Exhibit 10.1

 

EXECUTION VERSION

 

 

MASTER REPURCHASE AGREEMENT

 

Dated as of February 9, 2018

 

by and between

 

TRMT CB LENDER LLC,
as Seller,

 

and

 

CITIBANK, N.A.,
as Buyer

 

 

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TABLE OF CONTENTS

 

 

Page

 

 

ARTICLE 1 APPLICABILITY

1

 

 

ARTICLE 2 DEFINITIONS

1

 

 

ARTICLE 3 INITIATION; CONFIRMATION; TERMINATION; FEES

21

 

 

ARTICLE 4 MARGIN MAINTENANCE

31

 

 

ARTICLE 5 PAYMENTS; COLLECTION ACCOUNT

31

 

 

ARTICLE 6 SECURITY INTEREST

36

 

 

ARTICLE 7 TRANSFER AND CUSTODY

37

 

 

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

38

 

 

ARTICLE 9 REPRESENTATIONS AND WARRANTIES

39

 

 

ARTICLE 10 NEGATIVE COVENANTS OF SELLER

45

 

 

ARTICLE 11 AFFIRMATIVE COVENANTS OF SELLER

46

 

 

ARTICLE 12 SINGLE PURPOSE ENTITY

51

 

 

ARTICLE 13 EVENTS OF DEFAULT; REMEDIES; SET-OFF

53

 

 

ARTICLE 14 SINGLE AGREEMENT

59

 

 

ARTICLE 15 [INTENTIONALLY OMITTED]

59

 

 

ARTICLE 16 NOTICES AND OTHER COMMUNICATIONS

59

 

 

ARTICLE 17 ENTIRE AGREEMENT; SEVERABILITY

60

 

 

ARTICLE 18 NON-ASSIGNABILITY

60

 

 

ARTICLE 19 GOVERNING LAW

62

 

 

ARTICLE 20 NO WAIVERS, ETC.

62

 

 

ARTICLE 21 INTENT

62

 

 

ARTICLE 22 DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

63

 

 

ARTICLE 23 CONSENT TO JURISDICTION; WAIVERS

64

 

 

ARTICLE 24 NO RELIANCE

65

 

 

ARTICLE 25 INDEMNITY AND EXPENSES

65

 

 

ARTICLE 26 DUE DILIGENCE

67

 

 

ARTICLE 27 SERVICING

68

 

 

ARTICLE 28 MISCELLANEOUS

69

 

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EXHIBITS

 

Exhibit I

 

Names and Addresses for Communications

Exhibit II

 

Form of Transaction Request

Exhibit III

 

Form of Confirmation Statement

Exhibit IV

 

Authorized Representatives of Seller

Exhibit V

 

Form of Power of Attorney

Exhibit VI

 

Form of Covenant Compliance Certificate

Exhibit VII

 

Due Diligence Checklist

Exhibit VIII

 

Form of Margin Call Notice

Exhibit IX

 

Form of Servicer Letter

Exhibit X

 

Representations and Warranties Regarding Each Individual Purchased Asset

 

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MASTER REPURCHASE AGREEMENT

 

MASTER REPURCHASE AGREEMENT, dated as of February 9, 2018 (as amended, restated,
supplemented or otherwise modified and in effect from time to time, this
“Agreement”), by and between TRMT CB LENDER LLC, a Delaware limited liability
company (“Seller”), and CITIBANK, N.A., a national banking association
(including any successor thereto, “Buyer”).

 

ARTICLE 1

APPLICABILITY

 

Subject to the terms of the Transaction Documents, from time to time the parties
hereto may enter into transactions in which Seller will sell to Buyer, all of
Seller’s right, title and interest in and to certain Eligible Assets (as defined
herein) and the other related Purchased Items (as defined herein) (collectively,
the “Assets”) subject to the transfer of funds by Buyer to Seller, with a
simultaneous agreement by Buyer to re-sell back to Seller, and by Seller to
repurchase, such Assets at a date certain or on demand, subject to the transfer
of funds by Seller to Buyer.  Each such transaction shall be referred to herein
as a “Transaction” and, unless otherwise agreed in writing by Seller and Buyer,
shall be governed by this Agreement, including any supplemental terms or
conditions contained in any exhibits, schedules or annexes identified herein as
applicable hereunder.  Each individual transfer of an Eligible Asset shall
constitute a distinct Transaction.  Notwithstanding any provision or agreement
herein, this Agreement is not a commitment by Buyer to engage in Transactions,
but sets forth the requirements under which Buyer would consider entering into
Transactions from time to time.  At no time shall Buyer be obligated to purchase
or effect the transfer of any Eligible Asset from Seller to Buyer.  Any
commitment to enter into a Transaction shall be subject to Buyer’s sole
discretion, shall be evidenced by Buyer’s delivery of a Confirmation pursuant to
Article 3(c)(ii) and shall be subject to satisfaction of all terms and
conditions of this Agreement.

 

ARTICLE 2
DEFINITIONS

 

The following capitalized terms shall have the respective meanings set forth
below.

 

“Accelerated Repurchase Date” shall have the meaning specified in
Article 13(b)(i).

 

“Accepted Servicing Practices” shall have the meaning set forth in the Servicing
Agreement.

 

“Account Bank” shall mean PNC Bank National Association or any successor
approved by Buyer in its sole discretion.

 

“Account Control Agreement” shall mean that certain Account Control Agreement,
dated as of the Closing Date, among Buyer, Seller and Account Bank with respect
to the Collection Account, as the same may be amended, modified, and/or restated
from time to time, and/or any replacement agreement.

 

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“Act of Insolvency” shall mean, with respect to any Person, (a) the filing of a
petition, commencing, or authorizing the commencement of any case or proceeding,
or the voluntary joining of any case or proceeding under any Insolvency Law, or
suffering any such petition or proceeding to be commenced by another which is
consented to, not timely contested or results in entry of an order for relief,
or, in the case of a petition not initiated by, on behalf of or with the consent
of Seller, is not dismissed or stayed within sixty (60) days; (b) the seeking of
or consenting to the appointment of a receiver, trustee, custodian or similar
official for such Person or all or substantially all of the property of such
Person; (c) the appointment of a receiver, conservator, or manager for such
Person by any governmental agency or authority having the jurisdiction to do so;
(d) the making of a general assignment for the benefit of creditors; (e) the
admission in writing by such Person of its inability to pay its debts or
discharge its obligations as they become due or mature (including without
limitation, its obligations under any Transaction Documents); or (f) that any
Governmental Authority or agency or any person, agency or entity acting or
purporting to act under Governmental Authority shall have taken any action to
condemn, seize or appropriate, or to assume custody or control of, all or any
substantial part of the property of such Person, or shall have taken any action
to displace the management of such Person or to curtail its authority in the
conduct of the business of such Person.

 

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

 

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

 

“Alternative Rate” shall have the meaning specified in Article 3(g).

 

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

 

“Anti-Money Laundering Laws” shall have the meaning specified in Article 9(kk).

 

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

 

“Appraisal” shall mean a FIRREA compliant appraisal of the related Mortgaged
Property from a third party appraiser in form and substance satisfactory to
Buyer.

 

“Asset Schedule and Exception Report” shall have the meaning specified in the
Custodial Agreement.

 

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

 

“Assignment of Mortgage” shall mean, with respect to any Mortgage, an assignment
of the mortgage, notice of transfer or equivalent instrument in recordable form,
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect the assignment and pledge of the Mortgage.

 

“Bailee Agreement” shall mean a Bailee Agreement among Seller, Buyer and
Settlement Agent in form and substance acceptable to Buyer in its sole
discretion.

 

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“Bankruptcy Code” shall mean Title 11 of the United States Code, as amended from
time to time, or any successor statute.

 

“Business Day” shall mean a day other than (a) a Saturday or Sunday, or (b) a
day in which the New York Stock Exchange or banks in the State of New York or
the state in which the Collection Account is located are authorized or obligated
by law or executive order to be closed.

 

“Buyer” shall have the meaning specified in the introductory paragraph hereof.

 

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

 

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

 

“Change of Control” shall mean the occurrence of any of the following events:
(a) any “person” or “group” (within the meaning of Section 13(d) or 14(d) of the
Exchange Act) shall become, or obtain rights (whether by means of warrants,
options or otherwise) to become, the beneficial owner, directly or indirectly,
of 35% or more of the total voting power of all classes of Capital Stock of
Guarantor entitled to vote generally in the election of the directors (other
than the Manager, the Manager’s Parent or any Person Controlled by Manager’s
Parent), (b) the Guarantor shall cease to directly or indirectly own and
Control, of record and beneficially, 100% of the direct interests of Seller,
(c) Manager’s Parent shall cease to directly or indirectly own and Control, of
record and beneficially, 100% of the interests of the Manager, and (d) the
Manager shall cease to act as the external manager for the Guarantor pursuant to
the Management Agreement.

 

“Closing Date” shall mean February 9, 2018.

 

“Collateral” shall have the meaning specified in Article 6(a).

 

“Collection Account” shall have the meaning specified in Article 5(c).

 

“Commercial Asset” shall mean, an Eligible Asset with respect to which the
Mortgaged Property consists of office, retail, industrial, self-storage and/or
mixed use properties.

 

“Confidential Information” shall have the meaning specified in Article 28(j).

 

“Confirmation” shall mean a confirmation substantially in the form of
Exhibit III hereto, as same may be amended, modified and/or restated from time
to time.

 

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“Contingent Liabilities” shall mean, with respect to any Person as of any date
of determination, all of the following as of such date: (a) liabilities and
obligations (including any Guarantees) of such Person in respect of “off-balance
sheet arrangements” (as defined in the Off-Balance Sheet Rules defined below),
(b) obligations, including Guarantees, whether or not required to be disclosed
in the footnotes to such Person’s financial statements, guaranteeing in whole or
in part any Non-Recourse Indebtedness, lease, dividend or other obligation,
excluding, however, (i) contractual indemnities (including any indemnity or
price-adjustment provision relating to the purchase or sale of securities or
other assets), (ii) guarantees of non-monetary obligations which have not yet
been called on or quantified, of such Person or any other Person and
(iii) reasonable and customary “bad boy” acts agreed to by such person (as a
guarantor thereunder) in connection with a mortgage loan or mezzanine loan
transaction, and (c) forward commitments or obligations to fund or provide
proceeds with respect to any loan or other financing which is obligatory and
non-discretionary on the part of the lender which is not or, in the case of a
future advance obligation under an Eligible Asset, will not be fully offset by a
corresponding asset.  The amount of any Contingent Liabilities described in the
preceding clause (b) shall be deemed to be (i) with respect to a guarantee of
interest or interest and principal, or operating income guarantee, the sum of
all payments required to be made thereunder (which, in the case of an operating
income guarantee, shall be deemed to be equal to the debt service for the note
secured thereby), through (x) in the case of an interest or interest and
principal guarantee, the stated date of maturity of the obligation (and
commencing on the date interest could first be payable thereunder), or (y) in
the case of an operating income guarantee, the date through which such guarantee
will remain in effect, and (ii) with respect to all guarantees not covered by
the preceding clause (i), an amount equal to the stated or determinable amount
of the primary obligation in respect of which such guarantee is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder) as recorded on
the balance sheet and in the footnotes to the most recent financial statements
of such Person.  “Off-Balance Sheet Rules” shall mean the Disclosure in
Management’s Discussion and Analysis About Off-Balance Sheet Arrangements and
Aggregate Contractual Obligations, Securities Act Release Nos. 33-8182;
34-47264; FR-67 International Series Release No. 1266 File No. S7-42-02, 68 Fed.
Reg. 5982 (Feb. 5, 2003) (codified of 17 CFR Parts 228, 229 and 249).

 

“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 ownership of voting securities, the
ability to exercise voting power, by contract or otherwise. “Controlling,”
“Controlled” and “under common Control” have correlative meanings.

 

“Covenant Compliance Certificate” shall mean an officer’s certificate from
Seller substantially in the form of Exhibit VI attached hereto.

 

“Covered Taxes” shall mean any Taxes imposed on or with respect to Buyer or
required to be withheld or deducted from a payment to Buyer under the
Transaction Documents excluding (a) income taxes, branch profits taxes,
franchise taxes or any other Taxes imposed on net income (however denominated)
or any similar Taxes imposed by the jurisdiction in which Buyer is organized,
maintains either its principal office or a lending or purchasing office, or any
other jurisdiction in which Buyer is engaged in a trade or business, or any
political subdivision of any thereof or that are Other Connection Taxes, (b) any
and all withholding Taxes imposed by the

 

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laws of the United States of America that are in effect (x) as of the date of
this Agreement, or (y) as of the date when Buyer becomes a buyer pursuant to
Article 18(b), (c) any Taxes attributable to Buyer’s or any assignee’s of Buyer
failure to comply with Article 5(k)(v) or Article 18(f), (d) any U.S. federal
withholding Taxes imposed under FATCA, and (e) any Tax imposed on a transferee,
assignee or participant at the time it acquired its interest in a Transaction,
except, in each case, to the extent the relevant transferor, assignor or Buyer
was entitled to receive additional amounts hereunder.

 

“Credit Event” shall mean, with respect to any Purchased Asset, a material
adverse change in the credit characteristics of the related Mortgaged Property,
any related Mortgagor or other obligor (including, without limitation, any
guarantor, participant or sponsor) or the related commercial real estate market
in which the Mortgaged Property is located; provided, however, that a Credit
Event shall not be deemed to exist solely as a result of any event that results
in the increase or decrease of interest rate spreads or other similar benchmarks
(including, without limitation, U.S. treasury rates, interest rate swaps, LIBOR
or the prime rate) or any disruption in the commercial mortgage backed
securities markets, capital markets or credit markets.  Any determination that a
Credit Event has occurred shall be made by Buyer in its sole but good faith
business judgment.

 

“Custodial Agreement” shall mean the Custodial Agreement, dated as of the
Closing Date, by and among Custodian, Seller and Buyer, as the same may be
amended, modified and/or restated from time to time, and/or any replacement
agreement.

 

“Custodial Delivery” shall mean compliance by Seller with the delivery
obligations set forth in Section 2.02 of the Custodial Agreement.

 

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

 

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

 

“Dollars” and “$” shall mean freely transferable lawful money of the United
States of America.

 

“Due Diligence Checklist” shall mean, with respect to any Eligible Asset, the
due diligence materials set forth on Exhibit VII hereto.

 

“Due Diligence Package” shall mean, with respect to any Eligible Asset, (a) the
items on the Due Diligence Checklist, in the case of each item, to the extent
applicable, (b) the Requested Exceptions Report and (c) such other documents or
information as Buyer or its counsel shall reasonably deem necessary.

 

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

 

“Early Repurchase Date” shall have the meaning specified in Article 3(d).

 

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“Economic Sanctions” shall have the meaning specified in Article 9(hh).

 

“Effective Date” shall mean February 9, 2018.

 

“Effective Purchase Price Percentage” shall have the meaning specified in the
Fee Letter.

 

“Eligibility Criteria” shall mean (i) the proposed Purchased Asset is a Mortgage
Loan accruing interest at a floating rate based on LIBOR, (ii) after giving
effect to the purchase of the proposed Purchased Asset, the Portfolio Purchase
Price Debt Yield (including the proposed Purchased Asset), as determined by
Buyer, will be greater than the Minimum Portfolio Purchase Price Debt Yield,
(iii) there is no monetary or material non-monetary default or event of default
(beyond all applicable notice and grace periods) under the related Purchased
Asset Documents, (iv) the Mortgaged Property LTV of the proposed Purchase Asset
will not exceed the Mortgaged Property LTV Threshold and (v) the maximum term of
the proposed Purchased Asset, including all extension options, is not more than
five (5) years.

 

“Eligible Asset” shall mean any performing, floating-rate Mortgage Loan (i) that
is approved by Buyer in its sole and absolute discretion, (ii) with respect to
which, upon such Eligible Asset becoming a Purchased Asset, the applicable
representations and warranties set forth in this Agreement (including the
exhibits hereto) are true and correct in all material respects except to the
extent disclosed in a Requested Exceptions Report approved by Buyer, (iii) which
is secured by stabilized or unstabilized Commercial Assets, Multifamily Assets
or Hotel Assets (provided that other property types will be considered by Buyer
on a case-by-case basis) and is not secured by any land loans, properties under
ground up construction or for-sale residential properties and (iv) that
satisfies the Eligibility Criteria as of any date of determination as determined
by Buyer in its sole discretion (except to the extent waived by Buyer as of the
Purchase Date).

 

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

 

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

 

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

 

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

 

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

 

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“Exit Fee Side Letter” shall mean the side letter agreement, dated as of the
date hereof, from Citigroup Global Markets, Inc. and accepted and agreed by
Seller, as same may be amended, modified and/or restated from time to time.

 

“Facility Amount” shall have the meaning specified in the Fee Letter.

 

“Facility Expiration Date” shall mean the day that is the earlier of (i) the
Stated Facility Expiration Date and (ii) any Accelerated Repurchase Date.

 

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

 

“FDIA” shall have the meaning specified in Article 21(c).

 

“FDICIA” shall have the meaning specified in Article 21(d).

 

“Federal Funds Rate” shall mean, for any day, the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System, arranged by federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average of the quotations for
the day of such transactions received by Buyer from three (3) federal funds
brokers of recognized standing selected by it; provided that such selected
brokers shall be the same brokers as selected for all of Buyer’s other
repurchase customers where the Federal Funds Rate is to be applied, to the
extent such brokers are available.

 

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

 

“Filings” shall have the meaning specified in Article 6(c).

 

“Future Advance Failure” shall have the meaning specified in Article 11(m).

 

“Future Funding Advance Draw” shall have the meaning specified in
Article 3(e)(iii).

 

“Future Funding Advance Draw Request” shall have the meaning specified in
Article 3(e)(iii).

 

“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

 

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jurisdiction exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government (including any supra
national bodies such as the European Union or the European Central Bank).

 

“Guarantee” shall mean, with respect 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 reasonably
anticipated liability in respect thereof as determined by such Person in good
faith in accordance with GAAP.  The terms “Guarantee” and “Guaranteed” used as
verbs shall have correlative meanings.

 

“Guarantor” shall mean Tremont Mortgage Trust, a Maryland real estate investment
trust, or any respective successor thereto, and any other guarantor that joins
the Guaranty with the consent of Buyer granted in its sole discretion.

 

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

 

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

 

“Hotel Asset” shall mean, an Eligible Asset with respect to which the Mortgaged
Property consists of one or more hotel properties.

 

“Income” shall mean, with respect to any Purchased Asset at any time, all monies
collected from or in respect of such Purchased Asset by or on behalf of Seller,
including without limitation, payments of interest, principal, repayment, rental
or other income, insurance and liquidation proceeds, plus all proceeds from sale
or other disposition of such Purchased Asset, but excluding all related security
deposits, escrow and reserve payments, account fees and all expense
reimbursement payments, which shall be applied pursuant to the Servicing
Agreement.  For the avoidance of doubt, Income shall not include origination
fees and expense deposits paid in connection with the origination and closing of
the Purchased Asset.

 

“Indebtedness” shall mean, with respect to any Person on any date, all of the
following on such date, whether or not included as indebtedness or liabilities
in accordance with GAAP determined without duplication:

 

(i)                                     obligations in respect of money borrowed
(including principal, interest, assumption fees, prepayment fees, yield
maintenance charges, penalties, exit fees, contingent interest and other
monetary obligations whether choate or inchoate and whether by loan, the
issuance and sale of debt securities or the sale of property or assets to
another Person subject to an understanding or agreement, contingent or
otherwise, to repurchase such property or assets, or otherwise);

 

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(ii)                                  obligations, whether or not for money
borrowed (A) represented by notes payable, letters of credit or drafts accepted,
in each case representing extensions of credit, (B) evidenced by bonds,
debentures, notes or similar instruments, (C) constituting purchase money
indebtedness, conditional sales contracts, title retention debt instruments or
other similar instruments, upon which interest charges are customarily paid or
that are issued or assumed as full or partial payment for property or services
rendered, or (D) in connection with the issuance of preferred equity or trust
preferred securities;

 

(iii)                               Capitalized Lease Obligations;

 

(iv)                              reimbursement obligations under any letters of
credit or acceptances (whether or not the same have been presented for payment);

 

(v)                                 Off-Balance Sheet Obligations;

 

(vi)                              obligations to purchase, redeem, retire,
defease or otherwise make any payment in respect of any mandatory redeemable
stock issued by such Person or any other Person (inclusive of forward equity
contracts), valued at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends;

 

(vii)                           as applicable, all obligations of such Person
(but not the obligation of others) in respect of any keep well arrangements,
credit enhancements, committed future funding obligations which are not fully
offset by a corresponding asset, purchase obligations, repurchase obligations,
sale/buy-back agreements, takeout commitments or forward equity commitments
which are not fully offset by a corresponding asset, in each case evidenced by a
binding agreement (excluding any such obligation to the extent the obligation
can be satisfied by the issuance of equity interests (other than mandatory
redeemable stock));

 

(viii)                        all Non-Recourse Indebtedness, recourse
indebtedness and all indebtedness of other Persons which such Person has
guaranteed or is otherwise recourse to such Person (other than pursuant to any
guarantee of customary non-recourse exceptions, but only to the extent they are
contingent);

 

(ix)                              all indebtedness of another Person secured by
(or for which the holder of such indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien (other than Liens permitted hereunder)
on property or assets owned by such Person, even though such Person has not
assumed or become liable for the payment of such indebtedness or other payment
obligation; provided that, if such Person has not assumed or become liable for
the payment of such indebtedness, then for the purposes of this definition the
amount of such indebtedness shall not exceed the market value of the property
subject to such Lien;

 

(x)                                 all Contingent Liabilities;

 

(xi)                              all obligations of such Person incurred in
connection with the acquisition or carrying of fixed assets by such Person or
obligations of such Person to pay the deferred purchase or acquisition price of
property or assets, including contracts for the deferred purchase price of
property or assets that include the procurement of services;

 

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(xii)                           indebtedness of general partnerships for which
such Person is liable as a general partner (whether secondarily or contingently
liable or otherwise); and

 

(xiii)                        obligations to fund capital commitments under any
articles or certificate of incorporation or formation, by-laws, partnership,
limited liability company, operating or trust agreement and/or other
organizational, charter or governing documents, subscription agreement or
otherwise.

 

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person.

 

“Indemnified Amounts” and “Indemnified Parties” shall each have the meaning
specified in Article 25(a).

 

“Independent Director” shall mean a natural Person who:

 

(a)                                 is not at the time of initial appointment
and has never been, and will not while serving as Independent Director be: (i) a
stockholder, director, officer, employee, partner, member (other than a “special
member” or “springing member”), manager (with the exception of serving as the
Independent Director of Seller or any Affiliate thereof), attorney or counsel of
any Seller Party or any Affiliate or equity owner of any Seller Party; (ii) a
customer, supplier or other Person who derives any of its purchases or revenues
(other than any revenue derived from serving as the Independent Director of such
party) from its activities with any Seller Party, or any Affiliate or equity
owner of any Seller Party; (iii) a Person Controlled, Controlling or under
common Control with any such stockholder, director, officer, employee, partner,
member, manager, attorney, counsel, equity owner, customer, supplier or other
Person of any Seller Party or any Affiliate or equity owner of any Seller Party;
or (iv) a member of the immediate family of any such stockholder, director,
officer, employee, partner, member, manager, attorney, counsel, equity owner,
customer, supplier or other Person of any Seller Party or any Affiliate or
equity owner of any Seller Party; and

 

(b)                                 is provided by CT Corporation, Corporation
Service Company, National Corporate Research, Ltd., National Registered
Agents, Inc., Wilmington Trust Company, Stewart Management Company or Lord
Securities Company, or if none of these companies is then providing professional
independent directors, another nationally recognized company reasonably
acceptable to Buyer, that is not an Affiliate of Seller and that provides, inter
alia, professional independent directors or independent members in the ordinary
course of their respective business to issuers of securitization or structured
finance instruments, agreements or securities or lenders or borrowers
originating commercial real estate loans for inclusion in securitization or
structured finance instruments, agreements or securities (a “Professional
Independent Director”) and is an employee of such a company or companies at all
times during his or her service as an Independent Director.

 

A natural Person who satisfies the foregoing definition except for being (or
having been) the independent director or independent member of a “special
purpose entity” that is an Affiliate

 

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of any Seller Party (provided that such Affiliate does not or did not own a
direct or indirect equity interest in Seller) shall not be disqualified from
serving as an Independent Director, provided that such natural Person satisfies
all other criteria set forth above and that the fees such individual earns from
serving as independent director or independent member of Affiliates of Seller or
in any given year constitute in the aggregate less than five percent (5%) of
such individual’s annual income for that year.  A natural person who satisfies
the foregoing definition other than subparagraph (a)(ii) shall not be
disqualified from serving as an Independent Director if such individual is a
Professional Independent Director and such individual complies with the
requirements of the previous sentence.

 

“Insolvency Laws” shall mean the Bankruptcy Code and all other applicable
liquidation, conservatorship, bankruptcy, dissolution, 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.

 

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

 

“Knowledge” shall mean, whenever in this Agreement or any of the Transaction
Documents, or in any document or certificate executed on behalf of any Person
pursuant to the Transaction Documents, reference is made to the knowledge of any
such Person shall mean the actual knowledge of the chief financial officer or
chief executive officer (whether by use of the words “knowledge” or “know”),
unless otherwise expressly specified of such Person.

 

“LIBOR” shall mean, with respect to each Pricing Rate Period, the rate
(expressed as a percentage per annum and rounded upward, if necessary, to the
next nearest 1/1000 of 1%) for deposits in U.S. dollars, for a one month period,
that appears on “Page BBAM” of the Bloomberg Financial Markets Services Screen
(or the successor thereto) as of 11:00 a.m., London time, on the related Pricing
Rate Determination Date.  If such rate does not appear on “Page BBAM” of the
Bloomberg Financial Markets Services Screen (or the successor thereto) as of
11:00 a.m., London time, on such Pricing Rate Determination Date, Buyer shall
request the principal London office of any four major reference banks in the
London interbank market selected by Buyer to provide such bank’s offered
quotation (expressed as a percentage per annum) to prime banks in the London
interbank market for deposits in U.S. dollars for a one month period as of 11:00
a.m., London time, on such Pricing Rate Determination Date for amounts of not
less than the Repurchase Price of the applicable Transaction. If at least two
such offered quotations are so provided, LIBOR shall be the arithmetic mean of
such quotations.  If fewer than two such quotations are so provided, Buyer shall
request any three major banks in New York City selected by Buyer to provide such
bank’s rate (expressed as a percentage per annum) for loans in U.S. dollars to
leading European banks for a one month period as of approximately 11:00 a.m.,
New York City time on the applicable Pricing Rate Determination Date for amounts
of not less than the Repurchase Price of such Transaction. If at least two such
rates are so provided, LIBOR shall be the arithmetic mean of such rates. LIBOR
shall be determined by Buyer or its agent, which determination shall be
conclusive absent manifest error.  Buyer’s determination of LIBOR shall be
binding and conclusive on Seller absent manifest error.  Notwithstanding the
foregoing, in no event shall LIBOR be less than zero.

 

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

 

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

 

“Manager” shall mean Tremont Realty Advisors LLC, a Maryland limited liability
company.

 

“Manager’s Parent” shall mean The RMR Group LLC, a Delaware limited liability
company.

 

“Management Agreement” shall mean that certain Management Agreement, dated as of
September 18, 2017, between Guarantor and Manager.

 

“Mandatory Early Repurchase Event” shall mean, with respect to any Purchased
Asset (a) such Purchased Asset is subject to a material breach of a
representation and warranty set forth in Exhibit X hereto, as determined by
Buyer, in its sole discretion exercised in good faith (except to the extent
disclosed in a Requested Exceptions Report and approved by Buyer in writing),
(b) in respect of which the complete Purchased Asset File has not been delivered
to the Custodian in accordance with the terms of the Custodial Agreement (except
to the extent disclosed in a Trust Receipt issued by the Custodian on or prior
to the Purchase Date), (c) such Purchased Asset has been released from the
possession of the Custodian under the Custodial Agreement to the Seller for a
period in excess of the time period permitted under the Custodial Agreement,
(d) a Purchased Asset Event of Default exists with respect to such Purchased
Asset, (e) such Purchased Asset has not been repurchased on the applicable
Repurchase Date or (f) the failure of any Purchased Asset to qualify for safe
harbor treatment as contemplated in Article 21.

 

“Margin Amount” shall have the meaning specified in the Fee Letter.

 

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

 

“Margin Deficit” shall mean an amount equal to the positive difference (if any)
between the aggregate Margin Amount for all Purchased Assets and the aggregate
Market Value of all Purchased Assets (for the avoidance of doubt, a Margin
Deficit shall exist at any time when the aggregate Margin Amount of all
Purchased Assets is greater than the aggregate Market Value of all Purchased
Assets).

 

“Margin Excess” shall mean, with respect to any Purchased Asset on any date, the
product of (a) the amount by which the Market Value of such Purchased Asset
exceeds the Margin Amount of such Purchased Asset on such date, multiplied by
(b) the Maximum Purchase Price Percentage for such Purchased Asset.

 

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“Margin Excess Advance” shall have the meaning specified in Article 3(e)(iv).

 

“Margin Excess Request” shall have the meaning specified in Article 3(e)(iv).

 

“Margin Percentage” shall have the meaning specified in the Fee Letter.

 

“Market Value” shall mean, with respect to any Purchased Asset, on any date, the
lesser of (i) the market value for such Purchased Asset, as determined by Buyer
in its sole discretion exercised in good faith, and (ii) the outstanding
principal balance of such Purchased Asset.  The Market Value of a Purchased
Asset as of the Purchase Date will be set forth in the Confirmation executed in
connection with the Transaction for such Purchased Asset, and notwithstanding
anything to the contrary contained herein or in any Transaction Document, such
Market Value will not be adjusted by Buyer for any Purchased Asset after the
related Purchased Date except upon the occurrence and during the continuance of
a Credit Event with respect to such Purchased Asset.   Without limiting the
foregoing, the Market Value may be reduced by Buyer, at Buyer’s discretion,
exercised in good faith (including to zero) with respect to any Purchased Asset
(i) in respect of which there is a material breach of any representation or
warranty contained in this Agreement (other than a breach disclosed to Buyer in
a Requested Exceptions Report), (ii) in respect of which a monetary or material
non-monetary Purchased Asset Event of Default has occurred and is continuing
under the related Purchased Asset Documents, or (iii) if such Purchased Asset is
not repurchased on its Repurchase Date, from and after the Repurchase Date of
such Purchased Asset.

 

“Material Adverse Effect” shall mean a material adverse effect on (a) the
business, condition (financial or otherwise), or results of operations (or
prospects) of the Seller Parties, taken as a whole, (b) the ability of any
Seller Party to perform its obligations under any of the Transaction Documents,
(c) the validity or enforceability of any of the Transaction Documents or
(d) the rights and remedies of Buyer under any of the Transaction Documents, in
each case determined by Purchase in its sole discretion exercised in good faith.

 

“Minimum Portfolio Purchase Price Debt Yield” shall have the meaning specified
in the Fee Letter.

 

“Mortgage” shall mean a mortgage, deed of trust, deed to secure debt or other
instrument, creating a valid and enforceable first Lien on or a first priority
ownership interest in (subject to Permitted Encumbrances) an estate in fee
simple in real property and the improvements thereon or a ground lease, securing
a Mortgage Note or similar evidence of indebtedness.

 

“Mortgage Loan” shall mean a whole mortgage loan that is secured by a first Lien
on one or more Commercial Assets, Multifamily Assets or Hotel Assets (provided
that other property types will be considered by Buyer on a case-by-case basis).

 

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

 

“Mortgaged Property” shall mean, with respect to any Mortgage Loan, the
mortgaged property securing such Mortgage Loan.

 

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“Mortgaged Property LTV” shall mean, on any date with respect to any Purchased
Asset, a fraction (expressed as a percentage) (A) the numerator of which is the
outstanding principal balance of such Purchased Asset and (B) the denominator of
which is the “as-is” appraised value as identified on the Appraisal(s) of the
related Mortgaged Property or Mortgaged Properties.

 

“Mortgaged Property LTV Threshold” shall have the meaning set forth in the Fee
Letter.

 

“Mortgagor” shall mean the obligor on a Mortgage Note and the grantor of the
related Mortgage.

 

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

 

“Multifamily Asset” shall mean, an Eligible Asset with respect to which the
Mortgaged Property consists of real property with five (5) or more residential
units (including mixed use multi-family/office and multi-family retail) as to
which the majority of the underwritten revenue is from residential rental units,
and which may include mobile housing and student housing.

 

“Non-Recourse Indebtedness” shall mean Indebtedness of a Person for borrowed
money in respect of which recourse for payment (except for customary exceptions
for fraud, misapplication of funds, environmental indemnities, Act of
Insolvency, non-approved transfers or other events) is contractually limited to
specific assets of such Person encumbered by a Lien securing such Indebtedness
or to a special purpose vehicle subsidiary of such Person whose only assets are
such specific assets (solely to the extent that such special purpose vehicle is
not subject to a substantive consolidation with such Person).

 

“Non-U.S. Person” shall have the meaning specified in Article 5(k)(v).

 

“Off-Balance Sheet Obligations” shall mean, with respect to any Person on any
date, to the extent not included as a liability on the balance sheet of such
Person, all of the following with respect to such Person as of such date:
(a) monetary obligations under any financing lease or so-called “synthetic,” tax
retention or off-balance sheet lease transaction which, upon the application of
any Insolvency Laws, would be characterized as Indebtedness, (b) monetary
obligations under any sale and leaseback transaction which does not create a
liability on the balance sheet of such Person, or (c) any other monetary
obligation arising with respect to any other transaction which (i) is
characterized as Indebtedness for tax purposes but not for accounting purposes,
or (ii) is the functional equivalent of or takes the place of borrowing but
which does not constitute a liability on the balance sheet of such Person (for
purposes of this clause (c), any transaction structured to provide tax
deductibility as interest expense of any dividend, coupon or other periodic
payment will be deemed to be the functional equivalent of a borrowing).

 

“Other Connection Taxes” shall mean Taxes imposed on Buyer or an assignee of the
Buyer’s rights and obligations under this Agreement as a result of a present or
former connection between Buyer or such assignee and the jurisdiction imposing
such Tax (other than connections arising from Buyer or such assignee having
executed, delivered, become a party to, performed its

 

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obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Transaction Document).

 

“Other Taxes” shall have the meaning specified in Article 5(k)(ii).

 

“Participant Register” shall have the meaning specified in Article 18(e).

 

“Patriot Act” shall have the meaning specified in Article 9(hh).

 

“Permitted Encumbrances” shall mean, with respect to any Purchased Asset
(a) such liens, easements, rights and encumbrances as are permitted by the
related Purchased Asset Documents and (b) Liens granted pursuant to the
Transaction Documents.

 

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

 

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

 

“Portfolio Purchase Price Debt Yield” shall have the meaning specified in the
Fee Letter.

 

“Pre-Purchase Legal/Due Diligence Review Fee” shall mean a non-refundable fee
payable by Seller to Buyer, in the amount of Buyer’s reasonable attorneys’ fees
and disbursements, plus incidentals, actually incurred by Buyer in connection
with each proposed Purchased Asset to be subject to a Transaction.

 

“Pricing Rate” shall have the meaning specified in the Fee Letter.

 

“Pre-Purchase Due Diligence” shall have the meaning specified in Article 3(c).

 

“Pricing Rate Determination Date” shall mean with respect to any Pricing Rate
Period with respect to any Transaction, the second (2nd) London Business Day
preceding the first day of such Pricing Rate Period.

 

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

 

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“Principal Payment” shall mean, with respect to any Purchased Asset, any payment
or prepayment of principal received as, or applied to, as a payment or
prepayment of principal in respect thereof.

 

“Prohibited Person” shall mean (i) a person or entity whose name appears on, is
directly or indirectly owned or controlled by anyone appearing on the list of
Specially Designated Nationals and Blocked Persons by the Office of Foreign
Asset Control (“OFAC”), (ii) any foreign shell bank and (iii) any person or
entity resident in or whose subscription funds are transferred from or through
an account in a jurisdiction that has been designated as a non-cooperative with
international anti-money laundering principles or procedures by an
intergovernmental group or organization, such as the Financial Action Task Force
on Money Laundering (“FATF”), of which the U.S. is a member and with which
designation the U.S. representative to the group or organization continues to
concur.  See http://www.fatf-gati.org for FATF’s list of Non-Cooperative
Countries and Territories.

 

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

 

“Purchase Price” shall have the meaning specified in the Fee Letter.

 

“Purchase Price Debt Yield” shall have the meaning specified in the Fee Letter.

 

“Purchase Price Differential” shall have the meaning specified in the Fee
Letter.

 

“Purchase Price LTV” shall have the meaning specified in the Fee Letter.

 

“Purchase Price Percentage” shall have the meaning specified in the Fee Letter.

 

“Purchased Asset” shall mean (a) with respect to any Transaction, the Eligible
Asset, and any related rights, interests or claims of any kind with respect to
such Eligible Asset sold by Seller to Buyer in such Transaction and (b) with
respect to the Transactions in general, all Eligible Assets sold by Seller to
Buyer (other than Purchased Assets that have been repurchased by Seller), in the
case of each of sub-clauses (a) and (b) above, including to the extent related
to the Purchased Assets, all of Seller’s right, title and interest in and to,
(i) the Purchased Asset Documents, (ii) the Servicing Rights, (iii) the
Servicing Agreement, (iv) the Servicing Records, (v) mortgage guaranties,
mortgage insurance, insurance policies, insurance certificates, insurance
claims, insurance proceeds, collection and escrow accounts, letters of credit,
forward trades and take out commitments, (vi) the principal balances of the
Purchased Assets, not just the amount advanced by Buyer to Seller in respect of
the Purchase Price of such Purchased Asset, (vii) Income, (viii) indemnities,
warranties or other credit support or enhancement, (ix) all related pledged
collateral and (x) all supporting obligations of any kind.  Any Purchased Asset
that is repurchased by Seller in accordance with this Agreement shall cease to
be a Purchased Asset.

 

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

 

“Purchased Asset Event of Default” shall mean for any Purchased Asset, an “Event
of Default” as defined in the Purchased Asset Documents for such Purchased
Asset.

 

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

 

“Purchased Items” shall mean all of Seller’s right, title and interest in, to
and under each of the following items of property, whether now owned or
hereafter acquired, now existing or hereafter created and wherever located:

 

(a)                                 the Purchased Assets;

 

(b)                                 all proceeds relating to the sale,
securitization, liquidation, or other disposition of the Purchased Assets;

 

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

 

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

 

“Qualified Transferee” shall mean (a) any real estate investment trust,
insurance company, bank, savings and loan association, investment bank, trust
company, commercial credit corporation, pension plan, pension fund, pension fund
advisory firm, mutual fund, sovereign fund, government entity or plan,
investment company, money management firm or investment fund or (b) any
Affiliate of Buyer.

 

“Qualified Transferee Requirements” shall mean any requirement under any
Purchased Asset Document that the holder or the transferee of the related
Purchased Asset be a qualified or eligible transferee, qualified institutional
lender or qualified or eligible lender (however defined).

 

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

 

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

 

“Representatives” shall have the meaning specified in Article 28(j).

 

“Repurchase Date” shall mean, with respect to any Purchased Asset, the earliest
to occur of (a) the date set forth in the applicable Confirmation, or if such
day is not a Business Day, the immediately following Business Day; (b) the
maturity date of such Purchased Asset (as same may be extended pursuant to the
Purchased Asset Documents); (c) the Facility Expiration Date; (d) the Early
Repurchase Date with respect to such Purchased Asset; (e) the Accelerated
Repurchase Date; (f) the date set forth in Article 3(i)(1)(B); (g) the second
(2nd) Business Day following a Principal Payment in full with respect to such
Purchased Asset prior to the related

 

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maturity date; or (h) the date set forth in Article 11(m) following the
occurrence of a Future Advance Failure with respect to such Purchased Asset.

 

“Repurchase Obligations” shall have the meaning specified in Article 6(a).

 

“Repurchase Price” shall mean, with respect to any Purchased Asset as of any
Repurchase Date or any date on which the Repurchase Price is required to be
determined hereunder, the price at which such Purchased Asset is to be
transferred from Buyer to Seller; such price will be determined in each case as
the sum of (i) the outstanding Purchase Price of such Purchased Asset as of such
date; (ii) the accrued and unpaid Purchase Price Differential with respect to
such Purchased Asset as of such date; (iii) all accrued and unpaid out of pocket
costs and expenses (including, without limitation, the fees and expenses of
counsel) of Buyer relating to such Purchased Assets not previously paid or
reimbursed by Seller; and (iv) any other amounts due and owing by Seller to
Buyer and its Affiliates pursuant to the terms of the Transaction Documents as
of such date (including, without limitation, any amount payable pursuant to
Article 3(f)(ii) or any Exit Fee payable pursuant to the Fee Letter).

 

“Requested Exceptions Report” shall mean, with respect to any proposed Purchased
Asset, a list delivered to Buyer as part of the Due Diligence Package containing
any and all exceptions to the representations and warranties and any other
Eligibility Criteria contained in this Agreement applicable to such proposed
Purchased Asset (or that will be applicable to such proposed Purchased Asset if
it becomes a Purchased Asset).

 

“Requirement of Law” shall mean, as of any date, any applicable 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.

 

“S&P” shall mean Standard and Poor’s Ratings Services and any successor or
successors thereto.

 

“SEC” shall have the meaning specified in Article 22(a).

 

“Securities Act” shall mean the Securities Act of 1933, as amended.

 

“Seller” shall have the meaning specified in the introductory paragraph hereof.

 

“Seller Party” shall mean, collectively or individually, as the context may
require, Seller and Guarantor.

 

“Seller Threshold” shall have the meaning specified in the Fee Letter.

 

“Servicer” shall mean (i) Midland Loan Services, a Division of PNC Bank National
Association, for so long as it maintains a primary and special servicer rating
of “above average” or better from S&P, or (ii) any other third-party servicer
(a) having a primary and special servicer rating of “above average” or better
from S&P, and (b) approved by Buyer in its reasonable discretion.

 

“Servicer Letter” shall have the meaning specified in Article 27(e).

 

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“Servicing Agreement” shall mean the Servicing Agreement, dated as of
February 9, 2018, among Servicer, Manager and Seller, as same may be amended,
modified and/or restated, or any replacement thereof with a successor Servicer,
which replacement servicing agreement is acceptable to Buyer in its sole
discretion exercised in good faith.

 

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

 

“Servicing Rights” shall mean rights of any Person, to administer, service or
subservice the Purchased Assets or to possess related Servicing Records.

 

“Settlement Agent” shall mean a nationally recognized title company, escrow
company or law firm, as applicable, in accordance with local law and practice,
which is a party to the Bailee Agreement and is approved by Buyer in its sole
and absolute discretion.

 

“Significant Modification” shall mean:

 

(i)                                     any modification, consent to a
modification or waiver of any monetary term or material non-monetary term
(including, without limitation, prepayment terms, timing of payments and
acceptance of discounted payoffs) of a Purchased Asset (or related Mortgage
Loan, as applicable) or any extension of the maturity date of such Purchased
Asset (or related Mortgage Loan, as applicable), except pursuant to the exercise
of any extension term expressly provided in the related Purchased Asset
Documents for which there is no material lender discretion;

 

(ii)                                  any release of collateral or any
acceptance of substitute or additional collateral for a Purchased Asset (or
related Mortgage Loan, as applicable) or any consent to either of the foregoing,
other than if required pursuant to the specific terms of the related Purchased
Asset Documents (or related Mortgage Loan, as applicable) and for which there is
no material lender discretion (it being acknowledged that Seller’s right to
calculate the debt service coverage ratio, debt yield, loan to value ratio or
other similar financial tests (but not the waiver or modification of any such
tests) shall not be considered material lender discretion for purposes of this
clause (ii));

 

(iii)                               any waiver of a “due-on-sale” or
“due-on-encumbrance” clause with respect to a Purchased Asset (or related
Mortgage Loan, as applicable) or, if lender consent is required, any consent to
such a waiver or consent to a transfer of a Mortgaged Property or interests in
the Mortgagor or consent to the incurrence of additional debt, other than any
such transfer or incurrence of debt as may be effected without the consent of
the lender under the related Purchased Asset Documents; and

 

(iv)                              any acceptance of an assumption agreement
releasing a Mortgagor from liability under a Purchased Asset (or related
Mortgage Loan, as applicable) other than pursuant to the specific terms of such
Purchased Asset (or related Mortgage Loan, as applicable) and for which there is
no material lender discretion.

 

“SIPA” shall have the meaning specified in Article 22(a).

 

“Stated Facility Expiration Date” shall mean February 9, 2021.

 

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

 

“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.

 

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

 

“Transaction Documents” shall mean, collectively, this Agreement, the Fee
Letter, the Exit Fee Side Letter, the Guaranty, the Custodial Agreement, the
Servicing Agreement, the Servicer Letter (if any), the Account Control
Agreement, all Confirmations and assignment documentation executed pursuant to
this Agreement in connection with specific Transactions, all other documents
executed in connection with this Agreement or any Transaction and all exhibits,
annexes, schedules and other attachments to any of the foregoing, in each case,
as such document may be amended, modified and/or restated from time to time.

 

“Transaction Request” shall mean a transaction request substantially in the form
of Exhibit II hereto.

 

“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 Asset 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.

 

“Trust Receipt” shall have the meaning specified in the Custodial Agreement.

 

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

 

“UCC Filing Jurisdiction” shall mean, with respect to Seller, the State of
Delaware.

 

“UCC Financing Statement” shall have the meaning specified in
Article 3(b)(i)(K).

 

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

 

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

 

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

 

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“Volcker Rule” shall have the meaning specified in Article 9(x).

 

The terms defined in this Agreement have the meanings assigned to them in this
Agreement and include the plural as well as the singular, and the use of any
gender herein shall be deemed to include the other gender.  All references to
articles, schedules and exhibits are to articles, schedules and exhibits in or
to this Agreement unless otherwise specified.  The words “hereof,” “herein” and
“hereunder” and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement.  The term “or” has, except where otherwise indicated, the inclusive
meaning represented by the phrase “and/or.”  The term “include” or “including”
shall mean without limitation by reason of enumeration.  All accounting terms
not specifically defined herein shall be construed in accordance with generally
accepted accounting principles.  References to “good faith” in this Agreement
shall mean “honesty in fact in the conduct or transaction concerned”.  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 subject in all cases to the
implied covenant of good faith and fair dealing.

 

ARTICLE 3
INITIATION; CONFIRMATION; TERMINATION; FEES

 

(a)                                 Initiation and Confirmation.  (i) On or
after the Effective Date but prior to the Facility Expiration Date, Seller may,
from time to time request that Buyer enter into a Transaction with respect to a
proposed Purchased Asset by delivering to Buyer a Transaction Request and Due
Diligence Package.  Buyer shall have the right to request such additional
diligence materials with respect to a proposed Purchased Asset as Buyer deems
necessary in its sole discretion.  Buyer shall use commercially reasonable
efforts to, within ten (10) Business Days after receipt of a Transaction
Request, Due Diligence Package and additionally requested diligence materials,
(i)(A) complete its due diligence review of the proposed Purchased Asset and
(B) receive an internal credit decision with respect to the proposed Transaction
and (ii) upon completion of the conditions in the preceding clause, (A) notify
Seller that the proposed Transaction is approved by delivering to Seller a duly
completed Confirmation executed by Buyer or (B) notify Seller that the proposed
Transaction is disapproved; provided that Buyer’s decision to approve any
Transaction shall be made in Buyer’s sole and absolute discretion.  Upon receipt
of a completed Confirmation executed by Buyer, Seller shall evidence its
agreement to proceed with the proposed Transaction by promptly returning to
Buyer a counter-executed Confirmation.  Unless Buyer and Seller agree otherwise
in writing, Buyer’s failure to respond to Seller within the time period set
forth in the preceding sentence shall be deemed disapproval of Seller’s request
to enter into a proposed Transaction.  For the avoidance of doubt, Seller
acknowledges that at no time shall Buyer be obligated to agree to purchase or
effect the transfer of any asset proposed by Seller.

 

(ii)                                  Upon the satisfaction of all conditions
set forth in Article 3(b) for the initial Transaction and Article 3(c) for each
Transaction (including the initial

 

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Transaction), the proposed Purchased Asset shall be transferred to Buyer as
specified in Article 7(a).

 

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

 

(b)                                 Conditions Precedent to Initial
Transaction.  Buyer’s agreement to enter into the initial Transaction is subject
to the satisfaction, immediately prior to or concurrently with the making of
such Transaction, of the following conditions precedent:

 

(i)                                     Delivery of Documents.  The following
documents, shall have been delivered to Buyer:

 

(A)                               this Agreement, duly completed and executed by
each of the parties hereto;

 

(B)                               the Fee Letter, duly completed and executed by
each of the parties thereto;

 

(C)                               the Exit Fee Side Letter, duly completed and
executed by each of the parties thereto;

 

(D)                               the Custodial Agreement, duly completed and
executed by each of the parties thereto;

 

(E)                                the Account Control Agreement, duly completed
and executed by each of the parties thereto;

 

(F)                                 the Guaranty, duly completed and executed by
each of the parties thereto;

 

(G)                               the Servicing Agreement, duly completed and
executed by each of the parties thereto;

 

(H)                              the Servicer Letter, duly completed and
executed by each of the parties thereto;

 

(I)                                   any and all consents and waivers
applicable to Seller;

 

(J)                                   a power of attorney from Seller
substantially in the form of Exhibit V hereto, duly completed and executed;

 

(K)                               a UCC financing statement for filing in the
UCC Filing Jurisdiction of Seller, naming Seller as “Debtor” and Buyer as
“Secured Party” and describing as “Collateral” “all assets of the debtor whether
now owned or existing or hereafter acquired or arising and wheresoever located,
including all

 

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accessions thereto and products and proceeds thereof” (the “UCC Financing
Statement”), together with any other documents necessary or reasonably requested
by Buyer to perfect the security interests granted by Seller in favor of Buyer
under this Agreement or any other Transaction Document;

 

(L)                                opinions of outside counsel to the Seller
Parties reasonably acceptable to Buyer (including, but not limited to, those
relating to enforceability, corporate matters, applicability of the Investment
Company Act of 1940, security interests and a Bankruptcy Code safe harbor
opinion);

 

(M)                            for each of the Seller Parties, good standing
certificates, certified copies of organizational documents and certified copies
of resolutions (or similar authority documents) with respect to the execution,
delivery and performance of the Transaction Documents and each other document to
be delivered by the Seller Parties from time to time in connection herewith; and

 

(N)                               all such other and further documents and
documentation as Buyer in its discretion shall reasonably require.

 

(ii)                                  Payment of Expenses.  Buyer shall have
received payment from Seller in the amount of all expenses, including but not
limited to reasonable legal fees and due diligence fees, actually incurred by
Buyer in connection with the preparation and execution of this Agreement, the
other Transaction Documents and any other documents prepared in connection
herewith or therewith and required to be paid by Seller pursuant to
Article 25(b).

 

(iii)                               Payment of Fees.  Buyer shall have received
payment from Seller of the Upfront Fee.

 

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

 

(i)                                     Transaction Approval.  Buyer shall have
(A) determined, in its sole discretion, that the each related proposed Purchased
Asset is an Eligible Asset and (B) received internal credit approval with
respect to the proposed Transaction, each of the foregoing, as evidenced by
Buyer’s execution and delivery of a Confirmation with respect thereto.

 

(ii)                                  Confirmation.  Seller shall have received
from Buyer a duly completed and executed Confirmation, and Seller shall have
duly executed the same and delivered such Confirmation to Buyer.

 

(iii)                               Waiver of Exceptions.  Buyer shall have
waived all exceptions contained in the related Requested Exceptions Report (as
evidenced by its execution and delivery of a Confirmation with respect thereto).

 

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(iv)                              Custodial Delivery; Trust Receipt; Asset
Schedule and Exception Report.  Seller shall have delivered to Custodian, in
accordance with the Custodial Agreement, the Custodial Delivery and the
Purchased Asset File with respect to each Eligible Asset and (A) Custodian shall
have issued to Buyer a Trust Receipt and a final Asset Schedule and Exception
Report and (B) Buyer shall have, in its sole and absolute discretion, approved
any and all exceptions listed on such Asset Schedule and Exception Report.

 

(v)                                 Due Diligence.  Any due diligence review
performed by Buyer with respect to the Eligible Asset (including without
limitation, confirmation by Buyer that it meets any applicable Qualified
Transferee Requirements) or otherwise in accordance with Article 26 is
satisfactory to Buyer in its sole discretion.

 

(vi)                              Facility Amount.  The sum of (A) the aggregate
Purchase Price for all Purchased Assets, plus (B) the requested Purchase Price
for the pending Transaction, plus (C) the aggregate amount of potential Future
Funding Advance Draws with respect to all Purchased Assets (if any), plus
(D) the amount of any Margin Excess, in the aggregate, shall not exceed Facility
Amount.

 

(vii)                           No Margin Deficit.  No Margin Deficit shall
exist, either immediately prior to or after giving effect to the requested
Transaction.

 

(viii)                        No Default or Event of Default.  No Default or
Event of Default shall have occurred and be continuing under any Transaction
Document.

 

(ix)                              No Material Adverse Effect.  No event shall
have occurred which is reasonably expected to have a Material Adverse Effect.

 

(x)                                 Representations and Warranties.  The
representations and warranties made by Seller in Article 9 shall be true and
correct in all material respects on and as of the Purchase Date for the pending
Transaction with the same force and effect as if made on and as of such date
(or, if any such representation or warranty is expressly stated to have been
made as of a specific date, as of such specific date).

 

(xi)                              Acknowledgement of Servicer.  Buyer shall have
received from Servicer a written acknowledgement that each Eligible Asset to be
sold to Buyer will be serviced in accordance with the Servicing Agreement as of
the related Purchase Date.

 

(xii)                           No Change in Law.  Buyer shall not have
determined that the introduction of or a change in any Requirement of Law or in
the interpretation or administration of any Requirement of Law has made it
unlawful, and no Governmental Authority shall have asserted that it is unlawful,
for Buyer to enter into Transactions.

 

(xiii)                        Repurchase Date.  The Repurchase Date for such
Transaction is not later than the Facility Expiration Date.

 

(xiv)                       Security Interest.  Seller shall have taken such
other action as is necessary or, in the reasonable opinion of Buyer, desirable
in order to transfer the related Eligible Asset to Buyer pursuant to this
Agreement and to perfect all security interests granted

 

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under this Agreement or any other Transaction Document in favor of Buyer as
secured party under the UCC with respect to such Eligible Asset.

 

(xv)                          Other Documents.  Buyer shall have received all
such other and further documents and documentation as Buyer in its reasonable
discretion shall require including, but not limited to, endorsements in blank of
the original Mortgage Note and assignments in blank of the underlying Mortgage
and related Mortgage documents.

 

(xvi)                       Payment of Fees.  Buyer shall have received payment
from Seller of all fees then due and payable, including the Unused Fee and the
Pre-Purchase Legal/Due Diligence Review Fee on the Purchase Date; provided, that
Seller agrees to pay Pre-Purchase Legal/Due Diligence Review Fee with respect to
any proposed Asset that Buyer determines will not be a Purchased Asset within
five (5) Business Days of Buyer’s written notice of such determination.

 

(d)                                 Early Repurchase of Purchased Assets. 
Seller shall be entitled to terminate a Transaction on demand and repurchase the
Purchased Asset subject to such Transaction on any Business Day prior to the
Repurchase Date (as determined in accordance with subclauses (a), (b), (c) and
(e) of the definition of Repurchase Date) (an “Early Repurchase Date”);
provided, however, that:

 

(i)                                     no later than five (5) Business Days
prior to such Early Repurchase Date, Seller notifies Buyer in writing of its
intent to terminate such Transaction and repurchase such Purchased Asset,
setting forth the Early Repurchase Date and identifying with particularity the
Purchased Asset to be repurchased on such Early Repurchase Date;

 

(ii)                                  no Default or Event of Default shall have
occurred and be continuing both as of the date notice is delivered pursuant to
Article 3(d)(i) above and as of the applicable Early Repurchase Date, unless
such Default or Event of Default is cured by such repurchase;

 

(iii)                               on such Early Repurchase Date, Seller pays
to Buyer an amount equal to the Repurchase Price for the applicable Purchased
Asset and any other amounts then due and payable under this Agreement,
including, without limitation, any amount payable pursuant to
Article 3(f)(ii) or any Exit Fee payable pursuant to the Fee Letter; and

 

(iv)                              no Margin Deficit shall exist both as of the
date notice is delivered pursuant to Article 3(d)(i) above and as of the
applicable Early Repurchase Date unless such Margin Deficit is cured
contemporaneously with such repurchase.

 

With respect to any Purchased Asset, within two (2) Business Days after receipt
of written notice from Buyer instructing a mandatory early repurchase with
respect to a Purchased Asset as to which a Mandatory Early Repurchase Event has
occurred, Seller shall be required to terminate the relevant Transaction and
repurchase such Purchased Asset and pay to Buyer cash in an amount equal to the
Repurchase Price for such Purchased Asset.

 

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(e)                                  Repurchase of Purchased Assets; Prepayment;
Future Funding Advances; Margin Excess.

 

(i)                                     Repurchase.  On the Repurchase Date for
any Transaction, termination of the Transaction will be effected by transfer to
Seller of the Purchased Assets being repurchased and any Income in respect
thereof received by Buyer (and not previously credited or transferred to, or
applied to the obligations of, Seller pursuant to Article 5) against the
simultaneous transfer of the Repurchase Price to an account of Buyer; provided,
however, that Buyer shall have no obligation to permit Seller to repurchase any
Purchased Asset if a Default or an Event of Default shall have occurred and be
continuing or any unsatisfied Margin Deficit shall exist unless such Margin
Deficit, Default or Event of Default would be cured by the repurchase of such
Purchased Asset or such Margin Deficit is concurrently paid by Seller in
accordance with Article 4 of this Agreement or such Default or Event of Default
is concurrently cured in accordance with this Agreement.  Concurrently with
payment of the Repurchase Price to Buyer in accordance with the foregoing on
such Repurchase Date, Buyer’s security interest in the related Collateral shall
terminate in accordance with Article 6(c).

 

(ii)                                  Prepayment.  On any Remittance Date before
the Repurchase Date for a Purchased Asset, Seller shall have the right, from
time to time, to transfer cash to Buyer for the purpose of reducing the Purchase
Price of, but not terminating, a Transaction and without the release of any
Collateral and without any prepayment fee or penalty.

 

(iii)                               Future Funding Advance Draws.  In the event
that (i) Seller is contractually obligated to make a future funding advance of
loan proceeds to the Mortgagor under a Purchased Asset pursuant to the related
Purchased Asset Documents and (ii) Buyer has agreed in its sole discretion to
make an additional advance with respect to the Purchase Price of such Purchased
Asset (which agreement of Buyer may be made prior to the initial Purchase Date
for such Purchased Asset and set forth in the Confirmation therefor), then in
connection with making such future funding advance to such Mortgagor, Seller may
submit to Buyer a written request (a “Future Funding Advance Draw Request”)
requesting that Buyer transfer to Seller cash in an amount that is not less than
$250,000 (or, up to two times for each Purchased Asset, $100,000) (with respect
to one or more future funding advances to the applicable Mortgagor) but does not
exceed the Margin Excess for such Purchased Asset, and Buyer shall (x) transfer
to Seller the amount of cash so requested (such transfer, a “Future Funding
Advance Draw”) (which shall increase the Purchase Price for such Purchased
Asset) and (y) deliver to Seller a revised Confirmation reflecting the
corresponding increase in the Purchase Price of such Purchased Asset and the
increased principal amount outstanding under the Purchased Asset and
accordingly, the increase in Market Value and such other consequential revisions
as may be appropriate, in each case, by no later than 2:00 p.m. (New York City
time) on the second (2nd) Business Day following the Business Day on which Buyer
determines in its sole discretion that the conditions precedent set forth below
are satisfied (or, in Buyer’s sole discretion, waived):

 

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(A)                               no Default or Event of Default shall have
occurred and be continuing both as of the date of such request and as of the
date of the Future Funding Advance Draw;

 

(B)                               the Future Funding Advance Draw shall not
cause the sum of the (A) the aggregate Purchase Price for all Purchased Assets,
plus (B) the requested Purchase Price for any pending Transaction, plus (C) the
aggregate amount of any potential Future Funding Advance Draws with respect to
all Purchased Assets, plus (D) the amount of any Margin Excess (after giving
effect to such Future Funding Advance Draw), in the aggregate, to exceed the
Facility Amount;

 

(C)                               the Effective Purchase Price Percentage after
giving effect to such Future Funding Advance Draw and the corresponding increase
in the outstanding principal balance of the Purchased Asset shall not exceed the
Purchase Price Percentage set forth in the related Confirmation for such
Purchased Asset;

 

(D)                               there is no Margin Deficit immediately prior
to and immediately after the Future Funding Advance Draw;

 

(E)                                if the Confirmation of the Transaction
relating to the applicable Purchased Asset specifies additional future advance
conditions precedent (including, without limitation, debt yield, debt service
coverage ratio and loan-to-value ratio tests as determined by Buyer and Seller),
such additional conditions precedent shall be satisfied immediately upon the
Future Funding Advance Draw;

 

(F)                                 Seller shall have delivered evidence
reasonably satisfactory to Buyer that all conditions precedent to the future
funding advance under the related Purchased Asset Documents shall have been
satisfied in all material respects;

 

(G)                               No event shall have occurred which is
reasonably be expected to have a Material Adverse Effect.

 

(H)                              The representations and warranties made by
Seller in Article 9 shall be true and correct in all material respects on and as
of the date of such Future Funding Advance Draw with the same force and effect
as if made on and as of such date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such specific
date); and

 

(I)                                   Buyer shall have received all such other
and further documents and documentation as Buyer in its reasonable discretion
shall require in connection with such Future Funding Advance Draw, provided that
such documents or documentation are in Seller’s possession or reasonably
obtainable to Seller.

 

The failure or delay of Seller, on any one or more occasions, to exercise its
rights under this Article 3(e)(iii) shall not change or alter the terms and
conditions of this Agreement or limit or waive the right of Seller to request a
Future Funding Advance Draw Request at a later date.

 

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(iv)                              Margin Excess.  With respect to any Purchased
Asset, Seller may submit to Buyer a written request, to be delivered no more
frequently than once each calendar month (a “Margin Excess Request”), requesting
that Buyer make an additional advance (a “Margin Excess Advance”) with respect
to the applicable Purchased Asset in the amount requested by Seller in such
Margin Excess Request that is not less than $250,000 (or, up to two times for
each Purchased Asset, $100,000) (but not to exceed the Margin Excess for such
Purchased Asset). Buyer shall by no later than 2:00 p.m. (New York City time) on
the second (2nd) Business Day following the Business Day of Buyer’s receipt of
such Margin Excess Request, (x) transfer to Seller the amount of cash requested
by Seller, and (y) deliver to Seller a revised Confirmation reflecting the
corresponding increase in the Purchase Price of such Purchased Asset.  Buyer’s
disbursement of any Margin Excess Advance (if any) shall be subject to
satisfaction of the following conditions precedent, as determined by Buyer in
its sole discretion (or, in Buyer’s sole discretion, waived):

 

(A)                               no Default or Event of Default shall have
occurred and be continuing both as of the date of such request and as of the
date of the Margin Excess Advance;

 

(B)                               the Margin Excess Advance shall not cause
(A) the aggregate Purchase Price for all Purchased Assets, plus (B) the
requested Purchase Price for any pending Transaction, plus (C) the aggregate
amount of any potential Future Funding Advance Draws with respect to all
Purchased Assets, plus (D) the amount of any Margin Excess (after giving effect
to such Margin Excess Advance), in the aggregate, to exceed the Facility Amount;

 

(C)                               the Effective Purchase Price Percentage after
giving effect to such Margin Excess Advance shall not exceed the Purchase Price
Percentage set forth in the related Confirmation for such Purchased Asset;

 

(D)                               there is no Margin Deficit immediately prior
to and immediately after the Margin Excess Advance;

 

(E)                                no event shall have occurred which is
reasonably expected to have a Material Adverse Effect; and

 

(F)                                 the representations and warranties made by
Seller in Article 9 shall be true and correct in all material respects on and as
of the date of such Margin Excess Advance with the same force and effect as if
made on and as of such date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such specific
date).

 

(f)                                   Costs and Expenses.  Upon written demand
by Buyer, Seller shall indemnify Buyer and hold Buyer harmless from any cost or
expense (including, without limitation, reasonable attorneys’ fees and
disbursements) that Buyer actually sustains or incurs as a consequence of (i) a
failure by Seller in repurchasing any Purchased Asset on the Early Repurchase
Date after Seller has given a notice in accordance with Article 3(d) of an Early

 

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Repurchase Date, (ii) any payment of the Repurchase Price on any day other than
a Remittance Date, or any conversion to the Alternative Rate in accordance with
Article 3(g) on any day other than a Pricing Rate Determination Date, and/or
(iii) any determination by Seller to not sell an Eligible Asset to Buyer after
Seller has notified Buyer of a proposed Transaction and Buyer has agreed to
purchase such Eligible Assets in accordance with the provisions of this
Agreement.

 

(g)                                  Alternative Rate.  If on the Pricing Rate
Determination Date for any Pricing Rate Period with respect to any Transaction,
Buyer shall have determined in the exercise of its sole and absolute business
judgment (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 LIBOR for such
Pricing Rate Period, Buyer shall give written notice thereof to Seller as soon
as practicable thereafter.  If such notice is given, the Pricing Rate with
respect to such Transaction for the Pricing Rate Period to which such Pricing
Rate Determination Date relates, and for any subsequent Pricing Rate Periods
until such notice has been withdrawn by Buyer (which withdrawal shall be
delivered by Buyer promptly after Buyer becomes aware that the condition for
switching to the Alternative Rate no longer exists), shall be a per annum rate
equal to the Federal Funds Rate plus the Applicable Spread (the “Alternative
Rate”).  In exercising its rights and remedies under this Article 3(g), Buyer
shall act in a manner similar to all similar repurchase facilities of which
Buyer is contemporaneously exercising similar remedies in agreements with
similarly situated counterparties.

 

(h)                                 [Intentionally Omitted].

 

(i)                                     Requirements of Law.  (1) 
Notwithstanding any other provision herein, if the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof after the
date of this Agreement shall make it unlawful for Buyer (A) to enter into
Transactions, then the commitment of Buyer hereunder to enter into new
Transactions shall forthwith be canceled, (B) to maintain or continue
Transactions, then a Repurchase Date shall occur for all Transactions on the
next Remittance Date or on such earlier date as may be required by law, or
(C) to accrue Purchase Price Differential based on a LIBOR rate, then the
Transactions then outstanding shall be converted automatically to Alternative
Rate Transactions on the next Pricing Rate Determination Date or within such
earlier period as may be required by law, as long as Buyer contemporaneously
acts in a similar manner under all similar repurchase facilities of Buyer.  If
any termination or conversion of a Transaction shall occur in accordance with
subclause (B) or (C) of the preceding sentence, Seller shall pay to Buyer such
amounts as may be required pursuant to Article 3(f)(ii).

 

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

 

(A)                               shall subject Buyer to any Taxes (other than
(i) Covered Taxes, (ii) Taxes described in clauses (a) through (e) of the
definition of Covered Taxes and (iii) Other Connection Taxes) with respect to
the Transaction Documents, any

 

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Purchased Asset or any Transaction, or change the basis of taxation of payments
to Buyer in respect thereof;

 

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

 

(C)                               shall impose on Buyer any other condition;

 

and the result of any of the foregoing is to increase the cost to Buyer of
entering into or maintaining the Transactions, then Seller shall promptly pay
Buyer, upon demand therefor, any additional amounts necessary to compensate
Buyer for such increased cost, as long as such increased cost is also assessed
against all sellers under similar repurchase facilities with Buyer.  This
covenant shall survive the termination of this Agreement and the repurchase by
Seller of any or all of the Purchased Assets.

 

(3)                                 If Buyer shall have determined that the
adoption of or any change in any Requirement of Law regarding capital adequacy
or in the interpretation or application thereof or compliance by Buyer or any
corporation controlling Buyer with any request or directive regarding capital
adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof 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 is
reasonably expected to achieve but for such adoption, change or compliance
(taking into consideration Buyer’s or such corporation’s policies with respect
to capital adequacy), then Seller shall promptly pay to Buyer such additional
amount or amounts as will compensate Buyer for such reduction, as long as such
additional amount is also assessed against all sellers under similar repurchase
facilities with Buyer.

 

(4)                                 If Buyer becomes entitled to claim any
amount pursuant to clauses (2) or (3) above, Buyer shall, within ten
(10) Business Days after becoming aware that it is so entitled, notify Seller in
writing specifying the event by reason of which it has become so entitled and
setting forth the calculation of any such amount, which calculation shall be
conclusive evidence of any such amount absent manifest error.  Without limiting
the foregoing, Seller shall not be required to compensate Buyer pursuant to
clauses (2) or (3) above for any increased costs incurred or reductions suffered
more than one hundred eighty (180) days prior to the date that Buyer notifies
Seller of the change in Requirement of Law giving rise to such increased costs
or reductions, and of Buyer’s intention to claim compensation thereof (except
that, if the change in Requirement of Law giving rise to such increased costs or
reductions is retroactive, then the 180 day period referred to above shall be
extended to include the period of retroactive effect thereof).

 

(5)                                 If Buyer shall exercise its rights under
Articles 3(i)(2) or 3(i)(3) hereof, then Seller shall have the right, within
ninety (90) days after Buyer has delivered written notice to Seller that it will
exercise its rights under Articles 3(i)(2) or 3(i)(3) hereof

 

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(unless Buyer has at such time waived any claims pursuant to such Articles or
such Articles no longer apply) to terminate this Agreement and all Transactions
hereunder by payment in full to Buyer of the then outstanding Repurchase Price
of all Purchased Assets, and, in connection with any such termination,
notwithstanding anything to the contrary contained herein or in any other
Transaction Document, there shall be no Exit Fee or prepayment fee or premium
due.

 

ARTICLE 4
MARGIN MAINTENANCE

 

(a)                                 Upon the occurrence and continuation of a
Credit Event with respect to any Purchased Asset, Buyer may, in its sole
discretion exercised in good-faith, re-determine the Market Value for such
Purchased Asset.  At any time that a Margin Deficit exceeds an amount equal to
the lesser of (i) $500,000 or (ii) two percent (2%) of the Purchase Price of
such Purchased Asset, Buyer may, deliver written notice to Seller substantially
in the form of Exhibit VIII (a “Margin Call Notice”).

 

(b)                                 No later than the second (2nd) Business Day
following receipt of such Margin Call Notice, Seller shall (at Seller’s
election) utilize any combination of the following, so that after giving effect
to such transfer or repurchase, no Margin Deficit shall be outstanding:
(A) transfer to Buyer cash in reduction of the Purchase Price in an amount equal
to the Margin Deficit or (B) repurchase one of more Purchased Assets pursuant to
Article 3(d).

 

(c)                                  The failure or delay by Buyer or Seller, on
any one or more occasions, to exercise its rights under this Article 4 shall not
(i) change or alter the terms and conditions of this Agreement, (ii) limit or
waive the right of Buyer or Seller to exercise its rights under this Agreement
at a later date or (iii) in any way create additional rights for any party
hereto.

 

ARTICLE 5
PAYMENTS; COLLECTION ACCOUNT

 

(a)                                 All transfers of funds to be made by Seller
hereunder shall be made in Dollars, in immediately available funds, without
deduction, set-off or counterclaim.

 

(b)                                 All payments required to be made directly to
Buyer shall be made in accordance with the wiring instructions set forth below
(or such other wire instructions provided by Buyer to Seller in writing), not
later than 2:00 p.m. (New York City time), on the date on which such payment
shall become due (and each such payment made after such time shall be deemed to
have been made on the next succeeding Business Day).

 

Bank Name:

Citibank, New York

ABA Number:

021000089

Account Number:

4078-4524

Account Name:

SSB

Attention:

Mortgage Ops

Reference:

Tremont Mortgage Trust

 

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(c)                                  Concurrently with the execution and
delivery of this Agreement, Seller shall establish a segregated deposit account
(the “Collection Account”) in the name of Seller for the benefit of Buyer at
Account Bank.  The Collection Account shall be subject to the Account Control
Agreement in favor of Buyer.  All amounts required to be deposited to the
Collection Account shall be sent in accordance with the wiring instructions set
forth below.

 

Bank Name:

PNC Bank National Association

ABA Number:

031207607

Account Number:

8026393881

Account Title:

TRMT CB Lender LLC

 

(d)                                 On each Remittance Date, Seller shall pay to
Buyer all accrued and unpaid Purchase Price Differential with respect to such
Remittance Date, to the extent not paid to Buyer in accordance with
Article 5(f).

 

(e)                                  Seller shall deposit, and shall cause
Servicer to deposit, all Income it or Servicer receives with respect to the
Purchased Assets into the Collection Account.  In furtherance of the foregoing,
if Buyer is at any time not a party to the Servicing Agreement, Seller shall
cause any Servicer to execute and deliver a Servicer Letter in accordance with
Article 27(e).  In addition, Seller shall require any Servicer that is an
Affiliate of Seller or Guarantor to deposit any Income received by such Servicer
into the Collection Account within two (2) Business Days of its receipt
thereof.  If a Servicer, Mortgagor or any other Person, as applicable, forwards
any Income with respect to a Purchased Asset to Seller rather than directly to
the Collection Account or the Servicer, Seller shall (i) take commercially
reasonable efforts to cause such Servicer, Mortgagor or Person, as applicable,
to forward any such future amounts directly to the Collection Account or the
Servicer, as applicable, and (ii) deposit in the Collection Account any such
amounts within two (2) Business Days of Seller’s receipt thereof (provided that,
if such Income is forwarded to Seller by a Servicer that is an Affiliate of
Seller or Guarantor, such two (2) Business Days period shall run concurrently
with the two (2) Business Days period given to such Servicer pursuant to the
preceding sentence).  Amounts in the Collection Account shall be remitted by
Account Bank in accordance with the applicable provisions of Articles 5(f), (g),
and (i).

 

(f)                                   So long as no Event of Default shall have
occurred and be continuing, Account Bank shall, on each Remittance Date, remit
all amounts on deposit in the Collection Account in the following amounts and
order of priority (or, with respect to Principal Payments in full on any
Purchased Asset received by Account Bank, on the first (1st) Business Day after
receipt remit from the Collection Account to Buyer the amount necessary to
reduce the outstanding Purchase Price of the applicable Purchased Asset to zero
together with accrued and unpaid Price Differential thereon):

 

(i)                                     first, to pay all fees and other amounts
then due and payable to Custodian pursuant to the Custodial Agreement and
Servicer pursuant to the Servicing Agreement (to the extent not previously
withdrawn from the Collection Account);

 

(ii)                                  second, to Buyer, an amount equal to all
accrued and unpaid Purchase Price Differential then due and payable;

 

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(iii)                               third, to Buyer, an amount equal to all
accrued and unpaid Unused Fee (if any) then due and payable;

 

(iv)                              fourth, to Buyer, an amount equal to any
unpaid Margin Deficit;

 

(v)                                 fifth, to the extent any Principal Payment
in part is received for any Purchased Asset, to Buyer to be applied in reduction
of the Purchase Price by an amount equal to the product of (x) the amount of
such Principal Payment multiplied by (y) the related Effective Purchase Price
Percentage for such Purchased Asset;

 

(vi)                              sixth, to Buyer, an amount equal to any other
amounts then due and payable to Buyer under any Transaction Document; and

 

(vii)                           seventh, the surplus, if any, to Seller.

 

(g)                                  Upon receipt of notice from Buyer that an
Event of Default shall have occurred and is continuing, and so long as Buyer has
not withdrawn such notice, Account Bank shall cease remitting funds to, or at
the direction of, Seller pursuant to Article 5(h) and shall instead remit, on
each Business Day beginning on the Business Day after receipt of such notice
from Buyer, all amounts on deposit in the Collection Account as of the prior
Business Day to Buyer for application to the Repurchase Obligations in such
order of priority as Buyer shall determine in its sole and absolute discretion

 

(h)                                 All remittances by Account Bank shall be
made (i) so long as no Event of Default shall have occurred and be continuing,
in accordance with instructions received from Seller or any Servicer on its
behalf and approved by Buyer, and (ii) during the continuance of an Event of
Default, in accordance with instructions received from Buyer.

 

(i)                                     If the amounts applied by Buyer as
provided in Articles 5(f) or (g) above are insufficient to pay all amounts due
and payable from Seller to Buyer under this Agreement or any Transaction
Document on a Remittance Date, the Repurchase Date, upon the occurrence of an
Event of Default or otherwise, Seller shall nevertheless remain liable for and
shall pay to Buyer when due all such amounts.

 

(j)                                    Withholding Taxes.

 

(i)                                     All payments made by Seller under the
Transaction Documents shall be made free and clear of and without deduction or
withholding for or on account of any Taxes unless the withholding or deduction
is required by applicable law. If Seller is required by applicable law to deduct
or withhold any Taxes from any such payment, Seller shall: (i) make such
deduction or withholding; (ii) pay the amount so deducted or withheld to the
appropriate Governmental Authority not later than the date when due;
(iii) deliver to Buyer, as soon as practicable, original tax receipts or a
certified copy of a receipt issued by such Governmental Authority or other
evidence reasonably satisfactory to Buyer of the payment when due of the full
amount of such Taxes; and (iv) if such deduction or withholding are Covered
Taxes, then the sum payable by Seller shall be increased as necessary so that
after such deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable

 

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under this Article 5) Buyer receives an amount equal to the sum it would have
received had no such deduction or withholding been made.

 

(ii)                                  In addition, Seller agrees to pay to the
relevant Governmental Authority in accordance with applicable law any current or
future recordation, stamp, documentary, intangible, filing or similar Taxes that
arise from any payment made under, from the execution, delivery, performance,
enforcement or registration of, from the receipt or perfection of a security
interest under, or otherwise with respect to, any Transaction Document, except
any such Taxes that are Other Connection Taxes imposed with respect to an
assignment of the Buyer’s rights and obligations under this Agreement  (such
Taxes other than Other Connection Taxes, “Other Taxes”).

 

(iii)                               Without duplication of the obligation of
Seller to pay additional amounts on account of Covered Taxes pursuant to
Article 5(j)(i) and to pay Other Taxes pursuant to Article 5(j)(ii), Seller
agrees to indemnify Buyer for the full amount of any and all Covered Taxes and
Other Taxes, and the full amount of any Covered Taxes imposed on amounts payable
under this Article 5(j)(iii), and any reasonable expenses arising therefrom or
with respect thereto,  (excluding any Taxes that are neither Covered Taxes nor
Other Taxes) arising therefrom or with respect thereto, whether or not such
Covered Taxes or Other Taxes were correctly or legally imposed or asserted by
the relevant Government Authority.  A certificate as to the amount of such
payment or liability delivered to Seller by Buyer shall be conclusive absent
manifest error.

 

(iv)                              Without prejudice to the survival of any other
agreement hereunder, the agreements and obligations of each party contained in
this Article 5(j) shall survive the termination of this Agreement. Nothing
contained in this Article 5(j) shall require Buyer to make available any of its
tax returns or other information that it deems to be confidential or
proprietary.

 

(v)                                 If a Person acquires any of the rights and
obligations of Buyer as an assignee under this Agreement, and such Person is not
a U.S. Person (a “Non-U.S. Person”), then such Non-U.S. Person shall, to the
extent it is legally entitled to do so, deliver to Seller on or before the date
when such Person becomes a party to this Agreement, two duly completed and
executed copies of, as applicable, IRS Form W-8BEN, IRS Form W-8BEN-E or IRS
Form W-8ECI or any successor forms thereto designated as such by the IRS.  If
the Non-U.S. Person is eligible for and wishes to claim exemption from US
federal withholding tax under Section 881(c) of the Internal Revenue Code with
respect to payments of “portfolio interest,” then such Person shall deliver both
the Form W-8BEN or Form W-8BEN-E and a statement, reasonably satisfactory to
Seller, certifying that such Person is not a bank, a “10 percent shareholder” or
a “controlled foreign corporation” within the meaning of Section 881(c)(3) of
the Internal Revenue Code. If any previously delivered form or statement becomes
inaccurate with respect to the Non-U.S. Person that delivered it, the Non-U.S.
Person shall promptly notify Seller of this fact. If a payment made to a
Non-U.S. Person under any Transaction Document would be subject to U.S. federal
withholding Tax imposed by FATCA if such Non-U.S. Person were to fail to comply
with the applicable reporting requirements of FATCA (including those contained
in Section 1471(b) or

 

34

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1472(b) of the Internal Revenue Code, as applicable), such Non-U.S. Person shall
deliver to the Seller at the time or times prescribed by law and at such time or
times reasonably requested by the Seller such documentation prescribed by
applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the
Internal Revenue Code) and such additional documentation reasonably requested by
the Seller as may be necessary for the Seller to comply with its obligations
under FATCA and to determine that such Non-U.S. Person has complied with such
Non-U.S. Person’s obligations under FATCA or to determine the amount to deduct
and withhold from such payment. Solely for purposes of this Article 5(j)(v),
“FATCA” shall include any amendments made to FATCA after the date of this
Agreement.

 

(vi)                              If Seller is required by law or regulation to
deduct or withhold any Taxes from or in respect of any amount payable hereunder
and Buyer is entitled to an exemption from or reduction of such Taxes, Buyer
agrees that it will deliver to Seller and, if applicable, to the authority
imposing the Taxes, any certificate or document reasonably requested by Seller
that would entitle Buyer to an exemption from, or reduction in the rate of,
withholding or deduction of Taxes form amounts payable hereunder by Seller to
Buyer.  In addition, Buyer, if 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.

 

(vii)                           If any party determines, in its sole discretion
exercised in good faith, that it has received a refund of any Taxes as to which
it has been indemnified pursuant to this Article 5(j) (including by the payment
of additional amounts pursuant to this Article 5(j)), it shall pay to the
indemnifying party an amount equal to such refund (but only to the extent of the
indemnity payments made under this Article 5(j) with respect to Taxes giving
rise to such refund), net of all out-of-pocket expenses (including Taxes) of
such indemnified party and without interest (other than interest paid by the
relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this Article 5(j)(vii) (plus
any penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority.  Notwithstanding anything to the contrary
in this Article 5(j)(vii), in no event will the indemnified party be required to
pay any amounts to an indemnifying party pursuant to this Article 5(j)(vii) 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 the 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.

 

(viii)                        If Buyer requests compensation under this
Article 5(j), Seller may, at its option, within thirty (30) days after delivery
of such request, terminate this facility by

 

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payment in full to Buyer of the then outstanding Repurchase Price of all
Purchased Assets and any other amounts then otherwise due and payable under the
facility (excluding any compensation which is not already due and payable
pursuant to this Agreement), and, in connection with any such termination,
notwithstanding anything to the contrary contained herein or in any other
Transaction Document, there shall be no Exit Fee or prepayment fee or premium
due.

 

ARTICLE 6
SECURITY INTEREST

 

(a)                                 Buyer and Seller intend that the
Transactions hereunder be sales to Buyer of the Purchased Assets and not loans
from Buyer to Seller secured by the Purchased Assets (other than as described in
Article 21(g)).  However, in order to preserve Buyer’s rights under the
Transaction Documents, in the event that a court or other forum re-characterizes
the Transactions hereunder as other than sales, and as security for the
performance by Seller of all of Seller’s obligations to Buyer under the
Transaction Documents and the Transactions entered into hereunder, or in the
event that a transfer of a Purchased Asset is otherwise ineffective to effect an
outright transfer of such Purchased Asset to Buyer, Seller hereby assigns,
pledges and grants a security interest in all of its right, title and interest
in, to and under the Collateral, whether now owned or hereafter acquired, now
existing or hereafter created and wherever located, subject to the terms and
conditions of this Agreement, to Buyer to secure the payment of the Repurchase
Price on all Transactions to which Seller is a party and all other amounts owing
by Seller to Buyer hereunder, including, without limitation, amounts owing
pursuant to Article 25, and under the other Transaction Documents (collectively,
the “Repurchase Obligations”).  For purposes of this Agreement, “Collateral”
shall mean:

 

(i)                                     the Collection Account and all monies
from time to time on deposit in the Collection Account and any and all
replacements, substitutions, distributions on, income relating to or proceeds of
any and all of the foregoing; and

 

(ii)                                  the Purchased Items.

 

(b)                                 Intentionally omitted.

 

(c)                                  Buyer’s security interest in the Collateral
and the Collection Account shall terminate only upon satisfaction of the
Repurchase Obligations.  Upon such satisfaction and upon request of Seller,
Buyer shall, at Seller’s sole expense, deliver to Seller such UCC termination
statements and other release documents as may be commercially reasonable and
return (or approve the return by Custodian in accordance with the Custodial
Agreement, as applicable) the Purchased Assets, Purchased Asset Documents and
Purchased Asset Files to Seller and reconvey the Purchased Assets to Seller and
release its security interest in the Collateral and the Collection Account, such
release to be effective automatically without further action by any party.  For
purposes of the grant of the security interest pursuant to this Article 6, this
Agreement shall be deemed to constitute a security agreement under the New York
Uniform Commercial Code (the “UCC”).  Buyer shall have all of the rights and may
exercise all of the remedies of a secured creditor under the UCC and the other
laws of the State of New York.  In furtherance of the foregoing, (i) Buyer, at
Seller’s sole cost and expense, shall cause to be filed in

 

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such locations as may be necessary to perfect and maintain perfection and
priority of the security interest granted hereby, UCC financing statements and
continuation statements (collectively, the “Filings”), and shall forward copies
of such Filings to Seller upon completion thereof, and (ii)  Seller shall from
time to time take such further actions as may be requested by Buyer in its sole
discretion to maintain and continue the perfection and priority of the security
interest granted hereby (including marking its records and files to evidence the
interests granted to Buyer hereunder).  Notwithstanding the foregoing, the
Repurchase Obligations shall be full recourse to Seller.

 

(d)                                 Seller acknowledges that it has no rights to
service the Purchased Assets but only has rights granted to it pursuant to
Article 27.  Without limiting the generality of the foregoing and the grant of a
security interest pursuant to Article 6(a), and in the event that Seller is
deemed by a court, other forum or otherwise to retain any residual Servicing
Rights (notwithstanding that such Servicing Rights are Purchased Items
hereunder), and for the avoidance of doubt, Seller hereby acknowledges and
agrees that the Servicing Rights constitute Collateral hereunder for all
purposes.  The foregoing provision is intended to constitute a security
agreement or other arrangement or other credit enhancement related to the
Agreement and Transactions hereunder as defined under Section 741(7)(xi) of the
Bankruptcy Code.

 

(e)                                  Seller agrees, to the extent permitted by
applicable law, that neither it nor anyone claiming through or under it will set
up, claim or seek to take advantage of any appraisement, valuation, stay,
extension or redemption law now or hereafter in force in any locality where any
Purchased Asset may be situated in order to prevent, hinder or delay the
enforcement or foreclosure of this Agreement, or the absolute sale of any of the
Purchased Assets, in each case in accordance with the terms of this Agreement,
or the final and absolute putting into possession thereof, immediately after
such sale, of the Buyers thereof, and Seller, for itself and all who may at any
time claim through or under it, hereby waives until the Repurchase Obligations
are paid in full, to the full extent that it may be lawful so to do, the benefit
of all such laws and any and all right to have any of the properties or assets
constituting the Purchased Assets marshaled upon any such sale, and agrees that,
upon the occurrence and during the continuance of an Event of Default, Buyer or
any court having jurisdiction to foreclose the security interests granted in
this Agreement may, upon the occurrence and during the continuance of an Event
of Default, sell the Purchased Assets as an entirety or in such parcels as Buyer
or such court may determine.

 

ARTICLE 7
TRANSFER AND CUSTODY

 

(a)                                 On the Purchase Date for each Transaction,
ownership of the related proposed Purchased Assets and other Purchased Items
shall be transferred to Buyer or its designee (including the Custodian) against
the simultaneous transfer of the Purchase Price for such proposed Purchased
Asset to an account of Seller specified in the related Confirmation and such
proposed Purchased Asset shall become a Purchased Asset hereunder.

 

(b)                                 Seller shall deposit the Purchased Asset
Files representing the Purchased Assets, or direct that such Purchased Asset
Files be deposited directly with the Custodian in accordance with the Custodial
Agreement.  The Purchased Asset Files shall be maintained in accordance with the
Custodial Agreement.  If a Purchased Asset File is not delivered to Buyer or its
designee

 

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(including the Custodian), such Purchased Asset File shall be held in trust by
Seller or its designee for the benefit of Buyer as the owner thereof.  Seller or
its designee shall maintain a copy of the Purchased Asset File and the originals
of the Purchased Asset File not delivered to Buyer or its designee (including
the Custodian).  The possession of the Purchased Asset File by Seller or its
designee is at the will of Buyer for the sole purpose of servicing the related
Purchased Asset, and such retention and possession by Seller or its designee is
in a custodial capacity only.  The books and records (including, without
limitation, any computer records or tapes) of Seller or its designee shall be
marked appropriately to reflect clearly the sale of the related Purchased Asset
to Buyer.  Seller or its designee (including the Custodian) shall release its
custody of the Purchased Asset File only in accordance with a written request
acknowledged in writing by Buyer and otherwise in accordance with the Custodial
Agreement.

 

(c)                                  From time to time, Seller shall forward to
the Custodian, with copy to Buyer, additional original documents or additional
documents evidencing any assumption, modification, consolidation or extension of
a Purchased Asset approved (if and to the extent required) in accordance with
the terms of this Agreement, and upon receipt of any such other documents (which
shall be clearly marked as to which Purchased Asset File such documents relate)
Custodian will be required to hold such other documents in the related Purchased
Asset File in accordance with the Custodial Agreement.

 

(d)                                 In the event Buyer elects to complete any
Assignment of Mortgage with respect to a Purchased Asset and cause the
recordation of such Assignment of Mortgage prior to the occurrence and
continuance of an Event of Default, Buyer shall provide written notice to Seller
of its intention prior to taking any such action.

 

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

 

(a)                                 Title to each Purchased Assets shall pass to
Buyer on the related Purchase Date, and Buyer shall have free and unrestricted
use of all Purchased Assets, subject, however, to the terms of this Agreement. 
Nothing in this Agreement or any other Transaction Document shall preclude Buyer
from engaging in repurchase transactions with the Purchased Assets or otherwise
selling, transferring, pledging, repledging, hypothecating or rehypothecating
the Purchased Assets, all on terms that Buyer may determine in its sole
discretion, but no such transaction shall relieve Buyer (i) of its obligations
to transfer the same Purchased Assets to Seller pursuant to Article 3, (ii) of
its obligations under Article 18, and (iii) of its obligation to apply all
amounts as required under Article 5(f).

 

(b)                                 Nothing contained in this Agreement or any
other Transaction Document shall obligate Buyer to segregate any Purchased
Assets delivered to Buyer by Seller.  Except to the extent expressly set forth
in this Agreement or any other Transaction Document, no Purchased Asset shall
remain in the custody of Seller or any Affiliate of Seller.

 

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ARTICLE 9
REPRESENTATIONS AND WARRANTIES

 

Seller represents and warrants to Buyer as of the Closing Date, each Purchase
Date, the date of any Future Funding Advance Draw and the date of any Margin
Excess Advance as follows:

 

(a)                                 Organization, Etc.  Seller (i) is duly
organized, validly existing and in good standing under the laws and regulations
of the State of Delaware, (ii) is duly licensed, qualified, and in good standing
in every state where such licensing or qualification is necessary for the
transaction of its business except where failure to do so could not be
reasonably likely to result in a Material Adverse Effect, (iii) has the limited
liability company power to own and hold the assets it purports to own and hold,
and to carry on its business as now being conducted and proposed to be conducted
and (iv) has the limited liability company power to execute, deliver, and
perform its obligations under the Transaction Documents.

 

(b)                                 Authorization, Acting as Principal,
Approvals, Compliance.  Seller represents that (i) it is duly authorized to
execute and deliver the Transaction Documents to which it is a party, to enter
into Transactions as contemplated hereunder and to perform its obligations under
the Transaction Documents, and has taken all necessary action to authorize such
execution, delivery and performance, (ii) it will engage in Transactions as
principal, (iii) each person signing any Transaction Document on its behalf is
duly authorized to do so on its behalf and (iv) it has obtained all
authorizations of any Governmental Authority required in connection with the
Transaction Documents and the Transactions hereunder and such authorizations are
in full force and effect.

 

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

 

(d)                                 Licenses and Permits.  Seller is duly
licensed, qualified and in good standing in every jurisdiction where such
licensing, qualification or standing is necessary, except where failure to do so
could not be reasonably likely to result in a Material Adverse Effect, and has
all licenses, permits and other consents that are necessary, for the transaction
of Seller’s business, including the acquisition, origination (if applicable),
ownership or sale of any Purchased Asset or other Purchased Item.

 

(e)                                  Due Execution; Enforceability.  The
Transaction Documents to which it is a party have been or will be duly executed
and delivered by Seller, for good and valuable consideration.  Once executed by
each applicable counterparty, 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 general principles of
equity.

 

(f)                                   Ability to Perform.  Seller does not
believe, nor does it have any reason or cause to believe, that it cannot perform
each and every covenant applicable to it and contained in the Transaction
Documents to which it is a party.

 

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(g)                                  Non-Contravention.  Neither the execution
and delivery of the Transaction Documents, nor consummation by Seller of the
transactions contemplated by the Transaction Documents (or any of them), nor
compliance by Seller with the terms, conditions and provisions of the
Transaction Documents (or any of them) will conflict with or result in a breach
of any of the terms, conditions or provisions of (i) the organizational
documents of Seller, (ii) any contractual obligation to which Seller is now a
party or the rights under which have been assigned to Seller or the obligations
under which have been assumed by Seller or to which the assets of Seller is
subject or constitute a default thereunder, or result thereunder in the creation
or imposition of any lien upon any of the assets of Seller, other than pursuant
to the Transaction Documents, (iii) any judgment or order, writ, injunction,
decree or demand of any court applicable to Seller, or (iv) any applicable
Requirement of Law.

 

(h)                                 Litigation; Requirements of Law.  Except as
disclosed in writing to Buyer, there is no action, suit, proceeding,
investigation or arbitration pending or, to Seller’s Knowledge, threatened in
writing against Seller or Guarantor or its respective assets that (i) is in an
amount greater than the Seller Threshold with respect to Seller or the Guarantor
Threshold with respect to Guarantor or (ii) if adversely determined is
reasonably likely to result in any Material Adverse Effect.  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, or decree of any arbitrator or Governmental Authority that is
reasonably likely to result in a Material Adverse Effect or is reasonably likely
to constitute a Default or an Event of Default or that would adversely affect
the legality, validity or enforceability of any Transaction Document.

 

(i)                                     Judgments.  Except as disclosed in
writing to Buyer, there are no judgments against Seller in the amount of the
Seller Threshold, or against Guarantor in the aggregate in an amount greater
than the Guarantor Threshold that, in each case, are unsatisfied of record or
docketed in any court located in the United States of America.

 

(j)                                    No Bankruptcies.  No Act of Insolvency
has ever occurred with respect to any Seller Party.

 

(k)                                 Intentionally Omitted.

 

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

 

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

 

(n)                                 No Decline in Market Value.  To Seller’s
Knowledge, there are no facts or circumstances that are reasonably likely to
cause or have caused the Market Value of any Purchased Asset to decline in any
material respect from the Market Value set forth in the Confirmation therefor as
of the Purchase Date (and as such Market Value may have been reduced by Buyer
after the Purchase Date), except as disclosed in writing by Seller.

 

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(o)                                 No Material Adverse Effect.  To Seller’s
Knowledge, no actual or prospective development, event or other fact has
occurred that has not been disclosed in writing by Seller and is reasonably
likely to have a Material Adverse Effect.

 

(p)                                 Intentionally Omitted.

 

(q)                                 Authorized Representatives.  The duly
authorized representatives of Seller are listed on and true signatures of such
authorized representatives are set forth on Exhibit IV hereto, or such other
most recent list of authorized representatives substantially in the form of
Exhibit IV hereto as Seller may from time to time deliver to Buyer.

 

(r)                                    Chief Executive Office; Jurisdiction of
Organization; Location of Books and Records.  Each Seller Party’s chief
executive office is located at the address for notices specified for such Seller
Party on Exhibit I, unless such Seller Party has provided a new chief executive
office address to Buyer in writing.  Seller’s jurisdiction of organization is
the State of Delaware.  The location where Seller keeps its books and records,
including all computer tapes and records relating to the Collateral, is its
chief executive office and/or at its corporate counsel’s office, Sullivan &
Worcester LLP, One Post Office Square, Boston, Massachusetts 02109 unless Seller
has provided a different address to Buyer in writing within thirty (30) days
following any change of address.

 

(s)                                   Representations and Warranties Regarding
the Purchased Assets.  Each of the representations and warranties made in
respect of the Purchased Assets pursuant to Exhibit X are true, complete and
correct in all material respects, except as disclosed in writing by Seller prior
to a Purchase Date for any Purchased Asset and reflected in the related
Confirmation.

 

(t)                                    Good Title to Purchased Assets. 
Immediately prior to the purchase of any Purchased Assets by Buyer from Seller,
(i) such Purchased Assets are free and clear of any lien, encumbrance or
impediment to transfer (including any “adverse claim” as defined in
Article 8-102(a)(1) of the UCC), (ii) such Purchased Assets are not subject to
any right of set-off, any prior sale, transfer, assignment or participation
(other than a transfer or chain of transfers from Affiliates of Seller to Seller
on or prior to the Purchase Date), or any agreement by Seller to assign, convey,
transfer or participate such Purchased Assets, in each case, in whole or in
part, (iii) Seller is the sole record and beneficial owner of and has good and
marketable title to such Purchased Assets and (iv)  Seller has the right to sell
and transfer such Purchased Assets to Buyer.  Upon the purchase of any Purchased
Assets by Buyer from Seller, Buyer shall be the sole owner of such Purchased
Assets free of any adverse claim existing as of the Purchase Date, subject to
the terms and conditions of the Purchased Asset Documents and Seller’s rights
under this Agreement.

 

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

 

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(v)                                 Security Interest in Collateral.  Upon
execution and delivery of the Account Control Agreement, Buyer shall have a
legal, valid, enforceable and fully perfected first priority security interest
in all right, title and interest of Seller in the Collection Account and all
funds credited thereto, subject to bankruptcy, insolvency, and other limitations
on creditors’ rights generally and to general principles of equity.  In the
event any related Transaction is recharacterized as a secured financing of the
Purchased Assets, the provisions of this Agreement are effective to create in
favor of Buyer a valid “security interest” (as defined in Section 1-201(b)(35)
of the UCC) in all rights, title and interest of Seller in, to and under the
Collateral, and:

 

(i)                                     with respect to the portion of the
Collateral constituting an “instrument” (as defined in Section 9-102(a)(47) of
the UCC), upon possession of such Collateral constituting an “instrument” by the
Custodian endorsed in blank in accordance with the Custodial Agreement or by a
bailee pursuant to a Bailee Agreement, Buyer shall have a valid, perfected first
priority security interest in such Collateral constituting an “instrument”; and

 

(ii)                                  upon filing the UCC Financing Statements
in the applicable UCC Filing Jurisdiction, Buyer shall have a valid, perfected
first priority security interest in the Collateral to the extent that a security
interest in the Collateral can be perfected under the UCC by the filing of
financing statements.

 

(w)                               Delivery of Purchased Asset File.  With
respect to each Purchased Asset, the Mortgage Note, the Mortgage, the Assignment
of Mortgage and any other document required to be delivered under this Agreement
and the Custodial Agreement for such Purchased Asset has been delivered to the
Buyer or the Custodian on its behalf (or shall be delivered in accordance with
the time periods set forth herein).

 

(x)                                 Covered Fund.  Seller has been structured so
as not to constitute, and is not, a “covered fund” for purposes of Section 619
of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Volcker
Rule”), and is relying upon an exception or exemption from the registration
requirements of the Investment Company Act set forth in Section 3(c)(5)(C) of
the Investment Company Act.

 

(y)                                 Federal Regulations.   Seller is not
required to register as an “investment company,” or a company “controlled by an
investment company,” within the meaning of the Investment Company Act of 1940,
as amended.

 

(z)                                  Taxes.  Seller has filed or caused to be
filed all tax returns or extensions thereto that, to Seller’s Knowledge, would
be delinquent if they had not been filed on or before the date hereof (taking
into account any extensions) and has paid all Taxes shown to be due and payable
on or before the date hereof on such returns or on any assessments made against
it or any of its property (in each case taking into account any extensions)
except for any such Taxes as are being appropriately contested in good faith by
appropriate proceedings and with respect to which adequate reserves have been
provided in accordance with GAAP; to Seller’s Knowledge, no Tax liens have been
filed against any of Seller’s assets, except for such Tax liens as are being
appropriately contested in good faith by appropriate proceedings and with
respect to which

 

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adequate reserves have been provided in accordance with GAAP, and, to Seller’s
Knowledge, no material claims are being asserted with respect to any such Taxes.

 

(aa)                          ERISA.  Seller does not have any Plans or any
ERISA Affiliates and makes no contributions to any Plans or any Multiemployer
Plans.

 

(bb)                          Solvency; No Fraudulent Transfer.  Seller has
adequate capital for the normal obligations foreseeable in a business of its
size and character and in light of its contemplated business operations.  Seller
is generally able to pay, and is paying, its debts as they come due. Neither the
Transaction Documents nor any Transaction thereunder are entered into in
contemplation of insolvency or with intent to hinder, delay or defraud any
creditors of Seller.  As of each Purchase Date, Seller is not insolvent within
the meaning of 11 U.S.C. Section 101(32) or any successor provision thereof and
the transfer and sale of the related Purchased Assets on such Purchase Date
pursuant hereto and the obligation to repurchase such Purchased Assets (i) will
not cause the liabilities of Seller to exceed the assets of Seller, (ii) will
not result in Seller having unreasonably small capital, and (iii) will not
result in debts that would be beyond Seller’s ability to pay as the same
mature.  Seller received reasonably equivalent value in exchange for each
transfer and sale of the Purchased Assets subject hereto to Buyer.  No Act of
Insolvency has occurred with respect to Seller.  Seller has only entered into
agreements on terms that would be considered arm’s length and otherwise on terms
consistent with other similar agreements with other similarly situated entities.

 

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

 

(dd)                          Full and Accurate Disclosure.  All information,
reports, statements, exhibits, schedules and certificates (i) furnished in
writing by or on behalf of any Seller Party in connection with the negotiation,
preparation or delivery of the Transaction Documents, or after the date hereof
pursuant to the terms of any Transaction Document or (ii) included in any
Transaction Document, when taken as a whole, do not and will not, contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements contained therein not misleading in light of the
circumstances under which they were made, or (in the case of projections) is or
will be based on reasonable estimates, on the date as of which such information
is stated or certified.

 

(ee)                            Financial Information; Business Condition.  All
financial data concerning the Seller Parties and, to Seller’s Knowledge, the
Purchased Assets that has been delivered by or on behalf of Seller to Buyer is
true, complete and correct in all material respects on the date of the delivery
thereof to Buyer.  All financial data concerning each Seller Party has been
prepared fairly in accordance with GAAP consistently applied.  To Seller’s
Knowledge, all financial data concerning the Purchased Assets and the other
Purchased Items has been prepared in accordance with standard industry
practices.  Since the delivery of such data, except as otherwise disclosed

 

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in writing to Buyer, there has been no change in the business condition
(financial or otherwise) or the results of operations (or prospects) of any
Seller Party or in the results of operations of any Seller Party, or the
Purchased Assets, which change could result in a Material Adverse Effect.

 

(ff)                              Intentionally Omitted.

 

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

 

(hh)                          Economic Sanctions, Patriot Act and Foreign
Corrupt Practices Act.   The Seller Parties are in compliance, in all material
respects, with (i) the U. S. laws related to economic sanctions administered by
the U.S. Department of Treasury, including its Office of Foreign Assets Control,
or the U.S. Department of State (the “Economic Sanctions”), including the
Trading with the Enemy Act, as amended, and each of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) and any other applicable enabling legislation or
executive order relating thereto, and (ii) the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (the
“Patriot Act”).  No part of the proceeds of any Transaction will be used,
directly or indirectly (i) for any payments to any governmental official or
employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as amended, or
(ii) to fund or finance any activities or business of or with any individual or
entity or in any country or territory that, at the time of such funding or
financing, is subject to country-wide or territory-wide Economic Sanctions
(including, as of the date hereof, Cuba, Iran, North Korea, Sudan and Syria) or
of or with any individual or entity that, at the time of such funding or
financing, is subject to Economic Sanctions.

 

(ii)                                  Prohibited Persons.  No Seller Party is a
Prohibited Person, or is located, organized or resident in a country or
territory that is subject to country-wide or territory-wide Economic Sanctions
(including, as of the date hereof, Cuba, Iran, North Korea, Sudan and Syria).

 

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

 

(kk)                          Anti-Money Laundering Laws.  Seller has complied
in all material respects with all financial recordkeeping and reporting
requirements, including those required by the laws

 

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referenced in Article 9(hh) (collectively, the “Anti-Money Laundering Laws”) and
no action, suit or proceeding by or before any Governmental Authority involving
Seller or Guarantor or any of their Affiliates with respect to such Anti-Money
Laundering Laws is pending or, to Seller’s Knowledge, threatened.

 

(ll)                                  Notice Address; Jurisdiction of
Organization.  Seller’s address for notices is as specified on Exhibit I hereto,
unless Seller has provided a new address to Buyer in writing.  Seller’s
jurisdiction of organization is the State of Delaware.

 

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

 

(nn)                          Tax Status.  For U.S. federal income tax purposes,
Seller is a disregarded entity.

 

(oo)                          No Real Property.  Seller has not at any time
since its formation held title to any real property.

 

ARTICLE 10
NEGATIVE COVENANTS OF SELLER

 

On and as of the date hereof and at all times while this Agreement or any
Transaction hereunder is in effect, Seller shall not, without the prior written
consent of Buyer:

 

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

 

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

 

(c)                                  create, incur, assume or suffer to exist
any Lien, encumbrance or security interest in or on any of the Purchased Assets
or the other Collateral, whether now owned or hereafter acquired, other than the
Liens and security interest granted by Seller pursuant to the Transaction
Documents;

 

(d)                                 create, incur, assume or suffer to exist any
Indebtedness if the same would cause Seller to violate the covenants contained
in Article 12;

 

(e)                                  subject to Article 27, permit (through the
giving of consent, waiver, failure to object or otherwise) any Mortgaged
Property or Mortgagor, in each case, relating to any Purchased Asset, to create,
incur, assume or suffer to exist any Liens or Indebtedness, including without
limitation, junior mortgage debt or mezzanine debt (in each case, excluding
Permitted Encumbrances against the related Mortgaged Property and except to the
extent that any such Liens or Indebtedness are otherwise created, incurred,
assumed or permitted in accordance with the Purchased Asset Documents);

 

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(f)                                   consent or assent to any Significant
Modification relating to any Purchased Asset or other agreement or instrument
relating to any Purchased Asset other than in accordance with Article 27 and the
Servicing Agreement or Servicer Letter (as applicable);

 

(g)                                  permit the organizational documents or
organizational structure of Seller to be amended in any material respect;

 

(h)                                 enter into any transaction of merger or
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation, winding up or dissolution), sell all or substantially
all of its assets (except in connection with the sale or securitization of
assets in the ordinary course of Seller’s business in accordance with this
Agreement);

 

(i)                                     suffer a Change of Control of Seller;

 

(j)                                    after the occurrence and during the
continuance of an Event of Default, make any distribution, payment on account
of, or set apart assets for, a sinking or other analogous fund for the purchase,
redemption, defeasance, retirement or other acquisition of any Capital Stock of
Seller or Guarantor, 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 or Guarantor; provided that, Seller and
Guarantor may distribute the minimum amount of cash required to be distributed
so that Guarantor can maintain its status as a “real estate investment trust”
under Sections 856 through 860 of the Code and avoid the payment of any income
or excise taxes imposed under Section 857(b)(1), 857 (b)(3) or 4981 of the Code;

 

(k)                                 acquire or maintain any right or interest in
any Purchased Asset or Mortgaged Property relating to any Purchased Asset that
is senior to or pari passu with the rights and interests of Buyer therein under
the Transaction Documents;

 

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

 

(m)                             directly, or through a Subsidiary, acquire or
hold title to any real property; or

 

(n)                                 make any election or otherwise take any
action that would cause Seller to be treated as an association taxable as a
corporation for U.S. federal income tax purposes.

 

ARTICLE 11
AFFIRMATIVE COVENANTS OF SELLER

 

On and as of the date hereof and at all times while this Agreement or any
Transaction hereunder is in effect, Seller covenants that:

 

(a)                                 Seller Notices.

 

(i)                                     Material Adverse Effect.  Seller shall
promptly notify Buyer of any Material Adverse Effect of which Seller has
Knowledge; provided, however, that nothing in this Article 11 shall relieve
Seller of its obligations under this Agreement.

 

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(ii)                                  Default or Event of Default.  Seller shall
promptly notify Buyer of the occurrence of any Default or Event of Default with
respect to Seller as soon as possible but in no event later than three
(3) Business Days after obtaining Knowledge of such event.

 

(iii)                               Purchased Asset Defaults.  Seller shall
promptly, and in any event not later than three (3) Business Days following
receipt thereof, deliver to Buyer any notice of the occurrence of any Purchased
Asset Event of Default.

 

(iv)                              Other Defaults, Litigation and Judgments.

 

(A)                               Seller shall promptly, and in any event not
later than three (3) Business Days, after obtaining Knowledge thereof, notify
Buyer of (x) any event of default (beyond applicable notice and grace periods)
on the part of  Seller under any Indebtedness or other material contractual
obligations; and (y) the commencement or written threat of, or judgment in, any
action, suit, proceeding, investigation or arbitration before any Governmental
Authority involving Seller or any of its respective assets.

 

(B)                               Seller shall promptly, and in any event not
later than two (2) Business Days after obtaining Knowledge thereof, notify Buyer
of (1) to the extent such default or event of default could reasonably be
expected to constitute an Event of Default hereunder, any default or event of
default (or similar event) on the part of a Guarantor under any Indebtedness or
other contractual obligations; and (2) the commencement or written threat of, or
judgment in, any action, suit, proceeding, investigation or arbitration before
any Governmental Authority involving a Guarantor or any of its assets, which is
likely (in Seller’s reasonable judgment) to be adversely determined and, if so,
could reasonably be expected to have a Material Adverse Effect as reasonably
determined by Seller.

 

(v)                                 Mandatory Early Repurchase Event. Seller
shall promptly, and in any event not later than three (3) Business Day after
obtaining Knowledge thereof, notify Buyer of any Mandatory Early Repurchase
Event that has occurred, which notice to Buyer shall state the details of such
Mandatory Early Repurchase Event including the related Purchased Assets for
which such Mandatory Early Repurchase Event has occurred and whether such
Mandatory Early Repurchase Event is continuing.

 

(vi)                              Decline in Market Value.  Seller shall notify
Buyer of any events, facts or circumstances that, in Seller’s good faith
determination, have caused or are reasonably likely to cause the Market Value of
any Purchased Asset to decline in any material respect from the Market Value set
forth in the Confirmation therefor as of the Purchase Date, promptly, and in any
event not later than three (3) Business Days, after obtaining Knowledge thereof.

 

(vii)                           Corporate Change.  Seller shall advise Buyer in
writing of the opening of any new chief executive office, or the closing of any
such office, of any Seller Party and of any change in any Seller Party’s name or
the places where the books and records

 

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pertaining to the Purchased Asset are held not less than fifteen (15) Business
Days prior to taking any such action.  Seller shall provide Buyer at least two
(2) Business Days prior notice of the removal and/or replacement of any
Independent Director, together with the name and contact information of the
replacement Independent Director and evidence of the replacement’s satisfaction
of the definition of Independent Director.

 

(viii)                        Anti-Terrorism; Anti-Bribery and Anti-Money
Laundering Laws.  Seller shall promptly (and in any event within three
(3) Business Days after knowledge thereof) notify Buyer of any violation of the
representation and warranty contained in Article 9(hh) (Economic Sanctions,
Patriot Act and Foreign Corrupt Practices Act), Article 9(ii) (Prohibited
Persons) or Article 9(kk) (Anti-Money Laundering Laws).

 

(b)                                 Reporting.

 

(i)                                     Purchased Asset Information.  Seller
shall provide, or shall cause to be provided, to Buyer (A) no later than the
fifteen (15th) day of each month, any and all property level financial
information (including, without limitation, operating and financial statements)
with respect to the Purchased Assets that was received during the preceding
calendar month and is in the possession of Seller or an Affiliate, including,
without limitation, rent rolls, income statements and STR reports; and
(B) promptly upon request, such other information with respect to the Purchased
Assets that may be reasonably requested by Buyer from time to time and to the
extent available to Seller.

 

(ii)                                  Monthly Servicing Report.  With respect to
the Purchased Assets and related Mortgaged Properties, not less than two
(2) Business Days prior to the Remittance Date each calendar month, Seller shall
provide, or shall cause to be provided, to Buyer a monthly operations/servicing
report covering collections, delinquencies, losses, recoveries, and cash flows,
in form reasonably acceptable to Buyer.

 

(iii)                               Quarterly Purchased Asset Reports.  With
respect to the Purchased Assets and related Mortgaged Properties, as frequently
as provided, but in no event later than within fifty (50) days after the last
day of any calendar quarter in any fiscal year, Seller shall provide, or shall
cause to be provided, to Buyer an asset management report prepared by Seller or
any Guarantor (to the extent of information in the possession of Seller or an
Affiliate), in form reasonably acceptable to Buyer.

 

(iv)                              Quarterly Financial Reports.  Seller shall
provide, or shall cause to be provided, to Buyer within forty-five (45) days
after the end of the first three quarterly fiscal periods of each fiscal year of
the Guarantor, the unaudited consolidated balance sheets of the Guarantor, as at
the end of such period and the related unaudited, consolidated statements of
income and member equity of the Guarantor for such period (without footnotes)
and the portion of the fiscal year through the end of such period, accompanied
by an officer’s certificate of the Guarantor, which certificate shall state that
said consolidated financial statements fairly present the financial condition of
Guarantor, in accordance with GAAP, consistently applied, as at the end of, and
for, such period (subject to normal year-end audit adjustments).

 

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(v)                                 Annual Financial Reports.  Seller shall
provide, or shall cause to be provided, to Buyer within ninety (90) days after
the end of each fiscal year of the Seller and the Guarantor, the audited
consolidated balance sheets of Guarantor and the unaudited balance sheet of
Seller, as at the end of such fiscal year and the related audited, consolidated
statements of income, member equity and cash flows of Guarantor and unaudited
statement of income and member equity of Seller for such fiscal year, and in the
case of such Guarantor financial statements, accompanied by an opinion thereon
of independent certified public accountants of recognized national standing,
which opinion shall not be qualified as to scope of audit or going concern and
shall state that said consolidated financial statements fairly present the
consolidated financial condition and results of operations of Guarantor in
accordance with GAAP, as at the end of, and for, such period (subject to normal
year-end audit adjustments).

 

(vi)                              Covenant Compliance Certificate. 
Simultaneously with the delivery of financial statements for each fiscal quarter
in any fiscal year and for fiscal year end, Seller shall deliver to Buyer a
Covenant Compliance Certificate from Seller addressed to Buyer certifying that,
as of the end of such fiscal quarter or fiscal year, as applicable, (x) the
Seller Parties are in compliance in all material respects with all of the terms
and requirements of the Transaction Documents (or, if any material
non-compliance exists, the steps being or proposed to be taken to remedy such
noncompliance), (y) Guarantor is in compliance with the financial covenants set
forth in the Guaranty (including therein detailed calculations demonstrating
such compliance) and (z) no Event of Default is then continuing.

 

(vii)                           Other Information.  Seller shall provide, or
shall cause to be provided, to Buyer such other information regarding the
financial condition, operations or business of Seller or any Mortgagor or
underlying guarantor with respect to a Purchased Asset as Buyer may reasonably
request and to the extent reasonably available to Seller, including without
limitation, such documents as Buyer may request evidencing the truthfulness of
the representations set forth in Article 9.

 

(c)                                  Additional Rights.  If Seller shall at any
time become entitled to receive or shall receive any rights, whether in addition
to, in substitution of, as a conversion of, or in exchange for a Purchased
Asset, or otherwise in respect thereof, Seller shall accept the same as Buyer’s
agent, hold the same in trust for Buyer and deliver the same forthwith to Buyer
(or the Custodian, as appropriate) in the exact form received, duly endorsed by
Seller to Buyer, if required, together with an undated power covering such
rights duly executed in blank to be held by Buyer hereunder as additional
collateral security for the Transactions.  If any sums of money or property so
paid or distributed in respect of the Purchased Assets shall be received by
Seller, Seller shall, until such money or property is paid or delivered to
Buyer, hold such money or property in trust for Buyer, segregated from other
funds of Seller, as additional collateral security for the Transactions.  If any
amount payable under or in connection with any of the Collateral shall be or
become evidenced by any promissory note, other instrument or certificated
security, such note, instrument or certificated security shall be promptly
delivered to Buyer, duly endorsed in a manner satisfactory to Buyer, to be
itself held as Collateral pursuant to the Transaction Documents.

 

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(d)                                 Defense of Buyer’s Security Interest;
Further Assurances.  At any time from time to time, at the sole expense of
Seller, Seller shall (i) defend the right, title and interest of Buyer in and to
the Purchased Assets and other Collateral against, and take such other action as
is necessary to remove, the Liens, security interests, claims and demands of all
Persons, (ii) at Buyer’s reasonable request, take all action Buyer reasonably
deems necessary or desirable to ensure that Buyer will have a first priority
security interest in the Purchased Assets and other Collateral subject to any of
the Transactions in the event such Transactions are recharacterized as secured
financings and (iii) at Buyer’s reasonable request, promptly and duly execute
and deliver such further instruments, documents and information and take such
further actions as Buyer may deem reasonably necessary or desirable to
(1) obtain or preserve the security interest granted hereunder, (2) ensure that
such security interest remains fully perfected at all times and remains at all
times first in priority as against all other creditors of Seller (whether or not
existing as of the date hereof or in the future), (3) obtain or preserve the
rights and powers herein granted (including, among other things, filing such UCC
financing statements as Buyer may request) or (4) ensure compliance with the
Patriot Act or any other Requirements of Law in all material respects.

 

(e)                                  Preservation of Existence; Compliance with
Law.  Seller shall, and shall cause Guarantor to, at all times (i) comply with
all material contractual obligations, (ii) comply in all material respects with
all Requirements of Law having jurisdiction over it or its assets and
(iii) maintain and preserve its legal existence and all of its material rights,
privileges, licenses and franchises necessary for the operation of its business
(including, without limitation, with respect to Seller, all lending licenses
held by it and its status as a “qualified transferee” (however denominated)
under all documents which govern the Purchased Assets).

 

(f)                                   Operations.  Seller shall continue to
engage in business of the same general type as now conducted by it or otherwise
as approved by Buyer prior to the date hereof.  Seller shall maintain records
with respect to the Collateral and the conduct and operation of its business
with no less a degree of prudence than if the Collateral were held by Seller for
its own account and shall furnish Buyer, upon reasonable request by Buyer or its
designated representative, with reasonable information obtainable by Seller with
respect to the Collateral and the conduct and operation of its business.

 

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

 

(h)                                 Compliance with Transaction Documents. 
Seller shall observe, perform and satisfy all the terms, provisions and
covenants required to be observed, performed or satisfied by it, and shall pay
when due all costs, fees and expenses required to be paid by it, under the
Transaction Documents.  Seller shall cause the Guarantor to at all times comply
with the terms and conditions of the Guaranty, including without limitation, any
financial covenants contained therein.  Seller shall be solely responsible for
the fees and expenses of Custodian, Account Bank, and Servicer.

 

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(i)                                     Taxes and Other Charges.  Seller shall
timely file all income, franchise and other tax returns required to be filed by
it and shall timely pay and discharge all taxes, levies, assessments, liens and
other charges imposed on it, on its income or profits, on any of its property or
on the Collateral prior to the date on which penalties attach thereto, except
for any such tax, levy, assessment, liens or other charge which is being
contested in good faith and by proper proceedings and against which adequate
reserves are being maintained in accordance with GAAP.

 

(j)                                    ERISA.  Seller shall not violate the
representations and warranties contained in Article 9(xx).

 

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

 

(l)                                     Economic Sanctions, Patriot Act and
Foreign Corrupt Practices Act.  Seller shall not violate the representations and
warranties contained in Article 9(hh) (Economic Sanctions, Patriot Act and
Foreign Corrupt Practices Act), Article 9(ii) (Prohibited Persons) or
Article 9(kk) (Anti-Money Laundering Laws).

 

(m)                             Future Advances.  To the extent any future
advance is required to be made pursuant to the Purchased Asset Documents with
respect to any Purchased Asset, Seller shall be required to fund such future
advance in accordance with such Purchased Asset Documents, regardless of whether
Buyer agrees to fund an increase in the Purchase Price or the conditions for
increasing the Purchase Price under this Agreement have been satisfied with
regard to such future advance.   Any Purchased Asset with respect to which there
is any litigation or other proceeding alleging a failure to fund any future
advance as and when required (collectively, a “Future Advance Failure”) shall
cease being an Eligible Asset and shall be repurchased by Seller within two
(2) Business Days following receipt of written notice from Buyer.

 

ARTICLE 12
SINGLE PURPOSE ENTITY

 

On and as of the date hereof and at all times while this Agreement or any
Transaction hereunder is in effect and Seller covenants that:

 

(a)                                 Seller shall own no assets, and shall not
engage in any business, other than the Purchased Assets, proposed Purchased
Assets and Purchased Assets reacquired by Seller from Buyer, and other assets
incidental to the origination, acquisition, ownership, financing and disposition
of the Purchased Assets;

 

(b)                                 Seller shall not make any loans or advances
to any Affiliate or third party and shall not acquire obligations or securities
of its Affiliates other than those obligations related to Purchased Assets or
securities consisting of Purchased Assets;

 

(c)                                  Seller shall use only its own assets to pay
its debts and liabilities (including, as applicable, shared personnel and
overhead expenses), provided that the foregoing shall not require any Person to
make any capital contribution to Seller;

 

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(d)                                 Seller shall comply with the provisions of
its organizational documents;

 

(e)                                  Seller shall do all things necessary to
observe its organizational formalities and to preserve its existence;

 

(f)                                   Seller shall maintain all of its books,
records, financial statements and bank accounts separate from those of its
Affiliates (except that such financial statements may be consolidated to the
extent consolidation is permitted or required under GAAP or as a matter of
Requirements of Law; provided that appropriate notation shall be made on such
consolidated financial statements to indicate that Seller’s assets are pledged
as collateral for another security agreement) and file its own tax returns
(except to the extent Seller is treated as a “disregarded entity” for tax
purposes and is not required to file tax returns under Requirements of Law);

 

(g)                                  Seller shall be, and at all times shall
hold itself out to the public as, a legal entity separate and distinct from any
other entity (including any Affiliate) (other than for tax purposes and with
respect to consolidated financial statements), shall correct any known
misunderstanding regarding its status as a separate entity, shall conduct
business in its own name or through a servicer on its behalf, and shall not
identify itself or any of its Affiliates as a division of the other;

 

(h)                                 Seller shall maintain adequate capital for
the normal obligations reasonably foreseeable in a business of its size and
character and in light of its contemplated business operations and shall remain
solvent, provided that the foregoing shall not require any Person to make any
capital contribution to Seller;

 

(i)                                     Seller shall not commingle its funds or
other assets with those of any Affiliate or any other Person (it being
understood that transfers of Seller’s funds to a centralized account payable
system utilized by Seller and Guarantor and administered by Manager’s Parent
from which Seller’s expenses are paid does not violate or breach this covenant)
and shall maintain its properties and assets in such a manner that it would not
be costly or difficult to identify, segregate or ascertain its properties and
assets from those of others;

 

(j)                                    Seller shall maintain its properties,
assets and bank accounts separate from those of any Affiliate or any other
Person;

 

(k)                                 Seller shall not hold itself out to be
responsible for the debts or obligations of any other Person;

 

(l)                                     Seller shall not, without the prior
written consent of its Independent Director, take any action that is reasonably
expected to or is intended to result in an Act of Insolvency;

 

(m)                             Seller shall, at all times, have at least one
(1) Independent Director;

 

(n)                                 Seller’s organizational documents shall
provide that to the extent permitted by Requirements of Law any Independent
Director of Seller shall not have any fiduciary duty to anyone including the
holders of the equity interest 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

 

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Insolvency; provided that the foregoing shall not eliminate the implied
contractual covenant of good faith and fair dealing;

 

(o)                                 Seller shall not enter into any transaction
with an Affiliate of Seller except on commercially reasonable terms similar to
those available to unaffiliated parties in an arm’s length transaction;

 

(p)                                 Seller shall not pledge its assets to secure
the obligations of any other Person (other than under the Transaction
Documents);

 

(q)                                 Seller shall not form, acquire or hold any
Subsidiary or own any equity interest in any other entity; and

 

(r)                                    Seller shall not create, incur, assume or
suffer to exist any Indebtedness, Lien, encumbrance or security interest in or
on any of its property, assets, revenue, the Purchased Assets, the other
Collateral, whether now owned or hereafter acquired, other than (i) obligations
under the Transaction Documents, (ii) obligations under the documents evidencing
the Purchased Assets, and (iii) unsecured trade payables, in an aggregate amount
not to exceed the Seller Threshold at any one time outstanding, incurred in the
ordinary course of acquiring, owning, financing and disposing of the Purchased
Assets; provided, however, that any such trade payables incurred by Seller shall
be paid within sixty (60) days of the date incurred unless subject to a bona
fide dispute.

 

ARTICLE 13
EVENTS OF DEFAULT; REMEDIES; SET-OFF

 

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

 

(i)                                     Failure to Repurchase or Repay.  Seller
shall fail to repurchase Purchased Assets upon the applicable Repurchase Date or
shall fail to repay the Purchase Price with respect to any Purchased Asset when
and as required pursuant to the Transaction Documents.

 

(ii)                                  Failure to Pay Purchase Price
Differential.  Seller shall fail to pay any accrued and unpaid Purchase Price
Differential when due.

 

(iii)                               Failure to Cure Margin Deficit.  Seller
shall fail to cure any Margin Deficit in accordance with Article 4 when due.

 

(iv)                              Failure to Remit Principal Payment.  Seller
fails to remit (or cause to be remitted) to Buyer any Principal Payment received
with respect to a Purchased Asset for application to the payment of the
Repurchase Price for such Purchased Asset in accordance with Article 5(e).

 

(v)                                 Failure to Pay Fees. Seller shall fail to
pay any Exit Fee or any other fee hereunder as and when due.

 

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(vi)                              Other Failure to Pay.  Seller shall fail to
make any payment not otherwise enumerated that is owing to Buyer under the
Transaction Documents that has become due, whether by acceleration or otherwise,
and, if no notice and/or grace period is expressly provided for such payment in
this Agreement, the same is not cured within two (2) Business Days after receipt
of demand thereto from Buyer.

 

(vii)                           Act of Insolvency.   An Act of Insolvency occurs
with respect to Seller or any Guarantor.

 

(viii)                        Admission of Inability to Pay.  Seller or any
Guarantor shall admit in writing to any Person its inability to, or its
intention not to, perform any of its respective obligations under any
Transaction Document.

 

(ix)                              Transaction Documents.  Any Transaction
Document or a replacement therefor acceptable to Buyer shall for whatever reason
be terminated (other than by Buyer without cause) or cease to be in full force
and effect, or shall not be enforceable in accordance with its terms, or any
Person (other than Buyer) shall contest the validity or enforceability of any
Transaction Document or the validity, perfection or priority of any Lien granted
thereunder, or any Person (other than Buyer) shall seek to disaffirm, terminate
or reduce its obligations under any Transaction Document, provided with respect
to the Servicing Agreement and Custodial Agreement it shall not be an Event of
Default hereunder if such agreements are replaced by replacement agreements
satisfactory to Buyer prior to termination.

 

(x)                                 Cross-Default.

 

(A)                               Seller shall be in default (beyond any
applicable notice and cure periods) under any of its Indebtedness with an
outstanding principal amount of at least the Seller Threshold, which default
(A) is a monetary default or (B) permits the acceleration of the maturity of
obligations by any other party to or beneficiary with respect to such
Indebtedness, and Seller fails to repurchase all Purchased Assets within two
(2) Business Days thereafter.

 

(B)                               Guarantor shall be in default (beyond any
applicable notice and cure periods) under any of its Indebtedness with an
outstanding principal amount of at least the Guarantor Threshold, which default
(A) is a monetary default or (B) permits the acceleration of the maturity of
obligations by any other party to or beneficiary with respect to such
Indebtedness, and Seller fails to repurchase all Purchased Assets within two
(2) Business Days thereafter.

 

(C)                               Guarantor shall be in a material non-payment
default (beyond any applicable notice and cure periods) under any of its
Indebtedness which default results in the acceleration of the maturity of
obligations by any other party to or beneficiary with respect to such
Indebtedness with an asserted damage claim in excess of the Guarantor Threshold
and Seller fails to repurchase all Purchased Assets within two (2) Business Days
thereafter.

 

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(xi)                              Judgment.  A final non appealable judgment by
any competent court in the United States of America for the payment of money
shall have been (A) rendered against Seller in an amount greater than the Seller
Threshold or (B) rendered against Guarantor in an amount greater than the
Guarantor Threshold, and in each case, such judgment remains undischarged or
unpaid, unless the execution of such judgment is stayed by posting of cash, bond
or other collateral acceptable to Buyer in the amount of such judgment within
thirty (30) days after the entry thereof.

 

(xii)                           ERISA.  Seller shall violate the representations
and warranties contained in Article 9(aa) (ERISA).

 

(xiii)                        Ownership; Security Interest.  Either (A) the
Transaction Documents shall for any reason not cause, or shall cease to cause,
Buyer to be the owner free of any adverse claim of any of the Purchased Assets
or (B) if the Transaction Documents with respect to any Transaction shall for
any reason cease to create and maintain a valid first priority security interest
in favor of Buyer in any of the Collateral.

 

(xiv)                       Government or Regulatory Action.   Any Governmental
Authority, or agency, any person, agency or entity acting or purporting to act
under Governmental Authority or any regulatory or self-regulatory authority
shall (1) have taken any action to displace the management of Seller in any
material respect or curtail its authority in any material respect in the conduct
of the business of Seller and such action has not been dismissed or stayed
within thirty (30) days or (2) have taken any action to remove, limit, restrict,
suspend or terminate the rights, privileges, or operations of Seller or
Guarantor in any material respect.

 

(xv)                          Conveyance of Assets.  Any conveyance, transfer or
disposal of all or substantially all assets of a Guarantor to any Person (other
than a Subsidiary of Guarantor).

 

(xvi)                       Change of Control.  A Change of Control shall occur
without the prior written consent of Buyer; provided, however if the event
causing the Change of Control is of the type referred to in clause (a) of the
definition of Change of Control and Buyer has not delivered its consent to such
event, then such event shall not constitute a Default or Event of Default under
this Agreement unless Seller fails to terminate this Agreement, repurchase the
Purchased Assets and repay the Repurchase Price in full by not later than sixty
(60) days after Seller’s receipt of written notice of such event.

 

(xvii)                    Representations.  Any representation, warranty or
certification made by any Seller Party or any Servicer that is an Affiliate of
any Seller Party to Buyer under this Agreement or any Transaction Document
(other than any representation contained in Article 9(s)) shall have been
incorrect or untrue when made or repeated or deemed to have been made or
repeated in any material respect and, to the extent that such incorrect or
untrue representation is capable of being cured by Seller, such breach is not
cured by Seller within five (5) Business Days after the earlier of receipt of
written notice thereof from Buyer or Seller’s knowledge of such incorrect or
untrue representation.

 

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(xviii)                 Guarantor Breach.  The breach by Guarantor of the
covenants made by it in Article V of the Guaranty.

 

(xix)                       Merger; Consolidation.  A merger or consolidation of
Seller or any Guarantor shall occur and either Guarantor and/or an Affiliate of
such Guarantor is not the direct or indirect controlling surviving entity.

 

(xx)                          Sale of Assets.  The sale or transfer of all or
substantially all assets of Seller or Guarantor to any person or entity other
than an Affiliate of Seller or Guarantor other than sales of assets of Seller in
accordance with the Transaction Documents.

 

(xxi)                       Other Covenant Default.  If Seller, or any Servicer
that is an Affiliate of Seller, shall breach or fail to perform any of the
terms, covenants or obligations under 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
the earlier of ten (10) Business Days after (a) delivery of notice thereof to
Seller by Buyer, or (b) Knowledge by Seller of such breach or failure to
perform; provided, however, that if such breach is not reasonably susceptible of
cure within such ten (10) Business Day period, then, provided that Seller
commences within such ten (10) Business Day period and diligently pursues a
cure, such ten (10) Business day period shall be extended as reasonably
necessary to complete the cure thereof for a period not to exceed ten
(10) additional Business Days.

 

(b)                                 Remedies.  Seller shall appoint Buyer as
attorney-in-fact of Seller in accordance with Exhibit V hereto for the purpose
of taking any action and executing or endorsing any instruments that Buyer may
deem necessary or advisable to accomplish the purposes of this Agreement, which
appointment as attorney-in-fact is irrevocable and coupled with an interest.  If
an Event of Default shall occur and be continuing with respect to Seller, the
following rights and remedies shall be available to Buyer:

 

(i)                                     At the option of Buyer, the Repurchase
Date for each Transaction hereunder shall, if it has not already occurred,
immediately occur (such date, the “Accelerated Repurchase Date”).

 

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

 

(A)                               Seller’s obligations hereunder to repurchase
all Purchased Assets shall become immediately due and payable on and as of the
Accelerated Repurchase Date and Buyer may immediately terminate all Transactions
pursuant to the Transaction Documents, in each case, with notice to Seller;

 

(B)                               to the extent permitted by applicable law, the
Repurchase Price with respect to each Transaction (determined as of the
Accelerated Repurchase Date) shall be increased by the aggregate amount obtained
by daily application of, on a 360 day per year basis for the actual number of
days during the period from and including the Accelerated Repurchase Date to,
but excluding, the date of payment of the Repurchase Price (as so increased),
(x) the Pricing Rate for such

 

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Transaction multiplied by (y) the Repurchase Price for such Transaction
(decreased by (I) any amounts actually remitted to Buyer by the Account Bank or
Seller pursuant to this Agreement and applied to such Repurchase Price, and
(II) any amounts applied to the Repurchase Price pursuant to
Article 13(b)(ii)(D));

 

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

 

(D)                               Upon prior notice to Seller, Buyer may in
accordance with Requirements of Law (1) immediately after the Accelerated
Repurchase Date, sell any and all of the Purchased Assets in its sole
discretion, and/or (2) in its sole and absolute discretion elect, in lieu of
selling all or a portion of such Purchased Assets, to give Seller credit for
such Purchased Assets in an amount equal to the fair market value of such
Purchased Assets, as determined by Buyer in its sole discretion, against the
aggregate unpaid Repurchase Price for such Purchased Assets and any other
amounts owing by Seller under the Transaction Documents.  The proceeds of any
disposition of Purchased Assets effected pursuant to sub-clause (1) above shall
be applied by Buyer in the order and manner set forth in Article 5(g).

 

(iii)                               The parties acknowledge and agree that
(A) the Purchased Assets subject to any Transaction hereunder are not
instruments traded in a recognized market, (B) in the absence of a generally
recognized source for prices or bid or offer quotations for any Purchased Asset,
the Buyer may establish the source therefor in its sole and absolute discretion
and (C) all prices, bids and offers shall be determined together with accrued
Income (except to the extent contrary to market practice with respect to the
relevant Purchased Assets).  The parties recognize that it may not be possible
to purchase or sell all of the Purchased Assets on a particular Business Day, or
in a transaction with the same Buyer, or in the same manner because the market
for such Purchased Assets may not be liquid.  In view of the nature of the
Purchased Assets, the parties agree that liquidation of a Transaction or the
Purchased Assets does not require a public purchase or sale and that a good
faith private purchase or sale shall be deemed to have been made in a
commercially reasonable manner.  Accordingly, Buyer may elect, in its sole and
absolute discretion, the time and manner of liquidating any Purchased Assets,
and nothing contained herein shall (A) obligate Buyer to liquidate any Purchased
Assets on the occurrence and during the continuance of an Event of Default or to
liquidate all of the Purchased Assets in the same manner or on the same Business
Day or (B) constitute a waiver of any right or remedy of Buyer.

 

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

 

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(v)                                 Buyer shall have, in addition to its rights
and remedies under the Transaction Documents, all of the rights and remedies
provided by applicable federal, state, foreign (where relevant), and local laws
(including, without limitation, if the Transactions are recharacterized as
secured financings, the rights and remedies of a secured party under the UCC, to
the extent that the UCC is applicable, and the right to offset any mutual debt
and claim), in equity, and under any other agreement between Buyer and Seller. 
Without limiting the generality of the foregoing, Buyer shall be entitled to set
off the proceeds of the liquidation of the Purchased Assets against all of
Seller’s obligations to Buyer under this Agreement, without prejudice to Buyer’s
right to recover any deficiency.

 

(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.

 

(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, to the extent permitted by law,
any defense Seller might otherwise have arising from the use of nonjudicial
process, disposition of any or all of the Purchased Assets, or from any other
election of remedies.  Seller recognizes that nonjudicial remedies are
consistent with the usages of the trade, are responsive to commercial necessity
and are the result of a bargain at arm’s length.

 

(c)                                  Set-off.  In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, Seller hereby grants to Buyer and its Affiliates
a right of set-off while an Event of Default exists, without notice to Seller,
any sum or obligation (whether or not arising under this Agreement, whether
matured or unmatured, whether or not contingent and irrespective of the
currency, place of payment or booking office of the sum or obligation) owed by
Seller to Buyer or any Affiliate of Buyer against (i) any sum or obligation
(whether or not arising under this Agreement, whether matured or unmatured,
whether or not contingent and irrespective of the currency, place of payment or
booking office of the sum or obligation) owed by Buyer or its Affiliates to
Seller and (ii) any and all deposits (general or specified), monies, credits,
securities, collateral or other property of Seller and the proceeds therefrom,
now or hereafter held or received for the account of Seller (whether for
safekeeping, custody, pledge, transmission, collection, or otherwise) by Buyer
or its Affiliates or any entity under the control of Buyer or its Affiliates and
its respective successors and assigns (including, without limitation, branches
and agencies of Buyer, wherever located).

 

Buyer and its Affiliates are hereby authorized at any time and from time to time
upon the occurrence and during the continuance of an Event of Default, without
notice to Seller, to set-off, appropriate, apply and enforce such right of
set-off against any and all items hereinabove referred to against any amounts
owing to Buyer or its Affiliates by Seller under the Transaction Documents,
irrespective of whether Buyer or its Affiliates shall have made any demand
hereunder and although such amounts, or any of them, shall be contingent or
unmatured and

 

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regardless of any other collateral securing such amounts.  If a sum or
obligation is unascertained, Buyer may in good faith estimate that obligation
and set-off in respect of the estimate, subject to the relevant party accounting
to the other when the obligation is ascertained.  Nothing in this
Article 13(c) shall be effective to create a charge or other security interest.
This Article 13(c) shall be without prejudice and in addition to any right of
set-off, combination of accounts, lien or other rights to which any party is at
any time otherwise entitled (whether by operation of law, contract or
otherwise).

 

ANY AND ALL RIGHTS TO REQUIRE BUYER OR ITS AFFILIATES TO EXERCISE THEIR RIGHTS
OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL OR PURCHASED ITEMS THAT SECURE
THE AMOUNTS OWING TO BUYER OR ITS AFFILIATES BY SELLER UNDER THE TRANSACTION
DOCUMENTS, PRIOR TO EXERCISING THEIR RIGHT OF SET-OFF WITH RESPECT TO SUCH
MONIES, SECURITIES, COLLATERAL, DEPOSITS, CREDITS OR OTHER PROPERTY OF SELLER,
ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED BY SELLER.

 

ARTICLE 14
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 (as well as the grant of the security interest
in Article 6 hereof) constitute a single business and contractual relationship
and have been made in consideration of each other.  Accordingly, each of Buyer
and Seller agrees (i) to perform all of its obligations in respect of each
Transaction hereunder, and that a default in the performance of any such
obligations shall constitute a default by it in respect of all Transactions
hereunder, (ii) that each of them shall be entitled to set-off claims and apply
property held by them in respect of any Transaction against obligations owing to
them in respect of any other Transactions hereunder and (iii) that payments,
deliveries and other transfers made by either of them in respect of any
Transaction shall be deemed to have been made in consideration of payments,
deliveries and other transfers in respect of any other Transactions hereunder,
and the obligations to make any such payments, deliveries and other transfers
may be applied against each other and netted.

 

ARTICLE 15
[INTENTIONALLY OMITTED]

 

ARTICLE 16
NOTICES AND OTHER COMMUNICATIONS

 

Unless otherwise provided in this Agreement, all notices, consents, approvals
and requests required or permitted hereunder shall be given in writing and shall
be effective for all purposes if sent by (a) hand delivery, with proof of
delivery, (b) certified or registered United States mail, postage prepaid,
(c) expedited prepaid delivery service, either commercial or United States
Postal Service, with proof of delivery, (d) by telecopier (with answerback
acknowledged) provided that such telecopied notice must also be delivered by one
of the means set forth in (a), (b) or (c) above, or (e) by electronic mail
provided that such electronic mail notice must also be

 

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delivered by one of the means set forth in (a), (b) or (c) above, to the address
and person specified in Exhibit I hereto or to such other address and person as
shall be designated from time to time by any party hereto in a written notice to
the other parties hereto in the manner provided for in this Article 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, if refused, the first attempted delivery on a Business Day, (x) in
the case of expedited prepaid delivery, upon delivery or, if refused, the first
attempted delivery on a Business Day, (y) in the case of telecopier, upon
receipt of answerback confirmation, provided that such telecopied notice was
also delivered as required in this Article 16 or (z) in the case of electronic
mail, upon receipt of a verbal or electronic communication confirming receipt
thereof, provided that such electronic mail notice was also delivered as
required in this Article 16.  A party receiving a notice that does not comply
with the technical requirements for notice under this Article 16 may elect to
waive any deficiencies and treat the notice as having been properly given.

 

ARTICLE 17
ENTIRE AGREEMENT; SEVERABILITY

 

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

 

ARTICLE 18
NON-ASSIGNABILITY

 

(a)                                 No Seller Party may assign any of its rights
or obligations under this Agreement or the other Transaction Documents without
the prior written consent of Buyer (which may be granted or withheld in Buyer’s
sole and absolute discretion) and any attempt by any Seller Party to assign any
of its rights or obligations under this Agreement or any other Transaction
Document without the prior written consent of Buyer shall be null and void.

 

(b)                                 Buyer may, without consent of Seller, at any
time and from time to time, assign or participate some or all of its rights and
obligations under the Transaction Documents and/or under any Transaction
(subject to Article 8(a)) to any Person and, in connection therewith, may
bifurcate or allocate (i.e. senior/subordinate) amounts due to Buyer provided,
that, so long as no Event of Default has occurred and is continuing, (i) Buyer
shall act as exclusive agent for all assignees or participants with respect to
any such assignment or participation in any dealings with Seller (subject to the
immediately succeeding sentence) with regard to this Agreement and the
Transactions, (ii) Seller’s obligations hereunder are not increased and its
rights hereunder are not impaired without Seller’s written consent and
(iii) such Person shall be a Qualified Transferee.  In connection with any sale,
assignment or transfer by Buyer hereunder, other than a sale, assignment,
transfer or participation of one hundred percent (100%) of its rights and
obligations under the Transaction Documents, provided that no Event of Default
has occurred and is continuing, Buyer shall continue to control decision-making
with respect to the Purchased Assets, determining whether to purchase any
Eligible Asset in a Transaction and determining the Market Value of the
Purchased Assets.  Seller agrees to cooperate with Buyer in connection with

 

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any such assignment, transfer or sale of participating interest and to enter
into such restatements of, and amendments, supplements and other modifications
to, the Transaction Documents to which it is a party in order to give effect to
such assignment, transfer or sale of participating interest.  In connection with
any sale, assignment or transfer by Buyer hereunder other than a sale,
assignment, transfer or participation by Buyer of one hundred percent (100%) of
its rights and obligations under the Transaction Documents provided no Event of
Default has occurred and is continuing (i) Buyer shall retain control and
authority over its rights and obligations under the Transaction Documents and
any Transaction and (ii) Seller shall not be obligated or required to deal
directly with any Person other than Buyer.

 

(c)                                  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 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.

 

(d)                                 Seller shall maintain a record of ownership
(the “Register”) identifying the name and address of each assignee hereunder and
the amount of each such assignee’s interest in the Purchased Assets, which
Register is intended to be maintained in accordance with Section 5f.103-1(c) of
the Treasury Regulations.  Transfers made pursuant to Article 18(b) shall be
recorded upon such Register.  Such Register shall be available for inspection by
Buyer at any reasonable time and from time to time upon reasonable prior
notice.  The entries in the Register shall be conclusive absent manifest error,
and Seller and Buyer 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.

 

(e)                                  If Buyer sells a participation with respect
to its rights under this Agreement or under any other Transaction Document with
respect to the Purchased Assets, Buyer shall, acting for this purposes as an
agent of the Seller, maintain a record of ownership (the “Participant Register”)
identifying the name and address of each participant and the amount of each such
participant’s interest in the Purchased Assets, provided that the Buyer and any
such other participant shall not have any obligation to disclose all or any
portion of the Participation Register (including the identity of any participant
or any information related to a participant’s interest in any Transaction
Document) to any Person except to the extent necessary to establish that such
interests are in registered form under Section 5f.103-1(c) of the Treasury
Regulations.  The entries in the Participant Register shall be conclusive absent
manifest error and Buyer shall treat each Person whose name is recorded in the
Participant Register as the owners of such participation for all purposes of
this Agreement notwithstanding any notice to the contrary.

 

(f)                                   Buyer shall cause each assignee,
participant or other transferee of Buyer to provide to Seller a property
completed and duly executed United States Internal Revenue Service form W-9,
W-8BEN, W-8BEN-E, W-8ECI, or W-8IMY and/or, as appropriate, other applicable
forms as described by the United States Internal Revenue Service or other
certifications reasonably requested by Seller for purposes of compliance with
applicable withholding provisions pursuant to the Internal Revenue Code and
underlying Treasury Regulations.  Buyer and each assignee, participant or
transferee hereby agrees to notify Seller of any change in circumstance that
causes a certificate or document provided by it to Seller to no longer be true

 

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and to provide updated forms upon the obsolescence of any previously delivered
form or promptly notify the Seller in writing of its legal inability to do so.
Seller shall have no obligation to pay any additional amounts hereunder that may
result from the tax status of any assignee, participant or transferee differing
from the tax status of Buyer.

 

ARTICLE 19
GOVERNING LAW

 

THIS AGREEMENT (AND ANY CLAIM OR CONTROVERSY HEREUNDER) 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 WITHOUT REGARD TO THE CONFLICT OF LAWS DOCTRINE APPLIED IN SUCH STATE
(OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE
STATE OF NEW YORK).

 

ARTICLE 20
NO WAIVERS, ETC.

 

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

 

ARTICLE 21
INTENT

 

(a)                                 The parties intend and acknowledge that
(i) each Transaction is a “repurchase agreement” as that term is defined in
Section 101(47) of Title 11 of the United States Code, as amended (except
insofar as the type of Assets subject to such Transaction or the term of such
Transaction would render such definition inapplicable), and a “securities
contract” as that term is defined in Section 741(7) of the Bankruptcy Code
(except insofar as the type of assets subject to such Transaction would render
such definition inapplicable), (ii) each Purchased Asset constitutes either a
“mortgage loan” or “an interest in a mortgage” as such terms are used in the
Bankruptcy Code and (iii) all payments hereunder are deemed “margin payments” or
settlement payments” as defined in the Bankruptcy Code.

 

(b)                                 The parties intend and acknowledge that
either party’s right to cause the termination, liquidation or acceleration of,
or to set-off or net termination values, payment amounts or other transfer
obligations arising under, or in connection with, this Agreement or any
Transaction hereunder or to exercise any other remedies pursuant to Article 13
is in each case a contractual right to cause or exercise such right as described
in Sections 362(b)(6), 555  and 561 of the Bankruptcy Code.

 

(c)                                  The parties intend and acknowledge that if
a party hereto is an “insured depository institution,” as such term is defined
in the Federal Deposit Insurance Act, as amended

 

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(“FDIA”), then this Agreement and each Transaction hereunder is a “qualified
financial contract,” as that term is defined in the FDIA and any rules, orders
or policy statements thereunder (except insofar as the type of assets subject to
such Transaction would render such definition inapplicable).

 

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

 

(e)                                  The parties intend and acknowledge that
this Agreement constitutes a “master netting agreement” as defined in
Section 101(38A) of the Bankruptcy Code, and as used in Section 561 of the
Bankruptcy Code and a “securities contract” with the meaning of Section 555 and
Section 559 of the Bankruptcy Code.

 

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

 

(g)                                  It is the intention of the parties that,
for U.S. Federal, state and local income and franchise tax purposes, each
Transaction constitute a financing to Seller (or any person from whom Seller is
disregarded for U.S. federal income tax purposes), and that Seller (or any
person from whom Seller is disregarded for U.S. federal income tax purposes) be
(except to the extent that Buyer shall have exercised its remedies following an
Event of Default) the owner of the Purchased Assets 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.

 

ARTICLE 22
DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

 

The parties acknowledge that they have been advised that:

 

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

 

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

 

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

 

ARTICLE 23
CONSENT TO JURISDICTION; WAIVERS

 

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

 

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

 

(c)                                  The parties hereby irrevocably waive, to
the fullest extent each may effectively do so, the defense of an inconvenient
forum to the maintenance of such action or proceeding and irrevocably consent to
the service of any summons and complaint and any other process by the mailing of
copies of such process to them at their respective address specified herein. 
The parties hereby agree that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.  Nothing in this Article 23
shall affect the right of either party to serve legal process in any other
manner permitted by law or affect the right of either party to bring any action
or proceeding against the other party or its property in the courts of other
jurisdictions.

 

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

 

(e)                                  EACH PARTY HEREBY WAIVES ANY RIGHT TO CLAIM
OR RECOVER FROM THE OTHER PARTY OR ANY INDEMNIFIED PARTY ANY SPECIAL, EXEMPLARY,
PUNITIVE, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND OR NATURE
WHATSOEVER OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES, WHETHER
THE LIKELIHOOD OF SUCH DAMAGES WAS KNOWN AND REGARDLESS OF THE FORM OF THE CLAIM
OF ACTION.

 

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ARTICLE 24
NO RELIANCE

 

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

 

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

 

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

 

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

 

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

 

(e)                                  no joint venture exists between Buyer and
any Seller Party; and

 

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

 

ARTICLE 25
INDEMNITY AND EXPENSES

 

(a)                                 Seller hereby agrees to indemnify Buyer,
Buyer’s Affiliates and each of their officers, directors, employees and agents
(“Indemnified Parties”) from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, fees, reasonable,
out-of-pocket costs and expenses or disbursements (including reasonable and
documented attorneys’ fees and disbursements of outside counsel) (all of the
foregoing included amounts, 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 arising out of or in
connection with, or relating to, or as a result of, this Agreement, the other
Transaction Documents, any Event of Default or any Transaction 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

 

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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 Buyer harmless from and
indemnify Buyer against all Indemnified Amounts with respect to all Purchased
Assets relating to or arising out of any violation or alleged violation of any
environmental law, rule or regulation or any consumer credit laws, including
without limitation ERISA, the Truth in Lending Act and/or the Real Estate
Settlement Procedures Act.  In any suit, proceeding or action brought by Buyer
in connection with any Purchased Asset for any sum owing thereunder, or to
enforce any provisions of any Purchased Asset, Seller shall save, indemnify and
hold Buyer harmless from and against all Indemnified Amounts suffered by reason
of any defense, set-off, counterclaim, recoupment or reduction or liability
whatsoever of the account debtor or obligor thereunder, arising out of a breach
by any Seller Party or any Affiliate thereof of any obligation thereunder or
arising out of any other agreement, indebtedness or liability at any time owing
to or in favor of such account debtor or obligor or its successors from Seller. 
Seller also agrees to reimburse Buyer as and when billed by Buyer for all
Buyer’s out-of-pocket costs and expenses incurred in connection with the
enforcement or the preservation of Buyer’s rights under any Transaction Document
or Transaction, including without limitation the reasonable and documented fees
and disbursements of its counsel.  Seller hereby acknowledges that the
obligations of Seller hereunder are recourse obligations of Seller.

 

(b)                                 Seller agrees to pay or reimburse on demand
all of Buyer’s out of pocket costs and expenses, including, without limitation,
the fees and expenses of accountants, reasonable attorneys and advisors,
incurred in connection with (i) the preparation, negotiation, execution and
consummation of, and any amendment, supplement or modification to, any
Transaction Document or any Transaction thereunder, whether or not such
Transaction Document (or amendment thereto) or such Transaction is ultimately
consummated, (ii) the consummation and administration of any Transaction,
(iii) any enforcement of any of the provisions of the Transaction Documents, any
preservation of the Buyer’s rights under the Transaction Documents or any
performance by Buyer of any obligations of Seller in respect of any Purchased
Asset, or any actual or attempted sale, or any exchange, enforcement,
collection, compromise or settlement in respect of any of the Collateral and for
the custody, care or preservation of the Collateral (including insurance, filing
and recording costs) and defending or asserting rights and claims of Buyer in
respect thereof, by litigation or otherwise, (iv) the maintenance of the
Collection Account and registering the Collateral in the name of Buyer or its
nominee, (v) any default by Seller in repurchasing the Purchased Asset after
Seller has given a notice in accordance with Article 3(e) of an Early Repurchase
Date, (vi) any payment of the Repurchase Price on any day other than a
Remittance Date or conversion to the Alternative Rate in accordance with
Article 3(g) on any day other than a Pricing Rate Determination Date (including
in each case, without limitation, as a consequence of terminating any hedging
transactions entered into by Buyer in relation to the Purchased Asset)
(“Breakage Costs”), (vii) any failure by Seller to sell any Eligible Asset to
Buyer on the Purchase Date thereof, (viii) any actions taken to perfect or
continue any lien created under any Transaction Document, (ix) Buyer owning any
Purchased Asset or other Purchased Item and/or (x) any due diligence performed
by Buyer in accordance with Article 26.  All such expenses shall be recourse
obligations of Seller to Buyer under this Agreement.  A certificate as to such
costs and expenses, setting forth the calculations thereof shall be conclusive
and binding upon Seller absent manifest error.

 

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(c)                                  This Article 25 shall survive termination
of this Agreement and the repurchase of all Purchased Assets.

 

(d)                                 This Article 25 shall have no application
with respect to Taxes other than any Covered Taxes that represent, losses,
claims, damages, etc. arising from any non-Tax claim.

 

ARTICLE 26
DUE DILIGENCE

 

(a)                                 Seller acknowledges that Buyer has the right
to perform continuing due diligence reviews with respect to the Purchased
Assets, the Seller Parties and Servicer for purposes of verifying compliance
with the representations, warranties and specifications made hereunder, or
otherwise.  Seller agrees that upon reasonable prior notice (unless an Event of
Default has occurred and is continuing, in which case no prior notice shall be
required), Seller shall provide (or shall cause any other Seller Party or
Servicer, as applicable, to provide) reasonable access to Buyer and any of its
agents, representatives or permitted assigns to the offices of Seller, such
other Seller Party or Servicer, as the case may be, during normal business hours
and permit them to examine, inspect, and make copies and extracts of the
Purchased Asset Files, Servicing Records and any and all documents, records,
agreements, instruments or information relating to such Purchased Assets in the
possession or under the control of such party.

 

(b)                                 Seller agrees that it shall, promptly upon
reasonable request of Buyer, deliver (or shall cause to be delivered) to Buyer
and any of its agents, representatives or permitted assigns copies of any
documents permitted to be reviewed by Buyer in accordance with Article 26(a).

 

(c)                                  Seller agrees to make available (or to
cause any other Seller Party or Servicer, as applicable, to make available) to
Buyer and any of its agents, representatives or permitted assigns (i) in person
at the time of any inspection pursuant to Article 26(a) or (ii) upon prior
written notice (unless an Event of Default has occurred and is continuing, in
which case no prior notice shall be required and there shall be no limitation on
frequency), by phone, as applicable, a knowledgeable financial or accounting
officer or asset manager, as applicable, of Seller, such other Seller Party or
Servicer, as the case may be, for the purpose of answering questions about any
of the foregoing Persons, or any other matters relating to the Transaction
Documents or any Transaction that Buyer reasonably needs to discuss with such
Person.

 

(d)                                 Without limiting the generality of the
foregoing, Seller acknowledges that Buyer may enter into Transactions with
Seller based solely upon the information provided by Seller to Buyer and the
representations, warranties and covenants contained herein, and that Buyer, at
its option, has the right at any time to conduct a partial or complete due
diligence review on some or all of the Purchased Assets.  Buyer may underwrite
such Purchased Assets itself or engage a third-party underwriter to perform such
underwriting.  Seller agrees to cooperate with Buyer and any third party
underwriter in connection with such underwriting, including, but not limited to,
providing Buyer and any third party underwriter with access to any and all
documents, records, agreements, instruments or information relating to such
Purchased Assets in the possession, or under the control, of any Seller Party or
any Affiliate thereof.

 

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(e)                                  Seller hereby acknowledges and agrees that
Buyer shall have the right to commission and order an Appraisal of any Mortgaged
Property at any time and from time to time, and Seller shall be responsible for
the out of pocket costs and expenses incurred by Buyer in obtaining one such
Appraisal for the Mortgaged Property or Properties securing a Purchased Asset
during any twelve (12) consecutive month period, commencing with the second year
after the related Purchase Date.  Seller shall cooperate with Buyer in
connection with the commission or order of any Appraisal by Buyer, and, subject
to the relevant Purchased Asset Documents, Seller shall use commercially
reasonable efforts to cause the applicable Mortgagor to cooperate with Buyer in
obtaining any such Appraisal, including, without limitation, by providing Buyer
with access to the Mortgaged Property.

 

(f)                                   Seller agrees to reimburse Buyer on demand
for any and all out of pocket costs and expenses (including, without limitation,
the reasonable fees and expenses of counsel) incurred by Buyer in connection
with its due diligence activities pursuant to this Article 26.

 

ARTICLE 27
SERVICING

 

(a)                                 The parties hereto agree and acknowledge
that the Purchased Assets are sold to Buyer on a “servicing released” basis and
Buyer is the sole owner of all Servicing Rights with respect to each Purchased
Asset so long as such Purchased Asset is subject to this Agreement. 
Notwithstanding the foregoing, Seller shall be granted a revocable license
(which license shall automatically be revoked upon the occurrence of an Event of
Default) to cause Servicer to service the Purchased Assets, and Seller shall, at
Seller’s sole cost and expense, cause the Servicer to service the Purchased
Assets in accordance with the Servicing Agreement and this Article 27 for the
benefit of Buyer.  Notwithstanding the foregoing, Seller shall not take any
Significant Modification of any Purchased Asset without first having given prior
notice thereof to Buyer in each such instance and receiving the prior written
consent of Buyer.

 

(b)                                 The obligation of Servicer (or Seller to
cause Servicer) to service any of the Purchased Assets shall cease, at Buyer’s
option, upon the earlier of (i) Buyer’s termination of Servicer in accordance
with Article 27(c), or (ii) the transfer of servicing to any other Servicer and
the assumption of such servicing by such other Servicer.  Seller agrees to
cooperate with Buyer in connection with any termination of Servicer.  Upon any
termination of Servicer, if no Event of Default shall have occurred and be
continuing, Seller shall at its sole cost and expense transfer the servicing of
the affected Purchased Assets to another Servicer approved by Buyer, such
approval not to be unreasonably withheld, conditioned or delayed, as
expeditiously as possible.

 

(c)                                  Buyer may, in its sole and absolute
discretion, terminate Servicer or any sub-servicer with respect to any Purchased
Asset (i) at any time that a default by the Servicer under the Servicing
Agreement or the Servicing Letter exists after the expiration of any applicable
grace, notice and/or cure period set forth therein or (ii) during the
continuance of an Event of Default, either for cause or without cause, in each
case of clauses (i) and (ii), without payment of any penalty or termination fee
by Buyer.

 

68

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(d)                                 Seller shall not, and shall not permit
Servicer to, employ any sub-servicers to service the Purchased Assets without
the prior written approval of Buyer.  If the Purchased Assets are serviced by a
sub-servicer, Seller shall irrevocably assign all Seller’s right, title and
interest in the servicing agreement with such sub-servicer to Buyer.

 

(e)                                  Seller shall cause Servicer and any
sub-servicer to service the Purchased Assets in accordance with Accepted
Servicing Practices.  Seller shall cause Servicer (at the request of Buyer) and
any sub-servicers engaged by Seller to execute a letter agreement with Buyer
substantially in the form attached as Exhibit IX hereto (a “Servicer Letter”)
acknowledging Buyer’s security interest in the Purchased Assets and agreeing to
remit all Income received with respect to the Purchased Asset to the Collection
Account in accordance with Article 5(e) or as otherwise directed by Buyer in
accordance with the Servicer Letter.

 

(f)                                   Seller agrees that Buyer is the owner of
all servicing records relating to the Purchased Assets, including but not
limited to the Servicing Agreement, 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 Assets
(the “Servicing Records”) so long as the Purchased Assets are subject to this
Agreement.  Seller covenants to (or to cause Servicer to) safeguard such
Servicing Records and to deliver them promptly to Buyer or its designee
(including the Custodian) at Buyer’s request.

 

(g)                                  The payment of servicing fees shall be
solely the responsibility of Seller and shall be subordinate to payment of
amounts outstanding and due to Buyer under the Transaction Documents.

 

ARTICLE 28
MISCELLANEOUS

 

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

 

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

 

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

 

(d)                                 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.

 

69

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(e)                                  This Agreement together with the other
Transaction Documents 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.

 

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

 

(g)                                  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.

 

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

 

(i)                                     Buyer hereby acknowledges and agrees
that except to the extent of the Guaranteed Obligations (as defined in the
Guaranty) of the Guarantor pursuant to the Guaranty, and subject to the terms,
conditions and limitations set forth therein, (a) all obligations of Seller
under the Agreement and the other Transaction Documents are recourse obligations
solely of Seller, and (b) none of the obligations of Seller under this Agreement
and the other Transaction Documents are recourse to the  Guarantor or any of
their Affiliates, subsidiaries, members, partners, officers, directors or
personnel.

 

(j)                                    All information regarding the terms set
forth in any of the Transaction Documents or the Transactions (the “Confidential
Information”) shall be kept confidential and shall not be disclosed by either
Seller or Buyer to any Person except (a) to the Affiliates of such party or its
or their respective directors, officers, employees, agents, accountants,
attorneys, advisors and other representatives (collectively, “Representatives”)
who are informed of the confidential nature of such information and instructed
to keep it confidential, (b) to the extent requested by any regulatory authority
or Governmental Authority or required by Requirements of Law (including any
disclosures required pursuant to any subpoena, legal process or other court or
regulatory authority order), (c) to the extent required to be included in the
financial statements of either Seller or Buyer or their respective Affiliates,
(d) to the extent required to exercise any rights or remedies under the
Transaction Documents or Purchased Asset Documents, (e) to the extent required
to consummate and administer a Transaction, and (f) to any actual or prospective
holder of a Participation Interest or other Person which agrees to comply with
this Article 28(j); provided, however, that, except for disclosures made
pursuant to clause (f) of this sentence, no such disclosure made with respect to
any Transaction Document shall include a copy of such

 

70

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Transaction Document to the extent that a summary would suffice, but if it is
necessary for a copy of any Transaction Document to be disclosed, all pricing
and other economic terms set forth therein shall be redacted before disclosure. 
In furtherance of the foregoing, Buyer agrees to keep confidential all
non-public information delivered by or on behalf of Seller or either Guarantor
or any of their Affiliates and shall not disclose such information other than as
permitted or required pursuant to the foregoing clauses (a) through (f),
inclusive, except that, after the occurrence of an Event of Default, all such
information relating solely to any Purchased Asset and the Collateral, but not,
for the avoidance of doubt, any such information relating to a Guarantor or any
of its Affiliates, shall be automatically excluded from the provisions of this
Article 28(j).

 

Notwithstanding anything in this Article 28(j) to the contrary, Confidential
Information shall not include any information that (i) is or becomes generally
available to the public through no fault of Buyer or any of its Representatives
in violation of this Article 28(j); (ii) is or becomes available to Buyer or any
of its Representatives on a non-confidential basis from a source other than
Seller not known to Buyer or its Representatives to be prohibited from
disclosing such information by a contractual, legal or fiduciary obligation of
confidentiality after due inquiry; (iii) is independently developed by Buyer or
any of its Representatives without use of or reliance on, either directly or
indirectly, any Confidential Information; (iv) was known to or in the possession
of Buyer or any of its Representatives on a non-confidential basis, without
appropriate documentary evidence thereof, prior to disclosure by Seller.

 

[SIGNATURES FOLLOW]

 

71

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

 

 

SELLER:

 

 

 

TRMT CB LENDER LLC

 

a Delaware limited liability company

 

 

 

By:

/s/ David M. Blackman

 

 

Name:

David M. Blackman

 

 

Title:

Chief Executive Officer

 

[Signature Page to Master Repurchase Agreement]

 

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

 

 

BUYER:

 

 

 

CITIBANK, N.A.

 

 

 

By:

/s/ Richard B. Schlenger

 

 

Name:

Richard B. Schlenger

 

 

Title:

Authorized Signatory

 

[Signature Page to Master Repurchase Agreement]

 

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

 

EXHIBIT I

 

NAMES AND ADDRESSES FOR COMMUNICATIONS

 

Buyer:

 

Citibank, N.A.

 

 

390 Greenwich Street

 

 

New York, New York 10013

 

 

Attn:

Richard Schlenger

 

 

Tel:

(212) 816-7806

 

 

Fax:

(212) 816-8307

 

 

Email:

richard.schlenger@citi.com

 

 

 

 

 

with copies to:

 

 

 

 

 

Sidley Austin LLP

 

 

787 Seventh Avenue

 

 

New York, New York 10019

 

 

Attn:

Brian Krisberg, Esq.

 

 

Tel:

(212) 839-8735

 

 

Fax:

(212) 839-5599

 

 

Email:

bkrisberg@sidley.com

 

 

 

Seller:

 

TRMT CB Lender LLC

 

 

Two Newton Place

 

 

255 Washington Street, Suite 300

 

 

Newton, Massachusetts 02458

 

 

Attn:

Douglas Lanois

 

 

Tel:

(617) 658-0755

 

 

Fax:

(617) 454-3645

 

 

Email:

dlanois@tremontadv.com

 

 

 

 

 

with copies to:

 

 

 

 

 

Tremont Realty Advisors LLC

 

 

Two Newton Place

 

 

255 Washington Street, Suite 300

 

 

Newton, Massachusetts 02458

 

 

Attn:

Jennifer B. Clark, Esq.

 

 

Tel:

(617) 796-8183

 

 

Fax:

(617) 454-3645

 

 

Email:

jclark@rmrgroupadvisors.com

 

 

 

 

 

and

 

 

 

 

 

Goulston & Storrs

 

 

400 Atlantic Avenue

 

Ex. I-1

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

 

 

 

Boston, Massachusetts 02110

 

 

Attn:

James H. Lerner, Esq.

 

 

Tel:

(617) 574-3525

 

 

Fax:

(617) 574-7607

 

 

Email:

jlerner@goulstonstorrs.com

 

Ex. I-2

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

 

EXHIBIT II

 

FORM OF TRANSACTION REQUEST

 

[DATE]

 

To:                             Citibank, N.A.

 

Re:                             Master Repurchase Agreement, dated as of
February 9, 2018 (as amended, restated, supplemented, or otherwise modified and
in effect from time to time, the “Repurchase Agreement”) by and among TRMT CB
Lender LLC and Citibank, N.A. (“Buyer”).

 

Ladies and Gentlemen:

 

Pursuant to Article 3(a) of the Repurchase Agreement, the undersigned hereby
requests that Buyer enter into a Transaction with respect to the Eligible
Asset(s) specified below in accordance with the other terms specified below. 
Capitalized terms used but not otherwise defined herein shall have the meanings
assigned thereto in the Repurchase Agreement.

 

Eligible Asset(s):

 

As identified on attached Schedule 1

Aggregate Principal Amount of Eligible Asset(s):

 

As identified on attached Schedule 1

Governing Agreements:

 

As identified on attached Schedule 1

Requested Purchase Price:

 

$             

Purchase Price Percentage:

 

     %

Effective Purchase Price Percentage:

 

     %

Amount of Seller’s Future Funding Obligations:

 

$             

Amount of Buyer’s Future Funding Advance Obligations:

 

$             

Requested Purchase Date:

 

 

Seller’s Wiring Instructions:

 

 

 

 

 

Bank Name:

 

[        ]

ABA Number:

 

[        ]

Account Number:

 

[        ]

Reference:

 

[        ]

 

In connection with this request for a Transaction, the Requested Exceptions
Report is attached as Schedule 2 hereto.  The applicable materials listed on the
Due Diligence Checklist are also enclosed herewith or have been otherwise
provided.

 

Ex. II-1

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

 

 

TRMT CB LENDER LLC

 

 

 

 

 

By: 

 

 

 

Name:

 

 

Title:

 

Ex. II-2

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

 

Schedule 1 to Transaction Request

 

ASSET INFORMATION

 

Loan / Property Flag:

 

 

 

 

 

Number of Properties:

 

 

 

 

 

Borrower:

 

 

 

 

 

Property Name (for each property):

 

 

 

 

 

Property Address (for each property):

 

 

 

 

 

Origination Date:

 

 

 

 

 

Loan Amount:

 

 

Current Principal Balance

 

$             

Maximum Principal Balance

 

$             

 

 

 

Interest Rate:

 

 

 

 

 

Maturity Date:

 

 

 

 

 

Governing Agreements:

 

 

 

Ex. II-3

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

 

Schedule 2 to Transaction Request

 

REQUESTED EXCEPTIONS REPORT

 

INSTRUCTIONS:  LIST ANY AND ALL EXCEPTIONS TO THE REPRESENTATIONS AND WARRANTIES
AND ANY OTHER ELIGIBILITY CRITERIA CONTAINED IN THE REPURCHASE AGREEMENT THAT
ARE APPLICABLE TO THE PROPOSED ASSET(S).

 

Ex. II-4

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

 

EXHIBIT III

 

FORM OF CONFIRMATION STATEMENT

 

[DATE]

 

To:          TRMT CB Lender LLC

 

Re:                             Master Repurchase Agreement, dated as of
February 9, 2018 (as amended, restated, supplemented, or otherwise modified and
in effect from time to time, the “Repurchase Agreement”) by and among TRMT CB
Lender LLC and Citibank, N.A. (“Buyer”).

 

Ladies and Gentlemen:

 

In accordance with Article 3(a) of the Repurchase Agreement, Buyer is pleased to
deliver this written CONFIRMATION of its agreement to enter into a Transaction
with you pursuant to which Buyer will purchase from you the Eligible Asset
identified below on the terms set forth herein and in accordance with the
Repurchase Agreement.  Capitalized terms used but not otherwise defined herein
shall have the meanings assigned thereto in the Repurchase Agreement.

 

Purchase Date:

                    , 20    

Eligible Asset(s):

As identified on attached Schedule 1

Aggregate Principal Amount of Eligible Asset(s):

As identified on attached Schedule 1

Governing Agreements:

As identified on attached Schedule 1

Repurchase Date:

                    , 20     

Purchase Price:

$                                

Initial Market Value of Purchased Asset:

$                                

Purchase Price Debt Yield

                                    %

 

 

Pricing Rate:

LIBOR plus Applicable Spread of         basis points

Purchase Price Percentage:

Effective Purchase Price Percentage:

          %

           %

 

 

Amount of Seller’s Future Funding Obligations:

$                                

Purchase Price LTV:

           %

 

Ex. III-1

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

 

Amount of Buyer’s Future Funding Advance Obligations:

$                                    

 

[FOR FUTURE FUNDING ADVANCE DRAW, IF APPLICABLE][In addition to the satisfaction
of all terms and conditions set forth in the Repurchase Agreement, the pending
Transaction shall be subject to the following conditions precedent:]

 

[FUTURE FUNDING ADVANCE DRAW CONDITIONS PRECEDENT TO BE ADDED]

 

Seller’s Wiring Instructions:

 

 

 

 

Bank Name:

[                 ]

 

ABA Number:

[                 ]

 

Account Number:

[                 ]

 

Reference:

[                 ]

 

You hereby certify that the proposed Purchased Asset is an Eligible Asset and
that the representations and warranties in Article 9 of the Repurchase Agreement
(subject to other Transactions and subject to any exceptions set forth in the
Requested Exceptions Report attached to the Transaction Request for the pending
Transaction) are true correct and complete on and as of the Purchase Date for
the pending Transaction in all material respects (or, if any such representation
or warranty is expressly stated to have been made as of a specific date, as of
such specific date).

 

Please evidence your agreement to proceed with the proposed Transaction by
promptly returning to Buyer a countersigned counterpart of this Confirmation.

 

 

CITIBANK, N.A.

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

AGREED AND ACKNOWLEDGED:

 

 

 

TRMT CB LENDER LLC

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

Ex. III-2

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

 

Schedule 1 to Confirmation Statement

 

ASSET INFORMATION

 

Loan / Property Flag:

 

 

 

Number of Properties:

 

 

 

Borrower:

 

 

 

Property Name (for each property):

 

 

 

Property Address (for each property):

 

 

 

Origination Date:

 

 

 

Loan Amount:

 

 

Current Principal Balance

$                            

 

Maximum Principal Balance

$                            

 

 

Interest Rate:

 

 

 

Maturity Date:

 

 

 

Governing Agreements:

 

 

Ex. III-3

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

 

EXHIBIT IV

 

AUTHORIZED REPRESENTATIVES OF SELLER

 

Name

 

Title

 

Specimen Signature

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ex. IV-1

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

 

EXHIBIT V

 

FORM OF POWER OF ATTORNEY

 

Know All Men by These Presents, that TRMT CB Lender LLC, a Delaware limited
liability company (“Seller”), does hereby appoint Citibank, N.A. (“Buyer”), its
attorney-in-fact to act in Seller’s name, place and stead, in any way that
Seller could do with respect to (i)  the completion of the endorsements of the
Purchased Assets, including without limitation the Mortgage Notes and
Assignments of Mortgages, and any transfer documents related thereto, (ii)  the
recordation of the Assignments of Mortgages, (iii) the preparation and filing,
in form and substance satisfactory to Buyer, of such financing statements,
continuation statements, and other uniform commercial code forms, as Buyer may
from time to time, reasonably consider necessary to create, perfect, and
preserve Buyer’s security interest in the Purchased Assets and (iv) upon the
occurrence and during the continuance of an Event of Default, the enforcement of
Seller’s rights under the Purchased Assets purchased by Buyer pursuant to the
Master Repurchase Agreement, dated as of February 9, 2018 (as amended, restated,
supplemented, or otherwise modified and in effect from time to time, the
“Repurchase Agreement”), by and between Seller and Buyer, and to take such other
steps as may be necessary or desirable to enforce Buyer’s rights against such
Purchased Assets, the related Purchased Asset Files and the Servicing Records to
the extent that Seller is permitted by law to act through an agent.  Capitalized
terms used but not otherwise defined herein shall have the meanings assigned
thereto in the Repurchase Agreement.

 

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

 

THIS 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 WITHOUT REGARD TO THE CONFLICT
OF LAWS DOCTRINE APPLIED IN SUCH STATE (OTHER THAN SECTION 1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK).

 

[SIGNATURE PAGE FOLLOWS]

 

Ex. V-1

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

 

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

 

 

TRMT CB LENDER LLC

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

STATE OF                                   )

COUNTY OF                               )

 

On         , 20   , before me,                                  , a Notary
Public, personally appeared                                  , who 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 authorized 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.

 

I certify under PENALTY OF PERJURY under the laws of the
                            that the foregoing paragraph is true and correct.

 

WITNESS my hand and official seal.

 

Signature

 

 

(Seal)

 

 

Ex. V-2

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

 

EXHIBIT VI

 

FORM OF COVENANT COMPLIANCE CERTIFICATE

 

[DATE]

 

Citibank, N.A.
390 Greenwich Street

New York, New York 10013

 

Re:                             Master Repurchase Agreement, dated as of
February 9, 2018 (as amended, restated, supplemented, or otherwise modified and
in effect from time to time, the “Master Repurchase Agreement”) by and between
Citibank, N.A. (“Buyer”) and TRMT CB Lender LLC (“Seller”)

 

Ladies and Gentlemen:

 

This Compliance Certificate is furnished pursuant to that Master Repurchase
Agreement and the Guaranty dated as of February 9, 2018 (the “Guaranty”) made by
Tremont Mortgage Trust, a Maryland real estate investment trust (“Guarantor”),
in favor of Buyer.  Capitalized terms used but not otherwise defined herein
shall have the meanings assigned thereto in the Master Repurchase Agreement.

 

THE UNDERSIGNED HEREBY CERTIFIES THAT:

 

(v)                                 I am a duly elected, qualified and
authorized [Chief Financial Officer] of Guarantor.

 

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

 

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

 

(viii)                        As of the date hereof, and since the date of the
certificate most recently delivered pursuant to Article 11(b)(iv) or 11(b)(v) of
the Master Repurchase Agreement, each Seller Party has observed or performed all
of its covenants and other agreements, and satisfied every condition, contained
in the Master Repurchase

 

Ex. VI-1

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

 

Agreement, the Guaranty and the other Transaction Documents to be observed,
performed or satisfied by it in all material respects.

 

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

 

(x)                                 Attached hereto are the financial statements
required to be delivered pursuant to Article 11(b) of the Master Repurchase
Agreement, which financial statements, to the best of my knowledge after due
inquiry, fairly and accurately present, the financial condition and results of
operations of Guarantor as of the date or with respect to the period therein
specified, determined in accordance with the requirements set forth in
Article 11(b) of the Master Repurchase Agreement.

 

(xi)                              Attached hereto are the calculations
demonstrating compliance with the financial covenants set forth in the Guaranty.

 

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

 

 

 

The foregoing certifications, together with the financial statements, updates,
reports, materials, calculations and other information set forth in any exhibit
or other attachment hereto, or otherwise covered by this Compliance Certificate,
are made and delivered as of the date first above written.

 

 

 

 

Name:

 

Title:

 

Ex. VI-2

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

 

EXHIBIT VII

 

DUE DILIGENCE CHECKLIST

 

General Information

Asset Summary Report, including without limitation, material issues summary
(credit and/or underwriting) and market analysis

Site Inspection Report

Maps and Photos

Summary of Qualified Transferee Requirements

 

Borrower/Sponsor Information

Credit Reports

Financial Statements

Tax Returns (to the extent obtained by the applicable Seller or required by the
loan documents)

Borrower Structure or Org Chart

Bankruptcy and Foreclosure History

 

Property Information

Historical Operating Statements

Rent Rolls

Budget

Retail Sales Figures (to the extent obtained by the applicable Seller or
required by the loan documents)

 

Leasing Information (to the extent required by the loan documents)

Stacking Plan

Major Leases and Abstracts (to the extent abstracts are prepared or available)

Tenant Estoppels

Standard Lease Forms

SNDA’s

 

Third Party Reports(1) and Internal Reviews

Appraisals

Engineering Reports

Environmental Reports (Phase I and, if recommended in Phase I, II)

Insurance Review (including Evidence of Insurance if not otherwise included in
Legal Binder)

Seismic Reports

Title Policy or final Pro Forma or binding “marked commitment”

Survey

Zoning Report

Flood Zone Certificates

 

For Hotel Assets

Hotel Franchise Compliance Reports

Hotel Franchise Agreement and Abstract

Hotel Franchise Comfort Letters

 

Documentation

Purchase and Sale Agreement

Closing Statement

Complete Legal Binder

Ground Lease and Abstract (to the extent abstracts are prepared or available)

Management Contract and Abstract (to the extent abstracts are prepared or
available)

 

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

(1)  All third party reports must be (1) satisfactory to Buyer in accordance
with its underwriting policies then in effect and (2) sufficient to cause Buyer
to be in compliance with all applicable regulatory requirements.

 

Ex. VIl-1

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

 

EXHIBIT VIII

 

FORM OF MARGIN CALL NOTICE

 

[DATE]

 

Via Electronic Transmission

 

To:          TRMT CB Lender LLC

 

Re:                             Master Repurchase Agreement, dated as of
February 9, 2018 (as amended, restated, supplemented, or otherwise modified and
in effect from time to time, the “Repurchase Agreement”), by and between TRMT CB
Lender LLC (“Seller”) and Citibank, N.A. (“Buyer”).

 

Ladies and Gentlemen:

 

Pursuant to Article 4(a) of the Repurchase Agreement, Buyer hereby notifies
Seller that a Margin Deficit has occurred as set forth below.  Capitalized terms
used but not otherwise defined herein shall have the meanings assigned thereto
in the Repurchase Agreement.

 

(a)           Aggregate Market Value of all Purchased Assets:       
$                  

(b)           Aggregate Margin Amount of all Purchased Assets:   
$                  

 

A Margin Deficit exists when the amount in (a) above is less than the amount in
(b) above.

 

(c)           Margin Deficit ((b) above minus (a) above):  $                  

 

WHEN A MARGIN DEFICIT EXISTS, SELLER IS REQUIRED TO CURE THE MARGIN DEFICIT
SPECIFIED IN (c) ABOVE IN ACCORDANCE WITH THE REPURCHASE AGREEMENT AND WITHIN
THE TIME PERIOD SPECIFIED IN ARTICLE 4(b) THEREOF.

 

 

CITIBANK, N.A.

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

Ex. VIll-I

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

 

EXHIBIT IX

 

FORM OF SERVICER LETTER

 

(attached)

 

Ex. IX-1

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

 

EXECUTION VERSION

 

SERVICER ACKNOWLEDGMENT AND IRREVOCABLE
INSTRUCTION LETTER

 

February 9, 2018

 

Midland Loan Services,

a Division of PNC Bank, National Association

10851 Mastin, Suite 300

Overland Park, Kansas 66210

Attention: Executive Vice President — Division Head

 

Re:                             Master Repurchase Agreement, dated as of the
date hereof by and between TRMT CB Lender LLC (“Seller”) and Citibank, N.A.
(“Buyer”) (as amended, supplemented, replaced or modified from time to time, the
“Repurchase Agreement”.

 

Ladies and Gentlemen:

 

1.              Midland Loan Services, a Division of PNC Bank, National
Association (in such capacity, “Servicer”), is servicing the mortgage loans
listed on Exhibit A attached hereto, as such list shall be updated from time to
time by Seller or Buyer (together with the related mortgaged properties, the
“Serviced Loans”) pursuant to that certain Master Servicing Agreement, dated as
of the date hereof, among Servicer, Tremont Realty Advisors LLC, a Maryland
limited liability company (“Manager”), and Seller (the “Servicing Agreement”). 
Capitalized terms used herein and not defined herein shall have the meanings
given in the Servicing Agreement.

 

2.              Servicer is hereby notified that Seller has sold the Serviced
Loans to Buyer pursuant to the Repurchase Agreement, and such Serviced Loans are
also subject to a security interest in favor of Buyer.

 

3.              Pursuant to Section 3.02 of the Servicing Agreement, Seller and
Buyer hereby direct Servicer to, and Servicer shall, establish and maintain an
account (the “Collection Account”) for the benefit of the Buyer and to deposit
into the Collection Account all payments, collections and other amounts received
by it with respect to the Serviced Loans (such amounts, “Income”) within one
(1) Business Day following receipt and identification thereof.  The Collection
Account shall be denominated “Midland Loan Services, a Division of PNC Bank,
National Association, on behalf of TRMT CB Lender LLC for the benefit of
Citibank, N.A.”, or in such other manner as Servicer and Seller mutually agree.

 

4.              Notwithstanding anything to the contrary herein or in the
Servicing Agreement, (a) on the Remittance Date, funds in the Collection Account
shall be remitted, net of any amounts that the Servicer is expressly permitted
in the Servicing Agreement to withdraw or retain with respect to the Serviced
Loans:  (i) so long as Servicer has not received a Notice (as defined below), in
accordance with the most recent written instructions received by Servicer from
Seller, or (ii) following receipt by Servicer of a Notice (as defined below), in
accordance with written instructions received from Buyer, and (b) in the case of
Principal Payments in full of any Serviced Loan, Servicer shall remit to Buyer,
pursuant to instructions received from Seller, within one (1) Business Day of
receipt and identification, the amount due Buyer, net of any amounts that the
Servicer is expressly permitted in the Servicing Agreement to withdraw or retain
with respect to the Serviced Loans.  Buyer and Seller shall only give
instructions to Servicer and apply

 

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

 

amounts received by Servicer in accordance with the terms and conditions of the
Repurchase Agreement.

 

5.              Servicer and Seller acknowledge and agree that at all times:
(a) subject to the Servicer’s rights under the Servicing Agreement, Buyer is the
sole owner of the servicing rights and the Serviced Loans; (b) until the Notice
(as defined below) is delivered to Servicer, Seller shall retain all obligations
of Owner under the Servicing Agreement with respect to the Serviced Loans;
(c) Servicer shall service the Serviced Loans on behalf of Buyer in accordance
with the Servicing Agreement; (d) unless Buyer has sent and Servicer has
received the Notice (as defined below), Seller has a limited revocable license
to exercise the rights as Owner with respect to the Serviced Loans under the
Servicing Agreement, (e) after Buyer has sent and Servicer has received the
Notice (as defined below), Buyer shall be entitled to exercise and enforce the
rights granted to Seller under the Servicing Agreement as modified by the terms
of this instruction letter (including, without limitation, pursuant to Sections
3.02, 7.02, and 8.01 of the Servicing Agreement) and (f) the Servicing Agreement
may not be modified or amended and no “Servicer Events of Default” thereunder
may be waived, in each case, without the prior written consent of Buyer.

 

1.              Servicer, Buyer and Seller acknowledge and irrevocably agree
that following Buyer’s delivery to Servicer and Servicer’s receipt at the
addresses for Servicer in the Servicing Agreement of written notice that an
Event of Default (each as defined in the Repurchase Agreement) exists and, if
applicable, Seller’s limited revocable license to exercise certain servicing
rights as Owner has been revoked in accordance with the Repurchase Agreement
(the “Notice”), Servicer shall: (a) only follow the instructions of Buyer with
respect to the Serviced Loans as if Buyer were Seller under the Servicing
Agreement, (b) continue to perform loan servicing under the Servicing Agreement
until such time as Buyer in its discretion, by written notice to Servicer,
terminates the Servicing Agreement with respect to the Serviced Loans in
accordance with the procedures set forth in the Servicing Agreement as modified
by this letter agreement, and transfers servicing of the Serviced Loans to Buyer
or Buyer’s designee, at Seller’s cost and expense, and (c) continue to deliver
to Buyer any information with respect to the Serviced Loans that Servicer would
otherwise be required to deliver to Owner with respect to the Serviced Loans
under the Servicing Agreement.  Following delivery of the Notice, Buyer shall be
treated for all purposes as “Owner” under the Servicing Agreement and shall be
deemed to have assumed the obligations of “Owner” under the Servicing Agreement
that arise from actions, inactions or events first occurring on or after the
date of delivery of the Notice to Servicer.  For the avoidance of doubt, Buyer
shall have no liability or obligation with respect to any obligations or
liabilities arising from actions or events occurring prior to the date of the
delivery of the Notice.  Upon termination by Buyer of the Servicing Agreement,
Servicer and Seller shall reasonably cooperate with Buyer in the transfer of
servicing responsibilities of the Serviced Loans to Buyer or its designee. 
Buyer and Seller acknowledge that Servicer shall have no liability for any
action, inactions or instructions directed or requested by Seller with respect
to the Serviced Loans prior to Servicer having received the Notice.  Following
receipt of the Notice, Servicer shall not take any action directed or requested
by Seller.  Upon Servicer’s receipt of the Notice from Buyer, although Servicer
retains the right to terminate the Servicing Agreement in accordance with the
terms thereof, in no event will Servicer terminate the Servicing Agreement
unless and until Servicer has transferred all funds to an account or accounts
which have been reasonably and timely designated by Buyer.

 

2.              Notwithstanding any contrary information which may be delivered
to Servicer by Seller, Servicer may conclusively rely (without any duty of
inquiry or investigation) on any direction, approval, consent, instruction,
communication, information or Notice received from Buyer as fully

 

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

 

authorized, valid and binding. Servicer is hereby and shall be released by
Seller, Buyer and their Affiliates from any and all liability resulting from its
reliance on any information, direction, approval, consent, instruction,
communication or Notice delivered by Buyer to Servicer.  The parties hereto
agree that Buyer is an intended third party beneficiary of the performance of
Servicer’s rights to Seller under the Servicing Agreement.

 

3.              Servicer further agrees that it shall send Buyer copies of all
reports and notices provided to Owner under the Servicing Agreement concurrently
with providing such reports and notices to Owner in the manner for delivery of
notices under the Servicing Agreement at the addresses set forth in the
Servicing Agreement.

 

4.              Buyer hereby approves the Servicing Agreement in the form
attached hereto as Exhibit B.

 

5.              Subject to Sections 5 and 6 hereof, Seller, as owner of the
Serviced Loans, shall be responsible for payment of any fees, expenses and
indemnities that may be due and owing pursuant to the Servicing Agreement, and
except as otherwise provided herein, Buyer shall not be responsible for the
payment of any such amounts.

 

6.              This letter agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original, but all
of which, when taken together, shall constitute one and the same instrument.

 

7.              This letter agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
conflicts of laws principles thereof other than Section 5-1401 of the New York
General Obligations law, which shall govern.

 

8.              Servicer, Seller and Buyer have executed this letter agreement
below to evidence their consent to the terms, covenants and conditions contained
in this letter agreement.

 

[Remainder of Page Intentionally Blank]

 

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

 

Please acknowledge receipt of this instruction letter by signing in the
signature block below and forwarding an executed copy to Buyer promptly upon
receipt.

 

 

Very truly yours,

 

 

 

CITIBANK, N.A.,

 

 a national banking association

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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

 

ACKNOWLEDGED AND AGREED TO BY:

 

 

 

SERVICER;

 

 

 

MIDLAND LOAN SERVICES, A DIVISION OF

 

PNC BANK, NATIONAL ASSOCIATION

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

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

 

 

SELLER:

 

 

 

TRMT CB LENDER LLC,

 

a Delaware limited liability company

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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

 

EXHIBIT A

 

SERVICED LOANS

 

Serviced Loan Name

 

Serviced Loan Number

 

Original Principal Balance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

EXHIBIT B

 

SERVICING AGREEMENT

 

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

 

EXHIBIT X

 

REPRESENTATIONS AND WARRANTIES
REGARDING EACH INDIVIDUAL PURCHASED ASSET

 

(attached)

 

Ex. XI-1

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

 

REPRESENTATIONS AND WARRANTIES
REGARDING EACH INDIVIDUAL PURCHASED ASSET

 

For purposes of the representations and warranties contained in this Exhibit X,
the phrases “the Seller’s knowledge” and other words and phrases of like import
shall mean, except where otherwise expressly set forth herein, the actual
knowledge of the chief financial officer or chief executive officer (whether by
use of the words “knowledge” or “know”), unless otherwise expressly specified of
such Person.  All information contained in documents which are part of the
Servicing Records shall be deemed to be within the Seller’s knowledge.

 

Capitalized terms used but not defined in this Exhibit X shall have the
respective meanings given them in the Master Repurchase Agreement to which this
Exhibit X is attached.

 

CERTAIN DEFINED TERMS

 

“Anticipated Repayment Date” shall mean, with respect to any Mortgage Loan that
is identified on the related Seller Asset Schedule as an ARD Loan, the date upon
which such Mortgage Loan commences accruing interest at an increased interest
rate.

 

“ARD Loan” shall mean a Mortgage Loan the terms of which provide that if, after
an Anticipated Repayment Date, the related Mortgagor has not prepaid such
Mortgage Loan in full, any principal outstanding on the Anticipated Repayment
Date will accrue interest at an increased interest rate.

 

“Assignment of Leases” shall mean any assignment of leases, rents and profits or
similar document or instrument executed by a Mortgagor in connection with the
origination of a Mortgage Loan.

 

“Fixed Rate Loan” shall mean any Mortgage Loan for which interest accrues at a
fixed rate.

 

“Ground Lease” shall mean a lease creating a leasehold estate in real property
where the fee owner as the ground lessor conveys for a term or terms of years
its entire interest in the land and buildings and other improvements, if any,
comprising the premises demised under such lease to the ground lessee (who may,
in certain circumstances, own the building and improvements on the land),
subject to the reversionary interest of the ground lessor as fee owner and does
not include industrial development agency (IDA) or similar leases for purposes
of conferring a tax abatement or other benefit.

 

“Moody’s” shall mean Moody’s Investors Service, Inc. and any successor thereto.

 

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

 

“Servicing Records” shall mean the servicing records relating to the Purchased
Assets, including but not limited to the Servicing Agreement, files, documents,
records, data bases,

 

Ex. X-2

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

 

computer tapes, proof of insurance coverage, copies of insurance policies,
appraisals, copies of other closing documentation, payment history records, and
any other records relating to or evidencing the servicing of Purchased Assets,
provided that Servicer shall not hold any originals of documents required to be
included as originals in the Purchased Asset File.

 

“Single-Purpose Entity” shall mean an entity, other than an individual, whose
organizational documents (or if the Mortgage Loan has a maximum principal
balance equal to $5 million or less, its organizational documents or the related
Purchased Asset Documents) provide substantially to the effect that it was
formed or organized solely for the purpose of owning and operating one or more
of the Mortgaged Properties securing the Mortgage Loans and prohibit it from
engaging in any business unrelated to such Mortgaged Property or Properties, and
whose organizational documents further provide, or which entity represented in
the related Purchased Asset Documents, substantially to the effect that it does
not have any significant assets other than those related to its interest in and
operation of such Mortgaged Property or Properties, or any indebtedness other
than as permitted by the related Mortgage(s) or the other related Purchased
Asset Documents, that it has its own books and records and accounts separate and
apart from those of any other person (other than a Mortgagor for a Mortgage Loan
that is cross-collateralized and cross-defaulted with the related Mortgage
Loan), and that it holds itself out as a legal entity, separate and apart from
any other person or entity.

 

“Treasury Regulations” shall mean applicable final or temporary regulations of
the U.S. Department of the Treasury.

 

REPRESENTATIONS AND WARRANTIES

 

A.            Mortgage Loans.  With respect to each Mortgage Loan that
(i) constitutes a Purchased Asset or (ii) is related to a Purchased Asset that
is a Mortgage Note:

 

(1)           Complete Servicing File.  All documents comprising the Servicing
Records are in the possession of the Servicer.

 

(2)           Type of Purchased Asset; Ownership of Purchased Assets. 
Immediately prior to the sale, transfer and assignment to Purchaser, no
Purchased Asset was subject to any assignment (other than assignments to the
Seller), participation or pledge, and the Seller had good title to, and was the
sole owner of, each Purchased Asset free and clear of any and all liens,
charges, pledges, encumbrances, participations, any other ownership interests
on, in or to such Purchased Asset other than Permitted Liens (as defined in the
Purchased Asset Documents) and Permitted Encumbrances (as defined below). 
Seller has full right and authority to sell, assign and transfer each Purchased
Asset, and upon the insertion of Purchaser’s name where applicable and
countersignature by Purchaser where applicable, the assignment to Purchaser
constitutes a legal, valid and binding assignment of such Purchased Asset free
and clear of any and all liens, pledges, charges or security interests of any
nature encumbering such Purchased Asset.

 

(3)           Purchased Asset File.  The Purchased Asset File contains a true,
correct and complete copy (or, if required by the Custodial Agreement, original)
of each document evidencing or securing the Purchased Asset, or affecting the
rights of any

 

Ex. X-3

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

 

holder thereof.  To the Seller’s knowledge, with respect to any document
contained in the Purchased Asset File that is required to be recorded or filed
in accordance with the requirements set forth in the Custodial Agreement, such
document is in form suitable for recording or filing, as applicable, in the
appropriate jurisdiction and has been or will be recorded or filed as required
by the Custodial Agreement.    With respect to each assignment, assumption,
modification, consolidation or extension contained in the Purchased Asset File,
if the document or agreement being assigned, assumed, modified, consolidated or
extended is required to be recorded or filed, to the Seller’s knowledge, such
assignment, assumption, modification, consolidation or extension is in form
suitable for recording or filing, as applicable, in the appropriate
jurisdiction.

 

(4)           Whole Loans.  Such Mortgage Loan is a whole Mortgage Loan and not
a Participation Interest or other partial interest in a Mortgage Loan.

 

(5)           Loan Document Status. Each related Mortgage Note, Mortgage,
Assignment of Leases (if a separate instrument) and other agreement executed by
or on behalf of the related Mortgagor in connection with such Purchased Asset is
the legal, valid and binding obligation of the related Mortgagor (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 as such
enforcement may be limited by (i) anti-deficiency laws, bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other similar laws affecting
the enforcement of creditors’ rights generally and (ii) general principles of
equity (regardless of whether such enforcement is considered in a proceeding in
equity or at law) and except that certain provisions in such Purchased Asset
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 Asset
Documents invalid as a whole or materially interfere with the mortgagee’s
realization of the principal benefits and/or security provided thereby (clauses
(i) and (ii) collectively, the “Standard Qualifications”).

 

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

 

(6)           Mortgage Provisions.  Subject to the Standard Qualifications, the
Purchased Asset Documents for each Mortgage Loan contain provisions that render
the rights and remedies of the holder thereof adequate for the practical
realization against the Mortgaged Property of the principal benefits of the
security intended to provided thereby, including realization by judicial or, if
applicable, nonjudicial foreclosure.

 

Ex. X-4

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

 

(7)           Hotel Provisions.  The Purchased Asset Documents for each Mortgage
Loan that is secured by a hotel property operated pursuant to a franchise
agreement or license agreement include an executed copy of such franchise
agreement or license agreement as well as a comfort letter or similar agreement
signed by the Mortgagor and franchisor or licensor of such property enforceable
by the Purchaser or any subsequent holder of such Mortgage Loan (including a
securitization trustee) against such franchisor, either directly or as an
assignee of the originator, or pursuant to a replacement comfort letter or
similar agreement with Purchaser. Subject to the Standard Qualifications, the
Mortgage or related security agreement for each Mortgage Loan secured by a
hospitality property creates a valid and enforceable security interest in the
revenues of such property for which a UCC financing statement has been filed in
the appropriate filing office.

 

(8)           Mortgage Status; Waivers and Modifications.  Since origination and
except by written instruments set forth in the related Purchased Asset File
(a) the material terms of each Mortgage, Mortgage Note, Mortgage Loan guaranty
and related operative Purchased Asset 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
Mortgage; (b) no related Mortgaged Property or any portion thereof has been
released from the lien of the related Mortgage in any manner which materially
interferes with the security intended to be provided by such Mortgage or the use
or operation of the remaining portion of such Mortgaged Property; and (c) the
Mortgagor has not been released from its material obligations under the related
Purchased Asset Documents.

 

(9)           Lien; Valid Assignment.  Subject to the Standard Qualifications,
each assignment of Mortgage and assignment of Assignment of Leases from the
Seller will constitute a legal, valid and binding assignment from the Seller. 
Each related Mortgage and Assignment of Leases is freely assignable without the
consent of the related Mortgagor.  Each related Mortgage is a legal, valid and
enforceable first lien on the related Mortgagor’s fee (or if identified on the
related Seller Asset Schedule and Exception Report, leasehold) interest in the
Mortgaged Property in the principal amount of such Mortgage Loan or allocated
loan amount (subject only to Permitted Encumbrances (as defined below) or any
other title exceptions identified to Purchaser in a requested Exceptions Report
(“Title Exceptions”)), except as the enforcement thereof may be limited by the
Standard Qualifications. Such Mortgaged Property (subject to and excepting
Permitted Encumbrances or any Title Exceptions) as of the origination date of
the related Mortgage Loan and as of the related Purchase Date, to Seller’s
knowledge, is free and clear of any recorded mechanics’ liens, recorded
materialmen’s liens and other recorded encumbrances which are prior to or equal
with the lien of the related Mortgage, except those which are bonded over,
escrowed for or insured against by a lender’s title insurance policy, and, to
the Seller’s knowledge and subject to the rights of tenants (subject to and
excepting Permitted Encumbrances and any other Title Exceptions), and no rights
exist which under law could give rise to any such lien or encumbrance that would
be prior to or equal with the lien of the related Mortgage, except those which
are bonded over, escrowed for or insured against by a lender’s title insurance
policy (as described below).  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

 

Ex. X-5

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

 

extent that possession or control of such items or actions other than the filing
of UCC financing statements is required in order to effect such perfection.

 

(10)         Permitted Liens; Title Insurance.  Each Mortgaged Property securing
a Mortgage Loan is covered by an American Land Title Association loan title
insurance policy or a comparable form of loan title insurance policy approved
for use in the applicable jurisdiction (or, if such policy is yet to be issued,
by a pro forma policy, a preliminary title policy with escrow instructions or a
“marked up” commitment, in each case binding on the title insurer) (the “Title
Policy”) in the original principal amount of such Mortgage Loan (or with respect
to a Mortgage Loan secured by multiple properties, an amount equal to at least
the allocated loan amount with respect to the Title Policy for each such
property) after all advances of principal (including any advances held in escrow
or reserves), that insures for the benefit of the owner of the indebtedness
secured by the Mortgage, the first priority lien of the Mortgage, which lien is
subject only to (a) the lien of current real property taxes, water charges,
sewer rents and assessments not yet due and payable; (b) covenants, conditions
and restrictions, rights of way, easements and other matters of public record;
(c) the exceptions (general and specific) and exclusions set forth in such Title
Policy; (d) other matters to which like properties are commonly subject; (e) the
rights of tenants (as tenants only) under leases (including subleases)
pertaining to the related Mortgaged Property and condominium declarations; and
(f) if the related Mortgage Loan is cross-collateralized with any other Mortgage
Loan, the lien of the Mortgage for another Mortgage Loan contained in the same
cross-collateralized group, provided that none of which items (a) through (f),
individually or in the aggregate, materially and adversely interferes with the
value or current use of the Mortgaged Property or the security intended to be
provided by such Mortgage or the Mortgagor’s ability to pay its obligations when
they become due (collectively, the “Permitted Encumbrances”).  Except as
contemplated by clause (f) of the preceding sentence none of the Permitted
Encumbrances are mortgage liens that are senior to or coordinate and co-equal
with the lien of the related Mortgage.  Such Title Policy (or, if it has yet to
be issued, the coverage to be provided thereby) is in full force and effect, all
premiums thereon have been paid and no claims have been made thereunder and no
claims have been paid thereunder. Neither the Seller, nor to the Seller’s
knowledge, any other holder of the Mortgage Loan, has done, by act or omission,
anything that would materially impair the coverage under such Title Policy.

 

(11)         Junior Liens.  It being understood that B notes secured (and any
other Purchased Assets that are cross-collateralized and/or cross defaulted with
a Purchased Asset) by the same Mortgage as a Mortgage Loan are not subordinate
mortgages or junior liens, except as set forth on the related Transaction
Request, there are no subordinate mortgages or junior liens securing the payment
of money encumbering the related Mortgaged Property (other than Permitted
Encumbrances and the Title Exceptions, taxes and assessments, mechanics’ and
materialmen’s liens (which are the subject of the representation in paragraph
(9) above), and equipment and other personal property financing).  Except as set
forth on the related Transaction Request, to Seller’s knowledge there is no
mezzanine debt secured directly by interests in the related Mortgagor.

 

Ex. X-6

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

 

(12)         Assignment of Leases and Rents.  There exists as part of the
related Purchased Asset File an Assignment of Leases (either as a separate
instrument or incorporated into the related Mortgage).  Subject to Permitted
Encumbrances and Title Exceptions, each related Assignment of Leases creates a
valid first-priority collateral assignment of, or a valid first-priority lien or
security interest in, rents and certain rights under the related lease or
leases, subject only to a license granted to the related Mortgagor to exercise
certain rights and to perform certain obligations of the lessor under such lease
or leases, including the right to operate the related leased property, except as
the enforcement thereof may be limited by the Standard Qualifications.  The
related Mortgage or related Assignment of Leases, subject to applicable law,
provides that, upon an event of default under the Mortgage Loan, a receiver is
permitted to be appointed for the collection of rents or for the related
mortgagee to enter into possession to collect the rents or for rents to be paid
directly to the mortgagee.

 

(13)         UCC Filings.  If the related Mortgaged Property is operated as a
hospitality property, the 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 Mortgage Loan to perfect a valid security interest in all items of
physical personal property reasonably necessary to operate such Mortgaged
Property owned by such Mortgagor and located on the related Mortgaged Property
(other than any non-material personal property, any personal property subject to
a purchase money security interest, a sale and leaseback financing arrangement
as permitted under the terms of the related Mortgage or any other personal
property leases applicable to such personal property), to the extent a security
interest may be perfected pursuant to applicable law by recording or filing, as
the case may be.  Subject to the Standard Qualifications, each related UCC
financing statement (or equivalent document) creates a valid and enforceable
lien and security interest on the items of personalty described above.  No
representation is made as to the perfection of any security interest in rents or
other personal property to the extent that possession or control of such items
or actions other than the filing of UCC financing statements are required in
order to effect such perfection.

 

(14)         Condition of Property.  The Seller or the originator of the
Purchased Asset (or related Mortgage Loan, as applicable) inspected or caused to
be inspected each related Mortgaged Property no more than six (6) months prior
to the origination of such Purchased Asset (or related Mortgage Loan, as
applicable) or no more than six (6) months prior to the related Purchase Date.

 

An engineering report or property condition assessment was prepared in
connection with the origination of such Mortgage Loan no more than
six (6) months prior to origination, which indicates that the related Mortgaged
Property is free of any material damage, except to the extent that such material
damage (i) would not have a material adverse effect on the value of such
Mortgaged Property as security for the related Purchased Asset, (ii) has been
repaired in all material respects or (iii) has not yet been repaired but is
addressed by the escrow of funds established in an aggregate amount consistent
with the standards utilized by Seller with respect to similar loans it holds for
its

 

Ex. X-7

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

 

own account have been established, which escrowed amount will in all events be
in an aggregate amount not less than the estimated cost of the necessary
repairs. Seller has no knowledge of any issues with the physical condition of
the Mortgaged Property that Seller believes would have a material adverse effect
on the use, operation or value of the Mortgaged Property other than those
disclosed in the engineering report or property condition assessment and those
addressed in sub-clauses (i), (ii) and (iii) of the preceding sentence.

 

(15)         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
Mortgaged Property that would be of equal or superior priority to the lien of
the Mortgage and that have become delinquent in respect of each related
Mortgaged Property have been paid, or an escrow of funds has been established in
an amount sufficient to cover such payments and reasonably estimated interest
and penalties, if any, thereon.  For purposes of this representation and
warranty, real estate taxes and governmental assessments and other outstanding
governmental charges and installments thereof shall not be considered delinquent
until the earlier of (a) the date on which interest and/or penalties would first
be payable thereon and (b) the date on which enforcement action is entitled to
be taken by the related taxing authority.

 

(16)         Condemnation.  As of the date of origination of such Mortgage Loan
and 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 of such
Mortgage Loan and as of the Purchase Date, there is no proceeding threatened for
the total or partial condemnation of such Mortgaged Property that would have a
material adverse effect on the value, use or operation of the Mortgaged
Property.

 

(17)         Actions Concerning Mortgage Loan.  As of the date of origination of
such Mortgage Loan and to the Seller’s knowledge, as of the Purchase Date, there
was no pending, filed or threatened action, suit or proceeding, arbitration or
governmental investigation involving any Mortgagor, guarantor, or Mortgagor’s
interest in the Mortgaged Property, an adverse outcome of which would reasonably
be expected to materially and adversely affect (a) such Mortgagor’s title to the
Mortgaged Property, (b) the validity or enforceability of the Mortgage, (c) such
Mortgagor’s ability to perform under the related Mortgage 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 Asset Documents
or (f) the current principal use of the Mortgaged Property.

 

(18)         Escrow Deposits.  All escrow deposits and payments required to be
escrowed with lender pursuant to each Mortgage 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, and
the right to all such escrows and deposits that are required to be escrowed with
lender under the related Purchased Asset Documents are being conveyed by the
Seller to Purchaser or its Servicer.

 

Ex. X-8

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

 

(19)         No Holdbacks.  The principal amount of the Mortgage Loan stated on
the related Transaction Request 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 Mortgage Loan has been disbursed but a
portion thereof is being held in escrow or reserve accounts pending the
satisfaction of certain conditions relating to leasing, repairs or other matters
with respect to the related Mortgaged Property, the Mortgagor or other
considerations determined by Seller to merit such holdback), except as set forth
in the related Confirmation.

 

(20)         Insurance.  Each related Mortgaged Property is, and is required
pursuant to the related Purchased Asset Documents to be, insured by a property
insurance policy providing coverage for loss in accordance with coverage found
under a “special cause of loss form” or “all risk form” that includes
replacement cost valuation issued by an insurer meeting the requirements of the
related Purchased Asset Documents and having a claims-paying or financial
strength rating of at least “A-:VIII” from A.M. Best Company, “A” from Moody’s
or “A-” from S&P (collectively, the “Insurance Rating Requirements”), in an
amount (subject to a customary deductible) not less than the lesser of (x) the
original principal balance of the Mortgage Loan and (y) the full insurable value
on a replacement cost basis of the improvements, furniture, furnishings,
fixtures and equipment owned by the related Mortgagor included in the Mortgaged
Property (with no deduction for physical depreciation), but, in any event, not
less than the amount necessary or containing such endorsements as are necessary
to avoid the operation of any coinsurance provisions with respect to the related
Mortgaged Property.

 

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

 

If any material part of the improvements, exclusive of a parking lot, located on
a Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards, the related
Mortgagor is required to maintain insurance in the maximum amount available
under the National Flood Insurance Program.

 

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

 

The Mortgaged Property is covered, and required to be covered pursuant to the
related Purchased Asset Documents, by a commercial general liability insurance
policy issued by an insurer meeting the Insurance Rating Requirements including
coverage for property damage, contractual damage and personal injury (including
bodily injury and

 

Ex. X-9

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

 

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 Mortgaged Properties located in seismic zones 3 or 4 in order to evaluate
the structural and seismic condition of such property for the sole purpose of
assessing either the scenario expected limit (“SEL”) or the probable maximum
loss (“PML”) for the Mortgaged Property in the event of an earthquake. In such
instance, the SEL or PML, as applicable was based on a 475-year return period,
an exposure period of 50 years and a 10% probability of exceedance.  If the
resulting report concluded that the SEL or PML, as applicable would exceed 20%
of the amount of the replacement costs of the improvements, earthquake insurance
on such Mortgaged Property was obtained by an insurer meeting the Insurance
Rating Requirements in an amount not less than 100% of the SEL or PML, as
applicable.

 

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

 

All premiums on all insurance policies referred to in this section required to
be paid as of the related Purchase Date have been paid, and such insurance
policies name the lender under the Mortgage 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 Purchaser.  Each related
Mortgage Loan obligates the related Mortgagor to maintain all such insurance
and, at such Mortgagor’s failure to do so, authorizes the lender to maintain
such insurance at the Mortgagor’s cost and expense and to charge such Mortgagor
for premiums.  All such insurance policies (other than commercial liability
policies) require at least ten (10) days’ prior notice to the lender of
termination or cancellation arising because of nonpayment of a premium and at
least thirty (30) days prior notice to the lender of termination or cancellation
(or such lesser period, not less than ten (10) days, as may be required by
applicable law) arising for any reason other than non-payment of a premium and
no such notice has been received by Seller.

 

(21)         Access; Utilities; Separate Tax Lots.  Each Mortgaged Property
(a) is, to the Seller’s knowledge, 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, to the Seller’s knowledge, served by or has uninhibited access rights to
public or private water and sewer (or well and septic) and all required
utilities, all of which are appropriate for the current use of the Mortgaged
Property, and (c) constitutes one or more separate tax parcels which do not
include any property which is not part of the Mortgaged Property or is subject
to an

 

Ex. X-10

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

 

endorsement under the related Title Policy insuring the Mortgaged Property, or
in certain cases, an application has been, or will be, made to the applicable
governing authority for creation of separate tax lots, in which case the
Mortgage Loan requires the Mortgagor to escrow an amount sufficient to pay taxes
for the existing tax parcel of which the Mortgaged Property is a part until the
separate tax lots are created.

 

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

 

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

 

(24)         REMIC. To the extent Seller identifies such Mortgage Loan to Buyer
as being eligible for a “real estate mortgage investment conduit” (“REMIC”) (a
“REMIC Eligible Loan”), the Purchased Asset is a “qualified mortgage” within the
meaning of Section 860G(a)(3) of the Code (but determined without regard to the
rule in Treasury Regulations Section 1.860G-2(f)(2) that treats certain
defective mortgage loans as qualified mortgages), and, accordingly, (A) the
issue price of the Purchased Asset to the related Mortgagor at origination did
not exceed the non-contingent principal amount of the Purchased Asset and
(B) either: (a) such Purchased Asset is secured by an interest in real property
(including buildings and structural components thereof, but excluding personal
property) having a fair market value (i) at the date the Purchased Asset was
originated at least equal to 80% of the adjusted issue price of the Purchased
Asset on such date or (ii) at the Purchase Date at least equal to 80% of the
adjusted issue price of the Purchased Asset on such date, provided that for
purposes hereof, the fair market value of the real property interest must first
be reduced by (A) the amount of any lien on the real property interest that is
senior to the Purchased Asset and (B) a proportionate amount of any lien that is
in parity with the Purchased Asset; or (b) substantially all of the proceeds

 

Ex. X-11

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

 

of such Purchased Asset were used to acquire, improve or protect the real
property which served as the only security for such Purchased Asset (other than
a recourse feature or other third-party credit enhancement within the meaning of
Treasury Regulations Section 1.860G-2(a)(1)(ii)).  If the Purchased Asset was
“significantly modified” prior to the Purchase Date so as to result in a taxable
exchange under Section 1001 of the Code, it either (x) was modified as a result
of the default or reasonably foreseeable default of such Purchased Asset or
(y) satisfies the provisions of either sub-clause (B)(a)(i) above (substituting
the date of the last such modification for the date the Purchased Asset was
originated) or sub-clause (B)(a)(ii), including the proviso thereto.  Any
prepayment premium and yield maintenance charges applicable to the Purchased
Asset constitute “customary prepayment penalties” within the meaning of Treasury
Regulations Section 1.860G-1(b)(2).  All terms used in this paragraph shall have
the same meanings as set forth in the related Treasury Regulations.

 

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

 

(26)         Authorized to do Business.  To the extent required under applicable
law, as of the Purchase Date or as of the date that such entity held the
Mortgage Note, each holder of the Mortgage Note was authorized to transact and
do business in the jurisdiction in which each related Mortgaged Property is
located, or the failure to be so authorized does not materially and adversely
affect the enforceability of such Mortgage Loan by any holder thereof.

 

(27)         Trustee under Deed of Trust.  With respect to each Mortgage which
is a deed of trust, as of the date of origination of the related Mortgage Loan
and, to the Seller’s knowledge, as of the Purchase Date, a trustee, duly
qualified under applicable law to serve as such, currently so serves and is
named in the deed of trust or has been substituted in accordance with the
Mortgage and applicable law or may be substituted in accordance with the
Mortgage and applicable law by the related mortgagee.

 

(28)         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 commercial and
multifamily mortgage loans, with respect to the improvements located on or
forming part of each Mortgaged Property securing a Mortgage Loan as of the date
of origination of such Mortgage Loan and as of the Purchase Date, there are no
material violations of applicable zoning ordinances, building codes and land
laws other than those which (i) are insured by the Title Policy or law and
ordinance insurance coverage has been obtained or (ii) would not have a material
adverse effect on the value, operation or net operating income of the Mortgaged
Property.  The terms of the Purchased Asset Documents require the Mortgagor to
comply in all material respects with all applicable governmental regulations,
zoning and building laws.

 

Ex. X-12

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

 

(29)         Licenses and Permits.  Each Mortgagor covenants in the Purchased
Asset Documents that it shall keep all material licenses, permits and applicable
governmental authorizations necessary for its operation of the Mortgaged
Property in full force and effect, and, to the Seller’s knowledge based upon any
of a letter from any government authorities, a consultant’s report, or other
affirmative investigation of local law compliance consistent with the
investigation conducted by the Seller for similar commercial and multifamily
mortgage loans; all such material licenses, permits and applicable governmental
authorizations are in effect.  The Mortgage Loan requires the related Mortgagor
to be qualified to do business in the jurisdiction in which the related
Mortgaged Property is located.

 

(30)         Recourse Obligations.  The Purchased Asset Documents for each
Mortgage Loan provide that such Mortgage Loan (a) becomes full recourse to the
Mortgagor and guarantor (which is a natural person or persons, or an entity
distinct from the Mortgagor (but may be affiliated with the Mortgagor) that has
assets other than equity in the related Mortgaged Property 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
Mortgagor; (ii) Mortgagor or guarantor shall have colluded with other creditors
to cause an involuntary bankruptcy filing with respect to the Mortgagor or
(iii) voluntary transfers of either the Mortgaged Property or equity interests
in Mortgagor made in violation of the Purchased Asset Documents; and
(b) contains provisions providing for recourse against the Mortgagor and
guarantor (which is a natural person or persons, or an entity distinct from the
Mortgagor (but may be affiliated with the Mortgagor) that has assets other than
equity in the related Mortgaged Property that are not de minimis), for losses
and damages sustained by reason of Mortgagor’s (i) misappropriation of rents
after the occurrence of an event of default under the Mortgage Loan,
(ii) misappropriation of security deposits, insurance proceeds, or condemnation
awards; (iii) fraud or intentional material misrepresentation; (iv) breaches of
the environmental covenants in the Purchased Asset Documents; or (v) commission
of intentional material physical waste at the Mortgaged Property.

 

(31)         Mortgage Releases.  The terms of the related Mortgage or related
Purchased Asset Documents do not provide for release of any material portion of
the Mortgaged Property from the lien of the Mortgage except (a) a partial
release, accompanied by principal repayment of not less than a specified
percentage at least equal to the lesser of (i) 110% of the related allocated
loan amount of such portion of the Mortgaged Property and (ii) the outstanding
principal balance of the Mortgage Loan, (b) upon payment in full of such
Mortgage Loan, (c) releases of out-parcels that are unimproved or other portions
of the Mortgaged Property which will not have a material adverse effect on the
underwritten value of the Mortgaged Property and which were not afforded any
material value in the appraisal obtained at the origination of the Mortgage Loan
and are not necessary for physical access to the Mortgaged Property or
compliance with zoning requirements, or (d) as required pursuant to an order of
condemnation. With respect to any partial release under the preceding clauses
(a) or (c) for a REMIC Eligible Loan, either: (x) such release of collateral
(i) would not constitute a “significant modification” of the subject Purchased
Asset within the meaning of Treasury Regulations

 

Ex. X-13

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

 

Section 1.860G-2(b)(2) and (ii) would not cause the subject Purchased Asset to
fail to be a “qualified mortgage” within the meaning of Section 860G(a)(3)(A) of
the Code; or (y) the mortgagee or servicer can, in accordance with the related
Purchased Asset Documents, condition such release of collateral on the related
Mortgagor’s delivery of an opinion of tax counsel to the effect specified in the
immediately preceding clause (x).  For purposes of the preceding clause (x), for
all Purchased Assets originated after December 6, 2010, if the fair market value
of the real property constituting such Mortgaged Property after the release is
not equal to at least 80% of the principal balance of the Purchased Asset
outstanding after the release, the Mortgagor is required to make a payment of
principal in an amount not less than the amount required by any applicable legal
requirements relating to any “real estate mortgage investment conduit” within
the meaning of Section 860D of the Code that holds any interest in all or any
portion of such Purchased Asset.

 

With respect to any partial release under the preceding clause (d) for a REMIC
Eligible Loan, for all Purchased Assets originated after December 6, 2010, the
Mortgagor can be required to pay down the principal balance of the Purchased
Asset in an amount not less than the amount required by any applicable legal
requirements relating to any “real estate mortgage investment conduit” within
the meaning of Section 860D of the Code that holds any interest in all or any
portion of such Purchased Asset and, to such extent, may not be required to be
applied to the restoration of the Mortgaged Property or released to the
Mortgagor, if, immediately after the release of such portion of the Mortgaged
Property from the lien of the Mortgage (but taking into account the planned
restoration) the fair market value of the real property constituting the
remaining Mortgaged Property is not equal to at least 80% of the remaining
principal balance of the Purchased Asset.

 

No Purchased Asset that is a REMIC Eligible Loan that is secured by more than
one Mortgaged Property or that is cross-collateralized with another Purchased
Asset permits the release of cross-collateralization of the related Mortgaged
Properties, other than in compliance with the any applicable legal requirements
relating to any “real estate mortgage investment conduit” within the meaning of
Section 860D of the Code that holds any interest in all or any portion of such
Purchased Asset.

 

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

 

(33)         Acts of Terrorism Exclusion.  With respect to each Mortgage Loan
with a maximum principal balance over $20 million, the related special-form
all-risk insurance

 

Ex. X-14

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

 

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 other Mortgage Loan,
the related special all-risk insurance policy and business interruption policy
(issued by an insurer meeting the Insurance Rating Requirements) did not, as of
the date of origination of the Mortgage Loan, and, to Seller’s knowledge, do
not, as of the Purchase Date, specifically exclude Acts of Terrorism, as defined
in TRIA, from coverage, or if such coverage is excluded, it is covered by a
separate terrorism insurance policy.  With respect to each Mortgage Loan, the
related Purchased Asset Documents do not expressly waive or prohibit the
mortgagee from requiring coverage for Acts of Terrorism, as defined in TRIA, or
damages related thereto provided, however, that if TRIA or a similar or
subsequent statute is not in effect, then, provided that terrorism insurance is
commercially available, the Mortgagor under each Mortgage Loan is required to
carry terrorism insurance, but in such event the Mortgagor shall not be required
to spend on terrorism insurance coverage more than two times the amount of the
insurance premium that is payable at such time in respect of the property and
business interruption/rental loss insurance required under the related Purchased
Asset Documents (without giving effect to the cost of terrorism and earthquake
components of such casualty and business interruption/rental loss insurance),
and if the cost of terrorism insurance exceeds such amount, the Mortgagor is
required to purchase the maximum amount of terrorism insurance available with
funds equal to such amount.

 

(34)         Due-on-Sale or Encumbrance.  Subject to certain exceptions set
forth below, each Mortgage Loan contains a “due on sale” or other such provision
for the acceleration of the payment of the unpaid principal balance of such
Mortgage Loan if, without the consent of the holder of the Mortgage (which
consent, in some cases, may not be unreasonably withheld) and/or complying with
the requirements of the related Purchased Asset Documents (which provide for
transfers without the consent of the lender which are customarily acceptable to
prudent commercial and multifamily mortgage lending institutions lending on the
security of property comparable to the related Mortgaged Property, including,
without limitation, transfers of worn-out or obsolete furnishings, fixtures, or
equipment promptly replaced with property of equivalent value and functionality
and transfers by leases entered into in accordance with the Purchased Asset
Documents), (a) the related Mortgaged Property, or any controlling equity
interest in the related Mortgagor, is directly or indirectly pledged,
transferred or sold, other than as related to (i) family and estate planning
transfers or transfers upon death or legal incapacity, (ii) transfers to certain
affiliates as defined in the related Purchased Asset Documents, (iii) transfers
of less than, or other than, a controlling interest in the related Mortgagor,
(iv) transfers to another holder of direct or indirect equity in the Mortgagor,
a specific Person designated in the related Purchased Asset Documents or a
Person satisfying specific criteria identified in the related Purchased Asset
Documents, (v) transfers of stock or similar equity units in publicly traded
companies, (vi) a substitution or release of collateral within the parameters of
paragraphs 28 and 33 herein or (vii) any mezzanine debt that existed at the
origination of the related Mortgage Loan, or future permitted mezzanine debt or
(b) the related Mortgaged

 

Ex. X-15

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

 

Property is encumbered with a subordinate lien or security interest against the
related Mortgaged Property, other than (i) any Companion Interest in such
Mortgage Loan or subordinate debt that existed at origination and is permitted
under the related Purchased Asset Documents, (ii) purchase money security
interests, (iii) any Mortgage Loan that is cross-collateralized and
cross-defaulted with another Mortgage Loan or (iv) Permitted Encumbrances;
provided, however, that the Mortgage Loan may provide a mechanism for the
assumption of the Mortgage Loan by a third party upon the Mortgagor’s
satisfaction of certain conditions precedent and the payment of a required
transfer fee.  The Mortgage or other Purchased Asset Documents provide that to
the extent any rating agency fees are incurred in connection with the review of
and consent to any transfer or encumbrance, the Mortgagor is responsible for
such payment along with all other reasonable fees and expenses incurred by the
mortgagee relative to such transfer or encumbrance.

 

(35)         Single-Purpose Entity.  Each Mortgage Loan requires the Mortgagor
to be a Single-Purpose Entity for at least as long as the Mortgage Loan is
outstanding.  Both the Purchased Asset Documents and the organizational
documents of the Mortgagor with respect to each Mortgage Loan with a maximum
principal balance in excess of $5 million provide that the Mortgagor is a
Single-Purpose Entity, and each Mortgage Loan with a maximum principal balance
of $50 million or more has a counsel’s opinion regarding non-consolidation of
the Mortgagor.

 

(36)         Interest Rates.  With respect to each Mortgage Loan that is a Fixed
Rate Loan, such Mortgage Loan bears interest at a rate that remains fixed
throughout the remaining term of such Mortgage Loan.  With respect to each
Mortgage Loan that is a Floating Rate Loan, such Mortgage Loan bears interest at
a floating rate of interest that is based on LIBOR plus a margin (which interest
rate may be subject to a minimum or “floor” rate).

 

(37)         Ground Leases.  With respect to any Mortgage Loan where the
Mortgage Loan is secured by a ground leasehold estate under a Ground Lease in
whole or in part, and the related Mortgage does not also encumber the related
lessor’s fee interest in such Mortgaged Property, based upon the terms of the
Ground Lease and any estoppel or other agreement received from the ground lessor
in favor of the originator, its successors and assigns, Seller represents and
warrants that:

 

(a)           The Ground Lease or a memorandum regarding such Ground Lease has
been duly recorded or submitted for recording in a form that is acceptable for
recording in the applicable jurisdiction.  The Ground Lease or an estoppel or
other agreement received from the ground lessor permits the interest of the
lessee to be encumbered by the related Mortgage and does not restrict the use of
the related Mortgaged Property by such lessee, its successors or assigns in a
manner that would materially adversely affect the security provided by the
related Mortgage.  No material change in the terms of the Ground Lease has
occurred since the origination of the applicable Mortgage Loan, except by a
written instrument which has been included in the Due Diligence Package.

 

Ex. X-16

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

 

(b)           The lessor under such Ground Lease has agreed in a writing
included in the related Purchased Asset File (or in such Ground Lease) that the
Ground Lease may not be amended, modified, or cancelled or terminated by
agreement of lessor and lessee without the prior written consent of the lender,
and no such consent has been granted since the origination of the Mortgage Loan,
except as reflected in any written instruments included in the related Purchased
Asset File.

 

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

 

(d)           The Ground Lease either (i) is not subject to any liens or
encumbrances superior to, or of equal priority with, the Mortgage, except for
the related fee interest of the ground lessor and the Permitted Encumbrances, or
(ii) is subject to a subordination, non-disturbance and attornment agreement to
which the mortgagee on the lessor’s fee interest in the Mortgaged Property is
subject.

 

(e)           The Ground Lease does not place commercially unreasonable
restrictions on the identity of the mortgagee and the Ground Lease is assignable
to the holder of the Mortgage Loan and its assigns without the consent of the
lessor thereunder (or if such consent is necessary it has been obtained), and in
the event it is so assigned, it is further assignable by the holder of the
Mortgage Loan and its successors and assigns without the consent of the lessor.

 

(f)            The Seller has not received any written notice of default under
or notice of termination of such Ground Lease.  To the Seller’s knowledge, there
is no default under such Ground Lease and no condition that, but for the passage
of time or giving of notice, would result in a default under the terms of such
Ground Lease and to the Seller’s knowledge, such Ground Lease is in full force
and effect as of the Purchase Date.

 

(g)           The Ground Lease or ancillary agreement between the lessor and the
lessee requires the lessor to give to the lender written notice of any material
default, and provides that no notice of default or termination is effective
against lender unless such notice is given to the lender.

 

(h)           A lender is permitted a reasonable opportunity (including, where
necessary, sufficient time to gain possession of the interest of the lessee
under the Ground Lease through legal proceedings) to cure any default under the
Ground Lease which is curable after the lender’s receipt of notice of any
default before the lessor may terminate the Ground Lease.

 

(i)            Intentionally Omitted.

 

Ex. X-17

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(j)                                    Under the terms of the Ground Lease, an
estoppel or other agreement received from the ground lessor and the related
Mortgage (taken together), any related insurance proceeds or the portion of the
condemnation award allocable to the ground lessee’s interest (other than (i) de
minimis amounts for minor casualties or (ii) in respect of a total or
substantially total loss or taking as addressed in subpart (k))  will be applied
either to the repair or to restoration of all or part of the related Mortgaged
Property with (so long as such proceeds are in excess of the threshold amount
specified in the related Purchased Asset Documents) the lender or a trustee
appointed by it having the right to hold and disburse such proceeds as repair or
restoration progresses, or to the payment of the outstanding principal balance
of the Mortgage Loan, together with any accrued interest.

 

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

 

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

 

(38)                          Servicing.  To the Seller’s knowledge, the
servicing and collection practices used by the Seller with respect to the
Mortgage Loan have been, in all respects, legal and have met Accepted Servicing
Practices.

 

(39)                          Origination and Underwriting.  The origination
practices of the Seller (or, to the Seller’s knowledge, the related originator
if the Seller was not the originator) with respect to each Mortgage Loan have
been, in all material respects, legal and as of the date of its origination,
such Mortgage Loan and the origination thereof complied in all material respects
with, or was exempt from, all requirements of federal, state or local law
relating to the origination of such Mortgage 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 X.

 

(40)                          No Material Default; Payment Record.  No Mortgage
Loan has been more than thirty (30) days delinquent, without giving effect to
any grace or cure period, in making required payments since origination, and as
of its Purchase Date, no Mortgage Loan is more than thirty (30) days delinquent
(beyond any applicable grace or cure period) in making required payments.  To
the Seller’s knowledge, there is (a) no material default, breach, violation or
event of acceleration existing under the related Mortgage 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

 

Ex. X-18

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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 Mortgage Loan or
the value, use or operation of the related Mortgaged Property, provided,
however, that this representation and warranty does not cover any default,
breach, violation or event of acceleration that specifically pertains to or
arises out of an exception scheduled to any other representation and warranty
made by the Seller in this Exhibit X.  No person other than the holder of such
Mortgage Loan may declare any event of default under the Mortgage Loan or
accelerate any indebtedness under the Purchased Asset Documents.

 

(41)                          Bankruptcy.  As of the date of origination of such
Mortgage Loan and to the Seller’s knowledge as of the Purchase Date, neither the
Mortgaged Property (other than tenants of such Mortgaged Property), nor any
portion thereof, is the subject of, and no Mortgagor, guarantor or tenant
occupying a single-tenant property is a debtor in state or federal bankruptcy,
insolvency or similar proceeding.

 

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

 

(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 Mortgage Loans, a Phase II
environmental site assessment (collectively, an “ESA”) meeting ASTM requirements
conducted by a reputable environmental consultant in connection with such
Mortgage Loan within twelve (12) months prior to its origination date, 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 Mortgaged 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 Mortgagor and is held
or controlled by the related lender; (B) if the only Environmental Condition
relates to the presence of asbestos-containing materials, radon in indoor air,
lead based paint or lead in drinking water, and the only recommended action in
the ESA is the institution of such a plan, an operations or maintenance plan has
been required to be instituted by the related Mortgagor that can reasonably be
expected to mitigate the identified risk; (C) the Environmental Condition
identified in the related environmental report was remediated or abated in all
material respects prior to the Purchase Date, and, if and as appropriate, a no
further action or closure letter was obtained from the applicable governmental
regulatory authority (or the environmental issue affecting the related Mortgaged
Property was otherwise listed by such governmental authority as “closed” or a
reputable environmental consultant has concluded that no further action is
required); (D) an environmental policy or a lender’s pollution legal

 

Ex. X-19

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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 Mortgagor 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 Mortgagor having financial resources reasonably estimated
to be adequate to address the situation is required to take action.  To Seller’s
knowledge, except as set forth in the ESA, there is no Environmental Condition
(as such term is defined in ASTM E1527-05 or its successor) at the related
Mortgaged Property.

 

(44)                          Appraisal.  The Purchased Asset File contains an
appraisal of the related Mortgaged Property with an appraisal date within six
(6) months of the Mortgage Loan origination date.  The appraisal is signed by an
appraiser who is a Member of the Appraisal Institute and, to the Seller’s
knowledge, had no interest, direct or indirect, in the Mortgaged Property or the
Mortgagor or in any loan made on the security thereof, and whose compensation is
not affected by the approval or disapproval of the Mortgage Loan. Each appraiser
has represented in such appraisal or in a supplemental letter that the appraisal
satisfies the requirements of the “Uniform Standards of Professional Appraisal
Practice” as adopted by the Appraisal Standards Board of the Appraisal
Foundation. Each appraisal contains a statement, or is accompanied by a letter
from the appraiser, to the effect that the appraisal was performed in accordance
with the requirements of FIRREA, as in effect on the date such Purchased Asset
was originated.

 

(45)                          Transaction Request.  The information pertaining
to each Purchased Asset which is set forth in the related Transaction Request
delivered to Purchaser is true and correct in all material respects as of the
Purchase Date and contains all information required by the Agreement to be
contained therein.

 

(46)                          Cross-Collateralization.  No Mortgage Loan is
cross-collateralized or cross-defaulted with any other Mortgage Loan, except as
set forth in the Requested Exception Report.

 

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

 

(48)                          Compliance with Anti-Money Laundering Laws.  The
Seller has complied in all material respects with all applicable anti-money
laundering laws and regulations,

 

Ex. X-20

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including without limitation the USA Patriot Act of 2001 with respect to the
origination of the Mortgage Loan.

 

(49)                          Affiliates.  The related Mortgagor is not an
affiliate of the Seller.

 

Ex. X-21

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