Exhibit 10.1

 

AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

 

Dated as of December 7, 2005

 

BETWEEN:

 

CITIGROUP GLOBAL MARKETS REALTY CORP., as buyer (“Buyer”, which term shall
include any “Principal” as defined and provided for in Annex I) or as agent
pursuant hereto (“Agent”),

 

and

 

SPIRIT FINANCE CORPORATION, as seller (“Seller”).

 

1.                                      APPLICABILITY

 

Buyer shall, from time to time, agree to enter into transactions in which Seller
transfers to Buyer Eligible Assets against the transfer of funds by Buyer, with
a simultaneous agreement by Buyer to transfer to Seller such Purchased Assets at
a date certain, against the transfer of funds by Seller.  Each such transaction
shall be referred to herein as a “Transaction” and, unless otherwise agreed in
writing, shall be governed by this Agreement.

 

This Agreement amends and restates that certain Master Repurchase Agreement,
dated as of September 13, 2005, as amended by an amendment dated as of
September 22, 2005, between Buyer and Seller.

 

2.                                      DEFINITIONS AND INTERPRETATION

 

A)                                      DEFINED TERMS.

 

“Accepted Servicing Standards” shall have the meaning assigned thereto in the
Custody Agreement.

 

“Additional Purchased Assets” shall have the meaning assigned thereto in
Section 6 hereof.

 

“Affiliate” means, with respect to any Person, any other Person which, directly
or indirectly, controls, is controlled by, or is under common control with, such
Person.  For purposes of this definition, “control” (together with the
correlative meanings of “controlled by” and “under common control with”) means
possession, directly or indirectly, of the power (a) to vote 10% or more of the
securities (on a fully diluted basis) having ordinary voting power for the
directors or managing general partners (or their equivalent) of such Person, or
(b) to direct or cause the direction of the management or

 

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policies of such Person, whether through the ownership of voting securities, by
contract, or otherwise.

 

“Agent” means Citigroup Global Markets Realty Corp. or any successor.

 

“Agreement” means this Master Repurchase Agreement, as it may be amended,
supplemented or otherwise modified from time to time.

 

“ALTA” means the American Land Title Association.

 

“Appraised Value” shall mean the value set forth in an appraisal (described on
the Loan Schedule) made in connection with the origination or acquisition of the
related Loan as the value of the Mortgaged Property securing such Loan.

 

“Appraisal” means, with respect to a Loan, an appraisal of the related Mortgaged
Property securing a Loan (i) from an MAI professional real estate appraiser who
(A) is a member in good standing of the Appraisal Institute and (B) if the state
in which the subject Mortgaged Property is located certifies or licenses
appraisers, is certified or licensed in such state, (ii) conducted in accordance
with the standards of the Appraisal Institute or such other standards as
mutually agreed to by the parties hereto, and (iii) performed within six months
of the date such Appraisal is delivered to the Buyer, or such other form of
appraisal approved by the Buyer in its sole discretion.

 

“Asset Base” shall mean, as of any date of determination, the aggregate
Collateral Value of all Purchased Assets.

 

“Asset Base Certificate” shall mean the certificate prepared by the Seller
substantially in the form of Exhibit B, attached hereto.

 

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

 

“Borrower” means the obligor or obligors on a Note, including any Person that
has acquired the related collateral and assumed the obligations of the original
obligor or obligors under the Note and, in the case of Net Lease Loans, the
Tenant of the related Mortgaged Property.

 

“Business Day” shall mean any day other than (i) a Saturday or Sunday, (ii) a
day on which the New York Stock Exchange, the Federal Reserve Bank of New York,
the Custodian or banking and savings and loan institutions in New York, New York
or the city and state in which the Custodian’s offices are located are closed,
or (iii) a day on which trading in securities on the New York Stock Exchange or
any other major securities exchange in the United States is not conducted.

 

“Buyer’s Margin Amount” means, with respect to any Transaction as of any date of
determination, the amount obtained by application of Buyer’s Margin Percentage
to the Repurchase Price (exclusive of accrued Pricing Differential) for such
Transaction as of such date.

 

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“Buyer’s Margin Percentage” shall have the meaning assigned thereto in the Side
Letter.

 

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

 

“Cash Equivalents” shall mean (a) securities with maturities of 90 days or less
from the date of acquisition issued or fully guaranteed or insured by the United
States Government or any agency thereof, (b) certificates of deposit with
maturities of 90 days or less from the date of acquisition and overnight bank
deposits of any commercial bank having capital and surplus in excess of
$500,000,000, (c) repurchase obligations of any commercial bank satisfying the
requirements of clause (b) of this definition, having a term of not more than
seven days with respect to securities issued or fully guaranteed or insured by
the United States Government, (d) commercial paper of a domestic issuer rated at
least A-1 or the equivalent thereof by “S&P” or P-1 or the equivalent thereof by
Moody’s Investors Service, Inc. “Moody’s” and in either case maturing within 90
days after the day of acquisition, (e) securities with maturities of 90 days or
less from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political subdivision or
taxing authority of any such state, commonwealth or territory, the securities of
which state, commonwealth, territory, political subdivision or taxing authority
(as the case may be) are rated at least A by S&P or A by Moody’s, (f) securities
with maturities of 90 days or less from the date of acquisition backed by
standby letters of credit issued by any commercial bank satisfying the
requirements of clause (b) of this definition or, (g) shares of money market
mutual or similar funds which invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition.

 

“Change in Control” shall mean the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended from time to time) of outstanding shares of
voting stock of such Person at any time, if after giving effect to such
acquisition such Person or Persons owns twenty percent (20%) or more of such
outstanding voting stock.

 

“Change in Law” means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by Buyer (or any Affiliate of Buyer)
with any request, guideline or directive (whether or not having the force of
law) of any Governmental Authority made or issued after the date of this
Agreement.

 

“Closing Date” means December 7, 2005.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time.

 

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“Collateral” shall have the meaning assigned thereto in Section 9 hereof.

 

“Collateral Value” shall mean with respect to each Purchased Asset, (i) on the
applicable Purchase Date, the value of such Purchased Asset as ascribed by the
Buyer, and (ii) on any date of determination following the applicable Purchase
Date, the least of (a) the outstanding principal balance of such Purchased
Asset, (b) the related Market Value, (c) a value equal to 60% of the Appraised
Value of such Purchased Asset, as applicable and (d) a value equal to 60% of the
cost of acquiring such Purchased Asset; provided that, the Collateral Value
shall be deemed to be zero with respect to each Purchased Asset that is not an
Eligible Asset.

 

 “Collection Account” shall have the meaning assigned thereto in the Custody
Agreement.

 

“Computer Tape” means a computer tape or other electronic medium generated by or
on behalf of Seller and delivered to Buyer and Custodian which provides
information relating to the Purchased Assets, including the information set
forth in the Loan Schedule, in a format acceptable to Buyer.

 

“Confirmation” shall have the meaning assigned thereto in Section 4(b) hereof.

 

“Contractual Obligation” shall mean as to any Person, any material provision of
any agreement, instrument or other undertaking to which such Person is a party
or by which it or any of its property is bound or any material provision of any
security issued by such Person.

 

“Custody Agreement” means the Amended and Restated Custody and Servicing
Agreement, dated as of December 7, 2005, as amended, among Seller, Buyer,
Servicer and Custodian.

 

“Custodian” means LaSalle Bank, National Association or its successors and
permitted assigns.

 

“Custodian’s Loan File” shall have the meaning assigned thereto in the Custody
Agreement.

 

“Default” means an Event of Default or an event that with notice or lapse of
time or both would become an Event of Default.

 

“Default Rate” means, as of any date of determination, the lesser of (i) the
Pricing Rate plus 4% and (ii) the maximum rate permitted by applicable law.

 

“Defaulted Loan” means a Loan with respect to which a default (other than a
payment default) occurs that materially and adversely affects the interests of
the Seller and that continues unremedied for the applicable grace period under
the terms of the Loan (or, if no grace period is specified, for 30 days).

 

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“Delinquent Loan” means a Loan for which any related payment has not been
received on or before the date 30 days after the date on which such payment is
due pursuant to the related Note without regard to any grace period, provided
that a Delinquent Loan shall remain a Delinquent Loan until the related Borrower
cures such delinquency and makes two successive monthly payments on a timely
basis, including any related grace period.

 

“Effective Date” shall mean September 13, 2005.

 

“Eligible Asset” shall have the meaning assigned thereto in the Side Letter.

 

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

 

“Event of Default” shall have the meaning assigned thereto in Section 19 hereof.

 

“Foreign Buyer” means any Buyer that is organized under the laws of a
jurisdiction other than the one in which Seller is located.  For purposes of
this definition, the United States of America, each state thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

 

“GAAP” shall mean generally accepted accounting principles in the United States
of America in effect from time to time.

 

“Governmental Authority” shall mean, with respect to any Person, any nation or
government, any state or other political subdivision thereof, or any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government and any court or arbitrator having
jurisdiction over such Person, any of its subsidiaries or any of their
properties.

 

“Guarantee” shall mean, as to any Person, any obligation of such Person directly
or indirectly guaranteeing any Indebtedness of any other Person or in any manner
providing for the payment of any Indebtedness of any other Person or otherwise
protecting the holder of such Indebtedness against loss (whether by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, or to take-or-pay or otherwise); provided that, the term
“Guarantee” shall not include (i) endorsements for collection or deposit in the
ordinary course of business or (ii) obligations to make servicing advances for
delinquent taxes and insurance, or other obligations in respect of a Mortgaged
Property, to the extent required by the Buyer. The amount of any Guarantee of a
Person shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Guarantee is made or,
if not stated or determinable, the maximum reasonably anticipated liability in
respect thereof as determined by such Person in good faith. The terms
“Guarantee” and “Guaranteed” used as verbs shall have correlative meanings.

 

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“Hedge Counterparty”: Citibank, N.A. or a Person (i) (A) with long-term and
commercial paper or short-term deposit ratings of “P-1” by Moody’s and “A-1” by
S&P and (B) which shall agree in writing that, in the event that any of its
long-term or commercial paper or short-term deposit ratings cease to be at or
above “A-2” by Moody’s and “A” by S&P, it shall secure its obligations in
accordance with the request of the Buyer or Buyer shall have the option to treat
such failure as an Early Termination Event (as defined in the ISDA Master
Agreement) by such Hedge Counterparty, (ii) that has entered into a Hedge
Instrument and (iii) that is acceptable to the Buyer.

 

“Hedge Instrument” means any interest rate cap agreement, interest rate floor
agreement, interest rate swap agreement or other interest rate hedging agreement
entered into by the Seller with a Hedge Counterparty.  Each Hedge Instrument
shall meet the requirements set forth in Section 38 hereof with respect thereto
and shall be a hedging instrument as described in Section 856(c)(6).

 

“Improvements” means all buildings, structures, improvements, parking areas,
landscaping, fixtures and articles of property now erected on, attached to, or
used or adapted for use in the operation of any Mortgaged Property, including,
without limitation, all heating, air conditioning and incinerating apparatus and
equipment, all boilers, engines, motors, dynamos, generating equipment, piping
and plumbing fixtures, water heaters, ranges, cooking apparatus and mechanical
kitchen equipment, refrigerators, freezers, cooling, ventilating, sprinkling and
vacuum cleaning systems, fire extinguishing apparatus, gas and electric
fixtures, carpeting, floor covering, underpadding, storm sashes, awnings, signs,
furnishings of public spaces, halls and lobbies, and shrubbery and plants.

 

“Income” means, with respect to any Purchased Asset at any time, any principal
thereof and all interest thereon and all dividends, sale proceeds (including,
without limitation, any proceeds from the securitization of such Purchased Asset
or other disposition thereof) and other collections and distributions thereon
(including, without limitation, any proceeds received in respect of mortgage
insurance), but not including any commitment nor origination fees.

 

“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) Capital Lease Obligations of such Person; (f) obligations of such
Person under repurchase agreements

 

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or like arrangements; (g) indebtedness of others Guaranteed by such Person;
(h) all obligations of such Person incurred in connection with the acquisition
or carrying of fixed assets by such Person; (i) indebtedness of general
partnerships of which such Person is a general partner; and (j) any other
indebtedness of such Person by a note, bond, debenture or similar instrument.

 

 “Investment Company Act” means the Investment Company Act of 1940, as amended,
including all rules and regulations promulgated thereunder.

 

“Lease” shall mean each lease entered into between a Borrower or Net Lease
Borrower and a Tenant, as amended or restated with the consent of the Buyer.

 

“LIBO Rate” shall mean with respect to each day a Transaction is outstanding (or
if such day is not a Business Day, the next succeeding Business Day), the rate
(reset on a daily basis) per annum equal to the rate published by Bloomberg or
if such rate is not available, the rate appearing at page 3750 of the Telerate
Screen as one-month LIBO Rate on such date, and if such rate shall not be so
quoted, the rate per annum at which the Buyer is offered Dollar deposits at or
about 11:00 A.M., New York City time, on such date by prime banks in the
interbank eurodollar market where the eurodollar and foreign currency and
exchange operations in respect of its Transactions are then being conducted for
delivery on such day for a period of one month and in an amount comparable to
the amount of the Transactions to be outstanding on such day.

 

“Lien” means any lien, claim, charge, restriction, pledge, security interest,
mortgage, deed of trust or other encumbrance.

 

“LLC Agreement” means the limited liability company agreement entered into by a
Net Lease Borrower, as applicable, pursuant to which LLC Interests are issued by
such Net Lease Borrower.

 

“LLC Certificate” means physical certificates evidencing LLC Interests.

 

“LLC Interests” means LLC membership interests issued pursuant to an LLC
Agreement, evidencing beneficial ownership interests in the related Net Lease
Borrower.

 

“Loan”  means a Mortgage Loan or Net Lease Loan secured by Specialty Retailers,
Drug Stores, Movie Theatres, Education Facilities, Restaurants, Interstate
Travel Plazas, Automotive Dealerships and Retailers and any other Loan secured
by any other asset type approved by Buyer in its sole discretion, in each case
originated by Seller or any of its Affiliates in accordance with the
Underwriting Guidelines.

 

“Loan Documents” shall have the meaning assigned thereto in the Custody
Agreement.

 

“Loan Schedule” means the list of Loans and/or LLC Interests delivered by Seller
to Buyer and Custodian together with each Transaction Notice and attached by the
Custodian to the Trust Receipt and setting forth as to (i) each Loan the related
Borrower name, the address of the related Mortgaged Property and the outstanding
principal balance of the Loan as of the initial Purchase Date, together with any
other information

 

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specified by Buyer from time to time and (ii) any LLC Interests, any information
specified by Buyer from time to time.

 

“Margin Call” shall have the meaning assigned thereto in Section 6 hereof.

 

“Margin Deficit” shall have the meaning assigned thereto in Section 6 hereof.

 

“Market Value” shall mean the value, determined by the Buyer in its sole
discretion, of the Purchased Assets if sold in their entirety to a single
third-party purchaser.  The Buyer’s determination of Market Value shall be
conclusive upon the parties, absent manifest error on the part of the Buyer. 
The Buyer shall have the right to mark to market the Purchased Assets on a daily
basis, which Market Value with respect to one or more of the Purchased Assets
may be determined to be zero. The Seller acknowledges that the Buyer’s
determination of Market Value is for the limited purposes of determining (i) the
Purchase Price, (ii) whether there is a Margin Deficit pursuant to Section 6
hereof and (iii) Collateral Value for purchasing purposes hereunder without the
ability to perform customary purchaser’s due diligence and is not necessarily
equivalent to a determination of the fair market value of the Purchased Assets
achieved by obtaining competing bids in an orderly market in which the
originator/servicer is not in default under a repurchase facility and the
bidders have adequate opportunity to perform customary loan and servicing due
diligence.

 

“Master Lease” shall mean a master lease pursuant to which multiple Mortgaged
Properties are leased.

 

“Master Lease FCCR” shall mean the sum of all cash flows for all Mortgaged
Properties under a Master Lease (each, as used to calculate FCCR for one such
Mortgaged Property under such Master Lease).

 

“Master Loan Agreement” means the Master Loan Agreement, dated as of
September 13, 2005, between Spirit Master Funding II, LLC and Seller and any
other master loan agreement between Seller and a Net Lease Borrower approved by
Buyer from time to time, each as amended, supplemented, modified or restated
from time to time subject to the consent of the Buyer.

 

“Master Note” means the master promissory note issued pursuant to the Master
Loan Agreement together with all riders thereto and amendments thereof or other
evidence of indebtedness of a Net Lease Borrower.

 

“Material Adverse Change” means, with respect to a Person, any material adverse
change in the business, condition (financial or otherwise), operations,
performance or properties taken as a whole or prospects of such Person.

 

“Material Adverse Effect” shall mean a material adverse effect on (a) the
property, business, operations, financial condition or prospects of the Seller,
(b) the ability of the Seller to perform in all material respects its
obligations under any of the Program Documents to which it is a party, (c) the
validity or enforceability in all material respects of any of the Program
Documents, (d) the rights and remedies of the Buyer under any of

 

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the Program Documents, (e) the timely repurchase of the Purchased Assets or
other amounts payable in connection therewith or (f) the Collateral.

 

“Maximum Aggregate LLC Interests Purchase Price” means $100,000,000.

 

“Maximum Aggregate Purchase Price” means $200,000,000 plus the Maximum Aggregate
LLC Interest Purchase Price.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor or successors
thereto.

 

“Mortgage” shall mean with respect to a Loan, the mortgage, deed of trust or
other instrument, which creates a first lien on the fee simple or leasehold
estate in such real property which secures the Note.

 

“Mortgage Loan” shall mean each of the mortgage loans which the Custodian has
been instructed to hold for the Buyer pursuant to the Custody and Servicing
Agreement, and which such mortgage loans each include, without limitation, (i) a
Note, the related Mortgage and all other Loan Documents and (ii) all right,
title and interest of the Seller in and to the Mortgaged Property covered by
such Mortgage.

 

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

 

“Multiemployer Plan” shall mean a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been or are required to be
made by Seller or any ERISA Affiliate and that is subject to Section 412 of the
Code or Section 302 or by Title IV of ERISA.

 

“Net Income” shall mean for any period, the net income of the Seller for such
period as determined in accordance with GAAP.

 

“Net Lease Borrower” means Spirit Master Funding II, LLC, Spirit Master Funding
III, LLC, and any other Affiliates of Seller approved by the Buyer.

 

“Net Lease Loan” means indebtedness of a Net Lease Borrower evidenced by a Note
or Master Note issued pursuant to a Master Loan Agreement secured by a Mortgage
on a Mortgaged Property owned by such Net Lease Borrower.

 

“Net Worth” means, with respect to any Person, the excess of total assets of
such Person, over total liabilities of such Person, adding back accumulated
depreciation but excluding the impact of “other comprehensive income”, all as
determined in accordance with GAAP.

 

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“Net Worth Increase Amounts” shall mean, on any date of determination, 75% of
the net proceeds of any issuance of equity securities by the Seller subsequent
to the date of this Agreement.

 

“Net Worth Requirements” shall have the meaning assigned thereto in
Section 14(o) hereof.

 

“Note” means, with respect to any Loan, the Master Note or any other Note, as
applicable, together with all riders thereto and amendments thereof or other
evidence of indebtedness of the related Borrower.

 

“Notice Date” shall have the meaning assigned thereto in Section 4 hereof.

 

“Obligations” means (a) all of Seller’s obligations to pay the Repurchase Price
on the Repurchase Date, and other obligations and liabilities of Seller, to
Buyer, its Affiliates or Custodian arising under, or in connection with, the
Program Documents or otherwise, whether now existing or hereafter arising;
(b) any and all sums paid by Buyer or on behalf of Buyer pursuant to the Program
Documents in order to preserve any Purchased Asset or its interest therein;
(c) in the event of any proceeding for the collection or enforcement of any of
Seller’s indebtedness, obligations or liabilities referred to in clause (a), the
reasonable expenses of retaking, holding, collecting, preparing for sale,
selling or otherwise disposing of or realizing on any Purchased Asset, or of any
exercise by Buyer or such Affiliate of its rights under the related agreements,
including without limitation, reasonable attorneys’ fees and disbursements and
court costs; and (d) all of Seller’s indemnity obligations to Buyer or Custodian
or both pursuant to the Program Documents.

 

“Origination Fee” shall have the meaning assigned thereto in the Side Letter.

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.

 

“Permitted Exceptions” shall mean the exceptions to lien priority including but
not limited to: (i) the lien of current real property taxes and assessments not
yet due and payable; (ii) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of recording
acceptable to mortgage lending institutions generally and specifically referred
to in the lender’s title insurance policy delivered to the originator of the
Loan and (A) referred to or otherwise considered in the appraisal (if any) made
for the originator of the Loan or (B) which do not adversely affect the
appraised value of the Mortgaged Property set forth in such appraisal; and
(iii) other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided
by the Mortgage or the use, enjoyment, value or marketability of the related
Mortgaged Property.

 

“Person” shall mean any legal person, including any individual, corporation,
partnership, association, joint venture, trust, limited liability company,
unincorporated organization, governmental entity or other entity of similar
nature.

 

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“Plan” shall mean an employee benefit or other plan established or maintained by
the Seller or any ERISA Affiliate and that is subject to Section 412 of the Code
or Section 302 or by Title IV of ERISA, other than a Multiemployer Plan.

 

“Price Differential” means, with respect to each Transaction as of any date, the
aggregate amount obtained by daily application of the Pricing Rate for such
Transaction to the Purchase Price on a 360-day-per-year basis for the actual
number of days during the period commencing on (and including) the Purchase Date
and ending on (but excluding) the date of determination (reduced by any amount
of such Price Differential in respect of such period previously paid by Seller
to Buyer) with respect to such Transaction.

 

“Pricing Rate” means the per annum percentage rate for determination of the
Price Differential calculated as described in Section 3(b) hereof or as
otherwise set forth in the related Confirmation.

 

“Prime Rate” means the prime rate of U.S. commercial banks as published in The
Wall Street Journal (or, if more than one such rate is published, the average of
such rates).

 

“Principal” shall have the meaning given to it in Annex I.

 

“Program Documents” means this Agreement, the Custody Agreement, any Servicing
Agreement, any Securities Account Control Agreement, any assignment of Hedge
Instrument, the Side Letter and any other agreement entered into by Seller, on
the one hand, and Buyer or one of its Affiliates (or Custodian on its behalf) on
the other, in connection herewith or therewith.

 

“Property” means any right or interest in or to property of any kind whatsoever,
whether real, personal or mixed and whether tangible or intangible.

 

“Purchase Date” means the date on which Purchased Assets are to be transferred
by Seller to Buyer.

 

“Purchase Price” shall have the meaning assigned thereto in the Side Letter.

 

“Purchased Assets” means, with respect to a Transaction, the LLC Interests, the
Loans comprising the Master Note as set forth in the Master Loan Agreement, or
other Loans, together with the related Records, Servicing Rights, Seller’s
rights under any related Hedge Instruments, and other Collateral, such other
property, rights, titles or interests as are specified on a related Transaction
Notice, and all instruments, chattel paper, securities, investment property,
accounts, and general intangibles comprising or relating to all of the
foregoing.  The term “Purchased Assets” with respect to any Transaction at any
time also shall include Additional Purchased Assets delivered pursuant to
Section 6 hereof.

 

“Qualified Originator” shall mean (a) the Seller and (b) any other originator of
Loans as may be approved by the Buyer in its sole discretion in writing from
time to time.

 

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“Rated Loan” means a Loan (i) with an Investment Grade Credit Rating or shadow
rating from any of the Rating Agencies or (ii) for which the timely payment of
principal and interest is insured by a monoline insurer, the long-term debt
obligations of which have an Investment Grade Credit Rating but are rated no
lower than “AAA” or “Aaa” by any of the Rating Agencies.

 

“Rating Agencies” means S&P and Moody’s.

 

“Records” means all instruments, agreements and other books, records, and
reports and data generated by other media for the storage of information
maintained by Seller or any other person or entity with respect to a Purchased
Asset. Records shall include the Notes, LLC Certificates, any Mortgages, the
Custodian’s Loan Files and any other instruments necessary to document or
service a Loan or the LLC Interests.

 

“Renewal Fee” as mutually agreed to by the Buyer and the Seller.

 

“Repurchase Date” shall have the meaning assigned thereto in Section 3(b) and
shall also include the date determined by application of Section 20.

 

“Repurchase Price” means the price at which Purchased Assets are to be
transferred from Buyer to Seller upon termination of a Transaction, which will
be determined in each case (including Transactions terminable upon demand) as
the sum of the Purchase Price, the Price Differential, any of the Buyer’s costs
relating to the unwinding of a related Hedge Instrument, as applicable, as of
the date of such determination.

 

“Requirement of Law” means as to any Person, the certificate of incorporation
and by-laws or other organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an arbitrator or a court
or other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.

 

“Responsible Officer” shall mean, as to any Person, the chief executive officer
or, with respect to financial matters, the chief financial officer of such
Person; provided, that in the event any such officer is unavailable at any time
he or she is required to take any action hereunder, Responsible Officer shall
mean any officer authorized to act on such officer’s behalf as demonstrated by a
certificate of corporate resolution.

 

“Restricted Payments” shall mean with respect to any Person, collectively, all
dividends or other distributions of any nature (cash, securities, assets or
otherwise), and all payments, by virtue of redemption or otherwise, on any class
of equity securities (including, without limitation, warrants, options or rights
therefor) issued by such Person, whether such securities are now or may
hereafter be authorized or outstanding and any distribution in respect of any of
the foregoing, whether directly or indirectly.

 

“S&P” means Standard and Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., and any successor or successors thereto.

 

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“Securities Account Control Agreement” means an agreement, in form and substance
acceptable to Buyer, among Seller, a securities intermediary and Buyer, pursuant
to which Buyer obtains a perfected security interest in one or more Hedge
Instruments.

 

“Servicer” means (i) Midland Loan Services, Inc., a Delaware corporation, or
(ii) any other servicer approved by Buyer in its sole discretion.

 

“Servicer Termination Event” shall have the meaning assigned thereto in the
Custody Agreement.

 

“Servicing Agreement” means any agreement (other than the Custody Agreement)
giving rise or relating to Servicing Rights with respect to a Purchased Asset,
including any assignment or other agreement relating to such agreement.

 

“Servicing Rights” means contractual, possessory or other rights of Seller,
Servicer or any other Person arising under a Servicing Agreement, the Custody
Agreement or otherwise, to administer or service a Purchased Asset or to possess
related Records.

 

“Servicing Transmission” shall mean a computer-readable magnetic or other
electronic format acceptable to the parties containing the information
identified on Exhibit C.

 

“Side Letter” means the Amended and Restated Side Letter, dated as of
December 7, 2005, between Seller and Buyer, as the same may be amended, restated
or modified from time to time.

 

“Subsidiary” means, with respect to any Person, any corporation, partnership or
other entity of which at least a majority of the securities or other ownership
interests having by the terms thereof ordinary voting power to elect a majority
of the board of directors or other persons performing similar functions of such
corporation, partnership or other entity (irrespective of whether or not at the
time securities or other ownership interests of any other class or classes of
such corporation, partnership or other entity shall have or might have voting
power by reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such Person.

 

“Tangible Net Worth” shall mean, with respect to any Person, as of any date of
determination: (i) the consolidated Net Worth of such Person and its
Subsidiaries, less (ii) the consolidated net book value of all assets of such
Person and its Subsidiaries (to the extent reflected as an asset in the balance
sheet of such Person or any Subsidiary at such date) which will be treated as
intangibles under GAAP, including, without limitation, such items as deferred
taxes, net leasehold improvements, good will, trademarks, trade names, service
marks, copyrights, patents, licenses and unamortized debt discount and expense,
but not including lease intangibles.

 

“Tenant” means the tenant of a Mortgaged Property pursuant to a Lease or
sub-lease of such Mortgaged Property, together with such tenant’s Affiliates and
any guarantor of such tenant’s obligations under such Lease.

 

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“Termination Date” has the meaning assigned thereto in Section 28.

 

“Tier One Asset” shall have the meaning assigned thereto in the Side Letter.

 

“Total Assets” shall mean with respect to any Person, for any period, the
aggregate assets of such Person and its Subsidiaries during such period,
calculated in accordance with GAAP.

 

 “Total Indebtedness” shall mean with respect to any Person, for any period, the
aggregate Indebtedness of such Person and its Subsidiaries during such period,
less the amount of any nonspecific consolidated balance sheet reserves
maintained in accordance with GAAP.

 

“Transaction” has the meaning assigned thereto in Section 1.

 

“Transaction Notice” means a written request of Seller to enter into a
Transaction, in the form attached to the Custody Agreement, which is delivered
to Buyer and Custodian.

 

“Triple Net Lease” means a Lease under which the tenant pays all operating
expenses of the property including, without limitation, insurance, taxes,
maintenance and capital expenditures relating to such property.

 

“Trust Receipt” means a Trust Receipt and Certification as defined in the
Custody Agreement.

 

“Trustee Report” means the Trustee Report as defined in the Indenture dated as
of July 26, 2005 between Spirit Master Funding, LLC, a Delaware limited
liability company and Citibank, N.A., a national banking association, not in its
individual capacity, but solely as Indenture Trustee.

 

“Underwriting Guidelines” means the Spirit Finance Corporation Underwriting
Manual, dated as of April 2005, which has been approved in writing by Buyer, as
the same may be amended from time to time.

 

“Underwriting Package” means, with respect to each Loan, the Spirit Finance
Credit Memorandum as defined in the Underwriting Guidelines.

 

“Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect on
the date hereof in the State of New York; provided, that if by reason of
mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than New York,
“Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection.

 

“Unit-Level FCCR” shall mean the FCCR for any unit where unit information was
available as of the date of determination, the ratio of (1) the sum of the
unit’s, (i) pre-tax income, (ii) interest expense, (iii) all non-cash amounts in
respect of depreciation and

 

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amortization, (iv) all non-recurring expenses, (v) specifically documented
discretionary management fees, and (vi) all operating lease or rent expense
(including with respect to any equipment loans) less (vii) all non-recurring
income and normalized overhead based on parent company’s general and
administrative expenses as a percent of sales (if not available, industry
standards applied), for the related fiscal period, to (2) the sum of the unit’s,
(i) total operating lease or rent expense, (ii) interest expense and
(iii) scheduled principal payments on indebtedness payable in respect of the
unit or obligor, in each case for the period of time as to which such figure is
presented.

 

“Weighted Average Aggregate FCCR” shall mean the FCCR calculated by weighting
Unit-Level FCCR and Master Lease FCCR by Collateral Value of the related
Purchased Assets.

 

“Wet Funded Loan” means a Loan for which the related Custodian’s Loan File has
not been delivered to the Custodian as of the related Purchase Date.  Upon
delivery of the Custodian’s Loan File to the Custodian, the Loan shall cease to
be a Wet Funded Loan.

 

B)                                CAPITALIZED TERMS USED BUT NOT DEFINED IN THIS
AGREEMENT SHALL HAVE THE MEANINGS ASSIGNED THERETO IN THE CUSTODY AGREEMENT.

 

C)                                 INTERPRETATION.

 

Headings are for convenience only and do not affect interpretation. The
following rules of this subsection (c) apply unless the context requires
otherwise. The singular includes the plural and conversely. A gender includes
all genders. Where a word or phrase is defined, its other grammatical forms have
a corresponding meaning. A reference to a subsection, Section, Annex or
Exhibit is, unless otherwise specified, a reference to a Section of, or annex or
exhibit to, this Agreement. A reference to a party to this Agreement or another
agreement or document includes the party’s successors and permitted substitutes
or assigns. A reference to an agreement or document is to the agreement or
document as amended, modified, novated, supplemented or replaced, except to the
extent prohibited by any Program Document. A reference to legislation or to a
provision of legislation includes a modification or re-enactment of it, a
legislative provision substituted for it and a regulation or statutory
instrument issued under it. A reference to writing includes a facsimile
transmission and any means of reproducing words in a tangible and permanently
visible form. A reference to conduct includes, without limitation, an omission,
statement or undertaking, whether or not in writing. An Event of Default
subsists until it has been waived in writing by Buyer. The words “hereof”,
“herein”, “hereunder” and similar words refer to this Agreement as a whole and
not to any particular provision of this Agreement. The term “including” is not
limiting and means “including without limitation.” In the computation of periods
of time from a specified date to a later specified date, the word “from” means
“from and including”; the words “to” and “until” each mean “to but excluding”,
and the word “through” means “to and including.” This Agreement may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are independent of each
other and shall each be performed in accordance with their terms. Unless the
context otherwise clearly requires, all accounting terms not expressly defined
herein shall be construed, and all financial computations required under this
Agreement shall be made, in accordance with GAAP, consistently applied.
References herein to “fiscal year”

 

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and “fiscal quarter” refer to such fiscal periods of Seller. Except where
otherwise provided in this Agreement any determination, consent, approval,
statement or certificate made or confirmed in writing with notice to Seller by
Buyer or an authorized officer of Buyer provided for in this Agreement is
conclusive and binds the parties in the absence of manifest error, except where
the consent of the Seller is required. A reference to an agreement includes a
security interest, guarantee, agreement or legally enforceable arrangement
whether or not in writing related to such agreement. A reference to a document
includes an agreement (as so defined) in writing or a certificate, notice,
instrument or document, or any information recorded in computer disk form. Where
Seller is required to provide any document to Buyer under the terms of this
Agreement, the relevant document shall be provided in writing or printed form
unless Buyer requests otherwise. At the request of Buyer, the document shall be
provided in computer disk form or both printed and computer disk form, unless
such computer disk copy requires Seller to pay an unreasonable expense.  This
Agreement is the result of negotiations among and has been reviewed by counsels
to Buyer and Seller, and is the product of all the parties. In the
interpretation of this Agreement, no rule of construction shall apply to
disadvantage one party on the ground that such party proposed or was involved in
the preparation of any particular provision of this Agreement or this Agreement
itself. Except where otherwise expressly stated Buyer may give or withhold, or
give conditionally, approvals and consents and may form opinions and make
determinations and exercise discretion at its absolute discretion.  Any
requirement of good faith, discretion or judgment by Buyer shall not be
construed to require Buyer to request or await receipt of information or
documentation not immediately available from or with respect to Seller, a
servicer of the Purchased Assets, any other Person or the Purchased Assets
themselves.

 

3.                                      THE TRANSACTIONS

 

A)                                 SELLER SHALL REPURCHASE PURCHASED ASSETS FROM
BUYER ON EACH RELATED REPURCHASE DATE.  EACH OBLIGATION TO REPURCHASE EXISTS
WITHOUT REGARD TO ANY PRIOR OR INTERVENING LIQUIDATION OR FORECLOSURE WITH
RESPECT TO EACH PURCHASED ASSET (BUT LIQUIDATION OR FORECLOSURE PROCEEDS
RECEIVED BY BUYER SHALL BE APPLIED TO REDUCE THE REPURCHASE PRICE EXCEPT AS
OTHERWISE PROVIDED HEREIN).  SELLER IS OBLIGATED TO OBTAIN THE PURCHASED ASSETS
FROM BUYER OR ITS DESIGNEE (INCLUDING THE CUSTODIAN) AT SELLER’S EXPENSE ON (OR
AFTER) THE RELATED REPURCHASE DATE.

 

B)                                PROVIDED THAT THE APPLICABLE CONDITIONS IN
SECTIONS 10(A) AND (B) HAVE BEEN SATISFIED, EACH PURCHASED ASSET THAT IS A LOAN
THAT IS REPURCHASED BY SELLER ON THE 10TH DAY OF EACH MONTH (OR, IF SUCH 10TH
DAY IS NOT A BUSINESS DAY, THE IMMEDIATELY FOLLOWING BUSINESS DAY) AND EACH
PURCHASED ASSET THAT IS AN LLC INTEREST THAT IS REPURCHASED BY SELLER ON THE
20TH DAY OF EACH MONTH (OR, IF SUCH 20TH DAY IS NOT A BUSINESS DAY, THE
IMMEDIATELY FOLLOWING BUSINESS DAY) FOLLOWING THE RELATED INITIAL PURCHASE DATE
(THE DAY OF THE MONTH SO DETERMINED FOR EACH MONTH, OR ANY OTHER DATE DESIGNATED
BY SELLER TO BUYER FOR SUCH A REPURCHASE ON AT LEAST ONE BUSINESS DAY’S PRIOR
NOTICE TO BUYER, A “REPURCHASE DATE,” WHICH TERM SHALL ALSO INCLUDE THE DATE
DETERMINED BY APPLICATION OF SECTION 20) SHALL AUTOMATICALLY BECOME SUBJECT TO A
NEW TRANSACTION UNLESS BUYER IS NOTIFIED BY SELLER AT LEAST ONE BUSINESS DAY
PRIOR TO THE RELATED REPURCHASE DATE; PROVIDED THAT, IF THE REPURCHASE DATE SO
DETERMINED IS LATER THAN THE TERMINATION DATE, THE REPURCHASE DATE FOR SUCH
TRANSACTION SHALL AUTOMATICALLY RESET TO THE TERMINATION DATE, AND THE
PROVISIONS OF THIS SENTENCE AS IT MIGHT RELATE TO A NEW TRANSACTION SHALL EXPIRE
ON SUCH DATE. FOR EACH PURCHASED ASSET SUBJECT TO A TRANSACTION, UNLESS
OTHERWISE

 

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AGREED, (X) WITH RESPECT TO THE LLC INTERESTS, TO THE EXTENT BUYER DOES NOT HAVE
ACCESS TO SUCH REPORT THROUGH CITIBANK, N.A., SELLER SHALL PROVIDE TO BUYER THE
MOST RECENT TRUSTEE REPORT IMMEDIATELY UPON SELLER’S RECEIPT OF SAME, (Y) THE
ACCRUED AND UNPAID PRICE DIFFERENTIAL SHALL BE CALCULATED BEGINNING ON THE FIRST
DAY AND ENDING ON THE LAST DAY OF THE CALENDAR MONTH PRIOR TO THE RELATED
REPURCHASE DATE AND SETTLED IN CASH ON EACH RELATED REPURCHASE DATE AND (Z) THE
PRICING RATE SHALL BE AS SET FORTH IN THE SIDE LETTER.  IN THE EVENT A PRICING
RATE IS BASED ON A LIBO RATE THAT IS NOT FIXED FOR ANY SUCH PERIOD, AGENT SHALL
ESTABLISH A LIBO RATE ON EACH BUSINESS DAY, BASED ON ONE-MONTH LIBO RATE FOR
EACH SUCH DAY, AND THE PRICING RATE WILL CHANGE UPON EACH CHANGE IN LIBO RATE.

 

4.                                      ENTERING INTO TRANSACTIONS; TRANSACTION
NOTICE, CONFIRMATIONS

 

A)                                 UNLESS OTHERWISE AGREED, SELLER SHALL GIVE
BUYER NOTICE BY NO LATER THAN 5:00 P.M. (NEW YORK CITY TIME) ON THE DAY THAT IS
TWO BUSINESS DAYS PRIOR TO ANY PROPOSED PURCHASE DATE (THE DATE ON WHICH SUCH
NOTICE IS GIVEN, THE “NOTICE DATE”). ON THE NOTICE DATE, SELLER SHALL REQUEST
THAT BUYER ENTER INTO A TRANSACTION BY FURNISHING TO BUYER A TRANSACTION NOTICE,
LOAN SCHEDULE AND ASSET BASE CERTIFICATE.  THE SELLER SHALL DELIVER TO CUSTODIAN
A TRANSACTION NOTICE, THE RELATED LOAN SCHEDULE AND THE RELATED CUSTODIAN’S LOAN
FILE FOR EACH LOAN OR LLC INTERESTS SUBJECT TO SUCH TRANSACTION IN ACCORDANCE
WITH THE TERMS OF THE CUSTODY AGREEMENT.

 

B)                                IN THE EVENT THAT THE PARTIES HERETO DESIRE TO
ENTER INTO A TRANSACTION ON TERMS OTHER THAN AS SET FORTH HEREIN, THE PARTIES
SHALL EXECUTE A “CONFIRMATION” SPECIFYING SUCH TERMS PRIOR TO ENTERING INTO SUCH
TRANSACTION. ANY SUCH CONFIRMATION AND THE RELATED TRANSACTION NOTICE, TOGETHER
WITH THIS AGREEMENT, SHALL CONSTITUTE CONCLUSIVE EVIDENCE OF THE TERMS AGREED
BETWEEN BUYER AND SELLER WITH RESPECT TO THE TRANSACTION TO WHICH THE
CONFIRMATION RELATES.

 

5.                                      PAYMENT AND TRANSFER

 

Unless otherwise agreed, all transfers of funds hereunder shall be in
immediately available funds and all Purchased Assets transferred shall be
transferred to the Custodian pursuant to the Custody Agreement. Any Repurchase
Price received by Buyer after 2:00 p.m. New York City time shall be applied on
the next succeeding Business Day.

 

6.                                      MARGIN MAINTENANCE

 

A)                                 IF AT ANY TIME THE AGGREGATE MARKET VALUE OF
ALL PURCHASED ASSETS SUBJECT TO ALL TRANSACTIONS IS LESS THAN THE AGGREGATE
BUYER’S MARGIN AMOUNT FOR ALL SUCH TRANSACTIONS (A “MARGIN DEFICIT”), THEN BUYER
MAY BY NOTICE TO SELLER REQUIRE SELLER IN SUCH TRANSACTIONS, AT BUYER’S OPTION,
TO TRANSFER TO BUYER CASH, ADDITIONAL LOANS OR LLC INTERESTS ACCEPTABLE TO BUYER
IN ITS SOLE DISCRETION (“ADDITIONAL PURCHASED ASSETS”), SO THAT THE CASH AND
AGGREGATE MARKET VALUE OF THE PURCHASED ASSETS, INCLUDING ANY SUCH ADDITIONAL
PURCHASED ASSETS, WILL THEREUPON EQUAL OR EXCEED SUCH AGGREGATE BUYER’S MARGIN
AMOUNT (SUCH REQUIREMENT, A “MARGIN CALL”).

 

B)                                NOTICE REQUIRED PURSUANT TO SECTION 6 MAY BE
GIVEN BY ANY MEANS PROVIDED IN SECTION 36 HEREOF. ANY NOTICE GIVEN BEFORE
1:00 P.M. NEW YORK TIME ON A BUSINESS DAY SHALL BE MET, AND THE RELATED MARGIN
CALL SATISFIED, NO LATER THAN 5:00 P.M. NEW YORK TIME ON THE NEXT

 

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SUCCEEDING BUSINESS DAY; NOTICE GIVEN AFTER 1:00 P.M. NEW YORK TIME ON A
BUSINESS DAY SHALL BE MET, AND THE RELATED MARGIN CALL SATISFIED, NO LATER THAN
2:00 P.M. NEW YORK TIME ON THE SECOND SUCCEEDING BUSINESS DAY. THE FAILURE OF
BUYER, ON ANY ONE OR MORE OCCASIONS, TO EXERCISE ITS RIGHTS HEREUNDER, SHALL NOT
CHANGE OR ALTER THE TERMS AND CONDITIONS TO WHICH THIS AGREEMENT IS SUBJECT OR
LIMIT THE RIGHT OF BUYER TO DO SO AT A LATER DATE. SELLER AND BUYER EACH AGREE
THAT A FAILURE OR DELAY BY BUYER TO EXERCISE ITS RIGHTS HEREUNDER SHALL NOT
LIMIT OR WAIVE BUYER’S RIGHTS UNDER THIS AGREEMENT OR OTHERWISE EXISTING BY LAW
OR IN ANY WAY CREATE ADDITIONAL RIGHTS FOR SELLER.

 

7.                                      INCOME PAYMENTS

 

Where a particular term of a Transaction extends over the date on which Income
is paid in respect of any Purchased Assets subject to that Transaction, such
Income shall be the property of Buyer. Notwithstanding the foregoing, and
provided no Default has occurred and is continuing, all Income received, whether
by Seller, Buyer, Custodian, Servicer or any servicer or any other Person, in
respect of the Purchased Assets shall be applied in accordance with
Section 4.1(c) of the Custody Agreement.

 

8.                                      TAXES; TAX TREATMENT

 

A)                                 ALL PAYMENTS MADE BY THE SELLER UNDER THIS
AGREEMENT SHALL BE MADE FREE AND CLEAR OF, AND WITHOUT DEDUCTION OR WITHHOLDING
FOR OR ON ACCOUNT OF, ANY PRESENT OR FUTURE TAXES, LEVIES, IMPOSTS, DEDUCTIONS,
CHARGES OR WITHHOLDINGS, AND ALL LIABILITIES (INCLUDING PENALTIES, INTEREST AND
ADDITIONS TO TAX) WITH RESPECT THERETO IMPOSED BY ANY GOVERNMENTAL AUTHORITY
THEREOF OR THEREIN, EXCLUDING INCOME TAXES, BRANCH PROFITS TAXES, FRANCHISE
TAXES OR ANY OTHER TAX IMPOSED ON THE NET INCOME BY THE UNITED STATES, A STATE
OR A FOREIGN JURISDICTION UNDER THE LAWS OF WHICH THE BUYER IS ORGANIZED OR OF
ITS APPLICABLE LENDING OFFICE, OR ANY POLITICAL SUBDIVISION THEREOF, (ALL SUCH
NON-EXCLUDED TAXES, “TAXES”), ALL OF WHICH SHALL BE PAID BY THE SELLER FOR ITS
OWN ACCOUNT NOT LATER THAN THE DATE WHEN DUE. IF THE SELLER IS REQUIRED BY LAW
OR REGULATION TO DEDUCT OR WITHHOLD ANY TAXES FROM OR IN RESPECT OF ANY AMOUNT
PAYABLE HEREUNDER, IT SHALL: (A) MAKE SUCH DEDUCTION OR WITHHOLDING; (B) PAY THE
AMOUNT SO DEDUCTED OR WITHHELD TO THE APPROPRIATE GOVERNMENTAL AUTHORITY NOT
LATER THAN THE DATE WHEN DUE; (C) DELIVER TO BUYER, PROMPTLY, ORIGINAL TAX
RECEIPTS AND OTHER EVIDENCE SATISFACTORY TO BUYER OF THE PAYMENT WHEN DUE OF THE
FULL AMOUNT OF SUCH TAXES; AND (D) PAY TO THE BUYER SUCH ADDITIONAL AMOUNTS AS
MAY BE NECESSARY SO THAT SUCH BUYER RECEIVES, FREE AND CLEAR OF ALL TAXES, A NET
AMOUNT EQUAL TO THE AMOUNT IT WOULD HAVE RECEIVED UNDER THIS AGREEMENT, AS IF NO
SUCH DEDUCTION OR WITHHOLDING HAD BEEN MADE.

 

B)                                IN ADDITION, THE SELLER AGREES TO PAY TO THE
RELEVANT GOVERNMENTAL AUTHORITY IN ACCORDANCE WITH APPLICABLE LAW ANY CURRENT OR
FUTURE STAMP OR DOCUMENTARY TAXES OR ANY OTHER EXCISE OR PROPERTY TAXES, CHARGES
OR SIMILAR LEVIES (INCLUDING, WITHOUT LIMITATION, MORTGAGE RECORDING TAXES,
TRANSFER TAXES AND SIMILAR FEES) IMPOSED BY THE UNITED STATES OR ANY TAXING
AUTHORITY THEREOF OR THEREIN THAT ARISE FROM ANY PAYMENT MADE HEREUNDER OR FROM
THE EXECUTION, DELIVERY OR REGISTRATION OF, OR OTHERWISE WITH RESPECT TO, THIS
AGREEMENT (“OTHER TAXES”).

 

C)                                 THE SELLER AGREES TO INDEMNIFY THE BUYER FOR
THE FULL AMOUNT OF TAXES (INCLUDING ADDITIONAL AMOUNTS WITH RESPECT THERETO) AND
OTHER TAXES, AND THE FULL AMOUNT OF TAXES OF ANY

 

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KIND IMPOSED BY ANY JURISDICTION ON AMOUNTS PAYABLE UNDER THIS SECTION 8(C), AND
ANY LIABILITY (INCLUDING PENALTIES, INTEREST AND EXPENSES) ARISING THEREFROM OR
WITH RESPECT THERETO, PROVIDED THAT THE BUYER SHALL HAVE PROVIDED THE SELLER
WITH EVIDENCE, REASONABLY SATISFACTORY TO THE SELLER, OF PAYMENT OF TAXES OR
OTHER TAXES, AS THE CASE MAY BE; PROVIDED THAT BUYER GIVES NOTICE TO SELLER OF
ALL DEFICIENCY NOTICES RECEIVED BY THE BUYER.

 

D)                                ANY FOREIGN BUYER SHALL PROVIDE THE SELLER
WITH PROPERLY COMPLETED UNITED STATES INTERNAL REVENUE SERVICE (IRS) FORM W-8BEN
OR W-8ECI OR ANY SUCCESSOR FORM PRESCRIBED BY THE IRS, CERTIFYING THAT SUCH
BUYER IS ENTITLED TO BENEFITS UNDER AN INCOME TAX TREATY TO WHICH THE UNITED
STATES IS A PARTY WHICH REDUCES THE RATE OF WITHHOLDING TAX ON PAYMENTS OF
INTEREST OR CERTIFYING THAT THE INCOME RECEIVABLE PURSUANT TO THIS AGREEMENT IS
EFFECTIVELY CONNECTED WITH THE CONDUCT OF A TRADE OR BUSINESS IN THE UNITED
STATES ON OR PRIOR TO THE DATE UPON WHICH EACH SUCH FOREIGN BUYER BECOMES A
BUYER.  EACH FOREIGN BUYER WILL RESUBMIT THE APPROPRIATE FORM ON THE EARLIEST OF
(A) THE THIRD ANNIVERSARY OF THE PRIOR SUBMISSION OR (B) ON OR BEFORE THE
EXPIRATION OF THIRTY (30) DAYS AFTER THERE IS A “CHANGE IN CIRCUMSTANCES” WITH
RESPECT TO SUCH BUYER AS DEFINED IN TREAS. REG. SECTION 1.1441(E)(4)(II)(D).
 FOR ANY PERIOD WITH RESPECT TO WHICH A FOREIGN BUYER HAS FAILED TO PROVIDE THE
SELLER WITH THE APPROPRIATE FORM OR OTHER RELEVANT DOCUMENT PURSUANT TO THIS
SECTION 8(D) (UNLESS SUCH FAILURE IS DUE TO A CHANGE IN TREATY, LAW, OR
REGULATION OCCURRING SUBSEQUENT TO THE DATE ON WHICH A FORM ORIGINALLY WAS
REQUIRED TO BE PROVIDED), SUCH BUYER SHALL NOT BE ENTITLED TO ANY “GROSS-UP” OF
TAXES OR INDEMNIFICATION UNDER SECTION 8(C) WITH RESPECT TO TAXES IMPOSED BY THE
UNITED STATES; PROVIDED, HOWEVER, THAT SHOULD A FOREIGN BUYER, WHICH IS
OTHERWISE EXEMPT FROM A WITHHOLDING TAX, BECOME SUBJECT TO TAXES BECAUSE OF ITS
FAILURE TO DELIVER A FORM REQUIRED HEREUNDER, THE SELLER SHALL TAKE SUCH STEPS
AS SUCH FOREIGN BUYER SHALL REASONABLY REQUEST TO ASSIST SUCH FOREIGN BUYER TO
RECOVER SUCH TAXES.

 

E)                                 WITHOUT PREJUDICE TO THE SURVIVAL OF ANY
OTHER AGREEMENT OF SELLER HEREUNDER, THE AGREEMENTS AND OBLIGATIONS OF SELLER
CONTAINED IN THIS SECTION 8 SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT. 
NOTHING CONTAINED IN THIS SECTION 8 SHALL REQUIRE BUYER TO MAKE AVAILABLE ANY OF
ITS TAX RETURNS OR OTHER INFORMATION THAT IT DEEMS TO BE CONFIDENTIAL OR
PROPRIETARY.

 

F)                                   EACH PARTY TO THIS AGREEMENT ACKNOWLEDGES
THAT IT IS ITS INTENT FOR PURPOSES OF U.S. FEDERAL, STATE AND LOCAL INCOME AND
FRANCHISE TAXES TO TREAT EACH TRANSACTION AS INDEBTEDNESS OF SELLER THAT IS
SECURED BY THE PURCHASED ASSETS AND THAT THE PURCHASED ASSETS ARE OWNED BY
SELLER IN THE ABSENCE OF A DEFAULT BY SELLER.  ALL PARTIES TO THIS AGREEMENT
AGREE TO SUCH TREATMENT AND AGREE TO TAKE NO ACTION INCONSISTENT WITH THIS
TREATMENT, UNLESS REQUIRED BY LAW.

 

9.                                      SECURITY INTEREST

 

A)                                 SELLER AND BUYER INTEND THAT THE TRANSACTIONS
HEREUNDER BE SALES TO BUYER OF THE PURCHASED ASSETS AND NOT LOANS FROM BUYER TO
SELLER SECURED BY THE PURCHASED ASSETS. HOWEVER, IN ORDER TO PRESERVE BUYER’S
RIGHTS UNDER THIS AGREEMENT IN THE EVENT THAT A COURT OR OTHER FORUM
RECHARACTERIZES THE TRANSACTIONS HEREUNDER AS OTHER THAN SALES, AND AS SECURITY
FOR SELLER’S PERFORMANCE OF ALL OF ITS OBLIGATIONS, SELLER HEREBY GRANTS BUYER A
FULLY PERFECTED FIRST PRIORITY SECURITY INTEREST IN THE FOLLOWING PROPERTY,
WHETHER NOW EXISTING OR HEREAFTER ACQUIRED: (I) THE PURCHASED ASSETS, (II) THE
RECORDS, (III) ALL RELATED SERVICING RIGHTS, (IV) ALL MORTGAGE GUARANTIES AND
INSURANCE RELATING TO SUCH PURCHASED ASSETS (ISSUED BY GOVERNMENTAL AGENCIES OR
OTHERWISE)

 

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OR THE RELATED MORTGAGED PROPERTY AND ANY MORTGAGE INSURANCE CERTIFICATE OR
OTHER DOCUMENT EVIDENCING SUCH MORTGAGE GUARANTIES OR INSURANCE AND ALL CLAIMS
AND PAYMENTS THEREUNDER, (V) ALL INSTRUMENTS, CHATTEL PAPER, SECURITIES,
INVESTMENT PROPERTY AND GENERAL INTANGIBLES AND OTHER ASSETS COMPRISING OR
RELATING TO THE PURCHASED ASSETS, (VI) ANY SECURITIES ACCOUNT, INCLUDING THE
COLLECTION ACCOUNT AND ALL SECURITY ENTITLEMENTS TO FINANCIAL ASSETS NOW OR
HEREAFTER CARRIED IN OR CREDITED TO ANY SECURITIES ACCOUNT, (VII) ALL RIGHTS TO
INCOME AND THE RIGHTS TO ENFORCE SUCH PAYMENTS ARISING FROM ANY OF THE PURCHASED
ASSETS, (VIII) ALL GUARANTEES OR OTHER SUPPORT FOR THE PURCHASED ASSETS,
(IX) ANY AND ALL REPLACEMENTS, SUBSTITUTIONS, DISTRIBUTIONS ON THE PURCHASED
ASSETS, (X) ANY INTEREST IN THE PURCHASED ASSETS OR THE SERVICING OF THE
PURCHASED ASSETS, AND (XI) ANY NOW EXISTING OR HEREAFTER ARISING PROCEEDS AND
DISTRIBUTIONS WITH RESPECT TO ANY OF THE FOREGOING AND ANY OTHER PROPERTY,
RIGHTS, TITLES OR INTERESTS AS ARE SPECIFIED ON A TRANSACTION NOTICE
(COLLECTIVELY, THE “COLLATERAL”).  SELLER ACKNOWLEDGES AND AGREES THAT ITS
RIGHTS WITH RESPECT TO THE COLLATERAL (INCLUDING WITHOUT LIMITATION, ITS
SECURITY INTEREST IN THE PURCHASED ASSETS AND ANY OTHER COLLATERAL GRANTED TO
SELLER PURSUANT TO ANY OTHER AGREEMENT) ARE AND SHALL CONTINUE TO BE AT ALL
TIMES JUNIOR AND SUBORDINATE TO THE RIGHTS OF BUYER HEREUNDER.

 

The parties acknowledge and agree that the perfection of such security interest
is intended to be accomplished through possession of the related Purchased
Assets by Buyer, the Custodian or by any other Person on Buyer’s behalf, and
that such possession unless otherwise agreed is for Buyer’s own account.

 

B)                                SELLER HEREBY IRREVOCABLY CONSTITUTES AND
APPOINTS BUYER AND ANY OFFICER OR AGENT THEREOF, WITH FULL POWER OF
SUBSTITUTION, AS ITS TRUE AND LAWFUL ATTORNEY-IN-FACT WITH FULL IRREVOCABLE
POWER AND AUTHORITY IN THE PLACE AND STEAD OF SELLER AND IN THE NAME OF SELLER
OR IN ITS OWN NAME, FROM TIME TO TIME IN BUYER’S DISCRETION, FOR THE PURPOSE OF
CARRYING OUT THE TERMS OF THIS AGREEMENT, TO TAKE ANY AND ALL APPROPRIATE ACTION
AND TO EXECUTE ANY AND ALL DOCUMENTS AND INSTRUMENTS WHICH MAY BE REASONABLY
NECESSARY OR DESIRABLE TO ACCOMPLISH THE PURPOSES OF THIS AGREEMENT, TO FILE
SUCH FINANCING STATEMENT OR STATEMENTS RELATING TO THE PURCHASED ASSETS AND THE
COLLATERAL WITHOUT SELLER’S SIGNATURE THEREON AS BUYER AT ITS OPTION MAY DEEM
APPROPRIATE, AND, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SELLER
HEREBY GIVES BUYER THE POWER AND RIGHT, ON BEHALF OF SELLER, WITHOUT ASSENT BY,
BUT WITH NOTICE TO, SELLER, IF AN EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING, TO DO THE FOLLOWING:

 

(I)                                     IN THE NAME OF SELLER, OR IN ITS OWN
NAME, OR OTHERWISE, TO TAKE POSSESSION OF AND ENDORSE AND COLLECT ANY CHECKS,
DRAFTS, NOTES, ACCEPTANCES OR OTHER INSTRUMENTS FOR THE PAYMENT OF MONEYS DUE
WITH RESPECT TO ANY OTHER PURCHASED ASSETS AND TO FILE ANY CLAIM OR TO TAKE ANY
OTHER ACTION OR PROCEEDING IN ANY COURT OF LAW OR EQUITY OR OTHERWISE DEEMED
APPROPRIATE BY BUYER FOR THE PURPOSE OF COLLECTING ANY AND ALL SUCH MONEYS DUE
WITH RESPECT TO ANY OTHER PURCHASED ASSETS WHENEVER PAYABLE;

 

(II)                                  TO PAY OR DISCHARGE TAXES AND LIENS LEVIED
OR PLACED ON OR THREATENED AGAINST THE PURCHASED ASSETS;

 

(III)                               (A) TO DIRECT ANY PARTY LIABLE FOR ANY
PAYMENT UNDER ANY PURCHASED ASSETS TO MAKE PAYMENT OF ANY AND ALL MONEYS DUE OR
TO BECOME DUE THEREUNDER DIRECTLY TO BUYER OR AS BUYER SHALL DIRECT; (B) TO ASK
OR DEMAND FOR, COLLECT, RECEIVE PAYMENT OF AND RECEIPT FOR, ANY AND ALL MONEYS,
CLAIMS AND OTHER AMOUNTS DUE OR TO BECOME DUE AT ANY

 

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TIME IN RESPECT OF OR ARISING OUT OF ANY PURCHASED ASSETS; (C) TO SIGN AND
ENDORSE ANY INVOICES, ASSIGNMENTS, VERIFICATIONS, NOTICES AND OTHER DOCUMENTS IN
CONNECTION WITH ANY PURCHASED ASSETS; (D) TO COMMENCE AND PROSECUTE ANY SUITS,
ACTIONS OR PROCEEDINGS AT LAW OR IN EQUITY IN ANY COURT OF COMPETENT
JURISDICTION TO COLLECT THE PURCHASED ASSETS OR ANY PROCEEDS THEREOF AND TO
ENFORCE ANY OTHER RIGHT IN RESPECT OF ANY PURCHASED ASSETS; (E) TO DEFEND ANY
SUIT, ACTION OR PROCEEDING BROUGHT AGAINST SELLER WITH RESPECT TO ANY PURCHASED
ASSETS; (F) TO SETTLE, COMPROMISE OR ADJUST ANY SUIT, ACTION OR PROCEEDING
DESCRIBED IN CLAUSE (E) ABOVE AND, IN CONNECTION THEREWITH, TO GIVE SUCH
DISCHARGES OR RELEASES AS BUYER MAY DEEM APPROPRIATE; AND (G) GENERALLY, TO
SELL, TRANSFER, PLEDGE AND MAKE ANY AGREEMENT WITH RESPECT TO OR OTHERWISE DEAL
WITH ANY PURCHASED ASSETS AS FULLY AND COMPLETELY AS THOUGH BUYER WERE THE
ABSOLUTE OWNER THEREOF FOR ALL PURPOSES, AND TO DO, AT BUYER’S OPTION AND
SELLER’S EXPENSE, AT ANY TIME, AND FROM TIME TO TIME, ALL ACTS AND THINGS WHICH
BUYER DEEMS NECESSARY TO PROTECT, PRESERVE OR REALIZE UPON THE PURCHASED ASSETS
AND THE COLLATERAL AND BUYER’S LIENS THEREON AND TO EFFECT THE INTENT OF THIS
AGREEMENT, ALL AS FULLY AND EFFECTIVELY AS SELLER MIGHT DO.

 

Seller hereby ratifies all that said attorneys shall lawfully do or cause to be
done by virtue hereof.  This power of attorney is a power coupled with an
interest and shall be irrevocable until all Obligations have been paid in full
and this Agreement is terminated in accordance with the terms hereof.

 

Seller also authorizes Buyer, if an Event of Default shall have occurred, from
time to time, to execute, in connection with any sale provided for in Section 20
hereof, any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Purchased Assets.  The powers conferred on Buyer
hereunder are solely to protect Buyer’s interests in the Purchased Assets and
shall not impose any duty upon it to exercise any such powers.  Buyer shall be
accountable only for amounts that it actually receives as a result of the
exercise of such powers, and neither it nor any of its officers, directors,
employees or agents shall be responsible to Seller for any act or failure to act
hereunder, except for its or their own gross negligence or willful misconduct.

 

10.                               CONDITIONS PRECEDENT

 

A)                                 AS CONDITIONS PRECEDENT TO THE FIRST
TRANSACTION TO OCCUR ON OR AFTER THE EFFECTIVE DATE, BUYER SHALL HAVE COMPLETED
THE DUE DILIGENCE REVIEW PURSUANT TO SECTION 39, AND SUCH REVIEW SHALL BE
SATISFACTORY TO BUYER IN ITS SOLE DISCRETION.  BUYER SHALL HAVE RECEIVED ON OR
BEFORE THE DAY OF SUCH FIRST TRANSACTION THE FOLLOWING, IN FORM AND SUBSTANCE
SATISFACTORY TO BUYER AND DULY EXECUTED BY EACH PARTY THERETO:

 

(I)                                     THE PROGRAM DOCUMENTS DULY EXECUTED AND
DELIVERED BY THE PARTIES THERETO AND BEING IN FULL FORCE AND EFFECT, FREE OF ANY
MODIFICATION, BREACH OR WAIVER;

 

(II)                                  EVIDENCE THAT ALL OTHER ACTIONS NECESSARY
OR, IN THE OPINION OF BUYER, DESIRABLE TO PERFECT AND PROTECT BUYER’S INTEREST
IN THE PURCHASED ASSETS AND OTHER COLLATERAL HAVE BEEN TAKEN, INCLUDING, WITHOUT
LIMITATION, DULY EXECUTED AND FILED UNIFORM COMMERCIAL CODE FINANCING STATEMENTS
ON FORM UCC-1;

 

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(III)                               A CERTIFIED COPY OF SELLER’S CORPORATE
RESOLUTIONS, APPROVING THE PROGRAM DOCUMENTS AND TRANSACTIONS THEREUNDER (EITHER
SPECIFICALLY OR BY GENERAL RESOLUTION), AND ALL DOCUMENTS EVIDENCING OTHER
NECESSARY LIMITED LIABILITY COMPANY OR CORPORATE ACTION OR GOVERNMENTAL
APPROVALS AS MAY BE REQUIRED IN CONNECTION WITH THE PROGRAM DOCUMENTS;

 

(IV)                              AN INCUMBENCY CERTIFICATE OF THE SECRETARY OF
SELLER, CERTIFYING THE NAMES, TRUE SIGNATURES AND TITLES OF SELLER’S
REPRESENTATIVES DULY AUTHORIZED TO REQUEST TRANSACTIONS HEREUNDER AND TO EXECUTE
THE PROGRAM DOCUMENTS AND THE OTHER DOCUMENTS TO BE DELIVERED THEREUNDER;

 

(V)                                 OPINIONS OF SELLER’S COUNSEL AS TO SUCH
MATTERS AS BUYER MAY REASONABLY REQUEST (INCLUDING, WITHOUT LIMITATION,
PERFECTED SECURITY INTEREST IN THE COLLATERAL) AND IN FORM AND SUBSTANCE
ACCEPTABLE TO BUYER;

 

(VI)                              A COPY OF THE UNDERWRITING GUIDELINES
CERTIFIED BY AN OFFICER OF THE SELLER;

 

(VII)                           EVIDENCE OF ESTABLISHMENT OF THE COLLECTION
ACCOUNT; AND

 

(VIII)                        ANY OTHER DOCUMENTS REASONABLY REQUESTED BY BUYER.

 

B)                                THE OBLIGATION OF BUYER TO ENTER INTO EACH
TRANSACTION (INCLUDING THE INITIAL TRANSACTION) PURSUANT TO THIS AGREEMENT IS
SUBJECT TO THE FOLLOWING CONDITIONS PRECEDENT:

 

(I)                                     BUYER OR ITS DESIGNEE SHALL HAVE
RECEIVED ON OR BEFORE THE DAY OF A TRANSACTION WITH RESPECT TO SUCH PURCHASED
ASSETS THE FOLLOWING, IN FORM AND SUBSTANCE SATISFACTORY TO BUYER AND (IF
APPLICABLE) DULY EXECUTED:

 

(A)                              TRANSACTION NOTICE AND LOAN SCHEDULE DELIVERED
PURSUANT TO SECTION 4(A);

 

(B)                                THE TRUST RECEIPT WITH RESPECT TO SUCH
PURCHASED ASSETS, WITH THE LOAN SCHEDULE ATTACHED; AND

 

(C)                                SUCH CERTIFICATES, CUSTOMARY OPINIONS OF
COUNSEL OR OTHER DOCUMENTS AS BUYER MAY REASONABLY REQUEST, PROVIDED THAT SUCH
OPINIONS OF COUNSEL SHALL NOT BE REQUIRED ROUTINELY IN CONNECTION WITH EACH
TRANSACTION BUT SHALL ONLY BE REQUIRED FROM TIME TO TIME AS DEEMED NECESSARY BY
BUYER IN GOOD FAITH.

 

(II)                                  NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING.

 

(III)                               BUYER SHALL NOT HAVE 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 MADE IT
UNLAWFUL, AND NO GOVERNMENTAL AUTHORITY SHALL HAVE ASSERTED THAT IT IS UNLAWFUL,
FOR BUYER TO ENTER INTO TRANSACTIONS WITH A PRICING RATE BASED ON LIBO RATE.

 

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(IV)                              ALL REPRESENTATIONS AND WARRANTIES IN THE
PROGRAM DOCUMENTS SHALL BE TRUE AND CORRECT ON THE DATE OF SUCH TRANSACTION AND
SELLER IS IN COMPLIANCE WITH THE TERMS AND CONDITIONS OF THE PROGRAM DOCUMENTS.

 

(V)                                 THE THEN AGGREGATE OUTSTANDING PURCHASE
PRICE FOR ALL PURCHASED ASSETS, WHEN ADDED TO THE PURCHASE PRICE FOR THE
REQUESTED TRANSACTION, SHALL NOT EXCEED THE MAXIMUM AGGREGATE PURCHASE PRICE
WITH RESPECT TO ALL PURCHASED ASSETS.

 

(VI)                              BUYER SHALL HAVE DETERMINED THAT ALL ACTIONS
NECESSARY OR, IN THE OPINION OF BUYER, DESIRABLE TO MAINTAIN THE BUYER’S
PERFECTED INTEREST IN THE PURCHASED ASSETS AND OTHER COLLATERAL HAVE BEEN TAKEN,
INCLUDING, WITHOUT LIMITATION, DULY EXECUTED AND FILED UNIFORM COMMERCIAL CODE
FINANCING STATEMENTS ON FORM UCC-1.

 

(VII)                           SELLER SHALL HAVE PAID TO BUYER ALL FEES AND
EXPENSES OWED TO BUYER IN ACCORDANCE WITH THIS AGREEMENT.

 

(VIII)                        BUYER OR ITS DESIGNEE SHALL HAVE RECEIVED ANY
OTHER DOCUMENTS REASONABLY REQUESTED BY BUYER.

 

(IX)                                THERE IS NO MARGIN DEFICIT AT THE TIME
IMMEDIATELY PRIOR TO OR IMMEDIATELY FOLLOWING SUCH TRANSACTION.

 

(X)                                   NO EVENT OR EVENTS SHALL HAVE BEEN
REASONABLY DETERMINED BY BUYER TO HAVE OCCURRED RESULTING IN THE EFFECTIVE
ABSENCE OF A “REPO MARKET” RESPECTING LOANS OR MORTGAGE-BACKED OR ASSET-BACKED
SECURITIES SUCH THAT BUYER IS OR WAS UNABLE TO FINANCE OR FUND PURCHASES UNDER
THIS AGREEMENT THROUGH THE “REPO MARKET” OR BUYER’S CUSTOMERS.

 

(XI)                                EACH SECURED PARTY (INCLUDING ANY PARTY THAT
HAS A PRECAUTIONARY SECURITY INTEREST IN A LOAN OR LLC INTERESTS) HAS RELEASED
ALL OF ITS RIGHT, TITLE AND INTEREST IN, TO AND UNDER SUCH LOAN OR LLC INTERESTS
(INCLUDING, WITHOUT LIMITATION, ANY SECURITY INTEREST THAT SUCH SECURED PARTY OR
SECURED PARTY’S AGENT MAY HAVE BY VIRTUE OF ITS POSSESSION, CUSTODY OR CONTROL
THEREOF) AND HAS FILED UNIFORM COMMERCIAL CODE TERMINATION STATEMENTS IN RESPECT
OF ANY UNIFORM COMMERCIAL CODE FILINGS MADE IN RESPECT OF SUCH LOAN OR LLC
INTERESTS, AND EACH SUCH RELEASE AND UNIFORM COMMERCIAL CODE TERMINATION
STATEMENT HAS BEEN DELIVERED TO THE BUYER PRIOR TO SUCH TRANSACTION.

 

(XII)                             SELLER SHALL HAVE DELIVERED IN SUCH
TRANSACTION TO BUYER, WITH RESPECT TO A LOAN, THE UNDERWRITING PACKAGE (A) FOR
EACH LOAN THAT IS A TIER ONE ASSET, NOT LESS THAN FOUR BUSINESS DAYS PRIOR TO
THE DATE OF THE RELATED TRANSACTION NOTICE AND (B) FOR EACH LOAN THAT IS NOT A
TIER ONE ASSET, NOT LESS THAN TEN BUSINESS DAYS PRIOR TO THE DATE OF THE RELATED
TRANSACTION NOTICE, AND BUYER SHALL HAVE APPROVED EACH SUCH LOAN IN ITS SOLE
DISCRETION. BUYER AGREES THAT IT SHALL NOTIFY SELLER OF ITS APPROVAL OR
DISAPPROVAL OF EACH SUCH PROPOSED LOAN WITHIN TEN BUSINESS DAYS AFTER ITS
RECEIPT OF THE COMPLETE UNDERWRITING PACKAGE AND SUPPLEMENTAL REQUESTS (WHETHER
REQUESTED ORALLY OR IN WRITING) RELATED TO SUCH PROPOSED LOAN. FOR PURPOSES OF
THIS PROVISION, AN UNDERWRITING PACKAGE RECEIVED BY BUYER AFTER 1:00 P.M. NEW
YORK CITY TIME SHALL BE DEEMED TO BE RECEIVED ON THE FOLLOWING BUSINESS DAY.

 

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(XIII)                          EACH LOAN CONSTITUTING A PURCHASED ASSET IN SUCH
TRANSACTION SHALL HAVE AN INTEREST RATE NOT LESS THAN: (A) WITH RESPECT TO A
FIXED-RATE LOAN, THE 10-YEAR U.S. DOLLAR INTEREST RATE SWAPS PLUS 1.75% AS OF
THE INITIAL PURCHASE DATE OF SUCH PURCHASED ASSET OR (B) WITH RESPECT TO A
FLOATING-RATE LOAN, LIBO RATE PLUS 1.75% AS OF THE INITIAL PURCHASE DATE OF SUCH
PURCHASED ASSET.

 

(XIV)                         SATISFACTION OF ANY CONDITIONS PRECEDENT TO THE
FIRST TRANSACTION ON OR AFTER THE EFFECTIVE DATE AS SET FORTH IN CLAUSE (A) OF
THIS SECTION 10 THAT WERE NOT SATISFIED PRIOR TO SUCH FIRST PURCHASE DATE.

 

(XV)                            WITH RESPECT TO THE LLC INTERESTS, SELLER SHALL
HAVE DIRECTED ALL PAYMENTS ON THE LLC INTEREST TO BE DEPOSITED INTO A CASH
ACCOUNT ENTITLED “CITIGROUP GLOBAL MARKETS REALTY CORP.”, FOR THE BENEFIT OF
BUYER.

 

11.                               RELEASE OF PURCHASED ASSETS

 

Upon timely payment in full of the Repurchase Price and all other Obligations
owing with respect to a Purchased Asset, if no Default or Event of Default has
occurred and is continuing, Buyer shall, and shall direct Custodian to, release
such Purchased Asset unless such release would give rise to or perpetuate a
Margin Deficit. Except as set forth in Sections 6 and 16, Seller shall give at
least three Business Days’ prior written notice to Buyer if such repurchase
shall occur on other than a Repurchase Date set forth in Section 3(b).

 

If such a Margin Deficit is applicable, Buyer shall notify Seller of the amount
thereof and Seller may thereupon satisfy the Margin Call in the manner specified
in Section 6.

 

12.                               RELIANCE

 

With respect to any Transaction, Buyer may conclusively rely upon, and shall
incur no liability to Seller in acting upon, any request or other communication
that Buyer reasonably believes to have been given or made by a person authorized
to enter into a Transaction on Seller’s behalf.

 

13.                               REPRESENTATIONS AND WARRANTIES

 

Seller hereby represents and warrants, and shall on and as of the Purchase Date
for any Transaction and on and as of each date thereafter through and including
the related Repurchase Date be deemed to represent and warrant, that:

 

A)                                 EXISTENCE.  THE SELLER (A) IS A CORPORATION
DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE
JURISDICTION OF ITS ORGANIZATION AND QUALIFIES AS A REAL ESTATE INVESTMENT TRUST
UNDER SECTION 856 OF THE CODE AND IS IN COMPLIANCE WITH ALL PROVISIONS OF THE
CODE GOVERNING ITS STATUS AS A REAL ESTATE INVESTMENT TRUST, (B) HAS ALL
REQUISITE CORPORATE OR OTHER POWER, AND HAS ALL GOVERNMENTAL LICENSES,
AUTHORIZATIONS, CONSENTS AND APPROVALS, NECESSARY TO OWN ITS ASSETS AND CARRY ON
ITS BUSINESS AS NOW BEING, OR AS PROPOSED TO BE, CONDUCTED, EXCEPT WHERE THE
LACK OF SUCH LICENSES, AUTHORIZATIONS, CONSENTS AND APPROVALS WOULD NOT BE
REASONABLY

 

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LIKELY TO HAVE A MATERIAL ADVERSE EFFECT, (C) IS QUALIFIED TO DO BUSINESS AND IS
IN GOOD STANDING IN ALL OTHER JURISDICTIONS IN WHICH THE NATURE OF THE BUSINESS
CONDUCTED BY IT MAKES SUCH QUALIFICATION NECESSARY, EXCEPT WHERE FAILURE SO TO
QUALIFY WOULD NOT BE REASONABLY LIKELY (EITHER INDIVIDUALLY OR IN THE AGGREGATE)
TO HAVE A MATERIAL ADVERSE EFFECT, AND (D) IS IN COMPLIANCE IN ALL MATERIAL
RESPECTS WITH ALL REQUIREMENTS OF LAW, EXCEPT WHERE FAILURE SO TO COMPLY WOULD
NOT HAVE A MATERIAL ADVERSE EFFECT.

 

B)                                FINANCIAL CONDITION.  THE SELLER HAS
HERETOFORE FURNISHED TO THE BUYER A COPY OF ITS AUDITED CONSOLIDATED BALANCE
SHEETS WHICH INCLUDE ITS CONSOLIDATED SUBSIDIARIES, EACH AS OF DECEMBER 31,
2004.  ALL SUCH FINANCIAL STATEMENTS ARE MATERIALLY COMPLETE AND CORRECT AND
FAIRLY PRESENT THE CONSOLIDATED FINANCIAL CONDITION OF THE SELLER AND ITS
SUBSIDIARIES AND THE CONSOLIDATED RESULTS OF THEIR OPERATIONS FOR THE FISCAL
YEAR ENDED ON SAID DATE, ALL IN ACCORDANCE WITH GAAP APPLIED ON A CONSISTENT
BASIS. SINCE DECEMBER 31, 2004, THERE HAS BEEN NO DEVELOPMENT OR EVENT OR ANY
PROSPECTIVE DEVELOPMENT OR EVENT WHICH HAS HAD OR SHOULD REASONABLY BE EXPECTED
TO HAVE A MATERIAL ADVERSE EFFECT.

 

C)                                 LITIGATION.  THERE ARE NO ACTIONS, SUITS,
ARBITRATIONS, INVESTIGATIONS OR PROCEEDINGS PENDING OR, TO ITS KNOWLEDGE,
THREATENED AGAINST THE SELLER OR ANY OF ITS SUBSIDIARIES OR AFFECTING ANY OF THE
PROPERTY THEREOF BEFORE ANY GOVERNMENTAL AUTHORITY, (I) AS TO WHICH INDIVIDUALLY
OR IN THE AGGREGATE THERE IS A REASONABLE LIKELIHOOD OF AN ADVERSE DECISION
WHICH WOULD BE REASONABLY LIKELY TO HAVE A MATERIAL ADVERSE EFFECT OR (II) WHICH
QUESTIONS THE VALIDITY OR ENFORCEABILITY OF ANY OF THE PROGRAM DOCUMENTS OR ANY
ACTION TO BE TAKEN IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY AND
THERE IS A REASONABLE LIKELIHOOD OF A MATERIAL ADVERSE EFFECT OR ADVERSE
DECISION.

 

D)                                NO BREACH.  NEITHER (A) THE EXECUTION AND
DELIVERY OF THE PROGRAM DOCUMENTS OR (B) THE CONSUMMATION OF THE TRANSACTIONS
THEREIN CONTEMPLATED IN COMPLIANCE WITH THE TERMS AND PROVISIONS THEREOF WILL
CONFLICT WITH OR RESULT IN A BREACH OF THE CHARTER OR BY-LAWS (OR OTHER
ORGANIZATIONAL OR GOVERNING DOCUMENTS) OF THE SELLER, OR ANY APPLICABLE LAW,
RULE OR REGULATION, OR ANY ORDER, WRIT, INJUNCTION OR DECREE OF ANY GOVERNMENTAL
AUTHORITY, OR OTHER MATERIAL AGREEMENT OR INSTRUMENT TO WHICH THE SELLER, OR ANY
OF ITS SUBSIDIARIES, IS A PARTY OR BY WHICH ANY OF THEM OR ANY OF THEIR PROPERTY
IS BOUND OR TO WHICH ANY OF THEM IS SUBJECT, OR CONSTITUTE A DEFAULT UNDER ANY
SUCH MATERIAL AGREEMENT OR INSTRUMENT, OR (EXCEPT FOR THE LIENS CREATED PURSUANT
TO THIS AGREEMENT) RESULT IN THE CREATION OR IMPOSITION OF ANY LIEN UPON ANY
PROPERTY OF THE SELLER OR ANY OF ITS SUBSIDIARIES, PURSUANT TO THE TERMS OF ANY
SUCH AGREEMENT OR INSTRUMENT.

 

E)                                 ACTION.  THE SELLER HAS ALL NECESSARY
CORPORATE OR OTHER POWER, AUTHORITY AND LEGAL RIGHT TO EXECUTE, DELIVER AND
PERFORM ITS OBLIGATIONS UNDER EACH OF THE PROGRAM DOCUMENTS TO WHICH IT IS A
PARTY; THE EXECUTION, DELIVERY AND PERFORMANCE BY THE SELLER OF EACH OF THE
PROGRAM DOCUMENTS TO WHICH IT IS A PARTY HAS BEEN DULY AUTHORIZED BY ALL
NECESSARY CORPORATE OR OTHER ACTION ON ITS PART; AND EACH PROGRAM DOCUMENT HAS
BEEN DULY AND VALIDLY EXECUTED AND DELIVERED BY THE SELLER AND CONSTITUTES A
LEGAL, VALID AND BINDING OBLIGATION OF THE SELLER, ENFORCEABLE AGAINST THE
SELLER IN ACCORDANCE WITH ITS TERMS.

 

F)                                   APPROVALS.  NO AUTHORIZATIONS, APPROVALS OR
CONSENTS OF, AND NO FILINGS OR REGISTRATIONS WITH, ANY GOVERNMENTAL AUTHORITY,
OR ANY OTHER PERSON, ARE NECESSARY FOR THE EXECUTION, DELIVERY OR PERFORMANCE BY
THE SELLER OF THE PROGRAM DOCUMENTS TO WHICH IT IS A PARTY

 

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OR FOR THE LEGALITY, VALIDITY OR ENFORCEABILITY THEREOF, EXCEPT FOR FILINGS AND
RECORDINGS IN RESPECT OF THE LIENS CREATED PURSUANT TO THIS AGREEMENT.

 

G)                                MARGIN REGULATIONS.  NEITHER A TRANSACTION
HEREUNDER, NOR THE USE OF THE PROCEEDS THEREOF, WILL VIOLATE OR BE INCONSISTENT
WITH THE PROVISIONS OF REGULATION T, U OR X.

 

H)                                TAXES.  THE SELLER AND ITS SUBSIDIARIES HAVE
FILED ALL FEDERAL INCOME TAX RETURNS AND ALL OTHER MATERIAL TAX RETURNS THAT ARE
REQUIRED TO BE FILED BY THEM AND HAVE PAID ALL TAXES DUE PURSUANT TO SUCH
RETURNS OR PURSUANT TO ANY ASSESSMENT RECEIVED BY ANY OF THEM, EXCEPT FOR ANY
SUCH TAXES, IF ANY, THAT ARE BEING APPROPRIATELY CONTESTED IN GOOD FAITH BY
APPROPRIATE PROCEEDINGS DILIGENTLY CONDUCTED AND WITH RESPECT TO WHICH ADEQUATE
RESERVES HAVE BEEN PROVIDED. THE CHARGES, ACCRUALS AND RESERVES ON THE BOOKS OF
THE SELLER AND ITS SUBSIDIARIES IN RESPECT OF TAXES AND OTHER GOVERNMENTAL
CHARGES ARE ADEQUATE.

 

I)                                    INVESTMENT COMPANY ACT.  NEITHER THE
SELLER NOR ANY OF ITS SUBSIDIARIES IS AN “INVESTMENT COMPANY”, OR A COMPANY
“CONTROLLED” BY AN “INVESTMENT COMPANY”, WITHIN THE MEANING OF THE INVESTMENT
COMPANY ACT OF 1940, AS AMENDED FROM TIME TO TIME. THE SELLER IS NOT SUBJECT TO
ANY FEDERAL OR STATE STATUTE OR REGULATION WHICH LIMITS ITS ABILITY TO INCUR
INDEBTEDNESS.

 

J)                                    NO LEGAL BAR.  WITH THE CAVEAT AS SET
FORTH IN 13(D), THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT AND
THE TRANSACTIONS HEREUNDER AND THE USE OF THE PROCEEDS THEREOF WILL NOT VIOLATE
ANY REQUIREMENT OF LAW OR CONTRACTUAL OBLIGATION OF THE SELLER OR OF ANY OF ITS
SUBSIDIARIES AND WILL NOT RESULT IN, OR REQUIRE, THE CREATION OR IMPOSITION OF
ANY LIEN (OTHER THAN THE LIENS CREATED HEREUNDER) ON ANY OF ITS OR THEIR
RESPECTIVE PROPERTIES OR REVENUES PURSUANT TO ANY SUCH REQUIREMENT OF LAW OR
CONTRACTUAL OBLIGATION.

 

K)                                 NO DEFAULT.  NEITHER THE SELLER NOR ANY OF
ITS SUBSIDIARIES IS IN DEFAULT UNDER OR WITH RESPECT TO ANY OF ITS CONTRACTUAL
OBLIGATIONS IN ANY RESPECT WHICH SHOULD REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT. NO DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING UNDER THIS AGREEMENT.

 

L)                                    COLLATERAL; COLLATERAL SECURITY.

 

(I)                                     THE SELLER HAS NOT ASSIGNED, PLEDGED, OR
OTHERWISE CONVEYED OR ENCUMBERED ANY PURCHASED ASSET TO ANY OTHER PERSON, AND
IMMEDIATELY PRIOR TO THE SALE OF ANY SUCH PURCHASED ASSET TO THE BUYER, THE
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 LIENS TO BE
RELEASED SIMULTANEOUSLY WITH THE LIENS GRANTED IN FAVOR OF THE BUYER HEREUNDER
AND NO PERSON OTHER THAN THE SELLER HAS ANY LIEN ON ANY PURCHASED ASSET.

 

(II)                                  THE PROVISIONS OF THIS AGREEMENT ARE
EFFECTIVE TO CREATE IN FAVOR OF THE BUYER A VALID SECURITY INTEREST IN ALL
RIGHT, TITLE AND INTEREST OF THE SELLER IN, TO AND UNDER THE COLLATERAL.

 

(III)                               UPON RECEIPT BY THE CUSTODIAN OF EACH NOTE,
ENDORSED IN BLANK BY A DULY AUTHORIZED OFFICER OF THE PAYEE OR LAST ENDORSEE,
THE BUYER SHALL HAVE A FULLY PERFECTED

 

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FIRST PRIORITY SECURITY INTEREST THEREIN, IN THE LOAN EVIDENCED THEREBY AND IN
THE SELLER’S INTEREST IN THE RELATED MORTGAGED PROPERTY.

 

(IV)                              UPON RECEIPT BY THE CUSTODIAN OF EACH LLC
CERTIFICATE, THE BUYER SHALL HAVE A FULLY PERFECTED FIRST PRIORITY SECURITY
INTEREST IN THE RELATED LLC INTERESTS.

 

(V)                                 UPON THE FILING OF FINANCING STATEMENTS ON
FORM UCC-1, NAMING THE BUYER AS “SECURED PARTY” AND THE SELLER AS “DEBTOR” AND
DESCRIBING THE COLLATERAL, THE SECURITY INTERESTS GRANTED HEREUNDER IN THE
COLLATERAL WILL CONSTITUTE FULLY PERFECTED FIRST PRIORITY SECURITY INTERESTS
UNDER THE UNIFORM COMMERCIAL CODE IN ALL RIGHT, TITLE AND INTEREST OF THE SELLER
IN, TO AND UNDER SUCH COLLATERAL, WHICH CAN BE PERFECTED BY FILING UNDER THE
UNIFORM COMMERCIAL CODE.

 

M)                              CHIEF EXECUTIVE OFFICE; CHIEF OPERATING OFFICE. 
THE SELLER’S CHIEF EXECUTIVE OFFICE ON THE EFFECTIVE DATE IS LOCATED AT 14631 N.
SCOTTSDALE RD., SUITE 200, SCOTTSDALE, ARIZONA 85254 AND THE CHIEF OPERATING
OFFICE IS LOCATED AT 14631 N. SCOTTSDALE RD., SUITE 200, SCOTTSDALE, ARIZONA
85254.

 

N)                                LOCATION OF BOOKS AND RECORDS.  THE LOCATION
WHERE THE SELLER KEEPS ITS BOOKS AND RECORDS, INCLUDING ALL COMPUTER TAPES AND
RECORDS RELATING TO THE PURCHASED ASSETS AND ANY COLLATERAL, IS ITS CHIEF
EXECUTIVE OFFICE OR CHIEF OPERATING OFFICE OR THE OFFICES OF THE CUSTODIAN AND
THE SERVICER.

 

O)                                TRUE AND COMPLETE DISCLOSURE.  THE
INFORMATION, REPORTS, FINANCIAL STATEMENTS, EXHIBITS AND SCHEDULES FURNISHED IN
WRITING BY OR ON BEHALF OF THE SELLER TO THE BUYER IN CONNECTION WITH THE
NEGOTIATION, PREPARATION OR DELIVERY OF THIS AGREEMENT AND THE OTHER PROGRAM
DOCUMENTS OR INCLUDED HEREIN OR THEREIN OR DELIVERED PURSUANT HERETO OR THERETO,
WHEN TAKEN AS A WHOLE, DO NOT CONTAIN ANY UNTRUE STATEMENT OF MATERIAL FACT OR
OMIT TO STATE ANY MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS HEREIN OR
THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT
MISLEADING. ALL WRITTEN INFORMATION FURNISHED AFTER THE DATE HEREOF BY OR ON
BEHALF OF THE SELLER TO THE BUYER IN CONNECTION WITH THIS AGREEMENT AND THE
OTHER PROGRAM DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY
WILL BE TRUE, COMPLETE AND ACCURATE IN EVERY MATERIAL RESPECT, OR (IN THE CASE
OF PROJECTIONS) BASED ON REASONABLE ESTIMATES, ON THE DATE AS OF WHICH SUCH
INFORMATION IS STATED OR CERTIFIED. THERE IS NO FACT KNOWN TO A RESPONSIBLE
OFFICER THAT, AFTER DUE INQUIRY, COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT THAT HAS NOT BEEN DISCLOSED HEREIN, IN THE OTHER PROGRAM
DOCUMENTS OR IN A REPORT, FINANCIAL STATEMENT, EXHIBIT, SCHEDULE, DISCLOSURE
LETTER OR OTHER WRITING FURNISHED TO THE BUYER FOR USE IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

P)                                ERISA.  EACH PLAN TO WHICH THE SELLER OR ITS
SUBSIDIARIES MAKE DIRECT CONTRIBUTIONS, AND, TO THE KNOWLEDGE OF THE SELLER,
EACH OTHER PLAN AND EACH MULTIEMPLOYER PLAN, IS IN COMPLIANCE IN ALL MATERIAL
RESPECTS WITH, AND HAS BEEN ADMINISTERED IN ALL MATERIAL RESPECTS IN COMPLIANCE
WITH, THE APPLICABLE PROVISIONS OF ERISA, THE CODE AND ANY OTHER FEDERAL OR
STATE LAW. NO EVENT OR CONDITION HAS OCCURRED AND IS CONTINUING AS TO WHICH THE
SELLER WOULD BE UNDER AN OBLIGATION TO FURNISH A REPORT TO THE BUYER UNDER
SECTION 14(A)(VI) HEREOF.

 

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Q)                                LICENSES.  THE BUYER WILL NOT BE REQUIRED
SOLELY AS A RESULT OF PURCHASING THE PURCHASED ASSETS TO BE LICENSED, REGISTERED
OR APPROVED OR TO OBTAIN PERMITS OR OTHERWISE QUALIFY (I) TO DO BUSINESS IN ANY
STATE IN WHICH IT CURRENTLY SO REQUIRED OR (II) UNDER ANY STATE CONSUMER
LENDING, FAIR DEBT COLLECTION OR OTHER APPLICABLE STATE STATUTE OR REGULATION.

 

R)                                   TRUE SALES.  ANY AND ALL INTEREST OF A
QUALIFIED ORIGINATOR IN, TO AND UNDER ANY MORTGAGE FUNDED IN THE NAME OF OR
ACQUIRED BY SUCH QUALIFIED ORIGINATOR OR SELLER WHICH IS AN AFFILIATE OF THE
SELLER HAS BEEN SOLD, TRANSFERRED, CONVEYED AND ASSIGNED TO THE SELLER PURSUANT
TO A LEGAL SALE AND SUCH QUALIFIED ORIGINATOR RETAINS NO INTEREST IN SUCH LOAN.

 

S)                                 NO BURDENSOME RESTRICTIONS.  NO REQUIREMENT
OF LAW OR CONTRACTUAL OBLIGATION OF THE SELLER OR ANY OF ITS SUBSIDIARIES HAS A
MATERIAL ADVERSE EFFECT.

 

T)                                   SUBSIDIARIES.  ALL OF THE SUBSIDIARIES OF
THE SELLER AT THE DATE HEREOF ARE LISTED ON SCHEDULE A TO THIS AGREEMENT.

 

U)                                ORIGINATION AND ACQUISITION OF LOANS.  THE
LOANS WERE ORIGINATED OR ACQUIRED BY THE SELLER OR A QUALIFIED ORIGINATOR, AND
THE ORIGINATION AND COLLECTION PRACTICES USED BY THE SELLER OR QUALIFIED
ORIGINATOR, AS APPLICABLE, WITH RESPECT TO THE LOANS HAVE BEEN, IN ALL MATERIAL
RESPECTS LEGAL, PROPER, PRUDENT AND CUSTOMARY IN THE FRANCHISE OR COMMERCIAL, AS
APPLICABLE, MORTGAGE LOAN ORIGINATION BUSINESS AND IN ACCORDANCE WITH THE
UNDERWRITING GUIDELINES.  THE SERVICING OF EACH OF THE LOANS HAS BEEN IN ALL
MATERIAL RESPECTS, LEGAL, PROPER, PRUDENT AND CUSTOMARY IN THE COMMERCIAL
MORTGAGE LOAN SERVICING BUSINESS AND IN ACCORDANCE WITH THE ACCEPTED SERVICING
PRACTICES.

 

V)                                SELLER SOLVENT; FRAUDULENT CONVEYANCE. AS OF
THE DATE HEREOF AND IMMEDIATELY AFTER GIVING EFFECT TO EACH TRANSACTION, THE
FAIR VALUE OF THE ASSETS OF THE SELLER IS GREATER THAN THE FAIR VALUE OF THE
LIABILITIES (INCLUDING, WITHOUT LIMITATION, CONTINGENT LIABILITIES IF AND TO THE
EXTENT REQUIRED TO BE RECORDED AS A LIABILITY ON THE FINANCIAL STATEMENTS OF THE
SELLER IN ACCORDANCE WITH GAAP) OF THE SELLER AND THE SELLER IS AND WILL BE
SOLVENT, IS AND WILL BE ABLE TO PAY ITS DEBTS AS THEY MATURE AND DOES NOT AND
WILL NOT HAVE AN UNREASONABLY SMALL AMOUNT OF CAPITAL TO ENGAGE IN THE BUSINESS
IN WHICH IT IS ENGAGED AND PROPOSES TO ENGAGE. SELLER DOES NOT INTEND TO INCUR,
OR BELIEVE THAT IT HAS INCURRED, DEBTS BEYOND ITS ABILITY TO PAY SUCH DEBTS AS
THEY MATURE. SELLER IS NOT CONTEMPLATING THE COMMENCEMENT OF INSOLVENCY,
BANKRUPTCY, LIQUIDATION OR CONSOLIDATION PROCEEDINGS OR THE APPOINTMENT OF A
RECEIVER, LIQUIDATOR, CONSERVATOR, TRUSTEE OR SIMILAR OFFICIAL IN RESPECT OF
SELLER OR ANY OF ITS ASSETS. SELLER IS NOT TRANSFERRING ANY PURCHASED ASSET WITH
ANY INTENT TO HINDER, DELAY OR DEFRAUD ANY OF ITS CREDITORS.

 

W)                              FCCR.  (I) THE WEIGHTED AVERAGE AGGREGATE FCCR
FOR ALL OF THE PURCHASED ASSETS IS NOT LESS THAN 1.5; AND (II) (A) NO MORE THAN
FIVE PERCENT (5%) OF THE PURCHASED ASSETS (BY AGGREGATE COLLATERAL VALUE) HAVE A
UNIT-LEVEL FCCR OF BETWEEN 1.25 AND 1.10; PROVIDED THAT IF THE AGGREGATE
COLLATERAL VALUE OF THE PURCHASED ASSETS IS LESS THAN $100,000,000, THEN NO MORE
THAN THE GREATER OF (1) FIVE PERCENT (5%) OF THE PURCHASED ASSETS (BY AGGREGATE
COLLATERAL VALUE) OR (2) $6,500,000 IN COLLATERAL VALUE OF THE PURCHASED ASSETS
HAVE A UNIT-LEVEL FCCR OF BETWEEN 1.25 AND 1.10 AND (B) NO MORE THAN FIVE
PERCENT (5%) OF PURCHASED ASSETS HAVE A MASTER LEASE FCCR OF BETWEEN 1.25 AND
1.10; PROVIDED THAT IF THE AGGREGATE COLLATERAL VALUE OF THE PURCHASED ASSETS IS
LESS THAN $100,000,000, THEN NO MORE THAN THE GREATER OF (1) FIVE PERCENT

 

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(5%) OF THE PURCHASED ASSETS (BY AGGREGATE COLLATERAL VALUE) OR (2) $6,500,000
IN COLLATERAL VALUE OF THE PURCHASED ASSETS HAVE A MASTER LEASE FCCR OF BETWEEN
1.25 AND 1.10.

 

X)                                  PROGRAM DOCUMENTS.  THE PROGRAM DOCUMENTS
AND ANY OTHER AGREEMENT EXECUTED AND DELIVERED IN CONNECTION WITH THE LOANS AND
THE LLC INTERESTS ARE GENUINE, AND EACH IS THE LEGAL, VALID AND BINDING
OBLIGATION OF THE MAKER THEREOF ENFORCEABLE IN ACCORDANCE WITH ITS TERMS. THE
PROGRAM DOCUMENTS ARE IN FULL FORCE AND EFFECT, AND THE ENFORCEABILITY OF THE
PROGRAM DOCUMENTS HAVE NOT BEEN CONTESTED BY ANY OTHER PARTY.  NO DEFAULT OR
EVENT OF DEFAULT EXISTS UNDER ANY OF THE PROGRAM DOCUMENTS THAT COULD REASONABLY
BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT OR THAT HAS NOT BEEN CURED OR
REMEDIED ON A TIMELY BASIS.  NEITHER THE SELLER NOR ANY OTHER PARTY TO THE
PROGRAM DOCUMENTS HAVE WAIVED THE PERFORMANCE BY ANY OTHER PARTY OF ANY ACTION,
IF THE FAILURE TO PERFORM SUCH ACTION WOULD CAUSE THE PROGRAM DOCUMENTS TO BE IN
DEFAULT, NOR HAS THE SELLER WAIVED ANY DEFAULT RESULTING FROM ANY ACTION OR
INACTION BY SUCH PARTY, IN EACH CASE IF SUCH WAIVER COULD REASONABLY BE EXPECTED
TO HAVE A MATERIAL ADVERSE EFFECT.

 

14.                               COVENANTS OF SELLER

 

Seller hereby covenants with Buyer as follows:

 

A)                                 FINANCIAL STATEMENTS.  THE SELLER SHALL
DELIVER TO THE BUYER:

 

(I)                                     ANNUAL CONSOLIDATED AUDITED FINANCIAL
STATEMENTS OF THE SELLER AND ITS AFFILIATES NO LATER THAN 90 DAYS AFTER YEAR-END
AND QUARTERLY UNAUDITED STATEMENTS OF THE SELLER AND ITS AFFILIATES NO LATER
THAN 45 DAYS AFTER QUARTER-END, ALL IN ACCORDANCE WITH GAAP, CONSISTENTLY
APPLIED, AS AT THE END OF, AND FOR, SUCH PERIOD (SUBJECT TO NORMAL YEAR-END
AUDIT ADJUSTMENTS);

 

(II)                                  AS SOON AS REASONABLY PRACTICABLE,
(A) QUARTERLY AND ANNUAL CONSOLIDATING FINANCIAL STATEMENTS REFLECTING MATERIAL
INTER-COMPANY ADJUSTMENTS AND (B) ALL FORM 10-K, REGISTRATION STATEMENTS AND
OTHER “CORPORATE FINANCE” FILINGS MADE WITH THE SECURITIES AND EXCHANGE
COMMISSION (“SEC”) (OTHER THAN 8-K AND SECTION 16 FILINGS); PROVIDED, HOWEVER,
THAT THE SELLER WILL PROVIDE BUYER WITH A COPY OF THE SELLER’S OR ITS
AFFILIATES’ ANNUAL SEC FORM 10-K FILING NO LATER THAN 90 DAYS AFTER YEAR-END,
ALL IN ACCORDANCE WITH GAAP, CONSISTENTLY APPLIED, AS AT THE END OF, AND FOR,
SUCH PERIOD (SUBJECT TO NORMAL YEAR-END AUDIT ADJUSTMENTS);

 

(III)                               ON A QUARTERLY BASIS, AN OFFICER’S
CERTIFICATE AS SET FORTH IN EXHIBIT A HERETO, STATING THAT THE SELLER IS IN
COMPLIANCE WITH THE NET WORTH REQUIREMENTS AND THE DETAILS OF SUCH COMPLIANCE;

 

(IV)                              MONTHLY PORTFOLIO PERFORMANCE DATA WITH
RESPECT TO THE NOTES AND ASSOCIATED COLLATERAL, INCLUDING, WITHOUT LIMITATION,
ANY OUTSTANDING DELINQUENCIES, PREPAYMENTS IN WHOLE OR IN PART;

 

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(V)                                 FROM TIME TO TIME SUCH OTHER INFORMATION
REGARDING THE COLLATERAL AND THE FINANCIAL CONDITION, OPERATIONS, OR BUSINESS OF
THE SELLER AS THE BUYER MAY REASONABLY REQUEST; AND

 

(VI)                              AS SOON AS REASONABLY POSSIBLE, AND IN ANY
EVENT WITHIN THIRTY (30) DAYS AFTER A RESPONSIBLE OFFICER KNOWS, OR WITH RESPECT
TO ANY PLAN OR MULTIEMPLOYER PLAN TO WHICH THE SELLER OR ANY OF ITS SUBSIDIARIES
MAKES DIRECT CONTRIBUTIONS, HAS REASON TO BELIEVE, THAT ANY OF THE EVENTS OR
CONDITIONS SPECIFIED BELOW WITH RESPECT TO ANY PLAN OR MULTIEMPLOYER PLAN HAS
OCCURRED OR EXISTS, A STATEMENT SIGNED BY A SENIOR FINANCIAL OFFICER OF THE
SELLER SETTING FORTH DETAILS RESPECTING SUCH EVENT OR CONDITION AND THE ACTION,
IF ANY, THAT THE SELLER OR ITS ERISA AFFILIATE PROPOSES TO TAKE WITH RESPECT
THERETO (AND A COPY OF ANY REPORT OR NOTICE REQUIRED TO BE FILED WITH OR GIVEN
TO PBGC BY THE SELLER OR AN ERISA AFFILIATE WITH RESPECT TO SUCH EVENT OR
CONDITION):

 

(A)                              ANY REPORTABLE EVENT, AS DEFINED IN
SECTION 4043(B) OF ERISA AND THE REGULATIONS ISSUED THEREUNDER, WITH RESPECT TO
A PLAN, AS TO WHICH PBGC HAS NOT BY REGULATION OR OTHERWISE WAIVED THE
REQUIREMENT OF SECTION 4043(A) OF ERISA THAT IT BE NOTIFIED WITHIN THIRTY (30)
DAYS OF THE OCCURRENCE OF SUCH EVENT (PROVIDED THAT A FAILURE TO MEET THE
MINIMUM FUNDING STANDARD OF SECTION 412 OF THE CODE OR SECTION 302 OF ERISA,
INCLUDING, WITHOUT LIMITATION, THE FAILURE TO MAKE ON OR BEFORE ITS DUE DATE A
REQUIRED INSTALLMENT UNDER SECTION 412(M) OF THE CODE OR SECTION 302(E) OF
ERISA, SHALL BE A REPORTABLE EVENT REGARDLESS OF THE ISSUANCE OF ANY WAIVERS IN
ACCORDANCE WITH SECTION 412(D) OF THE CODE) (A “REPORTABLE EVENT”); AND ANY
REQUEST FOR A WAIVER UNDER SECTION 412(D) OF THE CODE FOR ANY PLAN;

 

(B)                                THE DISTRIBUTION UNDER SECTION 4041(C) OF
ERISA OF A NOTICE OF INTENT TO TERMINATE ANY PLAN OR ANY ACTION TAKEN BY THE
SELLER OR AN ERISA AFFILIATE TO TERMINATE ANY PLAN;

 

(C)                                THE INSTITUTION BY PBGC OF PROCEEDINGS UNDER
SECTION 4042 OF ERISA FOR THE TERMINATION OF, OR THE APPOINTMENT OF A TRUSTEE TO
ADMINISTER, ANY PLAN, OR THE RECEIPT BY THE SELLER OR ANY ERISA AFFILIATE OF A
NOTICE FROM A MULTIEMPLOYER PLAN THAT SUCH ACTION HAS BEEN TAKEN BY PBGC WITH
RESPECT TO SUCH MULTIEMPLOYER PLAN;

 

(D)                               THE COMPLETE OR PARTIAL WITHDRAWAL FROM A
MULTIEMPLOYER PLAN BY THE SELLER OR ANY ERISA AFFILIATE THAT RESULTS IN
LIABILITY UNDER SECTION 4201 OR 4204 OF ERISA (INCLUDING THE OBLIGATION TO
SATISFY SECONDARY LIABILITY AS A RESULT OF A PURCHASER DEFAULT) OR THE RECEIPT
BY THE SELLER OR ANY ERISA AFFILIATE OF NOTICE FROM A MULTIEMPLOYER PLAN THAT IT
IS IN REORGANIZATION OR INSOLVENCY PURSUANT TO SECTION 4241 OR 4245 OF ERISA OR
THAT IT INTENDS TO TERMINATE OR HAS TERMINATED UNDER SECTION 4041A OF ERISA;

 

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(E)                                 THE INSTITUTION OF A PROCEEDING BY A
FIDUCIARY OF ANY MULTIEMPLOYER PLAN AGAINST THE SELLER OR ANY ERISA AFFILIATE TO
ENFORCE SECTION 515 OF ERISA, WHICH PROCEEDING IS NOT DISMISSED WITHIN THIRTY
(30) DAYS; AND

 

(F)                                 THE ADOPTION OF AN AMENDMENT TO ANY PLAN
THAT, PURSUANT TO SECTION 401(A)(29) OF THE CODE OR SECTION 307 OF ERISA, WOULD
RESULT IN THE LOSS OF TAX-EXEMPT STATUS OF THE TRUST OF WHICH SUCH PLAN IS A
PART IF THE SELLER OR AN ERISA AFFILIATE FAILS TO TIMELY PROVIDE SECURITY TO
SUCH PLAN IN ACCORDANCE WITH THE PROVISIONS OF SAID SECTIONS.

 

(VII)                           THE SELLER WILL FURNISH TO THE BUYER, AT THE
TIME IT FURNISHES THE FINANCIAL STATEMENTS PURSUANT TO PARAGRAPH (III) ABOVE, A
CERTIFICATE OF A RESPONSIBLE OFFICER OF THE SELLER TO THE EFFECT THAT, TO THE
BEST OF SUCH RESPONSIBLE OFFICER’S KNOWLEDGE, THE SELLER DURING SUCH FISCAL
PERIOD HAS OBSERVED OR PERFORMED ALL OF ITS COVENANTS AND OTHER AGREEMENTS, AND
SATISFIED EVERY MATERIAL CONDITION, CONTAINED IN THIS AGREEMENT AND THE OTHER
PROGRAM DOCUMENTS TO BE OBSERVED, PERFORMED OR SATISFIED BY IT, AND THAT SUCH
RESPONSIBLE OFFICER HAS OBTAINED NO KNOWLEDGE OF ANY DEFAULT OR EVENT OF DEFAULT
EXCEPT AS SPECIFIED IN SUCH CERTIFICATE (AND, IF ANY DEFAULT OR EVENT OF DEFAULT
HAS OCCURRED AND IS CONTINUING, DESCRIBING THE SAME IN REASONABLE DETAIL AND
DESCRIBING THE ACTION THE SELLER HAS TAKEN OR PROPOSES TO TAKE WITH RESPECT
THERETO).

 

B)                                LITIGATION.  THE SELLER WILL PROMPTLY, AND IN
ANY EVENT WITHIN ONE (1)  BUSINESS DAY AFTER SERVICE OF PROCESS, GIVE TO THE
BUYER NOTICE OF ALL LEGAL OR ARBITRABLE PROCEEDINGS AFFECTING THE SELLER OR ANY
OF ITS SUBSIDIARIES THAT QUESTIONS OR CHALLENGES THE VALIDITY OR ENFORCEABILITY
OF ANY OF THE PROGRAM DOCUMENTS OR AS TO WHICH THERE IS A REASONABLE LIKELIHOOD
OF ADVERSE DETERMINATION WHICH WOULD RESULT IN A MATERIAL ADVERSE EFFECT OR IN
WHICH THE MATTER IN CONTROVERSY EXCEEDS $1,000,000.

 

C)                                 EXISTENCE, ETC.  EACH OF THE SELLER AND ITS
SUBSIDIARIES WILL:

 

(I)                                     WITH RESPECT TO THE SELLER AND NET LEASE
BORROWERS ONLY, PRESERVE AND MAINTAIN ITS LEGAL EXISTENCE AND ALL OF ITS
MATERIAL RIGHTS, PRIVILEGES, LICENSES AND FRANCHISES;

 

(II)                                  COMPLY WITH THE REQUIREMENTS OF ALL
APPLICABLE LAWS, RULES, REGULATIONS AND ORDERS OF GOVERNMENTAL AUTHORITIES
(INCLUDING, WITHOUT LIMITATION, TRUTH IN LENDING, REAL ESTATE SETTLEMENT
PROCEDURES AND ALL ENVIRONMENTAL LAWS) IF FAILURE TO COMPLY WITH SUCH
REQUIREMENTS WOULD BE REASONABLY LIKELY (EITHER INDIVIDUALLY OR IN THE
AGGREGATE) TO HAVE A MATERIAL ADVERSE EFFECT;

 

(III)                               KEEP ADEQUATE RECORDS AND BOOKS OF ACCOUNT,
IN WHICH COMPLETE ENTRIES WILL BE MADE IN ACCORDANCE WITH GAAP CONSISTENTLY
APPLIED;

 

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(IV)                              PAY AND DISCHARGE ALL TAXES, ASSESSMENTS AND
GOVERNMENTAL CHARGES OR LEVIES IMPOSED ON IT OR ON ITS INCOME OR PROFITS OR ON
ANY OF ITS PROPERTY PRIOR TO THE DATE ON WHICH PENALTIES ATTACH THERETO, EXCEPT
FOR ANY SUCH TAX, ASSESSMENT, CHARGE OR LEVY THE PAYMENT OF WHICH IS BEING
CONTESTED IN GOOD FAITH AND BY PROPER PROCEEDINGS AND AGAINST WHICH ADEQUATE
RESERVES ARE BEING MAINTAINED; AND

 

(V)                                 PERMIT REPRESENTATIVES OF THE BUYER, DURING
NORMAL BUSINESS HOURS UPON ONE (1) BUSINESS DAY’S PRIOR WRITTEN NOTICE AT A
MUTUALLY DESIRABLE TIME OR AT ANY TIME DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT, TO EXAMINE, COPY AND MAKE EXTRACTS FROM ITS BOOKS AND RECORDS, TO
INSPECT ANY OF ITS PROPERTIES, AND TO DISCUSS ITS BUSINESS AND AFFAIRS WITH ITS
OFFICERS, ALL TO THE EXTENT REASONABLY REQUESTED BY THE BUYER.

 

D)                                PROHIBITION OF FUNDAMENTAL CHANGES.  THE
SELLER SHALL NOT 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) OR SELL ALL OR SUBSTANTIALLY ALL OF ITS
ASSETS; PROVIDED, THAT THE SELLER MAY MERGE OR CONSOLIDATE WITH (A) ANY
SUBSIDIARY OF THE SELLER OR (B) ANY OTHER PERSON IF THE SELLER IS THE SURVIVING
ENTITY, OR THE BUYER CONSENTS TO SUCH MERGER OR CONSOLIDATION; AND PROVIDED
FURTHER, THAT IF AFTER GIVING EFFECT THERETO, NO DEFAULT WOULD EXIST HEREUNDER.

 

E)                                 MARGIN DEFICIT.  IF AT ANY TIME THERE EXISTS
A MARGIN DEFICIT, THE SELLER SHALL CURE SAME IN ACCORDANCE WITH
SECTION 6(A) HEREOF.

 

F)                                   NOTICES. THE SELLER SHALL GIVE NOTICE TO
THE BUYER PROMPTLY:

 

(I)                                     UPON THE SELLER BECOMING AWARE OF, AND
IN ANY EVENT WITHIN ONE (1) BUSINESS DAY AFTER, THE OCCURRENCE OF ANY DEFAULT OR
EVENT OF DEFAULT OR ANY EVENT OF DEFAULT OR DEFAULT UNDER ANY OTHER MATERIAL
AGREEMENT OF THE SELLER;

 

(II)                                  UPON THE SELLER BECOMING AWARE OF ANY
DEFAULT RELATED TO ANY PURCHASED ASSET OR COLLATERAL, ANY MATERIAL ADVERSE
EFFECT OR ANY EVENT OR CHANGE IN CIRCUMSTANCES WHICH SHOULD REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT;

 

(III)                               UPON THE SELLER BECOMING AWARE DURING THE
NORMAL COURSE OF ITS BUSINESS THAT THE MORTGAGED PROPERTY IN RESPECT OF ANY LOAN
OR LOANS WITH AN AGGREGATE UNPAID PRINCIPAL BALANCE OF AT LEAST $250,000 HAS
BEEN DAMAGED BY WASTE, FIRE, EARTHQUAKE OR EARTH MOVEMENT, WINDSTORM, FLOOD,
TORNADO OR OTHER CASUALTY, OR OTHERWISE DAMAGED SO AS TO MATERIALLY AND
ADVERSELY AFFECT THE VALUE OF SUCH LOAN;

 

(IV)                              UPON THE ENTRY OF A JUDGMENT OR DECREE AGAINST
THE SELLER OR ANY OF ITS SUBSIDIARIES IN AN AMOUNT IN EXCESS OF $1,000,000; AND

 

(V)                                 UPON THE TERMINATION OF THE CUSTODY AND
SERVICING AGREEMENT OR ANY OTHER SERVICING AGREEMENT; AND

 

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(VI)                              OF A MOVE OF THE SELLER’S CHIEF EXECUTIVE
OFFICE OR CHIEF OPERATING OFFICE FROM THE ADDRESSES REFERRED TO IN
SECTION 13(M), WHICH SUCH NOTICE SHALL BE WRITTEN NOTICE THIRTY (30) DAYS PRIOR
TO SUCH MOVE.

 

Each notice pursuant to this Section 14(f) (other than (v) and (vi)) shall be
accompanied by a statement of a Responsible Officer of the Seller setting forth
details of the occurrence referred to therein and stating what action the Seller
has taken or proposes to take with respect thereto.

 

G)                                SERVICING.  THE SELLER SHALL CAUSE THE
SERVICER TO SERVICE, OR CAUSE TO BE SERVICED, THE PURCHASED ASSETS, IN
ACCORDANCE WITH ACCEPTED SERVICING PRACTICES, PENDING ANY DELIVERY OF SUCH
SERVICING TO THE BUYER PURSUANT TO THE CUSTODY AND SERVICING AGREEMENT OR ANY
OTHER SERVICING AGREEMENT, EMPLOYING AT LEAST THE SAME PROCEDURES AND EXERCISING
THE SAME CARE THAT THE SERVICER CUSTOMARILY EMPLOYS IN SERVICING MORTGAGED
PROPERTIES AND MORTGAGE LOANS FOR ITS OWN ACCOUNT.  THE SELLER SHALL CAUSE THE
SERVICER TO HOLD OR CAUSE TO BE HELD ALL ESCROW FUNDS COLLECTED WITH RESPECT TO
SUCH PURCHASED ASSETS IN TRUST ACCOUNTS AND SHALL APPLY THE SAME FOR THE
PURPOSES FOR WHICH SUCH FUNDS WERE COLLECTED.  IF THE SELLER SHOULD DISCOVER
THAT, FOR ANY REASON WHATSOEVER, THE SELLER OR ANY ENTITY RESPONSIBLE TO THE
BUYER BY CONTRACT FOR MANAGING OR SERVICING ANY SUCH PURCHASED ASSET HAS FAILED
TO PERFORM FULLY THE SERVICER’S OBLIGATIONS WITH RESPECT TO THE SERVICING OF THE
PURCHASED ASSETS OR ANY OF THE OBLIGATIONS OF SUCH ENTITIES WITH RESPECT TO THE
LOANS OR THE LLC INTERESTS, THE SELLER SHALL PROMPTLY NOTIFY THE BUYER.  PRIOR
TO ANY PERSON OTHER THAN MIDLAND LOAN SERVICES, INC. BECOMING THE SERVICER OR A
SUBSERVICER OF THE PURCHASED ASSETS, THE BUYER SHALL HAVE THE RIGHT TO APPROVE
EACH SUCH SERVICER AND THE FORM OF ALL SERVICING AGREEMENTS OR SERVICING SIDE
LETTER AGREEMENTS WITH RESPECT THERETO.

 

H)                                UNDERWRITING GUIDELINES.  THE SELLER SHALL
NOTIFY THE BUYER IN WRITING OF ANY MATERIAL MODIFICATIONS TO THE UNDERWRITING
GUIDELINES PRIOR TO IMPLEMENTATION OF SUCH CHANGE, AND UNLESS THE BUYER OBJECTS
IN WRITING WITHIN TEN (10) BUSINESS DAYS OF RECEIPT OF NOTICE, THE PROPOSED
MODIFICATIONS SHALL BE DEEMED ACCEPTABLE.

 

I)                                    LINES OF BUSINESS.  THE SELLER WILL NOT
ENGAGE TO ANY SUBSTANTIAL EXTENT IN ANY LINE OR LINES OF BUSINESS ACTIVITY OTHER
THAN FINANCING, ACQUIRING, LEASING, SELLING OR EXCHANGING COMMERCIAL REAL
ESTATE, INTERESTS IN COMMERCIAL REAL ESTATE OR INTERESTS IN ENTITIES THAT OWN OR
OPERATE COMMERCIAL REAL ESTATE, AND THE BUSINESSES GENERALLY CARRIED ON BY IT AS
OF THE INITIAL PURCHASE DATE.

 

J)                                    TRANSACTIONS WITH AFFILIATES.  THE SELLER
WILL NOT ENTER INTO ANY TRANSACTION, INCLUDING, WITHOUT LIMITATION, ANY
PURCHASE, SALE, LEASE OR EXCHANGE OF PROPERTY OR THE RENDERING OF ANY SERVICE,
WITH ANY AFFILIATE UNLESS SUCH TRANSACTION IS (A) NOT EXPRESSLY PROHIBITED UNDER
THIS AGREEMENT, (B) IN THE ORDINARY COURSE OF THE SELLER’S BUSINESS AND (C) UPON
FAIR AND REASONABLE TERMS NO LESS FAVORABLE TO THE SELLER THAN IT WOULD OBTAIN
IN A COMPARABLE ARM’S LENGTH TRANSACTION WITH A PERSON WHICH IS NOT AN
AFFILIATE.

 

K)                                 LIMITATION ON LIENS.  THE SELLER WILL NOT,
NOR WILL IT PERMIT OR ALLOW OTHERS TO, CREATE, INCUR OR PERMIT TO EXIST ANY
LIEN, SECURITY INTEREST OR CLAIM ON OR TO ANY OF ITS COLLATERAL, EXCEPT FOR:
(I) LIENS (NOT OTHERWISE PERMITTED HEREUNDER) WHICH ARE CREATED IN CONNECTION
WITH THE PURCHASE OF FIXED ASSETS AND EQUIPMENT NECESSARY IN THE ORDINARY COURSE
OF THE SELLER’S

 

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BUSINESS OR TO FINANCE RESIDUAL CERTIFICATES ISSUED IN CONNECTION WITH
SECURITIZATIONS OF MORTGAGE LOANS COMPLETED BY THE SELLER WHICH ARE FINANCED
SOLELY BASED ON A PLEDGE OF SUCH RESIDUAL CERTIFICATES; AND (II) LIENS ON THE
COLLATERAL CREATED PURSUANT TO THIS AGREEMENT. THE SELLER WILL DEFEND THE
COLLATERAL AGAINST, AND WILL TAKE SUCH OTHER ACTION AS IS NECESSARY TO REMOVE,
ANY LIEN, SECURITY INTEREST OR CLAIM ON OR TO THE COLLATERAL, OTHER THAN THE
SECURITY INTERESTS CREATED UNDER THIS AGREEMENT, AND THE SELLER WILL DEFEND THE
RIGHT, TITLE AND INTEREST OF THE BUYER IN AND TO ANY OF THE COLLATERAL AGAINST
THE CLAIMS AND DEMANDS OF ALL PERSONS WHOMSOEVER.  THE SELLER WILL NOT PERMIT OR
ALLOW ANY OF ITS SUBSIDIARIES TO CREATE, INCUR OR PERMIT TO EXIST ANY LIEN,
SECURITY INTEREST OR CLAIM ON OR TO ANY MORTGAGED PROPERTY THAT IS RELATED TO A
PURCHASED ASSET, EXCEPT IN ACCORDANCE WITH THE PROGRAM DOCUMENTS AND ANY MASTER
LOAN AGREEMENT.

 

L)                                    LIMITATION ON SALE OF ASSETS.  EXCEPT FOR
SALES AND SECURITIZATIONS OF PURCHASED ASSETS WITH RESPECT TO WHICH THE SELLER
HAS PAID THE REPURCHASE PRICE AS SET FORTH HEREIN, THE SELLER AND ITS
SUBSIDIARIES, TAKEN AS A COLLECTIVE WHOLE, SHALL NOT CONVEY, SELL, LEASE,
ASSIGN, TRANSFER OR OTHERWISE DISPOSE OF (COLLECTIVELY, “TRANSFER”), ALL OR
SUBSTANTIALLY ALL OF ITS PROPERTY, BUSINESS OR ASSETS (INCLUDING, WITHOUT
LIMITATION, RECEIVABLES AND LEASEHOLD INTERESTS) WHETHER NOW OWNED OR HEREAFTER
ACQUIRED OR ALLOW ANY SUBSIDIARY TO TRANSFER SUBSTANTIALLY ALL OF SELLER’S
CONSOLIDATED ASSETS TAKEN AS A WHOLE TO ANY PERSON; PROVIDED, THAT THE SELLER
MAY AFTER PRIOR WRITTEN NOTICE TO THE BUYER ALLOW SUCH ACTION WITH RESPECT TO
ANY SUBSIDIARY WHICH IS NOT A MATERIAL PART OF THE SELLER’S OVERALL BUSINESS
OPERATIONS.

 

M)                              LIMITATION ON DISTRIBUTIONS.  WITHOUT THE
BUYER’S CONSENT, EXCEPT FOR CUSTOMARY CASH DIVIDENDS AND DISTRIBUTIONS OF ITS
COMMON STOCK, THE SELLER SHALL NOT MAKE ANY PAYMENT ON ACCOUNT OF, OR SET APART
ASSETS FOR A SINKING OR OTHER ANALOGOUS FUND FOR THE PURCHASE, REDEMPTION,
DEFEASANCE, RETIREMENT OR OTHER ACQUISITION OF, ANY STOCK OR SENIOR OR
SUBORDINATE DEBT OF THE SELLER, WHETHER NOW OR HEREAFTER OUTSTANDING, OR MAKE
ANY OTHER DISTRIBUTION IN RESPECT THEREOF, EITHER DIRECTLY OR INDIRECTLY,
WHETHER IN CASH OR PROPERTY OR IN OBLIGATIONS OF THE SELLER.

 

N)                                MAINTENANCE OF NET WORTH/LIQUIDITY.  THE
SELLER SHALL ENSURE THAT, AS OF THE END OF EACH QUARTER, IT MEETS THE NET WORTH
REQUIREMENTS (THE “NET WORTH REQUIREMENTS”) AS FOLLOWS:

 

(I)                                     THE SELLER SHALL NOT PERMIT ITS TANGIBLE
NET WORTH AT THE END OF EACH FISCAL QUARTER TO BE LESS THAN (I) $400,000,000
PLUS (II) NET WORTH INCREASE AMOUNTS.

 

(II)                                  THE SELLER SHALL ENSURE THAT, AS OF THE
END OF EACH FISCAL QUARTER, THE SELLER, TOGETHER WITH ITS CONSOLIDATED
SUBSIDIARIES, HAS CASH AND CASH EQUIVALENTS IN AN AMOUNT OF NOT LESS THAN
$15,000,000.

 

(III)                               THE SELLER SHALL NOT PERMIT THE RATIO OF
TOTAL INDEBTEDNESS TO TANGIBLE NET WORTH TO EXCEED 4:1.

 

(IV)                              THE SELLER SHALL NOT PERMIT THE RATIO OF TOTAL
INDEBTEDNESS TO TOTAL ASSETS TO EXCEED 0.7:1.

 

O)                                RESTRICTED PAYMENTS.  THE SELLER SHALL NOT
MAKE ANY RESTRICTED PAYMENTS FOLLOWING AN EVENT OF DEFAULT.

 

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P)                                SERVICING TRANSMISSION.  THE SELLER SHALL
PROVIDE TO THE BUYER TWO (2) BUSINESS DAYS PRIOR TO EACH REPURCHASE DATE (I) THE
SERVICING TRANSMISSION, WITH RESPECT TO THE MORTGAGED PROPERTIES SERVICED UNDER
THE CUSTODY AND SERVICING AGREEMENT BY THE SERVICER WHICH WERE A PART OF THE
PURCHASED ASSETS PRIOR TO THE FIRST DAY OF THE CURRENT MONTH, SUMMARIZING THE
SERVICER’S DELINQUENCY AND LOSS EXPERIENCE WITH RESPECT TO MORTGAGED PROPERTIES
SERVICED BY THE SERVICER (INCLUDING, IN THE CASE OF THE MORTGAGED PROPERTIES
AND, SPECIFICALLY, THE LEASES THEREOF, THE FOLLOWING CATEGORIES: CURRENT, 30-59,
60-89, 90-119, 120-149 AND 150+ DAYS DELINQUENT) AND (II) ANY OTHER INFORMATION
REASONABLY REQUESTED BY THE BUYER WITH RESPECT TO THE MORTGAGED PROPERTIES.  THE
SERVICER SHALL ALSO INCLUDE IN THE SERVICING TRANSMISSION SUCH INFORMATION
RELATING TO THE SERVICING OF THE PURCHASED ASSETS AS MAY BE REQUIRED BY THE
BUYER UNDER THE CUSTODY AND SERVICING AGREEMENT.

 

Q)                                NO AMENDMENT OR WAIVER.  THE SELLER WILL NOT,
NOR WILL IT PERMIT OR ALLOW OTHERS TO AMEND, MODIFY, TERMINATE OR WAIVE ANY
PROVISION OF ANY PURCHASED ASSET TO WHICH THE SELLER IS A PARTY IN ANY MANNER
WHICH SHALL REASONABLY BE EXPECTED TO MATERIALLY AND ADVERSELY AFFECT THE VALUE
OF SUCH PURCHASED ASSET AS COLLATERAL.  THE SELLER WILL NOT, NOR WILL IT PERMIT
OR ALLOW OTHERS TO AMEND, MODIFY, TERMINATE OR WAIVE ANY PROVISION OF ANY LLC
AGREEMENT PURSUANT TO WHICH PURCHASED ASSETS HAVE BEEN ISSUED WITHOUT THE PRIOR
WRITTEN CONSENT OF THE BUYER.

 

R)                                   MAINTENANCE OF PROPERTY; INSURANCE.  THE
SELLER SHALL KEEP OR CAUSE THE RELATED OPERATOR OF THE MORTGAGED PROPERTIES TO
KEEP THE RELATED MORTGAGED PROPERTY IN GOOD WORKING ORDER AND CONDITION.  THE
SELLER SHALL MAINTAIN OR CAUSE THE RELATED MORTGAGOR OR TENANT UNDER A MORTGAGE
OR LEASE AS OPERATOR OF THE MORTGAGED PROPERTY TO MAINTAIN THE INSURANCE IN FORM
AND AMOUNT AS REQUIRED UNDER THE RELATED MORTGAGE OR LEASE AND SHALL NOT REDUCE
SUCH COVERAGE WITHOUT THE WRITTEN CONSENT OF THE BUYER, AND SHALL ALSO MAINTAIN
OR CAUSE THE TENANT UNDER THE TERMS OF THE LEASE TO MAINTAIN SUCH INSURANCE WITH
FINANCIALLY SOUND AND REPUTABLE INSURANCE COMPANIES, AND WITH RESPECT TO
PROPERTY AND RISKS OF A CHARACTER USUALLY MAINTAINED BY ENTITIES ENGAGED IN THE
SAME OR SIMILAR BUSINESS SIMILARLY SITUATED, AGAINST LOSS, DAMAGE AND LIABILITY
OF THE KINDS AND IN THE AMOUNTS CUSTOMARILY MAINTAINED BY SUCH ENTITIES.  THE
SCHEDULE OF INSURANCE ATTACHED AS SCHEDULE B HERETO SETS FORTH THE INSURANCE IN
EFFECT ON THE INITIAL PURCHASE DATE.

 

S)                                 FURTHER IDENTIFICATION OF COLLATERAL. THE
SELLER WILL FURNISH TO THE BUYER FROM TIME TO TIME STATEMENTS AND SCHEDULES
FURTHER IDENTIFYING AND DESCRIBING THE PURCHASED ASSETS AND SUCH OTHER REPORTS
IN CONNECTION WITH THE PURCHASED ASSETS AS THE BUYER MAY REASONABLY REQUEST, ALL
IN REASONABLE DETAIL.

 

T)                                   PURCHASED ASSET DETERMINED TO BE
DEFECTIVE.  UPON DISCOVERY BY THE SELLER OR THE BUYER OF ANY BREACH OF ANY
REPRESENTATION OR WARRANTY LISTED ON APPENDIX A HERETO APPLICABLE TO ANY
PURCHASED ASSET THAT WOULD RESULT IN THE PURCHASED ASSET NOT BEING AN ELIGIBLE
ASSET, THE PARTY DISCOVERING SUCH BREACH SHALL PROMPTLY GIVE NOTICE OF SUCH
DISCOVERY TO THE OTHER.

 

U)                                ILLEGAL ACTIVITIES; ANTI-MONEY LAUNDERING
LAWS. THE SELLER HAS NOT ENGAGED, IS NOT ENGAGING, AND SHALL NOT IN THE FUTURE
ENGAGE IN ANY CONDUCT OR ACTIVITY THAT COULD SUBJECT ITS ASSETS TO FORFEITURE OR
SEIZURE, INCLUDING WITHOUT LIMITATION, CONDUCT OR ACTIVITIES IN VIOLATION OF THE
RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS ACT, THE BANK SECRECY ACT OR
NARCOTIC DRUG

 

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LAWS.  THE SELLER HAS COMPLIED WITH ALL APPLICABLE ANTI-MONEY LAUNDERING LAWS
AND REGULATIONS, INCLUDING WITHOUT LIMITATION THE USA PATRIOT ACT OF 200L
(COLLECTIVELY, THE “ANTI MONEY LAUNDERING LAWS”).  AS AND TO THE EXTENT REQUIRED
BY THE ANTI MONEY LAUNDERING LAWS, THE SELLER (I) HAS CONDUCTED 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 APPLICABLE MORTGAGOR, DEALERSHIP GUARANTOR, OTHER OBLIGOR, AND
THEIR RESPECTIVE PRINCIPALS, AND THE ORIGIN OF THE ASSETS USED BY THE SAID
MORTGAGOR TO PURCHASE THE PROPERTY IN QUESTION, AND (II) MAINTAINS, AND WILL
MAINTAIN, SUFFICIENT INFORMATION TO IDENTIFY THE APPLICABLE MORTGAGOR AND ITS
PRINCIPALS, FOR PURPOSES OF THE ANTI-MONEY LAUNDERING LAWS.  NO PURCHASED ASSET
IS SUBJECT TO NULLIFICATION PURSUANT TO EXECUTIVE ORDER 13224 (THE “EXECUTIVE
ORDER”) OR THE REGULATIONS PROMULGATED BY THE OFFICE OF FOREIGN ASSETS CONTROL
OF THE UNITED STATES DEPARTMENT OF THE TREASURY (THE “OFAC REGULATIONS”) OR IN
VIOLATION OF THE EXECUTIVE ORDER OR THE OFAC REGULATIONS, AND NO MORTGAGOR OR
ANY OF ITS PRINCIPALS, IS SUBJECT TO THE PROVISIONS OF SUCH EXECUTIVE ORDER OR
THE OFAC REGULATIONS NOR LISTED AS A “BLOCKED PERSON” FOR PURPOSES OF THE OFAC
REGULATIONS.

 

V)                                ORIGINATION FEE.  SELLER SHALL PAY TO BUYER
THE ORIGINATION FEE ON OR PRIOR TO THE EFFECTIVE DATE.

 

15.                               REPURCHASE DATE PAYMENTS/COLLECTIONS

 

On each Repurchase Date, Seller shall remit or shall cause to be remitted to
Buyer the Repurchase Price together with any other Obligations then due and
payable.

 

16.                               REPURCHASE OF PURCHASED ASSETS; CHANGE OF LAW

 

A)                                 UPON DISCOVERY BY SELLER OF A BREACH OF ANY
OF THE REPRESENTATIONS AND WARRANTIES SET FORTH IN APPENDIX A TO THIS AGREEMENT,
SELLER SHALL GIVE PROMPT WRITTEN NOTICE THEREOF TO BUYER.  UPON ANY SUCH
DISCOVERY BY BUYER, BUYER WILL NOTIFY SELLER.  IT IS UNDERSTOOD AND AGREED THAT
THE REPRESENTATIONS AND WARRANTIES SET FORTH IN APPENDIX A TO THIS AGREEMENT
SHALL SURVIVE DELIVERY OF THE RESPECTIVE CUSTODIAN’S LOAN FILES TO THE CUSTODIAN
AND SHALL INURE TO THE BENEFIT OF BUYER AND BUYER’S SUCCESSORS AND ASSIGNS.  THE
FACT THAT BUYER HAS CONDUCTED OR HAS FAILED TO CONDUCT ANY PARTIAL OR COMPLETE
DUE DILIGENCE INVESTIGATION IN CONNECTION WITH ITS PURCHASE OF ANY LOAN OR LLC
INTERESTS SHALL NOT AFFECT BUYER’S RIGHT TO DEMAND REPURCHASE AS PROVIDED UNDER
THIS AGREEMENT.  SELLER SHALL WITHIN FIVE BUSINESS DAYS OF THE EARLIER OF
SELLER’S DISCOVERY OR SELLER’S RECEIVING NOTICE, WITH RESPECT TO ANY LOAN OR LLC
INTERESTS, OF (I) ANY BREACH OF A REPRESENTATION OR WARRANTY CONTAINED IN
APPENDIX A TO THIS AGREEMENT OR (II) ANY FAILURE TO DELIVER ANY OF THE ITEMS
REQUIRED TO BE DELIVERED AS PART OF THE CUSTODIAN’S LOAN FILE WITHIN THE TIME
PERIOD REQUIRED FOR DELIVERY PURSUANT TO THE CUSTODY AGREEMENT, PROMPTLY CURE
SUCH BREACH OR DELIVERY FAILURE IN ALL MATERIAL RESPECTS.  IF WITHIN FIVE
BUSINESS DAYS AFTER THE EARLIER OF SELLER’S DISCOVERY OF SUCH BREACH OR DELIVERY
FAILURE OR SELLER’S RECEIVING NOTICE THEREOF SUCH BREACH OR DELIVERY FAILURE HAS
NOT BEEN REMEDIED BY SELLER, SELLER SHALL PROMPTLY UPON RECEIPT OF WRITTEN
INSTRUCTIONS FROM BUYER PURCHASE SUCH LOAN OR LLC INTERESTS, AS APPLICABLE, AT A
PURCHASE PRICE EQUAL TO THE REPURCHASE PRICE WITH RESPECT TO SUCH LOAN OR LLC
INTERESTS, AS APPLICABLE, BY DEPOSITING SUCH REPURCHASE PRICE IN THE COLLECTION
ACCOUNT; PROVIDED, HOWEVER, THAT, WITH THE EXCEPTION OF THE DELIVERY OF A NOTE
OR LLC CERTIFICATE, IF THE SELLER IS DILIGENTLY

 

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PURSUING A CURE OF SUCH BREACH OR DELIVERY FAILURE, SELLER SHALL HAVE TEN DAYS
IN ADDITION TO SUCH FIVE BUSINESS DAY PERIOD TO CURE SUCH BREACH OR DELIVERY
FAILURE IN ALL MATERIAL RESPECTS.

 

B)                                IF BUYER DETERMINES THAT THE INTRODUCTION OF,
ANY CHANGE IN, OR THE INTERPRETATION OR ADMINISTRATION OF ANY REQUIREMENT OF LAW
HAS MADE IT UNLAWFUL OR COMMERCIALLY IMPRACTICABLE TO ENGAGE IN ANY TRANSACTIONS
WITH A PRICING RATE BASED ON LIBO RATE, THEN SELLER (I) SHALL, UPON ITS RECEIPT
OF NOTICE OF SUCH FACT AND DEMAND FROM BUYER (WITH A COPY OF SUCH NOTICE TO
CUSTODIAN), REPURCHASE THE PURCHASED ASSETS SUBJECT TO THE TRANSACTION ON THE
NEXT SUCCEEDING BUSINESS DAY AND, AT SELLER’S ELECTION, CONCURRENTLY ENTER INTO
A NEW TRANSACTION WITH BUYER WITH A PRICING RATE BASED ON THE PRIME RATE PLUS
THE MARGIN SET FORTH IN THE SIDE LETTER AS PART OF THE PRICING RATE AND (II) MAY
ELECT, BY GIVING NOTICE TO BUYER AND CUSTODIAN, THAT ALL NEW TRANSACTIONS SHALL
HAVE PRICING RATES BASED ON THE PRIME RATE PLUS SUCH MARGIN.

 

C)                                 IF BUYER DETERMINES IN ITS SOLE DISCRETION
THAT ANY CHANGE IN LAW REGARDING CAPITAL REQUIREMENTS HAS OR WOULD HAVE THE
EFFECT OF REDUCING THE RATE OF RETURN ON BUYER’S CAPITAL OR ON THE CAPITAL OF
ANY AFFILIATE OF BUYER AS A CONSEQUENCE OF SUCH CHANGE IN LAW ON THIS AGREEMENT,
THEN FROM TIME TO TIME SELLER WILL COMPENSATE BUYER OR BUYER’S AFFILIATE, AS
APPLICABLE, FOR SUCH REDUCED RATE OF RETURN SUFFERED AS A CONSEQUENCE OF SUCH
CHANGE IN LAW.  BUYER SHALL PROVIDE SELLER WITH PROMPT NOTICE AS TO ANY CHANGE
IN LAW.  NOTWITHSTANDING ANY OTHER PROVISIONS IN THIS AGREEMENT, IN THE EVENT OF
ANY SUCH CHANGE IN LAW, SELLER WILL HAVE THE RIGHT TO TERMINATE ALL TRANSACTIONS
THEN OUTSTANDING WITHOUT ANY PREPAYMENT PENALTY AS OF A DATE SELECTED BY SELLER,
WHICH DATE SHALL BE PRIOR TO THE THEN APPLICABLE REPURCHASE DATE AND WHICH DATE
SHALL THEREAFTER FOR ALL PURPOSES HEREOF BE DEEMED TO BE THE REPURCHASE DATE.

 

17.                               RESERVED

 

18.                               REPURCHASE TRANSACTIONS

 

Buyer may, in its sole election, engage in repurchase transactions with the
Purchased Assets or otherwise pledge, hypothecate, assign, transfer or otherwise
convey the Purchased Assets with a counterparty of Buyer’s choice, in all cases
subject to Buyer’s obligation to reconvey the Purchased Assets (and not
substitutes therefor) on the Repurchase Date.  In the event Buyer engages in a
repurchase transaction with any of the Purchased Assets or otherwise pledges or
hypothecates any of the Purchased Assets, Buyer shall have the right to assign
to Buyer’s counterparty any of the applicable representations or warranties in
Appendix A to this Agreement and the remedies for breach thereof, as they relate
to the Purchased Assets that are subject to such repurchase transaction.

 

19.                               EVENTS OF DEFAULT

 

With respect to any Transactions covered by or related to this Agreement, the
occurrence of any of the following events shall constitute, if declared as such
by Buyer, an “Event of Default” other than the events described in (f) and
(g) below which, upon their occurrence, shall automatically constitute an Event
of Default:

 

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A)                                 SELLER FAILS TO TRANSFER THE PURCHASED ASSETS
TO BUYER ON THE APPLICABLE PURCHASE DATE (PROVIDED BUYER HAS TENDERED THE
RELATED PURCHASE PRICE); OR

 

B)                                SELLER EITHER FAILS TO REPURCHASE THE
PURCHASED ASSETS ON THE APPLICABLE REPURCHASE DATE OR FAILS TO PERFORM ITS
OBLIGATIONS UNDER SECTION 6; OR

 

C)                                 ANY REPRESENTATION, WARRANTY OR CERTIFICATION
MADE OR DEEMED MADE HEREIN OR IN ANY OTHER PROGRAM DOCUMENT BY THE SELLER OR ANY
CERTIFICATE FURNISHED TO THE BUYER PURSUANT TO THE PROVISIONS THEREOF, SHALL
PROVE TO HAVE BEEN FALSE OR MISLEADING IN ANY MATERIAL RESPECT (WHICH FALSITY IS
NOT CURED WITHIN TEN (10) BUSINESS DAYS OF THE EARLIER OF (I) THE RECEIPT OF
NOTICE BY THE SELLER AND (II) ACTUAL KNOWLEDGE OF THE SELLER THEREOF, AND COULD
REASONABLY RESULT IN A MATERIAL ADVERSE EFFECT) AS OF THE TIME MADE OR FURNISHED
(OTHER THAN THE REPRESENTATIONS AND WARRANTIES SET FORTH IN APPENDIX A WHICH
SHALL BE CONSIDERED SOLELY FOR THE PURPOSE OF DETERMINING THE PURCHASE PRICE OF
THE LOANS OR LLC INTERESTS, AS APPLICABLE); UNLESS (I) THE SELLER SHALL HAVE
MADE ANY SUCH REPRESENTATIONS AND WARRANTIES WITH KNOWLEDGE THAT THEY WERE
MATERIALLY FALSE OR MISLEADING AT THE TIME MADE AND THAT SUCH FALSITY COULD
REASONABLY RESULT IN A MATERIAL ADVERSE EFFECT, OR (II) ANY SUCH REPRESENTATIONS
AND WARRANTIES HAVE BEEN DETERMINED BY THE BUYER IN ITS SOLE DISCRETION TO BE
MATERIALLY FALSE OR MISLEADING ON A REGULAR BASIS AND THAT SUCH FALSITY COULD
REASONABLY RESULT IN A MATERIAL ADVERSE EFFECT); OR

 

D)                                THE SELLER SHALL FAIL TO OBSERVE OR PERFORM
ANY COVENANT OR AGREEMENT CONTAINED IN THIS AGREEMENT OR ANY OTHER PROGRAM
DOCUMENT AND SUCH FAILURE TO OBSERVE OR PERFORM SHALL CONTINUE UNREMEDIED FOR A
PERIOD OF FIVE (5) BUSINESS DAYS AFTER THE EARLIER OF (I) RECEIPT OF NOTICE BY
THE SELLER OR (II) ACTUAL KNOWLEDGE OF THE SELLER; OR

 

E)                                 A FINAL JUDGMENT OR JUDGMENTS FOR THE PAYMENT
OF MONEY IN EXCESS OF $2,000,000 IN THE AGGREGATE (TO THE EXTENT THAT IT IS, IN
THE REASONABLE DETERMINATION OF THE BUYER, UNINSURED AND PROVIDED THAT ANY
INSURANCE OR OTHER CREDIT POSTED IN CONNECTION WITH AN APPEAL SHALL NOT BE
DEEMED INSURANCE FOR THESE PURPOSES) SHALL BE RENDERED AGAINST THE SELLER OR ANY
OF ITS SUBSIDIARIES BY ONE OR MORE COURTS, ADMINISTRATIVE TRIBUNALS OR OTHER
BODIES HAVING JURISDICTION OVER THEM AND THE SAME SHALL NOT BE DISCHARGED (OR
PROVISION SHALL NOT BE MADE FOR SUCH DISCHARGE) OR BONDED, OR A STAY OF
EXECUTION THEREOF SHALL NOT BE PROCURED, WITHIN SIXTY (60) DAYS FROM THE DATE OF
ENTRY THEREOF AND THE SELLER OR ANY SUCH SUBSIDIARY SHALL NOT, WITHIN SAID
PERIOD OF SIXTY (60) DAYS, OR SUCH LONGER PERIOD DURING WHICH EXECUTION OF THE
SAME SHALL HAVE BEEN STAYED OR BONDED, APPEAL THEREFROM AND CAUSE THE EXECUTION
THEREOF TO BE STAYED DURING SUCH APPEAL; OR

 

F)                                   THE SELLER SHALL ADMIT IN WRITING ITS
INABILITY TO PAY ITS DEBTS AS SUCH DEBTS BECOME DUE; OR

 

G)                                THE SELLER OR ANY OF ITS SUBSIDIARIES SHALL
(I) APPLY FOR OR CONSENT TO THE APPOINTMENT OF, OR THE TAKING OF POSSESSION BY,
A RECEIVER, CUSTODIAN, TRUSTEE, EXAMINER OR LIQUIDATOR OF ITSELF OR OF ALL OR A
SUBSTANTIAL PART OF ITS PROPERTY, (II) MAKE A GENERAL ASSIGNMENT FOR THE BENEFIT
OF ITS CREDITORS, (III) COMMENCE A VOLUNTARY CASE UNDER THE BANKRUPTCY CODE,
(IV) FILE A PETITION SEEKING TO TAKE ADVANTAGE OF ANY OTHER LAW RELATING TO
BANKRUPTCY, INSOLVENCY, REORGANIZATION, LIQUIDATION, DISSOLUTION, ARRANGEMENT OR
WINDING-UP, OR COMPOSITION OR READJUSTMENT OF DEBTS, (V) FAIL TO CONTROVERT IN A
TIMELY AND APPROPRIATE MANNER, OR ACQUIESCE IN

 

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WRITING TO, ANY PETITION FILED AGAINST IT IN AN INVOLUNTARY CASE UNDER THE
BANKRUPTCY CODE OR (VI) TAKE ANY CORPORATE OR OTHER ACTION FOR THE PURPOSE OF
EFFECTING ANY OF THE FOREGOING; OR

 

H)                                A PROCEEDING OR CASE SHALL BE COMMENCED,
WITHOUT THE APPLICATION OR CONSENT OF THE SELLER OR ANY OF ITS SUBSIDIARIES, IN
ANY COURT OF COMPETENT JURISDICTION, SEEKING (I) ITS REORGANIZATION,
LIQUIDATION, DISSOLUTION, ARRANGEMENT OR WINDING-UP, OR THE COMPOSITION OR
READJUSTMENT OF ITS DEBTS, (II) THE APPOINTMENT OF, OR TAKING OF POSSESSION BY,
A RECEIVER, CUSTODIAN, TRUSTEE, EXAMINER, LIQUIDATOR OR THE LIKE OF THE SELLER
OR ANY SUCH SUBSIDIARY OR OF ALL OR ANY SUBSTANTIAL PART OF ITS PROPERTY, OR
(III) SIMILAR RELIEF IN RESPECT OF THE SELLER OR ANY SUCH SUBSIDIARY UNDER ANY
LAW RELATING TO BANKRUPTCY, INSOLVENCY, REORGANIZATION, LIQUIDATION,
DISSOLUTION, ARRANGEMENT OR WINDING-UP, OR COMPOSITION OR ADJUSTMENT OF DEBTS,
AND SUCH PROCEEDING OR CASE SHALL CONTINUE UNDISMISSED, OR AN ORDER, JUDGMENT OR
DECREE APPROVING OR ORDERING ANY OF THE FOREGOING SHALL BE ENTERED AND CONTINUE
UNSTAYED AND IN EFFECT, FOR A PERIOD OF SIXTY (60) OR MORE DAYS; OR AN ORDER FOR
RELIEF AGAINST THE SELLER OR ANY SUCH SUBSIDIARY SHALL BE ENTERED IN AN
INVOLUNTARY CASE UNDER THE BANKRUPTCY CODE; OR

 

I)                                    WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT
OF BUYER, THE CUSTODY AND SERVICING AGREEMENT OR ANY PROGRAM DOCUMENT SHALL FOR
WHATEVER REASON (INCLUDING AN EVENT OF DEFAULT THEREUNDER) BE TERMINATED OR THE
LIEN ON THE COLLATERAL CREATED BY THIS AGREEMENT OR SELLER’S MATERIAL
OBLIGATIONS HEREUNDER SHALL CEASE TO BE IN FULL FORCE AND EFFECT, OR THE
ENFORCEABILITY THEREOF SHALL BE CONTESTED BY THE SELLER; OR

 

J)                                    ANY MATERIAL ADVERSE EFFECT OR THE BUYER
REASONABLY DETERMINES THAT THERE EXISTS A MATERIAL IMPAIRMENT OF THE SELLER’S
ABILITY TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT, THE NOTE OR ANY OTHER
PROGRAM DOCUMENT; OR

 

K)                                 (I) ANY PERSON SHALL ENGAGE IN ANY
“PROHIBITED TRANSACTION” (AS DEFINED IN SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE) INVOLVING ANY PLAN OR MULTIEMPLOYER PLAN, (II) ANY MATERIAL
“ACCUMULATED FUNDING DEFICIENCY” (AS DEFINED IN SECTION 302 OF ERISA), WHETHER
OR NOT WAIVED, SHALL EXIST WITH RESPECT TO ANY PLAN OR MULTIEMPLOYER PLAN OR ANY
LIEN IN FAVOR OF PBGC OR A PLAN OR MULTIEMPLOYER PLAN SHALL ARISE ON THE ASSETS
OF THE SELLER OR ANY ERISA AFFILIATE, (III) A REPORTABLE EVENT 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 OR COMMENCEMENT OF PROCEEDINGS OR APPOINTMENT OF A TRUSTEE IS,
IN THE REASONABLE OPINION OF THE BUYERS, LIKELY TO RESULT IN THE TERMINATION OF
SUCH PLAN FOR PURPOSES OF TITLE IV OF ERISA, (IV) ANY PLAN SHALL TERMINATE FOR
PURPOSES OF TITLE IV OF ERISA, (V) THE SELLER OR ANY ERISA AFFILIATE SHALL, OR
IN THE REASONABLE OPINION OF THE BUYERS IS LIKELY TO, INCUR ANY LIABILITY IN
CONNECTION WITH A WITHDRAWAL FROM, OR THE INSOLVENCY OR REORGANIZATION OF, A
MULTIEMPLOYER PLAN OR (VI) ANY OTHER EVENT OR CONDITION SHALL OCCUR OR EXIST
WITH RESPECT TO A PLAN OR MULTIEMPLOYER PLAN; AND IN EACH CASE IN CLAUSES
(I) THROUGH (VI) 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; OR

 

L)                                    ANY CHANGE IN CONTROL OF THE SELLER SHALL
HAVE OCCURRED WITHOUT THE PRIOR CONSENT OF THE BUYER; OR

 

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M)                              THE SELLER SHALL GRANT, OR SUFFER TO EXIST, ANY
LIEN ON ANY OF THE PURCHASED ASSETS OR THE COLLATERAL EXCEPT THE LIENS
CONTEMPLATED HEREBY; OR THE LIENS CONTEMPLATED HEREBY SHALL CEASE TO BE FIRST
PRIORITY PERFECTED LIENS ON THE PURCHASED ASSETS OR THE COLLATERAL IN FAVOR OF
THE BUYER OR SHALL BE LIENS IN FAVOR OF ANY PERSON OTHER THAN THE BUYER; OR

 

N)                                THE BUYER SHALL REASONABLY REQUEST, SPECIFYING
THE REASONS FOR SUCH REQUEST, INFORMATION, AND/OR WRITTEN RESPONSES TO SUCH
REQUESTS, REGARDING THE FINANCIAL WELL-BEING OF THE SELLER AND SUCH INFORMATION
AND/OR RESPONSES SHALL NOT HAVE BEEN PROVIDED WITHIN FIVE (5) BUSINESS DAYS OF
SUCH REQUEST; OR

 

O)                                THE SELLER OR ANY SUBSIDIARY OR AFFILIATE OF
THE SELLER SHALL DEFAULT UNDER, OR FAIL TO PERFORM AS REQUIRED UNDER, OR SHALL
OTHERWISE MATERIALLY BREACH THE TERMS OF ANY INSTRUMENT, AGREEMENT OR CONTRACT
BETWEEN THE SELLER OR SUCH OTHER ENTITY, ON THE ONE HAND, AND THE BUYER OR ANY
OF THE BUYER’S AFFILIATES ON THE OTHER; OR THE SELLER OR ANY SUBSIDIARY OR
AFFILIATE OF THE SELLER SHALL DEFAULT UNDER, OR FAIL TO PERFORM AS REQUESTED
UNDER, THE TERMS OF ANY REPURCHASE AGREEMENT, LOAN AND SECURITY AGREEMENT OR
SIMILAR CREDIT FACILITY OR AGREEMENT FOR BORROWED FUNDS ENTERED INTO BY THE
SELLER OR SUCH OTHER ENTITY AND ANY THIRD PARTY, WHICH DEFAULT OR FAILURE
ENTITLES ANY PARTY TO REQUIRE ACCELERATION OR PREPAYMENT OF ANY INDEBTEDNESS
THEREUNDER IN AN AMOUNT GREATER THAN $250,000.

 

20.                               REMEDIES

 

Upon the occurrence of an Event of Default, Buyer, at its option (which option
shall be deemed to have been exercised immediately upon the occurrence of an
Event of Default pursuant to Section 19(f) or (g) hereof), shall have any or all
of the following rights and remedies, which may be exercised by Buyer:

 

A)                                      THE REPURCHASE DATE FOR EACH TRANSACTION
HEREUNDER SHALL BE DEEMED IMMEDIATELY TO OCCUR.

 

B)                                     (I) SELLER’S OBLIGATIONS HEREUNDER TO
REPURCHASE ALL PURCHASED ASSETS AT THE REPURCHASE PRICE THEREFOR ON THE
REPURCHASE DATE IN SUCH TRANSACTIONS SHALL THEREUPON BECOME IMMEDIATELY DUE AND
PAYABLE; ALL INCOME PAID AFTER SUCH EXERCISE OR DEEMED EXERCISE SHALL BE
REMITTED TO AND RETAINED BY BUYER AND APPLIED TO THE AGGREGATE REPURCHASE PRICES
AND ANY OTHER AMOUNTS OWING BY SELLER HEREUNDER; SELLER SHALL IMMEDIATELY
DELIVER TO BUYER OR ITS DESIGNEE ANY AND ALL ORIGINAL PAPERS, RECORDS AND FILES
RELATING TO THE PURCHASED ASSETS SUBJECT TO SUCH TRANSACTION THEN IN SELLER’S
POSSESSION AND/OR CONTROL; AND ALL RIGHT, TITLE AND INTEREST IN AND ENTITLEMENT
TO SUCH PURCHASED ASSETS AND SERVICING RIGHTS THEREON SHALL BE DEEMED
TRANSFERRED TO BUYER.

 

(II)                                  BUYER SHALL HAVE THE RIGHT TO (A) SELL, ON
OR FOLLOWING THE BUSINESS DAY FOLLOWING THE DATE ON WHICH THE REPURCHASE PRICE
BECAME DUE AND PAYABLE PURSUANT TO SECTION 20(B) WITHOUT NOTICE OR DEMAND OF ANY
KIND, AT A PUBLIC OR PRIVATE SALE AND AT SUCH PRICE OR PRICES AS BUYER MAY
REASONABLY DEEM SATISFACTORY ANY OR ALL PURCHASED ASSETS OR (B) IN ITS SOLE
DISCRETION, EXERCISED IN GOOD FAITH, ELECT, IN LIEU OF SELLING ALL OR A PORTION
OF SUCH PURCHASED ASSETS, TO GIVE SELLER CREDIT FOR SUCH PURCHASED ASSETS IN AN
AMOUNT EQUAL TO THE MARKET VALUE OF THE PURCHASED ASSETS AGAINST THE AGGREGATE
UNPAID

 

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REPURCHASE PRICE AND ANY OTHER AMOUNTS OWING BY SELLER HEREUNDER.  SELLER SHALL
REMAIN LIABLE TO BUYER FOR ANY AMOUNTS THAT REMAIN OWING TO BUYER FOLLOWING A
SALE AND/OR CREDIT UNDER THE PRECEDING SENTENCE.  THE PROCEEDS OF ANY
DISPOSITION OF PURCHASED ASSETS SHALL BE APPLIED FIRST TO THE COSTS AND EXPENSES
INCURRED BY BUYER IN CONNECTION WITH OR AS A RESULT OF AN EVENT OF DEFAULT;
SECOND TO THE AGGREGATE REPURCHASE PRICES; THIRD TO ALL OTHER OBLIGATIONS; AND
ANY AMOUNTS REMAINING SHALL BE PAID TO SELLER.

 

(III)                               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 UNDERLYING 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 THE TIME AND MANNER OF LIQUIDATING ANY PURCHASED ASSET AND NOTHING
CONTAINED HEREIN SHALL OBLIGATE BUYER TO LIQUIDATE ANY PURCHASED ASSET ON THE
OCCURRENCE OF AN EVENT OF DEFAULT OR TO LIQUIDATE ALL PURCHASED ASSETS IN THE
SAME MANNER OR ON THE SAME BUSINESS DAY OR CONSTITUTE A WAIVER OF ANY RIGHT OR
REMEDY OF BUYER.  NOTWITHSTANDING THE FOREGOING, THE PARTIES TO THIS AGREEMENT
AGREE THAT THE TRANSACTIONS HAVE BEEN ENTERED INTO IN CONSIDERATION OF AND IN
RELIANCE UPON THE FACT THAT ALL TRANSACTIONS HEREUNDER CONSTITUTE A SINGLE
BUSINESS AND CONTRACTUAL OBLIGATION AND THAT EACH TRANSACTION HAS BEEN ENTERED
INTO IN CONSIDERATION OF THE OTHER TRANSACTIONS.

 

C)                                 SELLER HEREBY ACKNOWLEDGES, ADMITS AND AGREES
THAT SELLER’S OBLIGATIONS UNDER THIS AGREEMENT ARE 10% RECOURSE OBLIGATIONS OF
SELLER TO WHICH SELLER PLEDGES ITS FULL FAITH AND CREDIT.  IN ADDITION TO ITS
RIGHTS HEREUNDER, BUYER SHALL HAVE THE RIGHT TO PROCEED AGAINST ANY OF SELLER’S
ASSETS WHICH MAY BE IN THE POSSESSION OF BUYER, ANY OF BUYER’S AFFILIATES OR ITS
DESIGNEE (INCLUDING THE CUSTODIAN, TO THE EXTENT ACTING AS A CUSTODIAN FOR THE
BENEFIT OF THE BUYER), INCLUDING THE RIGHT TO LIQUIDATE SUCH ASSETS AND TO
SET-OFF THE PROCEEDS AGAINST MONIES OWED BY SELLER TO BUYER PURSUANT TO THIS
AGREEMENT.  BUYER MAY SET OFF CASH, THE PROCEEDS OF THE LIQUIDATION OF THE
PURCHASED ASSETS AND ADDITIONAL PURCHASED ASSETS, ANY OTHER COLLATERAL OR ITS
PROCEEDS AND ALL OTHER SUMS OR OBLIGATIONS OWED BY BUYER TO SELLER HEREUNDER
AGAINST ALL OF SELLER’S OBLIGATIONS TO BUYER, WHETHER UNDER THIS AGREEMENT,
UNDER A TRANSACTION, OR UNDER ANY OTHER AGREEMENT BETWEEN THE PARTIES, OR
OTHERWISE, WHETHER OR NOT SUCH OBLIGATIONS ARE THEN DUE, WITHOUT PREJUDICE TO
BUYER’S RIGHT TO RECOVER ANY DEFICIENCY.

 

D)                                BUYER SHALL HAVE THE RIGHT TO OBTAIN PHYSICAL
POSSESSION OF THE RECORDS AND ALL OTHER FILES OF SELLER RELATING TO THE
PURCHASED ASSETS AND ALL DOCUMENTS RELATING TO THE PURCHASED ASSETS WHICH ARE
THEN OR MAY THEREAFTER COME INTO THE POSSESSION OF SELLER OR ANY THIRD PARTY
ACTING FOR SELLER AND SELLER SHALL DELIVER TO BUYER SUCH ASSIGNMENTS AS BUYER
SHALL REQUEST.

 

E)                                 BUYER MAY DIRECT ALL PERSONS SERVICING THE
PURCHASED ASSETS TO TAKE SUCH ACTION WITH RESPECT TO THE PURCHASED ASSETS AS
BUYER DETERMINES APPROPRIATE.

 

F)                                   SELLER SHALL BE LIABLE TO BUYER FOR THE
AMOUNT OF ALL EXPENSES (PLUS INTEREST THEREON AT A RATE EQUAL TO THE DEFAULT
RATE), AND ALL COSTS AND EXPENSES INCURRED IN CONNECTION WITH HEDGING OR
COVERING TRANSACTIONS RELATED TO THE PURCHASED ASSETS.

 

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G)                                SELLER SHALL CAUSE ALL SUMS RECEIVED BY IT OR
ON ITS BEHALF WITH RESPECT TO THE PURCHASED ASSETS TO BE DEPOSITED WITH
CUSTODIAN (OR SUCH OTHER PERSON AS BUYER MAY DIRECT) AFTER RECEIPT THEREOF.

 

H)                                BUYER SHALL WITHOUT REGARD TO THE ADEQUACY OF
THE SECURITY FOR THE OBLIGATIONS, BE ENTITLED TO THE APPOINTMENT OF A RECEIVER
BY ANY COURT HAVING JURISDICTION, WITHOUT NOTICE, TO TAKE POSSESSION OF AND
PROTECT, COLLECT, MANAGE, LIQUIDATE, AND SELL THE PURCHASED ASSETS AND ANY OTHER
COLLATERAL OR ANY PORTION THEREOF, COLLECT THE PAYMENTS DUE WITH RESPECT TO THE
PURCHASED ASSETS AND ANY OTHER COLLATERAL OR ANY PORTION THEREOF, AND DO
ANYTHING THAT BUYER IS AUTHORIZED HEREUNDER TO DO.  SELLER SHALL PAY ALL COSTS
AND EXPENSES INCURRED BY BUYER IN CONNECTION WITH THE APPOINTMENT AND ACTIVITIES
OF SUCH RECEIVER.

 

Buyer may enforce its rights and remedies hereunder without prior judicial
process or hearing, and Seller hereby expressly waives, to the extent permitted
by law, any right Seller might otherwise have to require Buyer to enforce its
rights by judicial process.  Seller also waives, to the extent permitted by law,
any defense Seller might otherwise have to the Obligations, arising from use of
nonjudicial process, enforcement and sale of all or any portion of the Purchased
Assets and any other Collateral or from any other election of remedies.  Seller
recognizes that nonjudicial remedies are consistent with the usages of the
trade, are responsive to commercial necessity and are the result of a bargain at
arm’s length.

 

In addition to all the rights and remedies specifically provided herein, Buyer
shall have all other rights and remedies provided by applicable federal, state,
foreign, and local laws, whether existing at law, in equity or by statute.

 

Buyer shall have, except as otherwise expressly provided in this Agreement, the
right to exercise any of its rights and/or remedies without presentment, demand,
protest or further notice of any kind other than as expressly set forth herein,
all of which are hereby expressly waived by Seller.

 

Seller hereby authorizes Buyer, at Seller’s expense, to file such financing
statement or statements relating to the Purchased Assets and the Collateral
without Seller’s signature thereon as Buyer at its option may deem appropriate,
and appoints Buyer as Seller’s attorney-in-fact to execute any such financing
statement or statements in Seller’s name and to perform all other acts which
Buyer deems appropriate to perfect and continue the lien and security interest
granted hereby and to protect, preserve and realize upon the Purchased Assets
and the Collateral, including, but not limited to, the right to endorse notes,
complete blanks in documents and execute assignments on behalf of Seller as its
attorney-in-fact.  This power of attorney is coupled with an interest and is
irrevocable without Buyer’s consent.

 

21.                               DELAY NOT WAIVER; REMEDIES ARE CUMULATIVE

 

No failure on the part of Buyer to exercise, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise by Buyer of any right, power or remedy hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy.  All rights and remedies of Buyer provided for herein
are cumulative and in addition to any and all other rights and remedies provided
by law,

 

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the Program Documents and the other instruments and agreements contemplated
hereby and thereby, and are not conditional or contingent on any attempt by
Buyer to exercise any of its rights under any other related document.  Buyer may
exercise at any time after the occurrence of an Event of Default one or more
remedies, as it so desires, and may thereafter at any time and from time to time
exercise any other remedy or remedies.

 

22.                               USE OF EMPLOYEE PLAN ASSETS

 

No assets of an employee benefit plan subject to any provision of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”) shall be used by
either party hereto in a Transaction.

 

23.                               INDEMNITY

 

A)                                 SELLER AGREES TO PAY ON DEMAND (I) ALL
REASONABLE OUT-OF-POCKET COSTS AND EXPENSES OF BUYER IN CONNECTION WITH THE
PREPARATION, EXECUTION, DELIVERY, MODIFICATION, ADMINISTRATION AND AMENDMENT OF
THE PROGRAM DOCUMENTS (INCLUDING, WITHOUT LIMITATION, (A) ALL COLLATERAL REVIEW
AND UCC SEARCH AND FILING FEES AND EXPENSES AND (B) THE REASONABLE FEES AND
EXPENSES OF COUNSEL FOR BUYER WITH RESPECT THERETO, WITH RESPECT TO ADVISING
BUYER AS TO ITS RIGHTS AND RESPONSIBILITIES, OR THE PERFECTION, PROTECTION OR
PRESERVATION OF RIGHTS OR INTERESTS, UNDER THIS AGREEMENT, WITH RESPECT TO
NEGOTIATIONS WITH SELLER OR WITH OTHER CREDITORS OF SELLER OR ANY OF THEIR
SUBSIDIARIES ARISING OUT OF ANY DEFAULT OR ANY EVENTS OR CIRCUMSTANCES THAT MAY
GIVE RISE TO A DEFAULT AND WITH RESPECT TO PRESENTING CLAIMS IN OR OTHERWISE
PARTICIPATING IN OR MONITORING ANY BANKRUPTCY, INSOLVENCY OR OTHER SIMILAR
PROCEEDING INVOLVING CREDITORS’ RIGHTS GENERALLY AND ANY PROCEEDING ANCILLARY
THERETO) AND (II) ALL COSTS AND EXPENSES OF BUYER IN CONNECTION WITH THE
ENFORCEMENT OF THIS AGREEMENT, WHETHER IN ANY ACTION, SUIT OR LITIGATION, ANY
BANKRUPTCY, INSOLVENCY OR OTHER SIMILAR PROCEEDING AFFECTING CREDITORS’ RIGHTS
GENERALLY (INCLUDING, WITHOUT LIMITATION, THE REASONABLE FEES AND EXPENSES OF
COUNSEL FOR BUYER) WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE
CONSUMMATED.

 

B)                                SELLER AGREES TO INDEMNIFY AND HOLD HARMLESS
BUYER AND EACH OF ITS RESPECTIVE AFFILIATES AND THEIR OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS AND ADVISORS (EACH, AN “INDEMNIFIED PARTY”) FROM AND AGAINST
(AND WILL REIMBURSE EACH INDEMNIFIED PARTY AS THE SAME IS INCURRED) ANY AND ALL
CLAIMS, DAMAGES, LOSSES, LIABILITIES AND EXPENSES (INCLUDING, WITHOUT
LIMITATION, REASONABLE FEES AND EXPENSES OF COUNSEL) THAT MAY BE INCURRED BY OR
ASSERTED OR AWARDED AGAINST ANY INDEMNIFIED PARTY, IN EACH CASE ARISING OUT OF
OR IN CONNECTION WITH OR BY REASON OF (INCLUDING, WITHOUT LIMITATION, IN
CONNECTION WITH ANY INVESTIGATION, LITIGATION OR OTHER PROCEEDING (WHETHER OR
NOT SUCH INDEMNIFIED PARTY IS A PARTY THERETO) RELATING TO, RESULTING FROM OR
ARISING OUT OF ANY OF THE PROGRAM DOCUMENTS AND ALL OTHER DOCUMENTS RELATED
THERETO, ANY BREACH OF A REPRESENTATION OR WARRANTY OF SELLER OR SELLER’S
OFFICER IN THIS AGREEMENT OR ANY OTHER PROGRAM DOCUMENT, AND ALL ACTIONS TAKEN
PURSUANT THERETO) (I) THE TRANSACTIONS, THE ACTUAL OR PROPOSED USE OF THE
PROCEEDS OF THE TRANSACTIONS, THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED THEREBY, INCLUDING, WITHOUT LIMITATION, ANY ACQUISITION OR PROPOSED
ACQUISITION OR ANY INDEMNITY PAYABLE UNDER ANY SERVICING AGREEMENT OR OTHER
SERVICING ARRANGEMENT, (II) THE ACTUAL OR ALLEGED PRESENCE OF HAZARDOUS
MATERIALS ON ANY PROPERTY OR ANY ENVIRONMENTAL ACTION RELATING IN ANY WAY TO ANY
PROPERTY OR (III) THE ACTUAL OR ALLEGED VIOLATION OF ANY FEDERAL, STATE,
MUNICIPAL OR LOCAL PREDATORY LENDING LAWS, EXCEPT TO THE EXTENT SUCH CLAIM,
DAMAGE, LOSS, LIABILITY

 

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OR EXPENSE IS FOUND IN A FINAL, NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT
JURISDICTION TO HAVE RESULTED FROM SUCH INDEMNIFIED PARTY’S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT.  SELLER ALSO AGREES NOT TO ASSERT ANY CLAIM AGAINST BUYER OR
ANY OF ITS AFFILIATES, OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES, ATTORNEYS AND AGENTS, ON ANY THEORY OF LIABILITY, FOR SPECIAL,
INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING OUT OF OR OTHERWISE RELATING
TO THE PROGRAM DOCUMENTS, THE ACTUAL OR PROPOSED USE OF THE PROCEEDS OF THE
TRANSACTIONS, THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY. 
THE FOREGOING INDEMNITY AND AGREEMENT NOT TO ASSERT CLAIMS EXPRESSLY APPLIES,
WITHOUT LIMITATION, TO THE NEGLIGENCE (BUT NOT GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT) OF THE INDEMNIFIED PARTIES.

 

C)                                 IF SELLER FAILS TO PAY WHEN DUE ANY COSTS,
EXPENSES OR OTHER AMOUNTS PAYABLE BY IT UNDER THIS AGREEMENT, INCLUDING, WITHOUT
LIMITATION, REASONABLE FEES AND EXPENSES OF COUNSEL AND INDEMNITIES, SUCH AMOUNT
MAY BE PAID ON BEHALF OF SELLER BY BUYER, IN ITS SOLE DISCRETION AND SELLER
SHALL REMAIN LIABLE FOR ANY SUCH PAYMENTS TO BUYER.  NO SUCH PAYMENT BY BUYER
SHALL BE DEEMED A WAIVER OF ANY OF BUYER’S RIGHTS UNDER THE PROGRAM DOCUMENTS.

 

D)                                WITHOUT PREJUDICE TO THE SURVIVAL OF ANY OTHER
AGREEMENT OF SELLER HEREUNDER, THE AGREEMENTS AND OBLIGATIONS OF SELLER
CONTAINED IN THIS SECTION SHALL SURVIVE THE PAYMENT IN FULL OF THE REPURCHASE
PRICE AND ALL OTHER AMOUNTS PAYABLE HEREUNDER AND DELIVERY OF THE PURCHASED
ASSETS BY BUYER AGAINST FULL PAYMENT THEREFOR.

 

24.                               WAIVER OF REDEMPTION AND DEFICIENCY RIGHTS

 

Seller hereby expressly waives, to the fullest extent permitted by law, every
statute of limitation on a deficiency judgment, any reduction in the proceeds of
any Purchased Assets as a result of restrictions upon Buyer or Custodian
contained in the Program Documents or any other instrument delivered in
connection therewith, and any right that it may have to direct the order in
which any of the Purchased Assets shall be disposed of in the event of any
disposition pursuant hereto.

 

25.                               REIMBURSEMENT

 

All sums reasonably expended by Buyer in connection with the exercise of any
right or remedy provided for herein shall be and remain Seller’s obligation. 
Seller agrees to pay, with interest at the Default Rate to the extent that an
Event of Default has occurred, the reasonable out-of-pocket expenses and
reasonable attorneys’ fees incurred by Buyer and/or Custodian in connection with
the enforcement of the Program Documents, the taking of any action, including
legal action, required or permitted to be taken by Buyer (without duplication to
Buyer) and/or Custodian pursuant thereto, any “due diligence” or loan agent
reviews conducted by Buyer or on its behalf or any refinancing or restructuring
in the nature of a “workout”.  If Buyer determines that, due to the introduction
of, any change in, or the compliance by Buyer with (i) any eurocurrency reserve
requirement or (ii) the interpretation of any law, regulation or any guideline
or request from any central bank or other Governmental Authority (whether or not
having the force of law), there shall be an increase in the cost to Buyer in
engaging in the present or any future Transactions, then Seller agrees to pay to
Buyer, from time to time, upon demand by Buyer (with a copy to Custodian) the
actual cost of additional amounts as specified by Buyer to

 

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compensate Buyer for such increased costs.  Notwithstanding any other provisions
in this Agreement, in the event of any such change in the eurocurrency reserve
requirement or the interpretation of any law, regulation or any guideline or
request from any central bank or other Governmental Authority, Seller will have
the right to terminate all Transactions then outstanding as of a date selected
by Seller, which date shall be prior to the applicable Repurchase Date and which
date shall thereafter for all purposes hereof, be deemed to be the Repurchase
Date.  In addition, Buyer shall promptly notify Seller if any events in clause
(i) or (ii) of this Section 25 occur.

 

In addition to any rights and remedies of Buyer hereunder and by law, Buyer
shall have the right, without prior notice to Seller, any such notice being
expressly waived by Seller to the extent permitted by applicable law, upon any
amount becoming due and payable by Seller hereunder (whether at the stated
maturity, by acceleration or otherwise) to set-off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by Buyer or any
Affiliate thereof to or for the credit or the account of Seller or any Affiliate
thereof.  Buyer agrees promptly to notify Seller after any such set off and
application made by Buyer; provided that the failure to give such notice shall
not affect the validity of such set off and application.

 

26.                               FURTHER ASSURANCES

 

Seller agrees to do such further acts and things and to execute and deliver to
Buyer such additional assignments, acknowledgments, agreements, powers and
instruments as are reasonably required by Buyer to carry into effect the intent
and purposes of this Agreement, to perfect the interests of Buyer in the
Purchased Assets or to better assure and confirm unto Buyer its rights, powers
and remedies hereunder.

 

27.                               ENTIRE AGREEMENT; PRODUCT OF NEGOTIATION

 

This Agreement supersedes and integrates all previous negotiations, contracts,
agreements and understandings between the parties relating to a sale and
repurchase of Purchased Assets and Additional Purchased Assets thereto, and it,
together with the other Program Documents, and the other documents delivered
pursuant hereto or thereto, contains the entire final agreement of the parties. 
No prior negotiation, agreement, understanding or prior contract shall have any
validity hereafter.

 

28.                               TERMINATION

 

This Agreement shall remain in effect until the earlier of (i) 364 days
following the earlier of the first Purchase Date, provided that such date may be
extended, in Buyer’s sole discretion, upon written request of the Seller
delivered to Buyer not less than 60 days prior to such date, or (ii) at Buyer’s
option, the occurrence of an Event of Default (such date, the “Termination
Date”).  However, no such termination shall affect Seller’s outstanding
obligations to Buyer at the time of such termination.  Pursuant to any extension
of this Agreement, the Seller shall pay to the Buyer the Renewal Fee.  Seller’s
obligations to indemnify Buyer pursuant to this

 

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Agreement shall survive the termination hereof.  Failure of Buyer to respond to
Seller’s request for an extension pursuant to clause (i) above shall be deemed a
rejection of such request.

 

29.                               ASSIGNMENT

 

A)                                 THE PROGRAM DOCUMENTS ARE NOT ASSIGNABLE BY
SELLER.  BUYER MAY FROM TIME TO TIME ASSIGN ALL OR A PORTION OF ITS RIGHTS AND
OBLIGATIONS UNDER THIS AGREEMENT AND THE PROGRAM DOCUMENTS; PROVIDED, HOWEVER,
THAT BUYER SHALL MAINTAIN, FOR REVIEW BY SELLER UPON WRITTEN REQUEST, A REGISTER
OF ASSIGNEES AND A COPY OF AN EXECUTED ASSIGNMENT AND ACCEPTANCE BY BUYER AND
ASSIGNEE (“ASSIGNMENT AND ACCEPTANCE”), SPECIFYING THE PERCENTAGE OR PORTION OF
SUCH RIGHTS AND OBLIGATIONS ASSIGNED.  UPON SUCH ASSIGNMENT, (A) SUCH ASSIGNEE
SHALL BE A PARTY HERETO AND TO EACH PROGRAM DOCUMENT TO THE EXTENT OF THE
PERCENTAGE OR PORTION SET FORTH IN THE ASSIGNMENT AND ACCEPTANCE, AND SHALL
SUCCEED TO THE APPLICABLE RIGHTS AND OBLIGATIONS OF BUYER HEREUNDER, AND
(B) BUYER SHALL, TO THE EXTENT THAT SUCH RIGHTS AND OBLIGATIONS HAVE BEEN SO
ASSIGNED BY IT TO EITHER (I) AN AFFILIATE OF BUYER WHICH ASSUMES THE OBLIGATIONS
OF SUCH BUYER OR (II) TO ANOTHER PERSON WHICH ASSUMES THE OBLIGATIONS OF BUYER,
BE RELEASED FROM ITS OBLIGATIONS HEREUNDER ACCRUING THEREAFTER AND UNDER THE
PROGRAM DOCUMENTS.  UNLESS OTHERWISE STATED IN THE ASSIGNMENT AND ACCEPTANCE,
SELLER SHALL CONTINUE TO TAKE DIRECTIONS SOLELY FROM BUYER UNLESS OTHERWISE
NOTIFIED BY BUYER IN WRITING.  BUYER MAY DISTRIBUTE TO ANY PROSPECTIVE ASSIGNEE
ANY DOCUMENT OR OTHER INFORMATION DELIVERED TO BUYER BY SELLER.  NOTWITHSTANDING
ANY ASSIGNMENT BY BUYER PURSUANT TO THIS SECTION 29, BUYER SHALL REMAIN LIABLE
AS TO THE TRANSACTIONS.

 

B)                                BUYER MAY SELL TO ONE OR MORE PERSONS
PARTICIPATIONS IN ALL OR A PORTION OF ITS RIGHTS AND OBLIGATIONS UNDER THIS
AGREEMENT OR OTHERWISE ENTER INTO ONE OR MORE SYNDICATIONS OF ITS RIGHTS AND
OBLIGATIONS UNDER THIS AGREEMENT.  IN THE EVENT OF ANY SUCH SALE OR SYNDICATION,
BUYER SHALL BE ENTITLED, AFTER CONSULTATION WITH THE SELLER, TO CHANGE THE
STRUCTURE, TERMS (INCLUDING PRICING) OR AMOUNT, IF BUYER DETERMINES THAT SUCH
CHANGES ARE ADVISABLE IN ORDER TO ACHIEVE A SUCCESSFUL SALE OR SYNDICATION;
PROVIDED, HOWEVER THAT SUCH CHANGE TO THE STRUCTURE, TERMS (INCLUDING PRICING)
OR AMOUNT IS NOT REASONABLY LIKELY TO TRIGGER AN EVENT OF DEFAULT.  WITH RESPECT
TO ANY SUCH SALE OR SYNDICATION, SELLER AGREES TO (A) PROVIDE AND CAUSE ITS
OFFICERS, DIRECTORS AND ADVISORS TO PROVIDE BUYER AND ANY OTHER PROPOSED BUYER
THAT BECOMES PART OF THE SYNDICATE OF BUYERS UPON REQUEST WITH ALL INFORMATION
REASONABLY DEEMED NECESSARY BY BUYER TO EFFECTUATE SUCH SALE OR SYNDICATION,
(B) ASSIST BUYER UPON ITS REASONABLE REQUEST IN THE PREPARATION OF AN OFFERING
MEMORANDUM TO BE USED IN CONNECTION WITH SUCH SALE OR SYNDICATION AND (C) MAKE
AVAILABLE THE OFFICERS, DIRECTORS AND ADVISORS OF THE SELLER AND ITS AFFILIATES,
FROM TIME TO TIME, TO ATTEND AND MAKE PRESENTATIONS REGARDING THE BUSINESS AND
PROSPECTS OF THE SELLER AND ITS AFFILIATES, AS APPROPRIATE, AT A MEETING OR
MEETINGS OF PROSPECTIVE BUYERS.  NOTWITHSTANDING THE TERMS OF SECTION 8, EACH
PARTICIPANT OF BUYER SHALL BE ENTITLED TO THE ADDITIONAL COMPENSATION AND OTHER
RIGHTS AND PROTECTIONS AFFORDED BUYER UNDER SECTION 8 TO THE SAME EXTENT AS
BUYER WOULD HAVE BEEN ENTITLED TO RECEIVE THEM WITH RESPECT TO THE PARTICIPATION
SOLD TO SUCH PARTICIPANT.

 

30.                               AMENDMENTS, ETC.

 

No amendment or waiver of any provision of this Agreement nor any consent to any
failure to comply herewith or therewith shall in any event be effective unless
the same shall be in writing and signed by Seller and Buyer, and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.

 

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31.                               SEVERABILITY

 

If any provision of Program Document is declared invalid by any court of
competent jurisdiction, such invalidity shall not affect any other provision of
the Program Documents, and each Program Document shall be enforced to the
fullest extent permitted by law.

 

32.                               BINDING EFFECT; GOVERNING LAW

 

This Agreement shall be binding and inure to the benefit of the parties hereto
and their respective successors and assigns, except that Seller may not assign
or transfer any of its rights or obligations under this Agreement or any other
Program Document without the prior written consent of Buyer.  THIS AGREEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAW OF THE STATE OF
NEW YORK.

 

33.                               CONSENT TO JURISDICTION

 

SELLER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT, THE PROGRAM DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.  SELLER HEREBY IRREVOCABLY AND UNCONDITIONALLY
CONSENTS, ON BEHALF OF ITSELF AND ITS PROPERTY, TO THE NON EXCLUSIVE
JURISDICTION OF ANY COURT OF THE STATE OF NEW YORK, OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, ARISING OUT OF OR RELATING
TO THE PROGRAM DOCUMENTS IN ANY ACTION OR PROCEEDING.  SELLER HEREBY SUBMITS TO,
AND WAIVES ANY OBJECTION SELLER MAY HAVE TO, NON EXCLUSIVE PERSONAL JURISDICTION
AND VENUE IN THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, WITH RESPECT TO ANY DISPUTES
ARISING OUT OF OR RELATING TO THE PROGRAM DOCUMENTS.  SELLER HEREBY IRREVOCABLY
CONSENTS TO THE SERVICE OF A SUMMONS AND COMPLAINT AND OTHER PROCESS IN ANY
ACTION, CLAIM OR PROCEEDING BROUGHT BY BUYER IN CONNECTION WITH THIS AGREEMENT
OR THE OTHER PROGRAM DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR
THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS, ON BEHALF OF
ITSELF OR ITS PROPERTY, IN THE MANNER SPECIFIED IN THIS SECTION 33 AND TO
SELLER’S ADDRESS SPECIFIED IN SECTION 36 OR SUCH OTHER ADDRESS AS SELLER SHALL
HAVE PROVIDED IN WRITING TO BUYER.  NOTHING IN THIS SECTION 33 SHALL AFFECT THE
RIGHT OF THE BUYER TO (I) SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW, OR (II) BRING ANY ACTION OR PROCEEDING AGAINST SELLER OR ITS
PROPERTIES IN THE COURTS OF ANY OTHER JURISDICTIONS.

 

34.                               SINGLE AGREEMENT

 

Seller and Buyer acknowledge that, and have entered hereinto and will enter into
each Transaction hereunder in consideration of and in reliance upon the fact
that, all Transactions

 

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hereunder constitute a single business and contractual relationship and have
been made in consideration of each other.  Accordingly, Seller and Buyer each
agree (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, and
(ii) that payments, deliveries and other transfers made by any of them in
respect of any Transaction shall be deemed to have been made in consideration of
payments, deliveries and other transfer in respect of any other Transaction
hereunder, and the obligations to make any such payments, deliveries and other
transfers may be applied against each other and netted.

 

35.                               INTENT

 

Seller and Buyer recognize that each Transaction is a “repurchase agreement” as
that term is defined in Section 101 of Title 11 of the United States Code, as
amended (“USC”) (except insofar as the Loans or LLC Interests subject to such
Transaction or the term of such Transaction would render such definition
inapplicable), a “forward contract” as that term is defined in Section 101 of
Title 11 of the USC and a “securities contract” as that term is defined in
Section 741 of Title 11 of the USC (except insofar as the Loans or LLC Interests
subject to such Transaction or the term of such Transaction would render such
definition inapplicable).

 

It is understood that Buyer’s right to liquidate the Purchased Assets delivered
to it in connection with the Transactions hereunder or to exercise any other
remedies pursuant to Section 20 hereof is a contractual right to liquidate such
Transaction as described in Sections 555 and 559 of Title 11 of the USC.

 

36.                               NOTICES AND OTHER COMMUNICATIONS

 

Except as provided herein, any notice required or permitted by this Agreement
shall be in writing and shall be effective and deemed delivered only when
received by the party to which it is sent; provided, however, that a facsimile
transmission shall be deemed to be received when transmitted so long as the
transmitting machine has provided an electronic confirmation (without error
message) of such transmission.  Any such notice shall be sent to a party at the
address or facsimile transmission number set forth below:

 

if to Seller:

 

 

 

 

 

 

Spirit Finance Corporation

 

 

14631 N. Scottsdale Road

 

 

Suite 200

 

 

Scottsdale, AZ 85254

 

 

Attention:

Catherine Long

 

Telephone:

(480) 606-0820

 

Facsimile:

(480) 606-0826

 

 

 

 

with a copy to:

 

Kutak Rock LLP

 

1801 California St., Suite 3100

 

Denver, Colorado 80202

 

48

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

 

 

Attention:

Paul E. Belitz, Esq.

 

Telephone:

(303) 297-2400

 

Facsimile:

(303) 292-7799

 

 

 

if to Buyer or Agent:

 

 

 

 

 

Citigroup Global Markets Realty Corp.

 

 

390 Greenwich Street

 

 

New York, New York 10013

 

 

Attention: Christian Anderson

 

 

Telephone: (212) 723-9714

 

 

Facsimile: (212) 723-8591

 

 

 

 

 

Citigroup Global Markets Realty Corp.

 

 

390 Greenwich Street

 

 

New York, New York 10013

 

 

Attention: James Xanthos

 

 

Telephone: (212) 723-4144

 

 

Facsimile: (212) 723-8591

 

 

as such address or number may be changed by like notice.

 

37.                               CONFIDENTIALITY

 

Buyer acknowledges that Seller is a public company subject to the Securities Act
of 1933 and Securities Exchange Act of 1934 and that the information furnished
by Seller to Buyer in the Collection Report, Asset Base Certificate and
otherwise under this Agreement may constitute material non-public information
(“Confidential Information”) within the meaning of such acts.  Except as
consented to by Seller, Buyer hereby agrees that it will keep all Confidential
Information confidential and not disclose such Confidential Information to any
third party and will not engage in, directly or indirectly, any transactions
involving the Seller’s publicly traded securities based upon such Confidential
Information. Notwithstanding the foregoing provisions of this Section 37,
nothing herein shall prevent any division or department of the Buyer from
engaging in any lawful transaction in the Seller’s publicly traded securities in
connection with the ordinary course of the business of such division or
department, provided that the decision to enter into such transaction is, as
required by applicable law, not based, in whole or in part, on any part of the
Confidential Information that is material non-public information.

 

This Agreement and its terms, provisions, supplements and amendments, and
transactions and notices hereunder, are proprietary to Buyer and Agent and shall
be held by Seller (and Seller shall cause Servicer to hold it) in strict
confidence and shall not be disclosed to any third party without the consent of
Buyer except for (i) disclosure to Seller’s direct and indirect parent
companies, directors, attorneys, agents or accountants, provided that such
attorneys or accountants likewise agree to be bound by this covenant of
confidentiality or (ii) upon prior written notice to Buyer, disclosure required
by law, rule, regulation or order of a court or other regulatory body or
(iii) to the extent necessary in dealing with obligors or tenants in connection
with Purchased Assets or (iv) with prior written notice to Buyer, to any
approved Hedge

 

49

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

 

Counterparty to the extent necessary to obtain any Hedge Instrument hereunder or
(v) with prior written notice to Buyer, any required Securities and Exchange
Commission or state securities’ law disclosures or filings; provided that Seller
shall not file the Side Letter with the Securities and Exchange Commission or
state securities office, unless otherwise agreed by Buyer in writing, and the
Seller agrees to use best efforts not to file the terms of the Side Letter with
any such filing.  Notwithstanding anything herein to the contrary, each party
(and each employee, representative, or other agent of each party) may disclose
to any and all persons, without limitation of any kind, the tax treatment and
tax structure of the transaction and all materials of any kind (including
opinions or other tax analyses) that are provided to it relating to such tax
treatment and tax structure.  For this purpose, tax treatment and tax structure
shall not include (i) the identity of any existing or future party (or any
Affiliate of such party) to this Agreement or (ii) any specific pricing
information or other commercial terms, including the amount of any fees,
expenses, rates or payments arising in connection with the transactions
contemplated by this Agreement.

 

38.                               HEDGE INSTRUMENTS

 

THE SELLER SHALL NOTIFY THE BUYER TWO BUSINESS DAYS PRIOR TO ENTERING INTO ANY
HEDGE INSTRUMENTS.

 

39.                               DUE DILIGENCE

 

Seller agrees to promptly provide Buyer and its agents with access to, copies of
and extracts from any and all documents, records, agreements, instruments or
information (including, without limitation, any of the foregoing in computer
data banks and computer software systems) relating to its financial condition,
the performance of its obligations under the Program Documents, the documents
contained in the Servicing File or the Purchased Assets in the possession, or
under the control, of Seller.  In addition, Buyer has the right to perform
continuing due diligence reviews of (x) Seller and its Affiliates, directors,
officers, employees and significant shareholders, including, without limitation,
their respective financial condition and performance of their obligations under
the Program Documents, (y) the Servicing File and the Purchased Assets and (z)
the Servicer.  Seller shall also make available to Buyer a knowledgeable
financial or accounting officer for the purpose of answering questions
respecting the Purchased Assets.  Without limiting the generality of the
foregoing, Seller acknowledges that Buyer shall enter into transactions with
Seller based solely upon the information provided by Seller to Buyer and the
representations, warranties and covenants contained herein, and that Buyer, at
its option, has the right at any time to conduct a partial or complete due
diligence review on some or all of the Purchased Assets, including, without
limitation, ordering new credit reports, new Appraisals on the related Mortgaged
Properties and otherwise re-generating the information used to originate such
Purchased Assets.  Seller shall pay Buyer’s out-of-pocket costs and expenses
incurred by Buyer in connection with any due diligence hereunder.

 

[Signature Page Follows]

 

50

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

 

IN WITNESS WHEREOF, Seller and Buyer have caused their names to be signed to
this Agreement by their respective officers thereunto duly authorized as of the
date first above written.

 

 

 

SPIRIT FINANCE CORPORATION, as Seller

 

 

 

 

 

By:

/s/ Christopher H. Volk

 

 

Name: Christopher H. Volk

 

Title: President and CEO

 

 

 

 

 

CITIGROUP GLOBAL MARKETS REALTY
CORP., as Buyer

 

and Agent, as applicable

 

 

 

 

 

By:

/s/ James Xanthos

 

 

Name: James Xanthos

 

Title: Authorized Signer

 

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

 

Annex I

 

Buyer Acting as Agent

 

This Annex I forms a part of the Amended and Restated Master Repurchase
Agreement, dated as of December 7, 2005 (the “Agreement”), between Citigroup
Global Markets Realty Corp. and Spirit Financial Corporation.  This Annex I sets
forth the terms and conditions governing all transactions in which a party
selling assets or buying assets, as the case may be (“Agent”), in a Transaction
is acting as agent for one or more third parties (each, a “Principal”). 
Capitalized terms used but not defined in this Annex I shall have the meanings
ascribed to them in the Agreement.

 

1.                                       ADDITIONAL REPRESENTATIONS.  AGENT
HEREBY MAKES THE FOLLOWING REPRESENTATIONS, WHICH SHALL CONTINUE DURING THE TERM
OF ANY TRANSACTION: PRINCIPAL HAS DULY AUTHORIZED AGENT TO EXECUTE AND DELIVER
THE AGREEMENT ON ITS BEHALF, HAS THE POWER TO SO AUTHORIZE AGENT AND TO ENTER
INTO THE TRANSACTIONS CONTEMPLATED BY THE AGREEMENT AND TO PERFORM THE
OBLIGATIONS OF SELLER OR BUYER, AS THE CASE MAY BE, UNDER SUCH TRANSACTIONS, AND
HAS TAKEN ALL NECESSARY ACTION TO AUTHORIZE SUCH EXECUTION AND DELIVERY BY AGENT
AND SUCH PERFORMANCE BY IT.

 

2.                                       IDENTIFICATION OF PRINCIPALS.  AGENT
AGREES (A) TO PROVIDE THE OTHER PARTY, PRIOR TO THE DATE ON WHICH THE PARTIES
AGREE TO ENTER INTO ANY TRANSACTION UNDER THE AGREEMENT, WITH A WRITTEN LIST OF
PRINCIPALS FOR WHICH IT INTENDS TO ACT AS AGENT (WHICH LIST MAY BE AMENDED IN
WRITING FROM TIME TO TIME WITH THE CONSENT OF THE OTHER PARTY), AND (B) TO
PROVIDE THE OTHER PARTY, BEFORE THE CLOSE OF BUSINESS ON THE NEXT BUSINESS DAY
AFTER ORALLY AGREEING TO ENTER INTO A TRANSACTION, WITH NOTICE OF THE SPECIFIC
PRINCIPAL OR PRINCIPALS FOR WHOM IT IS ACTING IN CONNECTION WITH SUCH
TRANSACTION.  IF (I) AGENT FAILS TO IDENTIFY SUCH PRINCIPAL OR PRINCIPALS PRIOR
TO THE CLOSE OF BUSINESS ON SUCH NEXT BUSINESS DAY OR (II) THE OTHER PARTY SHALL
DETERMINE IN ITS SOLE DISCRETION THAT ANY PRINCIPAL OR PRINCIPALS IDENTIFIED BY
AGENT ARE NOT ACCEPTABLE TO IT, THE OTHER PARTY MAY REJECT AND RESCIND ANY
TRANSACTION WITH SUCH PRINCIPAL OR PRINCIPALS, RETURN TO AGENT ANY PURCHASED
ASSETS OR PORTION OF THE PURCHASE PRICE, AS THE CASE MAY BE, PREVIOUSLY
TRANSFERRED TO THE OTHER PARTY AND REFUSE ANY FURTHER PERFORMANCE UNDER SUCH
TRANSACTION, AND AGENT SHALL IMMEDIATELY RETURN TO THE OTHER PARTY ANY PORTION
OF THE PURCHASE PRICE OR PURCHASED ASSETS, AS THE CASE MAY BE, PREVIOUSLY
TRANSFERRED TO AGENT IN CONNECTION WITH SUCH TRANSACTION; PROVIDED, HOWEVER,
THAT (A) THE OTHER PARTY SHALL PROMPTLY (AND IN ANY EVENT WITHIN ONE BUSINESS
DAY) NOTIFY AGENT OF ITS DETERMINATION TO REJECT AND RESCIND SUCH TRANSACTION
AND (B) TO THE EXTENT THAT ANY PERFORMANCE WAS RENDERED BY ANY PARTY UNDER ANY
TRANSACTION REJECTED BY THE OTHER PARTY, SUCH PARTY SHALL REMAIN ENTITLED TO ANY
PRICE DIFFERENTIAL OR OTHER AMOUNTS THAT WOULD HAVE BEEN PAYABLE TO IT WITH
RESPECT TO SUCH PERFORMANCE IF SUCH TRANSACTION HAD NOT BEEN REJECTED.  THE
OTHER PARTY ACKNOWLEDGES THAT AGENT SHALL NOT HAVE ANY OBLIGATION TO PROVIDE IT
WITH CONFIDENTIAL INFORMATION REGARDING THE FINANCIAL STATUS OF ITS PRINCIPALS;
AGENT AGREES, HOWEVER, THAT IT WILL ASSIST THE OTHER PARTY IN OBTAINING FROM
AGENT’S PRINCIPALS SUCH INFORMATION REGARDING THE FINANCIAL STATUS OF SUCH
PRINCIPALS AS THE OTHER PARTY MAY REASONABLY REQUEST.

 

1

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

 

3.                                       LIMITATION OF AGENT’S LIABILITY.  THE
PARTIES EXPRESSLY ACKNOWLEDGE THAT IF THE REPRESENTATIONS OF AGENT UNDER THE
AGREEMENT, INCLUDING THIS ANNEX I, ARE TRUE AND CORRECT IN ALL MATERIAL RESPECTS
DURING THE TERM OF ANY TRANSACTION AND AGENT OTHERWISE COMPLIES WITH THE
PROVISIONS OF THIS ANNEX I, THEN (A) AGENT’S OBLIGATIONS UNDER THE AGREEMENT
SHALL NOT INCLUDE A GUARANTEE OF PERFORMANCE BY ITS PRINCIPAL OR PRINCIPALS AND
(B) THE OTHER PARTY’S REMEDIES SHALL NOT INCLUDE A RIGHT OF SETOFF IN RESPECT OF
RIGHTS OR OBLIGATIONS, IF ANY, OF AGENT ARISING IN OTHER TRANSACTIONS IN WHICH
AGENT IS ACTING AS PRINCIPAL.

 

4.                                       MULTIPLE PRINCIPALS.

 

(a)                                  In the event that Agent proposes to act for
more than one Principal hereunder, Agent and the other party shall elect whether
(i) to treat Transactions under the Agreement as transactions entered into on
behalf of separate Principals or (ii) to aggregate such Transactions as if they
were transactions by a single Principal.  Failure to make such an election in
writing shall be deemed an election to treat Transactions under the Agreement as
transactions on behalf of a single Principal.

 

(b)                                 In the event that Agent and the other party
elect (or are deemed to elect) to treat Transactions under the Agreement as
transactions on behalf of separate Principals, the parties agree that (i) Agent
will provide the other party, together with the notice described in
Section 2(b) of this Annex I, notice specifying the portion of each Transaction
allocable to the account of each of the Principals for which it is acting (to
the extent that any such Transaction is allocable to the account of more than
one Principal); (ii) the portion of any individual Transaction allocable to each
Principal shall be deemed a separate Transaction under the Agreement; (iii) the
margin maintenance obligations of Seller under Section 6 of the Agreement shall
be determined on a Transaction-by-Transaction basis (unless the parties agree to
determine such obligations on a Principal-by-Principal basis); and (iv) Buyer’s
and Seller’s remedies under the Agreement upon the occurrence of an Event of
Default shall be determined as if Agent had entered into a separate Agreement
with the other party on behalf of each of its Principals.

 

(c)                                  In the event that Agent and the other party
elect to treat Transactions under the Agreement as if they were transactions by
a single Principal, the parties agree that (i) Agent’s notice under
Section 2(b) of this Annex I need only identify the names of its Principals but
not the portion of each Transaction allocable to each Principal’s account;
(ii) the margin maintenance obligations of Seller under Section 6 of the
Agreement shall, subject to any greater requirement imposed by applicable law,
be determined on an aggregate basis for all Transactions entered into by Agent
on behalf of any Principal; and (iii) Buyer’s and Seller’s remedies upon the
occurrence of an Event of Default shall be determined as if all Principals were
a single Seller or Buyer, as the case may be.

 

(d)                                 Notwithstanding any other provision of the
Agreement (including, without limitation, this Annex I), the parties agree that
any Transactions by Agent on

 

2

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

 

behalf of an employee benefit plan under ERISA shall be treated as Transactions
on behalf of separate Principals in accordance with Section 4(b) of this Annex I
(and all margin maintenance obligations of the parties shall be determined on a
Transaction- by-Transaction basis).

 

5.                                       INTERPRETATION OF TERMS.  ALL
REFERENCES TO “SELLER” OR “BUYER”, AS THE CASE MAY BE, IN THE AGREEMENT SHALL,
SUBJECT TO THE PROVISIONS OF THIS ANNEX I (INCLUDING, AMONG OTHER PROVISIONS,
THE LIMITATIONS ON AGENT’S LIABILITY IN SECTION 3 OF THIS ANNEX I), BE CONSTRUED
TO REFLECT THAT (I) EACH PRINCIPAL SHALL HAVE, IN CONNECTION WITH ANY
TRANSACTION OR TRANSACTIONS ENTERED INTO BY AGENT ON ITS BEHALF, THE RIGHTS,
RESPONSIBILITIES, PRIVILEGES AND OBLIGATIONS OF A “SELLER” OR “BUYER”, AS THE
CASE MAY BE, DIRECTLY ENTERING INTO SUCH TRANSACTION OR TRANSACTIONS WITH THE
OTHER PARTY UNDER THE AGREEMENT, AND (II) AGENT’S PRINCIPAL OR PRINCIPALS HAVE
DESIGNATED AGENT AS THEIR SOLE AGENT FOR PERFORMANCE OF SELLER’S OBLIGATIONS TO
BUYER OR BUYER’S OBLIGATIONS TO SELLER, AS THE CASE MAY BE, AND FOR RECEIPT OF
PERFORMANCE BY BUYER OF ITS OBLIGATIONS TO SELLER OR SELLER OF ITS OBLIGATIONS
TO BUYER, AS THE CASE MAY BE, IN CONNECTION WITH ANY TRANSACTION OR TRANSACTIONS
UNDER THE AGREEMENT (INCLUDING, AMONG OTHER THINGS, AS AGENT FOR EACH PRINCIPAL
IN CONNECTION WITH TRANSFERS OF SECURITIES, CASH OR OTHER PROPERTY AND AS AGENT
FOR GIVING AND RECEIVING ALL NOTICES UNDER THE AGREEMENT).  BOTH AGENT AND ITS
PRINCIPAL OR PRINCIPALS SHALL BE DEEMED “PARTIES” TO THE AGREEMENT AND ALL
REFERENCES TO A “PARTY” OR “EITHER PARTY” IN THE AGREEMENT SHALL BE DEEMED
REVISED ACCORDINGLY.

 

3

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

 

EXHIBIT A

 

QUARTERLY CERTIFICATION

 

I,                                     ,                                 , the
[OFFICER] of Spirit Finance Corporation (the “Seller”), do hereby certify that:

 

(I)                                     THE SELLER IS IN COMPLIANCE WITH ALL
PROVISIONS AND TERMS OF THE AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT
(THE “REPURCHASE AGREEMENT”) BY AND BETWEEN CITIGROUP GLOBAL MARKETS REALTY
CORP. (THE “BUYER”) AND THE SELLER DATED AS OF DECEMBER 7, 2005;

 

(II)                                  THE SELLER’S TANGIBLE NET WORTH AT THE END
OF THE MOST RECENT FISCAL QUARTER WAS NOT LESS THAN (I) $400,000,000 PLUS
(II) NET WORTH INCREASE AMOUNTS;

 

(III)                               AS OF THE END OF THE MOST RECENT FISCAL
QUARTER, SELLER, TOGETHER WITH ITS CONSOLIDATED SUBSIDIARIES, HAS CASH AND CASH
EQUIVALENTS IN AN AMOUNT OF NOT LESS THAN $15,000,000;

 

(IV)                              AS OF THE END OF THE MOST RECENT FISCAL
QUARTER, THE RATIO OF TOTAL INDEBTEDNESS TO TANGIBLE NET WORTH OF SELLER DID NOT
EXCEED 4:1;

 

(V)                                 AS OF THE END OF THE MOST RECENT FISCAL
QUARTER, THE RATIO OF TOTAL INDEBTEDNESS TO TOTAL ASSETS OF SELLER DID NOT
EXCEED 0.7:1; AND

 

(VI)                              THERE HAVE NOT BEEN ANY MODIFICATIONS TO THE
UNDERWRITING GUIDELINES THAT HAVE NOT BEEN APPROVED BY THE BUYER.

 

A-1

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

 

IN WITNESS WHEREOF, I have signed this certificate and affixed the seal of the
Seller.

 

Date:                 , 200  .

 

 

[

 

]

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

[SEAL]

 

 

 

I,                                     , the                            of the
Seller, do hereby certify that                                    is the duly
elected or appointed, qualified and acting                           of the
Seller, and the signature set forth above is the genuine signature of such
officer in the date hereof.

 

 

 

SPIRIT FINANCE CORPORATION

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

A-2

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

 

EXHIBIT B

 

ASSET BASE CERTIFICATE

 

SPIRIT FINANCE CORPORATION

ASSET BASE CERTIFICATE

AS OF

[Date]

 

 

 

TOTAL LOANS

 

 

 

 

 

Purchased Assets Collateral Value as shown on Loan Schedule (Appraised Values)

 

 

 

(a)  Total Collateral Value =

 

$

—

 

 

 

 

 

(b)  Less Mortgage Loan Collateral Values that are not “Eligible Mortgage Loans”
=

 

$

—

 

 

 

 

 

(c)  Total Eligible Mortgage Loan Collateral Value

 

$

—

 

 

 

 

 

Master Repurchase Agreement Advance Rate

 

$

—

 

 

 

 

 

Total Asset Base (up to facility limit of $                            )

 

$

—

 

 

 

 

 

Purchased Assets Outstanding (prior Asset Base Certificate):

 

$

—

 

 

 

 

 

Purchase Request As Of:

[Date]

 

 

 

 

 

 

 

 

Principal Repayments

 

 

$

—

 

 

 

 

 

 

Purchased Assets Outstanding as of

[DateME]

 

$

—

 

 

 

 

 

Excess Availability (Deficiency) versus Borrowing Base

 

$

—

 

 

 

 

 

Maximum Aggregate Purchase Price (Loans)

 

$

 

 

 

 

 

 

Unused Aggregate Purchase Price

 

$

(                           

)

 

B-1

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

 

EXHIBIT C

 

SERVICING TRANSMISSION

 

[to follow]

 

B-2

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

 

SCHEDULE A

 

SUBSIDIARIES

 

Spirit Finance Corporation

 

(a Maryland Corporation)

 

Spirit Finance Acquisitions, LLC

 

(a Delaware LLC)

 

Spirit Management Company

 

(a Maryland Corporation)

 

Spirit Property Holdings, LLC

 

(A Delaware LLC)

 

Spirit Pocono Corporation

 

(a Pennsylvania Corporation)

 

Spirit Master Funding, LLC

 

(a Delaware LLC)

 

Spirit Master Funding II, LLC

 

(a Delaware LLC)

 

Spirit Master Funding III, LLC

 

(a Delaware LLC)

 

Spirit SPE Missoula, LLC

 

(a Delaware LLC)

 

Spirit SPE Raleigh, LLC

 

(a Delaware LLC)

 

i

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

 

Spirit SPE Johnston, LLC

 

(a Delaware LLC)

 

Spirit SPE Columbia, LLC

 

(a Delaware LLC)

 

Spirit SPE US Plainview, LLC (1)

 

(a Delaware LLC)

 

Spirit SPE Covina, LLC

 

(a Delaware LLC)

 

Spirit SPE Portfolio

 

2005-1, LLC

 

(a Delaware LLC)

 

Spirit SPE Portfolio

 

2005-2, LLC

 

(a Delaware LLC)

 

Spirit SPE Portfolio

 

2005-3, LLC

 

(a Delaware LLC)

 

Spirit SPE Portfolio

 

2005-5, LLC

 

(a Delaware LLC)

 

Spirit SPE General Holdings, LLC

 

(a Delaware LLC)

 

Spirit Limited Holdings, LLC

 

(a Delaware LLC)

 

ii

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

 

Spirit SPE General Holdings II, LLC

 

(a Delaware LLC)

 

Spirit SPE Portfolio 2005-4, LP

 

(a Delaware limited partnership)

 

Spirit SPE US Vernon, LP

 

(a Delaware limited partnership)

 

Spirit SPE US Levelland, LP

 

(a Delaware limited partnership)

 

Spirit SPE US Lubbock, LP

 

(a Delaware limited partnership)

 

Spirit SPE US Burkburnett, LP

 

(a Delaware limited partnership)

 

Spirit SPE US Wichita Falls, LP

 

(a Delaware limited partnership)

 

Spirit SPE US Childress, LP

 

(a Delaware limited partnership)

 

Spirit SPE US Amarillo 522, LP

 

(a Delaware limited partnership)

 

Spirit SPE US Amarillo 526, LP

 

(a Delaware limited partnership)

 

Spirit SPE US Amarillo 527, LP

 

(a Delaware limited partnership)

 

Spirit SPE US Amarillo 533, LP

 

(a Delaware limited partnership)

 

iii

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

 

Spirit SPE US Snyder, LP

 

(a Delaware limited partnership)

 

Spirit SPE US Perryton, LP

 

(a Delaware limited partnership)

 

iv

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

 

SCHEDULE B

 

INSURANCE

 

[to follow]

 

i

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

 

APPENDIX A

 

REPRESENTATIONS AND WARRANTIES

 

i

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

 

Representations, Warranties and Indemnities in Favor of

Buyer and Subsequent Purchasers with Respect to the Loans and the LLC Interests

 

(I)                                    By delivering a Transaction Notice,
Seller shall be deemed to represent and warrant to Buyer, unless otherwise
disclosed to and approved by Buyer, with respect to each such Loan transferred
on any Purchase Date and, unless otherwise expressly disclosed by Seller in the
list of exceptions to these representations and warranties listed in the
schedule of exceptions delivered by Seller (the “Exception Schedule”) and
approved by Buyer, as of each Purchase Date (or such other date as specified
below), as follows:

 

(a)                                  Immediately prior to the transfer and
assignment of the Loan to Buyer, Seller had good and insurable fee title to, and
was the sole owner and holder of, the Loan, free and clear of any and all liens,
encumbrances and other interests on, in or to the Loan.  Unless the Mortgage is
in the name of the Collateral Agent, the related Assignment of Mortgage and
assignment of leases and rents (if any), constitutes the legal, valid and
binding assignment of the Mortgage and the related assignment of leases and
rents from Seller to the Collateral Agent on behalf of the Buyer. The
endorsement of each Note is genuine, properly endorsed and constitutes the
legal, valid and binding assignment of the Note and, together with the
Assignment of Mortgage and assignment of leases and rents (if any), legally and
validly conveys all right, title and interest in the subject Loan from Seller to
Buyer.

 

(b)                                 Seller has full right and authority to sell,
contribute, assign and transfer the Loan to Buyer.  The entire agreement with
the related Borrower (whether originated by Seller or a different originator) is
contained in the Loan Documents and there are no warranties, agreements or
options regarding such Loan or the related Mortgaged Property not set forth
therein.  Other than the Loan Documents, there are no agreements between any
predecessor in interest in the Loan and the Borrower.

 

(c)                                  The information pertaining to the Loan set
forth in the Loan Schedule is true and correct in all material respects.  The
Loan is an Eligible Asset. The Loan was originated or acquired in accordance
with, and fully complies with, the Underwriting Guidelines in all material
respects.  The related Custodian’s Loan File contains all of the documents and
instruments required to be contained therein.

 

(d)                                 The following (“Permitted Exceptions”):
(i) liens for real estate taxes and special assessments not yet due and payable
or due but not yet delinquent, (ii) covenants, conditions and restrictions,
rights-of-way, easements and other matters of public record, such exceptions
being of a type or nature that are acceptable to mortgage lending institutions
generally, (iii) certain purchase options and (iv) other matters to which like
properties are commonly subject, which matters referred to in clauses (i), (ii),
(iii), and (iv) do not, individually or in the aggregate, materially interfere
with the value of the Mortgaged Property, do not materially interfere or
restrict the current use or operation of the Mortgaged Property relating to the
Loan and do not materially interfere

 

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

 

with the security intended to be provided by the Mortgage, the current use or
operation of the Mortgaged Property or the current ability of the Mortgaged
Property to generate net operating income sufficient to service the Loan. 
Financing Statements have been filed and/or recorded (or, if not filed and/or
recorded, have been submitted in proper form for filing and recording), in all
public places necessary to perfect a valid first priority security interest in
all items of personal property pledged by the Borrower, if any, in connection
with such Loan and in all cases, subject to any applicable purchase money
security interest and to the extent perfection may be effected pursuant to
applicable law solely by recording or filing Financing Statements.

 

(e)                                  With respect to each Loan, the related
Mortgage constitutes a valid, legally binding and enforceable first priority
lien upon the related Mortgaged Property securing such Loan and the improvements
located thereon and forming a part thereof, prior to all other liens and
encumbrances, except for Permitted Exceptions.  The lien of the Mortgage is
insured by an ALTA lender’s title insurance policy (“Title Policy”), or its
equivalent as adopted in the applicable jurisdiction, issued by a nationally
recognized title insurance company, insuring the originator of the Loan, its
successors and assigns, as to the first priority lien of the Mortgage in the
original principal amount of the Loan after all advances of principal, subject
only to Permitted Exceptions (or, if a title insurance policy has not yet been
issued in respect of the Loan, a policy meeting the foregoing description is
evidenced by a commitment for title insurance “marked up” (or by “pro-forma”
otherwise agreed to in a closing instruction letter countersigned by the title
company) as of the closing date of the Loan).  Each Title Policy (or, if it has
yet to be issued, the coverage to be provided thereby) is in full force and
effect, all premiums thereon have been paid and no material claims have been
made thereunder and no claims have been paid thereunder.  Seller has not, by act
or omission, done anything that would materially impair the coverage under such
Title Policy.  Immediately following the transfer and assignment of the Loan to
Buyer, such Title 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.

 

(f)                                    Seller has not waived any material
default, breach, violation or event of acceleration existing under the Mortgage
or Mortgage Note.

 

(g)                                 The Borrower has not waived any material
default, breach, violation or event of acceleration by the Tenant existing under
the Lease.

 

(h)                                 There is no valid offset, defense or
counterclaim to the payment or performance obligations of the Loan.

 

(i)                                     The Mortgaged Property securing any Loan
is free and clear of any damage that would materially and adversely affect its
value as security for the Loan.  No proceeding for the condemnation of all or
any material portion of the Mortgaged Property has been commenced and the
Mortgaged Property is free and clear of any damage that would materially and
adversely affect the value or use of such Mortgaged Property.

 

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(j)                                     The Loan complied with all applicable
usury laws in effect at its date of origination.

 

(k)                                  The proceeds of the Loan have been fully
disbursed and there is no requirement for future advances thereunder.  All
costs, fees and expenses incurred in making, closing and recording the Loan,
including, but not limited to, mortgage recording taxes and recording and filing
fees relating to the origination of such Loan, have been paid.  Any and all
requirements as to completion of any on-site or off-site improvement by the
Borrower and as to disbursements of any escrow funds therefor that were to have
been complied with have been complied with.

 

(l)                                     The Borrower under the related Mortgage
Note, Mortgage and all other Loan Documents had the power, authority and legal
capacity to enter into, execute and deliver the same, and, as applicable, such
Mortgage Note, Mortgage and Loan Documents have been duly authorized, properly
executed and delivered by the parties thereto, and each is the legal, valid and
binding obligation of the maker thereof (subject to any non recourse provisions
contained in any of the foregoing agreements and any applicable state anti
deficiency legislation), 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).

 

(m)                               All improvements upon the Mortgaged Property
securing any Loan are insured under insurance policies (as described in
Schedule A the “Insurance Schedule”).  The Loan documents require the Borrower
to maintain, or cause the Tenant to maintain, and the Lease requires the Tenant
to maintain insurance coverage described on the Insurance Schedule and all
insurance required under applicable law including, without limitation, insurance
against loss by hazards with extended coverage in an amount (subject to a
customary deductible) at least equal to the full replacement cost of the
improvements located on such Mortgaged Property, including without limitation,
flood insurance if any portion of the improvements located upon the Mortgaged
Property was, at the time of the origination of the Loan, in a flood zone area
as identified in the Federal Register by the Federal Emergency Management Agency
as a 100 year flood zone or special hazard area, and flood insurance was
available under the then current guidelines of the Federal Insurance
Administration is in effect with a generally acceptable insurance carrier.  The
Loan Documents require the Borrower to maintain, or to cause the Tenant to
maintain on the Mortgaged Property securing any Loan a fire and extended perils
insurance policy, in an amount not less than the replacement cost and the amount
necessary to avoid the operation of any co-insurance provisions with respect to
the Mortgaged Property. All such insurance policies contain a standard
“additional insured” clause (or similar clause) naming the Borrower (as landlord
under the related Lease), its successors and assigns (including, without
limitation, subsequent owners of the Mortgaged Property), as additional insured,
and may not be reduced, terminated or canceled without thirty (30) days’ prior
written notice to the additional insured.  In addition, the Mortgage requires
the Borrower to (i) cause Seller, as the Mortgagee, to be named as an additional
insured mortgagee, and (ii) maintain (or to require the Tenant to

 

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maintain) in respect of the Mortgaged Property workers’ compensation insurance
(if applicable), commercial general, liability insurance in amounts generally
required by Seller, and at least 6 months rental or business interruption
insurance.  The related Loan Documents obligate the Borrower to maintain such
insurance and, at such Borrower’s failure to do so, authorizes the mortgagee to
maintain such insurance at the Borrower’s cost and expense and to seek
reimbursement therefor from such Borrower.  Each such insurance policy, as
applicable, is required to name the holder of the Mortgage as an additional
insured or contain a mortgagee endorsement naming the holder of the Mortgage as
loss payee and requires prior notice to the holder of the Mortgage of
termination or cancellation, and no such notice has been received, including any
notice of nonpayment of premiums, that has not been cured.  There have been no
acts or omissions that would impair the coverage of any such insurance policy or
the benefits of the mortgage endorsement.  All insurance contemplated in this
section is maintained with insurance companies with a General Policy Rating of
“A” or better by S&P or A:VI or better by Best’s Insurance Guide and are
licensed to do business in the state wherein the Borrower or the Mortgaged
Property subject to the policy, as applicable, is located.

 

(n)                                 The Mortgaged Property securing any Loan was
subject to one or more environmental site assessments or reports (or an update
of a previously conducted assessment or report) prior to the origination of such
Loan, and Seller has no knowledge of any material and adverse environmental
conditions or circumstance affecting such Mortgaged Property that was not
disclosed in the related assessment or report(s).  There are no material and
adverse environmental conditions or circumstances affecting the Mortgaged
Property securing any such Loan other than, with respect to any adverse
environmental condition described in such report, those conditions for which
remediation has been completed and, thereafter, to the extent that such report
or remediation program so recommended, (i) a program of annual integrity testing
and/or monitoring was recommended and implemented in connection with the
Mortgaged Property securing any such Loan or an adjacent or neighboring
property; (ii) an operations and maintenance plan or periodic monitoring of such
mortgaged Property or nearby properties was recommended and implemented or
(iii) a follow-up plan was otherwise required to be taken under CERCLA (as
defined below) or under regulations established thereunder from time to time by
the Environmental Protection agency and such plan has been implemented in the
case of (i), (ii) and (iii) above, the Seller determined in accordance with the
Underwriting Guidelines that adequate funding was available for such program or
plan, as applicable.  Seller has not taken any action with respect to the Loan
or the Mortgaged Property securing such Loan that could subject Buyer, or its
successors and assigns in respect of the Loan, to any liability under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended (“CERCLA”) or any other applicable federal, state or local environmental
law, and Seller has not received any actual notice of a material violation of
CERCLA or any applicable federal, state or local environmental law with respect
to the Mortgaged Property securing such Loan that was not disclosed in the
related report.  The Mortgage or other Loan Documents require the Borrower (and
the Leases require the Tenant) to comply with all applicable federal, state and
local environmental laws and regulations.

 

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(o)                                 The Loan is not cross-collateralized with
any mortgage loan that is not a Purchased Asset.

 

(p)                                 The terms of the Mortgage, Mortgage Note,
and other Loan Documents have not been impaired, waived, altered, modified,
satisfied, canceled or subordinated in any material respect, except by written
instruments that are part of the Custodian’s Loan File, recorded or filed in the
applicable public office if necessary to maintain the priority of the lien of
the related Mortgage, delivered to Buyer or its designee.

 

(q)                                 There are no delinquent taxes, ground rents,
assessments for improvements or other similar outstanding lienable charges
affecting the Mortgaged Property which are or may become a lien of priority
equal to or higher than the lien of the Mortgage.  For purposes of this
representation and warranty, real property taxes and assessments shall not be
considered unpaid until the date on which interest and/or penalties would be
payable thereon.

 

(r)                                    Except for Loans secured by Ground
Leases, the interest of the Borrower in the Mortgaged Property consists of a fee
simple estate in real property.

 

(s)                                  Each Loan is a whole loan and not a
participation interest.

 

(t)                                    The assignment of the Mortgage referred
to in the Custodian’s Loan File constitutes the legal, valid and binding
assignment of such Mortgage from the relevant assignor to Buyer or to the
Collateral Agent.  The Assignment of Leases and Rents set forth in the Mortgage
or separate from the Mortgage and related to and delivered in connection with
each Loan establishes and creates a valid, subsisting and, subject only to
Permitted Exceptions, enforceable first priority lien and first priority
security interest in the Borrower’s interest in all leases, subleases, licenses
or other agreements pursuant to which any person is entitled to occupy, use or
possess all or any portion of the real property subject to the Mortgage, and
each assignor thereunder has the full right to assign the same.  The related
assignment of Mortgage or any assignment of leases and rents not included in a
Mortgage, executed and delivered in favor of Buyer is in recordable form and
constitutes a legal, valid and binding assignment, sufficient to convey to the
assignee named therein all of the assignor’s right, title and interest in, to
and under such assignment of leases and rents.

 

(u)                                 All escrow deposits relating to the Loan
that are required to be deposited with the related Seller or its agent have been
so deposited.

 

(v)                                 As of the date of origination of such Loan
and, as of the Transfer Date, as the case may be, the Mortgaged Property
securing such Loan was and is free and clear of any mechanics’ and materialmen’s
liens or liens in the nature thereof which create a lien prior to that created
by the Mortgage, except those which are insured against by the Title Policy
referred to in (e) above.

 

(w)                               As of the date of the origination of the Loan,
no improvement that was included for the purpose of determining the appraised
value of the related Mortgaged

 

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Property securing such Loan at the time of origination of the Loan lay outside
the boundaries and building restriction lines of such property in any way that
would materially and adversely affect the value of such Mortgaged Property or
the ability to operate the Mortgaged Property under the related Lease (unless
affirmatively covered by the title insurance referred to in paragraph
(e) above), and no improvements on adjoining properties encroached upon such
Mortgaged Property to any material extent.

 

(x)                                   (i) There exists no material default,
breach or event of acceleration under the Loan, the Master Loan Agreement or any
of the Loan Documents or the Lease, (ii) there exists no event (other than
payments due but not yet delinquent) that, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute such a
material default, breach or event of acceleration and (iii) no payment on any
Loan is, or has previously been 30 or more days delinquent, however, that this
representation and warranty does not cover any default, breach or event of
acceleration that specifically pertains to any matter otherwise covered or
addressed by any other representation and warranty made by Seller with respect
to the Loans.

 

(y)                                 In connection with the origination of each
Loan, Seller inspected or caused to be inspected the Mortgaged Property securing
the Loan by inspection, appraisal or otherwise as required in Seller’s
Underwriting Guidelines then in effect.

 

(z)                                   The Loan contains no equity participation
by or shared appreciation rights in the lender or beneficiary under the
Mortgage, and does not provide for any contingent or additional interest in the
form of participation in the cash flow of the Mortgaged Property securing the
Loan, or for negative amortization.

 

(aa)                            No holder of the Loan has advanced funds or
induced, solicited or knowingly received any advance of funds from a party other
than the owner of the Mortgaged Property securing the Loan, directly or
indirectly, for the payment of any amount required by the Loan (other than
amounts paid by the Tenant as specifically provided under the related Lease).

 

(bb)                          To Seller’s knowledge, based on due diligence
customarily performed in the origination or acquisition of comparable mortgage
loans by Seller, as of the date of origination or acquisition of the Loans, the
related Borrowers were in compliance with all applicable laws relating to the
ownership and operation of the Mortgaged Properties securing the Loan as they
were then operated and were in possession of all material licenses, permits and
authorizations required by applicable laws for the ownership and operation of
such Mortgaged Properties as they were operated; and, to the Seller’s knowledge,
(1) the Tenant is not in default of its obligations under any such applicable
license, permit or agreement and (2) each such license, permit and agreement is
in full force and effect.  With respect to Mortgaged Properties that are
operated as franchised properties, and except with respect to Loans for which
the related Tenant is the franchisor, the Tenant of such Mortgaged Property has
entered into a legal, valid, and binding franchise agreement and such Tenant has
represented in the applicable lease documents that, as of the date of
origination or acquisition of the Loan, there were no defaults under the
franchise agreement by such Tenant.

 

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(cc)                            The origination, servicing and collection
practices Seller used with respect to the Loan, have complied with applicable
law in all material respects and are consistent and in accordance with the terms
of the related Loan Documents and in accordance with the applicable servicing
standard and customary industry standards.

 

(dd)                          The Mortgage or Mortgage Note, together with
applicable state law, contains customary and enforceable provisions (subject to
the exceptions set forth in paragraph (l) above) such as to render the rights
and remedies of the holders thereof adequate for the practical realization
against the Mortgaged Property securing the Loan of the principal benefits of
the security intended to be provided thereby, including the right of foreclosure
under the laws of the state in which the Mortgaged Property securing the Loan is
located governing foreclosures of mortgages and deeds of trust under power of
sale.

 

(ee)                            The Mortgage provides that insurance proceeds
and condemnation proceeds will be applied for one of the following purposes:
either to restore or repair the Mortgaged Property securing the Loan, to repay
the principal of the Loan or as otherwise directed by the holder of such
Mortgage.

 

(ff)                                There are no actions, suits, legal,
arbitration or administrative proceedings or investigations by or before any
court or governmental authority or, to the best of Seller’s knowledge, pending
against or affecting the Borrower, the Mortgaged Property securing the Loan
that, if determined adversely to such Borrower, Mortgaged Property securing the
Loan, would materially and adversely affect the value of the Mortgaged Property
securing the Loan or the ability of the Borrower to pay principal, interest or
any other amounts due under the Loan or the Lease, as applicable.

 

(gg)                          If the Mortgage is a deed of trust, a trustee,
duly qualified under applicable law to serve as such, is properly designated and
serving under such Mortgage.  Except in connection with a trustee’s sale or as
otherwise required by applicable law, after default by the Borrower, no fees or
expenses are payable to such trustee.

 

(hh)                          Except in cases where either (i) a release of a
portion of the Mortgaged Property securing the Loan was contemplated at
origination of the Loan and such portion was not considered material for
purposes of underwriting the Loan, or (ii) release is conditioned upon the
satisfaction of certain underwriting and legal requirements and the payment of a
release price, the Mortgage Note or Mortgage do not require the holder thereof
to release all or any portion of the Mortgaged Property securing the Loan from
the lien of the Mortgage except upon payment in full of all amounts due under
the Loan.

 

(ii)                                  The Mortgage does not permit the Mortgaged
Property securing the Loan to be encumbered by any lien junior to or of equal
priority with the lien of the Mortgage (excluding any lien relating to another
Loan that is cross collateralized with the Loan) without the prior written
consent of the holder thereof.

 

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(jj)                                  The Borrower is not a debtor in any state
or federal bankruptcy or insolvency proceeding.

 

(kk)                            As of the date of origination or acquisition of
each Mortgage by Seller, each Borrower which is not a natural person was duly
organized and validly existing under the laws of the state of its jurisdiction.

 

(ll)                                  The Loan contains provisions for the
acceleration of the payment of the unpaid principal balance of the Loan if,
without complying with the requirements of the Loan, the Mortgaged Property
securing the Loan, or any controlling interest in the Borrower, is directly or
indirectly transferred or sold.

 

(mm)                      The Loan Documents for each of the Loans provide that
the Borrower is to provide periodic financial and operating reports including,
without limitation, annual profit and loss statements, statements of cash flow
and other related information that Buyer reasonably requests from time to time.

 

(nn)                          To Seller’s actual knowledge, based upon zoning
letters, zoning report, the title insurance policy insuring the lien of the
Mortgage, historical use and/or other due diligence customarily performed by
Seller in connection with the origination of the Loan, the improvements located
on or forming part of such Mortgaged Property securing the Loan comply in all
material respects with applicable zoning laws and ordinances (except to the
extent that they may constitute legal non-conforming uses).

 

(oo)                          Each Mortgaged Property is located within one of
the 50 United States or the District of Columbia.

 

(pp)                          With respect to Loans and Net Lease Loans secured
by Mortgaged Property located in California or “seismic zones” 3 or 4, (i) the
related Borrower has obtained, and is required under the Loan Documents to
maintain, earthquake insurance with respect to the Improvements on such
Mortgaged Property or is required to cause the Tenant to maintain (and the
Tenant has obtained) earthquake insurance if such Mortgaged Property is located
in any such area or (ii) the Originator’s investment committee has approved
self-insurance by the Borrower with respect to earthquake risk or (iii) a
seismic study was performed in connection with the origination of such Loan and
such study indicates a probable maximum loss of less than 20% of the appraised
value of such Mortgaged Property.

 

(qq)                          Seller does not have knowledge of any circumstance
or condition with respect to such Loan, the Mortgaged Property securing the
Loan, the Lease or the Borrower’s or the Tenant’s credit standing that could
reasonably be expected to cause Buyer to regard such Loan as unacceptable
security, cause such Loan or Lease to become delinquent or have a material
adverse effect on the value or marketability of such Loan.

 

(rr)                                The Mortgaged Property securing the Loan has
adequate rights of access to public rights-of-way and is served by utilities,
including, without limitation, adequate water, sewer, electricity, gas,
telephone, sanitary sewer, and storm drain facilities. All public utilities
necessary to the continued use and enjoyment of the

 

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Mortgaged Property securing the Loan as presently used and enjoyed are located
in such public right-of-way abutting such Mortgaged Property or are the subject
of access easements for the benefit of the Mortgaged Property, and all such
utilities are connected so as to serve such Mortgaged Property without passing
over other property or are the subject of access easements for the benefit of
such Mortgaged Property. All roads necessary for the full use of the Mortgaged
Property securing the Loan for its current purpose have been completed and
dedicated to public use and accepted by all governmental authorities or are the
subject of access easements for the benefit of such Mortgaged Property.

 

(ss)                            With respect to any Loan where all or a material
portion of the Mortgaged Property securing such Loan is a leasehold estate, and
the related Mortgage does not also encumber the related lessor’s fee interest in
such Mortgaged Property, based upon the terms of the Ground Lease and any
estoppel letter or other writing received from the Ground Lessor included in the
related Custodian’s Loan File and, if applicable, the related Mortgage:

 

(1)                                  The Ground Lease or a memorandum regarding
such Ground Lease has been duly recorded.  The Ground Lessor has permitted the
interest of the Ground Lessee to be encumbered by the related Mortgage.  To the
best of Seller’s knowledge, there has been no material change in the terms of
the Ground Lease since its recordation, except by any written instruments which
are included in the related Custodian’s Loan File.

 

(2)                                  The Ground Lease may not be amended,
modified, canceled or terminated without the prior written consent of the lender
and that any such action without such consent is not binding on the lender, its
successors or assigns.

 

(3)                                  The Ground Lease has an original term (or
an original term plus one or more optional renewal terms, which, under all
circumstances, may be exercised, and is enforceable, by the lender) that extends
not less than 20 years beyond the stated maturity of the related Loan.

 

(4)                                  Based on the title insurance policy
referenced in (e) above, the Ground Leasehold interest is not subject to any
liens or encumbrances superior to, or of equal priority with, the Mortgage,
subject to Permitted Encumbrances and liens that encumber the Ground Lessor’s
fee interest.

 

(5)                                  The Ground Lease is assignable to the
lender and its assigns without the consent of the lessor thereunder.

 

(6)                                  The Ground Lease is in full force and
effect and no default has occurred under the Ground Lease and there is no
existing condition which, but for the passage of time or the giving of notice,
would result in a material default under the terms of the Ground Lease.

 

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(7)                                  The Ground Lessor is required to give
notice of any default by the related lessee to the lender.

 

(8)                                  The lender is permitted a reasonable
opportunity (including, where necessary, sufficient time to gain possession of
the interest of the lessee under the Ground Lease through legal proceedings, or
to take other action so long as the lender is proceeding diligently) to cure any
default under the Ground Lease, which is curable after the receipt of notice of
any default, before the Ground Lessor thereunder may terminate the Ground Lease.

 

(9)                                  Either (i) the Ground Lease does not impose
restrictions on subletting or (ii) the Ground Lessor has consented to the
existing Ground Lease with respect to the related Mortgaged Property securing
the related Loan.  The Ground Lessor is not permitted to disturb the possession,
interest or quiet enjoyment of any subtenant of the lessee in the relevant
portion of the Mortgaged Property subject to the Ground Lease for any reason, or
in any material manner, which would adversely affect the security provided by
the related Mortgage.

 

(10)                            Any related insurance proceeds or condemnation
award (other than in respect of a total or substantially total loss or taking)
is required to be applied either to the repair or restoration of all or part of
the related Mortgaged Property, with the lender or a trustee appointed by it
having the right to hold and disburse such proceeds as repair or restoration
progresses, or to the payment of the outstanding principal balance of the Loan,
together with any accrued interest, except that in the case of condemnation
awards, the Ground Lessor may be entitled to a portion of such award.

 

(11)                            Any related insurance proceeds, or condemnation
award in respect of a total or substantially total loss or taking of the related
Mortgaged Property is required to be applied first to the payment of the
outstanding principal balance of the Loan, together with any accrued interest
(except as provided by applicable law or in cases where a different allocation
would not be viewed as commercially unreasonable by any institutional investor,
taking into account the relative duration of the Ground Lease and the related
Mortgage and the ratio of the market value of the related Mortgaged Property to
the outstanding principal balance of such Loan).  Until the principal balance
and accrued interest are paid in full, neither the lessee nor the Ground Lessor
under the Ground Lease has an option to terminate or modify the Ground Lease
without the prior written consent of the lender as a result of any casualty or
partial condemnation, except to provide for an abatement of the rent.

 

(12)                            Provided that the lender cures any defaults
which are susceptible to being cured, the Ground Lessor has agreed to enter into
a

 

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new lease upon termination of the Ground Lease for any reason, including
rejection of the Ground Lease in a bankruptcy proceeding.

 

(tt)                                None of the Loans are construction loans.

 

(uu)                          Each Lease for the related Mortgaged Property was
not delinquent (giving effect to any applicable grace period) in the payment of
any monthly Lease payments (other than percentage rents that are being
recalculated with respect to certain Leases set forth in the Lease Schedule) as
of the Closing Date, and has not been during the time owned by Seller, 30 days
or more delinquent in respect of any monthly Lease payment required thereunder.

 

(vv)                          Lessor estoppels containing protection provisions
have been obtained from the owner of the fee simple interest in each Mortgaged
Property in which Seller has only a ground leasehold interest.

 

(ww)                      Neither each Lease nor any other agreement, document
or instrument executed in connection with such Lease has been waived, modified,
altered, satisfied, cancelled or subordinated in any material respect, and such
Lease has not been terminated or cancelled, nor has any instrument been executed
that would effect any such waiver, modification, alteration, satisfaction,
termination, cancellation, subordination or release, except in each case by a
written instrument that is part of the related Custodian’s Loan File.

 

(xx)                              The Loan is not a Defaulted Loan or a
Delinquent Loan as of the Closing Date.

 

(yy)                          There are no pending actions, suits or proceedings
by or before any court or governmental authority against or affecting, any
Lease, such Mortgaged Property or, to Seller’s knowledge, the Tenant, that is
reasonably likely to be determined adversely and, if determined adversely, would
materially and adversely effect the value of the Lease or use or value of the
Mortgaged Property, or the ability of the Tenant to pay any amounts due under
the Lease.

 

(zz)                              All of the material improvements built or to
be built on the Mortgaged Property that were included for the purpose of
determining the appraised value of the Mortgaged Property lay within the
boundaries of such Mortgaged Property and there are no encroachments into the
building setback restriction lines of such Mortgaged Property in any way that
would materially and adversely affect the value of the Mortgaged Property or the
ability of the Tenant to pay any amounts due under the Lease (unless
affirmatively covered in the applicable Title Policy described in (h) above.)

 

(aaa)                      There is no valid dispute, claim, offset, defense or
counterclaim to Seller’s rights in the Lease.

 

(bbb)                   Each Lease or other agreement, document or instrument
executed in connection with such Lease is the legal, valid and binding and
enforceable obligation

 

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of the Tenant (subject to certain creditors’ rights exceptions and other
exceptions of general application) and is in full force and effect.

 

(ccc)                      Each Lease, together with applicable state law,
contains customary and enforceable provisions such as to render the rights and
remedies of the lessors thereof adequate for the practical realization against
the related Mortgaged Property of the principal benefits of the security
intended to be provided thereby.

 

(ddd)                   With respect to each Mortgaged Property:

 

(1)                                  such Mortgaged Property is not subject to
any lease other than a sublease and/or the related Lease; no person has any
possessory interest in, or right to occupy, the leased property except under and
pursuant to the Lease or such sublease; the Tenant (or sub-tenant) is in
occupancy of the Mortgaged Property and is paying rent pursuant to the Lease;
and, in the case of any sublease, the Tenant remains primarily liable on the
Lease;

 

(2)                                  except with respect to those Properties
with respect to which the Tenant can terminate the related Lease during the last
42 months of the lease term in the event of a casualty and any insurance
proceeds related thereto are payable to the Tenant, the obligations of the
Tenant, including, but not limited to, the obligation to pay fixed and
additional rent, are not affected by reason of: any damage to or destruction of
any portion of the leased property; any taking of the leased property or any
part thereof by condemnation or otherwise; or any prohibition, limitation,
interruption, cessation, restriction, prevention or interference of the Tenant’s
use, occupancy or enjoyment of the leased property, except the Tenant’s rights
to abate or terminate its obligation to pay fixed or additional rent are coupled
with insurance proceeds or condemnation awards going to the lessor; or the right
to abate as a result of a landlord’s default;

 

(3)                                  Seller as lessor under the Lease does not
have any monetary obligations under the Lease that have not been satisfied;

 

(4)                                  the Tenant has not been released, in whole
or in part, from its obligations under the terms of the Lease;

 

(5)                                  all obligations related to the initial
construction of the improvements on the Mortgaged Property have been satisfied
and except for the obligation to rebuild such improvements after a casualty
(which obligation is limited by available insurance proceeds), Seller does not
have any nonmonetary obligations under the Lease and has made no representation
or warranty under the Lease, the breach of which would result in the abatement
of rent, a right of setoff or termination of the Lease;

 

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(6)                                  there is no right of rescission, set-off,
abatement (except in the case of casualty or condemnation), diminution, defense
or counterclaim to the Lease, nor does the operation of any of the terms of the
Lease, or the exercise of any rights thereunder, render the Lease unenforceable,
in whole or in part, or subject to any right of rescission, set-off, abatement,
diminution, defense or counterclaim, and no such right has been asserted;

 

(7)                                  the Tenant has agreed to indemnify the
lessor from any claims of any nature relating to the Lease and the related
leased property other than the lessor’s gross negligence or willful misconduct,
including, without limitation, arising as a result of violations of
environmental and hazardous waste laws resulting from the Tenant’s operation of
the property;

 

(8)                                  any obligation or liability imposed on the
lessor by any easement or reciprocal easement agreement is also an obligation of
the Tenant under the Lease;

 

(9)                                  the Tenant is required to make rental
payments as directed by the lessor and its successors and assigns; and

 

(10)                            except in certain cases where the Tenant may
exercise a right of first refusal, the Lease is freely assignable by the lessor
and its successors and assigns to any person without the consent of the Tenant,
and in the event the lessor’s interest is so assigned, the Tenant is obligated
to recognize the assignee as lessor under such Lease, whether under the Lease or
by operation of law.

 

(eee)                      In connection with Leases with a guaranty:

 

(1)                                  such guaranty, on its face, is
unconditional, irrevocable and absolute, and is a guaranty of payment and not
merely of collection and contains no conditions to such payment, other than a
notice and right to cure; and the guaranty provides that it is the guaranty of
both the performance and payment of the financial obligations of the Tenant
under the Lease and does not provide for offset, counterclaim or defense; and

 

(2)                                  such guaranty is binding on the successors
and assigns of the guarantor and inures to the benefit of the lessor’s
successors and assigns and cannot be released or amended without the lessor’s
consent or unless a predetermined performance threshold is achieved.

 

(fff)                            No fraudulent acts were committed by Seller
during the origination process with respect to the Lease related to such
Mortgaged Property.

 

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(ggg)                   The origination, servicing and collection of monthly
Lease payments on such Lease is in all respects legal, proper and prudent and in
accordance with customary industry standards.

 

(hhh)                   To the extent required under applicable law, Seller was
authorized to transact and do business in the jurisdiction in which such
Mortgaged Property is located, except where such failure to qualify would not
result in a material adverse effect on the enforceability of the related Lease.

 

(iii)                               The Custodian’s Loan File contains a survey
with respect to such Mortgaged Property, which survey was deemed sufficient to
delete the standard title survey exception (to the extent the deletion of such
exception is available in the related state).

 

(jjj)                               The Seller did not intentionally select such
Loan, whether individually or together with other Loans, in a manner adverse to
Buyer or in a manner that results in Buyer receiving Loans that are of lesser
quality than Loans pledged to other lenders pursuant to any other facility to
which Seller or any of its Affiliates are a party.

 

(kkk)                      With respect to any of the Properties which are the
subject of a Master Lease (noting that not all properties subject to such Master
Lease are included in the Properties), the lessor under the Master Lease has
assigned its interest in the Leases of the Properties to Seller and Seller and
the other lessors under the Master Leases have entered into inter-lessor
agreements by which the rents and the rights to enforce the provisions of the
Master Leases pertinent to any of the Properties have also been assigned to
Seller.

 

(lll)                               Such Mortgaged Property is (i) free of any
damage that would materially and adversely affect the use or value of such
Mortgaged Property, (ii) in good repair and condition so as not to materially
and adversely affect the use or value of such Mortgaged Property; and all
building systems contained in such Mortgaged Property are in good working order
so as not to materially and adversely affect the use or value of such Mortgaged
Property.

 

(mmm)             All security deposits collected in connection with such
Mortgaged Property are being held in accordance with all applicable laws.

 

(nnn)                   Seller has taken (or has caused to be taken) all such
actions and precautions as a reasonably prudent lender would take to protect and
preserve the Collateral and its security interest in all Collateral, including
without limitation, notation of Seller as lien holder on any certificates of
title to property the nature of which is such that ownership thereof is
evidenced by a certificate of title, where such notation is required under
applicable law to perfect the interest therein.

 

(ooo)                   Each Mortgage, Security Agreement and every other Loan
Document, contains customary and enforceable provisions so as to render the
rights and remedies of the holder thereof adequate for the practical realization
of the benefits of the

 

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security interests intended to be provided thereby, including, where applicable,
by judicial foreclosure, subject to the limitations described in the next
succeeding sentence. There is no exemption under existing law available to the
related Borrower which would interfere with the mortgagee’s or secured party’s
right to foreclose or to realize upon such related Mortgage, Security Agreement
or other Loan Document, if any, as applicable, other than which may be available
under the insolvency laws, other laws of general application relating to or
affecting the enforcement of creditors’ rights generally, applicable debt relief
or homestead statutes or general principles of equity.

 

(ppp)                   [reserved]

 

(qqq)                   As of the date of origination, the LTV (as defined in
the Underwriting Guidelines) of such Loan (other than Net Lease Loans) does not
exceed the required LTV specified in the Underwriting Guidelines for such Loan
type. With respect to Net Lease Loans, as of the date of origination, the fair
market value of the Mortgaged Property relating to such Net Lease Loan, as
determined by an Appraisal, was at least 100% of the principal amount of such
Net Lease Loan.

 

(rrr)                            There has been performed, not more than six
months prior to the origination date for such Loan, an Appraisal of the related
Mortgaged Property.

 

(sss)                      All principal, interest and any other amounts due
under such Loan are payable in U.S. dollars.  Interest and, as applicable,
principal, is payable on a monthly basis.

 

(ttt)                            Neither the Borrower nor any officer, director,
employee, member or Affiliate thereof is an officer, director, employee,
shareholder or partner or Affiliate of the Originator or Seller.

 

(uuu)                   The information furnished to Buyer by Seller and its
Affiliates in connection with Buyer’s investigation of each Loan, whether before
or after the date hereof, is true and correct in all material respects and does
not omit any information necessary to make the statements contained therein not
misleading.

 

(vvv)                   There is no action, suit, legal or arbitration
proceeding or administrative proceeding or investigation pending or, to the best
of Seller’s knowledge, threatened against or affecting any Loan, Loan Document,
Borrower or Collateral that have a reasonable probability of having a material
adverse effect on the Mortgaged Property or the related Loan.

 

(www)             Seller is not subject to any judgment, writ, decree,
injunction or order of any federal, foreign, state or local court or
Governmental Authority relating to the acquisition, collection, administration
or enforcement of any Loan or the foreclosure, acquisition or disposition of any
Collateral or, in each case, any transactions or activities incidental thereto.

 

(xxx)                         The transfer and assignment of the Loans by Seller
pursuant to this Agreement (i) does not constitute a sale of all or
substantially all of Seller’s assets and

 

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(ii) is not subject to the bulk transfer, bulk sales or any similar statutory
provisions in effect in any applicable jurisdiction.

 

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(II)                                By delivering a Transaction Notice, Seller
shall be deemed to represent and warrant to Buyer, unless otherwise disclosed to
and approved by Buyer, with respect to each of the LLC Interests transferred on
any Purchase Date and, unless otherwise expressly disclosed by Seller in the
Exception Schedule and approved by Buyer, as of each Purchase Date (or such
other date as specified below), as follows:

 

(A)                                     IMMEDIATELY PRIOR TO THE TRANSFER AND
ASSIGNMENT TO THE BUYER, THE SELLER HAS GOOD TITLE TO AND IS THE 100% OWNER AND
HOLDER OF THE LLC INTERESTS.  IMMEDIATELY PRIOR TO THE TRANSFER AND ASSIGNMENT
TO THE BUYER, THE LLC INTERESTS ARE NOT SUBJECT TO AN ASSIGNMENT OR PLEDGE AND
THE SELLER HAS FULL RIGHT AND AUTHORITY TO SELL AND ASSIGN THE LLC INTERESTS. 
THE SELLER IS TRANSFERRING SUCH LLC INTERESTS TO THE BUYER FREE AND CLEAR OF ANY
AND ALL LIENS, PLEDGES, CHARGES OR SECURITY INTERESTS OF ANY NATURE ENCUMBERING
THE LLC INTERESTS.

 

(B)                                    THE INITIAL ISSUANCE AND SALE OF THE LLC
INTERESTS WAS DULY AUTHORIZED BY ALL REQUISITE ACTION ON THE PART OF THE
APPLICABLE NET LEASE BORROWER.  THE LLC INTERESTS CONFORM AS OF THE RELATED
PURCHASE DATE TO THE DESCRIPTION THEREOF CONTAINED IN THE RELATED LLC AGREEMENT,
ARE DULY AND VALIDLY AUTHORIZED, EXECUTED, AND DELIVERED IN ACCORDANCE WITH THE
RELATED LLC AGREEMENT, AND ARE VALIDLY ISSUED AND OUTSTANDING AND ENTITLED TO
THE BENEFITS OF SUCH LLC AGREEMENT.  THE LLC INTERESTS ARE FULLY PAID AND
NON-ASSESSABLE AND HAVE BEEN OFFERED, ISSUED AND SOLD TO THE SELLER IN
COMPLIANCE WITH ALL APPLICABLE LAWS.

 

(C)                                     THE LLC INTERESTS ARE IN CERTIFICATED
FORM AND HELD BY SELLER.

 

(D)                                    OTHER THAN WITH RESPECT TO THE
TRANSACTION CONTEMPLATED BY THIS AGREEMENT, THERE ARE (I) NO OUTSTANDING RIGHTS,
OPTIONS, WARRANTS OR AGREEMENTS FOR A PURCHASE, SALE OR ISSUANCE, IN CONNECTION
WITH THE LLC INTERESTS, (II) NO AGREEMENTS ON THE PART OF THE SELLER TO SELL OR
DISTRIBUTE THE LLC INTERESTS, AND (III) NO OBLIGATIONS ON THE PART OF THE SELLER
(CONTINGENT OR OTHERWISE) TO PURCHASE, REPURCHASE, REDEEM OR OTHERWISE ACQUIRE
ANY SECURITIES OR ANY INTEREST THEREIN (OTHER THAN FROM THE BUYER) OR TO PAY ANY
DIVIDEND OR MAKE ANY DISTRIBUTION IN RESPECT OF THE LLC INTERESTS (OTHER THAN TO
THE BUYER).

 

(E)                                     THE INFORMATION SET FORTH ON THE LOAN
SCHEDULE IS TRUE AND CORRECT IN ALL MATERIAL RESPECTS AS OF THE FIRST DAY OF THE
MONTH FOR WHICH SUCH LOAN SCHEDULE RELATES OR SUCH OTHER DATE AS MAY BE
INDICATED IN SUCH SCHEDULE.

 

(F)                                       EXCEPT AS OTHERWISE PERMITTED BY THE
AGREEMENT, THE TERMS OF THE RELATED PROGRAM DOCUMENTS AND THE RELATED LLC
INTERESTS HAVE NOT BEEN IMPAIRED, ALTERED OR MODIFIED IN ANY MATERIAL RESPECT.

 

(G)                                    THE LLC INTERESTS ARE ASSIGNABLE BY THE
BUYER IN ACCORDANCE WITH THE LLC AGREEMENT.  THE RELATED PROGRAM DOCUMENTS
PERMIT THE BUYER TO SELL, ASSIGN, PLEDGE OR TRANSFER SUCH LLC INTERESTS.

 

(H)                                    ALL REPORTS PROVIDED BY THE SELLER TO THE
BUYER IN CONNECTION WITH THE TRANSACTION CONTEMPLATED HEREUNDER ARE TRUE AND
CORRECT IN ALL MATERIAL RESPECTS.

 

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(I)                                        THE RELATED NET LEASE BORROWER IS NOT
IN DEFAULT UNDER ANY MATERIAL PROVISIONS OF ANY AGREEMENT, CONTRACT, INSTRUMENT
OR INDENTURE TO WHICH SUCH NET LEASE BORROWER IS A PARTY OR BY WHICH IT IS
BOUND, NOR HAS ANY EVENT OCCURRED WHICH, WITH NOTICE OR LAPSE OF TIME OR BOTH,
WOULD CONSTITUTE A DEFAULT UNDER ANY SUCH AGREEMENT, CONTRACT, INSTRUMENT OR
INDENTURE, WHICH EVENT OF DEFAULT COULD HAVE A MATERIAL ADVERSE EFFECT ON THE
PERFORMANCE BY THE SELLER OF ITS OBLIGATIONS UNDER THE PROGRAM DOCUMENTS TO
WHICH IT IS A PARTY.

 

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