the
Market Value of such Purchased Assets (provided that, solely for purposes of
this Article 12(b)(iii)(B), Buyer’s determination of Market Value shall not take
into consideration the second sentence of the definition thereof) against the
aggregate unpaid Repurchase Price for such Purchased Assets and any other
amounts owing by Sellers under the Transaction Documents.  The proceeds of any
disposition of Purchased Assets effected pursuant to this
Article 12(b)(iii) shall be applied, (v) first, to the actual out-of-pocket
costs and expenses incurred by Buyer in connection with Sellers’ default;
(w) second, to actual, out-of-pocket damages incurred by Buyer in connection
with Sellers’ default, (x) third, to the Repurchase Price; (y) fourth, to any
Breakage Costs; and (z) fifth, to return any excess to Sellers.

 

(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

 

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same manner or on the same Business Day or (B) constitute a waiver of any right
or remedy of Buyer.

 

(v)                Each 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 losses, costs and expenses,
including reasonable legal fees and expenses, actually incurred by Buyer in
connection with or as a consequence of an Event of Default with respect to any
Seller.

 

(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
Sellers.  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 each 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 any
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 each Seller hereby expressly waives any
defenses Sellers might otherwise have to require Buyer to enforce its rights by
judicial process.  Each Seller also waives, to the extent permitted by law, any
defense any Seller might otherwise have arising from the use of nonjudicial
process, disposition of any or all of the Purchased Assets, or from any other
election of remedies.  Each Seller recognizes that nonjudicial remedies are
consistent with the usages of the trade, are responsive to commercial necessity
and are the result of a bargain at arm’s length.

 

(c)                                  If at any time Buyer determines that any
Purchased Asset is not an Eligible Asset as a result of a breach of any
representation or warranty set forth in this Agreement (including the exhibits
hereto) that materially and adversely affects the value of such Purchased Asset,
the Underlying Mortgaged Property related thereto or the interests of the Buyer
in such Purchased Asset, except to the extent specifically disclosed in writing
in a Requested Exceptions Report approved by Buyer (which approval shall be
evidenced by Buyer’s execution of the related Confirmation), the related
Transaction shall terminate and the applicable Seller shall be required to
repurchase such Purchased Asset. No later than three (3) Business Days after
receiving notice from Buyer that such Purchased Asset is not an Eligible Asset,
as provided in the immediately foregoing sentence, the applicable Seller shall
repurchase the affected Purchased Asset and such Seller shall pay the applicable
Repurchase Price for such Purchased Asset to Buyer by depositing such amount in
immediately available funds at the direction of Buyer.

 

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ARTICLE 13.

SINGLE AGREEMENT

 

Buyer and each Seller acknowledge that, and have entered hereinto and will enter
into each Transaction (including any related Additional Advance or Future
Funding 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 each 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.

 

ARTICLE 14.

RECORDING OF COMMUNICATIONS

 

EACH OF BUYER AND EACH SELLER SHALL HAVE THE RIGHT (BUT NOT THE OBLIGATION) FROM
TIME TO TIME TO MAKE OR CAUSE TO BE MADE TAPE RECORDINGS OF COMMUNICATIONS
BETWEEN ITS EMPLOYEES, IF ANY, AND THOSE OF THE OTHER PARTY WITH RESPECT TO
TRANSACTIONS; PROVIDED, HOWEVER, THAT SUCH RIGHT TO RECORD COMMUNICATIONS SHALL
BE LIMITED TO COMMUNICATIONS OF EMPLOYEES TAKING PLACE ON THE TRADING FLOOR OF
THE APPLICABLE PARTY.  EACH OF BUYER AND EACH 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 15.

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, to the address specified in Annex
I hereto or at such other address and person as shall be designated from time to
time by any party hereto, as the case may be, in a written notice to the other
parties hereto in the manner provided for in this Article 15.  A notice shall be
deemed to have been given: (w) in the case of hand delivery, at the time of
delivery, (x)

 

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in the case of registered or certified mail, when delivered or the first
attempted delivery on a Business Day, (y) in the case of expedited prepaid
delivery upon the first attempted delivery on a Business Day, or (z) in the case
of telecopier, upon receipt of answerback confirmation, provided that such
telecopied notice was also delivered as required in this Article 15.  A party
receiving a notice that does not comply with the technical requirements for
notice under this Article 15 may elect to waive any deficiencies and treat the
notice as having been properly given.

 

ARTICLE 16.

ENTIRE AGREEMENT; SEVERABILITY

 

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

 

ARTICLE 17.

NON-ASSIGNABILITY

 

(a)                                 No Seller may assign any of its rights or
obligations under this Agreement without the prior written consent of Buyer and
any attempt by any Seller to assign any of its rights or obligations under this
Agreement without the prior written consent of Buyer shall be null and void. 
Buyer may, without consent of any Seller, sell participating interests in any
Transaction, its interest in the Purchased Assets, or any other interest of
Buyer under this Agreement 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; provided, that, notwithstanding the foregoing, any such sale to a
Participant that is not an Eligible Transferee shall require the prior consent
of Sellers, such consent not to be unreasonably withheld, conditioned or
delayed, unless a Material Default or an Event of Default has occurred and is
continuing, in which case Sellers’ consent shall not be required.  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 its interest in the Purchased Assets, or any other
interest of Buyer under this Agreement; provided, that, notwithstanding the
foregoing, any such assignment to an Assignee that is not an Eligible Transferee
shall require the prior consent of Sellers, such consent not to be unreasonably
withheld, conditioned or delayed, unless a Material Default or an Event of
Default has occurred and is continuing, in which case Sellers’ consent shall not
be required.

 

Additional terms and provisions governing assignments and participations under
this Article 17(a) are set forth in the Fee Letter, and are hereby incorporated
by reference.

 

Each Seller agrees to, and to cause Guarantor to, cooperate with Buyer in
connection with any such assignment, transfer or sale of participating interest
and to enter into such restatements of, and amendments, supplements and other
modifications to, this Agreement in order to give effect to such assignment,
transfer or sale; provided that (a) any such restatements of, and amendments,
supplements and other modifications shall not have a material adverse effect on

 

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any of the rights or obligations of Sellers or Guarantor under this Agreement or
the other Transaction Documents and (b) Sellers and Guarantor shall not be
responsible for payment of any costs or expenses incurred by Buyer in connection
with, and Buyer shall reimburse Sellers or Guarantor, as applicable, for the
reasonable, out-of-pocket expenses incurred by Sellers or Guarantor in
connection with, the negotiation and execution of any such restatements of, and
amendments, supplements and other modifications requested by Buyer pursuant to
this Article 17(a).  Each Seller agrees that each Participant shall be entitled
to the benefits of Article 3(j), Article 3(k), and Articles 3(p) through
(u) (subject to the requirements and limitations therein, including the
requirements under Article 3(t) (it being understood, with respect to any
Participant, that the documentation required under Article 3(t) shall be
delivered to the participating Buyer)) to the same extent as if it were an
Assignee and had acquired its interest by assignment pursuant to this
Article 17(a); provided that such Participant (A) agrees to be subject to the
provisions of Article 3(w) as if it were an Assignee under this Article 17(a),
and (B) shall not be entitled to receive any greater payment under Article 3(k),
Article 3(p), or Article 3(s), with respect to any participation, than its
participating Buyer, as applicable, would have been entitled to receive, except
to the extent such entitlement to receive a greater payment results from the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof by a Governmental Authority, in any case which occurs after
the Participant acquired the applicable participation.  Each Buyer that sells a
participation agrees, at Sellers’ request and expense, to use reasonable efforts
to cooperate with Sellers to effectuate the provisions of Article 3(w) with
respect to the applicable Participant.  So long as no Default or Event of
Default has occurred and is continuing, Buyer shall notify Sellers in writing of
an assignment to any Assignee at least thirty (30) days prior to the effective
date of such assignment; provided that Buyer shall have no liability for any
failure to provide such notice, and any such failure shall not affect the
validity or enforceability of such assignment; provided, further, that no such
notice shall be required in connection with the sale by Buyer of any interest by
way of participation.

 

(b)                                 Buyer, acting for this purpose as an agent
of Sellers, shall maintain at one of its offices a register for the recordation
of the names and addresses of Buyer, and the percentage of the rights and
obligations under this Agreement owing to, Buyer and each Transferee pursuant to
the terms hereof from time to time, it being understood that each participating
Buyer or Assignee shall maintain said register with respect to its Participants
(each such register, a “Register”).  The entries in the Register shall be
conclusive, and each of each Seller, Buyer, and each Transferee shall treat each
Person whose name is recorded in the Register pursuant to the terms hereof as a
Buyer or Transferee, as applicable, hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary.  The Register shall be
available for inspection by Sellers at any reasonable time and from time to time
upon reasonable prior notice; provided that Buyer shall have no obligation to
disclose all or any portion of the Register regarding Participants (including
the identity of any Participant or any information relating to a Participant’s
beneficial interest in this Agreement) to any Person except to the extent that
such disclosure is necessary to establish that such beneficial interest in this
Agreement or other obligation is in registered form under Section 5f.103-1(c) of
the United States Treasury Regulations.  The entries in the Register shall be
conclusive absent manifest error, and Buyer shall treat each Person whose name
is recorded in the Register as the owner of its respective interest for all
purposes of this Agreement notwithstanding any notice to the contrary.  No sale,
assignment, transfer or participation pursuant to this Article 17 shall be
effective until reflected in the Register.

 

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ARTICLE 18.

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 19.

NO WAIVERS, ETC.

 

No express or implied waiver of any Event of Default by either party shall
constitute a waiver of any other Event of Default and no exercise of any remedy
hereunder by any party shall constitute a waiver of its right to exercise any
other remedy hereunder.  No modification or waiver of any provision of this
Agreement and no consent by any party to a departure herefrom shall be effective
unless and until such shall be in writing and duly executed by both of the
parties hereto.  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 20.

USE OF EMPLOYEE PLAN ASSETS

 

(a)                                 If assets of an employee benefit plan
subject to any provision of ERISA 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 prohibited
transaction under ERISA or is otherwise exempt therefrom, and the other party
may proceed in reliance thereon but shall not be required so to proceed.

 

(b)                                 Subject to the last sentence of subparagraph
(a) of this Article 20, any such Transaction shall proceed only if the
applicable 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 or a related
Additional Advance or Future Funding Transaction pursuant to this Article 20,
the applicable Seller shall be deemed (i) to represent to Buyer that since the
date of such Seller’s latest such financial statements, there has been no
material adverse change in such Seller’s financial condition that such Seller
has not disclosed to Buyer, and (ii) to agree to provide Buyer with future
audited and unaudited statements of its financial condition as they are issued,
so long as it is a Seller in any outstanding Transaction involving a Plan Party.

 

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ARTICLE 21.

INTENT

 

(a)                                 The parties intend and recognize that each
Transaction is 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 intend
(a) 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
“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 741 of the Bankruptcy Code, (b) 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 (c) that each party (for so long as each is either a “financial
institution,” “financial participant,” “repo participant,” “master netting
participant” or other entity listed in Section 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 12 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 12 and in Sections 362(b)(6), 362 (b)(7), 362(b)(27),
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 12 hereof is a contractual right to accelerate, terminate or
liquidate this Agreement or the Transactions 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.

 

(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,
Additional Advance and Future Funding 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 hereby further agrees that
it shall not challenge the characterization of (i) this Agreement or any
Transaction, Additional Advance or Future Funding Transaction] as a “repurchase
agreement,” “securities contract” and/or “master netting agreement,” or
(ii) each party as a “repo participant” within the meaning of the Bankruptcy
Code except insofar as the type of Asset subject to the Transactions, Additional
Advances and/or Future Funding Transactions or, in the case of a “repurchase
agreement,” the term of the

 

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Transactions, Additional Advances and/or Future Funding 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,
Additional Advance and Future Funding 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)                                  It is the intention of the parties that,
for U.S. Federal, state and local income and franchise tax purposes and for
accounting purposes, each Transaction, Additional Advance and Future Funding
Transaction constitute a financing, and that each Seller be (except to the
extent that Buyer shall have exercised its remedies following an Event of
Default) the owner of the applicable Purchased Assets for such purposes.  Unless
prohibited by applicable law, each Seller and Buyer shall treat the
Transactions, Additional Advances and Future Funding Transactions as described
in the preceding sentence (including on any and all filings with any U.S.
Federal, state, or local taxing authority and agree not to take any action
inconsistent with such treatment).

 

ARTICLE 22.

DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

 

The parties acknowledge that they have been advised that:

 

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

 

(b)                                 in the case of Transactions in which one of
the parties is a government securities broker or a government securities dealer
registered with the SEC under Section 15C of the Exchange 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,

 

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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 23.

CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

 

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

 

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

 

(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 23
shall affect the right of Buyer to serve legal process in any other manner
permitted by law or affect the right of Buyer to bring any action or proceeding
against any Seller or its property in the courts of other jurisdictions.

 

(d)                                 EACH 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 24.

NO RELIANCE

 

Each of Buyer and each 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:

 

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(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

 

(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 25.

INDEMNITY

 

Each Seller hereby agrees to indemnify Buyer, each Assignee, Buyer’s Affiliates,
each Assignee’s Affiliates and each of Buyer’s, such Assignee’s and any such
Affiliate’s respective officers, directors, employees and agents (“Indemnified
Parties”) from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, taxes (including stamp, excise,
sales or other taxes that may be payable or determined to be payable with
respect to any of the Purchased Assets or Purchased Items or in connection with
any of the transactions contemplated by this Agreement and the documents
delivered in connection herewith, other than income, withholding or other taxes
imposed upon Buyer or any Indemnified Party), fees, costs, expenses (including
reasonable attorneys’ fees and disbursements) 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 or asserted
against any Indemnified Party in any way whatsoever arising out of or in
connection with, or relating to, 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 except, in each case, to the extent that
any claimed Indemnified Amount results from such Indemnified Party’s gross
negligence or willful misconduct, as determined by a court of competent
jurisdiction pursuant to a final, non-appealable judgment or arbitration
proceeding pursuant to an arbitration award.  Without limiting

 

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the generality of the foregoing, each Seller agrees to hold each Indemnified
Party harmless from and indemnify each Indemnified Party 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.  In any suit,
proceeding or action brought by any Indemnified Party in connection with any
Purchased Asset for any sum owing thereunder, or to enforce any provisions of
any Purchased Asset, each Seller will save, indemnify and hold such Indemnified
Party harmless from and against all expense (including reasonable attorneys’
fees), 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 any 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
any Seller.  Each Seller also agrees to reimburse Buyer as and when billed by
Buyer for all Buyer’s reasonable costs and out-of-pocket expenses incurred in
connection with Buyer’s due diligence reviews with respect to the Purchased
Assets (including, without limitation, those incurred pursuant to Article 26 and
Article 3 (including, without limitation, all Pre-Transaction 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 out-of-pocket
fees and disbursements of its counsel.  Each Seller hereby acknowledges that the
obligations of Sellers hereunder are a recourse obligation of each Seller.  This
Article 25 shall not apply with respect to Taxes other than any Taxes that
represent liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, fees, costs or expenses arising from any non-Tax claim.

 

ARTICLE 26.

DUE DILIGENCE

 

Each 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 each Seller agrees that upon reasonable prior
notice to Sellers, 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 any Seller, Primary
Servicer, Interim Servicer, any other servicer or sub-servicer and/or the
Custodian.  Each 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 during the term of this Agreement, which
shall be paid by Sellers to Buyer within thirty (30) days after receipt of an
invoice therefor.  Each 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, each Seller acknowledges that
Buyer may enter into Transactions with Sellers based solely upon the information
provided by Sellers to Buyer and the representations, warranties and covenants
contained herein, and that Buyer, at its option, has the right at any time

 

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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.  Each 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 Sellers.  Each Seller further agrees that Sellers shall
reimburse Buyer for any and all reasonable attorneys’ fees, and actual
out-of-pocket costs and expenses incurred by Buyer in connection with continuing
due diligence on Eligible Assets and Purchased Assets.

 

ARTICLE 27.

SERVICING

 

(a)                                 Each servicer of any Purchased Asset
(including, without limitation, the Interim Servicer and the Primary Servicer)
shall service the Purchased Assets for the benefit of Buyer and Buyer’s
successors and assigns.  Sellers shall cause each such servicer (including,
without limitation, the Interim Servicer and the Primary Servicer) to service
the Purchased Assets at Sellers’ 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, without limitation, the Interim Servicer and the Primary
Servicer) of any of the Purchased Assets shall take any action with respect to
any Purchased Asset described in Article 7(d).

 

(b)                                 Each Seller agrees that Buyer is the owner
of all Servicing Rights, servicing records, including, but not limited to, any
and all servicing agreements (including, without limitation, the Primary
Servicing Agreement, the Interim Servicing Agreement or any other servicing
and/or subservicing 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, appraisals, other closing documentation,
payment history records, and any other records relating to or evidencing the
servicing and/or subservicing of Purchased Assets (the “Servicing Records”), so
long as the Purchased Assets are subject to this Agreement.  Each Seller grants
Buyer a security interest in all servicing fees and rights relating to the
Purchased Assets and all Servicing Rights and Servicing Records to secure the
obligation of each Seller or its designee to service in conformity with this
Article 27 and any other obligation of Sellers to Buyer.  Each Seller covenants
to safeguard such Servicing Records and to deliver them promptly to Buyer or its
designee (including the Custodian) 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 Primary Servicer, Interim Servicer or any other servicer or
sub-servicer of the Purchased Assets (including, without limitation, any Seller,
in its capacity as servicer of the Purchased Assets), with or without cause, in
each case without payment of any termination fee.

 

(d)                                 No Seller shall employ sub-servicers or any
other servicer other than Primary Servicer pursuant to the Primary Servicing
Agreement or Interim Servicer pursuant to the Interim Servicing Agreement to
service the Purchased Assets without the prior written approval

 

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of Buyer, in Buyer’s sole discretion.  If the Purchased Assets are serviced by a
sub-servicer or any other servicer, Sellers shall, irrevocably assign all
rights, title and interest (if any) in the servicing agreements in the Purchased
Assets to Buyer.  Sellers shall cause all servicers other than the Interim
Servicer (including, without limitation, the Primary Servicer) and sub-servicers
engaged by any Seller to execute the Servicer Notice with Buyer acknowledging
Buyer’s ownership of the Purchased Assets and Servicing Rights and Buyer’s
security interest and agreeing that each servicer and/or sub servicer shall
immediately transfer all Income and other amounts with respect to the Purchased
Assets to Buyer in accordance with the applicable Servicing Agreement and so
long as any Purchased Asset is owned by Buyer hereunder, following notice from
Buyer to Sellers and each such servicer of an Event of Default under this
Agreement, each such servicer (including the Interim Servicer and Primary
Servicer) or sub-servicer shall take no action with regard to such Purchased
Asset other than as specifically directed by Buyer.  Sellers shall cause each
Servicing Agreement (including the Interim Servicing Agreement) to be consistent
with the terms of this Agreement and each Servicer (including the Interim
Servicer) to comply with such terms.

 

(e)                                  [Reserved.]

 

(f)                                   For the avoidance of doubt, no Seller
retains any economic rights to the servicing of the Purchased Assets.  As such,
each Seller expressly acknowledges that the Purchased Assets are sold to Buyer
on a “servicing released” basis with such servicing retained by Buyer.

 

(g)                                  Contemporaneously with the execution of
this Agreement on the Closing Date, Buyer, Sellers and Interim Servicer shall
enter into the Interim Servicing Agreement.  The Interim Servicing Agreement
shall automatically terminate on the last day of each calendar month during the
term of this Agreement commencing with the last day of the calendar month
following the month in which the Closing Date occurs, unless, in each case,
Buyer shall agree, by prior written notice to the Interim Servicer to be
delivered on or before such scheduled termination date, to extend the
termination date for the following calendar month (which notice may be set forth
in the monthly remittance report received from the Interim Servicer for such
month).  Neither Sellers nor Interim Servicer may assign its rights or
obligations under the Interim Servicing Agreement without the prior written
consent of Buyer.

 

ARTICLE 28.

MISCELLANEOUS

 

(a)                                 Each Seller hereby acknowledges and agrees
that Buyer may either securitize or participate or otherwise sell interests in
the Transactions or any Transaction (any such transaction, a “Secondary Market
Transaction”).  To the extent Buyer desires to implement any Secondary Market
Transaction, each Seller agrees to reasonably cooperate with Buyer, at Buyer’s
sole cost and expense (including, without limitation, Buyer’s attorneys’ fees
and costs and Sellers’ and Guarantor’s reasonable attorneys’ fees and costs), to
plan, structure, negotiate, implement and execute such Secondary Market
Transaction; provided that such Secondary Market Transaction has no material
adverse tax consequence on Sellers or their direct or indirect owners; provided,
further that, notwithstanding the foregoing, any such Secondary Market
Transaction with a counterparty that is not an Eligible Transferee shall require
the prior consent of Sellers, such consent not to be unreasonably withheld,
conditioned or delayed, unless a

 

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Material Default or an Event of Default has occurred and is continuing, in which
case Sellers’ consent shall not be required.

 

Additional terms and provisions governing Secondary Market Transactions under
this Article 28(a) are set forth in the Fee Letter, and are hereby incorporated
by reference.

 

Each Seller agrees to, and to cause Guarantor to, cooperate with Buyer in
connection with any such Secondary Market Transaction and to enter into such
restatements of, and amendments, supplements and other modifications to, this
Agreement in order to give effect to such Secondary Market Transaction; provided
that (a) any such restatements of, and amendments, supplements and other
modifications shall not have a material adverse effect on any of the rights or
obligations of Sellers or Guarantor under this Agreement or the other
Transaction Documents and (b) Sellers and Guarantor shall not be responsible for
payment of any costs or expenses incurred by Buyer in connection with, and,
without duplication of the amounts described in the second sentence of this
Article 28(a), Buyer shall reimburse Sellers or Guarantor, as applicable, for
the reasonable, out-of-pocket expenses incurred by Sellers or Guarantor in
connection with, the negotiation and execution of any such restatements of, and
amendments, supplements and other modifications requested by Buyer pursuant to
this Article 28(a).  Each Seller consents to disclosure by Buyer or any of its
Affiliates of the Purchased Assets, collateral therefor and each Seller’s and
its Affiliates’ and/or principals’ operating and financial statements in
connection with the servicing of any Purchased Assets and any Secondary Market
Transaction.  Notwithstanding the foregoing, Buyer shall not engage in any
Secondary Market Transactions with any Person other than an Eligible Transferee
without the prior consent of the applicable Seller, such consent not to be
unreasonably withheld, conditioned or delayed, unless a Material Default or an
Event of Default has occurred and is continuing, in which case such Seller’s
consent shall not be required.

 

(b)                                 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.

 

(c)                                  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.

 

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

 

(e)                                  Without limiting the rights and remedies of
Buyer under the Transaction Documents, Sellers shall pay 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 and consummation of, and any amendment,
supplement or modification to, the Transaction Documents and the Transactions
thereunder, whether or not such Transaction Document (or amendment thereto) or
Transaction is

 

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ultimately consummated.  Each Seller agrees to pay Buyer on demand all actual
out-of-pocket costs and expenses (including 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 Sellers 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, each Seller
agrees to pay Buyer on demand all reasonable actual out-of-pocket costs and
expenses (including reasonable expenses for legal services) 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 each Seller to Buyer under this Agreement.

 

(f)                                   In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of such
rights, each 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 any
Seller under the Transaction Documents, upon any and all monies, securities,
collateral or other property of any 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 any Seller, whether for safekeeping, custody,
pledge, transmission, collection, or otherwise, and also upon any and all
deposits (general or specified) and credits of any 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 any Seller, to offset, appropriate, apply and enforce such right of
offset against any and all items hereinabove referred to against any amounts
owing to Buyer or its Affiliates by any Seller thereof under the Transaction
Documents or any other agreement, 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.  Each 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 each Seller under the Transaction Documents or any other
agreement, 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 ANY 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 ANY SELLER, ARE HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY WAIVED BY EACH SELLER.

 

(g)                                  All information regarding the terms set
forth in any of the Transaction Documents or the Transactions shall be kept
confidential and shall not be disclosed by either party hereto to any Person
except (a) to the Affiliates of such party or its or their respective directors,
officers, employees, agents, advisors, attorneys, accountants and other
representatives who are informed of the confidential nature of such information
and instructed to keep it confidential, (b) to the extent requested by any
regulatory authority, stock exchange, government department or agency,

 

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or required by Requirements of Law, (c) to the extent required to be included in
the financial statements of either party or an Affiliate thereof, (d) to the
extent required to exercise any rights or remedies under the Transaction
Documents, Purchased Assets or Underlying Mortgaged Properties, (e) to the
extent required to consummate and administer a Transaction, (f) in the event any
party is legally compelled to make pursuant to deposition, interrogatory,
request for documents, subpoena, civil investigative demand or similar process
by court order of a court of competent jurisdiction, and (g) to any actual or
prospective Participant, Assignee or Qualified Hedge Counterparty that agrees to
comply with this Article 28(g); provided, that, except with respect to the
disclosures by Buyer under this Article 28(g), no such disclosure made with
respect to any Transaction Document shall include a copy of such Transaction
Document to the extent that a summary would suffice, but if it is necessary for
a copy of any Transaction Document to be disclosed, all pricing and other
economic terms set forth therein shall be redacted before disclosure.

 

(h)                                 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.

 

(i)                                     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.

 

(j)                                    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.

 

(k)                                 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.

 

(l)                                     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 and absolute discretion and such decision by Buyer
shall be final and conclusive.

 

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ARTICLE 29.

JOINT AND SEVERAL LIABILITY

 

(a)                                 Each Seller hereby acknowledges and agrees
that each Seller shall be jointly and severally liable to Buyer to the maximum
extent permitted by any Requirement of Law for all representations, warranties,
covenants, obligations and indemnities of all of Sellers hereunder including,
without limitation, all of the Repurchase Obligations.

 

(b)                                 Each Seller hereby acknowledges and agrees
that (i) the liability of each Seller (A) shall be absolute and unconditional
and shall remain in full force and effect (or, as applicable, be reinstated)
until all Repurchase Obligations shall have been paid in full and the expiration
of any applicable preference or similar period pursuant to any Insolvency Law,
or at law or in equity, without any claim having been made before the expiration
of such period asserting an interest in all or any part of any
payment(s) received by Buyer, and (B) until such payment has been made, shall
not be discharged, affected, modified or impaired on the occurrence from time to
time of any event, including any of the following, whether or not with notice to
or the consent of any or all of Sellers: (1) the failure to give notice to each
Seller of the occurrence of an Event of Default, (2) the release, substitution
or exchange by Buyer of any Purchased Item (including, without limitation, any
Purchased Asset) (whether with or without consideration) or the acceptance by
Buyer of any additional collateral or the availability or claimed availability
of any other collateral or source of repayment or any nonperfection or other
impairment of collateral, (3) the release of any Person primarily or secondarily
liable for all or any part of the Repurchase Obligations, whether by Buyer or in
connection with any Act of Insolvency or other insolvency proceeding affecting
any Seller or any other Person who, or any of whose property, shall at the time
in question be obligated in respect of the Repurchase Obligations or any part
thereof, (4) the sale, exchange, waiver, surrender or release of any Purchased
Item (including, without limitation, any Purchased Asset), guarantee or other
collateral by Buyer, or (5) to the extent permitted by any Requirement of Law,
any other event, occurrence, action or circumstance that would, in the absence
of this Article 29, result in the release or discharge of any or all of Sellers
from the performance or observance of any Repurchase Obligation, (ii) Buyer
shall not be required first to initiate any suit or to exhaust its remedies
against any Seller or any other Person to become liable, or against any of the
Purchased Items (including, without limitation, any Purchased Asset), in order
to enforce the Transaction Documents, and each Seller expressly agrees that,
notwithstanding the occurrence of any of the foregoing, each Seller shall be and
remain directly and primarily liable for all sums due under any of the
Transaction Documents, and (iii) on the disposition by Buyer of any of the
Purchased Items (including, without limitation, each of the Purchased Assets),
each Seller shall be and shall remain jointly and severally liable for any
deficiency.

 

(c)                                  Each Seller hereby agrees that, to the
extent another Seller shall have paid more than its proportionate share of any
payment made hereunder, the appropriate Seller shall be entitled to seek and
receive contribution from and against any other Seller which has not paid its
proportionate share of such payment; provided however, that the provisions of
this clause shall in no respect limit the obligations and liabilities of any
Seller to Buyer, and, notwithstanding any payment or payments made by any Seller
(“Paying Seller”) hereunder or any set-off or application of funds of Paying
Seller by Buyer, Paying Seller shall not be entitled to be subrogated to any of
the rights of Buyer against any other Seller or any collateral security or

 

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guarantee or right of offset held by Buyer, nor shall Paying Seller seek or be
entitled to seek any contribution or reimbursement from the other Sellers in
respect of payments made by Paying Seller hereunder, until all amounts owing to
Buyer by Sellers under the Transaction Documents are paid in full.  If any
amount shall be paid to Paying Seller on account of such subrogation rights at
any time when all such amounts shall not have been paid in full, such amount
shall be held by Paying Seller in trust for Buyer, segregated from other funds
of Paying Seller, and shall, forthwith upon receipt by Paying Seller, be turned
over to Buyer in the exact form received by Paying Seller (duly indorsed by the
paying Seller to Buyer, if required), to be applied against amounts owing to
Buyer by Sellers under the Transaction Documents, whether matured or unmatured,
in such order as Buyer may determine.

 

(d)                                 Each Seller shall remain fully obligated
under this Agreement notwithstanding that, without any reservation of rights
against any Seller and without notice to or further assent by any Seller, any
demand by Buyer for payment of any amounts owing to Buyer by any other Seller
under the Transaction Documents may be rescinded by Buyer and any the payment of
any such amounts may be continued, and the liability of any other party upon or
for any part thereof, or any collateral security or guarantee therefor or right
of offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by Buyer (including any extension or postponement of the
time for payment or performance or renewal or refinancing of any Repurchase
Obligation), and this Agreement and the other Transaction Documents and any
other documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, in accordance with
its terms, as Buyer may deem advisable from time to time, and any collateral
security, guarantee or right of offset at any time held by Buyer for the payment
of amounts owing to Buyer by Sellers under the Transaction Documents may be
sold, exchanged, waived, surrendered or released.  Buyer shall not have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for amounts owing to Buyer by Sellers under the Transaction
Documents, or any property subject thereto.

 

(e)                                  Each Seller waives any and all notice of
the creation, renewal, extension or accrual of any amounts at any time owing to
Buyer by any other Seller under the Transaction Documents and notice of or proof
of reliance by Buyer upon any Seller or acceptance of the obligations of any
Seller under this Agreement, and all such amounts, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the obligations of Sellers under
this Agreement; and all dealings between Sellers, on the one hand, and Buyer, on
the other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon the obligations of Sellers under this Agreement. 
Each Seller waives diligence, presentment, protest, demand for payment and
notice of default or nonpayment to or upon any Seller with respect to any
amounts at any time owing to Buyer by any Seller under the Transaction
Documents.  Each Seller understands and agrees that it shall continue to be
liable under this Agreement without regard to (i) the validity, regularity or
enforceability of any other provision of this Agreement or any other Transaction
Document, any amounts at any time owing to Buyer by any Seller under the
Transaction Documents, or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
Buyer, (ii) any defense, set-off or counterclaim (other than a defense of
payment or performance) which may at any time be

 

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available to or be asserted by any Seller against Buyer, or (iii) any other
circumstance whatsoever (with or without notice to or knowledge of Sellers)
which constitutes, or might be construed to constitute, an equitable or legal
discharge of Sellers for any amounts owing to Buyer by Sellers under the
Transaction Documents, or of Sellers under this Agreement, in bankruptcy or in
any other instance.  When pursuing its rights and remedies under this Agreement
or under any of the other Transaction Documents against any Seller or any of the
Purchased Items (including, without limitation, any or all of the Purchased
Assets), when making any demand hereunder against any Seller, Buyer may, but
shall be under no obligation to, make a similar demand on any other Seller, or
otherwise pursue such rights and remedies as it may have against any Seller or
any other Person or against any collateral security or guarantee related thereto
or any right of offset with respect thereto, and any failure by Buyer to make
any such demand, file suit or otherwise pursue such other rights or remedies or
to collect any payments from any Seller or any such other Person or to realize
upon any such collateral security or guarantee or to exercise any such right of
offset, or any release of any Seller or any such other Person or any such
collateral security, guarantee or right of offset, shall not relieve any Seller
of any liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of Buyer
against any Seller.  As used herein, the term “demand” shall include the
commencement and continuation of any legal proceedings.

 

(f)                                   The Repurchase Obligations are full
recourse obligations to each Seller, and each Seller hereby forever waives,
demises, acquits and discharges any defense to the contrary, and shall at no
time assert or allege any defense, to the contrary.

 

(g)                                  Anything herein or in any other Transaction
Document to the contrary notwithstanding, the maximum liability of any Seller
hereunder in respect of the liabilities of the other Sellers under this
Agreement and the other Transaction Documents shall in no event exceed the
amount which can be guaranteed by each Seller under applicable federal and state
laws relating to the insolvency of debtors.

 

[REMAINDER OF PAGE LEFT BLANK]

 

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

 

 

 

BUYER:

 

 

 

 

 

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a national banking association

 

 

 

 

 

By:

/s/ Thomas N. Cassino

 

 

Name:

Thomas N. Cassino

 

 

Title:

Executive Director

 

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

 

 

SELLERS:

 

 

 

 

 

STARWOOD PROPERTY MORTGAGE SUB-14, L.L.C., a Delaware limited liability company

 

 

 

 

 

By:

/s/ Andrew J. Sossen

 

 

Name:

Andrew J. Sossen

 

 

Title:

Authorized Signatory

 

 

 

 

 

 

 

STARWOOD PROPERTY MORTGAGE SUB-14-A, L.L.C., a Delaware limited liability
company

 

 

 

 

 

By:

/s/ Andrew J. Sossen

 

 

Name:

Andrew J. Sossen

 

 

Title:

Authorized Signatory

 

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

 

ANNEXES, EXHIBITS AND SCHEDULES

 

ANNEX I

Names and Addresses for Communications between Parties

 

 

EXHIBIT I

Form of Confirmation

 

 

EXHIBIT II

Authorized Representatives of Sellers

 

 

EXHIBIT III-A

Monthly Reporting Package

 

 

EXHIBIT III-B

Quarterly Reporting Package

 

 

EXHIBIT III-C

Annual Reporting Package

 

 

EXHIBIT IV

Form of Custodial Delivery Certificate

 

 

EXHIBIT V

Form of Power of Attorney

 

 

EXHIBIT VI

Representations and Warranties Regarding Individual Purchased Assets

 

 

EXHIBIT VII

Asset Information

 

 

EXHIBIT VIII

Purchase and Additional Advance Procedures

 

 

EXHIBIT IX

Form of Bailee Letter

 

 

EXHIBIT X

Form of Margin Deficit Notice

 

 

EXHIBIT XI

Form of U.S. Tax Compliance Certificates

 

 

EXHIBIT XII

UCC Filing Jurisdictions

 

 

EXHIBIT XIII

[Reserved.]

 

 

EXHIBIT XIV

Form of Servicer Notice

 

 

EXHIBIT XV

Form of Release Letter

 

 

EXHIBIT XVI

Form of Covenant Compliance Certificate

 

 

EXHIBIT XVII

Form of Re-direction Letter

 

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

 

ANNEX I

 

NAMES AND ADDRESSES FOR COMMUNICATIONS BETWEEN PARTIES

 

Buyer:

 

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

383 Madison Avenue

New York, New York 10179

Attention:                                         Ms. Nancy S. Alto

Telephone:                                   (212) 834-3038

Telecopy:                                          (917) 546-2564

 

With copies to:

 

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

383 Madison Avenue

New York, New York 10179

Attention:                                         Thomas Nicholas Cassino

Telephone:                                   (212) 834-5158

Telecopy:                                          (212) 834-6029

 

and

 

Cadwalader Wickersham & Taft LLP

227 West Trade Street

Charlotte, North Carolina 28202

Attention:                                         Stuart N. Goldstein, Esq.

Telephone:                                   (704) 348-5258

Telecopy:                                          (704) 348-5200

 

Sellers:

 

STARWOOD PROPERTY MORTGAGE SUB-14, L.L.C.

STARWOOD PROPERTY MORTGAGE SUB-14-A, L.L.C.

c/o Starwood Property Trust, Inc.

591 West Putnam Avenue

Greenwich, Connecticut 06830

Attention: General Counsel

Telephone:  (203) 422-8191

Facsimile: (203) 422-8192

Email: asossen@starwood.com

 

With a copy to:

 

Sidley Austin LLP

787 Seventh Ave.

New York, NY 10019

 

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

 

Telephone: (212) 839-7352

Facsimile: (212) 839-5599

Attention: Robert L. Boyd

Email: rboyd@sidley.com

 

2

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

 

EXHIBIT I

 

CONFIRMATION STATEMENT

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

 

Ladies and Gentlemen:

 

Seller is pleased to deliver our written CONFIRMATION of our agreement to enter
into the Transaction pursuant to which JPMorgan Chase Bank, National Association
shall purchase from us the Purchased Assets identified on the attached
Schedule 1 pursuant to the Uncommitted Master Repurchase Agreement, dated as of
December 10, 2015 (the “Agreement”), between JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION (“Buyer”) and STARWOOD PROPERTY MORTGAGE SUB-14, L.L.C. [(“Seller”)]
and STARWOOD PROPERTY MORTGAGE SUB-14-A, L.L.C. [(“Seller”)] on the following
terms.  Capitalized terms used herein without definition have the meanings given
in the Agreement.

 

Purchase Date:

[    ] [  ], 201[  ]

Purchased Assets:

[Name]: As identified on attached Schedule 1

Aggregate Principal Amount of Purchased Assets:

$[    ]

Repurchase Date:

 

Purchase Price:
Maximum Purchase Price:

$[    ]

$[    ]

Market Value(1):

$[    ]

Pricing Rate:

one month LIBOR plus       %

Requested Advance Rate:
Maximum Advance Rate:

 

Existing Mezzanine Debt:

[Yes/No]

Total Future Funding Obligations of Seller:

Future Funding Amount:

 

Governing Agreements:

$[    ]

$[    ] [the funding of which by Buyer shall be subject to the terms and
conditions of Article 3(c) of the Agreement.]
As identified on attached Schedule 1

Type of Funding:

[Table/Non-table]

Wiring Instructions:

 

Primary Servicer:

 

 

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

(1)  As of the Purchase Date only.

 

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

 

Name and address for communications:

Buyer:

JPMorgan Chase Bank, National Association

383 Madison Avenue

New York, New York 10179

Attention:                 Ms. Nancy S. Alto

Telephone:           (212) 834-3038

Telecopy:                  (917) 546-2564

 

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

 

 

With a copy to:

JPMorgan Chase Bank, National Association

383 Madison Avenue

New York, New York 10179

 

 

Attention:

Mr. Thomas Nicholas Cassino

 

 

Telephone:

(212) 834-5158

 

 

Telecopy:

(212) 834-6029

 

 

 

 

 

Seller:

[STARWOOD PROPERTY MORTGAGE SUB-14, L.L.C.]
[STARWOOD PROPERTY MORTGAGE SUB-14-A, L.L.C.]

 

 

c/o Starwood Property Trust, Inc.

 

 

591 West Putnam Avenue

 

 

Greenwich, Connecticut

 

 

Attention:

Telephone:

Telecopy:

General Counsel

(203) 422-8191

(203) 422-8192

 

 

 

 

 

With copies to:

Sidley Austin LLP

787 Seventh Avenue

New York, New York

 

 

Attention:

Robert L. Boyd

 

 

Telephone:

(212) 839-7352

 

 

Telecopy:

(212) 839-5599

 

 

 

 

 

 

[STARWOOD PROPERTY MORTGAGE SUB-14, L.L.C.]

 

 

 

 

[STARWOOD PROPERTY MORTGAGE SUB-14-A, L.L.C.]

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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

 

AGREED AND ACKNOWLEDGED:

 

 

 

 

 

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

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

 

Schedule 1 to Confirmation Statement

 

Purchased Assets:

 

Aggregate Principal Amount:

 

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

 

EXHIBIT II

 

AUTHORIZED REPRESENTATIVES OF SELLERS

 

Name

 

Specimen Signature

 

 

 

 

 

 

 

 

 

 

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

 

EXHIBIT III-A

 

MONTHLY REPORTING PACKAGE

 

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

 

·                                          To the extent required to be
delivered monthly in accordance with the related Purchased Asset Documents, any
and all financial statements, rent rolls or other material information received
from the borrowers related to each Purchased Asset.  To the extent that any
Seller is not entitled pursuant to the related Purchased Asset Documents to
obtain such financial statements, rent rolls and other material information from
the borrowers on a monthly basis, Sellers shall provide such information to
Buyer on a quarterly basis.

 

·                                          A remittance report containing
servicing information, including without limitation, the amount of each periodic
payment due, the amount of each periodic payment received, the date of receipt,
the date due, and whether, to Seller’s Knowledge, 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.

 

·                                          A listing of all Purchased Assets
reflecting the payment status of each Purchased Asset and any material changes
in the financial or other condition of each Purchased Asset.

 

·                                          A listing of any existing Defaults to
the extent Seller has Knowledge thereof.

 

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

 

EXHIBIT III-B

 

QUARTERLY REPORTING PACKAGE

 

The Quarterly Reporting Package shall include 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 Exchange Act, or similar state securities laws,
presented in accordance with 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 quarter and statement of net assets as of the end of such quarter.

 

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

 

EXHIBIT III-C

 

ANNUAL REPORTING PACKAGE

 

The Annual Reporting Package shall include 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 and
accompanied by an unqualified report of the nationally recognized independent
certified public accounting firm that prepared them or, if such financial
statements being delivered have been filed with the SEC pursuant to the
requirements of the Exchange Act, or similar state securities laws, presented in
accordance with 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 quarter and
statement of net assets as of the end of such quarter.

 

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

 

EXHIBIT IV

 

FORM OF CUSTODIAL DELIVERY CERTIFICATE

 

On this [   ] of [    ], 201[  ], [STARWOOD PROPERTY MORTGAGE SUB-14, L.L.C.]
[STARWOOD PROPERTY MORTGAGE SUB-14-A, L.L.C.], a Delaware limited liability
company (“Seller”) under that certain Uncommitted Master Repurchase Agreement,
dated as of December 10, 2015 (the “Repurchase Agreement”) between JPMORGAN
CHASE BANK, NATIONAL ASSOCIATION (“Buyer”), STARWOOD PROPERTY MORTGAGE SUB-14,
L.L.C. and STARWOOD PROPERTY MORTGAGE SUB-14-A, L.L.C., does hereby deliver to
Wells Fargo Bank, National Association (“Custodian”), as custodian under that
certain Custodial Agreement, dated as of December 10, 2015 (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, the Custodian shall review the Purchased Asset Files
to ascertain delivery of the documents listed in Section 3 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.

 

 

 

[STARWOOD PROPERTY MORTGAGE SUB-14, L.L.C.]

 

 

 

 

 

[STARWOOD PROPERTY MORTGAGE SUB-14-A, L.L.C.]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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

 

Purchased Asset Schedule to Custodial Delivery

 

Purchased Assets

 

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

 

EXHIBIT V

 

FORM OF POWER OF ATTORNEY

 

Know All Men by These Presents, that [STARWOOD PROPERTY MORTGAGE SUB-14, L.L.C.]
[STARWOOD PROPERTY MORTGAGE SUB-14-A, L.L.C.], a Delaware limited liability
company (“Seller”), does hereby appoint JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION (“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 the
endorsements of the Purchased Assets, including without limitation the Mortgage
Notes, Assignments of Mortgages, Mezzanine Notes, Participation Certificates and
assignments of Participation Interests and any transfer documents related
thereto, (ii) the recordation of the Assignments of Mortgages, (iii) the
preparation and filing, in form and substance satisfactory to Buyer, of such
financing statements, continuation statements, and other uniform commercial code
forms, as Buyer may from time to time, reasonably consider necessary to create,
perfect, and preserve Buyer’s security interest in the Purchased Assets and
(iv) the enforcement of Seller’s rights under the Purchased Assets purchased by
Buyer pursuant to the Uncommitted Master Repurchase Agreement, dated as of
December 10, 2015 (as amended, restated, supplemented or otherwise modified and
in effect from time to time, the “Repurchase Agreement”), between Buyer,
Starwood Property Mortgage Sub-14, L.L.C. and Starwood Property Mortgage
Sub-14-A, L.L.C., and to take such other steps as may be necessary or desirable
to enforce Buyer’s rights against such Purchased Assets, the related Purchased
Asset Files and the Servicing Records to the extent that Seller is permitted by
law to act through an agent; provided, however that Buyer shall not exercise any
of its rights under this Power of Attorney unless and until an Event of Default
has occurred and is continuing.

 

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 POWER OF ATTORNEY IS COUPLED WITH AN INTEREST AND 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 tenth (10th) day of December, 2015.

 

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[SIGNATURES ON THE FOLLOWING PAGE]

 

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[STARWOOD PROPERTY MORTGAGE SUB-14, L.L.C.]

 

 

 

 

 

[STARWOOD PROPERTY MORTGAGE SUB-14-A, L.L.C.]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

3

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EXHIBIT VI

 

REPRESENTATIONS AND WARRANTIES

REGARDING EACH INDIVIDUAL PURCHASED ASSET THAT IS A

SENIOR MORTGAGE LOAN

 

1.                                      As applicable, each Purchased Asset is
either a whole loan and not a participation interest in a whole loan or an
A-note interest in a whole loan.  The sale of the Purchased Assets to Buyer or
its designee does not require Seller to obtain any governmental or regulatory
approval or consent that has not been obtained.  It being understood that
B-notes secured by the same Mortgage as a Senior Mortgage Loan are not
subordinate mortgages or junior liens, there are no subordinate mortgages or
junior liens encumbering the related Underlying Mortgaged Property. Seller has
no Knowledge of any mezzanine debt related to the Underlying Mortgaged Property
and secured directly by the ownership interests in the Mortgagor.

 

2.                                      No Purchased Asset is 30 days or more
delinquent in payment of principal and interest (without giving effect to any
applicable grace period) and no Purchased Asset has been 30 days or more
(without giving effect to any applicable grace period in the related Mortgage
Note) past due.

 

3.                                      Except with respect to the ARD Loans,
which provide that the rate at which interest accrues thereon increases after
the Anticipated Repayment Date, the Purchased Assets (exclusive of any default
interest, late charges or prepayment premiums) are fixed rate mortgage loans or
floating rate mortgage loans with terms to maturity, at origination or as of the
most recent modification, as set forth in the Purchased Asset Schedule.

 

4.                                      The information pertaining to each
Purchased Asset set forth on the Purchased Asset Schedule is true and correct in
all material respects as of the Purchase Date.  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 except as such amendment, modification, supplement or restatement
has been delivered to Buyer prior to the Purchase Date and, in the case of any
Significant Modification occurring on or after the related Purchase Date, with
respect to which Buyer has provided prior written consent.

 

5.                                      At the time of the assignment of the
Purchased Assets to Buyer, Seller had good and marketable title to and was the
sole owner and holder of, each Purchased Asset, free and clear of any pledge,
lien, encumbrance or security interest and such assignment validly and
effectively transfers and conveys all legal and beneficial ownership of the
Purchased Assets to Buyer free and clear of any pledge, lien, charge,
encumbrance, participation or security interest, any other ownership interests
and other interests on, in or to such Senior Mortgage Loan.  Seller has full
right and authority to sell, assign and transfer each Senior Mortgage Loan, and
the assignment to Buyer constitutes a legal, valid and binding assignment of
such Senior Mortgage Loan free and clear of any and all liens, pledges,

 

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charges or security interests of any nature encumbering such Senior Mortgage
Loan subject to the rights and obligations of Seller pursuant to the Agreement.

 

6.                                      To the extent required under applicable
law, Seller is authorized to transact and do business in the jurisdiction in
which each Underlying Mortgaged Property is located, or the failure to be so
authorized does not materially and adversely affect the enforceability of such
Senior Mortgage Loan.

 

7.                                      In respect of each Purchased Asset,
(A) the related 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 and (B) the Mortgagor is not a debtor in any bankruptcy,
receivership, conservatorship, reorganization, insolvency, moratorium or similar
proceeding.

 

8.                                      Each Purchased Asset is secured by (or
in the case of a Participation Interest, the Underlying Mortgage Loan is secured
by) a Mortgage that establishes and creates a valid and subsisting first
priority lien on the Underlying Mortgaged Property, free and clear of any liens,
claims, encumbrances, participation interests, pledges, charges or security
interests subject only to Permitted Encumbrances.  Such Mortgage, together with
any separate security agreement, UCC financing statement or similar agreement,
if any, establishes and creates a first priority security interest in favor of
Seller in all personal property owned by the Mortgagor that is used in, and is
reasonably necessary to, the operation of the Underlying Mortgaged Property and,
to the extent a security interest may be created therein and perfected by the
filing of a UCC financing statement under the Uniform Commercial Code as in
effect in the relevant jurisdiction, the proceeds arising from the Underlying
Mortgaged Property and other collateral securing such Purchased Asset, subject
only to Permitted Encumbrances.  There exists with respect to such Underlying
Mortgaged Property an assignment of leases and rents provision, either as part
of the related Mortgage or as a separate document or instrument, which
establishes and creates a first priority security interest in and to leases and
rents arising in respect of the Underlying Mortgaged Property subject only to
Permitted Encumbrances.  No person other than the related Mortgagor and the
mortgagee owns any interest in any payments due under the related leases. 
Subject to applicable Requirements of Law, such assignment of leases and rents
provision provides for the appointment of a receiver for rents or allows the
holder of the related Mortgage to enter into possession of the Underlying
Mortgaged Property to collect rent or provides for rents to be paid directly to
the holder of the related Mortgage in the event of a default beyond applicable
notice and grace periods, if any, under the related Purchased Asset Documents. 
As of the origination date, there are no mechanics’ or other similar liens or
claims that were filed for work, labor or materials affecting the Underlying
Mortgaged Property that are or may be prior or equal to the lien of the
Mortgage, except those that are insured against pursuant to the applicable Title
Policy (as defined below). As of the Purchase Date, there are no mechanics’ or
other similar liens or claims that have been filed for work, labor or materials
affecting the Underlying Mortgaged Property that are or may be prior or equal in
priority to the lien of the Mortgage, except those that are insured against
pursuant to the applicable Title Policy (as defined below).  Except with respect
to other Eligible Assets subject to Transactions under the Agreement, no
(a) Underlying Mortgaged

 

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Property secures any mortgage loan not represented on the Purchased Asset
Schedule, (b) Purchased Asset is cross-defaulted with any other mortgage loan,
other than a mortgage loan listed on the Purchased Asset Schedule, or (c)
Purchased Asset is secured by property that is not an Underlying Mortgaged
Property.

 

9.                                      The Purchased Asset Documents for each
Senior Mortgage Loan 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 by
the Seller against such franchisor, either directly or as an assignee of the
originator. The Mortgage or related security agreement for each Mortgage Loan
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.

 

10.                               The related Mortgagor under each Purchased
Asset has good and indefeasible fee simple or, with respect to those Purchased
Assets described in clause (31) hereof, leasehold title to the Underlying
Mortgaged Property comprising real estate subject to any Permitted Encumbrances.

 

11.                               Seller has received 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
Insurer (as defined below) and irrevocably obligating the Title Insurer 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
Insurer or its authorized agent) as adopted in the applicable jurisdiction (the
“Title Policy”), which was issued by a nationally recognized title insurance
company (the “Title Insurer”) qualified to do business in the jurisdiction where
the Underlying Mortgaged Property is located, covering the portion of each
Underlying Mortgaged Property comprised of real estate and insuring that the
related Mortgage is a valid first lien in the original principal amount of the
related Purchased Asset on the Mortgagor’s fee simple interest (or, if
applicable, leasehold interest) in such Underlying Mortgaged Property comprised
of real estate subject only to Permitted Encumbrances.  Such Title Policy was
issued in connection with the origination of the related Purchased Asset. No
claims have been made under such Title Policy.  Such Title Policy is in full
force and effect and all premiums thereon have been paid and will provide that
the insured includes the owner of the Purchased Asset and its successors and/or
assigns. No holder of the related Mortgage has done, by act or omission,
anything that would, and Seller has no actual Knowledge of any other
circumstance that would, 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), (i) that the
Underlying Mortgaged Property shown on the Survey is the same as the property
legally described in the Mortgage, and (i) to the extent that the Underlying
Mortgaged Property consists of two or more adjoining parcels, such parcels are
contiguous.

 

12.                               The related Assignment of Mortgage and the
related assignment of the assignment of leases and rents executed by Seller in
blank (assuming the insertion of an assignee’s

 

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name), upon recording of same in the applicable jurisdiction will constitute the
legal, valid and binding assignment of such Mortgage and the related assignment
of leases and rents from Seller to such named assignee (except as such
enforcement may be limited by anti-deficiency laws or bankruptcy, receivership,
conservatorship, reorganization, insolvency, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally, and by general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law) (collectively, the “Standard Qualifications”).
 The allonge or endorsement of the related Mortgage Note by Seller in blank
constitutes the legal, valid, binding and enforceable (except as such
enforcement may be limited by the Standard Qualifications) assignment of such
Mortgage Note, and together with such Assignment of Mortgage and the related
assignment of assignment of leases and rents, will legally and validly convey
all right, title and interest in such Purchased Asset and (except in the case of
an A-note or a Participation Interest) the Purchased Asset Documents to the
named assignee (except as such enforcement may be limited by the Standard
Qualifications).

 

13.                               The Purchased Asset Documents for each
Purchased Asset (or in the case of a Participation Interest, the Underlying
Mortgage Loan) provide that such Purchased Asset (or Underlying Mortgage Loan)
is non-recourse except that the related Mortgagor and at least one individual or
entity shall be fully liable for actual losses, liabilities, costs and damages
arising from at least the following acts of the related Mortgagor and/or its
principals: (a) (i) if any petition for bankruptcy, insolvency, dissolution or
liquidation pursuant to federal bankruptcy law, or any similar federal or state
law, shall be filed by, consented to, or acquiesced in by, the Mortgagor;
(ii) Mortgagor or guarantor shall have colluded with other creditors to cause an
involuntary bankruptcy filing with respect to the Mortgagor or (iii) transfers
of either the Underlying Mortgaged Property or equity interests in Mortgagor
made in violation of the Mortgage Loan documents; (b) (A) misapplication,
misappropriation or conversion of rents, insurance proceeds or condemnation
awards, or (B) any security deposits not delivered to lender upon foreclosure or
action in lieu thereof (except to the extent applied in accordance with leases
prior to a Mortgage Loan event of default); (c) the Mortgagor’s fraud or
intentional misrepresentation; (d) willful misconduct by the Mortgagor or
guarantor; (e) breaches of the environmental covenants in the Mortgage Loan
documents; or (f) commission of material physical waste at the Underlying
Mortgaged Property, which may, with respect to this clause (f), in certain
instances, be limited to acts or omissions of the related Mortgagor, guarantor,
property manager or their affiliates, employees or agents.

 

14.                               The Purchased Asset Documents for each
Purchased Asset contain enforceable provisions such as to 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, and there is no exemption available to the
related Mortgagor that would interfere with such right of foreclosure except
(i) any statutory right of redemption or (ii) any limitation arising under anti
deficiency laws or by bankruptcy, receivership, conservatorship, reorganization,
insolvency, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally, and by general

 

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principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law).

 

15.                               Each of the related Mortgage Notes and
Mortgages are the legal, valid and binding obligations of the related Mortgagor
named on the Purchased Asset Schedule and each of the other related Purchased
Asset Documents is the legal, valid and binding obligation of the parties
thereto (subject to any non-recourse provisions therein), enforceable in
accordance with its terms, except as such enforcement may be limited by anti
deficiency laws or bankruptcy, receivership, conservatorship, reorganization,
insolvency, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally, and by general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law), and
except that certain provisions of such Purchased Asset Documents are or may be
unenforceable in whole or in part under applicable state or federal laws, but
the inclusion of such provisions does not render any of the Purchased Asset
Documents invalid as a whole, and such Purchased Asset Documents taken as a
whole are enforceable to the extent necessary and customary for the practical
realization of the principal rights and benefits afforded thereby.

 

16.                               The terms of the Purchased Assets or the
related Purchased Asset Documents, (including, in the case of a Participation
Interest, the documents evidencing the Underlying Mortgage Loan) have not been
altered, impaired, modified or waived in any material respect, except prior to
the Purchase Date by written instrument duly submitted for recordation, to the
extent required, and as set forth in a document in the related Purchased Asset
File delivered to Buyer prior to the Purchase Date.

 

17.                               With respect to each Mortgage that 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 no
fees or expenses are or will become payable to the trustee under the deed of
trust, except in connection with a trustee’s sale after default by the Mortgagor
other than de minimis fees paid in connection with the full or partial release
of the Underlying Mortgaged Property or related security for such Purchased
Asset following payment of such Purchased Asset in full.

 

18.                               No Purchased Asset has been satisfied,
canceled, subordinated, released or rescinded, in whole or in part, and the
related Mortgagor has not been released, in whole or in part, from its
obligations under any related Purchased Asset Document except pursuant to a
document delivered to Buyer prior to the Purchase Date and, in the case of any
Significant Modification occurring on or after the related Purchase Date, with
respect to which Buyer has provided prior written consent.

 

19.                               Except with respect to the enforceability of
any provisions requiring the payment of default interest, late fees, additional
interest, prepayment premiums or yield maintenance charges, neither the
Purchased Asset nor any of the related Purchased Asset Documents is subject to
any right of rescission, set-off, abatement, diminution, valid counterclaim or
defense, including the defense of usury, including, without limitation, any
valid offset,

 

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defense, counterclaim or right based on intentional fraud by Seller in
connection with the origination of the Senior Mortgage Loan, nor will the
operation of any of the terms of any such Purchased Asset Documents, or the
exercise (in compliance with procedures permitted under applicable law) of any
right thereunder, render any Purchased Asset Documents subject to any right of
rescission, set-off, abatement, diminution, valid counterclaim or defense,
including the defense of usury (subject to anti-deficiency or one form of action
laws and to bankruptcy, receivership, conservatorship, reorganization,
insolvency, moratorium or other similar laws affecting the enforcement of
creditor’s rights generally and by general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law)),
and no such right of rescission, set-off, abatement, diminution, valid
counterclaim or defense has been asserted with respect thereto.  None of the
Purchased Asset Documents provides for a release of a portion of the Underlying
Mortgaged Property from the lien of the Mortgage except upon payment or
defeasance in full of all obligations under the Mortgage, provided that,
notwithstanding the foregoing, certain of the Purchased Assets may allow partial
release (a) upon payment or defeasance of an allocated loan amount which may be
formula based, but in no event less than 115% of the allocated loan amount, or
(b) in the event the portion of the Underlying Mortgaged Property being released
was not given any material value in connection with the underwriting or
appraisal of the related Purchased Asset.

 

20.                               There is no payment default that has existed
for more than ten (10) days, and (a) there is no other material default under
any of the related Purchased Asset Documents, giving effect to any applicable
notice and/or grace period; no such material default or breach has been waived
by Seller or on its behalf or, by Seller’s predecessors in interest with respect
to the Purchased Assets; and (b) no event has occurred that, with the passing of
time or giving of notice would constitute a material default or breach under the
related Purchased Asset Documents, which in the case of clauses (a) or (b) would
materially and adversely affect the value of the Purchased Asset or the value,
use or operation of the related Underlying Mortgaged Property.  No Purchased
Asset has been accelerated and no foreclosure or power of sale proceeding has
been initiated in respect of the related Mortgage.  Seller has not waived any
material claims against the related Mortgagor under any non-recourse exceptions
contained in the Mortgage Note.

 

21.                               The principal amount of the Purchased Asset
stated on the Purchased Asset Schedule has been fully disbursed as of the
Purchase Date (except as set forth in the Confirmation, and for certain amounts
that were fully disbursed by the mortgagee, but escrowed pursuant to the terms
of the related Purchased Asset Documents) and there are no future advances
required to be made by the mortgagee under any of the related Purchased Asset
Documents.  Seller has not, nor, have any of its agents or predecessors in
interest with respect to the Purchased Assets, in respect of such Purchased
Asset, directly or indirectly, advanced funds or induced, solicited or knowingly
received any advance of funds by a party other than the Mortgagor other than
(a) interest accruing on such Purchased Asset from the date of such disbursement
of such Purchased Asset to the date which preceded by thirty (30) days the first
payment date under the related Mortgage Note and (b) application and commitment
fees, escrow funds, points and reimbursements for fees and expenses, incurred in
connection with the origination and funding of the Purchased Asset.

 

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22.                               No Purchased Asset has capitalized interest
included in its principal balance, or provides for any shared appreciation
rights or other equity participation therein and no contingent or additional
interest contingent on cash flow or, except for ARD Loans, negative amortization
accrues or is due thereon.

 

23.                               Each Purchased Asset identified in the
Purchased Asset Schedule as an ARD Loan substantially fully amortizes over its
stated term, which term is at least 60 months after the related Anticipated
Repayment Date.  Each ARD Loan has an Anticipated Repayment Date not less than
seven years following the origination of such Purchased Asset.  If the related
Mortgagor elects not to prepay its ARD Loan in full on or prior to the
Anticipated Repayment Date pursuant to the existing terms of the Purchased Asset
or a unilateral option (as defined in Treasury Regulations under Article 1001 of
the Code) in the Purchased Asset exercisable during the term of the mortgage
loan, (i) the Purchased Asset’s interest rate will step up to an interest rate
per annum as specified in the related Purchased Asset Documents; provided,
however, that payment of such Excess Interest shall be deferred until the
principal of such ARD Loan has been paid in full; (ii) all or a substantial
portion of the Excess Cash Flow collected after the Anticipated Repayment Date
shall be applied towards the prepayment of such ARD Loan and once the principal
balance of an ARD Loan has been reduced to zero all Excess Cash Flow will be
applied to the payment of accrued Excess Interest; and (iii) if the property
manager for the Underlying Mortgaged Property can be removed by or at the
direction of the mortgagee on the basis of a debt service coverage test, the
subject debt service coverage ratio shall be calculated without taking account
of any increase in the related Mortgage Interest Rate on such Purchased Asset’s
Anticipated Repayment Date.  No ARD Loan provides that the property manager for
the Underlying Mortgaged Property can be removed by or at the direction of the
mortgagee solely because of the passage of the related Anticipated Repayment
Date.

 

24.                               Each Purchased Asset identified in the
Purchased Asset Schedule as an ARD Loan with a hard lockbox requires that
tenants at the Underlying Mortgaged Property shall (and each Purchased Asset
identified in the Purchased Asset Schedule as an ARD Loan with a springing
lockbox requires that tenants at the Underlying Mortgaged Property shall, upon
the occurrence of a specified trigger event, including, but not limited to, the
occurrence of the related Anticipated Repayment Date) make rent payments into a
lockbox controlled by the holder of the Purchased Asset and to which the holder
of the Purchased Asset has a first perfected security interest; provided
however, with respect to each ARD Loan that is secured by a multi-family
property with a hard lockbox, or with respect to each ARD Loan that is secured
by a multi-family property with a springing lockbox, upon the occurrence of a
specified trigger event, including, but not limited to, the occurrence of the
related Anticipated Repayment Date, tenants either pay rents to a lockbox
controlled by the holder of the mortgage loan or deposit rents with the property
manager who will then deposit the rents into a lockbox controlled by the holder
of the Purchased Asset.

 

25.                               The servicing and collection practices used by
Seller and each originator that is an Affiliate of Seller in respect of each
Senior Mortgage Loan and the terms of the Purchased Asset Documents evidencing
such Purchased Asset comply in all material respects with all applicable local,
state and federal laws, and regulations and Seller and

 

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each originator that is an Affiliate of Seller has complied with all material
requirements pertaining to the origination, funding and servicing of the
Purchased Assets, including but not limited to, usury and any and all other
material requirements of any federal, state or local law to the extent
non-compliance would have a Material Adverse Effect on the Purchased Asset.

 

26.                               The Underlying Mortgaged Property is, in all
material respects, 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 governing
the occupancy, use, and operation of such Underlying Mortgaged Property have
been obtained and are in full force and effect, except to the extent (a)(i) 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 (ii) 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, or
(b) no improvements encroach upon any easements except for encroachments the
removal of which would not materially and adversely affect the value or current
use of such Underlying Mortgaged Property or are insured by applicable
provisions of the Title Policy.

 

27.                               All (a) taxes, water charges, sewer rents,
assessments or other similar outstanding governmental charges and governmental
assessments that became due and owing prior to the Purchase Date in respect of
the Underlying Mortgaged Property (excluding any related personal property), and
that if left unpaid, would be, or might become, a lien on such Underlying
Mortgaged Property having priority over the related Mortgage and (b) insurance
premiums or ground rents that became due and owing prior to the Purchase Date in
respect of the Underlying Mortgaged Property (excluding any related personal
property), have been paid, or if any such items are disputed, an escrow of funds
in an amount sufficient (together with escrow payments required to be made prior
to delinquency) to cover such taxes and assessments and any late charges due in
connection therewith has been established.  As of the date of origination, the
Underlying Mortgaged Property consisted of one or more separate and complete tax
parcels.  For purposes of this representation and warranty, the items identified
herein shall not be considered due and owing until the date on which interest or
penalties would be first payable thereon.

 

28.                               None of the improvements that were included
for the purpose of determining the appraised value of the Underlying Mortgaged
Property at the time of the origination of such Purchased Asset lies outside the
boundaries and building restriction lines of such Underlying Mortgaged Property,
except to the extent that they are legally nonconforming as contemplated by the
representation in clause (38) below, and no improvements on adjoining properties
encroach upon such Underlying Mortgaged Property, with the exception in each
case of (a) immaterial encroachments that do not materially adversely

 

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affect the security intended to be provided by the related Mortgage or the use,
enjoyment, value or marketability of such Underlying Mortgaged Property or
(b) encroachments with respect to which affirmative insurance or endorsement
coverage was obtained under the related Title Policy.  With respect to each
Purchased Asset, the property legally described in the Survey, if any, obtained
for the Underlying Mortgaged Property for purposes of the origination thereof is
the same as the property legally described in the Mortgage.  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
sub-clauses (a) and (b) of the preceding sentence.

 

29.                               As of the date of the applicable engineering
report (which was performed within 12 months prior to the Purchase Date) related
to the Underlying Mortgaged Property and, as of the Purchase Date, in each case,
except as may be set forth in the applicable engineering report, the Underlying
Mortgaged Property was and is (i) in good repair, free and clear of any damage
that would materially adversely affect the value of such Underlying Mortgaged
Property as security for such Purchased Asset or the use and operation of the
Underlying Mortgaged Property as it was being used or operated as of the
origination date or (ii) escrows in an amount consistent with the standard
utilized by Seller with respect to similar loans it holds for its own account
have been established, which escrows will in all events be not less than 100% of
the estimated cost of the required repairs.  The Underlying Mortgaged Property
has not been damaged by fire, wind or other casualty or physical condition
(including, without limitation, any soil erosion or subsidence or geological
condition), which damage has not either been fully repaired or fully insured, or
for which escrows in an amount consistent with the standard utilized by Seller
with respect to loans it holds for its own account have not been established.

 

30.                               There are no proceedings pending or, to
Seller’s Knowledge, threatened, for the partial or total condemnation of the
Underlying Mortgaged Property.

 

31.                               The Purchased Assets that are identified as
being secured in whole or in part by a leasehold estate (a “Ground Lease”)
(except with respect to any Purchased Asset also secured by the related fee
interest in the Underlying Mortgaged Property), satisfy the following
conditions:

 

(i)                    such Ground Lease or a memorandum thereof has been or
will be duly recorded or submitted for recordation in a form that is acceptable
for recording in the applicable jurisdiction; such Ground Lease, or other
agreement received by the originator of the Purchased Asset from the ground
lessor, provides that the interest of the lessee thereunder may be encumbered by
the related Mortgage and does not restrict the use of the Underlying Mortgaged
Property by such lessee, its successors or assigns, in a manner that would
adversely affect the security provided by the Mortgage; as of the date of
origination of the Purchased Asset (or in the case of a Participation Interest,
the Underlying Mortgage Loan), there was no material change of record in the
terms of such Ground Lease with the

 

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exception of written instruments that are part of the related Purchased Asset
File and there has been no material change in the terms of such Ground Lease
since the recordation of the related Purchased Asset, with the exception of
written instruments that are part of the related Purchased Asset File;

 

(ii)                 such Ground Lease is not subject to any liens or
encumbrances superior to, or of equal priority with, the related Mortgage, other
than the related fee interest and Permitted Encumbrances and such Ground Lease
is, and shall remain, prior to any mortgage or other lien upon the related fee
interest unless a nondisturbance agreement is obtained from the holder of any
mortgage on the fee interest that is assignable to or for the benefit of the
related lessee and the related mortgagee;

 

(iii)              such Ground Lease provides that upon foreclosure of the
related Mortgage or assignment of the Mortgagor’s interest in such Ground Lease
in lieu thereof, the mortgagee under such Mortgage is entitled to become the
owner of such interest upon notice to, but without the consent of, the lessor
thereunder and, in the event that such mortgagee becomes the owner of such
interest, such interest is further assignable by such mortgagee and its
successors and assigns upon notice to such lessor, but without a need to obtain
the consent of such lessor;

 

(iv)             such Ground Lease is in full force and effect and no default of
tenant or ground lessor was in existence at origination, or is currently in
existence under such Ground Lease, nor at origination was, or is there any
condition that, but for the passage of time or the giving of notice, would
result in a default under the terms of such Ground Lease; either such Ground
Lease or a separate agreement contains the ground lessor’s covenant that it
shall not amend, modify, cancel or terminate such Ground Lease without the prior
written consent of the mortgagee under such Mortgage and any amendment,
modification, cancellation or termination of the Ground Lease without the prior
written consent of the related mortgagee, or its successors or assigns is not
binding on such mortgagee, or its successor or assigns;

 

(v)                such Ground Lease or other agreement requires that the lessor
thereunder will supply an estoppel and give written notice of any material
default by the lessee to the mortgagee under the related Mortgage, provided that
such mortgagee has provided the lessor with notice of its lien in accordance
with the provisions of such Ground Lease; and such Ground Lease or other
agreement provides that no such notice of default and no termination of the
Ground Lease in connection with such notice of default shall be effective
against such mortgagee unless such notice of default has been given to such
mortgagee and any related Ground Lease contains the ground lessor’s covenant
that it will give to the related mortgagee, or its successors or assigns, any
notices it sends to the Mortgagor;

 

(vi)             either (i) the related ground lessor has subordinated its
interest in the Underlying Mortgaged Property to the interest of the holder of
the Purchased Asset (or in the case of a Participation Interest, the Underlying
Mortgage Loan) or (ii) such Ground Lease or other agreement provides that
(A) the mortgagee under the

 

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related Mortgage is permitted a reasonable opportunity to cure any default under
such Ground Lease that is curable, including reasonable time to gain possession
of the interest of the lessee under the Ground Lease, after the receipt of
notice of any such default before the lessor thereunder may terminate such
Ground Lease; (B) in the case of any such default that is not curable by such
mortgagee, or in the event of the bankruptcy or insolvency of the lessee under
such Ground Lease, such mortgagee has the right, following termination of the
existing Ground Lease or rejection thereof by a bankruptcy trustee or similar
party, to enter into a new ground lease with the lessor on substantially the
same terms as the existing Ground Lease; and (C) all rights of the Mortgagor
under such Ground Lease may be exercised by or on behalf of such mortgagee under
the related Mortgage upon foreclosure or assignment in lieu of foreclosure;

 

(vii)          such Ground Lease has an original term (or an original term plus
one or more optional renewal terms that under all circumstances may be
exercised, and will be enforceable, by the mortgagee or its assignee) that
extends not less than 20 years beyond the stated maturity date of the related
Purchased Asset (or in the case of a Participation Interest, of the Underlying
Mortgage Loan);

 

(viii)       under the terms of such Ground Lease 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 in
respect of a total or substantially total loss or taking or the portion of the
condemnation award allocable to the ground lessee’s interest (other than in
respect of a total or substantially total loss or taking as addressed in subpart
(IX))) will be applied either to the repair or restoration of all or part of the
Underlying Mortgaged Property, with the mortgagee under such Mortgage or a
financially responsible institution acting as trustee appointed by it, or
consented to by it, or by the lessor having the right to hold and disburse such
proceeds as the repair or restoration progresses (except in such cases where a
provision entitling another party to hold and disburse such proceeds would not
be viewed as commercially unreasonable by a prudent institutional lender), or to
the payment in whole or in part of the outstanding principal balance of such
Purchased Asset together with any accrued and unpaid interest thereon;

 

(ix)             in the case of a total or substantial 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 Underlying Mortgaged Property to
the extent not applied to restoration, will be applied first to the payment of
the outstanding principal balance of the Senior Mortgage Loan, together with any
accrued interest;

 

(x)                Seller has not received any written notice of default under
or notice of termination of such ground lease; and

 

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(xi)             such Ground Lease does not impose any restrictions on
subletting that would be viewed as commercially unreasonable by Seller; such
Ground Lease contains a covenant (or applicable laws provide) that the lessor
thereunder is not permitted, in the absence of an uncured default, to disturb
the possession, interest or quiet enjoyment of any lessee in the relevant
portion of such Underlying Mortgaged Property subject to such Ground Lease for
any reason, or in any manner, which would materially adversely affect the
security provided by the related Mortgage.

 

32.                               An Environmental Site Assessment relating to
each 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.

 

33.                               Except as may be set forth in the
Environmental Site Assessment, 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 applicable federal, state or
local environmental laws, rules and regulations (collectively, “Environmental
Laws”) and such ESA (i) did not reveal any known circumstance or condition that
rendered the Underlying Mortgaged Property at the date of the ESA in material
noncompliance with applicable Environmental Laws or the existence of recognized
environmental conditions (as such term is defined in ASTM E1527-05 or its
successor, hereinafter “Environmental Condition”) or the need for further
investigation, or (ii) if any material noncompliance with Environmental Laws or
the existence of an Environmental Condition or need for further investigation
was indicated in any such ESA, other than with respect to an Underlying
Mortgaged Property (A) for which environmental insurance is maintained, or
(B) 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 110% 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

 

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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.

 

34.                               Each recordable Purchased Asset Document or
related assignment thereof delivered by Seller to Buyer in connection with such
Purchased Asset is in form and substance acceptable for recording in the
applicable jurisdiction.

 

35.                               With respect to any material adverse
environmental condition set forth in the Environmental Site Assessment, there
exists either (i) environmental insurance with respect to such Underlying
Mortgaged Property or (ii) an amount in an escrow account pledged as security
for such Purchased Asset under the relevant Purchased Asset Documents equal to
no less than 110% of the amount estimated in such Environmental Site Assessment
as sufficient to pay the cost of such remediation or other action in accordance
with such Environmental Site Assessment. Except for any hazardous materials
being handled in accordance with applicable Environmental Laws, (i) the related
Underlying Mortgaged Property is not being used for the treatment or disposal of
hazardous materials; (ii) no hazardous materials are being used or stored or
generated for off-site disposal or otherwise present at such Underlying
Mortgaged Property other than hazardous materials of such types and in such
quantities as are customarily used or stored or generated for off-site disposal
or otherwise present in or at properties of the relevant property type; and
(iii) such Underlying Mortgaged Property is not subject to any environmental
hazard (including, without limitation, any situation involving hazardous
materials) that under the Environmental Laws would have to be eliminated before
the sale of, or that could otherwise reasonably be expected to adversely affect
in more than a de minimis manner the value or marketability of, such Underlying
Mortgaged Property.

 

36.                               The related Mortgage or other Purchased Asset
Documents contain covenants on the part of the related Mortgagor requiring its
compliance with any present or future federal, state and local Environmental
Laws and regulations in connection with the Underlying Mortgaged Property.  The
related Mortgagor (or an affiliate thereof) has agreed to indemnify, defend and
hold Seller, and its successors and assigns (or in the case of a Participation
Interest, the lender of record), harmless from and against any and all losses,
liabilities, damages, penalties, fines, expenses and claims of whatever kind or
nature (including attorneys’ fees and costs) imposed upon or incurred by or
asserted against any such party resulting from a breach of the environmental
representations, warranties or covenants given by the related Mortgagor in
connection with such Purchased Asset.

 

37.                               For each of the Purchased Assets that is
covered by environmental insurance, each environmental insurance policy is in an
amount equal to 125% of the outstanding principal balance of the related
Purchased Asset and has a term ending no sooner than the

 

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date that is five years after the maturity date (or, in the case of an ARD Loan,
the final maturity date) of the related Purchased Asset.  All environmental
assessments or updates that were in the possession of Seller and that relate to
an Underlying Mortgaged Property as being insured by an environmental insurance
policy have been delivered to or disclosed to the environmental insurance
carrier issuing such policy prior to the issuance of such policy.

 

38.                               As of the date of origination of the related
Purchased Asset, and, as of the Purchase Date, the Underlying Mortgaged Property
is covered by insurance policies providing the coverage described below and the
Purchased Asset Documents permit the mortgagee to require the coverage described
below.  All premiums with respect to the insurance policies insuring each
Underlying Mortgaged Property have been paid in a timely manner or escrowed to
the extent required by the Purchased Asset Documents, and Seller has not
received any notice of cancellation or termination.  The relevant Purchased
Asset File contains the insurance policy required for such Purchased Asset or a
certificate of insurance for such insurance policy.  Each Mortgage requires that
the Underlying Mortgaged Property and all improvements thereon be covered by
insurance policies providing (a) coverage in the amount of the lesser of full
replacement cost of such Underlying Mortgaged Property and the outstanding
principal balance of the related Purchased Asset (subject to customary
deductibles) for fire and extended perils included within the classification
“All Risk of Physical Loss” in an amount sufficient to prevent the Mortgagor
from being deemed a co-insurer and to provide coverage on a full replacement
cost basis of such Underlying Mortgaged Property (in some cases exclusive of
foundations and footings) with an agreed amount endorsement to avoid application
of any coinsurance provision; such policies contain a standard mortgagee clause
naming mortgagee and its successor in interest as additional insureds or loss
payee, as applicable; (b) business interruption or rental loss insurance in an
amount at least equal to (i) 12 months of operations, with an extended indemnity
for twelve (12) additional months after the Underlying Mortgaged Property is
repaired or rebuilt as a result of casualty or condemnation or (ii) in some
cases all rents and other amounts customarily insured under this type of
insurance of the Underlying Mortgaged Property; (c) flood insurance (if any
portion of the improvements on the Underlying Mortgaged Property is located in
an area identified by the Federal Emergency Management Agency (“FEMA”), with
respect to certain Purchased Assets and the Secretary of Housing and Urban
Development with respect to other mortgage loans, as having special flood
hazards) in an amount not less than amounts prescribed by FEMA; (d) workers’
compensation, if required by law; (e) comprehensive general liability insurance
in an amount equal to not less than $1,000,000; all such insurance policies
contain clauses providing they are not terminable and may not be terminated
without thirty (30) days prior written notice to the mortgagee (except where
applicable law requires a shorter period or except for nonpayment of premiums,
in which case not less than ten (10) days prior written notice to the mortgagee
is required).  In addition, each Mortgage permits the related mortgagee to make
premium payments to prevent the cancellation thereof and shall entitle such
mortgagee to reimbursement therefor.  Any insurance proceeds in respect of a
casualty, loss or taking will be applied either to the repair or restoration of
all or part of the Underlying Mortgaged Property or the payment of the
outstanding principal balance of the related Purchased Asset together with any
accrued interest thereon.  The Underlying Mortgaged Property is insured by an

 

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insurance policy, issued by an insurer meeting the requirements of such
Purchased Asset (or in the case of a Participation Interest, of the Underlying
Mortgage Loan) and having a claims-paying or financial strength rating of at
least A:X from A.M. Best Company or “A” (or the equivalent) from S&P, Fitch or
Moody’s.  An architectural or engineering consultant has performed an analysis
of each of the Mortgaged Properties located in seismic zones 3 or 4 in order to
evaluate the structural and seismic condition of such property, for the sole
purpose of assessing the probable maximum loss (“PML”) for the Underlying
Mortgaged Property in the event of an earthquake.  In such instance, the PML was
based on a return period of not less than 100 years, an exposure period of 50
years and a 10% probability of exceedence.  If the resulting report concluded
that the PML 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:X by A.M. Best Company or “A” (or the
equivalent) from S&P, Fitch or Moody’s.  The insurer issuing each of the
foregoing insurance policies is qualified to write insurance in the jurisdiction
where the Underlying Mortgaged Property is located.

 

39.                               All escrow and reserve amounts required to be
deposited by each Mortgagor at origination under the related Purchased Asset
Documents have been deposited at origination.

 

40.                               To Seller’s Knowledge, as of the date of
origination of the related Purchased Asset there were and, as of the Purchase
Date, there are, no actions, suits, arbitrations or governmental investigations
or proceedings by or before any court or other Governmental Authority or agency
now pending against or affecting the Mortgagor or guarantor under any Purchased
Asset or any of the Mortgaged Properties that, if determined against such
Mortgagor or such Underlying Mortgaged Property, would materially and adversely
affect the value of such Underlying Mortgaged Property, the security intended to
be provided with respect to the related Purchased Asset, the ability of such
Mortgagor and/or the current use or operation of such Underlying Mortgaged
Property to generate net cash flow to pay principal, interest and other amounts
due under the related Purchased Asset, title to the Underlying Mortgaged
Property, or the validity or enforceability of the Mortgage.

 

41.                               Each Purchased Asset complied at origination,
in all material respects, with all of the terms, conditions and requirements of
Seller’s and each originator’s underwriting standards and all laws and
regulations applicable to such Purchased Asset and since origination, the
Purchased Asset has been serviced in all material respects in a legal manner in
conformance with Seller’s and each such originator’s servicing standards.

 

42.                               The originator of the Purchased Asset or
Seller has inspected or caused to be inspected each Underlying Mortgaged
Property within the 12 months prior to the Purchase Date.

 

43.                               The Purchased Asset Documents require the
Mortgagor to provide the holder of the Purchased Asset with quarterly and annual
operating statements, financial statements and except for Purchased Assets for
which the related Underlying Mortgaged Property is leased to a single tenant,
quarterly rent rolls.

 

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44.                               All escrow deposits and payments required by
the terms of each Purchased Asset are in the possession, or under the control of
Seller (or in the case of a Participation Interest, the servicer of the
Underlying Mortgage Loan), and all amounts required to be deposited by the
applicable Mortgagor under the related Purchased Asset Documents have been
deposited, and there are no deficiencies with regard thereto (subject to any
applicable notice and cure period).  All of Seller’s interest in such escrows
and deposits will be conveyed by Seller to Buyer hereunder.

 

45.                               Each Mortgagor with respect to a Purchased
Asset is an entity whose organizational documents or related Purchased Asset
Documents provide that it is, and at least so long as the Purchased Asset is
outstanding will continue to be, a Single Purpose Entity.  Both the Purchased
Asset Documents and the organizational documents of the Mortgagor with respect
to each Senior Mortgage Loan with a principal balance as of the Purchase Date in
excess of $5,000,000 provide that the Mortgagor is a Single Purpose Entity, and
each Senior Mortgage Loan with a principal balance as of the Purchase Date of
$25,000,000 or more has a counsel’s opinion regarding non-consolidation of the
Mortgagor.  For this purpose, “Single Purpose Entity” shall mean a Person, other
than an individual, whose organizational documents provide that it shall engage
solely in the business of owning and operating the Underlying Mortgaged Property
and that does not engage in any business unrelated to such property and the
financing thereof, does not have any assets other than those related to its
interest in the Underlying Mortgaged Property or the financing thereof or any
indebtedness other than as permitted by the related Mortgage or other Purchased
Asset Documents, and the organizational documents of which require that it have
its own separate books and records and its own accounts, in each case that are
separate and apart from the books and records and accounts of any other Person,
except as permitted by the related Mortgage or other Purchased Asset Documents,
and that it holds itself out as a legal entity, separate and apart from any
other person or entity.

 

46.                               The gross proceeds of each Purchased Asset to
the related Mortgagor at origination did not exceed the non-contingent principal
amount of the Purchased Asset and either: (a) such Purchased Asset is secured by
an interest in real property having a fair market value (i) at the date the
Purchased Asset was originated at least equal to 80% of the original principal
balance of the Purchased Asset or (ii) at the Purchase Date at least equal to
80% of the original principal balance of the Purchased Asset on such date;
provided that for purposes hereof, the fair market value of the real property
interest must first be reduced by (A) the amount of any lien on the real
property interest that is senior to the Purchased Asset and (B) a proportionate
amount of any lien that is in parity with the Purchased Asset (unless such other
lien secures a Purchased Asset that is cross-collateralized with such Purchased
Asset, in which event the computation described in sub-clauses (a)(i) and
(a)(ii) of this clause (46) shall be made on a pro rata basis in accordance with
the fair market values of the Mortgaged Properties securing such
cross-collateralized Purchased Asset); or (b) substantially all the proceeds of
such Purchased Asset were used to acquire, improve or protect the real property
that 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 Article 1.860G-2(a)(1)(ii)).  If the Purchased Asset was
“significantly modified” prior to the Closing Date so as to result in a taxable
exchange under Article 1001 of the Code, it either (x) was modified as a result
of the default or

 

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reasonably foreseeable default of such Purchased Asset or (y) satisfies the
provisions of either sub-clause (a)(i) above (substituting the date on the last
such modification for the date the Purchased Asset was originated) or sub-clause
(a)(ii), including the proviso thereto.  The Purchased Asset is a “qualified
mortgage” within the meaning of Article 860G(a)(3) of the Code (but without
regard to the rule in Treasury Regulations Article 1.860G-2(f)(2)).  Any
prepayment premium and yield maintenance charges applicable to the Purchased
Asset constitute “customary prepayment penalties” within the meaning of Treasury
Regulations Article 1.860G-1(b)(2).

 

47.                               Each of the Purchased Assets contain a “due on
sale” clause, which provides for the acceleration of the payment of the unpaid
principal balance of the Purchased Asset (or in the case of a Participation
Interest, of the related mortgage loan) if, without the prior written consent of
the holder of the Purchased Asset (or in the case of an A-note or a
Participation Interest, of the holder of title to the Underlying Mortgage Loan),
the property subject to the Mortgage, or any controlling interest therein, is
directly or indirectly transferred or sold (except that it may provide for
transfers by devise, descent or operation of law upon the death of a member,
manager, general partner or shareholder of a Mortgagor and that it may provide
for assignments subject to the Purchased Asset holder’s approval of transferee,
transfers to affiliates, transfers to family members for estate planning
purposes, transfers among existing members, partners or shareholders in
Mortgagors or transfers of passive interests so long as the key principals or
general partner retains control).  The Purchased Asset Documents contain a “due
on encumbrance” clause, which provides for the acceleration of the payment of
the unpaid principal balance of the Purchased Asset if the property subject to
the Mortgage or any controlling interest in the Mortgagor is further pledged or
encumbered, unless the prior written consent of the holder of the Purchased
Asset is obtained (except that it may provide for assignments subject to the
Purchased Asset holder’s approval of transferee, transfers to affiliates or
transfers of passive interests so long as the key principals or general partner
retains control).  As of the Purchase Date, Seller holds no preferred equity
interest in any Mortgagor and Seller holds no mezzanine debt related to such
Underlying Mortgaged Property.

 

48.                               Each Purchased Asset containing provisions for
defeasance of mortgage collateral requires either (a) the prior written consent
of, and compliance with the conditions set by, the holder of the Purchased Asset
to any defeasance, or (b)(i) the replacement collateral consist of U.S.
“government securities,” within the meaning of Treasury Regulations
Article 1.860 G-2(a)(8)(i), in an amount sufficient to make all scheduled
payments under the Mortgage Note when due (up to the maturity date for the
related Purchased Asset, the Anticipated Repayment Date for ARD Loans or the
date on which the Mortgagor may prepay the related Purchased Asset without
payment of any prepayment penalty); (ii) the loan may be assumed by a Single
Purpose Entity approved by the holder of the Purchased Asset; (iii) counsel
provide an opinion that the trustee has a perfected security interest in such
collateral prior to any other claim or interest; and (iv) such other documents
and certifications as the mortgagee may reasonably require, which may include,
without limitation, (A) a certification that the purpose of the defeasance is to
facilitate the disposition of the mortgaged real property or any other customary
commercial transaction and not to be part of an arrangement to collateralize a
REMIC offering with obligations

 

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that are not real estate mortgages and (B) a certification from an independent
certified public accountant that the collateral is sufficient to make all
scheduled payments under the Mortgage Note when due.  Each Purchased Asset
containing provisions for defeasance provides that, in addition to any cost
associated with defeasance, the related Mortgagor shall pay, as of the date the
mortgage collateral is defeased, all scheduled and accrued interest and
principal due as well as an amount sufficient to defease in full the Purchased
Asset.  In addition, if the related Purchased Asset permits defeasance, then the
mortgage loan documents provide that the related Mortgagor shall (x) pay all
reasonable fees associated with the defeasance of the Purchased Asset and all
other reasonable expenses associated with the defeasance, or (y) provide all
opinions required under the related Purchased Asset Documents, including a REMIC
opinion, and any applicable rating agency letters confirming that no downgrade
or qualification shall occur as a result of the defeasance.

 

49.                               In the event that a Purchased Asset is secured
by more than one Underlying Mortgaged Property, then, in connection with a
release of less than all of such Mortgaged Properties, an Underlying Mortgaged
Property may not be released as collateral for the related Purchased Asset
unless, in connection with such release, an amount equal to not less than 115%
of the Allocated Loan Amount for such Underlying Mortgaged Property is prepaid
or, in the case of a defeasance, an amount equal to 115% of the Allocated Loan
Amount is defeased through the deposit of replacement collateral (as
contemplated in clause (48) hereof) sufficient to make all scheduled payments
with respect to such defeased amount, or such release is otherwise in accordance
with the terms of the Purchased Asset Documents.

 

50.                               Each Underlying Mortgaged Property is owned in
fee by the related Mortgagor, with the exception of (i) Mortgaged Properties
that are secured in whole or in a part by a Ground Lease and (ii) out-parcels,
and is used and occupied for commercial or multifamily residential purposes in
accordance with applicable law.

 

51.                               If any letter of credit was issued and is
outstanding in connection with such Purchased Asset, Seller has delivered to
Buyer the original of such letter of credit, together with any modifications,
amendments or endorsements necessary to permit Buyer to draw upon such letter of
credit.

 

52.                               Neither Seller nor any affiliate thereof has
any obligation to make any capital contributions to the related Mortgagor under
the Purchased Asset.  The Purchased Asset was not originated for the sole
purpose of financing the construction of incomplete improvements on the
Underlying Mortgaged Property.

 

53.                               If the related Mortgage or other Purchased
Asset Documents provide for a grace period for delinquent monthly payments, such
grace period is no longer than ten (10) days from the applicable payment date.

 

54.                               The following statements are true with respect
to the Underlying Mortgaged Property: (a) the Underlying Mortgaged Property is
located on or adjacent to a dedicated road or has access to an irrevocable
easement permitting ingress and egress and (b) the Underlying

 

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Mortgaged Property is served by public or private utilities, water and sewer (or
septic facilities) and otherwise appropriate for the use in which the Underlying
Mortgaged Property is currently being utilized.

 

55.                               None of the Purchased Asset Documents contain
any provision that expressly excuses the related borrower from obtaining and
maintaining insurance coverage for acts of terrorism and, in circumstances where
terrorism insurance is not expressly required, the mortgagee is not prohibited
from requesting that the related borrower maintain such insurance, in each case,
to the extent such insurance coverage is generally available for like properties
in such jurisdictions at commercially reasonable rates. Each Underlying
Mortgaged Property is insured by an “all-risk” casualty insurance policy that
does not contain an express exclusion for (or, alternatively, is covered by a
separate policy that insures against property damage resulting from) acts of
terrorism.

 

56.                               An Appraisal of the Underlying Mortgaged
Property was conducted in connection with the origination of such Purchased
Asset (or in the case of a Participation Interest, the date of origination of
the Underlying Mortgage Loan), and such Appraisal satisfied the guidelines in
Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of
1989, as in effect on the date such Purchased Asset (or in the case of a
Participation Interest, the Underlying Mortgage Loan) was originated.  The
appraisal date is within six (6) months prior to the Senior Mortgage Loan
origination date, and within twelve (12) months prior to the Purchase Date. The
Appraisal is signed by an appraiser who is a Member of the Appraisal Institute
(“MAI”) and, to Seller’s Knowledge, had no interest, direct or indirect, in the
Underlying Mortgaged Property or the Mortgagor or in any loan made on the
security thereof, and whose compensation is not affected by the approval or
disapproval of the Senior Mortgage Loan. Each appraiser has represented in such
Appraisal or in a supplemental letter that the Appraisal satisfies the
requirements of the “Uniform Standards of Professional Appraisal Practice” as
adopted by the Appraisal Standards Board of the Appraisal Foundation.

 

57.                               [Reserved.]

 

58.                               [Reserved.]

 

59.                               The Senior Mortgage Loan 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 Senior Mortgage Loan to the related
Mortgagor at origination did not exceed the non-contingent principal amount of
the Senior Mortgage Loan and (B) either: (a) such Senior Mortgage Loan is
secured by an interest in real property (including buildings and structural
components thereof, but excluding personal property) having a fair market value
(i) at the date the Senior Mortgage Loan was originated at least equal to 80% of
the adjusted issue price of the Senior Mortgage Loan on such date or (ii) at the
Closing Date at least equal to 80% of the adjusted issue price of the Senior
Mortgage Loan on such date, provided that for purposes hereof, the fair market
value of the real property interest must first be reduced by (A) the amount of
any lien on the real property interest that is senior to the Senior

 

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Mortgage Loan and (B) a proportionate amount of any lien that is in parity with
the Senior Mortgage Loan; or (b) substantially all of the proceeds of such
Senior Mortgage Loan were used to acquire, improve or protect the real property
which served as the only security for such Senior Mortgage Loan (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 Senior Mortgage Loan
was “significantly modified” prior to the Closing Date so as to result in a
taxable exchange under Section 1001 of the Code, it either (x) was modified as a
result of the default or reasonably foreseeable default of such Senior Mortgage
Loan or (y) satisfies the provisions of either sub-clause (B)(a)(i) above
(substituting the date of the last such modification for the date the Senior
Mortgage Loan was originated) or sub-clause (B)(a)(ii), including the proviso
thereto. Any prepayment premium and yield maintenance charges applicable to the
Senior Mortgage Loan constitute “customary prepayment penalties” within the
meaning of Treasury Regulations Section 1.860G-(b)(2).  All terms used in this
paragraph shall have the same meanings as set forth in the related Treasury
Regulations.

 

60.                               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 one hundred eighty (180) days of the date of origination of the
related Senior Mortgage Loan. Seller has obtained 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 one hundred eighty (180) days of the date of origination of the
related Senior Mortgage Loan. The 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, it being understood that for Mortgaged Properties
acquired with the proceeds of a Senior Mortgage Loan, operating histories may
not have been available.

 

61.                               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 (i.e., the “Major Sponsors”). 
Each originator (1) 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 for at least ten (10) years regarding any bankruptcies
or other insolvencies, any felony convictions, and (2) 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 for at least ten (10) years regarding any
bankruptcies or other insolvencies, any felony convictions, and provided,
however, that records searches were limited to the last ten (10) years (clauses
(1) and (2) above, collectively, the “Sponsor Diligence”).  Based solely on
searches of the public records or services such as Lexis/Nexis or a similar
service performed by Seller and the Sponsor Diligence, to the Knowledge of
Seller, no

 

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Mortgagor, Major Sponsor or guarantor (i) was a debtor in a state of 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 within the five (5) years prior to origination of the Purchased Asset.

 

62.                               With respect to each Senior Mortgage Loan
predominantly secured by a retail, office or industrial property leased to a
single tenant, the Seller reviewed an estoppel obtained from such tenant no
earlier than 90 days prior to the origination date of the related Mortgage Loan,
and to the Seller’s Knowledge based solely on the related estoppel certificate,
the related lease is in full force and effect or if not in full force and effect
the related space was underwritten as vacant, subject to customary reservations
of tenant’s rights, such as, without limitation, with respect to CAM and
pass-through audits and verification of landlord’s compliance with co-tenancy
provisions. With respect to each Mortgage Loan predominantly secured by a
retail, office or industrial property, the Seller has received lease estoppels
executed within 90 days of the origination date of the related Mortgage Loan
that collectively account for at least 65% of the in-place base rent for the
Underlying Mortgaged Property. To the Seller’s knowledge, each lease with
respect to the Underlying Mortgaged Property is in full force and effect,
subject 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.

 

63.                               Such Senior Mortgage Loan is not
cross-collateralized or cross-defaulted with any other Asset that is not subject
to a Transaction.

 

64.                               [Reserved.]

 

65.                               Seller and each originator has complied with
its internal procedures with respect to all applicable anti-money laundering
laws and regulations, including without limitation the USA Patriot Act of 2001
in connection with the origination and/or acquisition of the Senior Mortgage
Loan.

 

Defined Terms

 

As used in this Exhibit:

 

The term “Allocated Loan Amount” shall mean, for each Underlying Mortgaged
Property, the portion of principal of the related Purchased Asset allocated to
such Mortgaged Property for certain purposes (including determining the release
prices of properties, if permitted) under such Purchased Asset as set forth in
the related loan documents.  There can be no assurance, and it is unlikely, that
the Allocated Loan Amounts represent the current values of individual Mortgaged
Properties, the price at which an individual Underlying Mortgaged Property could
be sold in the future to a willing buyer or the replacement cost of the
Mortgaged Properties.

 

The term “Anticipated Repayment Date” shall mean, with respect to any Purchased
Asset that is indicated on the Purchased Asset Schedule as having a Revised
Rate, the date upon which such Purchased Asset commences accruing interest at
such Revised Rate.

 

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The term “Assignment of Mortgage” shall mean, with respect to any Mortgage, an
assignment of the mortgage, notice of transfer or equivalent instrument in
recordable form, sufficient under the laws of the jurisdiction wherein the
related property is located to reflect the assignment and pledge of the
Mortgage, subject to the terms, covenants and provisions of this Agreement.

 

The term “ARD Loan” shall mean any Purchased Asset that provides that if the
unamortized principal balance thereof is not repaid on its Anticipated Repayment
Date, such Purchased Asset will accrue Excess Interest at the rate specified in
the related Mortgage Note and the Mortgagor is required to apply excess monthly
cash flow generated by the Underlying Mortgaged Property to the repayment of the
outstanding principal balance on such Purchased Asset.

 

The term “Environmental Site Assessment” shall mean a Phase I environmental
report meeting the requirements of the American Society for Testing and
Materials, and, if in accordance with customary industry standards a reasonable
lender would require it, a Phase II environmental report, each prepared by a
licensed third party professional experienced in environmental matters.

 

The term “Excess Cash Flow” shall mean the cash flow from the Underlying
Mortgaged Property securing an ARD Loan after payments of interest (at the
Mortgage Interest Rate) and principal (based on the amortization schedule), and
(a) required payments for the tax and insurance fund and ground lease escrows
fund, (b) required payments for the monthly debt service escrows, if any,
(c) payments to any other required escrow funds and (d) payment of operating
expenses pursuant to the terms of an annual budget approved by the servicer and
discretionary (lender approved) capital expenditures.

 

The term “Excess Interest” shall mean any accrued and deferred interest on an
ARD Loan in accordance with the following terms.  Commencing on the respective
Anticipated Repayment Date each ARD Loan (pursuant to its existing terms or a
unilateral option, as defined in Treasury Regulations under Article 1001 of the
Code, in the Purchased Assets exercisable during the term of the Purchased
Asset) generally will bear interest at a fixed rate (the “Revised Rate”) per
annum equal to the Mortgage Interest Rate plus a percentage specified in the
related Purchased Asset Documents.  Until the principal balance of each such
Purchased Asset has been reduced to zero (pursuant to its existing terms or a
unilateral option, as defined in Treasury Regulations under Article 1001 of the
Code, in the Purchased Assets exercisable during the term of the mortgage loan),
such Purchased Asset will only be required to pay interest at the Mortgage
Interest Rate and the interest accrued at the excess of the related Revised Rate
over the related Mortgage Interest Rate will be deferred (such accrued and
deferred interest and interest thereon, if any, is “Excess Interest”).

 

The term “Mortgage Interest Rate” shall mean the fixed rate, or the formula
applicable to determine the floating rate, of interest per annum that each
Purchased Asset bears as of the Purchase Date.

 

The term “Permitted Encumbrances” shall mean:

 

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I.                                        the lien of current real property
taxes, water charges, sewer rents and assessments not yet delinquent or accruing
interest or penalties;

 

II.                                   covenants, conditions and restrictions,
rights of way, easements and other matters of public record acceptable to
mortgage lending institutions generally and referred to in the related
mortgagee’s title insurance policy;

 

III.                              other matters to which like properties are
commonly subject and which are acceptable to mortgage lending institutions
generally, and

 

IV.                               the rights of tenants, as tenants only,
whether under ground leases or space leases at the Underlying Mortgaged Property

 

that together do not materially and adversely affect the related Mortgagor’s
ability to timely make payments on the related Purchased Asset, which do not
materially interfere with the benefits of the security intended to be provided
by the related Mortgage or the use, for the use currently being made, the
operation as currently being operated, enjoyment, value or marketability of such
Underlying Mortgaged Property, provided, however, that, for the avoidance of
doubt, Permitted Encumbrances shall exclude all pari passu, second, junior and
subordinated mortgages but shall not exclude mortgages that secure Purchased
Assets that are cross-collateralized with other Purchased Assets.

 

The term “Revised Rate” shall mean, with respect to those Purchased Assets on
the Purchased Asset Schedule indicated as having a revised rate, the increased
interest rate after the Anticipated Repayment Date (in the absence of a default)
for each applicable Purchased Asset, as calculated and as set forth in the
related Purchased Asset.

 

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

 

1.                                      The representations and warranties set
forth in this Exhibit VI regarding the Senior Mortgage Loan to which the
Purchased Asset is related shall be deemed incorporated herein with respect to
each such Purchased Asset.

 

2.                                      The information pertaining to each
Purchased Asset set forth on the Purchased Asset Schedule is true and correct in
all material respects as of the Purchase Date.  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 except as such amendment, modification, supplement or restatement
has been delivered to Buyer prior to the Purchase Date and, in the case of any
Significant Modification occurring on or after the related Purchase Date, with
respect to which Buyer has provided prior written consent.

 

3.                                      There exists no material default,
breach, violation or event of acceleration (and no event that, with the passage
of time or the giving of notice, or both, would constitute any of the foregoing)
under the documents evidencing or securing the Purchased Asset, in any such case
to the extent the same materially and adversely affects the value of the
Purchased Asset and the related underlying real property.

 

4.                                      Except with respect to the
enforceability of any provisions requiring the payment of default interest, late
fees, additional interest, prepayment premiums or yield maintenance charges,
neither the Purchased Asset nor any of the related Purchased Asset Documents is
subject to any right of rescission, set-off, abatement, diminution, valid
counterclaim or defense, including the defense of usury, nor will the operation
of any of the terms of any such Purchased Asset Documents, or the exercise (in
compliance with procedures permitted under applicable law) of any right
thereunder, render any Purchased Asset Documents subject to any right of
rescission, set-off, abatement, diminution, valid counterclaim or defense,
including the defense of usury (subject to anti-deficiency or one form of action
laws and to bankruptcy, receivership, conservatorship, reorganization,
insolvency, moratorium or other similar laws affecting the enforcement of
creditor’s rights generally and by general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law)),
and no such right of rescission, set-off, abatement, diminution, valid
counterclaim or defense has been asserted with respect thereto.

 

5.                                      The Purchased Asset Documents have been
duly and properly executed by the originator of the Purchased Asset, and each is
the legal, valid and binding obligation of the parties thereto, enforceable in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, receivership, moratorium or other laws
relating to or affecting the rights of creditors generally and by general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law).  The Purchased Asset is not usurious.

 

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6.                                      The terms of the related Purchased Asset
Documents have not been impaired, waived, altered or modified in any material
respect (other than by a written instrument that is included in the related
Purchased Asset File delivered to Buyer prior to the Purchase Date).

 

7.                                      The assignment of the Purchased Asset
constitutes the legal, valid and binding assignment of such Purchased Asset from
Seller to or for the benefit of Buyer enforceable in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other laws relating to or affecting
the rights of creditors generally and by general principles of equity
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).

 

8.                                      [Reserved].

 

9.                                      The servicing and collection practices
used by Seller and each originator that is an Affiliate of Seller in respect of
each Purchased Asset comply in all material respects with all applicable local,
state and federal laws, and regulations and Seller and each originator that is
an Affiliate of Seller has complied with all material requirements pertaining to
the origination, funding and servicing of the Purchased Assets, including but
not limited to, usury and any and all other material requirements of any
federal, state or local law to the extent non-compliance would have a Material
Adverse Effect on the Purchased Asset.

 

10.                               Each recordable Purchased Asset Document or
related assignment thereof delivered by Seller to Buyer in connection with such
Purchased Asset is in form and substance acceptable for recording in the
applicable jurisdiction.

 

11.                               As of the Purchase Date, there is no payment
default that has existed for more than ten (10) days, and there is no other
material default under any of the related Purchased Asset Documents, giving
effect to any applicable notice and/or grace period; no such material default or
breach has been waived by Seller or on its behalf or, by Seller’s predecessors
in interest with respect to the Purchased Assets; and no event has occurred
that, with the passing of time or giving of notice would constitute a material
default or breach; provided, however, that the representations and warranties
set forth in this sentence do not cover any default, breach, violation or event
of acceleration that specifically pertains to or arises out of any subject
matter otherwise covered by any other representation or warranty made by Seller
in this Exhibit VI.  No Purchased Asset has been accelerated and no foreclosure
or power of sale proceeding has been initiated in respect of the related
Mortgage.  Seller has not waived any material claims against the related
Mortgagor under any non-recourse exceptions contained in the Mortgage Note.

 

12.                               No Purchased Asset has been satisfied,
canceled, subordinated (except to the senior mortgage loan from which the
Purchased Asset is derived), released or rescinded, in whole or in part, and the
related Mortgagor has not been released, in whole or in part, from its
obligations under any related Purchased Asset Document.

 

13.                               [Reserved.]

 

14.                               [Reserved.]

 

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

 

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REPRESENTATIONS AND WARRANTIES
REGARDING EACH INDIVIDUAL PURCHASED ASSET THAT IS A
PARTICIPATION INTEREST

 

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

 

2.                                      The information set forth in the
Purchased Asset Schedule is complete, true and correct 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 except as such
amendment, modification, supplement or restatement has been delivered to Buyer
prior to the Purchase Date and, in the case of any Significant Modification
occurring on or after the related Purchase Date, with respect to which Buyer has
provided prior written consent.

 

3.                                      There exists no material default,
breach, violation or event of acceleration (and no event that, with the passage
of time or the giving of notice, or both, would constitute any of the foregoing)
under the documents evidencing or securing the Purchased Asset, in any such case
to the extent the same materially and adversely affects the value of the
Purchased Asset and the related underlying real property.

 

4.                                      Except with respect to the
enforceability of any provisions requiring the payment of default interest, late
fees, additional interest, prepayment premiums or yield maintenance charges,
neither the Purchased Asset nor any of the related Purchased Asset Documents is
subject to any right of rescission, set-off, abatement, diminution, valid
counterclaim or defense, including the defense of usury, nor will the operation
of any of the terms of any such Purchased Asset Documents, or the exercise (in
compliance with procedures permitted under applicable law) of any right
thereunder, render any Purchased Asset Documents subject to any right of
rescission, set-off, abatement, diminution, valid counterclaim or defense,
including the defense of usury (subject to anti-deficiency or one form of action
laws and to bankruptcy, receivership, conservatorship, reorganization,
insolvency, moratorium or other similar laws affecting the enforcement of
creditor’s rights generally and by general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law)),
and no such right of rescission, set-off, abatement, diminution, valid
counterclaim or defense has been asserted with respect thereto.

 

5.                                      The Purchased Asset Documents have been
duly and properly executed by the originator of the Purchased Asset, and each is
the legal, valid and binding obligation of the parties thereto, enforceable in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, receivership, moratorium or other laws
relating to or affecting the rights of creditors generally and by general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law).  The Purchased Asset is not usurious.

 

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6.                                      The terms of the related Purchased Asset
Documents have not been impaired, waived, altered or modified in any material
respect (other than by a written instrument that is included in the related
Purchased Asset File delivered to Buyer prior to the Purchase Date).

 

7.                                      The assignment of the Purchased Asset
constitutes the legal, valid and binding assignment of such Purchased Asset from
Seller to or for the benefit of Buyer enforceable in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other laws relating to or affecting
the rights of creditors generally and by general principles of equity
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).

 

8.                                      [Reserved].

 

9.                                      The servicing and collection practices
used by Seller and each originator that is an Affiliate of Seller in respect of
each Purchased Asset comply in all material respects with all applicable local,
state and federal laws, and regulations and Seller and each originator that is
an Affiliate of Seller has complied with all material requirements pertaining to
the origination, funding and servicing of the Purchased Assets, including but
not limited to, usury and any and all other material requirements of any
federal, state or local law to the extent non-compliance would have a Material
Adverse Effect on the Purchased Asset.

 

10.                               Each recordable Purchased Asset Document or
related assignment thereof delivered by Seller to Buyer in connection with such
Purchased Asset is in form and substance acceptable for recording in the
applicable jurisdiction.

 

11.                               As of the Purchase Date, there is no payment
default that has existed for more than ten (10) days, and there is no other
material default under any of the related Purchased Asset Documents, giving
effect to any applicable notice and/or grace period; no such material default or
breach has been waived by Seller or on its behalf or by Seller’s predecessors in
interest with respect to the Purchased Assets; and no event has occurred that,
with the passing of time or giving of notice would constitute a material default
or breach; provided, however, that the representations and warranties set forth
in this sentence do not cover any default, breach, violation or event of
acceleration that specifically pertains to or arises out of any subject matter
otherwise covered by any other representation or warranty made by Seller in this
Exhibit VI.  No Purchased Asset has been accelerated and no foreclosure or power
of sale proceeding has been initiated in respect of the related Mortgage. 
Seller has not waived any material claims against the related Mortgagor under
any non-recourse exceptions contained in the Mortgage Note.

 

12.                               No Purchased Asset has been satisfied,
canceled, subordinated (except to the senior mortgage loan from which the
Purchased Asset is derived), released or rescinded, in whole or in part, and the
related Mortgagor has not been released, in whole or in part, from its
obligations under any related Purchased Asset Document except pursuant to a
document delivered to Buyer prior to the Purchase Date and, in the case of any
Significant Modification occurring on or after the related Purchase Date, with
respect to which Buyer has provided prior written consent.

 

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

 

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

 

2.                                      If the Purchased Asset is a Related
Mezzanine Loan, the Underlying Mortgage Loan to which the Purchased Asset
relates is also a Purchased Asset.

 

3.                                      The Mezzanine Loan is a performing
mezzanine loan secured by a pledge of all of the Capital Stock of a Mortgagor on
a performing Underlying Mortgage Loan that owns income producing commercial real
estate.

 

4.                                      As of the Purchase Date, such Mezzanine
Loan complies in all material respects with, or is exempt from, all requirements
of federal, state or local law relating to such Mezzanine Loan.

 

5.                                      At the time of the assignment of such
Mezzanine Loan to Buyer, Seller had good and marketable title to and was the
sole owner and holder of, each such Mezzanine Loan, free and clear of any
pledge, lien, encumbrance or security interest and such assignment validly and
effectively transfers and conveys all legal and beneficial ownership of the
Mezzanine Loan to Buyer free and clear of any pledge, lien, charge, encumbrance,
participation or security interest, any other ownership interests and other
interests on, in or to such Mezzanine Loan.  Seller has full right and authority
to sell, assign and transfer each Mezzanine Loan, and the assignment to Buyer
constitutes a legal, valid and binding assignment of such Mezzanine Loan free
and clear of any and all liens, pledges, charges or security interests of any
nature encumbering such Mezzanine Loan subject to the rights and obligations of
Seller pursuant to the Agreement.

 

6.                                      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.

 

7.                                      All information pertaining to each
Purchased Asset set forth on the Purchased Asset Schedule in respect of such
Mezzanine Loan and the Underlying 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 except as such amendment, modification, supplement or restatement
has been delivered to Buyer prior to the Purchase Date and, in the case of any
Significant Modification occurring on or after the related Purchase Date, with
respect to which Buyer has provided prior written consent.

 

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8.                                      Each recordable Purchased Asset Document
or related assignment thereof delivered by Seller to Buyer in connection with
such Purchased Asset is in form and substance acceptable for recording in the
applicable jurisdiction.

 

9.                                      Such Mezzanine Loan and the related
Underlying Mortgage Loan are 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.

 

10.                               Seller has full right, power and authority to
sell and assign such Mezzanine Loan and such Mezzanine Loan or any related
Mezzanine Note has not been cancelled, satisfied or rescinded in whole or part
nor has any instrument been executed that would effect a cancellation,
satisfaction or rescission thereof.

 

11.                               Other than consents and approvals obtained as
of the related Purchase Date or those already granted in the documentation
governing such Mezzanine Loan (the “Mezzanine Loan Documents”), no consent or
approval by any Person is required in connection with Seller’s sale and/or
Buyer’s acquisition of such Mezzanine Loan, for Buyer’s exercise of any rights
or remedies in respect of such Mezzanine Loan or for Buyer’s sale, pledge or
other disposition 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.

 

12.                               The Mezzanine Collateral is a pledge of equity
ownership interests in the related borrower under the Underlying 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 lender under the
Mezzanine Loan.

 

13.                               The owner of the Underlying Mortgaged Property
(the “Underlying Property Owner”) 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 Property Owner 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 constitutes the sole assets of the Underlying Property Owner.

 

14.                               The Underlying Property Owner has good and
marketable title to the Underlying Mortgaged Property, no claims under the title
policies insuring the Underlying Property Owner’s title to the Underlying
Mortgaged Property have been made.

 

15.                               [Reserved].

 

16.                               The Mezzanine Loan Documents provide for the
acceleration of the payment of the unpaid principal balance of the Mezzanine
Loan if (i) the related borrower voluntarily transfers or encumbers all or any
portion of any related Mezzanine Collateral, or (ii) any direct or indirect
interest in the related borrower is voluntarily transferred or assigned,

 

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other than, in each case, as permitted under the terms and conditions of the
related loan documents.

 

17.                               Pursuant to the terms of the Mezzanine Loan
Documents: (a) no material terms of any related Underlying 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 Property Owner with respect to
the Underlying Mortgaged Property 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 Property Owner as it relates to the Underlying
Mortgaged Property; and (d) the holder of the Mezzanine Loan’s consent is
required prior to the Underlying Property Owner incurring any additional
indebtedness.

 

18.                               There is no payment default that has existed
for more than ten (10) days, and there is no other material default under any of
the related Purchased Asset Documents, giving effect to any applicable notice
and/or grace period; no such material default or breach has been waived by
Seller or on its behalf or, by Seller’s predecessors in interest with respect to
the Purchased Assets; and no event has occurred that, with the passing of time
or giving of notice would constitute a material default or breach under the
related Purchased Asset Documents that would materially and adversely affect the
value of the Purchased Asset.  No Purchased Asset has been accelerated and no
foreclosure or power of sale proceeding has been initiated in respect of the
related Mezzanine Collateral.  Seller has not waived any material claims against
the related mezzanine borrower under any non-recourse exceptions contained in
the Mezzanine Note.

 

19.                               No default or event of default has occurred
under any agreement pertaining to any lien or other interest that ranks pari
passu with or senior to the interests of the holder of such Mezzanine Loan or
with respect to any Underlying Mortgage Loan in respect of the related
Underlying Mortgaged Property and there is no provision in any agreement related
to any such lien, interest or loan which would provide for any increase in the
principal amount of any such lien, other interest or loan.

 

20.                               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), such UCC-9 Policy (or, if it has yet to be issued, the coverage
to be provided thereby) is in full force and effect, no material claims have
been made thereunder and no claims have been paid thereunder, 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 Buyer without the consent of or notice to the insurer.

 

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21.                               The Mezzanine Loan, and each party involved in
the origination of the Mezzanine Loan, complied as of the date of origination
with, or was exempt from, applicable state or federal laws, regulations and
other requirements pertaining to usury.

 

22.                               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.

 

23.                               Seller has not received any written notice
that the Mezzanine Loan may be subject to reduction or disallowance for any
reason, including without limitation, any setoff, right of recoupment, defense,
counterclaim or impairment of any kind.

 

24.                               Seller has no obligation to make loans to
(except as specified in the related Confirmation), make guarantees on behalf of,
or otherwise extend credit to, or make any of the foregoing for the benefit of,
the Mezzanine Borrower or any other person under or in connection with the
Mezzanine Loan.

 

25.                               The servicing and collection practices used by
the servicer of the Mezzanine Loan, and the origination practices of the related
originator, have been in all respects legal, proper and prudent and have met
customary industry standards by prudent institutional commercial mezzanine
lenders and mezzanine loan servicers except to the extent that, in connection
with its origination, such standards were modified as reflected in the
documentation delivered to Buyer.

 

26.                               If applicable, the ground lessor consented to
and acknowledged that (i) the Mezzanine Loan is permitted / approved, (ii) any
foreclosure of the Mezzanine Loan and related change in ownership of the ground
lessee will not require the consent of the ground lessor or constitute a default
under the ground lease, (iii) copies of default notices would be sent to
Mezzanine Lender and (iv) it would accept cure from Mezzanine Lender on behalf
of the ground lessee.

 

27.                               To the extent Buyer was granted a security
interest with respect to the Mezzanine Loan, such interest (i) was given for due
consideration, (ii) has attached, (iii) is perfected, (iv) is a first priority
Lien, and (v) has been appropriately assigned to Buyer by the Underlying
Property Owner.

 

28.                               No consent, approval, authorization or order
of, or registration or filing with, or notice to, any court or governmental
agency or body having jurisdiction or regulatory authority is required for any
transfer or assignment by the holder of such Mezzanine Loan.

 

29.                               Seller has not received written notice of any
outstanding liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind for which the
holder of such Mezzanine Loan is or may become obligated.

 

30.                               [Reserved.]

 

31.                               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

 

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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.  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.

 

32.                               [Reserved.]

 

33.                               The fire and casualty insurance policy
covering the 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 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 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 Underlying
Mortgaged Property on a replacement cost basis or the unpaid balance of the
related Mortgage Loan, whichever is less, (iii) names (and will name) the
present owner of the Underlying Mortgaged Property as the insured, and
(iv) contains a standard mortgagee loss payable clause in favor of Seller.

 

34.                               As of the Purchase Date of the Mezzanine Loan,
all insurance coverage required under the Mezzanine Loan Documents and/or the
Underlying Mortgage Loan related to the Underlying Mortgaged Property, which
insurance covered such risks as were customarily acceptable to prudent
commercial and multifamily mortgage lending institutions lending on the security
of property comparable to the related Underlying Mortgaged Property in the
jurisdiction in which such Underlying Mortgaged Property is located, and with
respect to a fire and extended perils insurance policy, is in an amount (subject
to a customary deductible) at least equal to the lesser of (i) the replacement
cost of improvements located on such Underlying Mortgaged Property, or (ii) the
outstanding principal balance of the Underlying Mortgage Loan, and in any event,
the amount necessary to prevent operation of any co-insurance provisions; and,
except if such Underlying Mortgaged Property is operated as a mobile home park,
is also covered by business interruption or rental loss insurance, in an amount
at least equal to 12 months of operations of the related Underlying Mortgaged
Property, all of which was in full force and effect with respect to each related
Underlying Mortgaged Property; and, as of the Purchase Date for the related
Purchased Asset, all insurance coverage required under the Mezzanine Loan
Documents and/or any Underlying Mortgage Loan related to the Underlying
Mortgaged Property, which insurance covers such risks and is in such amounts as
are customarily acceptable to prudent commercial and multifamily mortgage
lending institutions lending on the security of property comparable to the
related Underlying Mortgaged Property in the jurisdiction in which such
Underlying Mortgaged Property is located, is in full force and effect with
respect to each related Underlying Mortgaged Property; all premiums due and
payable through the Purchase Date for the related Purchased Asset have been
paid; and no notice of termination or cancellation with respect to any such
insurance policy has been received by Seller; and except for certain

 

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amounts not greater than amounts which would be considered prudent by an
institutional commercial and/or multifamily mortgage lender with respect to a
similar mortgage loan and which are set forth in the Mezzanine Loan Documents
and/or any Underlying Mortgage Loan related to the Underlying Mortgaged
Property, any insurance proceeds in respect of a casualty loss, will be applied
either (i) to the repair or restoration of all or part of the related Underlying
Mortgaged Property or (ii) the reduction of the outstanding principal balance of
the Underlying Mortgage Loan, subject in either case to requirements with
respect to leases at the related Underlying Mortgaged Property and to other
exceptions customarily provided for by prudent institutional lenders for similar
loans.  The Underlying Mortgaged Property is also covered by comprehensive
general liability insurance against claims for personal and bodily injury, death
or property damage occurring on, in or about the related Underlying Mortgaged
Property, in an amount customarily required by prudent institutional lenders. 
An architectural or engineering consultant has performed an analysis of the
Underlying Mortgaged Properties located in seismic zone 3 or 4 in order to
evaluate the structural and seismic condition of such property, for the sole
purpose of assessing the probable maximum loss (“PML”) for the Underlying
Mortgaged Property in the event of an earthquake.  In such instance, the PML was
based on a 475 year lookback with a 10% probability of exceedance in a 50 year
period.  If the resulting report concluded that the PML 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-:V by A.M. Best Company or “BBB-” (or the equivalent) from S&P and Fitch or
“Baa3” (or the equivalent) from Moody’s.  If the Underlying Mortgaged Property
is located in Florida or within 25 miles of the coast of Texas, Louisiana,
Mississippi, Alabama, Georgia, North Carolina or South Carolina such Underlying
Mortgaged Property is insured by windstorm insurance in an amount at least equal
to the lesser of (i) the outstanding principal balance of such Underlying
Mortgage Loan and (ii) 100% of the full insurable value, or 100% of the
replacement cost, of the improvements located on the related Underlying
Mortgaged Property.

 

35.                               The insurance policies contain a standard
Mortgagee clause naming the Mortgagee, its successors and assigns as loss payee,
in the case of a property insurance policy, and additional insured in the case
of a liability insurance policy and provide that they are not terminable without
30 days prior written notice to the Mortgagee (or, with respect to non-payment,
10 days prior written notice to the Mortgagee) or such lesser period as
prescribed by applicable law.  Each Mortgage requires that the Mortgagor under
the related Underlying Mortgage Loan maintain insurance as described above or
permits the Mortgagee to require insurance as described above, and permits the
Mortgagee to purchase such insurance at the Mortgagor’s expense if Mortgagor
fails to do so.

 

36.                               There is no material and adverse environmental
condition or circumstance affecting the Underlying Mortgaged Property; there is
no material violation of any applicable Environmental Law with respect to the
Underlying Mortgaged Property; neither Seller nor the Underlying Property Owner
has taken any actions which would cause the Underlying Mortgaged Property not to
be in compliance with all applicable Environmental Laws; the loan documents
relating to the Underlying Mortgage Loan require the borrower to comply with all
Environmental Laws; and each Mortgagor has

 

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agreed to indemnify the Mortgagee for any losses resulting from any material,
adverse environmental condition or failure of the Mortgagor to abide by such
Environmental Laws or has provided environmental insurance.

 

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

 

38.                               Each related Underlying Mortgaged Property was
inspected by or on behalf of the related originator or an affiliate during the
12 month period prior to the related origination date.

 

39.                               To Seller’s Knowledge, there are no material
violations of any applicable zoning ordinances, building codes and land laws
applicable to the Underlying Mortgaged Property or the use and occupancy thereof
which (i) are not insured by an ALTA lender’s title insurance policy (or a
binding commitment therefor), or its equivalent as adopted in the applicable
jurisdiction, or a law and ordinance insurance policy or (ii) would have a
material adverse effect on the value, operation or net operating income of the
Underlying Mortgaged Property.  The Purchased Asset Documents and the loan
documents relating to the Underlying Mortgage Loan require the Underlying
Mortgaged Property to comply with all applicable laws and ordinances.

 

40.                               [Reserved.]

 

41.                               As of the Purchase Date for the related
Purchased Asset, there was no pending action, suit or proceeding, or
governmental investigation of which Seller, the Mezzanine Borrower or the
Underlying Property Owner has received notice, against the Mortgagor under the
related Underlying Mortgage Loan 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 Mortgage Loan.

 

42.                               [Reserved.]

 

43.                               Except for Mortgagors under Underlying
Mortgage Loans 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.

 

44.                               The related Underlying Mortgaged Property is
not encumbered, and none of the Purchased Asset Documents or any loan documents
relating to the Underlying Mortgage Loan 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).

 

45.                               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

 

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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.

 

46.                               An Appraisal of the related Underlying
Mortgaged Property was conducted in connection with the origination of the
Underlying Mortgage Loan; and such Appraisal satisfied the guidelines in Title
XI of the Financial Institutions Reform, Recovery and Enforcement Act or 1989,
as in effect on the date such Underlying Mortgage Loan was originated.

 

47.                               The related Underlying Mortgaged Property is
served by public utilities, water and sewer (or septic facilities) and otherwise
appropriate for the use in which the Underlying Mortgaged Property is currently
being utilized.

 

48.                               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 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 Underlying
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.

 

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(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 Underlying 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 Underlying Mortgage Loan).

 

(x)                                 The Ground Lease does not impose any
restrictions on subletting that would be viewed as commercially unreasonable by
a prudent commercial lender.

 

(xi)                              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.

 

49.                               The assignment of the Purchased Asset
constitutes the legal, valid and binding assignment of such Purchased Asset from
Seller to or for the benefit of Buyer enforceable in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other laws relating to or affecting
the rights of creditors generally and by general principles of equity
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).

 

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EXHIBIT VII

 

ASSET INFORMATION

 

Loan ID #:

Borrower Name:

Borrower Address:

Borrower City:

Borrower State:

Borrower Zip Code:

Recourse?

Guaranteed?

Related Borrower Name(s):

Original Principal Balance:

Note Date:

Loan Date:

Loan Type (e.g. fixed/arm):

Current Principal Balance:

Current Interest Rate (per annum):

Paid to date:

Annual P&I:

Next Payment due date:

Index (complete whether fixed or arm):

Gross Spread/Margin (complete whether fixed or arm):

Life Cap:

Life Floor:

Periodic Cap:

Periodic Floor:

Rounding Factor:

Lookback (in days):

Interest Calculation Method (e.g., Actual/360):

Interest rate adjustment frequency:

P&I payment frequency:

First P&I payment due:

First interest rate adjustment date:

First payment adjustment date:

Next interest rate adjustment date:

Next payment adjustment date:

Conversion Date:

Converted Interest Rate Index:

Converted Interest Rate Spread:

Maturity date:

Loan term:

Amortization term:

 

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Hyper-Amortization Flag:

Hyper-Amortization Term:

Hyper-Amortization Rate Increase:

Balloon Amount:

Balloon LTV:

Prepayment Penalty Flag:

Prepayment Penalty Text:

Lockout Period:

Lien Position:

Fee/Leasehold:

Ground Lease Expiration Date:

CTL (Yes/No):

CTL Rating (Moody’s):

CTL Rating (Duff):

CTL Rating (S&P):

CTL Rating (Fitch):

Lease Guarantor:

CTL Lease Type (NNN, NN, Bondable):

Property Name:

Property Address:

Property City:

Property Zip Code:

Property Type (General):

Property Type (Specific):

Cross-collateralized (Yes/No)†:

Property Size:

Year built:

Year renovated:

Actual Average Occupancy:

Occupancy Rent Roll Date:

Underwritten Average Occupancy:

Largest Tenant:

Largest Tenant SF:

Largest Tenant Lease Expiration:

2nd Largest Tenant:

2nd Largest Tenant SF:

2nd Largest Tenant Lease Expiration:

3rd Largest Tenant:

3rd Largest Tenant SF:

3rd Largest Tenant Lease Expiration:

Underwritten Average Rental Rate/ADR:

Underwritten Vacancy/Credit Loss:

 

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† If yes, give property information on each property covered and in aggregate as
appropriate. Loan ID’s should be denoted with a suffix letter to signify
loans/collateral.

 

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Underwritten Other Income:

Underwritten Total Revenues:

Underwritten Replacement Reserves:

Underwritten Management Fees:

Underwritten Franchise Fees:

Underwritten Total Expenses:

Underwritten Leasing Commissions:

Underwritten Tenant Improvement Costs:

Underwritten NOI:

Underwritten NCF:

Underwritten Debt Service Constant:

Underwritten DSCR at NOI:

Underwritten DSCR at NCF:

Underwritten NOI Period End Date:

Hotel Franchise:

Hotel Franchise Expiration Date:

Appraiser Name:

Appraised Value:

Appraisal Date:

Appraisal Cap Rate:

Appraisal Discount Rate:

Underwritten LTV:

Environmental Report Preparer:

Environmental Report Date:

Environmental Report Issues:

Architectural and Engineering Report Preparer:

Architectural and Engineering Report Date:

Deferred Maintenance Amount:

Ongoing Replacement Reserve Requirement per A&E Report:

Immediate Repairs Escrow % (e.g. [   ]%):

Replacement Reserve Annual Deposit:

Replacement Reserve Balance:

Tenant Improvement/Leasing Commission Annual Deposits:

Tenant Improvement/Leasing Commission Balance:

Taxes paid through date:

Monthly Tax Escrow:

Tax Escrow Balance:

Insurance paid through date:

Monthly Insurance Escrow:

Insurance Escrow Balance:

Reserve/Escrow Balance as of Date:

Probable Maximum Loss %:

Covered by Earthquake Insurance (Yes/No):

Number of times 30 days late in last 12 months:

Number of times 60 days late in last 12 months:

Number of times 90 days late in last 12 months:

Servicing Fee:

Notes:

 

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EXHIBIT VIII

 

PURCHASE AND ADDITIONAL ADVANCE PROCEDURES

 

(a)                                 Submission of Due Diligence Package.  No
less than fifteen (15) Business Days prior to the proposed Purchase Date, 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 buyer would consider material, together
with the following due diligence information relating to the New Asset:

 

With respect to each Eligible Asset that is an Eligible Loan,

 

(i)                    the Asset Information and, if available, maps and photos;

 

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

 

(iii)              a cash flow pro-forma, plus historical information, if
available;

 

(iv)             copies of appraisal, environmental, engineering 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;

 

(v)                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 (including, without limitation, the
board of directors, if applicable) and, to the extent that real property does
not secure such Eligible Loan, the related collateral securing such Eligible
Loan, if any;

 

(vi)             indicative debt service coverage ratios;

 

(vii)          indicative loan-to-value ratios;

 

(viii)       a term sheet outlining the transaction generally;

 

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

 

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

 

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

 

(xi)             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;

 

(xii)          in the case of Subordinate Eligible Assets, all information
described in this section 2 that would otherwise be provided for the Underlying
Mortgage Loan if it were an Eligible Asset, and in addition, all documentation
evidencing such Subordinate Eligible Asset; and

 

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

 

3.                                      Environmental and Engineering.  A “Phase
1” (and, if requested by Buyer, “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.  A credit memorandum,
asset summary or other similar document that details cash flow underwriting,
historical operating numbers, underwriting footnotes, rent roll and lease
rollover schedule.

 

5.                                      Appraisal.  Either an Appraisal approved
by Buyer or a Draft Appraisal, each by an MAI appraiser, if applicable.  If
Buyer receives only a Draft Appraisal prior to entering into a Transaction,
Seller shall deliver an Appraisal approved by Buyer by an MAI appraiser on or
before ten (10) calendar days after the Purchase Date.  The related Appraisal
shall (i) be dated less than twelve (12) months prior to the proposed financing
date and (ii) not be ordered by the related borrower or an Affiliate of the
related borrower.

 

6.                                      Opinions of Counsel.  An opinion to
Seller and its successors and assigns from counsel to the underlying obligor on
the underlying loan transaction, as applicable, 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 or the underlying obligor 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, such as abstracts of all leases in effect at the real property relating
to such Eligible Asset.

 

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

 

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
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 of
types, in amounts, with insurers and otherwise in compliance with the terms,
provisions and conditions set forth in the Purchased Asset Documents.  Such
certificates or other evidence shall indicate that Seller (or, as to Subordinate
Eligible Assets, the lead lender on the whole loan or mezzanine loan in which
Seller is a participant or holder of a note or has an equity interest in the
Mortgagor, as applicable), will be named as an additional insured as its
interest may appear and shall contain a loss payee endorsement in favor of such
additional insured with respect to the policies required to be maintained under
the Purchased Asset Documents.

 

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

 

4.                                      Satisfactory reports of UCC, tax lien,
judgment and litigation searches and title updates conducted by search firms
and/or title companies 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.                                      A Title Policy in favor of the
applicable Seller (or its Affiliates the originated the Eligible Asset) and its
successors and assigns (or a closing escrow letter signed by the title company
committing to issue such a Title Policy), with an amount of insurance that shall
be not less than the original principal amount of such Eligible Asset, in each
case, reasonably satisfactory to Buyer.

 

6.                                      Certificates of occupancy and letters
certifying that the property is in compliance with all applicable 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, no less than five (5) calendar days prior to the
proposed Purchase Date, in its sole and absolute discretion (A) 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 (B) 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.  No less than two
(2) business days prior to the proposed Purchase Date, 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, which assignment shall be subject
to no liens except as expressly permitted by Buyer, and blacklined copies of
each document, showing all changes made to the forms of assignment documents
that have been approved in advance by Buyer.

 

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

 

EXHIBIT IX

 

FORM OF BAILEE LETTER

 

[    ] [  ], 201[ ]

 

 

 

Re:                             Bailee Agreement (the “Bailee Agreement”) in
connection with the pledge by [Starwood Property Mortgage Sub-14, L.L.C.]
[Starwood Property Mortgage Sub-14-A, L.L.C.] ( “Seller”) to JPMorgan Chase
Bank, National Association (“Buyer”)

 

Ladies and Gentlemen:

 

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 an
Identification Certificate in the form of Attachment 1 attached hereto to which
shall be attached a Purchased Asset Schedule identifying which Purchased Assets
are being delivered to the Bailee hereunder.  Such Purchased Asset Schedule
shall contain the following fields of information:  (a) the loan identifying
number; (b) the Purchased Asset obligor’s name; (c) the street address, city,
state and zip code for the applicable real property; (d) the original balance;
and (e) the current principal balance if different from the original balance.

 

(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 1
attached hereto (the “Purchased Asset Schedule”).

 

(c)                                  The Bailee shall issue and deliver to Buyer
and Wells Fargo Bank, National Association (the “Custodian”) on or prior to the
Funding Date by facsimile (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 Identification Certificate (as defined in
that certain Custodial Agreement, dated as of December 10, 2015, among Starwood
Property Mortgage Sub-14, L.L.C. and Starwood Property Mortgage Sub-14-A,
L.L.C.,

 

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

 

Buyer and Custodian, in addition to such other documents required to be
delivered to Buyer and/or Custodian pursuant to the Uncommitted Master
Repurchase Agreement, dated as of December 10, 2015, between Starwood Property
Mortgage Sub-14, L.L.C., Starwood Property Mortgage Sub-14-A, L.L.C. and Buyer
(the “Repurchase Agreement”).

 

(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 facsimile
to the Bailee at [    ] to the attention of [    ], an authorization (the
“Facsimile Authorization”) to release the Purchased Asset Files with respect to
the Purchased Assets identified therein to Seller.  Upon receipt of such
Facsimile Authorization, the Bailee shall release the Purchased Asset Files to
Seller in accordance with Seller’s instructions.

 

(e)                                  Following the Funding Date, the Bailee
shall forward the Purchased Asset Files to the Custodian at [    ], by insured
overnight courier for receipt by the Custodian no later than 1:00 p.m. on the
third 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 Facsimile Authorization or the applicable
Delivery Date, as applicable, the Bailee (a) shall maintain continuous custody
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 Agreement 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 negligence, lack of good faith or willful misconduct on the part of
the Bailee or any of its partners, directors, officers, agents or employees. 
The foregoing indemnification shall survive any resignation or removal of the
Bailee or the termination or assignment of this Bailee Agreement.

 

(h)                                 In the event that the Bailee fails to
produce a Mortgage Note, assignment of collateral or any other document related
to a Purchased Asset that was in its possession within ten (10) business days
after required or requested by

 

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

 

Seller or Buyer (a “Delivery Failure”), the Bailee shall indemnify Seller or
Buyer in accordance with paragraph (g) above.

 

(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 or the Bailee’s negligence, lack of good faith or willful misconduct. 
The foregoing indemnification shall survive any termination or assignment of
this Bailee Agreement.

 

(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 [    ], if acting as Bailee, has represented Seller in
connection with negotiation, execution and delivery of the Repurchase Agreement.

 

(k)                                 In connection with a pledge of the Purchased
Assets as collateral for an obligation of Buyer, Buyer may pledge its interest
in the corresponding Purchased Asset Files held by the Bailee for the benefit of
Buyer from time to time by delivering written notice to the Bailee that Buyer
has pledged its interest in the identified Purchased Assets and Purchased Asset
Files, together with the identity of the party to whom the Purchased Assets have
been pledged (such party, the “Pledgee”).  Upon receipt of such notice from
Buyer, the Bailee shall mark its records to reflect the pledge of the Purchased
Assets by Buyer to the Pledgee.  The Bailee’s records shall reflect the pledge
of the Purchased Assets by Buyer to the Pledgee until such time as the Bailee
receives written instructions from Buyer that the Purchased Assets are no longer
pledged by Buyer to the Pledgee, at which time the Bailee shall change its
records to reflect the release of the pledge of the Purchased Assets and that
the Bailee is holding the Purchased Assets as custodian for, and for the benefit
of, Buyer.

 

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

 

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

 

(n)                                 For the purpose of facilitating the
execution of this Bailee Agreement as herein provided and for other purposes,
this Bailee Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute and be one and the same instrument.

 

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

 

(o)                                 This Bailee Agreement shall be construed in
accordance with the laws of the State of New York, and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.

 

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

 

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

 

 

Very truly yours,

 

 

 

 

 

[STARWOOD PROPERTY MORTGAGE SUB-14, L.L.C.], as Seller

 

 

 

 

 

[STARWOOD PROPERTY MORTGAGE SUB-14-A, L.L.C.], as Seller

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

ACCEPTED AND AGREED:

 

 

 

[BAILEE]

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

 

 

ACCEPTED AND AGREED:

 

 

 

 

 

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

 

Buyer

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

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

 

Schedule A

 

[List of Purchased Asset Documents]

 

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

 

Attachment 1

 

IDENTIFICATION CERTIFICATE

 

On this [   ] day of [    ], 201[ ], [Starwood Property Mortgage Sub-14, L.L.C.]
[Starwood Property Mortgage Sub-14-A, L.L.C.] (“Seller”), under that certain
Bailee Agreement of even date herewith (the “Bailee Agreement”), among Seller,
[    ] (the “Bailee”), and JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, 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
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.

 

 

[STARWOOD PROPERTY MORTGAGE SUB-14, L.L.C.]

 

 

 

 

 

[STARWOOD PROPERTY MORTGAGE SUB-14-A, L.L.C.]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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

 

Exhibit A to Attachment 1

 

PURCHASED ASSET SCHEDULE

 

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

 

Attachment 2

 

FORM OF BAILEE’S TRUST RECEIPT AND CERTIFICATION

 

[    ] [  ], 201[ ]

 

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

383 Madison Avenue
New York, New York 10179
Attention:                                         Ms. Nancy S. Alto
Telephone:                                   (212) 834-3038

Telecopy:                                          (917) 546-2564

 

Re:                             Bailee Agreement, dated as of [    ] [  ],
201[ ] (the “Bailee Agreement”) among [Starwood Property Mortgage Sub-14,
L.L.C.] [Starwood Property Mortgage Sub-14-A, L.L.C.] (“Seller”), JPMorgan Chase
Bank, National Association (“Buyer”) and [    ] (“Bailee”)

 

Ladies and Gentlemen:

 

In accordance with the provisions of Paragraph (c) of the above-referenced
Bailee Agreement, 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 and has determined that (i) all documents listed in Schedule A
attached to the Bailee Agreement are in its possession and (ii) such documents
have been reviewed by it and appear regular on their face and relate to such
Purchased Asset and (iii) based on its examination, the foregoing documents on
their face satisfy the requirements set forth in Paragraph (b) of the Bailee
Agreement.

 

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 Agreement.

 

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

 

 

[    ], BAILEE

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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

 

EXHIBIT X

 

FORM OF MARGIN DEFICIT NOTICE

 

[DATE]

 

VIA ELECTRONIC TRANSMISSION

 

STARWOOD PROPERTY MORTGAGE SUB-14, L.L.C.
STARWOOD PROPERTY MORTGAGE SUB-14-A, L.L.C.
c/o Starwood Property Trust, Inc.

591 West Putnam Avenue

Greenwich, Connecticut 06830

 

Attention: General Counsel

 

Re:                             Uncommitted Master Repurchase Agreement, dated
as of December 10, 2015 (as amended, restated, supplemented, or otherwise
modified and in effect from time to time, the “Master Repurchase Agreement”;
capitalized terms used but not otherwise defined herein shall have the meanings
assigned thereto in the Master Repurchase Agreement) by and between JPMorgan
Chase Bank, National Association (“Buyer”) and Starwood Property Mortgage
Sub-14, L.L.C. and Starwood Property Mortgage Sub-14-A, L.L.C. (“Sellers”).

 

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

 

Repurchase Price for the Purchased Assets set forth on Schedule I attached
hereto:

$                    

Buyer’s Margin Amount for the Purchased Assets set forth on Schedule I attached
hereto:

$                    

MARGIN DEFICIT:

$                    

Accrued Interest from [    ] to [    ]:

$                    

TOTAL WIRE DUE:

$                    

MARGIN EXCESS AVAILABLE FROM OTHER PURCHASED ASSETS AS SET FORTH ON SCHEDULE II
ATTACHED HERETO

$                    

 

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

 

SELLERS ARE REQUIRED TO CURE THE MARGIN DEFICIT SPECIFIED ABOVE IN ACCORDANCE
WITH THE MASTER REPURCHASE AGREEMENT AND WITHIN THE TIME PERIOD SPECIFIED
ARTICLE 4(a) THEREOF.

 

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

 

 

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

 

 

 

 

 

By:

 

 

 

 Name:

 

 

 Title:

 

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

 

EXHIBIT XI-1

 

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 3(t) of the Uncommitted Master Repurchase
Agreement, dated as of December 10, 2015 (the “Master Repurchase Agreement”), by
and between JPMorgan Chase Bank, National Association, a national banking
association organized under the laws of the United States, as Buyer, and
Starwood Property Mortgage Sub-14, L.L.C. and Starwood Property Mortgage
Sub-14-A, L.L.C., each a Delaware limited liability company, as Sellers. 
Capitalized terms used and not otherwise defined herein shall have the
respective meanings assigned to such terms in the Master Repurchase 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 IRS Form W-8BEN-E, as applicable.  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[ ]

 

XI-1

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

 

EXHIBIT XI-2

 

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 3(t) of the Uncommitted Master Repurchase
Agreement, dated as of December 10, 2015 (the “Master Repurchase Agreement”), by
and between JPMorgan Chase Bank, National Association, a national banking
association organized under the laws of the United States, as Buyer, and
Starwood Property Mortgage Sub-14, L.L.C. and Starwood Property Mortgage
Sub-14-A, L.L.C., each a Delaware limited liability company, as Sellers. 
Capitalized terms used and not otherwise defined herein shall have the
respective meanings assigned to such terms in the Master Repurchase 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 IRS Form W-8BEN-E, as
applicable.  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[ ]

 

XI-2

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

 

EXHIBIT XI-3

 

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 3(t) of the Uncommitted Master Repurchase
Agreement, dated as of December 10, 2015 (the “Master Repurchase Agreement”), by
and between JPMorgan Chase Bank, National Association, a national banking
association organized under the laws of the United States, as Buyer, and
Starwood Property Mortgage Sub-14, L.L.C. and Starwood Property Mortgage
Sub-14-A, L.L.C., each a Delaware limited liability company, as Sellers. 
Capitalized terms used and not otherwise defined herein shall have the
respective meanings assigned to such terms in the Master Repurchase 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 IRS Form W-8BEN-E, as applicable,
or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS
Form W-8BEN-E, as applicable, 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[ ]

 

XI-3

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

 

EXHIBIT XI-4

 

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 3(t) of the Uncommitted Master Repurchase
Agreement, dated as of December 10, 2015 (the “Master Repurchase Agreement”), by
and between JPMorgan Chase Bank, National Association, a national banking
association organized under the laws of the United States, as Buyer, and
Starwood Property Mortgage Sub-14, L.L.C. and Starwood Property Mortgage
Sub-14-A, L.L.C., each a Delaware limited liability company, as Sellers. 
Capitalized terms used and not otherwise defined herein shall have the
respective meanings assigned to such terms in the Master Repurchase 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 IRS Form W-8BEN-E, as applicable, or
(ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E,
as applicable, 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[ ]

 

 

XI-4

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EXHIBIT XII

 

UCC FILING JURISDICTIONS

 

Delaware

 

XII-4

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EXHIBIT XIII

 

[Reserved.]

 

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EXHIBIT XIV

 

FORM OF SERVICER NOTICE

 

[DATE]

 

[SERVICER]
[ADDRESS]
Attention:

 

Re:                             Uncommitted Master Repurchase Agreement, dated
as of December 10, 2015 by and between JPMorgan Chase Bank, National Association
(“Buyer”), Starwood Property Mortgage Sub-14, L.L.C. and Starwood Property
Mortgage Sub-14-A, L.L.C. (as amended, restated, supplemented, or otherwise
modified and in effect from time to time, the “Master Repurchase Agreement”);
(capitalized terms used but not otherwise defined herein shall have the meanings
assigned thereto in the Master Repurchase Agreement).

 

Ladies and Gentlemen:

 

[    ] (the “Servicer”) is servicing certain mortgage assets sold by [Starwood
Property Mortgage Sub-14, L.L.C.] [Starwood Property Mortgage Sub-14-A, L.L.C.]
(“Seller”) to Buyer pursuant to the Master Repurchase Agreement (the “Purchased
Assets”) pursuant to a servicing agreement dated as of [    ] between Servicer
and Seller (the “Servicing Agreement”).  Servicer is hereby notified that,
pursuant to the Master Repurchase 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 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, remit all such Income to the
Depository Account at [       ], ABA # [    ], Account # [    ].  Upon receipt
of a notice of Event of Default under the Master Repurchase 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 that 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

 

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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
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 that 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 Agreement delivered
by Buyer, and, so long as an Event of Default under the Master Repurchase
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,

 

 

 

 

 

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

 

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ACKNOWLEDGED AND AGREED TO:

 

[STARWOOD PROPERTY MORTGAGE SUB-14, L.L.C.]

 

[STARWOOD PROPERTY MORTGAGE SUB-14-A, L.L.C.]

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

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EXHIBIT XV

 

FORM OF RELEASE LETTER

 

[Date]

 

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

383 Madison Avenue
New York, New York 10179
Attention:  Ms. Nancy S. Alto

 

Re:                             Uncommitted Master Repurchase Agreement, dated
as of December 10, 2015 by and between JPMorgan Chase Bank, National Association
(“Buyer”) and Starwood Property Mortgage Sub-14, L.L.C. and Starwood Property
Mortgage Sub-14-A, L.L.C. (each a “Seller” and, collectively, “Sellers”) (as
amended, restated, supplemented, or otherwise modified and in effect from time
to time, the “Master Repurchase Agreement”); (capitalized terms used but not
otherwise defined herein shall have the meanings assigned thereto in the Master
Repurchase 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
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 Agreement
(calculated in accordance with the terms thereof) in accordance with the wiring
instructions set forth in the Master Repurchase Agreement.

 

 

Very truly yours,

 

 

 

 

 

[STARWOOD PROPERTY MORTGAGE SUB-14, L.L.C.]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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

 

 

[STARWOOD PROPERTY MORTGAGE SUB-14-A, L.L.C.]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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Schedule A

 

[List of Purchased Asset Documents]

 

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EXHIBIT XVI

 

FORM OF COVENANT COMPLIANCE CERTIFICATE

 

[    ] [  ], 201[ ]

 

JPMorgan Chase Bank, National Association
383 Madison Avenue
New York, New York 10179
Attention:  Thomas Nicholas Cassino

 

This Covenant Compliance Certificate is furnished pursuant to that certain
Uncommitted Master Repurchase Agreement, dated as of December 10, 2015 by and
between JPMorgan Chase Bank, National Association (“Buyer”), Starwood Property
Mortgage Sub-14, L.L.C. and Starwood Property Mortgage Sub-14-A, L.L.C.
(collectively, “Sellers”) (as amended, restated, supplemented, or otherwise
modified and in effect from time to time, the “Master Repurchase Agreement”). 
Unless otherwise defined herein, capitalized terms used in this Covenant
Compliance Certificate have the respective meanings ascribed thereto in the
Master Repurchase Agreement.

 

THE UNDERSIGNED HEREBY CERTIFIES THAT:

 

1.                                      I am a duly elected Responsible Officer
of each Seller.

 

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

 

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

 

5.                                      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.

 

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

 

6.                                      To my Knowledge, as of the date hereof,
each of the representations and warranties made by each Seller in the Master
Repurchase Agreement are true and correct in all material respects with the same
force and effect as if made on and as of the date hereof, except as set forth in
any Requested Exceptions Report.

 

7.                                      Attached as Exhibit 1 hereto is a
description of all interests of Affiliates of any Seller in any Underlying
Mortgaged Property.

 

8.                                      Attached as Exhibit 2 hereto are the
financial statements required to be delivered pursuant to Article 11 of the
Master Repurchase 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 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 Guarantor as of the date or with respect to the period therein
specified, determined in accordance with the requirements set forth in
Article 11.

 

9.                                      Attached as Exhibit 3 hereto are the
calculations demonstrating compliance with the financial covenants set forth in
Article 9 of the Guarantee Agreement.

 

To the best of my knowledge, each Seller has, during the period since the
delivery of the immediately preceding Covenant Compliance Certificate, observed
or performed all of its covenants and other agreements in all material respects,
and satisfied in all material respects every condition, contained in the Master
Repurchase 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 paragraph 8, listing, in detail,
the nature of the condition or event, the period during which it has existed and
the action which the Guarantor or any 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 [    ], 201[  ].

 

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[STARWOOD PROPERTY MORTGAGE SUB-14, L.L.C.],

 

a Delaware limited liability company

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

[STARWOOD PROPERTY MORTGAGE SUB-14-A, L.L.C.],

 

a Delaware limited liability company

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

STARWOOD PROPERTY TRUST INC.,

 

a Maryland corporation

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

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EXHIBIT XVII

 

FORM OF RE-DIRECTION LETTER

 

[SELLER LETTERHEAD]

 

RE-DIRECTION LETTER

 

AS OF [    ] [  ], 201[ ]

 

Ladies and Gentlemen:

 

Please refer to: (a) that certain [Loan Agreement], dated [    ] [  ], 201[ ],
by and between [    ] (the “Borrower”), as borrower, and [    ] (the “Lender”),
as lender; and (b) all documents securing or relating to that certain $[    ]
loan made by the Lender to the Borrower on [    ] [  ], 201[ ] (the “Loan”).

 

You are advised as follows, effective as of the date of this letter.

 

Assignment of the Loan.  The Lender has entered into an Uncommitted Master
Repurchase Agreement, dated as of December 10, 2015 (as the same may be amended
and/or restated from time to time, the “Repurchase Agreement”), with JPMorgan
Chase Bank, National Association (“JPMorgan”), 383 Madison Avenue, New York, New
York 10179, and has assigned its rights and interests in the Loan (and all of
its rights and remedies in respect of the Loan) to JPMorgan, subject to the
terms of the Repurchase Agreement.  This assignment shall remain in effect
unless and until JPMorgan has notified Borrower otherwise in writing.

 

Direction of Funds.  In connection with Borrower’s obligations under the Loan,
Lender hereby directs Borrower to disburse, by wire transfer, any and all
payments to be made under or in respect of the Loan to the following account,
for the benefit of JPMorgan:

 

ABA # [    ]
Account # [    ]
Attn: [Insert information regarding Depository Account]
Acct Name: “[SERVICER] for the benefit of JPMorgan Chase Bank, National
Association, as Repurchase Agreement Buyer”

 

This direction shall remain in effect unless and until JPMorgan has notified
Borrower otherwise in writing.

 

Modifications, Waivers, Etc.  No modification, waiver, deferral, or release (in
whole or in part) of any party’s obligations in respect of the Loan, or of any
collateral for any obligations in respect of the Loan, shall be effective
without the prior written consent of JPMorgan.  Notwithstanding the foregoing,
neither Lender nor Servicer shall take any material action or effect any
modification or amendment to any Purchased Asset without first having given
prior notice thereof to Buyer in each such instance and receiving the prior
written consent of Buyer.

 

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Please acknowledge your acceptance of the terms and directions contained in this
correspondence by executing a counterpart of this correspondence and returning
it to the undersigned.

 

 

 

Very truly yours,

 

 

 

 

 

[STARWOOD PROPERTY MORTGAGE SUB-14, L.L.C., a Delaware limited liability
company]

 

 

 

 

 

[STARWOOD PROPERTY MORTGAGE SUB-14-A, L.L.C., a Delaware limited liability
company]

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

Date: [    ] [  ], 201[ ]

 

 

 

Agreed and accepted this [  ]

 

 

day of [    ], 201[ ]

 

 

 

 

 

[    ]

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

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