Exhibit 10.1

MASTER REPURCHASE AGREEMENT

between

GOLDMAN SACHS BANK USA,

as Buyer

and

643 SINGLE FAMILY FINCO 2014, LLC

as Seller

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TABLE OF CONTENTS

 

         Page   1.  

APPLICABILITY

     1    2.  

DEFINITIONS

     1    3.  

INITIATION; CONFIRMATION; TERMINATION; FEES

     19    4.  

MANDATORY PAYMENT OR DELIVERY OF ADDITIONAL ASSETS

     27    5.  

INCOME PAYMENTS AND PRINCIPAL PAYMENTS

     27    6.  

CAUTIONARY SECURITY INTEREST

     29    7.  

PAYMENT, TRANSFER AND CUSTODY

     30    8.  

CERTAIN RIGHTS OF BUYER WITH RESPECT TO THE PURCHASED LOANS

     34    9.  

INTENTIONALLY OMITTED

     34    10.  

REPRESENTATIONS

     34    11.  

NEGATIVE COVENANTS OF SELLER

     38    12.  

AFFIRMATIVE COVENANTS OF SELLER

     39    13.  

SINGLE-PURPOSE ENTITY

     43    14.  

EVENTS OF DEFAULT; REMEDIES

     45    15.  

SINGLE AGREEMENT

     49    16.  

NOTICES AND OTHER COMMUNICATIONS

     49    17.  

NON-ASSIGNABILITY

     50    18.  

GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

     51    19.  

NO RELIANCE; DISCLAIMERS

     51    20.  

INDEMNITY AND EXPENSES

     52    21.  

DUE DILIGENCE

     53    22.  

SERVICING

     53    23.  

TREATMENT FOR TAX PURPOSES

     54    24.  

INTENT

     54    25.  

MISCELLANEOUS

     55   

 

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SCHEDULES

 

SCHEDULE 1  

Intentionally Omitted

     1-1    SCHEDULE 2  

Purchased Loan Information

     2-1    SCHEDULE 3  

Prohibited Transferees

     3-1   

EXHIBITS

 

EXHIBIT I    Form of Confirmation EXHIBIT II    Authorized Representatives of
Seller EXHIBIT III    Intentionally Omitted EXHIBIT IV-1    Form of Power of
Attorney to Buyer EXHIBIT IV-2    Form of Power of Attorney to Seller EXHIBIT V
   Representations and Warranties Regarding the Purchased Loans EXHIBIT VI   
Form of Bailee Agreement

 

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MASTER REPURCHASE AGREEMENT

This Master Repurchase Agreement (this “Agreement”) is dated as of April 25,
2014 and is made by and between Goldman Sachs Bank USA, as buyer (“Buyer”) and
643 Single Family Finco 2014, LLC, as seller (“Seller”).

 

1. APPLICABILITY

From time to time the parties hereto may enter into transactions in which Seller
agrees to transfer to Buyer one or more Eligible Loans, on a servicing-released
basis, against the transfer of funds by Buyer, with a simultaneous agreement by
Buyer to transfer to Seller such Eligible Loans at a date certain (or such
earlier date, in accordance with the terms hereof), against the transfer of
funds by Seller. Each such transaction involving the transfer of a Purchased
Loan, including any Eligible Loan from Seller to Buyer shall be referred to
herein as a “Transaction” and, unless otherwise agreed in writing, shall be
governed by this Agreement.

 

2. DEFINITIONS

(a) Capitalized terms in this Agreement shall have the respective meanings set
forth below:

“Accelerated Repurchase Date” shall have the meaning specified in
Section 14(b)(i) of this Agreement.

“Accepted Servicing Practices” shall mean, with respect to any Purchased Loan,
servicing practices in conformity with those accepted and prudent servicing
practices in the industry for loans of the same type and in a manner at least
equal in quality to the servicing the applicable servicer provides for assets
that are similar to such Purchased Loan.

“Act of Insolvency” shall mean, with respect to any Person, (a) the filing of a
decree or order for relief by a court having jurisdiction over such Person or
any substantial part of its assets or property in an involuntary case under any
applicable Insolvency Law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its assets or property, or ordering
the winding–up or liquidation of such Person’s affairs, and such decree or order
shall remain unstayed and in effect for a period of sixty (60) days, (b) the
commencement by such Person of a voluntary case under any applicable Insolvency
Law now or hereafter in effect, (c) the consent by such Person to the entry of
an order for relief in an involuntary case under any Insolvency Law, (d) the
consent by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its assets or property, (e) the
making by such Person of any general assignment for the benefit of creditors,
(f) the admission in a legal proceeding or otherwise in writing of the inability
of such Person to pay its debts generally as they become due, (g) the failure of
such person generally to pay its debts as they become due, or (h) the taking of
action by such Person in furtherance of any of the foregoing.

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

“Aggregate Repurchase Price” shall mean, as of any date of determination, the
aggregate Repurchase Price (excluding any accrued and unpaid Price Differential)
of all Purchased Loans outstanding as of such date.

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

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

“Alternative Rate Transaction” shall mean any Transaction with respect to which
the Pricing Rate is determined with reference to the Alternative Rate.

“Applicable Standard of Discretion” shall mean (a) if the ratio of (x) the Asset
Base of such Purchased Loan to (y) the value of the related Property, determined
in Buyer’s commercially reasonable discretion, is less than or equal to the LTV
of such Purchased Loan as of the Purchase Date, Buyer’s commercially reasonable
discretion, and (b) if the ratio of (x) the Asset Base of such Purchased Loan to
(y) the value of the related Property, determined in Buyer’s commercially
reasonable discretion, is greater than the LTV of such Purchased Loan as of the
Purchase Date, Buyer’s sole discretion.

“Applicable Spread” has the meaning specified in the Fee Letter.

“Appraisal” shall mean either: (x) a broker price opinion obtained by Seller
from a broker approved by Buyer in its reasonable discretion or (y) an appraisal
obtained by Seller prepared in accordance with Uniform Standards of Professional
Appraisal Practice of the Appraisal Foundation, in compliance with the
requirements of Title 11 of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989 by an independent, third-party appraiser holding an MAI
designation, who is licensed or certified under the laws of the state in which
the applicable Property is located, if required by the laws of such state, and
approved by Buyer in its reasonable discretion.

“Asset Base” shall mean, as of any date of determination, the aggregate Asset
Base Components of all Purchased Loans transferred by Seller to Buyer hereunder
as of such date.

“Asset Base Component” shall mean, as of any date of determination, with respect
to each Purchased Loan, the lesser of (i) the product of its Asset Value as of
such date multiplied by the Purchase Percentage and (ii) the product of its
Market Value as of such date multiplied by the Purchase Percentage.

“Asset Value” shall mean, with respect to each Eligible Loan, an amount
determined by Buyer in its sole discretion equal to the outstanding principal
balance of such Eligible Loan as of such date.

“Backup Management Agreement” shall have the meaning set forth in Section 12(u)
of this Agreement.

“Backup Manager” shall have the meaning set forth in Section 12(u) of this
Agreement.

“Bailee” shall mean such third party as Buyer and Seller shall mutually approve
in their sole discretion.

“Bailee Agreement” shall mean the Bailee Agreement among Seller, Buyer and
Bailee in the form of Exhibit VI hereto.

“Bailee Delivery Failure” shall have the meaning specified in the Bailee
Agreement.

“Bankruptcy Code” shall mean Title 11 of the United State Code, as amended from
time to time.

“Blocked Account” shall have the meaning specified in Section 5(a) of this
Agreement.

 

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“Blocked Account Agreement” shall mean the Blocked Account Agreement, dated as
of the date hereof, executed by Buyer, Seller and the Depository Bank, as the
same may be amended, supplemented, otherwise modified or replaced from time to
time.

“Business Day” shall mean any day other than (i) a Saturday or Sunday and (ii) a
day on which the New York Stock Exchange, the Federal Reserve Bank of New York
or the Custodian and Buyer are authorized or obligated by law or executive order
to be closed.

“Buyer” shall mean Goldman Sachs Bank USA, and any successor or permitted
assign.

“Capital Lease Obligation” 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 Agreement, the amount of such
obligation shall be the capitalized amount thereof, determined in accordance
with GAAP.

“Cause” means, with respect to the Independent Director, (i) acts or omissions
by the Independent Director that constitute willful disregard of, or bad faith
or gross negligence with respect to, the Independent Director’s duties under
this Agreement, (ii) that the Independent Director has engaged in or charged
with or indicted, or has been convicted of, fraud or other acts constituting a
crime under any law applicable to the Independent Director, (iii) that the
Independent Director is unable to perform his or her duties as the Independent
Director due to death, disability or incapacity, or (iv) that the Independent
Director no longer meets the definition of Independent Director.

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

(a) a Transfer, whether directly or indirectly through its direct or indirect
Subsidiaries, of all or substantially all of Seller’s or Guarantor’s assets
(excluding any Transfer in connection with any securitization transaction or
sale of mortgage loans or sale of real estate owned and real estate investments
in the ordinary course of Seller’s or Guarantor’s business); or

(b) Guarantor shall cease to own, directly or indirectly, 100% of the equity
interest in and to, directly or indirectly, Control Seller.

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

“Collection Period” shall mean, with respect to the Remittance Date in any
month, the period beginning on the Remittance Date in the preceding month to and
including the calendar day immediately preceding such Remittance Date.

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

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

“Custodial Agreement” shall mean the Custodial Agreement, dated on or about the
date hereof, entered into by and among Custodian, Seller and Buyer, as the same
may be amended, supplemented or otherwise modified from time to time.

 

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“Custodial Delivery Certificate” shall mean the custodial delivery certificate,
a form of which is attached to the Custodial Agreement.

“Custodian” shall mean U.S. Bank, National Association or any successor
Custodian appointed by Buyer and reasonably acceptable to Seller.

“DBRS” shall mean DBRS, Inc.

“Debt Yield Ratio” shall mean, with respect to the Eligible Properties directly
or indirectly securing a New Loan, the quotient (expressed as a percentage) of
(i) net operating income for the trailing twelve-month period for the most
recently ended fiscal quarter divided by (ii) the total amount of indebtedness
secured directly or indirectly by such Eligible Property or Properties that are
senior to or pari passu with such New Loan.

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

“Defaulted Loan” shall mean any Purchased Loan as to which (i) there is a breach
beyond any applicable notice and cure period of a representation or warranty by
Seller under Exhibit V attached hereto (without regard to any knowledge
qualifier therein), other than the MTM Representations or to the extent
previously disclosed in the Exception Report delivered to Buyer prior to the
Purchase Date, (ii) a default has occurred and is continuing beyond any
applicable notice and cure period under the related Purchased Loan Documents in
the payment when due of any scheduled payment of interest or principal or any
other amounts due under the Purchased Loan Documents, (iii) the occurrence and
continuance of any other “Event of Default” as defined under the related
Purchased Loan Documents, (iv) to the extent that the related Transaction is
deemed to be a loan under federal, state or local law, Buyer ceases to have a
first priority perfected security interest in the related Repurchase Assets or
(v) the related Purchased Loan File or any portion thereof has been released
from the possession of the Custodian under the Custodial Agreement to anyone
other than Buyer or any Affiliate of Buyer except in accordance with the terms
of the Custodial Agreement.

“Delinquent Loan” shall mean any Loan as to which the payment of principal
and/or interest owed thereunder by the underlying obligor is thirty (30) days or
more past due.

“Depository Bank” shall mean PNC Bank, National Association or any successor
Depository Bank appointed by Buyer and reasonably acceptable to Seller.

“Diligence Fees” shall mean fees, costs and expenses payable by Seller to Buyer
in respect of Buyer’s out-of-pocket fees, costs and expenses (other than legal
expenses) incurred in connection with its review of the Diligence Materials
hereunder and Buyer’s continuing due diligence reviews of Purchased Loans
pursuant to Section 21 or otherwise hereunder.

“Diligence Materials” shall mean, with respect to any New Loan, the related
Preliminary Due Diligence Package together with the related Supplemental Due
Diligence Package.

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

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

“Early Repurchase Fee” has the meaning specified in the Fee Letter.

 

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“Eligible Loans” shall mean whole loans originated by Guarantor or its
Affiliates and secured by a first-priority pledge of equity interests in certain
entities that own fee interest in Eligible Properties which are: (A) acceptable
to Buyer in the exercise of its sole discretion prior to the applicable Purchase
Date, (B) which have a loan term equal to or less than five (5) years (assuming
exercise of all extension options), (C) as to which the applicable
representations and warranties set forth in Exhibit V are true and correct in
all material respects as of the applicable Purchase Date unless otherwise
disclosed in the Exception Report delivered to Buyer on or prior to such
Purchase Date and (D) which is not a Defaulted Loan as of the applicable
Purchase Date.

“Eligible Property” shall mean single-family for-rent properties being acquired,
renovated and leased by 643 Capital Management and its Affiliates and managed by
a property manager reasonably acceptable to Buyer or such other property type
acceptable to Buyer in the exercise of its sole discretion.

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

“ERISA Affiliate” shall mean any corporation or trade or business (whether or
not incorporated) that is a member of any group of organizations described in
Section 414(b), (c), (m) or (o) of the Code or Section 4001(b) of ERISA of which
Seller is a member at any relevant time.

“Event of Default” shall have the meaning given such term in Section 14(a).

“Exception Report” shall have the meaning given such term in Section 3(c)(viii).

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

“Excluded Taxes” shall mean any of the following Taxes imposed on or with
respect to a Buyer or required to be withheld or deducted from a payment to
Buyer, (a) Taxes imposed on or measured by net income or net worth or similar
Taxes imposed in lieu of net income (however denominated), franchise Taxes, and
branch profits Taxes, in each case, (i) imposed as a result of Buyer being
organized under the laws of, or having its principal office or the office from
which it books the Transaction located in, the jurisdiction imposing such Tax
(or any political subdivision thereof) or (ii) Taxes imposed as a result of a
present or former connection between Buyer and the jurisdiction imposing such
Taxes (other than a connection arising from Buyer having executed, delivered,
become a party to, performed its obligations under, received payments under, or
received or perfected a security under any Transaction Document), (b) U.S.
federal withholding Taxes imposed on amounts payable to or for the account of
Buyer or an assignee pursuant to a law in effect as of the date on which such
Person (i) becomes a party to this Agreement or (ii) changes the office from
which it books the Transaction, except to the extent that, pursuant to
Section 3(o) such Taxes were payable to such party’s assignor immediately before
such Person became a party to this Agreement or to such Person immediately
before it changed the office from which it books the Transaction, (c) Taxes
attributable to Buyer’s failure to comply with Sections 3(p), 17(c), and 23 of
this Agreement and (d) any U.S. federal withholding Taxes imposed under FATCA.

“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of
this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), together in each
case with any current or future regulations, guidance or official
interpretations thereof, any agreements entered into pursuant to
Section 1471(b)(1) of the Code and any law or agreement implementing an
intergovernmental approach thereto.

 

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“Facility Amount” shall mean $194,400,000.

“Facility Termination Date” shall mean April 25, 2017.

“Federal Trade Embargo” means any United States federal law imposing trade
restrictions, including (i) the Trading with the Enemy Act, as amended, and each
of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended), (ii) the International
Emergency Economic Powers Act (50 U.S.C. §§ 1701 et seq., as amended), (iii) any
enabling legislation or executive order relating to the foregoing,
(iv) Executive Order 13224, and (v) the PATRIOT Act.

“Federal Funds Rate” shall mean, for any day, an interest rate per annum equal
to the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers on
such day, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations at approximately 10:00 a.m.
(New York time) on such day or such transactions received by Buyer from three
Federal funds brokers of recognized standing selected by Buyer in its sole
discretion.

“Fee Letter” shall mean that certain fee letter agreement, dated the date
hereof, between Buyer and Seller, as the same may be amended, supplemented or
otherwise modified from time to time.

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

“Final Approval” shall have the meaning specified in Section 3(c) of this
Agreement.

“Financial Covenant Compliance Certificate” shall mean an Officer’s Certificate
to be delivered, subject to Section 3(e)(2) of this Agreement, by Guarantor
within forty-five (45) days after the end of each of the first three fiscal
quarters of such fiscal year and within ninety (90) days after the end of each
fiscal year confirming that as of the fiscal quarter or year (as applicable)most
recently ended, Guarantor satisfies the Guarantor Financial Covenants.

“Fitch” shall mean Fitch Inc.

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

“Governmental Authority” shall mean any national or federal government, any
state, regional, local or other political subdivision thereof with jurisdiction
and any Person with jurisdiction exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.

“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 endorsements for collection or deposit in the
ordinary course of business. The amount of any Guarantee of a Person shall be
deemed to be an amount equal to the maximum stated amount of the primary
obligations relating to such Guarantee (or, if less, the maximum stated
liability set forth in the instrument embodying such Guarantee), or if no such
amount or liability is stated, the maximum reasonably anticipated liability in
respect thereof as determined by such Person in accordance with GAAP. The terms
“Guarantee” and “Guaranteed” used as verbs shall have correlative meanings.

 

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

“Guarantor Financial Covenants” shall have the meaning set forth in the
Guaranty.

“Guaranty” shall mean that certain Guaranty, dated as of the date hereof, made
by Guarantor in favor of Buyer, as the same may be amended, supplemented or
otherwise modified from time to time.

“Hedging Transactions” shall mean, with respect to any or all of the Purchased
Loans, any short sale of U.S. Treasury Securities or mortgage related
securities, futures contract (including Eurodollar futures) or options contract
or any interest rate swap, cap or collar agreement or similar arrangements
providing for protection against fluctuations in interest rates or the exchange
of nominal interest obligations, either generally or under specific
contingencies, entered into by Seller or by the underlying obligor with respect
to any Purchased Loan and pledged to Seller as collateral for such Purchased
Loan, with one or more counterparties whose unsecured debt is rated at least A-
(or its equivalent) by any Rating Agency or, with respect to any Hedging
Transaction pledged to Seller as additional collateral for a Purchased Loan,
such other rating requirement applicable to such Hedging Transaction set forth
in the related Purchased Loan Documents or which is otherwise reasonably
acceptable to Buyer; provided that Seller shall not grant or permit any liens,
security interests, charges, or encumbrances with respect to any such hedging
arrangements for the benefit of any Person other than Buyer.

“Income” shall mean, with respect to any Purchased Loan at any time, all
Principal Payments and any payment or other cash distribution of interest,
dividends, fees, reimbursements or proceeds thereof (including sales proceeds)
or other cash distributions thereon; provided that, for avoidance of doubt, in
no event shall Income include any escrow or reserve payment made by the related
Underlying Obligor.

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

“Indemnified Amounts” and “Indemnified Parties” shall have the respective
meanings specified in Section 20(a) of this Agreement.

 

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

“Independent Director” of any corporation or limited liability company means an
individual who is provided by CT Corporation, Corporation Service Company,
National Registered Agents, Inc., Wilmington Trust Company, Stewart Management
Company, Lord Securities Corporation or, if none of those companies is then
providing professional independent directors, another nationally-recognized
company reasonably approved by Buyer, in each case that is not an Affiliate of
Seller and that provides professional independent directors and other corporate
services in the ordinary course of its business, and which individual is duly
appointed as a member of the board of directors of such corporation or as an
independent manager, member of the board of managers, or special member of such
limited liability company and is not, and has never been, and will not while
serving as Independent Director be, any of the following:

(i) a member (other than an independent, non-economic “springing” member),
partner, equityholder, manager, director, officer or employee of such
corporation or limited liability company or any of its equityholders or
affiliates (other than as an independent, non-economic “springing” member of an
affiliate of such corporation or limited liability company that is not in the
direct chain of ownership of such corporation or limited liability company and
that is required by a creditor to be a single purpose bankruptcy remote entity,
provided that such independent director or manager is employed by a company that
routinely provides professional independent directors or managers);

(ii) a creditor, supplier or service provider (including provider of
professional services) to such corporation or limited liability company or any
of its equityholders or affiliates (other than in its capacity as Independent
Director or as a nationally recognized company that routinely provides
professional independent managers or directors and that also provides lien
search and other similar services to such corporation or limited liability
company or any of its equityholders or affiliates in the ordinary course of
business);

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

(iv) a Person that controls (whether directly, indirectly or otherwise) any of
(i) or (ii) above.

A natural person who otherwise satisfies the foregoing definition other than
subparagraph (i) by reason of being the Independent Director of a Single-Purpose
Entity affiliated with the corporation or limited liability company in question
shall not be disqualified from serving as an Independent Director of such
corporation or limited liability company, provided that the fees that such
natural person earns from serving as Independent Director of affiliates of such
the corporation or limited liability company in any given year constitute in the
aggregate less than five percent of such natural person’s annual income for that
year. The same natural persons may not serve as Independent Directors of a
corporation or limited liability company and, at the same time, serve as
Independent Directors of an equityholder or member of such corporation or
limited liability company.

“Insolvency Laws” shall mean the Bankruptcy Code and all other applicable
liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
receivership, insolvency, reorganization, suspension of payments and similar
debtor relief laws from time to time in effect affecting the rights of creditors
generally.

“IRS” shall mean the U.S. Internal Revenue Service.

 

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“Knowledge” shall mean, as of any date of determination, the then current actual
(as distinguished from imputed or constructive) knowledge of (i) Stephen Plavin,
Thomas C. Ruffing or Douglas Armer, or (ii) any asset manager or employee with a
title equivalent or more senior to that of “principal” within The Blackstone
Group, L.P. (including, without limitation, Guarantor) that is responsible for
the origination, acquisition and/or management of each respective Purchased
Loan.

“LIBOR” shall mean the offered rate for thirty (30) day U.S. dollar deposits, as
the applicable rate appears on Reuters Screen LIBOR01 Page as of 11:00 a.m.
(London time) on each Pricing Rate Determination Date (rounded up to the nearest
whole multiple of 1/100%); provided that if the applicable rate does not appear
on Reuters Screen LIBOR01 Page, the rate for such Pricing Rate Determination
Date will be based upon the offered rates of the Reference Banks for U.S. dollar
deposits as of 11:00 a.m. (London time) on such Pricing Rate Determination Date.
In such event, Buyer will request the principal London office of each of the
Reference Banks to provide a quotation of its rate. If on such Pricing Rate
Determination Date, two or more Reference Banks provide such offered quotations,
LIBOR shall be the arithmetic mean of all such offered quotations (rounded to
the nearest whole multiple of 1/100%). If on such Pricing Rate Determination
Date, fewer than two Reference Banks provide such offered quotations, LIBOR
shall be the higher of (i) LIBOR as determined on the immediately preceding day
that LIBOR is available and (ii) the Reserve Interest Rate.

“LIBOR Rate” shall mean, as of any date of determination, a rate per annum
determined in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):

              LIBOR               

1 – Reserve Requirement

“LIBOR Transaction” shall mean any Transaction with respect to which the Pricing
Rate is determined with reference to the LIBOR Rate.

“Loan” shall mean a whole loan, in each case secured by a Security Instrument
and evidenced by a Note and all other Loan documents, all right, title and
interest of Seller in and to any Property covered by the related Security
Instrument and all related Servicing Rights.

“LTV” shall mean, with respect to any Eligible Loan or Loans, the ratio of the
aggregate outstanding debt secured, directly or indirectly, by the related
Eligible Properties, to the aggregate value of such Eligible Properties as
determined by Buyer in its sole good faith discretion. For purposes of Buyer’s
determination, (i) the value may be determined by reference to an Appraisal,
discounted cash flow analysis or other commercially reasonable method and
(ii) for the avoidance of doubt, Buyer may reduce value for any actual or
potential risks (including risk of delay) posed by any liens on the related
Eligible Properties.

“Manager Termination Event” shall have the meaning set forth in Section 12(t) of
this Agreement.

“Margin Deficit” shall have the meaning specified in Section 4 of this
Agreement.

“Market Value” shall mean, with respect to any Purchased Loan, the market value
for such Purchased Loan, as determined by Buyer at the Applicable Standard of
Discretion on each Business Day in accordance with this definition. For purposes
of Section 4, as applicable, changes in the Market Value of a Purchased Loan
shall be determined solely in relation to material positive or negative changes

 

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(relative to Buyer’s initial underwriting or the most recent determination of
Market Value in terms of the performance or condition of (i) the Properties
indirectly securing the Purchased Loan or other collateral securing or related
to the Purchased Loan, (ii) the Purchased Loan’s borrower (including obligors,
guarantors, participants and sponsors) and the borrower on any underlying
property or other collateral securing such Purchased Loan, (iii) the commercial
real estate market relevant to the Properties and (iv) any actual risks posed by
any liens or claims on the related Properties, (i) through (iv) taken in the
aggregate. In addition, the Market Value for any Purchased Loan may be deemed by
Buyer to be zero or such greater amount (in the Applicable Standard of
Discretion) in the event any of the following occurs with respect to such
Purchased Loan: (a) a negative change in Market Value to the extent resulting
from a continuing material breach of a representation or warranty set forth on
Exhibit V, other than (x) with respect to any MTM Representation and (y) as
disclosed in the Exception Report delivered to Buyer on or prior to such
Purchase Date (but without giving effect to any qualifications for Seller’s
Knowledge); or (b) the Repurchase Date with respect to such Purchased Loan
occurs without repurchase of such Purchased Loan.

Seller shall cooperate with Buyer in its determination of the Market Value of
each Purchased Loan (including, without limitation, providing all information
and documentation in the possession of Seller regarding such item of underlying
collateral or otherwise required by Buyer).

“Material Adverse Effect” shall mean a material adverse effect on (i) the
property, business, operations, financial condition or credit quality of
Guarantor and Seller, taken as a whole, (ii) the ability of the Guarantor or
Seller to perform its obligations under any of the Transaction Documents to
which it is party, (iii) the validity or enforceability of any the Transaction
Documents or (iv) the rights and remedies of Buyer under any of the Transaction
Documents.

“Monthly Statement” shall mean, for each calendar month during which this
Agreement shall be in effect, Seller’s or Servicer’s, as applicable,
reconciliation in arrears of beginning balances, interest and principal paid to
date and ending balances for each Purchased Loan, together with a certified
written report describing (i) any developments or events with respect to such
Purchased Loan that have occurred since the last Monthly Statement that are
reasonably likely to have a Material Adverse Effect, (ii) any and all written
modifications to any Purchased Loan Documents that have occurred since the last
Monthly Statement, (iii) loan status, collection performance and any delinquency
and loss experience with respect to any Purchased Loan, (iv) an update as to the
expected disposition or sale of the Purchased Loans and (v) such other
information as mutually agreed by Seller and Buyer, which report shall be
delivered to Buyer for each calendar month during the term of this Agreement
within ten (10) days following the end of each such calendar month.

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

“MTM Representation” shall mean the representations and warranties set forth as
items 13, 23, 25 and 32 through 43 on Exhibit V of this Agreement.

“New Loan” shall mean an Eligible Loan that Seller proposes to sell to Buyer
pursuant to a Transaction.

“Note” shall mean a note or other evidence of indebtedness of an Underlying
Obligor secured by a Security Instrument.

“OFAC” shall mean the Office of Foreign Assets Control of the United States
Department of the Treasury.

 

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“Officer’s Certificate” shall mean, as to any Person, a certificate of the chief
executive officer, the chief financial officer, the president, any vice
president or the secretary of such Person.

“Originated Loan” shall mean any loan that is an Eligible Loan originated by
Seller or an Affiliate of Seller.

“Other Taxes”: shall mean any and all present or future stamp, court or
documentary, intangible, recording, filing or similar Taxes that may arise from
any payment made under any Repurchase Document or from the execution, delivery
or enforcement of, or otherwise with respect to, any Transaction Document,
except (i) any such Taxes imposed with respect to an assignment, transfer or
sale of participation or other interest in or with respect to the Repurchase
Document and (ii) for the avoidance of doubt, any Excluded Taxes.

“Outside Date” shall have the meaning specified in Section 3(a) of this
Agreement.

“Permitted Encumbrances” shall mean (a) liens for real property Taxes, ground
rents, water charges, sewer rates and assessments not yet due and payable, or
which are being contested in good faith in accordance with the Purchased Loan
Documents, (b) liens arising by operation of law such as materialmen, mechanics,
carriers, workmen, repairmen and similar liens, arising in the ordinary course
of business which are discharged by payment, bonding or otherwise or which are
being contested in good faith by the Property Owner in accordance with the
related Purchased Loan Documents, (c) covenants, conditions and restrictions,
rights of way, easements and other matters of public record, none of which,
individually or in the aggregate, in the reasonable judgment of Seller,
materially interferes with the current use of the related Property or the
security intended to be provided by such Security Instrument or with the
underlying obligor’s ability to pay its obligations when they become due or the
value of the related Property, (d) liens and encumbrances set forth in the Title
Policy with respect to such Purchased Loan and (e) rights of existing or future
tenants as tenants only, pursuant to leases.

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

“Plan” shall mean an employee benefit or other plan that is covered by Title IV
of ERISA or Section 302 of ERISA or Section 412 of the Code.

“Plan Assets” shall mean assets of any (i) employee benefit plan (as defined in
Section 3(3) of ERISA) subject to Title I of ERISA, (ii) plan (as defined in
Section 4975(e)(l) of the Code) subject to Section 4975 of the Code, or
(iii) governmental plan (as defined in Section 3(32) of ERISA) subject to any
other federal, state or local laws, rules or regulations substantially similar
to Title I of ERISA or Section 4975 of the Code.

“Pre-Existing Loans” shall mean any loan that is an Eligible Loan and is not an
Originated Loan.

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

“Preliminary Due Diligence Package” shall mean, with respect to any New Loan,
the following due diligence information, to the extent applicable, relating to
such New Loan to be provided by Seller to Buyer pursuant to this Agreement:

(i) Seller’s summary memorandum, among other things, outlining the proposed
transaction, including potential transaction benefits and all material
underwriting risks, anticipated exit strategies, underwriting models and all
other characteristics of the proposed transaction that in the reasonable
judgment of Seller a prudent buyer would consider material;

 

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(ii) current rent roll, if applicable;

(iii) cash flow pro-forma, plus historical information, if available;

(iv) interest coverage ratios and Debt Yield Ratio;

(v) loan-to-value ratio;

(vi) Seller’s or any Affiliate’s relationship with the underlying borrower or
any affiliate;

(vii) material third party reports, to the extent available and applicable,
including:

(a) engineering and structural reports, each in form and prepared by consultants
acceptable to Buyer;

(b) current Appraisal;

(c) Phase I environmental report (including asbestos and lead paint report) and,
if applicable, Phase II or other follow-up environmental report if recommended
in Phase I, each in form and prepared by consultants acceptable to Buyer;

(d) seismic reports, each in form and prepared by consultants acceptable to
Buyer; and

(e) operations and maintenance plan with respect to asbestos containing
materials, each in form and prepared by consultants reasonably to Buyer;

(viii) copies of documents evidencing such New Loan, or current drafts thereof,
including, without limitation, underlying debt and security documents,
guaranties, underlying borrower’s organizational documents, loan and collateral
pledge agreements, and intercreditor agreements, as applicable;

(xi) to the extent applicable and available, insurance certificates or other
evidence of insurance coverage evidencing the insurance required to be
maintained with respect to any Eligible Properties pursuant to Section 3(c)(iv)
hereof; and

(xii) analyses and reports with respect to such other matters concerning the New
Loan as Buyer may reasonably require.

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

 

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“Pricing Period” shall mean, for any Purchased Loan, (a) in the case of the
first Remittance Date for such Purchased Loan, the period from the Purchase Date
of such Purchased Loan to but excluding such Remittance Date, and (b) in the
case of any subsequent Remittance Date, the one-month period commencing on and
including the prior Remittance Date and ending on but excluding such Remittance
Date; provided, that no Pricing Period shall end after the Repurchase Date for
any Purchased Loan.

“Pricing Rate Determination Date” shall mean, (a) in the case of the first
Pricing Period for a Purchased Loan, the related Purchase Date for such
Purchased Loan, and (b) in the case of each subsequent Pricing Period for a
Purchased Loan, the date that is two (2) Business Days prior to the Remittance
Date on which such Pricing Period begins.

“Pricing Rate” shall mean, for any Pricing Period, with respect to any
Transaction, an annual rate equal to the LIBOR Rate on such date plus the
Applicable Spread for the related Purchased Loan (subject to adjustment and/or
conversion as provided in Sections 3(k), 3(l), 3(n) and 3(o) of this Agreement).

“Principal Payment” shall mean, with respect to any Purchased Loan, any payment
or prepayment of principal received in respect thereof (including insurance
casualty or condemnation proceeds to the extent that such proceeds are not to be
reserved, escrowed, readvanced or applied for the benefit of the Underlying
Obligor or the related Property and to the extent that such proceeds are
permitted by the terms of the Purchased Loan Documents to be applied to
principal and which are, in fact, so applied). For purposes of clarification,
prepayment premiums, fees or penalties shall not be deemed to be principal.

“Prohibited Person” means any Person subject to trade restrictions under any
Federal Trade Embargo.

“Prohibited Transferee” means (i) with respect to any assignment, participation
or sale of a portion (but not all) of Buyer’s rights and obligations under the
Transaction Documents, any Person listed on Schedule 3-A hereto and any
Affiliate of such Person and (ii) with respect to any assignment, participation
or sale of all of Buyer’s rights and obligations under the Transaction
Documents, any Person listed on Schedule 3-B hereto and any Affiliate of such
Person.

“Property” shall mean the real property or properties securing, directly or
indirectly, repayment of the debt evidenced by a Note or Notes.

“Property Owner” shall mean the owner of fee simple legal and equitable title to
each Property.

“Purchase Date” shall mean, with respect to any Purchased Loan, the date on
which such Purchased Loan is purchased by Buyer from Seller in connection with a
Transaction.

“Purchase Percentage” shall mean eighty percent (80%).

“Purchase Price” shall mean, with respect to any Purchased Loan, the price at
which such Purchased Loan is transferred by Seller to Buyer on the applicable
Purchase Date; provided, however, that the Purchase Price as of any Purchase
Date for any Purchased Loan shall be an amount (expressed in dollars) that does
not exceed the lesser of (i) the Purchase Percentage times the lesser of (x) the
outstanding principal amount of such Purchased Loan and (y) the Market Value of
such Purchased Loan and (ii) the amount by which the Asset Base (after giving
effect to the requested Transaction) exceeds the aggregate outstanding Purchase
Price for all Purchased Loans (prior to giving effect to the requested
Transaction).

 

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“Purchase Term” shall mean, with respect to any Purchased Loan and any date of
determination, the applicable period from the Purchase Date for such Purchased
Loan to such date of determination.

“Purchased Loan” shall mean (i) with respect to any Transaction, the Eligible
Loans sold by Seller to Buyer in such Transaction and (ii) with respect to the
Transactions in general, all Eligible Loans sold by Seller to Buyer.

“Purchased Loan Documents” shall mean, with respect to a Purchased Loan, the
documents comprising the Purchased Loan File for such Purchased Loan.

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

“Purchased Loan Information” shall mean, with respect to each Purchased Loan,
the information set forth in Schedule 2 attached hereto.

“Purchased Loan Schedule” shall mean a schedule of Purchased Loans, together
with the Purchased Loan Information for each such loan attached to each Trust
Receipt and Custodial Delivery Certificate delivered in accordance with the
Custodial Agreement.

“Qualified Transferee” means a bank, saving and loan association, investment
bank, insurance company, trust company, commercial credit corporation, pension
plan, pension fund or pension advisory firm, mutual fund, government entity or
plan, real estate company, investment fund or an institution substantially
similar to any of the foregoing, provided in each case such Person has total
assets (in name or under management) in excess of $650,000,000 and
capital/statutory surplus or shareholder’s equity in excess of $250,000,000, or
any entity that is an Affiliate of an entity that satisfies the foregoing
criteria.

“Quarterly Report” shall mean, for each fiscal quarter during which this
Agreement shall be in effect, Seller’s or Servicer’s, as applicable, certified
written report summarizing (with a separate cover sheet for each Purchased Loan
or, in the case of a Purchased Loan secured (directly or indirectly) by a
portfolio of Properties, a cover sheet for such portfolio on a consolidated
basis), with respect to the Properties securing each Purchased Loan (or, in the
case of a Purchased Loan secured (directly or indirectly) by a portfolio of
Properties, such information on a consolidated basis), the net operating income,
debt service coverage, occupancy, in each case, to the extent received by
Seller, and such other information as mutually agreed by Seller and Buyer, which
report shall be delivered to Buyer for each fiscal quarter during the term of
this Agreement within forty-five (45) days following the end of each such fiscal
quarter.

“Rating Agency” shall mean any of Fitch, Moody’s, Standard & Poor’s and DBRS.

“Reference Banks” shall mean any leading banks selected by Buyer which are
engaged in transactions in Eurodollar deposits in the international Eurocurrency
market with an established place of business in London.

“Register” shall have the meaning specified in Section 17(c) hereof.

“Regulations T, U and X” shall mean Regulations T, U and X of the Board of
Governors of the Federal Reserve System (or any successor), as the same may be
modified and supplemented and in effect from time to time.

 

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“Remittance Date” shall mean the seventeenth (17th) calendar day of each month,
or the next succeeding Business Day, if such calendar day shall not be a
Business Day.

“Repurchase Assets” shall have the meaning specified in Section 6(a) hereof.

“Repurchase Date” shall mean, with respect to any Purchased Loan, the date that
is the earliest to occur of the following: (a) the Facility Termination Date,
(b) the maturity date of such Purchased Loan, (c) the date otherwise specified
in the related Confirmation, or (d) if applicable, the related Early Repurchase
Date or Accelerated Repurchase Date.

“Repurchased Loan” shall mean any Purchased Loan that has been repurchased by
Seller pursuant to the terms hereof.

“Repurchase Price” shall mean, with respect to any Purchased Loan as of any
date, the price at which such Purchased Loan is to be transferred from Buyer to
Seller upon termination of the related Transaction; in each case, such price
shall equal the sum of the Purchase Price of such Purchased Loan, the accrued
and unpaid Price Differential with respect to such Purchased Loan and all other
amounts then due and payable under the Transaction Documents as of the date of
such determination, minus all Income and other cash actually received by Buyer
in respect of such Purchased Loan and applied towards the Repurchase Price
and/or Price Differential pursuant to this Agreement.

“Required Manager Termination Event” shall mean the occurrence of any event that
gives rise to any right of the lender pursuant to any Purchased Loan Documents
to terminate any property manager, asset manager or other similar manager
responsible for the operation and management of the Properties as a result of
(i) for “cause”, meaning fraud, gross negligence, willful misconduct,
misappropriation of funds or moral turpitude by such manager, (ii) if any
bankruptcy or other insolvency action shall have been commenced against such
manager, (iii) if there occurs a material breach under the applicable management
agreement or assignment of management agreement in favor of such lender, (iv) if
such manager shall have violated any civil or criminal law or regulation; or
(v) if such manager shall be suspended or otherwise prohibited by any federal,
state or local housing authority or other governmental authority from
participation or eligibility to participate in any program that is necessary in
connection with such manager’s performance of its obligations under the
applicable management agreement.

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

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

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

 

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“Security Instrument” shall mean each security agreement or other instrument
creating a valid and enforceable first lien on a first priority ownership
interest in any Underlying Collateral.

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

“Servicer” shall mean Midland Loan Services, a division of PNC Bank, National
Association or any successor Servicer appointed by Buyer and reasonably
acceptable to Seller.

“Servicing Acknowledgement” means that certain Servicing Acknowledgement and
Irrevocable Instruction Letter, dated as of April 25, 2014, from Buyer and
acknowledged and agreed to by Servicer and Seller, as the same may be amended,
supplemented or otherwise modified from time to time.

“Servicing Agreement” means that certain Servicing Agreement, dated as of
April 25, 2014, between Seller and Servicer, as the same may be amended,
supplemented or otherwise modified from time to time.

“Servicing Records” shall have the meaning specified in Section 22(b) of this
Agreement.

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

“Side Letter Agreement” shall mean that certain side letter agreement, dated the
date hereof, between Buyer and Seller, as the same may be amended, supplemented
or otherwise modified from time to time.

“Significant Modification” shall mean (i) any material extension, amendment,
waiver, termination, rescission, cancellation, release, subordination or other
modification to the terms of, or any collateral, guaranty or indemnity for, any
Purchased Loan or Purchased Loan Document, or (ii) the foreclosure or exercise
of any material right or remedy by the holder of any Purchased Loan or Purchased
Loan Document.

“Single Purpose Entity” shall have the meaning specified in Exhibit VI.

“Solvent” shall mean with respect to any Person at any time, having a state of
affairs such that all of the following conditions are met at such time: (a) the
fair value of the assets and property of such Person is greater than the amount
of such Person’s liabilities (including disputed, contingent and unliquidated
liabilities) as such value is established and liabilities evaluated for purposes
of Section 101(32) of the Bankruptcy Code, (b) the present fair salable value of
the assets and property of such Person in an orderly liquidation of such Person
is not less than the amount that will be required to pay the probable liability
of such Person on its debts as they become absolute and matured, (c)such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay as such debts and liabilities
mature, and (d) such Person is not engaged in a business or a transaction, and
is not about to engage in a business or a transaction, for which such Person’s
assets and property would constitute unreasonably small capital.

 

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“Standard & Poor’s” shall mean Standard & Poor’s Ratings Services, Inc., a
division of the McGraw Hill Companies Inc.

“Subsidiary” shall mean, with respect to any Person, any other Person 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.

“Supplemental Due Diligence Package” shall mean, with respect to any New Loan,
information or deliveries concerning such New Loan that Buyer shall reasonably
request in addition to the Preliminary Due Diligence Package, including, without
limitation, a credit approval memorandum representing the final terms of the
underlying transaction, a loan-to-value ratio computation and a final Debt Yield
Ratio computation for such New Loan.

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

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

“Tangible Net Worth” has the meaning set forth in the Guaranty.

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

“Title Policy” shall have the meaning specified in paragraph 33 of Exhibit V.

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

“Transaction Conditions Precedent” shall have the meaning specified in
Section 3(e) of this Agreement.

“Transaction Costs” shall have the meaning specified in Section 20(b) of this
Agreement.

“Transaction Documents” shall mean, collectively, this Agreement, the Blocked
Account Agreement, the Custodial Agreement, the Fee Letter, the Guaranty, all
Transfer Documents, all Confirmations executed pursuant to this Agreement in
connection with specific Transactions and all other documents executed in
connection herewith and therewith.

 

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“Transfer” shall mean, with respect to any Person, any sale or other whole or
partial conveyance of all or any portion of such Person’s assets, or any direct
or indirect interest therein to a third party (other than in connection with the
transfer of a Purchased Loan to Buyer in accordance herewith), including the
granting of any purchase options, rights of first refusal, rights of first offer
or similar rights in respect of any portion of such assets or the subjecting of
any portion of such assets to restrictions on transfer.

“Transfer Documents” shall mean, with respect to any Purchased Loan, all
applicable documents described in Section 7(b) of this Agreement pursuant to
which all of Seller’s right, title and interest in such Purchased Loan is
transferred to Buyer in accordance with the terms of this Agreement.

“Trust Receipt” shall mean a trust receipt issued by the Custodian or the
Bailee, as applicable, to Buyer confirming the Bailee’s or the Custodian’s, as
applicable, possession of certain Purchased Loan Files that are the property of
and held by the Bailee or the Custodian, as applicable, on behalf of Buyer (or
any other holder of such trust receipt) in the form required under the Custodial
Agreement or the Bailee Agreement.

“UCC” shall mean the Uniform Commercial Code as in effect from time to time 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 any
security interest is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than New York, with respect to perfection or the effect of
perfection or non-perfection, “UCC” shall mean the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the provisions of this
Agreement relating to such perfection or effect of perfection or non-perfection.

“Underlying Collateral” shall mean the equity interests held by an Underlying
Obligor in each Property Owner and all other collateral (including, without
limitation, any master lease agreement) securing repayment of the debt evidenced
by a Note or Notes.

“Underlying Obligor” shall mean the obligor on a Note, the grantor of the
related equity pledge and the owner of the related Property.

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

“U.S. Tax Compliance Certificate” shall have the meaning specified in
Section 3(o) hereof.

(b) The following rules of this Section 2(b) 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 an Article, Section, Subsection,
Paragraph, Subparagraph, Clause, Annex, Schedule, Appendix, Attachment, Rider or
Exhibit is, unless otherwise specified, a reference to an Article, Section,
Subsection, Paragraph, Subparagraph or Clause of, or Annex, Schedule, Appendix,
Attachment, Rider or Exhibit to, this Agreement, all of which are hereby
incorporated herein by this reference and made a part hereof. A reference to a
party to this Agreement or another agreement or document includes the party’s
successors, substitutes or assigns permitted by the Transaction Documents. 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 Transaction Document. A reference to legislation or to a
provision of legislation includes a modification, codification, replacement,
amendment or reenactment of it, a legislative provision substituted for it and a
rule, regulation or statutory instrument issued under it. A reference to writing
includes a facsimile or electronic transmission and any means of reproducing
words in a tangible and permanently visible form. A reference to conduct
includes an omission, statement or undertaking, whether or not in writing. The
words “hereof,” “herein,” “hereunder” and similar words refer to this Agreement
as a whole and not to any particular provision of this Agreement, unless the
context clearly

 

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requires or the language provides otherwise. The word “including” is not
limiting and means “including without limitation.” The word “any” is not
limiting and means “any and all” unless the context clearly requires or the
language provides otherwise. 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.” The words “will” and “shall” have the
same meaning and effect. A reference to day or days without further
qualification means calendar days. A reference to any time means New York
time. This Agreement may use several different limitations, tests or
measurements to regulate the same or similar matters. All such limitations,
tests and measurements are cumulative and shall each be performed in accordance
with their respective terms. 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. Whenever a Person is required to
provide any document to Buyer hereunder, the relevant document shall be provided
in writing or printed form unless Buyer requests otherwise. Except where
otherwise expressly stated, Buyer may give or withhold, or give conditionally,
approvals and consents, and may form opinions and make determinations, in its
sole and absolute discretion. Reference herein or in any other Transaction
Document to Buyer’s discretion, shall mean, unless otherwise expressly stated
herein or therein, Buyer’s sole and absolute discretion, and the exercise of
such discretion shall be final and conclusive. In addition, whenever Buyer has a
decision or right of determination, opinion or request, exercises any right
given to it to agree, disagree, accept, consent, grant waivers, take action or
no action or to approve or disapprove (or any similar language or terms), or any
arrangement or term is to be satisfactory or acceptable to or approved by Buyer
(or any similar language or terms), the decision of Buyer with respect thereto
shall be in the sole and absolute discretion of Buyer and such decision shall be
final and conclusive, except as may be otherwise specifically provided herein.

(c) Unless the context otherwise clearly requires, all accounting terms not
expressly defined herein shall be construed in accordance with GAAP, and all
accounting determinations, financial computations and financial statements
required hereunder shall be made in accordance with GAAP, without duplication of
amounts, and on a consolidated basis with all Subsidiaries, except that such
determinations and financial computations with respect to any Person shall only
include joint ventures and other Persons, whether or not such joint ventures and
other Persons would be consolidated in accordance with GAAP, to the extent of
such Person’s proportionate share of the equity and results of operations of
such joint venture or other Person.

 

3. INITIATION; CONFIRMATION; TERMINATION; FEES

(a) Seller may, from time to time, prior to October 25, 2014 (the “Outside
Date”), request that Buyer enter into a Transaction with respect to one or more
New Loans. Seller shall initiate each request by submitting a Preliminary Due
Diligence Package for Buyer’s review and approval in Buyer’s sole discretion.
Notwithstanding anything to the contrary herein, Buyer shall have no obligation
to consider for purchase any New Loan if, immediately after the purchase of such
New Loan, the Aggregate Repurchase Price (including the proposed Purchase Price
of such New Loan) would exceed the Facility Amount. Buyer and its
representatives shall have the right to review all New Loans proposed to be sold
to Buyer in any Transaction and to conduct its own due diligence investigation
of such New Loans as Buyer determines is necessary in Buyer’s sole discretion.
Notwithstanding any provision to the contrary herein or any other Transaction
Document, Buyer shall be entitled to make a determination, in its sole
discretion, whether a New Loan qualifies as an Eligible Loan or whether to
reject any New Loan proposed to be sold to Buyer by Seller.

(b) Upon Buyer’s receipt of a Preliminary Due Diligence Package with respect to
a New Loan, Buyer shall have the right to request a Supplemental Due Diligence
Package to evaluate such New Loan. Upon Buyer’s receipt of such Supplemental Due
Diligence Package or Buyer’s waiver thereof,

 

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Buyer shall, within five (5) Business Days, either (i) notify Seller of Buyer’s
intent to proceed with the Transaction and of its determination with respect to
the Purchase Price and the Market Value for the related New Loan (such notice, a
“Preliminary Approval”) or (ii) deny, in Buyer’s sole discretion, Seller’s
request for the applicable Transaction. Buyer’s failure to respond to Seller
within five (5) Business Days, as applicable, shall be deemed to be a denial of
Seller’s request to enter into the proposed Transaction, unless Buyer and Seller
have agreed otherwise in writing.

(c) Upon Seller’s receipt of Buyer’s Preliminary Approval with respect to a
Transaction, Seller shall, if Seller desires to enter into such Transaction with
respect to the related New Loan upon the terms set forth by Buyer in its
Preliminary Approval, deliver the documents set forth below in this Section 3(c)
with respect to each New Loan and related Eligible Property or Properties (to
the extent not already delivered in the Preliminary Due Diligence Package or in
the Supplemental Due Diligence Package) as a condition precedent to Buyer’s
Final Approval and issuance of a Confirmation, all in a manner and/or form
satisfactory to Buyer in its sole discretion and pursuant to documentation
satisfactory to Buyer in its sole discretion:

(i) Delivery of Purchased Loan Documents. Seller shall deliver to Buyer:
(A) with respect to any New Loan that is a Pre-Existing Loan, copies of the
Purchased Loan Documents, except for such Purchased Loan Documents that were not
in Seller’s possession; and (B) with respect to any New Loan that is an
Originated Loan, drafts of the Purchased Loan Documents.

(ii) Environmental and Engineering. To the extent in Seller’s possession, Buyer
shall have received a “Phase I” (and if recommended by the Phase I, a Phase
“II”) environmental report, an asbestos survey, if applicable, and an
engineering report, each in form reasonably satisfactory to Buyer, by an
engineer and environmental consultant, approved by Buyer in its reasonable
discretion.

(iii) Appraisal. If obtained by Seller, Buyer shall have received either an
Appraisal or a Draft Appraisal of the related Eligible Properties. If Buyer
receives only a Draft Appraisal prior to entering into a Transaction, Seller
shall use its best efforts to deliver an Appraisal on or before thirty (30) days
after the Purchase Date.

(iv) Insurance. Buyer shall have received certificates or other evidence of
insurance detailing insurance coverage in respect of the related Eligible
Properties of types (including but not limited to casualty, general liability
and terrorism insurance coverage), in amounts, with insurers and otherwise in
compliance with the terms, provisions and conditions set forth in the Purchased
Loan Documents and otherwise reasonably satisfactory to Buyer. Such certificates
or other evidence shall indicate that Seller (or as to a New Loan that is a
Participation Interest, the lead lender on the related whole loan in which
Seller is a participant) will be named as an additional insured as its interest
may appear and shall contain a loss payee endorsement in favor of such
additional insured with respect to the policies required to be maintained under
the Purchased Loan Documents.

(v) Opinions of Counsel. Buyer shall have received copies of all legal opinions
delivered with respect to the New Loan (which shall include a non-consolidation
opinion, if applicable) that shall be in form and substance reasonably
satisfactory to Buyer; provided that Seller may deliver drafts of such opinions
if such New Loan is being originated concurrently with the transfer to Buyer and
shall deliver final, executed copies of such legal opinions on the Purchase Date
of such New Loan.

 

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(vi) Title Policy. To the extent in Seller’s possession, Seller shall have
delivered to Buyer the Title Policy for each Property in connection with such
Eligible Loan.

(vii) Additional Real Estate Matters. To the extent obtained by Seller, Seller
shall have delivered to Buyer such other real estate related certificates and
documentation as may have been reasonably requested by Buyer, such as
certificates of occupancy issued by the appropriate Governmental Authority and
either letters certifying that the related Eligible Properties are in compliance
with all applicable zoning laws issued by the appropriate Governmental
Authority, a zoning report in form and prepared by a zoning consultant
satisfactory to Buyer or evidence that the related Title Policy includes a
zoning endorsement.

(viii) Exception Report. Seller shall have delivered to Buyer a written report
of any exceptions to the representations and warranties in Exhibit V attached
hereto (an “Exception Report”).

(ix) Other Documents. Buyer shall have received such other documents in Seller’s
possession as Buyer shall reasonably deem to be necessary.

Within five (5) Business Days of Seller’s delivery of the documents and
materials contemplated in clauses (i) through (ix) above, Buyer shall in its
sole discretion either (A) notify Seller that Buyer has not approved the New
Loan or (B) notify Seller that Buyer agrees to purchase the New Loan, subject to
satisfaction (or waiver by Buyer) of the Transaction Conditions Precedent (a
“Final Approval”) set forth in Section 3(e) below. Buyer’s failure to respond to
Seller within five (5) Business Days shall be deemed to be a denial of Seller’s
request that Buyer purchase the New Loan, unless Buyer and Seller have agreed
otherwise in writing.

(d) Subject to satisfaction of the Transaction Conditions Precedent, Buyer shall
deliver to Seller a written confirmation of its Final Approval in the form of
Exhibit I attached hereto with respect to a proposed Transaction (a
“Confirmation”); provided that, unless otherwise agreed by Seller, Buyer shall
deliver a separate Confirmation with respect to each New Loan that will be the
subject of a Transaction. Each Confirmation shall be deemed to be incorporated
herein by reference with the same effect as if set forth herein at length.

(e) Provided that each of the Transaction Conditions Precedent set forth in this
Section 3(e) have been satisfied (or waived by Buyer in its sole discretion),
and subject to Seller’s rights under Section 3(f) hereof, Buyer shall transfer
the Purchase Price to Seller with respect to each New Loan for which it has
issued a Confirmation on the Purchase Date specified in such Confirmation, and
the related New Loan shall be concurrently transferred by Seller to Buyer or its
nominee. For purposes of this Section 3(e), the conditions precedent to any
proposed Transaction (“Transaction Conditions Precedent”) shall be satisfied
with respect to such proposed Transaction if:

(1) no Default, Event of Default or Margin Deficit shall have occurred and be
continuing as of the Purchase Date for such proposed Transaction;

(2) Guarantor shall have delivered to Buyer a true and accurate Financial
Covenant Compliance Certificate within sixty (60) days of Guarantor’s most
recently ended fiscal quarter;

(3) Seller shall have delivered to Buyer an Officer’s Certificate of Seller
certifying that the representations and warranties made by Seller in this
Agreement are true and correct in all material respects as of the Purchase Date
for such Transaction (except such representations which by their terms speak as
of a specified date and subject to any exceptions disclosed to Buyer in an
Exception Report prior to issuance of the Confirmation by Buyer);

 

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(4) Buyer shall have (A) determined, in accordance with the applicable
provisions of Section 3(a) of this Agreement that the New Loan proposed to be
sold to Buyer by Seller in such Transaction is an Eligible Loan (including,
without limitation, by satisfactory review of such New Loan by Buyer’s outside
counsel) and (B) obtained internal credit approval for the inclusion of such New
Loan as a Purchased Loan in a Transaction;

(5) the applicable Purchased Loan File described in Section 7(b) of this
Agreement shall have been delivered to Custodian or Bailee, and Buyer shall have
received a Trust Receipt from Custodian or Bailee with respect to such Purchased
Loan File;

(6) Seller shall have delivered to each Underlying Obligor or obligor or related
servicer or lead lender under any Purchased Loan a direction letter in
accordance with Section 5(a) of this Agreement unless such Underlying Obligor or
obligor or related servicer or lead lender is already remitting payments to the
Servicer whereupon Seller shall direct the Servicer to remit all such amounts
into the Blocked Account in accordance with Section 5(a) of this Agreement and
to service such payments in accordance with the provisions of this Agreement;

(7) Seller shall have paid to Buyer (i) any fees then due and payable under the
Fee Letter and (ii) any unpaid Transaction Costs in respect of such Purchased
Loan due and owing by Seller (which amounts and fees described in the foregoing
subclauses (i) and (ii), at Seller’s option, may be held back from funds
remitted to Seller by Buyer on the Purchase Date);

(8) such New Loan shall not be a Delinquent Loan or a Defaulted Loan as of the
Purchase Date;

(9) Buyer shall have received true and complete copies of fully executed
originals of all Transfer Documents;

(10) [reserved];

(11) no Material Adverse Effect shall have occurred and be continuing; and

(12) there shall not have occurred

(i) (a) a material change in financial markets, an outbreak or escalation of
hostilities or a material change in national or international political,
financial or economic conditions, or (b) a general suspension of trading on
major stock exchanges, or (c) a disruption in or moratorium on commercial
banking activities or securities settlement services; or

(ii) (a) an event or events in the determination of Buyer resulting in the
effective absence of a “repo market” or comparable “lending market” for
financing debt obligations secured by commercial mortgage loans, or (b) an event
or events shall have occurred resulting in the Buyer not being able to finance
Eligible Loans through the “repo market” or “lending market” with traditional
counterparties at rates which would have been commercially reasonable prior to
the occurrence of such event or events.

 

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(f) Each Confirmation, together with this Agreement, shall be conclusive
evidence of the terms of the Transaction covered thereby unless objected to in
writing by Seller no more than two (2) Business Days after the date such
Confirmation is received by Seller. An objection sent by Seller with respect to
any Confirmation must state specifically that the writing is an objection, must
specify the provision(s) of such Confirmation being objected to by Seller, must
set forth such provision(s) in the manner that Seller believes such provisions
should be stated, and must be received by Buyer no more than two (2) Business
Days after such Confirmation is received by Seller. Buyer, in its sole
discretion, may issue another Confirmation addressing Seller’s objections or may
elect not to proceed with the proposed Transaction.

(g) Seller shall be entitled to terminate a Transaction on demand, and
repurchase the related Purchased Loan on any Business Day prior to the
applicable Repurchase Date (an “Early Repurchase Date”); provided, however,
that:

(i) no Default, Event of Default or Margin Deficit shall be continuing or would
occur or result from such early repurchase, unless, in the case of a Default or
Margin Deficit, otherwise cured in connection with such repurchase;

(ii) Seller notifies Buyer in writing, no later than three (3) Business Days
prior to the Early Repurchase Date, of its intent to terminate such Transaction
and repurchase the related Purchased Loan; and

(iii) Seller shall pay to Buyer on the Early Repurchase Date an amount equal to
the sum of the Repurchase Price for such Transaction, the Early Repurchase Fee
(to the extent such Early Repurchase Fee is payable pursuant to the Fee Letter),
all Transaction Costs and any other amounts payable by Seller and outstanding
under this Agreement (including, without limitation, Sections 3(m), 3(n) and
3(o) of this Agreement, if any) with respect to such Transaction against
transfer to Seller or its agent of the related Purchased Loan.

(h) On the Repurchase Date (or the Early Repurchase Date, as applicable),
termination of the applicable Transactions will be effected by transfer to
Seller or, if requested by Seller, its designee of the related Purchased Loans,
and any Income in respect thereof received by Buyer (and not previously credited
or transferred to, or applied to the obligations of, Seller pursuant to
Section 4 or Section 5 hereof) against the simultaneous transfer of the
Repurchase Price, all Transaction Costs and any other amounts payable by Seller
and outstanding under this Agreement (including without limitation, Sections
3(m), 3(n) and 3(o) of this Agreement, if any) to an account of Buyer.

(i) So long as no Event of Default or monetary or material non-monetary Default
has occurred and is then continuing, the Repurchase Price with respect to one or
more Purchased Loans may be paid in part at any time upon two (2) Business Days
prior written notice from Seller to Buyer; provided, however, that any such
payment shall be accompanied by an amount representing accrued Price
Differential with respect to such Purchased Loan(s) on the amount of such
payment and all other amounts then due under the Transaction Documents. Each
partial payment of the Repurchase Price that is voluntary (as opposed to
mandatory under the terms of this Agreement) shall be in an amount of not less
than One Hundred Thousand Dollars ($100,000.00).

(j) [RESERVED]

(k) If (i) Buyer shall have reasonably determined (which determination shall be
conclusive and binding upon Seller absent manifest error) that, by reason of
circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the LIBOR Rate, or (ii) the LIBOR

 

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Rate determined or to be determined will not adequately and fairly reflect the
cost to Buyer (as reasonably determined by Buyer) of making or maintaining
Transactions, Buyer shall give notice thereof to Seller as soon as practicable
thereafter. If such notice is given, the Pricing Rate with respect to the
Transaction until such notice has been withdrawn by Buyer, shall be a per annum
rate equal to the sum of (i) the Federal Funds Rate, plus (ii) 0.25% plus
(iii) the Applicable Spread (the “Alternative Rate”).

(l) Notwithstanding any other provision herein, if, after the date of this
Agreement, the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for Buyer to effect
LIBOR Transactions as contemplated by the Transaction Documents, (i) the
commitment of Buyer hereunder to enter into new LIBOR Transactions and to
continue LIBOR Transactions as such shall forthwith be canceled, and (ii) the
LIBOR Transactions then outstanding shall be converted automatically to
Alternative Rate Transactions.

(m) Upon written demand by Buyer, Seller shall indemnify Buyer and hold Buyer
harmless from any net actual out-of-pocket loss or expense (not to include any
indirect or consequential damages including, without limitation, any lost profit
or opportunity) (including, without limitation, reasonable out-of-pocket
attorneys’ fees and disbursements) that Buyer actually sustains or incurs as a
direct result of (i) a default by Seller in terminating any Transaction after
Seller has given a notice in accordance with Section 3(g) of a termination of a
Transaction, (ii) any payment of all or any portion of the Repurchase Price, as
the case may be, on any day other than a Remittance Date (including, without
limitation, any such loss or expense arising from the reemployment of funds
obtained by Buyer to maintain Transactions hereunder or from fees payable to
terminate the deposits from which such funds were obtained, provided that Seller
shall not be obligated to reimburse Buyer for the incremental cost of
reemploying funds or terminating deposits that arise solely as a result of
Buyer’s depositing funds or employing funds at a rate calculated other than by
reference to LIBOR) or (iii) Seller’s failure to sell Eligible Loans to Buyer
after Seller has notified Buyer of a proposed Transaction and prior to such
failure Buyer has given a Final Approval to purchase such Eligible Loans in
accordance with the provisions of this Agreement.

(n) If Buyer shall have reasonably determined that the adoption of or any change
in any Requirement of Law regarding reserve, special deposit or similar
requirements relating to extensions of credit or other assets of Buyer or in the
interpretation or application thereof or compliance by Buyer or any corporation
controlling Buyer with any request or directive regarding such requirements
(whether or not having the force of law) from any Governmental Authority made
subsequent to the date hereof has the effect of reducing the rate of return on
Buyer’s or such corporation’s capital as a consequence of its obligations
hereunder to a level below that which Buyer or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
Buyer’s or such corporation’s policies with respect to such requirements) by an
amount deemed by Buyer to be material, then from time to time, within seven
(7) Business Days after submission by Buyer to Seller of a written request
therefor, Seller shall pay to Buyer such additional amount or amounts as will
compensate Buyer for such reduction. A certificate setting forth in reasonable
detail the calculation of any additional amounts payable pursuant to this
Section 3(n) shall be submitted by Buyer to Seller and shall be conclusive and
binding upon Seller in the absence of manifest error. With respect to any
increased cost payable or reduced amount receivable by Buyer, this covenant
shall survive for a period of nine (9) months from the date of the incurrence of
such increased costs or reduced amount receivable and Seller shall have no
further obligation hereunder with respect to such increased costs or reduced
amount.

(o) Any and all payments by or on account of any obligation of Seller under this
Agreement shall be made without deduction or withholding for any Taxes, except
as required by applicable law. If any applicable law requires the deduction or
withholding of any Tax from any such payment, then Seller shall make (or cause
to be made) such deduction or withholding and shall timely pay (or cause to be
timely paid) the full amount deducted or withheld to the relevant Governmental
Authority in accordance

 

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with applicable law and, if such Tax is an Indemnified Tax, then the sum payable
shall be increased by Seller as necessary so that after such deduction or
withholding has been made, Buyer receives an amount equal to the sum it would
have received had no such deduction or withholding been made. Seller shall
timely pay, without duplication, any Other Taxes (i) imposed on Seller to the
relevant Governmental Authority in accordance with Requirements of Law, and
(ii) imposed on Buyer, as the case may be, upon written notice from such Person
setting forth in reasonable detail the calculation of such Other Taxes. As soon
as practicable after any payment of Taxes by Seller to a Governmental Authority
pursuant to this Section 3(o), Seller shall deliver to Buyer the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to Buyer.

(p) (i) If Buyer is entitled to an exemption from or reduction of withholding
Tax with respect to payments made under the Transaction Documents, Buyer shall
deliver to Seller, prior to becoming a party to this Agreement, and at the time
or times reasonably requested by Seller, such properly completed and executed
documentation reasonably requested by Seller as will permit such payments to be
made without withholding or at a reduced rate of withholding. In addition,
Buyer, if reasonably requested by Seller, shall deliver such other documentation
prescribed by applicable law or reasonably requested by Seller as will enable
Seller to determine whether or not Buyer is subject to backup withholding or
information reporting requirements. Notwithstanding anything to the contrary in
the preceding two sentences, the completion, execution and submission of such
documentation (other than such documentation set forth in Section 3(p)(ii)(A),
Section 3(p)(ii)(B) and Section 3(p)(ii)(D) below) shall not be required if in
Buyer’s reasonable judgment such completion, execution or submission would be
illegal, would subject Buyer to any material unreimbursed cost or expense or
would otherwise materially prejudice the legal or commercial position of Buyer;
provided, that, Buyer shall deliver a written statement explaining in reasonable
detail any such determination not to provide necessary documentation to Seller.

(ii) Without limiting the generality of the foregoing,

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

(B) if the Buyer is not a United States person, it shall, to the extent it is
legally entitled to do so, deliver to Seller (in such number of copies as shall
be requested by Seller) on or prior to the date on which Buyer becomes a party
under this Agreement (and from time to time thereafter when previously delivered
certification expires or becomes obsolete, or otherwise upon the reasonable
request of Seller), whichever of the following is applicable:

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

(2) executed originals of IRS Form W-8ECI (or any successor form);

 

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

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

(C) if Buyer is not a United States person, it shall, to the extent it is
legally entitled to do so, deliver to Seller (in such number of copies as shall
be requested by Seller) on or prior to the date on which Buyer becomes a party
to this Agreement (and from time to time thereafter upon the reasonable request
of Seller), executed originals of any other form prescribed by applicable law as
a basis for claiming exemption from or a reduction in U.S. federal withholding
Tax, duly completed, together with such supplementary documentation as may be
prescribed by applicable law to permit Seller to determine the withholding or
deduction required to be made; and

(D) if a payment made to Buyer under any Transaction Document would be subject
to U.S. federal withholding Tax imposed by FATCA if Buyer were to fail to comply
with the applicable reporting requirements of FATCA (including those contained
in Section 1471(b) or 1472(b) of the Code, as applicable), Buyer shall deliver
to Seller at the time or times prescribed by law and at such time or times
reasonably requested by Seller such documentation prescribed by applicable law
(including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by Seller as may be necessary for
Seller to comply with its obligations under FATCA and to determine that Buyer
has complied with Buyer’s obligations under FATCA or to determine the amount to
deduct and withhold from such payment. Solely for purposes of this clause (D),
“FATCA” shall include any amendments made to FATCA after the date of this
Agreement.

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

(q) If any party determines, in its sole discretion exercised in good faith,
that it has received a refund of any Taxes as to which it has been indemnified
pursuant to this Section 3 (including by the payment of additional amounts
pursuant to this Section 3), it shall pay to the indemnifying party an amount
equal to such refund (but only to the extent of indemnity payments made under
this Section 3 with respect to the Taxes giving rise to such refund), net of all
out of pocket costs and expenses (including Taxes) of such indemnified party.
Such indemnifying party, upon the request of such indemnified party, shall repay
to such indemnified party the amount paid over pursuant to this Section 3(q) in
the event that such indemnified party is required to repay such refund to such
Governmental Authority. Notwithstanding anything to the contrary in this
Section 3(q), in no event will the indemnified party be required to pay any
amount to an indemnifying party pursuant to this Section 3(q) the payment of
which would place the indemnified party in a less favorable net after Tax
position than the indemnified party would have been in if the Tax subject to
indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts with
respect to such Tax had never been paid. This paragraph shall not be construed
to require any indemnified party to make available its Tax returns (or any other
information relating to its Taxes that it deems confidential) to the
indemnifying party or any other Person.

 

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(r) If any of the events described in Section 3(k), Section 3(l), Section 3(n)
or Section 3(o) result in Buyer’s election to use the Alternative Rate or
Buyer’s request for additional amounts or the condition set forth in
Section 3(e)(12) is not met at any time,, then Seller shall have the option to
notify Buyer in writing of its intent to terminate this Agreement and all of the
Transactions and repurchase all of the Purchased Loans no later than two
(2) Business Days after such notice is given to Buyer, and such repurchase by
Seller shall be conducted pursuant to and in accordance with Section 3(g). The
election by Seller to terminate the Transactions in accordance with this
Section 3(q) shall not relieve Seller for liability with respect to any
additional amounts or increased costs actually incurred by Buyer prior to the
actual repurchase of the Purchased Loans.

(s) From and after the Facility Termination Date, Buyer shall have no further
obligation to purchase any New Loans. On the Facility Termination Date, Seller
shall be obligated to repurchase all of the Purchased Loans and transfer payment
of the Repurchase Price for each such Purchased Loan, together with the accrued
and unpaid Price Differential and all Transaction Costs and other amounts due
and payable to Buyer hereunder. Following the Facility Termination Date, Buyer
shall not be obligated to transfer any Purchased Loans to Seller until payment
in full to Buyer of all amounts due hereunder.

 

4. MANDATORY PAYMENT OR DELIVERY OF ADDITIONAL ASSETS

Buyer may determine and re-determine the Asset Base on any Business Day and on
as many Business Days as it may elect. If at any such time the Aggregate
Repurchase Price of the Purchased Loans is greater than the Asset Base as
determined by Buyer in accordance with this Agreement and notified to Seller on
any Business Day (a “Margin Deficit”), then Seller shall, no later than one
(1) Business Day after receipt of such notice delivered by Buyer before 5:00
p.m. EST on a Business Day, or if delivered after 5:00 p.m. EST, no later than
two (2) Business Days after receipt of such notice, deliver to Buyer cash in an
amount sufficient to reduce the Aggregate Repurchase Price to an amount equal to
the Asset Base as re-determined by Buyer after giving effect to the delivery of
cash or additional collateral by Seller to Buyer pursuant to this Section 4. Any
cash delivered to Buyer pursuant to this Section 4 shall be applied by Buyer to
reduce the Repurchase Price of each Purchased Loan in such manner as shall be
determined by Buyer in its sole discretion.

 

5. INCOME PAYMENTS AND PRINCIPAL PAYMENTS

(a) On or before the date hereof, Seller and Buyer shall establish and maintain
with the Depository Bank a deposit account in the name of Seller and under the
sole control of Buyer with respect to which the Blocked Account Agreement shall
have been executed (such account, together with any replacement or successor
thereof, the “Blocked Account”). Seller shall cause all Income with respect to
the Purchased Loans or cash delivered under Section 4 to be deposited in the
Blocked Account. In furtherance of the foregoing, Seller shall cause Servicer to
remit to the Blocked Account all Income received in respect of the Purchased
Loans within one (1) Business Day of receipt. All Income in respect of the
Purchased Loans, which may include payments in respect of associated Hedging
Transactions, shall be deposited directly into, or, if applicable, remitted
directly from the applicable underlying collection account to, the Blocked
Account.

 

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(b) Unless an Event of Default shall have occurred and be continuing, (i) on
each Remittance Date, all Income (other than Principal Payments) on deposit in
the Blocked Account in respect of the Purchased Loans and the associated Hedging
Transactions and (ii) on the next succeeding Business Day following the receipt
of any Principal Payments in the Blocked Account in respect of the Purchased
Loans, shall be applied as follows:

(i) first, to Buyer, an amount equal to the Price Differential which has accrued
and is outstanding in respect of the Transactions as of such Remittance Date;

(ii) second, to Buyer, all Transaction Costs and all other amounts payable by
Seller and outstanding hereunder and under the other Transaction Documents
(other than the Repurchase Price);

(iii) third, if a Principal Payment in respect of any Purchased Loan has been
made during such Collection Period, to Buyer, an amount equal to the greater of
(i) the product of the amount of such Principal Payment multiplied by the
Purchase Percentage and (ii) such greater amount, such that after giving effect
to such payment of the applicable Repurchase Price, the Aggregate Repurchase
Price of the Purchased Loans is equal to the Asset Base, as determined by Buyer
after giving effect to such payment; and

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

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

(c) If an Event of Default shall have occurred and be continuing, all Income on
deposit in the Blocked Account in respect of the Purchased Loans and the
associated Hedging Transactions shall be applied on the Business Day next
following the Business Day on which such funds are deposited in the Blocked
Account as follows:

(i) first, to Buyer, an amount equal to the Price Differential which has accrued
and is outstanding in respect of the Transactions as of such Business Day;

(ii) second, to Buyer, all Transaction Costs and all other amounts payable by
Seller and outstanding hereunder and under the other Transaction Documents
(other than the Repurchase Price);

(iii) third, to Buyer, an amount equal to the Aggregate Repurchase Price of the
Purchased Loans, until the Aggregate Repurchase Price for all of the Purchased
Loans has been reduced to zero; and

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

(d) If at any time during the term of any Transaction any Income is distributed
to Seller with respect to the related Purchased Loan or Seller has otherwise
received such Income and has made a payment in respect of such Income to Buyer
pursuant to this Section 5, and for any reason such amount is required to be
returned by Buyer to an obligor under such Purchased Loan (either before or
after the Repurchase Date), Buyer may provide Seller with notice of such
required return, and Seller shall pay the amount of such required return to
Buyer by 11:00 a.m., New York time, on the Business Day following Seller’s
receipt of such notice.

 

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(e) Subject to the other provisions hereof, Seller shall be responsible for all
Transaction Costs in respect of any Purchased Loans to the extent it would be so
obligated if the Purchased Loans had not been sold to Buyer.

(f) All distributions made to Buyer and/or Seller shall be made pursuant to the
wiring instructions set forth on Annex I hereto or pursuant to such other
instructions as Buyer and/or Seller may provide from time to time pursuant to
written instructions; provided, however, that no such other written instruction
of from Seller shall be effective unless signed by two (2) officer’s of Seller
(and neither Buyer nor Servicer shall have any liability for failure to comply
with any written instructions of Seller which are not signed by two
(2) officer’s of Seller).

 

6. CAUTIONARY SECURITY INTEREST

(a) Buyer and Seller intend that all Transactions hereunder be sales to Buyer of
the Purchased Loans for all purposes (other than for U.S. Federal, state and
local income or franchise Tax purposes) and not loans from Buyer to Seller
secured by the Purchased Loans. However, in the event that any Transaction is
deemed to be a loan, Seller hereby pledges to Buyer as security for the
performance by Seller of its obligations under the Transactions and the
Transaction Documents and hereby grants to Buyer a first priority security
interest in all of Seller’s right, title and interest in and to (i) all of the
Purchased Loans (including, for the avoidance of doubt, all security interests,
mortgages and liens on personal or real property securing the Purchased Loans)
and related Servicing Rights, (ii) the Blocked Account and all amounts and
property from time to time on deposit therein, (iii) all Income from the
Purchased Loans, (iv) all insurance policies and insurance proceeds relating to
any Purchased Loan or the related Eligible Property, (v) all “general
intangibles”, “accounts” and “chattel paper” as defined in the UCC relating to
or constituting any and all of the foregoing, (vi) all replacements,
substitutions or distributions on or proceeds, payments and profits of, and
records and files relating to, any and all of the foregoing, and (viii) any
other property, rights, title or interests as are specified in the Confirmation
and/or the Trust Receipt, the Purchased Loan Schedule or exception report with
respect to the foregoing in all instances, whether now owned or hereafter
acquired, now existing or hereafter created (collectively, the “Repurchase
Assets”).

(b) With respect to the security interest in the Repurchase Assets granted in
Section 6(a) hereof, and with respect to the security interests granted in
Section 6(c), Buyer shall have all of the rights and may exercise all of the
remedies of a secured creditor under the UCC and any other applicable law and
shall have the right to apply the Repurchase Assets or proceeds therefrom to the
obligations of Seller under the Transaction Documents. In furtherance of the
foregoing, (i) Buyer, at Seller’s sole cost and expense, shall cause to be filed
as a protective filing with respect to the Repurchase Assets and as a UCC filing
with respect to the security interests granted in Section 6(c) one or more UCC
financing statements in form satisfactory to Buyer (to be filed in the filing
office indicated therein), in such locations as may be necessary to perfect and
maintain perfection and priority of the outright transfer (including under
Section 22 of this Agreement) and the security interest granted hereby and, in
each case, continuation statements and any amendments thereto (collectively, the
“Filings”), and shall forward copies of such Filings to Seller upon completion
thereof, and (ii) Seller shall, from time to time, at its own expense, deliver
and cause to be duly filed all such further filings, instruments and documents
and take all such further actions as may be necessary or desirable or as may be
reasonably requested by Buyer to maintain and continue the perfection and
priority of the outright transfer of the Purchased Loans and the security
interest granted hereunder in the Repurchase Assets and the rights and remedies
of Buyer with respect to the Repurchase Assets (including under Section 22 of
this Agreement) (including the payments of any fees and Taxes required in
connection with the execution and delivery of this Agreement). Seller hereby
authorizes Buyer to file such financing statement or statements relating to the
Purchased Assets (including a financing statement describing the collateral as
“all assets of the debtor” or such other super-generic description thereof as
Buyer may determine) without Seller’s signature thereon as Buyer, at its option,
may deem appropriate.

 

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(c) Seller hereby pledges to Buyer, as security for the performance by Seller of
its obligations under all Transactions, Seller’s rights under all Hedging
Transactions relating to Purchased Loans entered into by Seller and all proceeds
thereof. Seller shall take all action as is necessary or desirable to obtain
consent to assignment of any such Hedging Transaction to Buyer and shall use
commercially reasonable efforts to cause the counterparty under each such
Hedging Transaction to enter into such document or instrument satisfactory to
Buyer, Seller and such counterparty, pursuant to which such counterparty will
covenant and agree to accept notice from Buyer to redirect payments under such
Hedging Transaction as Buyer may direct.

(d) In connection with the repurchase by Seller of any Purchased Loan in
accordance herewith, upon receipt of the Repurchase Price by Buyer, Buyer will
deliver to Seller, at Seller’s expense, such documents and instruments as may be
reasonably necessary and requested by Seller to reconvey such Purchased Loan and
any Income related thereto to Seller.

 

7. PAYMENT, TRANSFER AND CUSTODY

(a) Subject to the terms and conditions of this Agreement, on the Purchase Date
for each Transaction, ownership of the Purchased Loans and all rights thereunder
shall be transferred to Buyer or its designee (including the Custodian) against
the simultaneous transfer of the Purchase Price to an account designated by
Seller specified in the Confirmation relating to such Transaction. Buyer will
provide Seller with a power of attorney, substantially in the form attached as
Exhibit IV-2 hereto, allowing Seller to administer, operate and service such
Purchased Loans at all times prior to the occurrence and continuance of an Event
of Default. Provided that no Event of Default shall have occurred and be
continuing, the power of attorney (including, subject to the terms of this
Agreement, the exercise of any voting rights or similar rights by Seller) shall
be binding upon Buyer and Buyer’s successors and assigns.

(b) With respect to each Table Funded Purchased Loan, Seller shall cause the
Bailee to deliver to the Buyer by no later than 1:00 p.m. (New York time), on
the Purchase Date, by facsimile or electronic mail a true and complete copy of
the related Note, the insured closing letter, if any, and escrow instructions,
if any, and the executed Bailee Agreement. In connection with the sale of each
Purchased Loan, not later than 1:00 p.m. (New York time), one (1) Business Days
prior to the related Purchase Date (or with respect to a Table Funded Purchased
Loan not later than 1:00 p.m. (New York time) on the third (3rd) Business Day
following the applicable Purchase Date), Seller shall deliver or cause Bailee to
deliver (with a copy to Buyer) and release to the Custodian (together with the
Custodial Delivery Certificate ), and shall cause the Custodian to deliver a
Trust Receipt on the Purchase Date (or in the case of a Table Funded Purchased
Loan, not later than two (2) Business Days following the receipt by the
Custodian) confirming the receipt of the following original (or where indicated,
copied) documents, to the extent applicable (collectively, the “Purchased Loan
File”), pertaining to each of the Purchased Loans identified in the Custodial
Delivery Certificate delivered therewith:

(i) With respect to each Purchased Loan, the following documents, as applicable
and subject to clauses (ii) and (iii) below:

(A) The original Note bearing all intervening endorsements, endorsed “Pay to the
order of                          without recourse” and signed in the name of
the last endorsee (the “Last Endorsee”) by an authorized Person of the Last
Endorsee (in the event that the Purchased Loan was acquired by the Last Endorsee
in a merger, the signature must be in

 

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the following form: “[Last Endorsee], successor by merger to [name of
predecessor]”; in the event that the Purchased Loan was acquired or originated
by the Last Endorsee while doing business under another name, the signature must
be in the following form: “[Last Endorsee], [formerly known] or [doing business]
as [previous name]”) or a lost note affidavit in a form reasonably approved by
Buyer, with a copy of the applicable Note attached thereto.

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

(C) The original equity interests certificate(s) held as collateral for the
Purchased Loan, together with an original endorsement to such certificate(s) in
blank.

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

(E) A copy or the original of any guarantor security agreement or equivalent
document executed in connection with the Purchased Loan.

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

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

(H) The original omnibus assignment in blank or such other documents necessary
and sufficient to transfer to Buyer all of Seller’s right, title and interest in
and to the Purchased Loan (if any).

(I) A copy of the Survey of the Property (if any) as accepted by the title
company for issuance of the Title Policy.

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

(K) A copy of the Underlying Obligor’s opinions of counsel.

(L) A copy or the original of any assignment of any management agreements,
permits, contracts and other material agreements (if any).

(M) Reports of UCC, Tax lien, judgment and litigation searches obtained by
Seller, conducted by search firms reasonably acceptable to Buyer with respect to
the Purchased Loan, Seller and the related underlying obligor.

 

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(N) The original or a copy of the intercreditor or co-lender agreement (if any)
executed in connection with the Purchased Loan to the extent the subject
borrower, or an affiliate thereof, has encumbered its assets with senior, junior
or similar financing, whether mortgage financing or mezzanine loan financing.

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

(P) With respect to each Property subject to a Purchased Loan: (i) a copy of the
deed evidencing ownership of such Property by the Property Owner, to the extent
in Seller’s possession, (ii) evidence of property and business liability
insurance for such Property, (iii) a copy of the Title Policy, (iv) an Appraisal
of such Property and (v) a copy of any lease or other occupancy agreement with
respect to such Property.

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

(ii) If Seller cannot deliver, or cause to be delivered, any of the original
documents and/or instruments required to be delivered as originals under the
provisions above, Seller shall deliver a photocopy thereof and, unless waived by
Buyer, an Officer’s Certificate of Seller certifying that such copy represents a
true and correct copy of the original. Seller shall then, (1) use commercially
reasonable efforts to obtain and deliver the original document within 180 days
after the related Purchase Date (or such longer period after the related
Purchase Date to which Buyer may consent in its sole good faith discretion, so
long as Seller is, as certified in writing to Buyer not less frequently than
monthly, using commercially reasonable to obtain the original), (2) after the
expiration of such best efforts period, deliver to Buyer a certification that
states, despite Seller’s commercially reasonable efforts, Seller was unable to
obtain such original document and (3) thereafter have no further obligation to
deliver the related original document.

(c) From time to time, Seller shall forward to the Custodian additional original
documents or additional documents evidencing any assumption, modification,
consolidation or extension of a Purchased Loan approved in accordance with the
terms of this Agreement, and upon receipt of any such other documents, the
Custodian shall hold such other documents on behalf of Buyer and as Buyer shall
request from time to time. With respect to any documents which have been
delivered or are being delivered to recording offices for recording and have not
been returned to Seller in time to permit their delivery hereunder at the time
required, in lieu of delivering such original documents, Seller shall deliver to
Buyer a true copy thereof with an Officer’s Certificate certifying that such
copy is a true, correct and complete copy of the original, which has been
transmitted for recordation. Seller shall deliver such original documents to the
Custodian promptly when they are received. With respect to all of the Purchased
Loans delivered by Seller to Buyer or its designee (including the Custodian),
Seller shall execute an omnibus power of attorney substantially in the form of
Exhibit IV-1 attached hereto irrevocably appointing Buyer its attorney-in-fact
with full power to (i) complete the endorsement of any Note and (ii) take such
other steps as may be reasonably necessary or desirable to enforce Buyer’s
rights against any Purchased Loans and the related Purchased Loan Files and the
Servicing Records, which power of attorney Buyer agrees will only be exercised
during the continuance of an Event of Default. Buyer shall deposit the Purchased
Loan Files representing the Purchased Loans, or cause the Purchased Loan Files
to be deposited directly, with the Custodian to be held by the Custodian on
behalf of Buyer. The Purchased Loan Files shall be

 

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maintained in accordance with the Custodial Agreement. Any Purchased Loan File
not delivered to Buyer or its designee (including the Custodian) is and shall be
held in trust by Seller or its designee for the benefit of Buyer as the owner
thereof. Seller or its designee shall maintain a copy of the Purchased Loan File
and the originals of the Purchased Loan File not delivered to Buyer or its
designee. The possession of the Purchased Loan File by Seller or its designee is
at the will of Buyer for the sole purpose of servicing the related Purchased
Loan, and such retention and possession by Seller or its designee is in a
custodial capacity only. The books and records (including, without limitation,
any computer records or tapes) of Seller or its designee shall be marked
appropriately to reflect clearly the transfer, subject to the terms and
conditions of this Agreement, of the related Purchased Loan to Buyer. Seller or
its designee (including the Custodian) shall release its custody of the
Purchased Loan File only in accordance with written instructions from Buyer,
unless such release is required as incidental to the servicing of the Purchased
Loans, is in connection with a Loan that was delivered to Custodian by Seller
but was not purchased by Buyer pursuant to this Agreement or is in connection
with a repurchase of any Purchased Loan by Seller or is pursuant to the order of
a court of competent jurisdiction.

(d) On the date of this Agreement, Buyer shall have received all of the
following items and documents, each of which shall be satisfactory to Buyer in
form and substance:

(i) Transaction Documents.

(A) this Agreement, duly executed and delivered by Seller and Buyer;

(B) the Custodial Agreement, duly executed and delivered by Seller, Buyer and
Custodian;

(C) the Blocked Account Agreement, duly executed and delivered by Seller, Buyer
and Depository Bank;

(D) the Fee Letter, duly executed and delivered by Seller and Buyer;

(E) the Guaranty, duly executed and delivered by Guarantor;

(F) the Side Letter Agreement, duly executed and delivered by Seller and Buyer;

(G) the Servicing Agreement, duly executed and delivered by Seller and Servicer;
and

(H) the Servicing Acknowledgement, duly executed by Buyer, Seller and Servicer.

(ii) Organizational Documents. Certified copies of the organizational documents
of Seller and Guarantor and resolutions or other documents evidencing the
authority of Seller and Guarantor with respect to the execution, delivery and
performance of the Transaction Documents to which it is a party and each other
document to be delivered by Seller and/or Guarantor from time to time in
connection with the Transaction Documents (and Buyer may conclusively rely on
such certifications until it receives notice in writing from Seller or
Guarantor, as the case may be, to the contrary);

 

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(iii) Legal Opinion. Opinions of counsel to Seller and Guarantor in form and
substance reasonably satisfactory to Buyer as to authority, enforceability of
the Transaction Documents to which it is a party, perfection, bankruptcy safe
harbors, the Investment Company Act, true sale (but only in connection with any
transfer of a Purchased Loan to Seller from an Affiliate of Seller) and such
other matters as may be requested by Buyer; and

(iv) Other Documents. Such other documents as Buyer may reasonably request on or
prior to the date hereof.

 

8. CERTAIN RIGHTS OF BUYER WITH RESPECT TO THE PURCHASED LOANS

(a) Subject to the terms and conditions of this Agreement, title to all
Purchased Loans shall pass to Buyer on the applicable Purchase Date, and Buyer
shall have free and unrestricted use of its interest in the Purchased Loans in
accordance with the terms and conditions of the Purchased Loan Documents.
Nothing in this Agreement or any other Transaction Document shall preclude Buyer
from engaging, at Buyer’s expense, in repurchase transactions with the Purchased
Loans with Persons in conformity with the terms and conditions of the Purchased
Loan Documents or otherwise selling, transferring, pledging, repledging,
hypothecating, or rehypothecating all or a portion of its interest in the
Purchased Loans to Persons in conformity with the terms and conditions of the
Purchased Loan Documents, but no such transaction shall relieve Buyer of its
obligations to transfer the Purchased Loans to Seller pursuant to Section 3 of
this Agreement or of Buyer’s obligation to credit or pay Income to, or apply
Income to the obligations of, Seller pursuant to Section 5 of this Agreement or
otherwise affect the rights, obligations and remedies of any party to this
Agreement, and prior to the occurrence and during the continuance of an Event of
Default, no such transaction shall be with a Prohibited Transferee.

(b) Subject to the terms and conditions of this Agreement, any documents
delivered to the Custodian pursuant to Section 7 of this Agreement shall be
released only in accordance with the terms and conditions of the Custodial
Agreement.

 

9. INTENTIONALLY OMITTED

 

10. REPRESENTATIONS

(a) Seller represents and warrants to Buyer that as of the Purchase Date and as
of the date of this Agreement and at all times while this Agreement and any
Transaction thereunder is in effect:

(i) Organization. Seller is duly organized, validly existing and in good
standing under the laws and regulations of the State of Delaware and is duly
licensed, qualified, and in good standing in every state where such licensing or
qualification is necessary for the transaction of Seller’s business. Seller has
the power to own and hold its assets and to carry on its business as now being
conducted and proposed to be conducted, and has the power to execute, deliver,
and perform its obligations under this Agreement and the other Transaction
Documents.

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

(iii) Non-Contravention; Consents. Neither the execution and delivery of the
Transaction Documents, nor consummation by Seller of the transactions
contemplated by the Transaction Documents (or any of them), nor compliance by
Seller with the terms, conditions and provisions of the Transaction Documents
(or any of them) will (x) conflict with or result in a

 

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breach or violation of any of the terms, conditions or provisions of any
judgment or order, writ, injunction, decree or demand of any court applicable to
Seller, (y) result in the creation or imposition of any lien or any other
encumbrance upon any of the assets of Seller, other than pursuant to the
Transaction Documents or (z) violate or conflict with contractual provisions of,
or cause an event of default under, any indenture, loan agreement, mortgage,
contract or other material agreement to which Seller is a party or by which
Seller may be bound. Seller has all necessary licenses, permits and other
consents from applicable Governmental Authorities necessary to acquire, own and
sell the Purchased Loans and for the performance of its obligations under the
Transaction Documents.

(iv) Litigation; Requirements of Law. Except as otherwise disclosed in writing
by Seller to Buyer, there is no action, suit, proceeding, investigation, or
arbitration pending or, to the Knowledge of Seller, threatened against Seller or
any of its assets which is reasonably likely to result in any Material Adverse
Effect, or which may have an adverse effect on the validity of the Transaction
Documents or any action taken or to be taken in connection with the obligations
of Seller under any of the Transaction Documents. Seller is in compliance in all
material respects with all Requirements of Law. Seller is not in default in any
material respect with respect to any judgment, order, writ, injunction, decree,
rule or regulation of any arbitrator or Governmental Authority.

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

(vi) Good Title to Purchased Loans. Immediately prior to the purchase of any
Purchased Loans by Buyer from Seller, such Purchased Loans are free and clear of
any lien, security interest, claim, option, charge, encumbrance or impediment to
transfer to Buyer (including any “adverse claim” as defined in
Section 8-102(a)(1) of the UCC), and are not subject to any rights of set-off,
any prior sale, transfer, assignment, or participation by Seller or any
agreement (other than the Transaction Documents) by Seller to assign, convey,
transfer or participate in such Purchased Loans, in whole or in part, and Seller
is the sole legal record and beneficial owner of, and owns and has the right to
sell and transfer, such Purchased Loans to Buyer, and, upon transfer of such
Purchased Loans to Buyer, Buyer shall be the owner of such Purchased Loans
(other than for U.S. Federal, state and local income and franchise Tax purposes)
free of any adverse claim, subject to Seller’s rights and Buyer’s obligations
pursuant to this Agreement and the other Transaction Documents. In the event
that the related Transaction is recharacterized as a secured financing of the
Purchased Loans and with respect to the security interests granted in Sections
6(a) and 6(c), the provisions of this Agreement are effective to create in favor
of Buyer a valid security interest in all right, title and interest of Seller
in, to and under the Repurchase Assets specified in Sections 6(a) and the other
collateral specified in Section 6(c), and Buyer shall have a valid, perfected
and enforceable first priority security interest in the Repurchase Assets and
such other collateral, subject to no lien or rights of others other than as
granted herein.

(vii) No Default. No Default or Event of Default has occurred and is continuing
under or with respect to the Transaction Documents.

(viii) Representations and Warranties Regarding Purchased Loans; Delivery of
Purchased Loan File. Each Purchased Loan sold to Buyer in a Transaction
hereunder, as of the applicable Purchase Date for such Purchased Loan, conforms
in all material respects to the

 

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applicable representations and warranties set forth in Exhibit V attached
hereto, except as has been disclosed to Buyer in an Exception Report delivered
to Buyer prior to the Purchase Date with respect to the related Purchased Loan.
It is understood and agreed that the representations and warranties set forth in
Exhibit V hereto (as modified by any Exception Report disclosed to Buyer in
writing prior to the Purchase Date with respect to the related Purchased Loan),
shall survive delivery of the respective Purchased Loan File to Buyer or its
designee (including the Custodian). With respect to each Purchased Loan, the
Note, the Security Instrument (if any), the Assignment of Security Instrument
(if any) and any other documents required to be delivered under this Agreement
and the Custodial Agreement for such Purchased Loan have been delivered (or with
respect to Table Funded Purchased Loans shall be delivered in accordance with
Section 7(b)) to Buyer or the Custodian on its behalf or such requirement will
have been expressly waived in writing by Buyer. Seller or its designee is in
possession of a complete, true and accurate Purchased Loan File with respect to
each Purchased Loan, except for such documents the originals of which have been
delivered to the Custodian.

(ix) Adequate Capitalization; No Fraudulent Transfer. Seller has, as of such
Purchase Date, adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its
contemplated business operations. Seller is generally able to pay, and as of the
date hereof is paying, its debts as they come due. Seller has not become, and is
not presently, financially insolvent nor will Seller be made insolvent by virtue
of Seller’s execution of or performance under any of the Transaction Documents
within the meaning of the Insolvency Laws. Seller has not entered into any
Transaction Document or any Transaction pursuant thereto in contemplation of
insolvency or with intent to hinder, delay or defraud any creditor. Seller has
not received any written notice that any payment or other transfer made to or on
account of Seller from or on account of any Underlying Obligor or any other
person obligated under any Purchased Loan Documents is or may be void or
voidable as an actual or constructive fraudulent transfer or as a preferential
transfer.

(x) Organizational Documents. Seller has delivered to Buyer true and correct
certified copies of its organizational documents, together with all amendments
thereto.

(xi) No Encumbrances. There are (a) no outstanding rights, options, warrants or
agreements on the part of Seller for a purchase, sale or issuance, in connection
with the Purchased Loans and (b) no agreements on the part of Seller to issue,
sell or distribute the Purchased Loans.

(xii) No Investment Company. Neither Seller nor Guarantor is an “investment
company”, or a company “controlled by an investment company”, within the meaning
of the Investment Company Act of 1940, as amended.

(xiii) Taxes. Seller has filed or caused to be filed all Tax returns that would
be delinquent if they had not been filed on or before the date hereof and has
paid all Taxes due and payable on or before the date hereof and all other Taxes,
fees or other charges imposed on it and any of its assets by any Governmental
Authority; no Tax liens have been filed against any of Seller’s assets; and, to
Seller’s Knowledge, no claims are being asserted with respect to any such Taxes,
fees or other charges.

(xiv) ERISA. Neither Seller nor any ERISA Affiliate (a) sponsors or maintains,
or has in the six-year period preceding the date of this Agreement sponsored or
maintained, any Plans or (b) makes or has made within the six-year period
preceding the date of this Agreement, any contributions to or has or had within
the six-year period preceding the date of this Agreement, any liabilities or
obligations (direct or contingent) with respect to any Plans. Seller does not,
and

 

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would not be deemed to, hold Plan Assets, and the consummation of the
transactions contemplated by this Agreement will not constitute or result in any
non-exempt prohibited transaction, with respect to which Buyer is the party in
interest, disqualified person or equivalent, under Section 406 of ERISA,
Section 4975 of the Code or substantially similar provisions under any other
federal, state or local laws, rules or regulations.

(xv) Judgments/Bankruptcy. Except as disclosed in writing to Buyer, there are no
judgments against Seller that are unsatisfied of record or docketed in any court
located in the United States of America and no Act of Insolvency has ever
occurred with respect to Seller.

(xvi) Full and Accurate Disclosure. No information provided pursuant to the
Transaction Documents, or any written statement furnished by or on behalf of
Seller pursuant to the terms of the Transaction Documents (including any
certification of Bailee), contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements contained herein
or therein not misleading in light of the circumstances under which they were
made when such statements and omissions are considered in the totality of the
circumstances in question.

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

(xviii) Jurisdiction of Organization. Seller’s jurisdiction of organization is
the State of Delaware.

(xix) Location of Books and Records. The location where Seller keeps its books
and records at its chief executive office at 345 Park Avenue, New York, NY
10154.

(xx) Regulation T, U and X. Neither the entering into nor consummation of any
Transaction hereunder, nor the use of the proceeds thereof, will violate any
provisions of Regulation T, U or X.

(xxi) Federal Reserve Form G-3. If requested by Buyer, Seller, any applicable
Affiliate of Seller and the recipient of any portion of the proceeds of, or any
portion of, any Transaction shall furnish to Buyer a statement on Federal
Reserve Form G-3 referred to in Regulation U.

(xxii) Federal Trade Embargoes. Each of Seller and Guarantor, and to Seller’s
Knowledge, each of their respective Affiliates, is in compliance with all
Federal Trade Embargos in all material respects. Without regard to owners of
publicly traded stock traded on a national exchange, no Prohibited Person owns
any direct or indirect equity interest in any of Seller or Guarantor. Seller has
implemented procedures, and will consistently apply those procedures throughout
the term of this Agreement, to ensure that the foregoing representations and
warranties remain true and correct during such term.

(xxiii) No Conflict of Interest. Seller is not and has not at any time been an
Affiliate of any Underlying Obligor.

 

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11. NEGATIVE COVENANTS OF SELLER

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

(a) subject to Seller’s right to repurchase any Purchased Loan, take any action
which would directly or indirectly materially impair or adversely affect Buyer’s
title to the Purchased Loans;

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

(c) create, incur or permit to exist any lien, encumbrance or security interest
in or on any of the Repurchase Assets or other collateral subject to the
security interests granted by Seller pursuant to Section 6 of this Agreement;

(d) create, incur or permit any lien, security interest, charges, or
encumbrances with respect to any Repurchase Assets or Hedging Transaction
relating to the Purchased Loans for the benefit of any Person other than Buyer;

(e) consent or assent to or effect a Significant Modification of any Purchased
Loan without the prior written consent of Buyer; provided, however, that Buyer’s
consent to any Significant Modification shall be deemed to be given if (i) no
Event of Default shall have occurred and be continuing (either at the date of
any notices specified below or as of the effective date of any deemed approval),
(ii) Seller shall have sent Buyer a written request for approval with respect to
such matter in accordance with the applicable terms and conditions hereof, which
written request shall have been (A) accompanied by the applicable documents
relating to the proposed Significant Modification, together with such other
information as is reasonably requested by Buyer and (B) marked in bold lettering
with the following language: “BUYER’S RESPONSE IS REQUIRED WITHIN FIVE
(5) BUSINESS DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF THE MASTER
REPURCHASE AGREEMENT BETWEEN THE UNDERSIGNED AND BUYER” and the envelope
containing such written request (or subject line if such notice is sent by
email) shall have been marked “PRIORITY-DEEMED APPROVAL MAY APPLY”; and
(iii) Buyer shall have failed to respond to such written request within the
aforesaid time-frame;

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

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

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

 

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(i) hold or be deemed to hold Plan Assets or engage in any transaction, in each
case, that would cause any obligation or action taken or to be taken hereunder
(or the exercise by Buyer of any of its rights under this Agreement, the
Purchased Loans or any Transaction Document) to be a non-exempt prohibited
transaction, with respect to which Buyer is the party in interest, disqualified
person or equivalent, under Section 406 of ERISA, Section 4975 of the Code or
substantially similar provisions under any other federal, state or local laws,
rules or regulations;

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

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

(l) incur any Indebtedness except as provided in Section 13(i) hereof or
otherwise cease to be a single-purpose entity meeting the requirements set forth
in Section 13.

 

12. AFFIRMATIVE COVENANTS OF SELLER

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

(a) Seller shall promptly notify Buyer of any event and/or condition of which
Seller has Knowledge and that is reasonably likely, in the commercially
reasonable judgment of Seller, to have a Material Adverse Effect.

(b) Seller shall give notice to Buyer of the following (accompanied by an
Officer’s Certificate setting forth details of the occurrence referred to
therein and stating what actions Seller has taken or proposes to take with
respect thereto):

(i) promptly upon receipt by Seller of notice or Knowledge of the occurrence of
any Default or Event of Default;

(ii) with respect to any Purchased Loan sold to Buyer hereunder, promptly
following receipt of any Principal Payment (in full or in part);

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

(iv) promptly upon receipt of notice by Seller or Knowledge of (1) any Purchased
Loan that becomes a Defaulted Loan, (2) any lien or security interest (other
than security interests created hereby) on, or claim asserted against, any
Purchased Loan or, to Seller’s Knowledge, the underlying collateral therefor or
(3) any event or change in circumstances that has or could reasonably be
expected to have a material adverse effect on the Market Value of a Purchased
Loan;

(v) promptly, and in any event within ten (10) days after service of process on
any of the following, give to Buyer notice of all litigation, actions, suits,
arbitrations, investigations (including, without limitation, any of the
foregoing which are pending or threatened in writing) or other legal or
arbitrable proceedings affecting Seller or affecting any of the assets of Seller
before any Governmental Authority that (1) questions or challenges the validity
or enforceability of any

 

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of the Transaction Documents or any action to be taken in connection with the
transactions contemplated hereby, (2) makes a claim or claims in an aggregate
amount greater than $1,000,000, or (3) which, individually or in the aggregate,
if adversely determined, would reasonably be likely to have a Material Adverse
Effect;

(vi) promptly upon any transfer of any underlying Property or any direct or
indirect equity interest in any Underlying Obligor of which the Seller has
Knowledge, whether or not consent to such transfer is required under the
applicable Purchased Loan Documents; and

(vii) promptly, and in any event within ten (10) days after Seller Knows that
any “reportable event” (within the meaning of Section 4043(c) of ERISA, with
respect to which the PBGC has not by regulation waived the requirement of
Section 4043(a) of ERISA that it be notified of such event) has occurred or is
reasonably expected to occur in respect of a Plan that, individually or in the
aggregate, either has resulted, or could reasonably be expected to result, in a
Material Adverse Effect.

(c) Seller shall provide Buyer with copies of such documents as Buyer may
reasonably request evidencing the truthfulness of the representations set forth
in Section 10 hereof.

(d) Seller shall defend the right, title and interest of Buyer in and to the
Purchased Loans against, and take such other action as is necessary to remove,
any liens, security interests, claims, encumbrances, charges and demands of all
Persons thereon (other than security interests granted to Buyer hereunder).

(e) Seller will permit Buyer or its designated representative to inspect any of
Seller’s records with respect to all or any portion of the Purchased Loans and
the conduct and operation of its business related thereto upon reasonable prior
notice at such reasonable times and with reasonable frequency requested by Buyer
or its designated representative and to make copies of extracts of any and all
thereof.

(f) If any amount payable under or in connection with any of the Purchased Loans
shall be or become evidenced by any promissory note, other instrument or chattel
paper (as each of the foregoing is defined under the UCC), such note, instrument
or chattel paper shall be immediately delivered to Buyer or its designee, duly
endorsed in a manner satisfactory to Buyer or if any collateral or other
security shall subsequently be delivered to Seller in connection with any
Purchased Loan, Seller shall immediately deliver or forward such item of
collateral or other security to Buyer or its designee, together with such
instruments of assignment as Buyer may reasonably request.

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

(i) the Monthly Statement;

(ii) the Quarterly Report, together with all operating statements and occupancy
information that Seller or Servicer has received relating to the Purchased Loans
for the related fiscal quarter;

(iii) the Financial Covenant Compliance Certificate;

(iv) as soon as available and in any event within forty-five (45) days after the
end of each quarterly fiscal period of each fiscal year of Guarantor, the
unaudited, consolidated balance sheet of Guarantor, as at the end of such period
and the related unaudited, consolidated statements

 

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of income, retained earnings and cash flows for such period and the portion of
the fiscal year through the end of such period, accompanied by an Officer’s
Certificate of Guarantor, which certificate shall state that said consolidated
financial statements fairly represent the consolidated financial condition and
results of operations of Seller in accordance with GAAP, consistently applied,
as at the end of, and for, such period (subject to normal year-end audit
adjustments);

(v) as soon as available and in any event within ninety (90) days after the end
of each fiscal year of Guarantor, the audited, consolidated balance sheet of
Guarantor, as at the end of such period and the related audited, consolidated
statements of income, retained earnings and cash flows for such period and the
portion of the fiscal year through the end of such period, accompanied by an
opinion thereon of an independent certified public accountant of recognized
national standing, which opinion shall not be qualified as to scope of audit or
going concern and shall state that said financial statements fairly present the
financial condition and results of operations of Guarantor as at the end of and
for such fiscal year in accordance with GAAP;

(vi) within sixty (60) days following the end of each of the first three
quarters, and within ninety (90) days following the end of each fiscal year, as
the case may be, an Officer’s Certificate of Seller in form and substance
reasonably satisfactory to Buyer certifying that no Event of Default has
occurred and is continuing and, to Seller’s Knowledge, no event or circumstance
has occurred and is continuing that would have a Material Adverse Effect;

(vii) [reserved];

(viii) within ten (10) Business Days after Buyer’s request, such further
information with respect to the operation of any Property, Purchased Loan, the
financial affairs of Seller or Guarantor as may be reasonably requested by
Buyer, including all business plans prepared by or for Seller; and

(ix) within ten (10) Business Days after Buyer’s request, such other reports as
Buyer shall reasonably request, to the extent available to Seller.

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

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

(j) Seller shall promptly advise Buyer in writing of the opening of any new
chief executive office of Seller or the closing of any such office and of any
change in Seller’s name or the places where the books and records pertaining to
the Purchased Loans are held, but in no event later than thirty (30) days before
any financing statement filing will lapse, lose perfection or become materially
misleading.

(k) Seller shall pay and discharge all Taxes, levies, liens and other charges,
if any, on its assets and on the Purchased Loans that, in each case, in any
manner would create any lien or charge upon the Purchased Loans, except for any
such Taxes and other charges as are being appropriately contested in good faith
by appropriate proceedings diligently conducted and with respect to which
adequate reserves have been provided in accordance with GAAP.

 

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(l) Seller shall observe, perform and satisfy all the terms, provisions,
covenants and conditions required to be observed, performed or satisfied by it,
and shall pay when due all Transaction Costs. Seller shall maintain its
existence as a limited liability company organized solely and in good standing
under the law of the State of Delaware and shall not dissolve, liquidate, merge
with or into any other Person or otherwise change its organizational structure
or documents or identity or incorporate or organize in any other jurisdiction.

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

(n) Seller shall provide Buyer with notice of each modification of any Purchased
Loan Documents consented to by Seller (including such modifications which do not
constitute a Significant Modification).

(o) Seller shall provide Buyer with reasonable access to operating statements,
the occupancy status and other property level information, with respect to the
Properties, plus any such additional reports as Buyer may reasonably request.

(p) Seller shall have no right to take any action pursuant to the Purchased Loan
Documents during the continuance of an Event of Default.

(q) Seller shall not cause any Purchased Loan to be serviced by any servicer
other than the Servicer or any other servicer expressly approved in writing by
Buyer.

(r) [Reserved].

(s) None of Seller or Guarantor or any of their respective direct or, without
regard to owners of publicly traded stock traded on a national exchange,
indirect, equityholders shall (i) knowingly conduct any business, or engage in
any transaction or dealing, with any Prohibited Person, including the making or
receiving of any contribution of funds, goods, or services, to or for the
benefit of a Prohibited Person, or (ii) knowingly engage in or conspire to
engage in any transaction that evades or avoids, or has the purpose of evading
or avoiding, or attempts to violate, any Federal Trade Embargo. Seller shall
cause the representation set forth in Section 10(a)(xxii) to remain true and
correct at all times.

(t) Upon the occurrence of a Required Manager Termination Event, Seller shall
terminate and replace the manager subject to such Required Manager Termination
Event within forty-five (45) days thereafter unless Buyer has consented in
writing to Seller not terminating such manager. Seller shall promptly notify
Buyer in writing upon the occurrence of a Required Manager Termination Event or
any other proposed replacement or termination of any property manager, asset
manager or other similar manager with respect to the Properties (collectively, a
“Manager Termination Event”). In connection with any Manager Termination Event
pursuant to which Seller’s approval is required by the Purchased Loan Documents
for the selection of a replacement manager, any replacement manager other than
the Backup Manager shall be subject to Buyer’s approval, such approval not to be
unreasonably withheld, conditioned or delayed; provided, however, that Buyer’s
approval of any replacement manager shall be deemed to be given if (i) no Event
of Default shall have occurred and be continuing (either at the date of any
notices specified below or as of the effective date of any deemed approval),
(ii) Seller shall have sent Buyer a written request for approval with respect to
such matter, which written request shall have been (A) accompanied by name of
the proposed replacement manager, the terms of the engagement of such

 

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replacement manager and such other information regarding the replacement manager
as is reasonably requested by Buyer in order for Buyer to make a determination
with respect to approving such replacement manager, and (B) marked in bold
lettering with the following language: “BUYER’S RESPONSE IS REQUIRED WITHIN TEN
(10) BUSINESS DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF THE MASTER
REPURCHASE AGREEMENT BETWEEN THE UNDERSIGNED AND BUYER”, and (iii) Buyer shall
have failed to respond to such request within the aforesaid time-frame.
Notwithstanding the foregoing, upon the occurrence of a “Default,” “Event of
Default” or other breach by the Underlying Obligor of the Purchased Loan
Documents that gives Seller, as lender thereunder, the right to terminate and/or
replace any property manager, asset manager or other similar manager with
respect to the Properties, Seller may, in its sole discretion, absent a Required
Management Termination Event, elect not to terminate and/or replace any such
manager.

(u) Seller agrees to use commercially reasonable efforts to appoint Green River
Capital as backup manager with respect to the Properties on or prior to
October 25, 2014 pursuant to a management agreement reasonably acceptable to
Buyer (the “Backup Management Agreement”), or if Seller is unable to appoint
Green River Capital as the backup manager, such other manager approved by Buyer
(such approval not to be unreasonably withheld, conditioned or delayed) (the
“Backup Manager”). Seller and Buyer agree to each pay fifty percent (50%) of all
fees, costs and expenses due to the Backup Manager pursuant to the Backup
Management Agreement, provided that Seller’s obligation for payment pursuant to
this sentence shall not exceed $25,000.00 per calendar year. Seller shall use
commercially reasonable efforts to promptly deliver to Buyer and Backup Manager
such documents, reports and other information with respect to the Properties as
Buyer and/or Backup Manager may reasonably request from time to time.
Notwithstanding the foregoing, Seller shall have no obligation to appoint the
Backup Manager as replacement manager in connection with the replacement of any
manager in accordance with Section 12(t) and may, in its sole discretion,
appoint another replacement manager, which manager shall be subject to Buyer’s
approval rights set forth in Section 12(t).

(v) Seller shall service and administer each Purchased Asset in accordance with
the terms of the Transaction Documents, the Purchased Loan Documents, and
applicable law, and independent of any relationship that Seller or any Affiliate
of Seller may have with the Underlying Obligor or any Affiliate of any
Underlying Obligor other than with respect to the Purchased Loan.

 

13. SINGLE-PURPOSE ENTITY.

Seller hereby represents and warrants to Buyer and covenants with Buyer that, as
of the date hereof and so long as any of the Transaction Documents shall remain
in effect:

(a) It is and intends to remain Solvent, and it has paid and intends to pay its
debts and liabilities (including overhead expenses) from and solely to the
extent of its own assets as the same shall become due.

(b) It has complied and will comply with the provisions of its certificate of
formation and its limited liability company agreement in all material respects.

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

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

 

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(e) It has been, is and will be, and at all times will hold itself out to the
public as, a legal entity separate and distinct from any other entity (including
any Affiliate), it shall correct any misunderstanding of which it has Knowledge
regarding its status as a separate entity, it shall conduct business in its own
name, it shall not identify itself or any of its Affiliates as a division or
part of the other and it shall maintain and utilize separate stationery,
invoices and checks and shall allocate fairly and reasonably any overhead for
shared office space and for services performed by any employee of its
Affiliates.

(f) It has not owned and will not own any property or any other assets other
than the Purchased Loans, cash and its interest under any associated Hedging
Transactions.

(g) It has not engaged and will not engage in any business other than the
origination, acquisition, ownership, servicing, enforcement, financing and
disposition of the Purchased Loans and any associated Hedging Transactions in
accordance with the applicable provisions of the Transaction Documents and its
organizational documents.

(h) It has not entered into, and will not enter into, any contract or agreement
with any of its Affiliates, except upon terms and conditions that are
substantially similar to those that would be available on an arm’s length basis
with Persons other than such Affiliate.

(i) It has not incurred and will not incur any Indebtedness or obligation,
secured or unsecured, direct or indirect, absolute or contingent (including
guaranteeing any obligation), other than (A) obligations under the Transaction
Documents, (B) obligations under the documents evidencing the Purchased Loans,
(C) unsecured trade payables, in an aggregate amount not to exceed $250,000 at
any one time outstanding, incurred in the ordinary course of acquiring, owning,
servicing, enforcement, financing and disposing of the Purchased Loans and which
are either (x) no more than ninety (90) days past due or (y) are being contested
in good faith with adequate reserves maintained therefor, and/or (D) as
otherwise expressly permitted under this Agreement.

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

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

(l) Neither it nor Guarantor will seek the dissolution, liquidation or winding
up, in whole or in part of Seller.

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

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

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

 

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

(q) Its organizational documents shall provide that (i) no Independent Director
of Seller may be removed or replaced without Cause, (ii) Buyer be given at least
two (2) Business Days prior notice of the removal and/or replacement of the
Independent Director, together with the name and contact information of the
replacement Independent Director and evidence of the replacement’s satisfaction
of the definition of Independent Director and (iii) any Independent Director of
Seller shall not have any fiduciary duty to anyone including the holders of the
equity interests in Seller and any Affiliates of Seller except Seller and the
creditors of Seller with respect to taking of, or otherwise voting on, any Act
of Insolvency; provided, that the foregoing shall not eliminate the implied
contractual covenant of good faith and fair dealing.

(r) It shall not, without the consent of its Independent Director, take any Act
of Insolvency.

 

14. EVENTS OF DEFAULT; REMEDIES

(a) The following shall constitute an event of default by Seller hereunder (each
a “Event of Default”):

(i) failure of Seller to repurchase one or more Purchased Loans on the
applicable Repurchase Date;

(ii) failure of Seller to apply any Income received by Seller in accordance with
the provisions hereof;

(iii) (A) the Transaction Documents shall for any reason not cause, or shall
cease to cause, Buyer to be the owner of, or, if recharacterized as a secured
financing, a secured party with respect to, the Repurchase Assets specified in
Sections 6(a) hereof and the other collateral specified in Section 6(c) hereof
free of any adverse claim, liens and other rights of others (other than as
granted herein); (B) if a Transaction is recharacterized as a secured financing,
the Transaction Documents with respect to any Transaction shall for any reason
cease to create a valid first priority security interest in favor of Buyer in
the Repurchase Assets specified in Section 6(a) hereof and the other collateral
specified in Section 6(c) hereof; or (C) if the Transaction Documents shall
cease to be in full force and effect or if the enforceability of any of them is
challenged or repudiated by Seller, Guarantor or Servicer or any Affiliate
thereof;

(iv) failure of Seller to make the payments required under Section 4 or
Section 5(b) when due;

(v) failure of Seller to make any other payment owing to Buyer which has become
due, whether by acceleration or otherwise, under the terms of this Agreement
which failure is not remedied within the period specified herein or, if no
period is specified, five (5) Business Days after notice thereof to Seller from
Buyer; provided, however, that Buyer shall not be required to provide notice in
the event of a failure by Seller to repurchase any Purchased Loan on the
required Repurchase Date therefor;

(vi) breach by Seller in the due performance or observance of any term, covenant
or agreement contained in Section 11 of this Agreement which has not been cured
within five (5) Business Days after notice thereof from Buyer to Seller;

 

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(vii) a Change of Control shall have occurred with respect to Seller or
Guarantor;

(viii) any representation made by Seller herein or in any Transaction Document
shall have been incorrect or untrue in any material respect when made or
repeated or deemed to have been made or repeated (other than with respect to the
MTM Representations) and such breach has not been cured within five (5) Business
Days following notice thereof from Buyer to Seller; provided that the
representations and warranties made by Seller in Section 10(a)(vi), 10(a)(viii),
10(a)(xvi) or 10(a)(xvii) (in each case, with respect to the affected or
Purchased Loans only) hereof shall not be considered an Event of Default if
incorrect or untrue in any material respect (which determination shall be made
with respect to the representations and warranties in Exhibit V without regard
to any knowledge qualifier therein), if Buyer terminates the related Transaction
and Seller repurchases the related Purchased Loan(s) on an Early Repurchase Date
no later than five (5) Business Days after receiving written notice of such
incorrect or untrue representation; provided, however, that if Seller shall have
made any such representation with Knowledge that it was materially incorrect or
untrue at the time made, such misrepresentation shall constitute an Event of
Default;

(ix) (A) a final judgment by any competent court in the United States of America
for the payment of money in an amount greater than $100,000 shall have been
rendered against Seller and remains undischarged or unpaid for a period of
forty-five (45) days, during which period execution of such judgment is not
effectively stayed or (B) a final judgment by any competent court in the United
States of America for the payment of money in an amount greater than the lesser
of (a) $50,000,000 or (b) three percent (3%) of the Tangible Net Worth of
Guarantor shall have been rendered against Guarantor and remains undischarged or
unpaid for a period of thirty (30) days, during which period execution of such
judgment is not effectively stayed;

(x) (A) Guarantor shall have defaulted or failed to perform under any note,
indenture, loan agreement, guaranty, swap agreement or any other contract,
agreement or transaction to which it is a party, and which default results in
the acceleration of an obligation equal to or greater than the lesser of
(i) three percent (3%) of the Tangible Net Worth of Guarantor or
(ii) $50,000,000.00; provided, however, that any such default, failure to
perform or breach shall not constitute an Event of Default if Seller or
Guarantor, as the case may be, cures such default, failure to perform or breach,
as the case may be, within the grace period, if any, provided under the
applicable agreement;

(xi) as of the end of any fiscal quarter, Guarantor breaches the Guarantor
Financial Covenants;

(xii) if Seller shall breach or fail to perform any of the terms, covenants,
obligations or conditions of this Agreement or any other Transaction Document,
other than as specifically otherwise referred to in this definition of “Event of
Default”, and such breach or failure to perform is not remedied within ten
(10) Business Days after notice thereof to Seller by Buyer, or its successors or
assigns; provided, however, that if such default is susceptible of cure but
cannot reasonably be cured within such ten (10) Business Day period and provided
further that Seller shall have commenced to cure such default within such ten
(10) Business Day period and thereafter diligently and expeditiously proceeds to
cure the same, such ten (10) Business Day period shall be extended for such time
as is reasonably necessary for Seller, in the exercise of due diligence, to cure
such default, and in no event shall such cure period exceed thirty (30) days
from Seller’s receipt of Buyer’s notice of such default;

(xiii) an Act of Insolvency shall have occurred with respect to Seller or
Guarantor;

 

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(xiv) Buyer ceases for any reason to have a valid and perfected first priority
security interest in any Purchased Loan;

(xv) Seller shall consent or assent to or effect a Significant Modification
without Buyer’s consent and, if such breach is susceptible to cure, such breach
has not been cured within five (5) Business Days following notice thereof from
Buyer to Seller;

(xvi) [reserved];

(xvii) an “event of default” or “termination event” (as defined in the
agreements relating to a facility described in clause (A) or (B) of this clause
(xviii)), by Seller or Guarantor beyond any applicable notice and cure period,
shall have occurred under (A) any repurchase facility, loan facility or hedging
transaction entered into by Seller or Guarantor or any Affiliate of any of them
and Buyer or any Affiliate of Buyer or (B) any repurchase facility, loan
facility or hedging transaction with Buyer or any Affiliate of Buyer in which
Seller or Guarantor or any Affiliate of any of them is a guarantor;

(xviii) (A) any of the representations and warranties of Guarantor in the
Guaranty, or of Guarantor in any Financial Covenant Compliance Certificate shall
have been incorrect or untrue in any material respect when made or repeated or
deemed to have been made or repeated or (B) Guarantor shall breach any covenant
in the Guaranty, and such breach has not been cured within five (5) Business
Days after receipt of notice thereof from Buyer; or

(xix) Seller’s termination or replacement of (or failure to terminate or
replace) a property manager, asset manager or other similar manager with respect
to the Properties in violation of Section 12(t) hereof.

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

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

(ii) If Buyer exercises or is deemed to have exercised the option referred to in
Section 14(b)(i) hereof:

(A) Seller’s obligations hereunder to repurchase all Purchased Loans shall
become immediately due and payable on and as of the Accelerated Repurchase Date,
and all Income deposited in the Blocked Account shall be retained by Buyer and
applied to the aggregate unpaid Repurchase Price and any other amounts owing by
Seller hereunder; and

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

 

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(C) Custodian shall, upon the request of Buyer (with simultaneous copy of such
request to Seller), deliver to Buyer all instruments, certificates and other
documents then held by Custodian relating to the Purchased Loans.

(iii) Buyer may, after ten (10) days’ notice to Seller of Buyer’s intent to take
such action (provided that no such notice shall be required in the circumstances
set forth in Section 9-611(d) of the UCC), in a commercially reasonable manner
(A) immediately sell, at a public or private sale at such price or prices as
Buyer may reasonably deem to be satisfactory any or all of the Purchased Loans
on a servicing released basis or (B) in its sole discretion elect, in lieu of
selling all or a portion of such Purchased Loans, to give Seller credit for such
Purchased Loans in an amount equal to the Market Value of such Purchased Loans
against the aggregate unpaid Repurchase Price for such Purchased Loans and any
other amounts owing by Seller under the Transaction Documents. The proceeds of
any disposition of Purchased Loans effected pursuant to this Section 14(b)(iii)
shall be applied (v) first, to the costs and expenses incurred by Buyer in
connection with Seller’s default, (w) second, to the costs of cover and/or
Hedging Transactions, if any, (x) third, to the Repurchase Price, (y) fourth, to
any other outstanding obligation owed by Seller to Buyer or its Affiliates
pursuant to the Transaction Documents (including interest which would be payable
as post-petition interest in connection with any bankruptcy or similar
proceeding) irrespective of whether such obligations are direct or indirect,
absolute or contingent, matured or unmatured, and (z) the balance, if any, to
Seller. In the event that Buyer shall not have received repayment in full of the
Aggregate Repurchase Price and the other obligations of the Seller under the
Transaction Documents following its liquidation of the Purchased Loans, Buyer
may, in its sole discretion, pursue the Seller and Guarantor (to the extent
provided in the Guaranty) for all or any part of any deficiency.

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

(v) Seller shall be liable to Buyer for (A) the amount of all actual expenses,
including reasonable legal fees and expenses of counsel, incurred by Buyer in
connection with or as a consequence of an Event of Default, (B) all actual costs
incurred in connection with covering transactions or hedging transactions
(including short sales) or entering into replacement transactions, (C) all
damages, losses, judgments, actual costs and other expenses of any kind that may
be imposed on, incurred by or asserted against Buyer relating to or arising out
of such Hedging Transactions or covering transactions, and (D) any other loss,
damage, actual cost or expense directly arising or resulting from the occurrence
of an Event of Default.

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

 

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

(viii) Without limiting any other rights or remedies of Buyer, Buyer shall have
the right, without prior notice to Seller, and any such notice being expressly
waived by Seller to the extent permitted by applicable law, to set off and
appropriate and apply any and all deposits (general or special, time or demand,
provisional or final) in any currency, and any other obligation (including to
return excess margin), 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 or due from Buyer or any Affiliate thereof to or
for the credit of the account of Seller, Guarantor or any Subsidiary of
Guarantor to any obligations of Seller hereunder to Buyer.

(ix) Buyer shall have, in addition to its rights and remedies under the
Transaction Documents, all of the rights and remedies provided by applicable
federal, state, foreign, and local laws (including, without limitation, if the
Transactions are recharacterized as secured financings, the rights and remedies
of a secured party under the UCC of the State of New York, to the extent that
the UCC is applicable, and the right to offset any mutual debt and claim), in
equity, and under any other agreement between Buyer and Seller, exercisable upon
ten (10) days notice from Buyer to Seller. Without limiting the generality of
the foregoing, Buyer shall be entitled to set off the proceeds of the
liquidation of the Purchased Loans against all of Seller’s obligations to Buyer
or its Affiliates, whether under this Agreement or under any other agreement
between Seller and Buyer or between Seller and any Affiliate of Buyer, or
otherwise, whether or not such obligations are then due, without prejudice to
Buyer’s right to recover any deficiency.

(x) Buyer shall at any time have the right, in each case until such time as
Buyer determines otherwise, to retain, to suspend payment or performance of, or
to decline to remit, any amount or property that Buyer would otherwise be
obligated to pay, remit or deliver to Seller hereunder if a monetary or material
non-monetary Default or an Event of Default has occurred and is continuing.

 

15. SINGLE AGREEMENT

Buyer and Seller acknowledge that, and have entered hereinto and will enter into
each Transaction hereunder in consideration of and in reliance upon the fact
that, all Transactions hereunder constitute a single business and contractual
relationship and have been made in consideration of each other. Accordingly,
each of Buyer and Seller agrees 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.

 

16. NOTICES AND OTHER COMMUNICATIONS

All notices, consents, approvals and requests required or permitted hereunder
shall be given in writing and shall be effective for all purposes if hand
delivered or sent by (a) hand delivery, with proof of attempted delivery,
(b) certified or registered United States mail, postage prepaid, (c) expedited
prepaid delivery service, either commercial or United States Postal Service,
with proof of attempted delivery, or (d) by e-mail (with return receipt
requested) to the addresses specified in Annex I hereto or at such other

 

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address and person as shall be designated from time to time by any party hereto,
as the case may be, in a written notice to the other parties hereto in the
manner provided for in this Section 16. A notice shall be deemed to have been
given: (v) in the case of hand delivery, at the time of delivery; (w) in the
case of registered or certified mail, when delivered or the first attempted
delivery on a Business Day; (x) in the case of expedited prepaid delivery upon
the first attempted delivery on a Business Day; or (y) in the case of e-mail,
upon receipt. A party receiving a notice that does not comply with the technical
requirements for notice under this Section 16 may elect to waive any
deficiencies and treat such notice as having been properly given. In furtherance
of the foregoing, notices pursuant to Section 4 hereof may be sent by electronic
mail to the e-mail addresses set forth on Annex I attached hereto.

 

17. NON-ASSIGNABILITY

(a) The rights and obligations of Seller under the Transaction Documents, the
Hedging Transactions and under any Transaction shall not be assigned by Seller
without the prior written consent of Buyer.

(b) Buyer may assign, participate or sell all or a portion of its rights and
obligations under the Transaction Documents and under any Transaction from time
to time, in each case, without the prior consent of Seller. Each assignee shall
be entitled to the benefits of Section 3 (subject to the requirements and
limitations therein, including the requirements under Section 3(p) (it being
understood that the documentation required under Section 3(p) shall be delivered
to the participating Buyer)) and Section 20; provided, however, that any such
assignee or participant shall not be entitled to receive any greater payment
under Section 3 than its participating Buyer would have been entitled to
receive. Notwithstanding the foregoing, Buyer agrees that, prior to the
occurrence and continuance of an Event of Default, (i) at any time prior to the
Outside Date, Buyer shall not assign, participate or sell all or any portion of
its rights and obligations under the Transaction Documents to any Person other
than a Qualified Transferee, (ii) Buyer shall remain sole agent under the
Transaction Documents, (iii) Seller shall continue to deal solely and directly
with Buyer in connection with any Transaction and (iv) Buyer shall not assign,
participate or sell all or any portion of its rights and obligations under the
Transaction Documents or any Transaction to any Prohibited Transferee. During
the continuance of an Event of Default, Buyer may assign, participate or sell
its rights and obligations under the Transaction Documents and/or any
Transaction to any Person without prior notice to Seller and without regard to
the limitations in this Section 17(b).

(c) Buyer, acting solely for this purpose as agent of the Seller shall maintain
a record of each assignment, participation, or sale and a register for the
recordation of the names and addresses of the assignees that become parties
hereto and, with respect to each assignee, the aggregate assigned Purchase Price
and applicable Price Differential (the “Register”). The entries in the Register
shall be conclusive absent manifest error, and the Buyer and the Seller shall
treat each person whose name is recorded in the Register pursuant to the terms
hereof as a Buyer hereunder for all purposes of this Agreement.

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

 

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18. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

(a) This Agreement shall be governed by the laws of the State of New York
without giving effect to the conflict of law principles thereof, except for
Section 5-1401 of the General Obligations Law of the State of New York.

(b) Each party irrevocably and unconditionally submits to the non-exclusive
jurisdiction of any United States Federal or New York State court sitting in
Manhattan, and any appellate court from any such court, solely for the purpose
of any suit, action or proceeding brought to enforce its obligations under this
Agreement or relating in any way to this Agreement or any Transaction under this
Agreement.

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

(d) Each party hereby irrevocably waives, to the fullest extent it may
effectively do so, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court and any right of jurisdiction on
account of its place of residence or domicile and irrevocably consents to the
service of any summons and complaint and any other process by the mailing of
copies of such process to them at their respective address specified herein.
Each party hereby agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Section 18
shall affect the right of Buyer or Seller to serve legal process in any other
manner permitted by law or affect the right of Buyer or Seller to bring any
action or proceeding against the other party or its property in the courts of
other jurisdictions.

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

 

19. NO RELIANCE; DISCLAIMERS

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

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

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

 

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

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

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

 

20. INDEMNITY AND EXPENSES

(a) Seller hereby agrees to hold Buyer and its Affiliates and each of their
respective officers, directors and employees (“Indemnified Parties”) harmless
from and indemnify the Indemnified Parties against any and all actual,
out-of-pocket liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, Indemnified Taxes, fees, costs, expenses (including reasonable
attorneys’ fees and disbursements of outside counsel and any and all servicing
and enforcement costs with respect to the Purchased Loans) or disbursements (all
of the foregoing, collectively “Indemnified Amounts”) that may at any time
(including, without limitation, such time as this Agreement shall no longer be
in effect and the Transactions shall have been repaid in full) be imposed on or
asserted against any Indemnified Party in any way whatsoever arising out of or
in connection with, or relating to, this Agreement or any Transactions
thereunder or any action taken or omitted to be taken by any Indemnified Party
under or in connection with any of the foregoing; provided, that Seller shall
not be liable for Indemnified Amounts resulting from the gross negligence or
willful misconduct of any Indemnified Party. Without limiting the generality of
the foregoing, Seller agrees to hold each Indemnified Party harmless from and
indemnify each Indemnified Party against all Indemnified Amounts with respect to
all Purchased Loans relating to or arising out of any violation or alleged
violation of any environmental law, rule or regulation or any consumer credit
laws, including without limitation ERISA, that, in each case, results from
anything other than the gross negligence or willful misconduct of an Indemnified
Party. In any suit, proceeding or action brought by Buyer in connection with any
Purchased Loan for any sum owing thereunder, or to enforce any provisions of any
Purchased Loan Documents, Seller will save, indemnify and hold Buyer harmless
from and against all actual, out-of-pocket expense, loss or damage suffered by
Buyer by reason of any defense, set-off, counterclaim, recoupment or reduction
or liability whatsoever of the account debtor or obligor thereunder, arising out
of a breach by Seller of any obligation thereunder or arising out of any other
agreement, indebtedness or liability at any time owing to or in favor of such
account debtor or obligor or its successors from Seller. Seller also agrees to
reimburse an Indemnified Party as and when billed by such Indemnified Party for
all such Indemnified Party’s costs and expenses incurred in connection with the
enforcement or the preservation of such Indemnified Party’s rights under this
Agreement and any other Transaction Document or any transaction contemplated
hereby or thereby, including without limitation the fees and disbursements of
its outside counsel. Seller hereby acknowledges that its obligations hereunder
are recourse obligations of Seller. For avoidance of doubt, this Section 20
shall not apply to claims with respect to Taxes, Excluded Taxes, or Other Taxes,
which are governed by Section 3 hereof.

 

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(b) Seller agrees to pay as and when billed by Buyer (i) all Indemnified Amounts
provided in Section 20(a), (ii) all of the out-of-pocket costs and expenses
incurred by Buyer in connection with the development, preparation and execution
of, and any amendment, supplement or modification to this Agreement and the
other Transaction Documents or any other documents prepared in connection
herewith or therewith, (iii) all of the out-of-pocket costs and expenses
incurred in connection with the consummation and administration of the
transactions contemplated hereby and thereby including without limitation all
the fees, disbursements and expenses of counsel to Buyer, (iv) all costs and
expenses contemplated by Section 14(b)(v) and (v) all the Diligence Fees
(collectively, “Transaction Costs”).

 

21. DUE DILIGENCE

Seller acknowledges that Buyer has the right to perform continuing due diligence
reviews with respect to the Purchased Loans, at Seller’s sole cost and expense,
for purposes of verifying compliance with the representations, warranties and
specifications made hereunder, or determining or re-determining the Asset Base
for purposes of Section 4 of this Agreement, or otherwise, and Seller agrees
that Buyer, at its option, has the right at any time to conduct a partial or
complete due diligence review on any or all of the Purchased Loans, including,
without limitation, ordering new credit reports and Appraisals on the applicable
collateral and otherwise regenerating the information used to originate such
Purchased Loans. Upon reasonable (but no less than one (1) Business Days) prior
notice to Seller, Buyer or its authorized representatives will be permitted
during normal business hours to examine, inspect, and make copies and extracts
of, the Purchased Loan Files and any and all documents, records, agreements,
instruments or information relating to any Purchased Loan in the possession or
under the control of Seller, any servicer or sub-servicer and/or Custodian.
Seller also shall make available to Buyer a knowledgeable financial or
accounting officer for the purpose of answering questions respecting the
Purchased Loan Files and the Purchased Loans. Seller agrees to cooperate with
Buyer and any third party underwriter designated by Buyer in connection with
such underwriting, including, but not limited to, providing Buyer and any third
party underwriter with access to any and all documents, records, agreements,
instruments or information relating to such Purchased Loans in the possession,
or under the control, of such Seller.

 

22. SERVICING

(a) The parties hereto agree and acknowledge that the Purchased Loans will be
sold by Seller to Buyer on a servicing released basis. In furtherance of the
foregoing, the Seller and the Buyer hereby agree and confirm that from and after
the date hereof, only such Servicing Agreements that have been approved by Buyer
shall govern the servicing of the Purchased Loans and any prior agreement
between Seller and any other Person or otherwise with respect to such servicing
is hereby superseded in all respects. Provided that Buyer shall have received a
duly executed Servicing Acknowledgement from Servicer, prior to an Event of
Default, Seller may retain, on behalf of the Buyer, the Servicer to service the
Purchased Loans for the benefit of or on behalf of Buyer; provided, however,
that the obligation of Servicer to service any Purchased Loan for the benefit of
or on behalf of Buyer as aforesaid shall cease upon the repurchase of such
Purchased Loan by Seller in accordance with the provisions of this Agreement or
as otherwise provided in the Servicing Acknowledgement.

(b) Seller agrees that, as between Seller and Buyer, Buyer is the owner of all
servicing records, including but not limited to any and all servicing
agreements, files, documents, records, data bases, computer tapes, copies of
computer tapes, proof of insurance coverage, insurance policies, appraisals,
other closing documentation, payment history records, and any other records
relating to or evidencing the servicing of Purchased Loans (the “Servicing
Records”) so long as the Purchased Loans are subject to this Agreement. Seller
covenants to safeguard any such Servicing Records in Seller’s possession and to
deliver them promptly to Buyer or its designee (including the Custodian) at
Buyer’s request.

 

53

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(c) Seller shall not, and shall not provide consent to Servicer to, employ any
other sub-servicers to service the Purchased Loans without the prior written
approval of Buyer which approval shall not be unreasonably withheld.

(d) Seller shall cause Servicer and any other sub-servicers engaged on behalf of
Buyer to execute a Servicing Acknowledgement acknowledging Buyer’s interest in
the Purchased Loans and the Servicing Agreement and agreeing that the Servicer
and any sub-servicer (if applicable) shall deposit all Income with respect to
the Purchased Loans in the Blocked Account, all in such manner as shall be
reasonably acceptable to Buyer.

(e) To the extent applicable, Seller shall cause Servicer to permit Buyer to
inspect Servicer’s servicing facilities for the purpose of satisfying Buyer that
Servicer has the ability to service such Purchased Loan as provided in this
Agreement.

(f) Buyer may, in its sole discretion if an Event of Default shall have occurred
and be continuing, sell the Purchased Loans on a servicing released basis
without payment of any termination fee or any other amount to Servicer. Upon the
occurrence of an Event of Default hereunder, Buyer shall have the right
immediately to terminate Servicer’s right to service the Purchased Loans without
payment of any penalty or termination fee.

 

23. TREATMENT FOR TAX PURPOSES

It is the intention of the parties that, for U.S. Federal, state and local
income and franchise Tax purposes, the Transactions constitute a financing, and
that Seller is, and, so long as no Event of Default shall have occurred and be
continuing, will continue to be, treated as the owner of the Purchased Loans for
such purposes. Unless prohibited by applicable law, Seller and Buyer agree to
treat the Transactions as described in the preceding sentence on any and all
filings with any U.S. Federal, state or local taxing authority.

 

24. INTENT

(a) The parties intend and acknowledge that this Agreement is a “master netting
agreement” as that term is defined in Section 101(38A)(A) of the Bankruptcy
Code.

(b) The parties intend and acknowledge that each Transaction is a “securities
contract” as that term is defined in Section 741(7) of the Bankruptcy Code.

(c) The parties intend and acknowledge that the Guaranty is a “securities
contract” as that term is defined in Section 741(7)(A)(xi) of the Bankruptcy
Code.

(d) The parties intend and acknowledge that any party’s right to cause the
termination, liquidation or acceleration of or to offset or net termination
values, payment amounts, or other transfer obligations arising under or in
connection with this Agreement or any Transaction hereunder is in each case a
contractual right to cause the termination, liquidation, or acceleration of or
to offset or net termination values, payment amounts, or other transfer
obligations arising under or in connection with this Agreement or any
Transaction hereunder as described in Section 555 and 561 of the Bankruptcy
Code.

(e) The parties intend and acknowledge that any provisions hereof or in any
other document, agreement or instrument that is related in any way to the
servicing of the Purchased Loans shall be deemed “related to” this Agreement
within the meaning of Section 741 of the Bankruptcy Code.

 

54

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(f) Each party hereto agrees that it shall not challenge the characterization of
this Agreement as a “securities contract” or “master netting agreement” within
the meaning of the Bankruptcy Code.

 

25. MISCELLANEOUS

(a) Time is of the essence under the Transaction Documents and all Transactions
thereunder, and all references to a time shall mean New York time in effect on
the date of the action unless otherwise expressly stated in the Transaction
Documents.

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

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

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

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

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

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

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

(i) To the extent permitted by applicable law, each party hereby waives any
right to claim or recover from the other party any exemplary or punitive damages
of any kind or nature whatsoever, whether the likelihood of such damages was
known or foreseeable and regardless of the form of the claim or action. The
foregoing waiver shall also apply to Indemnified Amounts.

[SIGNATURES COMMENCE ON THE NEXT PAGE]

 

55

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

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

 

BUYER:

GOLDMAN SACHS BANK USA,

a New York state member bank

By:       /s/ Charles D. Johnston   Name:   Charles D. Johnston   Title:  
Authorized Signatory

 

56

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

SELLER:

643 SINGLE FAMILY FINCO 2014, LLC,

a Delaware limited liability company

By:       /s/ Douglas Armer   Name:   Douglas Armer   Title:   Managing
Director, Head of Capital Markets and Treasurer

 

57

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

SCHEDULE 1

INTENTIONALLY OMITTED

 

Schedule 1-1

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

SCHEDULE 2

PURCHASED LOAN INFORMATION

 

a) Loan Number/Loan Type

 

b) Obligor Name

 

c) Property Address

 

d) Original Balance

 

e) Outstanding Balance

 

f) Maturity Date

 

g) Table Funding (Yes/No)

 

h) Such information as Buyer and Seller shall agree on a case-by-case basis.

 

Schedule 2-1

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

SCHEDULE 3-A

PROHIBITED TRANSFEREES

 

1. Annaly Capital Management, Inc.

2. Apollo Commercial Real Estate Finance, Inc.

3. Arbor Realty Trust Inc.

4. Ares Commercial Real Estate Corporation

5. Brookfield Investment Management Inc.

6. Cantor Fitzgerald & Co.

7. CapitalSource Inc.

8. Children’s Investment Fund LP

9. Colony Financial, Inc.

10. CreXus Investment Corp.

11. H/2 Credit Manager LP

12. iStar Financial Inc.

13. KKR & Co. L.P.

14. Ladder Capital Securities LLC

15. LoanCore Capital, LLC

16. Mesa West Capital, LLC

17. NCH Capital Inc.

18. NorthStar Realty Finance Corp.

19. RAIT Financial Trust

20. Redwood Trust Inc.

21. Rialto Capital Management, LLC

22. SL Green Realty Corp.

23. Square Mile Capital Management, LLC

24. Starwood Capital Group

25. Starwood Property Trust, Inc.

26. Winthrop Capital Management, LLC

 

Schedule 3-A

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

SCHEDULE 3-B

PROHIBITED TRANSFEREES

 

1. Annaly Capital Management, Inc.

2. Apollo Commercial Real Estate Finance, Inc.

3. Arbor Realty Trust Inc.

4. Ares Commercial Real Estate Corporation

5. Brookfield Investment Management Inc.

6. Cantor Fitzgerald & Co.

7. CapitalSource Inc.

8. Children’s Investment Fund LP

9. Colony Financial, Inc.

10. CreXus Investment Corp.

11. H/2 Credit Manager LP

12. iStar Financial Inc.

13. KKR & Co. L.P.

14. Ladder Capital Securities LLC

15. LoanCore Capital, LLC

16. Mesa West Capital, LLC

17. NCH Capital Inc.

18. NorthStar Realty Finance Corp.

19. RAIT Financial Trust

20. Redwood Trust Inc.

21. Rialto Capital Management, LLC

22. SL Green Realty Corp.

23. Square Mile Capital Management, LLC

24. Starwood Capital Group

25. Starwood Property Trust, Inc.

26. Winthrop Capital Management, LLC

27. Invesco Ltd.

28. OZ Management LP

29. Angelo, Gordon & Co., L.P.

30. Lone Star U.S. Acquisitions, LLC

31. Fortress Credit Corp.

32. Newcastle Investment Corp.

33. TPG Capital Management, L.P.

 

Schedule 3-B

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

EXHIBIT I

CONFIRMATION

GOLDMAN SACHS MORTGAGE COMPANY

Ladies and Gentlemen:

Goldman Sachs Bank USA is pleased to deliver our written CONFIRMATION of our
agreement (subject to satisfaction of the Transaction Conditions Precedent) to
enter into the Transaction pursuant to which Goldman Sachs Bank USA shall
purchase from you the Purchased Loan identified in Schedule I attached hereto,
pursuant to the Master Repurchase Agreement among Goldman Sachs Bank USA (the
“Buyer”) and 643 Single Family Finco 2014, LLC (“Seller”), dated as of April 25,
2014 (as amended from time to time the “Agreement”; capitalized terms used
herein without definition have the meanings given in the Agreement), as follows
below and on the attached Schedule 1:

 

Seller:   643 Single Family Finco 2014, LLC Purchase Date:  
[                        ], [                ] Purchased Loan:   As identified
on attached Schedule 1

Aggregate Principal

Amount of Purchased Loan:

  [                        ] Repurchase Date:  
[                        ],[                 ] Initial Purchase Price:   $
Pricing Rate:   LIBOR + 2.75% Purchase Percentage:   80% Type of Funding:  
[Table Funded/Non-Table Funded] Wire Instructions:  
[                                         ] Governing Agreements:   As
identified on attached Schedule 1

Name and address for

communications:

  Buyer:  

Goldman Sachs Bank USA

6011 Connection Drive

Irving, Texas 75039

Attention: Henry Nguyen

Telephone: (972) 368-2324

E-Mail: gs-warehouselending@gs.com

  with a copy to:    

Goldman Sachs Security Instrument Company

200 West Street

New York, New York 10282

Attention: Michelle Gill

Telephone: (212) 357-8721

E-Mail: michelle.gill@gs.com

 

Exhibit I-1

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

  with a copy to:    

Dechert LLP

Cira Centre

2929 Arch Street

Philadelphia, Pennsylvania 19104

Attention: Richard D. Jones, Esq.

Telephone: (212) 698-3844

Fax: (215) 655-2501

Email: richard.jones@dechert.com

  Seller:      

643 Single Family Finco 2014, LLC

c/o Blackstone Mortgage Trust, Inc.

345 Park Avenue

New York, NY 10154

Attn: Douglas Armer

Telephone: 212-583-5000

E-mail: BXMTGoldmanSFRrepo@blackstone.com

  with a copy to:    

Ropes & Gray LLP

1211 Avenue of the Americas

New York, New York 10036

Attention: David C. Djaha

Email: david.djaha@ropesgray.com

[SIGNATURES ON THE NEXT PAGE]

 

Exhibit I-2

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

GOLDMAN SACHS BANK USA,

a New York state member bank

By:       Name:     Title:  

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

AGREED AND ACKNOWLEDGED:

 

643 SINGLE FAMILY FINCO 2014, LLC,

a Delaware limited liability company

By:       Name:   Douglas Armer   Title:   Managing Director, Head of Capital
Markets and Treasurer

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

SCHEDULE 1 TO CONFIRMATION STATEMENT

 

Purchased Loan:

[Loan Type] dated as of [            ] in the original principal amount of
$[            ], made by [            ] to [            ] under and pursuant to
that certain [loan agreement/applicable document] (the “Governing Agreement”).

 

Aggregate Principal Amount:

$[            ] [(Plus up to $[            ] of future advances under Section
[            ] of the Governing Agreement)]. Buyer’s obligation to fund any
future advances is contingent on (a) Seller’s satisfaction of the conditions
captained in Section [            ] of [Governing Agreement] and (b) a bringdown
by Seller of all representations and warranties made on the date hereof with
regard to the Purchased Loan pursuant to Section 10 of the Agreement.)]

 

Representations:

Seller acknowledges and agrees that upon funding by Buyer of the Purchase Price
for the Purchased Loan [and in connection with any subsequent funding of the
Purchase Percentage of a future advance under the Purchased Loan, (i)] Seller
shall be deemed to have confirmed that all of the representations and warranties
set forth in Section 10 of the Agreement are true and correct in all material
respects as of the Purchase Date [or the applicable funding date, as the case
may be,], except as set forth in the attached Exception Report [and (ii) with
respect to the funding of a future advance, Seller shall be deemed to have
represented and warranted that all of the conditions to funding of such advance
set forth in Section [            ] of the Governing Agreement have been
satisfied (and no conditions have been waived, except as has been previously
disclosed by Seller to Buyer in writing)].

Fixed/Floating:

Coupon:

Term of Loan including Extension Options:

Amortization (e.g. IO, full amortization, etc.):

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

EXHIBIT II

AUTHORIZED REPRESENTATIVES OF SELLER

 

Name

  

Specimen Signature

[—]   

     

[—]   

     

[—]   

     

[—]   

     

[—]   

     

 

Exhibit II - 1

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

EXHIBIT III

INTENTIONALLY OMITTED

 

Exhibit III - 1

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

EXHIBIT IV-1

FORM OF POWER OF ATTORNEY TO BUYER

Know All Men by These Presents, that, subject to the terms and conditions of the
Repurchase Agreement (defined below), 643 Single Family Finco 2014, LLC
(“Seller”), does hereby appoint GOLDMAN SACHS BANK USA (“Buyer”), in connection
with the Repurchase Agreement (defined below) its attorney-in-fact to act in
Seller’s name, place and stead in any way which Seller could do with respect to
(i) the completion of the endorsements of the Notes and the Assignments of
Security Instruments, (ii) the recordation of the Assignments of Security
Instruments and (iii) the enforcement of Seller’s rights under the Purchased
Loans purchased by Buyer pursuant to the Master Repurchase Agreement dated as of
August 9, 2013, as amended from time to time, between Seller and Buyer (the
“Repurchase Agreement”) (including, for the avoidance of doubt, the enforcement
and exercise of Seller’s rights in respect of any interest reserve account or
other deposit account or securities account established by any borrower or any
other related obligor in connection with any Purchased Loans (including the
enforcement and exercise of Seller’s rights in respect of all funds or other
assets deposited in, or credited to, such accounts)) and to take such other
steps as may be necessary or desirable to enforce Buyer’s rights against such
Purchased Loans, the related Purchased Loan Files and the Servicing Records to
the extent that Seller is permitted by law to act through an agent. Capitalized
terms used herein and not otherwise defined shall have the meanings given such
terms in the Repurchase Agreement.

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

 

Exhibit IV - 1

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

IN WITNESS WHEREOF Seller has caused this Power of Attorney to be executed this
         day of                 , 20    .

 

643 SINGLE FAMILY FINCO 2014, LLC,

a Delaware limited liability company

By:       Name:   Douglas Armer   Title:   Managing Director, Head of Capital
Markets and Treasurer

 

STATE OF NEW YORK    )       )    COUNTY OF NEW YORK    )   

On this          of                 , before me, the undersigned, a Notary
Public in and for said state, personally appeared
                                                     , personally known to me or
proved to me on the basis of satisfactory evidence to be the person whose name
is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her capacity, and that by his/her signature on the
instrument, the person, or the entity upon behalf of which the person acted,
executed the instrument.

 

 

 

Notary Public

(Seal)

 

Exhibit IV - 1

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

EXHIBIT IV-2

FORM OF POWER OF ATTORNEY TO SELLER

Know All Men by These Presents, that GOLDMAN SACHS BANK USA (“Buyer”) does
hereby appoint 643 Single Family Finco 2014, LLC (“Seller”), its
attorney-in-fact to act in Buyer’s name, place and stead in any way which Buyer
could with respect to modifications described below, to mortgage loan documents
with respect to Purchased Loans sold by Seller to Buyer under that certain
Master Repurchase Agreement, dated as of August 9, 2013 (as amended from time to
time, the “Repurchase Agreement”). Capitalized terms used herein and not
otherwise defined shall have the meanings given such terms in the Repurchase
Agreement.

Subject to the terms and conditions of the Repurchase Agreement, Seller is
permitted to administer and service the Purchased Loans without the consent of
Buyer, any assignee or any other Person, pursuant to this power of attorney
delivered by Buyer, which power of attorney shall not be revoked by Buyer unless
an Event of Default under the Repurchase Agreement has occurred and is then
continuing. Notwithstanding the foregoing, Seller shall not consent or assent to
a Significant Modification without the prior written consent of Buyer. Actions
taken under the foregoing power of attorney shall be binding upon each holder of
the Purchased Loans.

“Purchased Loans” shall mean (i) with respect to any Transaction, the Eligible
Loans sold by Seller to Buyer in such Transaction and (ii) with respect to the
Transactions in general, all Eligible Loans sold by Seller to Buyer.

“Significant Modification” shall mean (i) any material extension, amendment,
waiver, termination, rescission, cancellation, release, subordination or other
material modification to the terms of, or any collateral, guaranty or indemnity
for, any Purchased Loan or Purchased Loan Document, or (ii) the foreclosure or
exercise of any material right or remedy by the holder of any Purchased Loan or
Purchased Loan Document.

 

Exhibit IV - 2

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

THIS POWER OF ATTORNEY MAY BE REVOKED BY BUYER BY DELIVERY OF WRITTEN NOTICE TO
SELLER DURING THE CONTINUANCE OF ANY EVENT OF DEFAULT UNDER THE REPURCHASE
AGREEMENT. IF THIS POWER OF ATTORNEY HAS NOT BEEN REVOKED AND IF REQUESTED BY
SELLER, BUYER WILL PROMPTLY CONFIRM IN WRITING TO SELLER, AND ANY OTHER PERSON
OR ENTITY REASONABLY DESIGNATED BY SELLER, THAT THIS POWER OF ATTORNEY HAS NOT
BEEN REVOKED AND IS IN FULL FORCE AND EFFECT.

IN WITNESS WHEREOF Seller has caused this Power of Attorney to be executed this
         day of                 , 20    .

 

GOLDMAN SACHS BANK USA,

a New York state member bank

By:       Name:     Title:  

 

STATE OF NEW YORK    )       )    COUNTY OF NEW YORK    )   

On this          of                     , before me, the undersigned, a Notary
Public in and for said state, personally appeared
                                        , personally known to me or proved to me
on the basis of satisfactory evidence to be the person whose name is subscribed
to the within instrument and acknowledged to me that he/she executed the same in
his/her capacity, and that by his/her signature on the instrument, the person,
or the entity upon behalf of which the person acted, executed the instrument.

 

 

 

Notary Public

(Seal)

 

Exhibit IV - 2

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

EXHIBIT V

REPRESENTATIONS AND WARRANTIES

REGARDING THE PURCHASED LOANS

With respect to each Purchased Loan, with respect to the Underlying Collateral
and with respect to the related Properties on the related Purchase Date, and,
except as expressly set forth below, at all times required by this Agreement,
Seller shall be deemed to make the following representations and warranties to
Buyer as of such date; provided, however, that with respect to any Purchased
Loan, such representations and warranties shall be deemed to be modified by any
Exception Report delivered by Seller to Buyer prior to the issuance of a
Confirmation with respect thereto:

 

(1) Purchased Loan Schedule and Purchased Loan Information. The information set
forth in the Purchased Loan Schedule and the Purchased Loan Information with
respect to each Purchased Loan on the Purchase Date is true and correct in all
material respects.

 

(2) Whole Loan; Ownership of Purchased Loans. Each Purchased Loan is a whole
loan and not a participation interest in a Purchased Loan. At the time of the
sale, transfer and assignment to Buyer, no Note or Security Instrument was
subject to any assignment (other than assignments to the Seller), participation
(other than any participation to the Seller, if applicable) or pledge, and the
Seller had good title to, and was the sole owner of, each Purchased Loan free
and clear of any and all liens, charges, pledges, encumbrances, participations,
any other ownership interests on, in or to such Purchased Loan. Seller has full
right and authority to sell, assign and transfer each Purchased Loan, and the
assignment to Buyer constitutes a legal, valid and binding assignment of such
Purchased Loan free and clear of any and all liens, pledges, charges or security
interests of any nature encumbering such Purchased Loan.

 

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

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

 

Exhibit V - 1

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

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

 

(5) Security Instrument Status; Waivers and Modifications. Since origination and
except by written instruments set forth in the related Purchased Loan File or as
otherwise approved by Buyer, (a) the material terms of such Security Instrument,
Note, Loan guaranty, and related Purchased Loan Documents have not been waived,
impaired, modified, altered, satisfied, canceled, subordinated or rescinded in
any respect which materially interferes with the security intended to be
provided by such Security Instrument; (b) no related Property or any portion
thereof has been released from the lien of the related Security Instrument in
any manner which materially interferes with the security intended to be provided
by such Security Instrument or the use or operation of the remaining portion of
such Property; and (c) neither the related Underlying Obligor nor the related
guarantor has been released from its material obligations under the Purchased
Loan.

 

(6) Lien; Valid Assignment. Subject to the Standard Qualifications, each
assignment of Security Instrument from the Seller constitutes a legal, valid and
binding assignment from the Seller. Each related Security Instrument is freely
assignable without the consent of the related Underlying Obligor. Each related
Security Instrument is a legal, valid and enforceable first lien on the
Underlying Collateral (other than any master lease agreement) in the principal
amount of such Purchased Loan or allocated loan amount, except as the
enforcement thereof may be limited by the Standard Qualifications. Such
Underlying Collateral (other than any master lease agreement) is free and clear
of any liens or encumbrances, and, to the Seller’s knowledge, no rights exist
which under law could give rise to any such lien or encumbrance that would be
prior to or equal with the lien of the related Security Instrument.
Notwithstanding anything herein to the contrary, no representation is made as to
the perfection of any security interest in rents or other personal property to
the extent that possession or control of such items or actions other than the
filing of Uniform Commercial Code financing statements is required in order to
effect such perfection.

 

(7) Junior Liens. There are no subordinate or junior liens securing the payment
of money encumbering the related Underlying Collateral. The Seller has no
Knowledge of any mezzanine or other debt secured directly by interests in the
related Underlying Obligor.

 

(8) UCC Filings. Seller has filed and/or recorded or caused to be filed and/or
recorded (or, if not filed and/or recorded, have been submitted in proper form
for filing and/or recording), UCC financing statements in the appropriate public
filing and/or recording offices necessary at the time of the origination of the
Purchased Loan to perfect a valid security interest in the Underlying
Collateral.

 

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

 

Exhibit V - 2

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

 

(11) Authorized to do Business. To the extent required under applicable law, as
of the Purchase Date or as of the date that such entity held the Note, each
holder of the Note was authorized to originate, acquire and/or hold (as
applicable) the Note in the jurisdiction in which each related Property is
located, or the failure to be so authorized does not materially and adversely
affect the enforceability of such Purchased Loan.

 

(12) Actions Concerning Purchased Loan. As of the date of origination and to the
Seller’s Knowledge as of the Purchase Date, there was no pending or filed
action, suit or proceeding, arbitration or governmental investigation involving
any Underlying Obligor, guarantor, or Underlying Obligor’s interest in the
Underlying Collateral, an adverse outcome of which would reasonably be expected
to materially and adversely affect (a) such Underlying Obligor’s title to the
Underlying Collateral, (b) the validity or enforceability of the Security
Instrument, (c) such Underlying Obligor’s ability to perform under the related
Purchased Loan, (d) such guarantor’s ability to perform under the related
guaranty, (e) the principal benefit of the security intended to be provided by
the Purchased Loan documents or (f) the current principal use of the Underlying
Collateral.

 

(13) Escrow Deposits. All escrow deposits and payments required to be escrowed
with Secured Party pursuant to each Purchased Loan are in the possession, or
under the control, of the Seller or its servicer, and there are no deficiencies
(subject to any applicable grace or cure periods) in connection therewith.

 

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

 

(15) Insurance. The related Properties are, and are required pursuant to the
related Security Instrument to be, insured by a property insurance policy
providing coverage for loss in accordance with coverage found under a “special
cause of loss form” or “all risk form” that includes replacement cost valuation
issued by an insurer meeting the requirements of the related Purchased Loan
Documents and having a claims-paying or financial strength rating of at least
“A-:VIII” from A.M. Best Company or “A3” (or the equivalent) from Moody’s
Investors Service, Inc. or “A-” from Standard & Poor’s Ratings Service
(collectively the “Insurance Rating Requirements”), in an amount in the
aggregate (subject to a customary deductible) not less than the lesser of
(1) the then outstanding principal balance of the Purchased Loan and (2) the
full insurable value on a replacement cost basis of the improvements, furniture,
furnishings, fixtures and equipment owned by the Underlying Obligor and included
in the Property (with no deduction for physical depreciation), but, in any
event, not less than the amount necessary or containing such endorsements as are
necessary to avoid the operation of any coinsurance provisions with respect to
the related Properties.

 

Exhibit V - 3

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

If any material part of the improvements located on a Property is in an area
identified in the Federal Register by the Federal Emergency Management Agency as
“a Special Flood Hazard Area”, the related Underlying Obligor is required to
maintain insurance in the maximum amount available under the National Flood
Insurance Program.

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

The Properties are covered, and required to be covered pursuant to the related
Purchased Loan Documents, by a commercial general liability insurance policy
issued by an insurer meeting the Insurance Rating Requirements including
coverage for property damage, contractual damage and personal injury (including
bodily injury and death) in amounts as are generally required by prudent
institutional commercial mortgage lenders, and in any event not less than $1
million per occurrence and $2 million in the aggregate.

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

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

All premiums on all insurance policies referred to in this section due and
payable as of the Purchase Date have been paid, and such insurance policies name
the Secured Party under the Purchased Loan and its successors and assigns as a
loss payee under a mortgagee endorsement clause or, in the case of the general
liability insurance policy, as named or additional insured. Such insurance
policies will inure to the benefit of the Buyer. Each related Purchased Loan
obligates the related Underlying Obligor to maintain all such insurance and, at
such Underlying Obligor’s failure to do so, authorizes the Secured Party to
maintain such insurance at the Underlying Obligor’s reasonable cost and expense
and to charge such Underlying Obligor for related premiums. All such insurance
policies (other than commercial liability policies) require prior notice to
lender of the termination or cancellation (or such lesser period as may be
required by applicable law) arising for any reason, including non-payment of a
premium.

 

Exhibit V - 4

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(16) Recourse Obligations. The Purchased Loan Documents for each Purchased Loan
provide that such Purchased Loan (a) becomes full recourse to the Underlying
Obligor and guarantor (which is a natural person or persons, or an entity
distinct from the Underlying Obligor (but may be affiliated with the Underlying
Obligor) that has assets other than equity in the related Properties that are
not de minimis) in any of the following events: (i) if any voluntary petition
for bankruptcy, insolvency, dissolution or liquidation pursuant to federal
bankruptcy law, or any similar federal or state law, shall be filed by the
Underlying Obligor; (ii) Underlying Obligor or guarantor shall have colluded
with (or, alternatively, solicited or caused to be solicited) other creditors to
cause an involuntary bankruptcy filing with respect to the Underlying Obligor or
(iii) voluntary transfers of either the Property or equity interests in
Underlying Obligor made in violation of the Purchased Loan Documents; and
(b) contains provisions providing for recourse against the Underlying Obligor
and guarantor (which is a natural person or persons, or an entity distinct from
the Underlying Obligor (but may be affiliated with the Underlying Obligor) that
has assets other than equity in the related Property that are not de minimis),
for losses and damages sustained by reason of Underlying Obligor’s
(i) misappropriation of rents after the occurrence of an event of default under
the Purchased Loan, (ii) misappropriation of (A) insurance proceeds or
condemnation awards or (B) security deposits or, alternatively, the failure of
any security deposits to be delivered to Secured Party upon foreclosure or
action in lieu thereof (except to the extent applied in accordance with leases
prior to a Purchased Loan event of default); (iii) fraud or intentional material
misrepresentation; (iv) breaches of the environmental covenants in the Purchased
Loan Documents; or (v) commission of intentional material physical waste at the
Property.

 

(17) Security Instrument Releases. The terms of the related Security Instrument
or related Purchased Loan Documents do not provide for release of any material
portion of the Underlying Collateral and/or Properties from the lien of the
Security Instrument except (a) a partial release, accompanied by principal
repayment, or partial defeasance, of not less than a specified percentage at
least equal to the lesser of (i) 110% of the related allocated loan amount of
such portion of the Property and (ii) the outstanding principal balance of the
Purchased Loan, (b) upon payment in full of such Purchased Loan, (c) upon a
defeasance, (d) releases of out-parcels that are unimproved or other portions of
the Property which will not have a material adverse effect on the underwritten
value of the Property and which were not afforded any material value in the
appraisal obtained at the origination of the Purchased Loan and are not
necessary for physical access to the Property or compliance with zoning
requirements, or (e) as required pursuant to an order of condemnation or taking
by a State or any political subdivision or authority thereof.

 

(18) Financial Reporting and Rent Rolls. The Purchased Loan documents for each
Purchased Loan require the Underlying Obligor to provide the owner or holder of
the Security Instrument with quarterly (other than for single-tenant properties)
and annual operating statements, and quarterly (other than for single-tenant
properties) for the Properties in the aggregate, which annual financial
statements with respect to each Purchased Loan with more than one Underlying
Obligor are in the form of an annual combined balance sheet of the Underlying
Obligor entities (and no other entities), together with the related combined
statements of operations, members’ capital and cash flows, including a combining
balance sheet and statement of income for the Properties on a combined basis.

 

(19)

Due on Sale or Encumbrance. Except as otherwise disclosed in the Due Diligence
Package, subject to specific exceptions set forth below, each Purchased Loan
contains a “due on sale” or other such provision for the acceleration of the
payment of the unpaid principal balance of such Purchased Loan if, without the
consent of the holder of the Security Instrument (which consent, in some cases,
may not be unreasonably withheld) and/or complying with the requirements of the

 

Exhibit V - 5

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  related Purchased Loan Documents (which provide for transfers without the
consent of the Secured Party which are customarily acceptable to prudent
commercial and multifamily lending institutions lending on the security of
property comparable to the related Properties, including, without limitation,
transfers of worn-out or obsolete furnishings, fixtures, or equipment promptly
replaced with property of equivalent value and functionality and transfers by
leases entered into in accordance with the Purchased Loan Documents), (a) the
related Underlying Collateral and/or Property, or any equity interest of greater
than 50% in the related Underlying Obligor, is directly or indirectly pledged,
transferred or sold, other than as related to (i) family and estate planning
transfers or transfers upon death or legal incapacity, (ii) transfers to certain
affiliates as defined in the related Purchased Loan Documents, (iii) transfers
of less than, or other than, a controlling interest in the related Underlying
Obligor, (iv) transfers to another holder of direct or indirect equity in the
Underlying Obligor, a specific Person designated in the related Purchased Loan
Documents or a Person satisfying specific criteria identified in the related
Purchased Loan Documents, such as a qualified equityholder, (v) transfers of
stock or similar equity units in publicly traded companies or (vi) a
substitution or release of collateral within the parameters of Section 17 or
pursuant to a defeasance or (b) the related Underlying Collateral is encumbered
by a subordinate lien and/or any related Property is encumbered with a
subordinate lien or security interest against the related Property, other than
(i) any Purchased Loan that is cross-collateralized and cross-defaulted with
another Purchased Loan, as set forth in the Due Diligence Package, or (ii) with
respect to the related Property, Permitted Encumbrances or Title Exceptions.

 

(20) Single-Purpose Entity. Except as otherwise disclosed in the Due Diligence
Package, each Purchased Loan requires the Underlying Obligor to be a
Single-Purpose Entity for at least as long as the Purchased Loan is outstanding.
Both the Purchased Loan Documents and the organizational documents of the
Underlying Obligor provide that the Underlying Obligor is a Single-Purpose
Entity and each Purchased Loan with an unpaid principal balance as of the
Purchase Date of $20,000,000.00 or more has a counsel’s opinion regarding
non-consolidation of the Underlying Obligor. For this purpose, a “Single-Purpose
Entity” shall mean an entity, other than an individual, whose organizational
documents provide substantially to the effect that it was formed or organized
solely for the purpose of owning and operating one or more of the single family
rental home properties indirectly securing the Purchased Loans and prohibit it
from engaging in any business unrelated to such Property or Properties, and
whose organizational documents further provide, or which entity represented in
the related Purchased Loan Documents, substantially to the effect that it does
not have any assets other than those related to its interest in and operation of
such Property or Properties, or any indebtedness other than as permitted by the
related Security Instrument(s) or the other related Purchased Loan Documents,
that it has its own books and records and accounts separate and apart from those
of any other person, and that it holds itself out as a legal entity, separate
and apart from any other person or entity.

 

(21) Fixed Interest Rates. Each Purchased Loan bears interest at a rate that
remains fixed throughout the remaining term of such Purchased Loan, except in
situations where default interest is imposed, or if such Purchased Loan bears
interest at a floating rate, the Purchased Loan Documents require the Underlying
Obligor to purchase an interest rate protection for the entire term of such
Purchased Loan, which interest rate protection agreement has been collaterally
assigned to Seller as collateral for the Purchased Loan.

 

(22) Ground Leases. No Property is owned by its respective Property Owner as a
leasehold, rather than fee interest.

 

Exhibit V - 6

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

 

(24) Origination and Underwriting. The origination practices of the Seller (or,
to Seller’s Knowledge, the related originator if the Seller was not the
originator) with respect to each Purchased Loan have been, in all material
respects, in compliance with applicable law and as of the date of its
origination, such Purchased Loan and to the extent originated by Seller or its
Affiliates or, if originated by another Person, to Seller’s Knowledge, the
origination thereof complied in all material respects with, or was exempt from,
all requirements of federal, state or local law relating to the origination of
such Purchased Loan; provided that such representation and warranty does not
address or otherwise cover any matters with respect to federal, state or local
law otherwise covered in this Exhibit V.

 

(25) No Material Default; Payment Record. As of the Purchase Date, no Purchased
Loan has been more than 30 days delinquent, without giving effect to any grace
or cure period, in making required debt service payments since origination, and
as of the date hereof, no Purchased Loan is more than 30 days delinquent (beyond
any applicable grace or cure period) in making required payments as of the
Purchase Date. As of the Purchase Date, to the Seller’s Knowledge, there is
(a) no material default, breach, violation or event of acceleration existing
under the related Purchased Loan, or (b) no event (other than payments due but
not yet delinquent) which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a material default,
breach, violation or event of acceleration, which default, breach, violation or
event of acceleration, in the case of either (a) or (b), materially and
adversely affects the value of the Purchased Loan or the value, use or operation
of the related Property. No person other than the holder of such Purchased Loan
may declare any event of default under the Purchased Loan or accelerate any
indebtedness under the Purchased Loan Documents.

 

(26) Bankruptcy. To Seller’s Knowledge, as of the date of origination of the
related Purchased Loan and to the Seller’s knowledge as of the Purchase Date,
neither the Property (other than any tenants of such Property), nor any portion
thereof, is the subject of, and no Underlying Obligor, Property Owner or
guarantor with respect to any Purchased Loan is a debtor in state or federal
bankruptcy, insolvency or similar proceeding.

 

(27) Organization of Underlying Obligor. With respect to each Purchased Loan, in
reliance on certified copies of the organizational documents of the Underlying
Obligor delivered by the Underlying Obligor in connection with the origination
of such Purchased Loan, the Underlying Obligor is an entity organized under the
laws of a state of the United States of America, the District of Columbia or the
Commonwealth of Puerto Rico.

 

(28) Appraisal. Seller has obtained an appraisal of the related Property with an
Appraisal date within 6 months of the Purchased Loan origination date, and
within 12 months of the Purchased Date. Each Appraisal was performed in
accordance with the requirements of the Financial Institutions Reform, Recovery
and Enforcement Act of 1989, as in effect on the date such Purchased Loan was
originated.

 

(29) Cross-Collateralization. No Purchased Loan is cross-collateralized or
cross-defaulted with any other Indebtedness that is not also a Purchased Loan.

 

Exhibit V - 7

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

 

(31) Compliance with Anti-Money Laundering Laws. Seller has complied in all
material respects with all Federal Trade Embargoes with respect to the
origination of the Purchased Loan.

 

(32) Ownership of Properties. Each Property Owner has good and marketable fee
simple legal and equitable title to its respective Property (subject to
Permitted Encumbrances). None of the Permitted Encumbrances (a) materially and
adversely affect the value of any Property, (b) impair the use or operation of
any Property (as currently used), or (c) impair the Underlying Obligor’s ability
to perform its obligations with respect to the Underlying Loan. Each Property
Owner’s ownership of its respective Property is free and clear of any liens
other than Permitted Encumbrances.

 

(33) Permitted Liens; Title Insurance. Each Property indirectly securing a
Purchased Loan is covered by an American Land Title Association loan title
insurance policy or a comparable form of loan title insurance policy approved
for use in the applicable jurisdiction (or, if such policy is yet to be issued,
by a pro forma policy, a preliminary title policy with escrow instructions or a
“marked up” commitment, in each case binding on the title insurer) (the “Title
Policy”) in an amount equal to not less than the purchase price of such
Property, that insures for the benefit of the Property Owner, the fee simple
ownership of such Property by the Property Owner, subject only to the Permitted
Encumbrances and Title Exceptions. Such Title Policy (or, if it has yet to be
issued, the coverage to be provided thereby) is in full force and effect, all
premiums thereon have been paid and no claims have been made by the Property
Owner thereunder and no claims have been paid thereunder. Neither the Seller,
nor to the Seller’s Knowledge, the Property Owner or any other Person, has done,
by act or omission, anything that would materially impair the coverage under
such Title Policy.

 

(34) Condition of Property. To the Seller’s Knowledge, based solely upon due
diligence customarily performed in connection with the origination of comparable
loans, and except as disclosed on any engineering report or property condition
report delivered to Buyer, as of the Purchase Date, each Property is free of and
clear of any material damage (other than (i) deferred maintenance for which
escrows were established at origination and (ii) any damage fully covered by
insurance) that would have a material adverse effect on the use or value of the
Property as security for the Purchased Loan. Each Property has been renovated in
accordance with the renovation standards set forth in the Purchased Loan
Documents, if any.

 

(35)

Taxes and Assessments. All taxes, governmental assessments and other outstanding
governmental charges (including, without limitation, water and sewage charges),
or installments thereof, which could be a lien on the related Property that
would be of equal or superior priority to the lien of the Security Instrument,
that would materially impair Seller’s or Buyer’s interest in any of the
collateral for the Purchased Loan, and that prior to that prior to the Purchase
Date have become delinquent in respect of each related Property have been paid,
or an escrow of funds has been established in an amount sufficient to cover such
payments and reasonably estimated interest and penalties, if any, thereon. For
purposes of this representation and warranty, real

 

Exhibit V - 8

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

  estate taxes and governmental assessments and other outstanding governmental
charges and installments thereof shall not be considered delinquent until the
earlier of (a) the date on which interest and/or penalties would first be
payable thereon and (b) the date on which enforcement action is entitled to be
taken by the related taxing authority.

 

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

 

(37) Actions Concerning the Properties. As of the date of origination and to the
Seller’s Knowledge as of the Purchase Date, there was no pending or filed
action, suit or proceeding, arbitration or governmental investigation involving
any Property Owner or Property Owner’s interest in its respective Property, an
adverse outcome of which would reasonably be expected to materially and
adversely affect (a) such Property Owner’s title to the Property, (b) the
validity or enforceability of the Security Instrument, (c) such Property Owner’s
ability to perform under the related Purchased Loan, (d) the principal benefit
of the security intended to be provided by the Purchased Loan documents or
(f) the current principal use of the Property.

 

(38) Access; Utilities; Separate Tax Lots. To the Seller’s Knowledge based
solely on the Title Policies (or, if such policy is not yet issued, a pro forma
title policy, a preliminary title policy with escrow instructions or a “marked
up” commitment) and any current surveys obtained in connection with the
origination of each Purchased Loan, each Property (a) is located on or adjacent
to a public road and has direct legal access to such road, or has access via an
irrevocable easement or irrevocable right of way permitting ingress and egress
to/from a public road, (b) is served by or has uninhibited access rights to
public or private water and sewer (or well and septic) and all required
utilities, all of which are appropriate for the current use of the Property, and
(c) constitutes one or more separate tax parcels which do not include any
property which is not part of the Property or is subject to an endorsement under
the related Title Policy insuring the Property, or in certain cases, an
application has been, or will be, made to the applicable governing authority for
creation of separate tax lots, in which case the Purchased Loan requires the
Underlying Obligor to escrow an amount sufficient to pay taxes for the existing
tax parcel of which the Property is a part until the separate tax lots are
created.

 

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

 

Exhibit V - 9

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(40) Local Law Compliance. To the Seller’s Knowledge, based upon any of a letter
from any governmental authorities, a legal opinion, an architect’s letter, a
zoning consultant’s report, an endorsement to the related Title Policy, or other
affirmative investigation of local law compliance consistent with the
investigation conducted by the Seller for similar single family rental home
loans intended for securitization, there are no material violations of
applicable zoning ordinances, building codes and land laws (collectively “Zoning
Regulations”) with respect to the improvements located on or forming part of
each Property securing a Purchased Loan as of the date of origination of such
Purchased Loan and as of the Purchase Date, other than those which (i) are
insured by the Title Policy or a law and ordinance insurance policy, (ii) are
adequately reserved for in accordance with the Purchased Loan Documents or
(iii) would not have a material adverse effect on the value, operation or net
operating income of such Property. The terms of the Purchased Loan Documents
require the Underlying Obligor and Property Owner to comply in all material
respects with all applicable governmental regulations, zoning and building laws.

 

(41) Licenses and Permits. Each Underlying Obligor and Property Owner covenants
in the Purchased Loan Documents that it shall keep all material licenses,
permits and applicable governmental authorizations necessary for the operation
of the Properties in full force and effect, and to the Seller’s Knowledge based
upon any of a letter from any government authorities or other affirmative
investigation of local law compliance consistent with the investigation
conducted by the Seller for similar single family rental home loans intended for
securitization, all such material licenses, permits and applicable governmental
authorizations are in effect. The Purchased Loan requires the related Underlying
Obligor and Property Owner to be qualified to do business in the jurisdiction in
which the related Property is located.

 

(42) Acts of Terrorism Exclusion. The related special-form all-risk insurance
policy and business interruption policy (issued by an insurer meeting the
Insurance Rating Requirements) do not specifically exclude Acts of Terrorism, as
defined in the Terrorism Risk Insurance Act of 2002, as amended by the Terrorism
Risk Insurance Program Reauthorization Act of 2007 (collectively referred to as
“TRIA”), from coverage, or if such coverage is excluded, it is covered by a
separate terrorism insurance policy. With respect to each Purchased Loan, the
related Purchased Loan Documents do not expressly waive or prohibit the Secured
Party from requiring coverage for Acts of Terrorism, as defined in TRIA, or
damages related thereto.

 

(43)

Environmental Conditions. A Phase I environmental site assessment (or update of
a previous Phase I and or Phase II site assessment) and, with respect to certain
Purchased Loans, a Phase II environmental site assessment (collectively, an
“ESA”) meeting ASTM requirements conducted by a reputable environmental
consultant in connection with such Purchased Loan within 12 months prior to its
origination date (or an update of a previous ESA was prepared), and such ESA
(i) did not identify the existence of recognized environmental conditions (as
such term is defined in ASTM E1527-05 or its successor, hereinafter
“Environmental Condition”) at the related Property or the need for further
investigation, or (ii) if the existence of an Environmental Condition or need
for further investigation was indicated in any such ESA, then at least one of
the following statements is true: (A) an amount reasonably estimated by a
reputable environmental consultant to be sufficient to cover the estimated cost
to cure any material noncompliance with applicable Environmental Laws or the
Environmental Condition has been escrowed by the related Underlying Obligor and
is held or controlled by the related Secured Party; (B) if the only
Environmental Condition relates to the presence of asbestos-containing
materials, radon in indoor air, lead based paint or lead in drinking water, the
only recommended action in the ESA is the institution of such a plan, an
operations or maintenance plan has been required to be instituted by the related
Underlying Obligor that, based on the ESA, can reasonably be expected to
mitigate the identified risk; (C) the Environmental Condition identified in the
related environmental report was remediated or abated in all material respects
prior to the date hereof, and, if and as appropriate, a no further action or
closure letter was obtained from the applicable governmental

 

Exhibit V - 10

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  regulatory authority (or the environmental issue affecting the related
Property was otherwise listed by such governmental authority as “closed” or a
reputable environmental consultant has concluded that no further action is
required); (D) an environmental policy or a lender’s pollution legal liability
insurance policy meeting the requirements set forth below that covers liability
for the identified circumstance or condition was obtained from an insurer rated
no less than A- (or the equivalent) by Moody’s, S&P and/or Fitch; (E) a party
not related to the Underlying Obligor was identified as the responsible party
for such condition or circumstance and such responsible party has financial
resources reasonably estimated to be adequate to address the situation; or (F) a
party related to the Underlying Obligor having financial resources reasonably
estimated to be adequate to address the situation is required to take action. To
Seller’s Knowledge, except as set forth in the ESA, there is no Environmental
Condition (as such term is defined in ASTM E1527-05 or its successor) at the
related Property.

 

(44) Master Lease Agreement. Each related Security Instrument is a legal, valid
and enforceable first lien on each master lease agreement in the principal
amount of such Purchased Loan or allocated loan amount in the aggregate together
with all other Underlying Colalteral (subject only to Permitted Encumbrances (as
defined below) and the exceptions to Section 33 hereof (“Permitted Liens; Title
Insurance”) set forth in the related Exception Report (each such exception, a
“Title Exception”)), except as the enforcement thereof may be limited by the
Standard Qualifications. Except as otherwise set forth in the Title Policy
relating to such Purchased Loan, such master lease agreements (subject to and
excepting Permitted Encumbrances and Title Exceptions) as of the origination
were, to the Seller’s Knowledge, free and clear of any recorded mechanics’
liens, recorded materialmen’s liens and other recorded encumbrances which are
prior to or equal with the lien of the related Security Instrument, except those
which are bonded over, escrowed for or insured against by a lender’s title
insurance policy and, to the Seller’s Knowledge and subject to the rights of
tenants (as tenants only) (subject to and excepting Permitted Encumbrances), no
rights exist which under law could give rise to any such lien or encumbrance
that would be prior to or equal with the lien of the related Security
Instrument, except those which are bonded over, escrowed for or insured against
by a lender’s title policy.

For purposes of these representations and warranties, “Secured Party” shall mean
the mortgagee, grantee or beneficiary under any Security Instrument, any holder
of legal title to any portion of any Purchased Loan or, if applicable, any agent
or servicer on behalf of such party.

 

Exhibit V - 11

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EXHIBIT VI

FORM OF BAILEE AGREEMENT

[SELLER ADDRESS]

                              , 20    

[                        ]

 

  Re: Bailee Agreement (the “Bailee Agreement”) in connection with the sale of
[                        ] by 643 Single Family Finco 2014, LLC (the “Seller”)
to Goldman Sachs Bank USA (the “Buyer”)

Ladies and Gentlemen:

Reference is made to that certain Master Repurchase Agreement dated as of
April 25, 2014, by and between Seller and Buyer (as further amended, modified or
supplemented from time to time, the “Repurchase Agreement”). In consideration of
the mutual promises set forth herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Seller, the
Buyer and [            ] (the “Bailee”) hereby agree as follows:

1. The Seller has delivered to the Bailee and the Bailee is holding, in
connection with the Purchased Loan(s) delivered to the Bailee hereunder (for
Bailee’s delivery to the Custodian), the custodial delivery certificate (the
“Custodial Delivery Certificate”) attached hereto as Attachment 1, in connection
with the Purchased Loan identified thereon.

2. On or prior to the date indicated on the Custodial Delivery Certificate
delivered by the Seller (the “Funding Date”), the Seller shall have delivered to
the Bailee, as bailee for hire, and Bailee hereby confirms receipt of, the
documents set forth on Exhibit B to the Custodial Delivery Certificate
(collectively, the “Purchased Loan File”) for the loans (the “Purchased Loans”)
listed in Exhibit A to the Custodial Delivery Certificate (the “Purchased Loan
Schedule”).

3. The Bailee shall issue and deliver to the Buyer and the Custodian (as defined
in Section 5 below) on or prior to the Funding Date by electronic mail (a) in
the name of the Buyer, an initial trust receipt and certification in the form of
Attachment 2 attached hereto (the “Trust Receipt”), which Trust Receipt shall
state that the Bailee has received the documents comprising the Purchased Loan
File as set forth in the Custodial Delivery Certificate.

4. On the applicable Funding Date, in the event that the Buyer fails to purchase
any New Loan from the Seller that is identified in the related Custodial
Delivery Certificate (as confirmed by Buyer in writing (which may include
electronic mail)), the Bailee shall release the Purchased Loan File to the
Seller in accordance with the Seller’s instructions.

5. Following the Funding Date, the Bailee shall forward the Purchased Loan Files
to U.S. Bank, National Association (the “Custodian”) by insured overnight
courier for receipt by the Custodian no later than 1:00 p.m. on the third
(3rd) Business Day following the applicable Funding Date (the “Delivery Date”).

 

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6. From and after the applicable Funding Date until the applicable Delivery
Date, the Bailee (a) shall maintain continuous custody and control of the
related Purchased Loan File as bailee for the Buyer (excluding any period when
the same is under the delivery process described in Section 5 hereof) and
(b) shall hold the related Purchased Loan File as sole and exclusive bailee for
the Buyer unless and until otherwise instructed in writing by the Buyer.

7. In the event that the Bailee fails to deliver a Note or other material
portion of a Purchased Loan File that was in its possession to the Custodian
within five (5) Business Days following the applicable Funding Date, the same
shall constitute a “Bailee Delivery Failure” under this Bailee Agreement.

8. The undersigned Seller agrees to indemnify and hold Bailee and its partners,
directors, officers, agents and employees harmless against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever, including
reasonable attorneys’ fees and costs, that may be imposed on, incurred by, or
asserted against it or them in any way relating to or arising out of this Bailee
Agreement or any action taken or not taken by it or them hereunder unless such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements (other than special, indirect, punitive or
consequential damages, which shall in no event be paid by the undersigned
Seller) were imposed on, incurred by or asserted against Bailee because of the
breach by Bailee of its obligations hereunder, which breach was caused by
negligence, lack of good faith or intentional misconduct on the part of Bailee
or any of its owners, directors, officers, agents or employees. The foregoing
indemnification shall survive any resignation or removal of Bailee or the
termination or assignment of this Bailee Agreement.

9. (a) In the event of a Bailee Delivery Failure, Bailee shall indemnify Buyer
in accordance with Section 9(b) of this Bailee Agreement.

(b) The Bailee agrees to indemnify and hold Buyer and Seller, and their
respective owners, officers, directors, employees, agents, affiliates and
designees, harmless against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever, including reasonable attorneys’ fees and
costs, that may be imposed on, incurred by, or asserted against it or them in
any way relating to or arising out of a Bailee Delivery Failure or Bailee’s
negligence, lack of good faith or intentional misconduct. The foregoing
indemnification shall survive any termination or assignment of this Bailee
Agreement.

10. The Seller hereby represents, warrants and covenants that the Bailee is not
an affiliate of or otherwise controlled by the Seller. Notwithstanding the
foregoing, the parties hereby acknowledge that the Bailee hereunder may act as
counsel to the Seller in connection with a proposed loan, that Dechert LLP, if
acting as bailee, has represented the Seller in connection with negotiation,
execution and delivery of the Repurchase Agreement and may represent Seller in
connection with any dispute related to this Bailee Agreement or the Transaction
Documents.

11. This Bailee Agreement may not be modified, amended or altered, except by
written instrument, executed by all of the parties hereto.

 

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12. This Bailee Agreement may not be assigned by the Seller or the Bailee
without the prior written consent of the Buyer.

13. For the purpose of facilitating the execution of this Bailee Agreement as
herein provided and for other purposes, this Bailee Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute and be one
and the same instrument. Electronically transmitted signature pages shall be
binding to the same extent.

14. This Bailee Agreement shall be construed in accordance with the laws of the
State of New York, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.

15. Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Repurchase Agreement.

[SIGNATURES COMMENCE ON NEXT PAGE]

 

- 3 -

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Very truly yours,

643 SINGLE FAMILY FINCO 2014, LLC,

a Delaware limited liability company

By:       Name:     Title:  

 

ACCEPTED AND AGREED: [                ], Bailee By:       Name:     Title:  
ACCEPTED AND AGREED: GOLDMAN SACHS BANK USA, Buyer By:       Name:     Title:  

 

- 4 -

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ATTACHMENT 1 TO BAILEE AGREEMENT

CUSTODIAL DELIVERY CERTIFICATE

 

- 5 -

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ATTACHMENT 2 TO BAILEE AGREEMENT

Form of Bailee’s Trust Receipt

                             , 201  

Goldman Sachs Bank USA

6011 Connection Drive

Irving, Texas 75039

Attention: Henry Nguyen

 

  Re: Bailee Agreement, dated                 , 201   (the “Bailee Agreement”)
among 643 Single Family Finco 2014, LLC (the “Seller”), Goldman Sachs Bank USA
(the “Buyer”) and                          (the “Bailee”)

Ladies and Gentlemen:

In accordance with the provisions of Section 3 of the above-referenced Bailee
Agreement, the undersigned, as the Bailee, hereby certifies that as to the
Purchased Loan(s) referred to therein, it has reviewed the Purchased Loan
File(s) and has determined that (i) all documents listed in Schedule A attached
to the Bailee Agreement are in its possession and (ii) such documents have been
reviewed by it and appear regular on their face and relate to the Purchased
Loan(s).

The Bailee hereby confirms that it is holding the Purchase Loan File as agent
and bailee for the exclusive use and benefit of the Buyer pursuant to the terms
of the Bailee Agreement.

All capitalized terms used herein and not defined herein shall have the meanings
ascribed to them in the above-referenced Bailee Agreement.

 

, Bailee

 

By:       Name:     Title:  

 

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ANNEX I

Names and Addresses for Communications Between Parties:

BUYER

Goldman Sachs Bank USA

6011 Connection Drive

Irving, Texas 75039

Attention: Henry Nguyen

Telephone: (972) 368-2324

E-Mail: gs-warehouselending@gs.com

with a copy to:

Goldman Sachs Security Instrument Company

200 West Street

New York, New York 10282

Attention: Michelle Gill

Telephone: (212) 357-8721

E-Mail: michelle.gill@gs.com

with a copy to:

Dechert LLP

Cira Centre

2929 Arch Street

Philadelphia, Pennsylvania 19104

Attention: Richard D. Jones, Esq.

Telephone: (212) 698-3844

Email: richard.jones@dechert.com

SELLER

345 Park Avenue

New York, New York 10154

Attention: Douglas Armer

Email: BXMTGoldmanSFRRepo@blackstone.com

With a copy to:

Ropes & Gray LLP

1211 Avenue of the Americas

New York, New York 10036

Attention: David C. Djaha

Email: david.djaha@ropesgray.com

Payments to Buyer: Payments to Buyer under this Agreement shall be made by
transfer, via wire transfer, to the following account of Buyer: Citibank, N.A.,
ABA #: 021000089, Account #: 30627664, Swift Code: CITIUS33, Account Name:
Goldman Sachs Bank USA, Ref: BXMT/643, Attention: Henry Nguyen. Buyer may
consider on a case-by-case-basis in its sole and absolute discretion alternative
funding arrangements.

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Payments to Seller: Payments to any Seller under this Agreement shall be made by
transfer, via wire transfer, to the following account of Seller:

Bank: Bank of America

ABA#: 026009593

Account #: 483024227101

Account Name: Blackstone Mortgage Trust, Inc.

Ref: [643 Single Family Loan A (Housekey)/643 Single Family Loan B (Gatehouse)]