Exhibit 10.50a
 
MASTER REPURCHASE AGREEMENT
 
Dated as of November 21, 2008
 
among
 
CAPITAL TRUST, INC.
 
and
 
CT BSI FUNDING CORP.
 
as Sellers,
 
and
 
JPMORGAN CHASE FUNDING INC.,
 
as Buyer
 

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TABLE OF CONTENTS

Page
 
ARTICLE 1.
APPLICABILITY
1
     
ARTICLE 2.
DEFINITIONS
1
     
ARTICLE 3.
INITIATION; CONFIRMATION; TERMINATION; FEES; EXTENSION OF MATURITY DATE
21
     
ARTICLE 4.
MARGIN MAINTENANCE
30
     
ARTICLE 5.
INCOME PAYMENTS AND PRINCIPAL PAYMENTS
30
     
ARTICLE 6.
SECURITY INTEREST
32
     
ARTICLE 7.
PAYMENT, TRANSFER AND CUSTODY
34
     
ARTICLE 8.
SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS
41
     
ARTICLE 9.
RESERVED
42
     
ARTICLE 10.
REPRESENTATIONS AND WARRANTIES
42
     
ARTICLE 11.
NEGATIVE COVENANTS OF EACH SELLER
50
     
ARTICLE 12.
AFFIRMATIVE COVENANTS OF EACH SELLER
52
     
ARTICLE 13.
EVENTS OF DEFAULT; REMEDIES
56
     
ARTICLE 14.
SINGLE AGREEMENT
61
     
ARTICLE 15.
RECORDING OF COMMUNICATIONS
61
     
ARTICLE 16.
NOTICES AND OTHER COMMUNICATIONS
61
     
ARTICLE 17.
ENTIRE AGREEMENT; SEVERABILITY
62
     
ARTICLE 18.
NON-ASSIGNABILITY
62
     
ARTICLE 19.
GOVERNING LAW
63
     
ARTICLE 20.
NO WAIVERS, ETC
63
     
ARTICLE 21.
USE OF EMPLOYEE PLAN ASSETS
63
     
ARTICLE 22.
INTENT
64

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TABLE OF CONTENTS
(continued)
Page
 
ARTICLE 23.
DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS
64
     
ARTICLE 24.
CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
65
     
ARTICLE 25.
NO RELIANCE
66
     
ARTICLE 26.
INDEMNITY
66
     
ARTICLE 27.
DUE DILIGENCE
67
     
ARTICLE 28.
SERVICING
68
     
ARTICLE 29.
MISCELLANEOUS
69
     
ARTICLE 30.
JOINT AND SEVERAL LIABILITY
71

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ANNEXES, EXHIBITS AND SCHEDULES
 
ANNEX I
Names and Addresses for Communications between Parties

 
EXHIBIT I
Form of Confirmation

 
EXHIBIT II
Responsible Officers of Sellers

 
EXHIBIT III-A
Monthly Reporting Package

 
EXHIBIT III-B
Quarterly Reporting Package

 
EXHIBIT III-C
Annual Reporting Package

 
EXHIBIT IV
Form of Custodial Delivery

 
EXHIBIT V
Form of Power of Attorney

 
EXHIBIT VI
Representations and Warranties Regarding Individual Purchased Assets

 
EXHIBIT VII
Asset Information

 
EXHIBIT VIII
Advance Procedures

 
EXHIBIT IX
Form of Bailee Letter

 
EXHIBIT X
Form of Margin Deficit Notice

 
EXHIBIT XI
UCC Filing Jurisdictions

 
EXHIBIT XII
Form of Servicer Notice

 
EXHIBIT XIII
Form of Release Letter

 
EXHIBIT XIV
Covenant Compliance Certificate

 

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MASTER REPURCHASE AGREEMENT
 
MASTER REPURCHASE AGREEMENT, dated as of November 21, 2008, by and among CAPITAL
TRUST, INC., a Maryland corporation and CT BSI FUNDING CORP., a Delaware
corporation (each a “Seller” with respect to the Eligible Assets that it sells
to Buyer and together, the “Sellers”) and JPMORGAN CHASE FUNDING INC., a
corporation organized under the laws of Delaware (the “Buyer”).
 
ARTICLE 1.
APPLICABILITY
 
From time to time the parties hereto may enter into transactions in which
Sellers and Buyer agree to the transfer from a Seller to Buyer all of its
rights, title and interest to certain Eligible Assets (as defined herein) or
other assets and, in each case, the other related Purchased Items (as defined
herein) (collectively, the “Assets”) against the transfer of funds by Buyer to
such Seller, with a simultaneous agreement by Buyer to transfer back to such
Seller such Assets at a date certain or on demand, against the transfer of funds
by such Seller to Buyer.  Each such transaction shall be referred to herein as a
“Transaction” and, unless otherwise agreed in writing, shall be governed by this
Agreement, including any supplemental terms or conditions contained in any
exhibits identified herein as applicable hereunder.  Each individual transfer of
an Eligible Asset shall constitute a distinct Transaction.  Notwithstanding any
provision or agreement herein, at no time shall Buyer be obligated to purchase
or effect the transfer of any Eligible Asset from a Seller to Buyer.
 
ARTICLE 2.
DEFINITIONS
 
“A-Note” shall mean the original promissory note, if any, that was executed and
delivered in connection with the senior position of a Senior Mortgage Loan.
 
“Accelerated Repurchase Date” shall have the meaning specified in Article
13(b)(i) of this Agreement.
 
“Acceptable Attorney” means an attorney-at-law that has delivered at a Seller’s
request a Bailee Letter, with the exception of an attorney whom Buyer has
notified such Seller is not satisfactory to Buyer.
 
“Accepted Servicing Practices” shall mean with respect to any applicable
Purchased Asset, those mortgage, B-Note/junior interest or mezzanine loan
servicing practices of prudent mortgage lending institutions that service
mortgage, B-Note/junior interest and/or mezzanine loans of the same type as such
Purchased Asset in the state where the related underlying real estate directly
or indirectly securing or supporting such Purchased Asset is located.
 

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“Act of Insolvency” shall mean, with respect to any Person, (i) the filing of a
petition, commencing, or authorizing the commencement of any case or proceeding
under any bankruptcy, insolvency, reorganization, liquidation, dissolution or
similar law relating to the protection of creditors, or suffering any such
petition or proceeding to be commenced by another which is consented to, not
timely contested or results in entry of an order for relief; (ii) the seeking or
consenting to the appointment of a receiver, trustee, custodian or similar
official for such Person or any substantial part of the property of such Person;
(iii) the appointment of a receiver, conservator, or manager for such Person by
any governmental agency or authority having the jurisdiction to do so; (iv) the
making of a general assignment for the benefit of creditors; (v) the admission
by such Person of its inability to pay its debts or discharge its obligations as
they become due or mature; or (vi) that any Governmental Authority or agency or
any person, agency or entity acting or purporting to act under Governmental
Authority shall have taken any action to condemn, seize or appropriate, or to
assume custody or control of, all or any substantial part of the property of
such Person, or shall have taken any action to displace the management of such
Person or to curtail its authority in the conduct of the business of such
Person.
 
“Advance Rate” shall mean, with respect to each Transaction and any Pricing Rate
Period, the initial Advance Rate selected by Buyer for such Transaction as shown
in the related Confirmation, unless otherwise agreed to by Buyer and Sellers,
which in any case shall not exceed the Maximum Advance Rate.
 
“Affiliate” shall mean, when used with respect to any specified Person, (i) any
other Person directly or indirectly controlling, controlled by, or under common
control with, such Person.  Control shall mean the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise and “controlling” and “controlled” shall have meanings
correlative thereto, or (ii) any “affiliate” of such Person, as such term is
defined in the Bankruptcy Code.
 
“Affiliated Hedge Counterparty” shall mean JPMorgan Chase Funding Inc., or any
Affiliate thereof, in its capacity as a party to any Hedging Transaction with
any Seller.
 
“Agreement” shall mean this Master Repurchase Agreement, dated as of November
21, 2008 by and among Capital Trust, Inc., CT BSI Funding Corp. and JPMorgan
Chase Funding Inc., as such agreement may be modified or supplemented from time
to time.
 
“Alternative Rate” shall have the meaning specified in Article 3(g) of this
Agreement.
 
“Alternative Rate Transaction” shall mean, with respect to any Pricing Rate
Period, any Transaction with respect to which the Pricing Rate for such Pricing
Rate Period is determined with reference to the Alternative Rate.
 
“Annual Reporting Package” shall mean the reporting package described on Exhibit
III-C.
 
“Applicable Spread” shall mean, with respect to a Transaction involving a
Purchased Asset:
 
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(i)        so long as no Event of Default shall have occurred and be continuing,
the incremental per annum rate (expressed as a number of “basis points”, each
basis point being equivalent to 1/100 of 1%) as set forth in the related
Confirmation, unless otherwise agreed to by Buyer and Sellers, and
 
(ii)       after the occurrence and during the continuance of an Event of
Default, the applicable incremental per annum rate described in clause (i) of
this definition, plus 400 basis points (4.0%).
 
“Asset Information” shall mean, with respect to each Purchased Asset, the
information set forth in Exhibit VII attached hereto.
 
“Assets” shall have the meaning specified in Article 1.
 
“B-Note” shall mean the original promissory note, if any, that was executed and
delivered in connection with the subordinate portion of a Senior Mortgage Loan.
 
“Bailee Letter” shall mean a letter from an Acceptable Attorney or from a Title
Company, in the form attached to this Agreement as Exhibit IX, wherein such
Acceptable Attorney or Title Company in possession of a Purchased Asset File (i)
acknowledges receipt of such Purchased Asset File, (ii) confirms that such
Acceptable Attorney, Title Company, or other Person acceptable to Buyer is
holding the same as bailee of Buyer under such letter and (iii) agrees that such
Acceptable Attorney or Title Company shall deliver such Purchased Asset File to
the Custodian by not later than the third (3rd) Business Day following the
Purchase Date for the related Purchased Asset.
 
“Bankruptcy Code” shall mean The United States Bankruptcy Code of 1978, as
amended from time to time.
 
“Breakage Costs” shall have the meaning assigned thereto in Article 3(l).
 
“Business Day” shall mean a day other than (i) a Saturday or Sunday, or (ii) a
day in which the New York Stock Exchange or banks in the State of New York are
authorized or obligated by law or executive order to be closed.  Notwithstanding
the foregoing sentence, when used with respect to the determination of LIBOR,
“Business Day” shall only be a day on which commercial banks are open for
international business (including dealings in U.S. Dollar deposits) in London,
England.
 
“Buyer” shall mean JPMorgan Chase Funding Inc., or any successor.
 
“Buyer’s Margin Amount” shall mean with respect to any Transaction and any
Purchased Asset on any date, the Maximum Advance Rate available for such
Purchased Asset, multiplied by the Market Value of such Purchased Asset as of
the date of determination.
 
“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.
 
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“Closing Date” shall mean November 21, 2008.
 
“CMBS” shall mean pass-through certificates representing beneficial ownership
interests in one or more first lien mortgage loans secured by commercial and/or
multifamily properties, regardless of rating.
 
“Code” shall mean the Internal Revenue Code of 1986, as amended.
 
“Collateral” shall have the meaning specified in Article 6 of this Agreement.
 
“Collection Account” shall mean the account or accounts maintained by Servicer
under the Interim Servicing Agreement, into which all Income is originally
deposited by Servicer immediately upon the receipt thereof pursuant to the
Interim Servicing Agreement.
 
“Collection Period” shall mean with respect to the Remittance Date in any month,
the period beginning on but excluding the Cut-off Date in the month preceding
the month in which such Remittance Date occurs and continuing to and including
the Cut-off Date immediately preceding such Remittance Date.
 
“Confirmation” shall have the meaning specified in Article 3(b)(i) of this
Agreement.
 
“Core Property Types” shall mean the following types of properties:
multi-family, mixed-use, retail, industrial, office building and hospitality, or
such other types of properties that Buyer may agree to in its sole and absolute
discretion.
 
“Covenant Compliance Certificate” shall have the meaning specified in Article
3(b)(ix) hereof.
 
“CRE CDO” shall mean commercial real estate collateralized debt obligations.
 
“Custodial Agreement” shall mean the Custodial Agreement, dated as of the date
hereof, by and among the Custodian, Sellers and Buyer.
 
“Custodial Delivery” shall mean the form executed by Sellers in order to deliver
the Purchased Asset Schedules and the Purchased Asset Files to Buyer or its
designee (including the Custodian) pursuant to Article 7 of this Agreement, a
form of which is attached hereto as Exhibit IV.
 
“Custodian” shall mean LaSalle Bank, National Association, or any successor
Custodian appointed by Buyer with the consent of Sellers.
 
“Cut-off Date” shall mean the second Business Day preceding each Remittance
Date.
 
“Default” shall mean any event which, with the giving of notice, the passage of
time, or both, would constitute an Event of Default.
 
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“Defaulted Mortgage Asset” shall mean any loan (a) that is sixty (60) days or
more delinquent in the payment of principal, interest, fees or other amounts
payable under the terms of the related loan documents, (b) as to which an Act of
Insolvency shall have occurred with respect to the Borrower or (c) as to which a
material non-monetary event of default shall have occurred under any document
included in the Purchased Asset File for such Purchased Asset.
 
“Delinquent Mortgage Asset” shall mean a loan that is thirty (30) or more days,
but less than sixty (60) days, delinquent in the payment of principal, interest,
fees or other amounts payable under the terms of the related loan documents.
 
“Depository” shall mean PNC Bank, National Association, or any successor
Depository appointed by Buyer with the prior written consent of Sellers (such
consent to not be unreasonably withheld or delayed).
 
“Depository Account” shall mean a segregated interest bearing account, in the
name of Buyer, established at Depository pursuant to the Depository Agreement.
 
“Depository Agreement” shall mean that certain Depository Agreement, dated as of
the date hereof, among Buyer, Sellers and Depository.
 
“DTC” shall mean the Depository Trust Company.
 
“Due Diligence Package” shall have the meaning specified in Exhibit VIII to this
Agreement.
 
“Early Repurchase” shall mean a repurchase of a Purchased Asset as described in
Article 3(f) of this Agreement.
 
“Early Repurchase Date” shall have the meaning specified in Article 3(f) of this
Agreement.
 
“EBITDA” shall mean, for any period, the sum, without duplication, for such
period of (a) Net Income of Seller for such period, (b) the sum of provisions
for such period for income taxes, interest expense, and depreciation and
amortization expense used in determining such Net Income, (c) amounts deducted
in accordance with GAAP in respect of other such non cash expenses in
determining such Net Income and (d) the amount of any aggregate net loss (or
minus the amount of any gain) during such period arising from the sale, exchange
or other disposition of capital assets (determined in accordance with GAAP) by
Seller, excluding (i) any reporting implications of Financial Interpretations
No. 45 and 46 and FASB 150 and (ii) gains and losses from investments.
 
“EBITDA to Fixed Charge Ratio” shall mean, determined as of any date of
determination, the ratio of (x) EBITDA during the twelve (12) month period
ending on the date of determination to (y) the Fixed Charges due and owing
during the twelve (12) month period ending on the date of determination.
 
“Eligible Assets” shall mean any of the following types of assets or loans (1)
that are acceptable to Buyer in its sole and absolute discretion, (2) with
respect to which the representations and warranties set forth in this Agreement
(including the exhibits hereto) are true and correct in all respects except to
the extent expressly disclosed in a Requested Exceptions Report approved by
Buyer, and (3) that are secured directly or indirectly by properties that are
Core Property Types and are located in the United States of America, its
territories or possessions (or elsewhere, in the sole discretion of Buyer):
 
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(i)        Senior Mortgage Loans;
 
(ii)       B-Notes/Junior Interests;
 
(iii)      Mezzanine Loans;
 
(iv)      CMBS;
 
(v)       CRE CDO rated BB-/Ba3 or higher, or, if issued by a Seller or an
Affiliate of a Seller, rated BBB/Baa3 or higher; and
 
(vi)      any other asset types or classifications that are mutually acceptable
to Buyer and Sellers, subject to mutual agreement on all necessary and
appropriate modifications to this Agreement and each of the Transaction
Documents, as determined by Buyer in its sole and absolute discretion.
 
Notwithstanding anything to the contrary contained in this Agreement, the
following shall not be Eligible Assets for purposes of this Agreement: (i)
non-performing loans; (ii) loans that are Defaulted Mortgage Assets or
Delinquent Mortgage Assets; (iii) loans for which the applicable appraisal is
(a) not dated within three hundred sixty-four (364) days of the proposed
financing date or (b) not ordered by a financial institution or mortgage broker
(and for the avoidance of doubt, such appraisal may not be ordered from the
related borrower or an Affiliate of the related borrower) or (iv) assets secured
directly or indirectly by loans described in the preceding clauses (i) through
(iii), other than CMBS or CRE CDO.
 
“Eligible Loans” shall mean any Senior Mortgage Loans, B-Notes/Junior Interests
or Mezzanine Loans that are also Eligible Assets.
 
“Environmental Law” shall mean any federal, state, foreign or local statute,
law, rule, regulation, ordinance, code, guideline, written policy and rule of
common law now or hereafter in effect and in each case as amended, and any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
employee health and safety or Hazardous Materials, including, without
limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C. §
1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.; the
Clean Air Act, 42 U.S.C. § 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C.
§ 3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq.; the
Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C. §
11001 et seq.; the Hazardous Material Transportation Act, 49 U.S.C. § 1801 et
seq. and the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq.; and
any state and local or foreign counterparts or equivalents, in each case as
amended from time to time.
 
“Environmental Site Assessment” shall have the meaning specified in Exhibit VI.
 
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“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated thereunder.  Article
references to ERISA are to ERISA, as in effect at the date of this Agreement
and, as of the relevant date, any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
 
“ERISA Affiliate” shall mean any corporation or trade or business that is a
member of any group of organizations (i) described in Article 414(b) or (c) of
the Code of which a Seller is a member and (ii) solely for purposes of potential
liability under Article 302(c)(11) of ERISA and Article 412(c)(11) of the Code
and the lien created under Article 302(f) of ERISA and Article 412(n) of the
Code, described in Article 414(m) or (o) of the Code of which any Seller is a
member.
 
“Event of Default” shall have the meaning specified in Article 13 of this
Agreement.
 
“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 federal funds brokers
of recognized standing selected by it.
 
“Filings” shall have the meaning specified in Article 6(d) of this Agreement.
 
“Financing Lease” shall mean any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.
 
“Fitch” shall mean Fitch, Inc.
 
“Fixed Charges” shall mean, for any period, the sum, without duplication, of (a)
Interest Expense, (b) provisions for cash income taxes made and (c) scheduled
payments made on account of principal on Indebtedness.
 
“GAAP” shall mean United States generally accepted accounting principles
consistently applied as in effect from time to time.
 
“Governmental Authority” shall mean any national or federal government, any
state, regional, local or other political subdivision thereof with jurisdiction
and any Person with jurisdiction exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central
Bank).
 
“Hedge-Required Asset” shall mean any Eligible Asset that is a fixed rate
Eligible Asset.
 
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“Hedging Transactions” shall mean, with respect to any or all of the Purchased
Assets, any short sale of U.S. Treasury Securities or mortgage-related
securities, futures contract (including Eurodollar futures) or options contract
or any interest rate swap, cap or collar agreement or similar arrangements
providing for protection against fluctuations in interest rates or the exchange
of nominal interest obligations, entered into by any Affiliated Hedge
Counterparty or Qualified Hedge Counterparty with Sellers, either generally or
under specific contingencies that is required by Buyer, or otherwise pursuant to
this Agreement, to hedge a Hedge-Required Asset, or that Sellers have elected to
pledge or transfer to Buyer pursuant to this Agreement.
 
“Income” shall mean, with respect to any Purchased Asset at any time, (x) any
collections of principal, interest, dividends, receipts or other distributions
or collections, (y) all net sale proceeds received by any Seller or any
Affiliate of any Seller in connection with a sale or liquidation of such
Purchased Asset and (z) all payments actually received by Buyer on account of
Hedging Transactions.
 
“Indebtedness” shall mean, for any Person, (a) obligations created, issued or
incurred by such Person for borrowed money (whether by loan, the issuance and
sale of debt securities or the sale of property to another Person subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
from such Person); (b) obligations of such Person to pay the deferred purchase
or acquisition price of property or services, other than trade accounts payable
(other than for borrowed money) arising, and accrued expenses incurred, in the
ordinary course of business so long as such trade accounts payable are payable
within ninety (90) days of the date the respective goods are delivered or the
respective services are rendered; (c) Indebtedness of others secured by a lien
on the property of such Person, whether or not the respective Indebtedness so
secured has been assumed by such Person; (d) obligations (contingent or
otherwise) of such Person in respect of letters of credit or similar instruments
issued or accepted by banks and other financial institutions for account of such
Person; (e) obligations of such Person under repurchase agreements,
sale/buy-back agreements or like arrangements; (f) Indebtedness of others
guaranteed by such Person; (g) all obligations of such Person incurred in
connection with the acquisition or carrying of fixed assets by such Person; (h)
Indebtedness of general partnerships of which such Person is secondarily or
contingently liable (other than by endorsement of instruments in the course of
collection), whether by reason of any agreement to acquire such indebtedness to
supply or advance sums or otherwise; (i) Capitalized Lease Obligations of such
Person; (j) all net liabilities or obligations under any interest rate, interest
rate swap, interest rate cap, interest rate floor, interest rate collar, or
other hedging instrument or agreement; and (k) all obligations of such Person
under Financing Leases.
 
“Indemnified Amounts” and “Indemnified Parties” shall have the meaning specified
in Article 26 of this Agreement.
 
“Interest Expense” shall mean, for any period, the total of all interest expense
with respect to all outstanding Indebtedness including, without limitation, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers’ acceptance financing and net costs under all Hedge
Transactions with respect to interest rates to the extent such net costs are
allocable to such period in accordance with GAAP.
 
“Interim Servicing Agreement” shall mean the Interim Servicing Agreement, dated
as of the date hereof, by and among the Servicer, Sellers and Buyer.
 
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“Internal Revenue Code” shall mean the Internal Revenue Code of 1986, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder.
 
“Junior Certificate” shall mean the original participation certificate, if any,
that was executed and delivered in connection with a Junior Interest that is a
junior participation.
 
“Junior Interest” shall mean a performing senior, junior or pari-passu
participation interest in a stabilized or transitional senior commercial,
multifamily fixed or floating rate mortgage loan secured by a first lien on
multifamily and commercial properties or a subordinate portion of a Senior
Mortgage Loan, or a performing Mezzanine Loan, in each case evidenced by a
Junior Certificate.
 
“Leverage” shall mean, for any Person, the aggregate amount of indebtedness for
money borrowed (included purchase money mortgage loans) outstanding at any time,
both secured and unsecured.
 
“LIBOR” shall mean the rate per annum calculated as set forth below:
 
(i)        On each Pricing Rate Determination Date, LIBOR for the next Pricing
Rate Period will be the rate for deposits in United States dollars for a
one-month period that appears on BBAM page 1229a of Bloomberg, L.P. as “LIBOR”
as of 11:00 a.m., London time, on such date; or
 
(ii)       On any Pricing Rate Determination Date on which no such rate appears
on BBAM page 1229a of Bloomberg, L.P. as described above, LIBOR for the next
Pricing Rate Period will be determined on the basis of the arithmetic mean of
the rates at which deposits in United States dollars are offered by the
Reference Banks at approximately 11:00 a.m., London time, on such date to prime
banks in the London interbank market for a one-month period.
 
All percentages resulting from any calculations or determinations referred to in
this definition will be rounded upwards, if necessary, to the nearest multiple
of 1/100 of 1% and all U.S. dollar amounts used in or resulting from such
calculations will be rounded to the nearest cent (with one-half cent or more
being rounding upwards).
 
“LIBO Rate” shall mean, with respect to any Pricing Rate Period pertaining to a
Transaction, a rate per annum determined for such Pricing Rate Period in
accordance with the following formula (rounded upward to the nearest 1/100th of
1%):
 
                LIBOR                
1 − Reserve Requirement
 
“Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any financing lease
having substantially the same economic effect as any of the foregoing), and the
filing of any financing statement under the UCC or comparable law of any
jurisdiction in respect of any of the foregoing.
 
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“Liquidity” shall mean, at any time and with respect to any Person, the amount
equal to the sum of (i) funds standing to the credit of the Depository Account;
plus (ii) Cash and Cash Equivalents (excluding Cash and Cash Equivalents
standing to the credit of a deposit account or other account that is the subject
of a “control agreement” (or the equivalent, however designated) at a time when
such Person does not have the right unilaterally to direct the withdrawal of
funds from such account (e.g., because a “default” or “event of default” (or the
equivalent, however designated) exists)).
 
“Margin Deadline” shall have the meaning specified in Article 4(a).
 
“Margin Deficit” shall have the meaning specified in Article 4(a).
 
“Margin Deficit Notice” shall have the meaning specified in Article 4(a).
 
“Market Value” shall mean, with respect to any Purchased Asset as of any
relevant date, the market value for such Purchased Asset on such date as
determined by Buyer in its sole and absolute discretion, exercised in good
faith.  The Market Value shall, at Buyer’s option, be deemed to be zero with
respect to each Purchased Asset (i) in respect of which there is a breach of a
representation and warranty set forth in Exhibit VI of this Agreement, (ii)
subject to Article 7(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, (iii) that has been released from the possession of the
Custodian under the Custodial Agreement to a Seller for a period in excess of
twenty (20) calendar days, (iv) upon the occurrence of any Act of Insolvency
with respect to any co-participant or any other Person having an interest in
such Purchased Asset or any related Underlying Mortgaged Property that is senior
to, or pari passu with, in right of payment or priority the rights of Buyer in
such Purchased Asset, (v) any Purchased Asset has become a specially serviced
loan as defined in the applicable servicing agreement, and (vi) that is
determined by Buyer not to be an Eligible Asset.
 
The Market Value of each Purchased Asset may be determined by Buyer, in its sole
discretion, on each Business Day during the term of this Agreement.
 
“Material Adverse Effect” shall mean a material adverse effect on (a) the
property, business, operations, financial condition or prospects of any Seller,
(b) the ability of a Seller to perform its obligations under any of the
Transaction Documents, (c) the validity or enforceability of any of the
Transaction Documents, and (d) the rights and remedies of Buyer under any of the
Transaction Documents.
 
“Materials of Environmental Concern” shall mean any toxic mold, any petroleum
(including, without limitation, crude oil or any fraction thereof) or petroleum
products (including, without limitation, gasoline) or any hazardous or toxic
substances, materials or wastes, defined as such in or regulated under any
Environmental Law, including, without limitation, asbestos, polychlorinated
biphenyls, and urea-formaldehyde insulation.
 
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“Maturity Date” shall mean October 24, 2009, or such later date as may be in
effect pursuant to Article 3(m) hereof.
 
“Maximum Advance Rate” shall mean, with respect to each Purchased Asset, the
maximum Advance Rate available to the applicable Seller as set forth in the
related Confirmation, or as otherwise agreed to by Buyer and Sellers.
 
“Mezzanine Loan” shall mean a performing loan (or a participation therein)
primarily secured by a pledge of full or partial equity ownership interests in
one or more entities that own directly or indirectly multifamily or commercial
properties that serve as collateral for Senior Mortgage Loans.
 
“Mezzanine Note” shall mean the original promissory note that was executed and
delivered in connection with a particular Mezzanine Loan.
 
“Minimum Transfer Amount” shall mean, with respect to each Seller, $250,000;
provided, however, that if a Default or an Event of Default has occurred and is
continuing hereunder, the Minimum Transfer Amount shall be U.S. $0.
 
“Monthly Reporting Package” shall mean the reporting package described on
Exhibit III-A.
 
“Moody’s” shall mean Moody’s Investors Service, Inc.
 
“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 an estate in fee simple in real property and the
improvements thereon, securing a Mortgage Note or similar evidence of
indebtedness.
 
“Mortgage Note” shall mean a note or other evidence of indebtedness of a
Mortgagor secured by a Mortgage, including any A-Note, B-Note or Junior
Certificate that is a Purchased Asset.
 
“Mortgagor” shall mean the obligor on a Mortgage Note and the grantor of the
related Mortgage, or the obligor on a Mezzanine Note or Junior Interest.
 
“Multiemployer Plan” shall mean a multiemployer plan defined as such in Article
3(37) of ERISA to which contributions have been, or were required to have been,
made by a Seller or any ERISA Affiliate and that is covered by Title IV of
ERISA.
 
“Net Assets” shall mean, for any Person, total assets (other than intangibles)
at cost, before deducting depreciation, reserves for bad debts or other non-cash
reserves, less total liabilities.
 
“Net Income” shall mean, with respect to any Person for any period, the net
income of such Person for such period as determined in accordance with GAAP.
 
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“New Asset” shall mean an Eligible Asset that any Seller proposes to be included
as a Purchased Item.
 
“Originated Asset” shall mean any Eligible Asset originated by any Seller.
 
“Permitted Liens” shall have the meaning specified in Article 11(e) hereof.
 
“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
a Seller or any ERISA Affiliate during the five year period ended prior to the
date of this Agreement or to which a Seller or any ERISA Affiliate makes, is
obligated to make or has, within the five year period ended prior to the date of
this Agreement, been required to make contributions and that is covered by Title
IV of ERISA or Article 302 of ERISA or Article 412 of the Code, other than a
Multiemployer Plan.
 
“Plan Party” shall have the meaning set forth in Article 21(a) of this
Agreement.
 
“Pre-Existing Asset” shall mean any Eligible Asset that is not an Originated
Asset.
 
“Preliminary Due Diligence Package” shall mean with respect to any New Asset, a
summary memorandum outlining the proposed transaction, including potential
transaction benefits and all material underwriting risks, all Underwriting
Issues and all other characteristics of the proposed transaction that a
reasonable buyer would consider material, together with the following due
diligence information relating to the New Asset to be provided by a Seller to
Buyer and Buyer’s counsel pursuant to this Agreement:
 
(i)        With respect to each Eligible Asset that consists of an Eligible
Loan:
 
(i)        the Asset Information and, if available, maps and photos;
 
(ii)       such Seller’s internal credit memoranda used for approval and
underwriting;
 
(iii)      current rent roll and roll over schedule, if applicable;
 
(iv)      cash flow pro-forma, plus historical information, if available;
 
(v)       copies of appraisal, environmental, engineering and any other
third-party reports provided that, if same are not available to such Seller at
the time of such Seller’s submission of the Preliminary Due Diligence Package to
Buyer, such Seller shall deliver such items to Buyer promptly upon such Seller’s
receipt of such items;
 
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(vi)      description of the underlying real estate directly or indirectly
securing or supporting such Purchased Asset and the ownership structure of the
borrower and the sponsor (including, without limitation, the board of directors,
if applicable) and, to the extent that real property does not secure such
Eligible Loan, the related collateral securing such Eligible Loan, if any;
 
(vii)     indicative debt service coverage ratios;
 
(viii)    indicative loan-to-value ratio;
 
(ix)       term sheet outlining the transaction generally;
 
(x)        such Seller’s relationship with the Mortgagor, if any, and
Mortgagor’s financial statements; and
 
(xi)       with respect to any New Asset that is a Pre-Existing Asset, a list
that specifically and expressly identifies any Purchased Asset Documents that
relate to such New Asset but are not in such Seller’s possession;
 
(xii)      analyses and/or reports with respect to such other matters concerning
the New Asset as Buyer may approve in its sole discretion;
 
(xiii)     documents evidencing such New Asset, or current drafts thereof,
including, without limitation, underlying debt and security documents,
guaranties, the underlying borrower’s organizational documents, warrant
agreements, and loan and collateral pledge agreements, as applicable, provided
that, if same are not available to such Seller at the time of such Seller’s
submission of the Preliminary Due Diligence Package to Buyer, such Seller shall
deliver such items to Buyer promptly upon such Seller’s receipt of such items;
 
(xiv)     in the case of Subordinate Eligible Assets, all information described
in this definition that would otherwise be provided for the Underlying Mortgage
Loan if it were an Eligible Asset, and in addition, all documentation evidencing
such Subordinate Eligible Asset; and
 
(xv)      any exceptions to the representations and warranties set forth in
Exhibit VI to this Agreement.
 
(ii)           With respect to each Eligible Asset that consists of CMBS:
 
(i)         the related prospectus or offering circular;
 
(ii)        all structural and collateral term sheets and all other
computational or other similar materials provided to such Seller in connection
with its acquisition of such CMBS;
 
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(iii)       all distribution date statements issued in respect thereof during
the immediately preceding 12 months (or, if less, since the date such CMBS was
issued);
 
(iv)       all monthly CMSA reporting packages issued in respect of such CMBS
during the immediately preceding 12 months (or, if less, since the date such
CMBS was issued);
 
(v)        all Rating Agency pre-sale reports;
 
(vi)       all asset summaries and any other due diligence materials, including,
without limitation, reports prepared by third parties, provided to such Seller
in connection with its acquisition of such CMBS; and
 
(vii)      the related pooling and servicing agreement.
 
With respect to each Eligible Asset that consists of an CRE CDO:
 
(i)         the related prospectus or offering circular;
 
(ii)        all remittance statements or other reports issued in respect thereof
during the immediately preceding 12 months (or, if less, since the date such CRE
CDO was issued);
 
(iii)       any information or reports provided to such Seller in connection
with its acquisition or ownership of the CRE CDO asset;
 
(iv)       the related indenture;
 
(v)        the most recent annual and quarterly 1934 Act reports filed with
respect to the related issuer, if applicable;
 
(vi)       all structural and collateral term sheets and all other computational
or other similar materials provided to such Seller in connection with its
acquisition of such CRE CDO asset;
 
(vii)      all distribution date statements issued in respect thereof during the
immediately preceding 12 months (or, if less, since the date such CRE CDO was
issued);
 
(viii)     all monthly CMSA reporting packages issued in respect of such CRE CDO
during the immediately preceding 12 months (or, if less, since the date such CRE
CDO was issued);
 
(ix)        all Rating Agency pre-sale reports; and
 
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(x)         all asset summaries and any other due diligence materials,
including, without limitation, reports prepared by third parties, provided to
such Seller in connection with its acquisition of such CRE CDO.
 
“Pre-Purchase Due Diligence” shall have the meaning set forth in Article
3(b)(ii) hereof.
 
“Pre-Purchase Legal Fees” shall mean all of the reasonable and necessary out of
pocket legal fees, costs and expenses incurred by Buyer in connection with the
Pre-Purchase Due Diligence associated with Buyer’s decision as to whether or not
to enter into a particular Transaction.
 
“Price Differential” shall mean, with respect to any Purchased Asset as of any
date, the aggregate amount obtained by daily application of the applicable
Pricing Rate for such Purchased Asset to the Purchase Price of such Purchased
Asset on a 360-day-per-year basis for the actual number of days during each
Pricing Rate Period commencing on (and including) the Purchase Date for such
Purchased Asset and ending on (but excluding) the date of determination (reduced
by any amount of such Price Differential previously paid by the applicable
Seller to Buyer with respect to such Purchased Asset).
 
“Pricing Rate” shall mean, for any Pricing Rate Period, an annual rate equal to
the sum of (i) the LIBO Rate and (ii) the relevant Applicable Spread, in each
case, for the applicable Pricing Rate Period for the related Purchased
Asset.  The Pricing Rate shall be subject to adjustment and/or conversion as
provided in the Transaction Documents or the related Confirmation.
 
“Pricing Rate Determination Date” shall mean with respect to any Pricing Rate
Period with respect to any Transaction, the second (2nd) 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 such
Remittance Date; provided, however, that in no event shall any Pricing Rate
Period for a Purchased Asset end subsequent to the Repurchase Date for such
Purchased Asset.
 
“Principal Payment” shall mean, with respect to any Purchased Asset, any payment
or prepayment received by the Depository in respect thereof.
 
“Prohibited Investor” shall mean (1) a person or entity whose name appears on
the list of Specially Designated Nationals and Blocked Persons by the Office of
Foreign Asset Control (“OFAC”), (2) any foreign shell bank, and (3) any person
or entity resident in or whose subscription funds are transferred from or
through an account in a jurisdiction that has been designated as a
non-cooperative with international anti-money laundering principles or
procedures by an intergovernmental group or organization, such as the Financial
Action Task Force on Money Laundering (“FATF”), of which the U.S. is a member
and with which designation the U.S. representative to the group or organization
continues to concur.  (See http://www.fatf-gati.org for FATF’s list of
Non-Cooperative Countries and Territories.)
 
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“Purchase Date” shall mean, with respect to any Purchased Asset, the date on
which Buyer purchases such Purchased Asset from a Seller hereunder.
 
“Purchase Price” shall mean, with respect to any Purchased Asset, the price at
which such Purchased Asset is transferred by a Seller to Buyer on the applicable
Purchase Date, adjusted after the Purchase Date as set forth below.  The
Purchase Price as of the Purchase Date for any Purchased Asset shall be an
amount (expressed in dollars) equal to the product obtained by multiplying (i)
the Market Value of such Purchased Asset (or the par amount of such Purchased
Asset, if lower than Market Value) by (ii) the Advance Rate for such Purchased
Asset, as determined by Buyer in its sole and absolute discretion.  The Purchase
Price of any Purchased Asset shall be (x) increased by any amounts disbursed by
Buyer to the applicable Seller or the related borrower with respect to such
Purchased Asset and (y) decreased by (i) the portion of any Principal Payments
on such Purchased Asset that are applied pursuant to Article 5 hereof to reduce
such Purchase Price and (ii) any other amounts paid to Buyer by a Seller to
reduce such Purchase Price.
 
“Purchased Asset” shall mean (i) with respect to any Transaction, an Eligible
Asset sold by a Seller to Buyer in such Transaction and (ii) with respect to the
Transactions in general, all Eligible Assets sold by a Seller to Buyer (other
than Eligible Assets that have been repurchased by a Seller).
 
“Purchased Asset Documents” shall mean, with respect to a Purchased Asset, the
documents comprising the Purchased Asset File for such Purchased Asset.
 
“Purchased Asset File” shall mean the documents specified as the “Purchased
Asset File” in Article 7(b), together with any additional documents and
information required to be delivered to Buyer or its designee (including the
Custodian) pursuant to this Agreement; provided that to the extent that Buyer
waives, including pursuant to Article 7(b), receipt of any document in
connection with the purchase of an Eligible Asset (but not if Buyer merely
agrees to accept delivery of such document after the Purchase Date), such
document shall not be a required component of the Purchased Asset File until
such time as the Buyer determines in good faith that such document is necessary
or appropriate for the servicing of the applicable Purchased Asset.
 
“Purchased Asset Schedule” shall mean a schedule of Purchased Assets attached to
each Trust Receipt and Custodial Delivery containing information substantially
similar to the Asset Information.
 
“Purchased Items” shall have the meaning specified in Article 6(a) of this
Agreement.
 
“Qualified Hedge Counterparty” shall mean, with respect to any Hedging
Transaction, any entity, other than an Affiliated Hedge Counterparty, that (a)
qualifies as an “eligible contract participant” as such term is defined in the
Commodity Exchange Act (as amended by the Commodity Futures Modernization Act of
2000), (b) the long-term debt of which is rated no less than “A+” by S&P, and
“A1” by Moody’s and (c) is reasonably acceptable to Buyer; provided, that with
respect to clause (c), if Buyer has approved an entity as a counterparty, it may
not thereafter deem such counterparty unacceptable with respect to any
previously outstanding Transaction unless clause (a) or clause (b) no longer
applies with respect to such counterparty.
 
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“Quarterly Reporting Package” shall mean the reporting package described on
Exhibit III-B.
 
“Rating Agency” shall mean any of Fitch, Moody’s and S&P.
 
“Reference Banks” shall mean banks each of which shall (i) be a leading bank
engaged in transactions in Eurodollar deposits in the international Eurocurrency
market and (ii) have an established place of business in London.  Initially, the
Reference Banks shall be JPMorgan Chase Bank, N.A, Barclays Bank, Plc and
Deutsche Bank AG.  If any such Reference Bank should be unwilling or unable to
act as such or if Buyer shall terminate the appointment of any such Reference
Bank or if any of the Reference Banks should be removed from the Reuters Monitor
Money Rates Service or in any other way fail to meet the qualifications of a
Reference Bank, Buyer, in its sole discretion exercised in good faith, may
designate alternative banks meeting the criteria specified in clauses (i) and
(ii) above.
 
“Release Letter” shall mean a letter substantially in the form of Exhibit XIII
hereto (or such other form as may be acceptable to Buyer).
 
“REMIC” shall mean a real estate mortgage investment conduit, within the meaning
of Section 860D(a) of the Internal Revenue Code.
 
“Remittance Date” shall mean the twentieth (20th) calendar day of each month, or
the immediately following Business Day, if such calendar day shall not be a
Business Day, or such other day as is mutually agreed to by Sellers and Buyer.
 
“Repurchase Date” shall mean, with respect to a Purchased Asset, the earliest to
occur of (i) the Maturity Date, (ii) the date set forth in the applicable
Confirmation, (iii) the Accelerated Repurchase Date, (iv) any Early Repurchase
Date for such Purchased Asset; or (v) the date of the occurrence of an Event of
Default.
 
“Repurchase Obligations” shall have the meaning assigned thereto in Article
6(a).
 
“Repurchase Price” shall mean, with respect to any Purchased Asset as of any
Repurchase Date or any date on which the Repurchase Price is required to be
determined hereunder, the price at which such Purchased Asset is to be
transferred from Buyer to a Seller; such price will be determined in each case
as the sum of the (i) Purchase Price of such Purchased Asset (as increased by
any other additional funds advanced in connection with such Purchased Asset);
(ii) the accreted and unpaid Price Differential with respect to such Purchased
Asset as of the date of such determination (other than, with respect to
calculations in connection with the determination of a Margin Deficit, accreted
and unpaid Price Differential for the current Pricing Rate Period); (iii) any
other amounts due and owing by any Seller to Buyer and its Affiliates pursuant
to the terms of this Agreement as of such date; (iv) if such Repurchase Date is
not a Remittance Date, any Breakage Costs payable in connection with such
repurchase other than with respect to the determination of a Margin Deficit; (v)
any amounts that would be payable to (a positive amount) a Qualified Hedge
Counterparty under any related Hedging Transaction, if such Hedging Transaction
were terminated on the date of determination, if such determination is in
connection with any calculation of Margin Deficit; and (vi) any amounts that
would be payable to (a positive amount) an Affiliated Hedge Counterparty under
any related Hedging Transaction, if such Hedging Transaction were terminated on
the date of determination, if such determination is in connection with any
calculation of Margin Deficit (and not in connection with an actual repurchase
of a Purchased Asset).  In addition to the forgoing, the Repurchase Price shall
be increased by any other additional funds advanced in connection with such
Purchased Asset and decreased by (A) the portion of any Principal Payments on
such Purchased Asset that is applied pursuant to Article 5 to reduce such
Repurchase Price and (B) any other amounts paid to Buyer by a Seller to reduce
such Repurchase Price.
 
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“Requested Exceptions Report” shall have the meaning assigned thereto in
Article 3(b)(ii)(E).
 
“Requirement of Law” shall mean any law, treaty, rule, regulation, code,
directive, policy, order or requirement or determination of an arbitrator or a
court or other Governmental Authority whether now or hereafter enacted or in
effect.
 
“Reserve Requirement” shall mean, with respect to any Pricing Rate Period, the
aggregate (without duplication) of the rates (expressed as a decimal fraction)
of reserve requirements in effect during such Pricing Rate Period (including,
without limitation, basic, supplemental, marginal and emergency reserves under
any regulations of the Board of Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect thereto) dealing with
reserve requirements prescribed for eurocurrency funding (currently referred to
as “Eurocurrency Liabilities” in Regulation D of such Board of Governors)
maintained by Buyer.
 
“Responsible Officer” shall mean any executive officer of a Seller.
 
“S&P” shall mean Standard and Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc.
 
“Seller” shall mean each of the entities identified as “Seller” in the Recitals
hereto and such other sellers as may be approved by Buyer in its sole discretion
from time to time.
 
“Senior Mortgage Loans” shall mean performing senior commercial or multifamily
fixed or floating rate mortgage loans, A-Notes or senior or pari passu
participation interests in those mortgage loans, in each case secured by first
liens on multifamily or commercial properties.
 
“Senior Recourse Indebtedness” shall mean, for any period, (a) any Indebtedness
of a Seller and its consolidated Subsidiaries during such period that can be
subject to a margin call under any repurchase facility and (b) any Indebtedness
of a Seller and its consolidated Subsidiaries during such period that has a
scheduled maturity date on or before the Maturity Date.
 
“Servicer” shall mean Midland Loan Services, Inc.
 
“Servicer Notice” shall mean a notice substantially in the form of Exhibit XII
hereto, as amended, supplemented or otherwise modified from time to time.
 
“Servicing Agreements” shall have the meaning specified in Article 28(b).
 
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“Servicing Records” shall have the meaning specified in Article 28(b).
 
“Servicing Rights” shall mean rights of any Person, to administer, service or
subservice, the Purchased Assets or to possess related Servicing Records.
 
“Servicing Tape” shall have the meaning specified in Exhibit III-A hereto.
 
“Subordinate Eligible Assets” shall mean Eligible Assets described in items (ii)
and (iii) of the definition of Eligible Assets.
 
“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 any Seller.
 
“Survey” shall mean a certified ALTA/ACSM (or applicable state standards for the
state in which the collateral is located) survey of the underlying real estate
directly or indirectly securing or supporting such Purchased Asset prepared by a
registered independent surveyor or engineer and in form and content satisfactory
to Buyer and the company issuing the Title Policy for such Property.
 
“Tangible Net Worth” shall mean, as of a particular date (a) all amounts which
would be included under capital (including any trust-preferred securities issued
by a bank holding company) of a Seller and its consolidated Subsidiaries, if
any, on a balance sheet of such Seller and its consolidated Subsidiaries at such
date, determined in accordance with GAAP, less (b) intangible assets of such
Seller and its consolidated Subsidiaries, if any.
 
“Target Price” shall mean, with respect to any Purchased Asset as of any date,
the amount (expressed in dollars) obtained by multiplying (i) the Market Value
of such Purchased Asset as of such date by (ii) the then-applicable Maximum
Advance Rate for such Purchased Asset.
 
“Title Company” shall mean a nationally-recognized title insurance company
acceptable to Buyer.
 
“Title Policy” shall have the meaning specified in Exhibit VI.
 
“Total Indebtedness” shall mean, for any period, the aggregate Indebtedness of a
Seller and its consolidated Subsidiaries during such period (including, without
limitation, off-balance sheet Indebtedness), less the amount of any nonspecific
balance sheet reserves maintained in accordance with GAAP, provided that the
calculation of Total Indebtedness will exclude (i) amounts of liabilities
resulting from the sale of participation interests classified as participations
sold on the liabilities side of such Seller’s balance sheet, (ii) liabilities
resulting from consolidation of debt associated with securitizations where
Seller has no recourse obligation for the debt and which debt was not issued by
such Seller or its Subsidiaries and (iii) liabilities resulting from the
consolidation of vehicles managed by such Seller or a Subsidiary of such Seller
where such Seller has less than a 50% equity interest.
 
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“Total Non-Securitized Indebtedness” shall mean, for any period, the aggregate
Indebtedness of a Seller and its consolidated Subsidiaries during such period
(including, without limitation, off-balance sheet Indebtedness), less the amount
of any nonspecific balance sheet reserves maintained in accordance with GAAP,
provided that the calculation of Total Indebtedness will exclude (i) amounts of
liabilities resulting from the sale of participation interests classified as
participations sold on the liabilities side of such Seller’s balance sheet,
(ii) liabilities resulting from consolidation of debt associated with
securitizations where such Seller has no recourse obligation for the debt and
(iii) liabilities resulting from the consolidation of vehicles managed by such
Seller or a Subsidiary of such Seller where such Seller has less than a 50%
equity interest.
 
“Transaction” shall mean a Transaction, as specified in Article 1 of this
Agreement.
 
“Transaction Documents” shall mean, collectively, this Agreement, any applicable
Annexes to this Agreement, the Custodial Agreement, the Interim Servicing
Agreement, the Depository Agreement, all Hedging Transactions and all
Confirmations and assignment documentation executed pursuant to this Agreement
in connection with specific Transactions.
 
“Trust Receipt” shall mean a trust receipt issued by Custodian to Buyer
confirming the Custodian’s possession of certain Purchased Asset Files that are
the property of and held by Custodian for the benefit of Buyer (or any other
holder of such trust receipt) or a bailment arrangement with counsel or other
third party acceptable to Buyer in its sole discretion.
 
“UCC” shall have the meaning specified in Article 6(d) of this Agreement.
 
“Underlying Mortgage Loan” shall mean, with respect to any B-Note, Junior
Interest, Mezzanine Loan, CMBS or CRE CDO, a mortgage loan made in respect of
the related Underlying Mortgaged Property.
 
“Underlying Mortgaged Property” shall mean, in the case of:
 
(a)           a Senior Mortgage Loan, the Mortgaged Property securing such
Senior Mortgage Loan, as applicable;
 
(b)           a Junior Interest, the Mortgaged Property securing such Junior
Interest, or the Mortgaged Property securing the Mortgage Loan in which such
Junior Interest represents a junior participation, as applicable;
 
(c)           a B-Note, the Mortgaged Property securing such B-Note;
 
(d)           a Mezzanine Loan, the Mortgaged Property that is owned by the
Person the equity of which is pledged as collateral security for such Mezzanine
Loan;
 
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(e)           a CMBS, the Mortgaged Properties securing the mortgage loans
related to such security;
 
(f)            a CRE CDO, the Mortgaged Properties securing the mortgage loans
related to such security.
 
“Underwriting Issues” shall mean, with respect to any Purchased Asset as to
which any Seller intends to request a Transaction, all material information that
has come to each Seller’s attention that, based on the making of reasonable
inquiries and the exercise of reasonable care and diligence under the
circumstances, would be considered a materially “negative” factor (either
separately or in the aggregate with other information), or a material defect in
loan documentation or closing deliveries (such as any absence of any material
Purchased Asset Document(s)), to a reasonable institutional mortgage buyer in
determining whether to originate or acquire the Purchased Asset in question.
 
All references to articles, schedules and exhibits are to articles, schedules
and exhibits in or to this Agreement unless otherwise specified.  The words
“hereof,” “herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement.  All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles.  References to “good faith” in this Agreement shall mean “honesty in
fact in the conduct or transaction concerned”.
 
 
ARTICLE 3.
INITIATION; CONFIRMATION; TERMINATION; FEES; EXTENSION OF MATURITY DATE
 
Buyer’s agreement to enter into the initial Transaction hereunder is subject to
the satisfaction, immediately prior to or concurrently with the making of such
Transaction, of the condition precedent that Buyer shall have received from each
Seller payment of an amount equal to all fees and expenses payable hereunder,
and all of the following items, each of which shall be satisfactory in form and
substance to Buyer and its counsel:
 
(a)           The following Transaction Documents, as well as certain other
documents, delivered to Buyer:
 
(i)           this Agreement, duly completed and executed by each of the parties
hereto (including all exhibits hereto);
 
(ii)          the Custodial Agreement, duly executed and delivered by each of
the parties thereto;
 
(iii)         the Depository Agreement, duly completed and executed by each of
the parties thereto;
 
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(iv)         the Interim Servicing Agreement, duly completed and executed by
each of the parties thereto;
 
(v)          any and all consents and waivers applicable to each Seller or to
the Purchased Assets;
 
(vi)         UCC financing statements for filing in each of the UCC filing
jurisdictions described on Exhibit XI hereto, each naming the Sellers as
“Debtors” and Buyer as “Secured Party” and describing as “Collateral” all of the
items set forth in the definition of Collateral and Purchased Items in this
Agreement, together with any other documents necessary or requested by Buyer to
perfect the security interests granted by each Seller in favor of Buyer under
this Agreement or any other Transaction Document;
 
(vii)        any documents relating to any Hedging Transactions;
 
(viii)       an opinion or opinions of outside counsel to each Seller,
reasonably acceptable to Buyer (including, but not limited to, those relating to
enforceability, corporate matters and security interests);
 
(ix)          good standing certificates and certified copies of the charters
and by-laws (or equivalent documents) of each Seller and of all corporate or
other authority for each Seller with respect to the execution, delivery and
performance of the Transaction Documents and each other document to be delivered
by such Seller from time to time in connection herewith (and Buyer may
conclusively rely on such certificate until it receives notice in writing from
such Seller to the contrary);
 
(x)           with respect to any Eligible Asset to be purchased hereunder on
the related Purchase Date that is not serviced by a Seller, such Seller shall
have provided to Buyer a copy of the related Servicing Agreement, certified as a
true, correct and complete copy of the original, together with a Servicer
Notice, fully executed by such Seller and Servicer;
 
(xi)          Buyer shall have received payment from Sellers of an amount equal
to the amount of actual costs and expenses, including, without limitation, the
reasonable fees and expenses of counsel to Buyer, incurred by Buyer in
connection with the development, preparation and execution of this Agreement,
the other Transaction Documents and any other documents prepared in connection
herewith or therewith;
 
(xii)         all such other and further documents, documentation and legal
opinions as Buyer in its discretion shall reasonably require.
 
(b)           Buyer’s agreement to enter into each Transaction (including the
initial Transaction) is subject to the satisfaction of the following further
conditions precedent, both immediately prior to entering into such Transaction
and also after giving effect to the consummation thereof and the intended use of
the proceeds of the sale:
 
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(i)           The applicable Seller shall give Buyer no less than one (1)
Business Day’s prior written notice of each Transaction (including the initial
Transaction), together with a signed, written confirmation in the form of
Exhibit I attached hereto prior to each Transaction (a “Confirmation”).  Each
Confirmation shall describe the Purchased Assets, shall identify Buyer and the
applicable Seller and shall be executed by both Buyer and such Seller (provided,
that, in instances where funds are being wired to an account other than
230-254-632 at JPMorgan Chase Funding Inc., the Confirmation shall be signed by
two Responsible Officers of the applicable Seller); provided, however, that
Buyer shall not be liable to such Seller if it inadvertently acts on a
Confirmation that has not been signed by a Responsible Officer of such Seller,
and shall set forth:
 
(A)           the Purchase Date;
 
(B)           the Purchase Price for the Purchased Asset included in the
Transaction;
 
(C)           the Repurchase Date;
 
(D)           any additional terms or conditions not inconsistent with this
Agreement; and
 
(E)           the requested Advance Rate and the related Maximum Advance Rate.
 
No Confirmation may be amended unless in a writing executed by Buyer and the
applicable Seller.  Neither (i) changes in the Repurchase Price related to a
Purchased Asset (due to the application of Principle Payments) nor (ii) periodic
adjustments to the LIBO Rate related to a Purchased Asset shall require an
amendment to the related Confirmation.
 
(ii)           Buyer shall have the right to review the Eligible Assets each
Seller proposes to sell to Buyer in any Transaction and to conduct its own due
diligence investigation of such Eligible Assets as Buyer determines
(“Pre-Purchase Due Diligence”).  Buyer shall be entitled to make a
determination, in the exercise of its sole discretion, that, in the case of a
Transaction, it shall or shall not purchase any or all of the assets proposed to
be sold to Buyer by each Seller.  On the Purchase Date for the Transaction,
which shall be not less than one (1) Business Day following the final approval
of an Eligible Asset by Buyer in accordance with Exhibit VIII hereto, the
Eligible Assets shall be transferred to Buyer or the Custodian against the
transfer of the Purchase Price to an account of Sellers.  Buyer shall inform the
applicable Seller of its determination with respect to any such proposed
Transaction solely in accordance with Exhibit VIII attached hereto.  Upon the
approval by Buyer of a particular proposed Transaction, Buyer shall deliver to
the applicable Seller a signed copy of the related Confirmation described in
clause (i) above, on or before the scheduled date of the underlying proposed
Transaction.  Prior to the approval of each proposed Transaction by Buyer:
 
(A)           Buyer shall have (i) determined, in its sole and absolute
discretion, that the asset proposed to be sold to Buyer by a Seller in such
Transaction is an Eligible Asset and (ii) obtained internal credit approval, to
be granted or denied in Buyer’s sole and absolute discretion, for the inclusion
of such Eligible Asset as a Purchased Asset in a Transaction, without regard for
any prior credit decisions by Buyer or any Affiliate of Buyer, and with the
understanding that Buyer shall have the absolute right to change any or all of
its internal underwriting criteria at any time, without notice of any kind to
such Seller;
 
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(B)           Buyer shall have fully completed all external legal due diligence;
 
(C)           Buyer shall have determined the Pricing Rate applicable to the
Transaction (including the Applicable Spread);
 
(D)           no Default or Event of Default shall have occurred and be
continuing under this Agreement or any other Transaction Document and no event
shall have occurred which has, or would reasonably be expected to have, a
Material Adverse Effect;
 
(E)           the applicable Seller shall have delivered to Buyer a list of all
exceptions to the representations and warranties relating to the Purchased Asset
and any other eligibility criteria for such Purchased Asset (the “Requested
Exceptions Report”);
 
(F)           Buyer shall have waived all exceptions in the Requested Exceptions
Report;
 
(G)           both immediately prior to the requested Transaction and also after
giving effect thereto and to the intended use thereof, the representations and
warranties made by Sellers in Exhibit VI and Article 10, as applicable, shall be
true, correct and complete on and as of such Purchase Date in all respects with
the same force and effect as if made on and as of such date (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date;
 
(H)           subject to Buyer’s right to perform one or more due diligence
reviews pursuant to Article 27, Buyer shall have completed its due diligence
review of the Purchased Asset File, and such other documents, records,
agreements, instruments, mortgaged properties or information relating to such
Purchased Asset as Buyer in its sole discretion deems appropriate to review and
such review shall be satisfactory to Buyer in its sole discretion and Buyer has
consented in writing to the Eligible Asset becoming a Purchased Asset; provided,
that if Buyer’s diligence review of the Purchased Asset File requires the
delivery of a mortgage file or the equivalent, the applicable Seller shall have
the benefit of such delayed delivery provisions as are customary in pooling and
servicing agreements (e.g., while a promissory note (or analogous document
directly evidencing the obligation) must be delivered as a condition of closing,
an ancillary document or estoppels may be delivered within a reasonable time
frame thereafter);
 
(I)            with respect to any Eligible Asset to be purchased hereunder on
the related Purchase Date that is not serviced by a Seller or an Affiliate
thereof, such Seller shall have provided to Buyer a copy of the related
Servicing Agreement, certified as a true, correct and complete copy of the
original, together with a Servicer Notice, fully executed by such Seller and the
servicer named in the related Servicing Agreement;
 
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(J)           Sellers, regardless of whether this Agreement is executed, shall
have paid to Buyer all legal fees and expenses and the reasonable costs and
expenses incurred by Buyer in connection with the entering into of any
Transaction hereunder, including, without limitation, costs associated with due
diligence, recording or other administrative expenses necessary or incidental to
the execution of any Transaction hereunder, which amounts, at Buyer’s option,
may be withheld from the sale proceeds of any Transaction hereunder;
 
(K)           Buyer shall have determined, in its sole and absolute discretion,
that no Margin Deficit shall exist, either immediately prior to or after giving
effect to the requested Transaction;
 
(L)            Buyer shall have received from Custodian on each Purchase Date an
Asset Schedule and Exception Report (as defined in the Custodial Agreement) with
respect to each Purchased Asset, dated the Purchase Date, duly completed and
with exceptions acceptable to Buyer in its sole discretion in respect of
Eligible Assets to be purchased hereunder on such Business Day;
 
(M)          Buyer shall have received from the applicable Seller a Release
Letter covering each Eligible Asset to be sold to Buyer;
 
(N)           Buyer shall have reasonably determined that no introduction of, or
a change in, any Requirement of Law or in the interpretation or administration
of any Requirement of Law applicable to Buyer has made it unlawful, and no
Governmental Authority shall have asserted that it is unlawful, for Buyer to
enter into Transactions;
 
(O)           the Repurchase Date for such Transaction is not later than the
Maturity Date;
 
(P)           each Seller shall have taken such other action as Buyer shall have
reasonably requested in order to transfer the Purchased Assets pursuant to this
Agreement and to perfect all security interests granted under this Agreement or
any other Transaction Document in favor of Buyer with respect to the Purchased
Assets;
 
(Q)           with respect to any Eligible Asset to be purchased hereunder, if
such Eligible Asset was acquired by Seller, Seller shall have disclosed to Buyer
the acquisition cost of such Eligible Asset (including therein reasonable
supporting documentation required by Buyer, if any);
 
(R)           Buyer shall have received all such other and further documents,
documentation and legal opinions (including, without limitation, opinions
regarding the perfection of Buyer’s security interests) as Buyer in its
reasonable discretion shall reasonably require;
 
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(S)           Buyer shall have received a copy of any documents relating to any
Hedging Transaction, and each Seller shall have pledged and assigned to Buyer,
pursuant to Article 6 hereunder, all of such Seller’s rights under each Hedging
Transaction included within a Purchased Asset, if any;
 
(T)           no “Termination Event”, “Event of Default”, “Potential Event of
Default” or any similar event by a Seller, however defined therein, shall have
occurred and be continuing under any Hedging Transaction; and
 
(U)           the counterparty to each Seller in any Hedging Transaction shall
be an Affiliated Hedge Counterparty or a Qualified Hedge Counterparty, and, in
the case of a Qualified Hedge Counterparty, in the event that such counterparty
no longer qualifies as a Qualified Hedge Counterparty, then, at the election of
Buyer, such Seller shall ensure that such counterparty posts additional
collateral in an amount satisfactory to Buyer under all its Hedging Transactions
with such Seller, or such Seller shall immediately terminate the Hedging
Transactions with such counterparty and enter into new Hedging Transactions with
a Qualified Hedge Counterparty.
 
(c)           With respect to any Transaction, the Pricing Rate shall be
determined initially on the Pricing Rate Determination Date applicable to the
first Pricing Rate Period for such Transaction, and shall be reset on the
Pricing Rate Determination Date for all of the next succeeding Pricing Rate
Periods for such Transaction.  Buyer or its agent shall determine in accordance
with the terms of this Agreement the Pricing Rate on each Pricing Rate
Determination Date for the related Pricing Rate Period in the Buyer’s sole and
absolute discretion, exercised in good faith, and notify the applicable Seller
of such rate for such period each such Pricing Rate Determination Date.
 
(d)           Each Confirmation, together with this Agreement, shall be
conclusive evidence of the terms of the Transaction(s) covered thereby.  In the
event of any conflict between the terms of such Confirmation and the terms of
this Agreement, other than with respect to the Advance Rate or the applicable
Price Differential set forth in the related Confirmation, this Agreement shall
prevail.
 
(e)           On the Repurchase Date (including any Early Repurchase Date) for
any Transaction, termination of the Transaction will be effected by (A) payment
by the applicable Seller to Buyer of an amount equal to the sum of (1) the
Repurchase Price for the applicable Purchased Asset and (2) any other amounts
payable under this Agreement (including, without limitation, Article 3(i)) and
under any related Hedging Transactions with respect to such Purchased Asset and
(B) transfer to such Seller of the Purchased Asset being repurchased and any
Income in respect thereof received by Buyer (and not previously credited or
transferred to, or applied to the obligations of, such Seller pursuant to
Article 5 of this Agreement).
 
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(f)           Each Seller shall be entitled to terminate a Transaction on demand
and repurchase the Purchased Asset subject to a Transaction on any Business Day
prior to the Repurchase Date (an “Early Repurchase Date”); provided, however,
that:
 
(i)            such 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, no later than five (5) Business Days
prior to such Early Repurchase Date;
 
(ii)           on such Early Repurchase Date, such Seller pays to Buyer an
amount equal to the sum of (A) the Repurchase Price for the applicable Purchased
Asset and (B) any other amounts payable under this Agreement (including, without
limitation, Article 3(i)) and under any related Hedging Transactions with
respect to such Purchased Asset against transfer to such Seller or its agent of
such Purchased Assets; and
 
(iii)           on such Early Repurchase Date, in addition to the amounts set
forth in subclause (ii) above, such Seller pays to Buyer, on account of a
Purchased Asset then subject to a Transaction, an amount sufficient to reduce
the Purchase Price for such Purchased Asset to an amount equal to the Target
Price for such Purchased Asset.
 
(g)           If prior to the first day of any Pricing Rate Period with respect
to any Transaction, (i) Buyer shall have determined in the exercise of its
reasonable business judgment (which determination shall be conclusive and
binding upon Sellers) that, by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the LIBO
Rate for such Pricing Rate Period, or (ii) the LIBO Rate determined or to be
determined for such Pricing Rate Period will not adequately and fairly reflect
the cost to Buyer (as determined and certified by Buyer) of making or
maintaining Transactions during such Pricing Rate Period, Buyer shall give
telecopy or telephonic notice thereof to Sellers as soon as practicable
thereafter.  If such notice is given, the Pricing Rate with respect to such
Transaction for such Pricing Rate Period, and for any subsequent Pricing Rate
Periods until such notice has been withdrawn by Buyer, shall be a per annum rate
equal to the Federal Funds Rate plus the Applicable Spread (the “Alternative
Rate”).
 
(h)           Notwithstanding any other provision herein, if the adoption of or
any change in any Requirement of Law or in the interpretation or application
thereof shall make it unlawful for Buyer to enter into or maintain Transactions
as contemplated by the Transaction Documents, (a) the commitment of Buyer
hereunder to enter into new Transactions and to continue Transactions as such
shall forthwith be canceled, and (b) the Transactions then outstanding shall be
converted automatically to Alternative Rate Transactions on the last day of the
then current Pricing Rate Period or within such earlier period as may be
required by law.  If any such conversion of a Transaction occurs on a day that
is not the last day of the then current Pricing Rate Period with respect to such
Transaction, the applicable Seller shall pay to Buyer such amounts, if any, as
may be required pursuant to Article 3(l) of this Agreement.
 
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(i)           Upon demand by Buyer, Sellers shall indemnify Buyer and hold Buyer
harmless from any loss, cost or expense (including, without limitation,
attorneys’ fees and disbursements) that Buyer may sustain or incur as a
consequence of (i) default by a Seller repurchasing any Purchased Asset after
Seller has given a notice in accordance with Article 3(f) of an Early
Repurchase, (ii) any payment of the Repurchase Price on any day other than a
Remittance Date, including Breakage Costs, (iii) a default by a Seller in
selling Eligible Assets after such Seller has notified Buyer of a proposed
Transaction and Buyer has agreed to purchase such Eligible Assets in accordance
with the provisions of this Agreement, (iv) Buyer’s enforcement of the terms of
any of the Transaction Documents, (v) any actions taken to perfect or continue
any lien created under any Transaction Documents, and/or (vi) Buyer entering
into any of the Transaction Documents or owning any Purchased Item.  A
certificate as to such costs, losses, damages and expenses, setting forth the
calculations therefor shall be submitted promptly by Buyer to such Seller and
shall be prima facie evidence of the information set forth therein.
 
(j)           If the adoption of or any change in any Requirement of Law or in
the interpretation or application thereof by any Governmental Authority or
compliance by Buyer with any request or directive (whether or not having the
force of law) from any central bank or other Governmental Authority having
jurisdiction over Buyer made subsequent to the date hereof:
 
(i)           shall subject Buyer to any tax of any kind whatsoever with respect
to the Transaction Documents, any Purchased Asset or any Transaction, or change
the basis of taxation of payments to Buyer in respect thereof (except for income
taxes and any changes in the rate of tax on Buyer’s overall net income);
 
(ii)          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 the LIBO Rate
hereunder; or
 
(iii)         shall impose on Buyer any other condition;
 
and the result of any of the foregoing is to increase the cost to Buyer, by an
amount that Buyer deems, in the exercise of its reasonable business judgment, to
be material, of entering into, continuing or maintaining Transactions or to
reduce any amount receivable under the Transaction Documents in respect thereof;
then, in any such case, such Seller shall promptly pay Buyer, upon its demand,
any additional amounts necessary to compensate Buyer for such increased cost or
reduced amount receivable.  If Buyer becomes entitled to claim any additional
amounts pursuant to this Article 3(j), it shall, within ten (10) Business Days
of such event, notify such Seller of the event by reason of which it has become
so entitled.  Such notification as to the calculation of any additional amounts
payable pursuant to this subsection shall be submitted by Buyer to such Seller
and shall be prima facie evidence of such additional amounts.  This covenant
shall survive the termination of this Agreement and the repurchase by such
Seller of any or all of the Purchased Assets.
 
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(k)           If Buyer shall have determined that the adoption of or any change
in any Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by Buyer or any corporation controlling Buyer
with any request or directive regarding capital adequacy (whether or not having
the force of law) from any Governmental Authority made subsequent to the date
hereof does or shall have the effect of reducing the rate of return on Buyer’s
or such corporation’s capital as a consequence of its obligations hereunder to a
level below that which Buyer or such corporation could have achieved but for
such adoption, change or compliance (taking into consideration Buyer’s or such
corporation’s policies with respect to capital adequacy) by an amount deemed by
Buyer, in the exercise of its reasonable business judgment, to be material, then
from time to time, after submission by Buyer to a Seller of a written request
therefor, such Seller shall pay to Buyer such additional amount or amounts as
will compensate Buyer for such reduction.  Such notification as to the
calculation of any additional amounts payable pursuant to this subsection shall
be submitted by Buyer to such Seller and shall be prima facie evidence of such
additional amounts.  This covenant shall survive the termination of this
Agreement and the repurchase by such Seller of any or all of the Purchased
Assets.
 
(l)           If a Seller repurchases Purchased Assets on a day other than the
last day of a Pricing Rate Period, such Seller shall indemnify Buyer and hold
Buyer harmless from any actual losses, costs and/or expenses which Buyer
sustains as a direct consequence thereof (“Breakage Costs”), in each case for
the remainder of the applicable Pricing Rate Period.  Buyer shall deliver to
such Seller a statement setting forth the amount and basis of determination of
any Breakage Costs in reasonable detail, it being agreed that such statement and
the method of its calculation shall be conclusive and binding upon Sellers
absent manifest error.  This Article 3(l) shall survive termination of this
Agreement and the repurchase of all Purchased Assets subject to Transactions
hereunder.
 
(m)           (i)           Notwithstanding the definition of Maturity Date
herein, provided that all of the extension conditions listed in clause (ii)
below (collectively, the “Maturity Date Extension Conditions”) shall have been
satisfied, Buyer shall agree to extend the Maturity Date, for a period of three
hundred sixty-four (364) additional days (the “Extension Period”) by giving
notice to Seller of such extension and of the new Maturity
Date.  Notwithstanding anything to the contrary in this Article 3(m), in no
event shall Seller be permitted to extend the Maturity Date for more than one
(1) Extension Period.
 
(ii)           For purposes of this Article 3(m), the Maturity Date Extension
Conditions shall be deemed to have been satisfied if:
 
(A)           Seller shall have given Buyer written notice, not less than
forty-five (45) days prior but no more than one hundred and eighty (180) days
prior to the originally scheduled Maturity Date, of Seller’ desire to extend the
Maturity Date;
 
(B)           no Material Adverse Effect, Margin Deficit, Default or Event of
Default under this Agreement shall have occurred and be continuing as of the
date notice is given under subclause (ii) above or as of the originally
scheduled Maturity Date and no “Termination Event,” “Event of Default” or
“Potential Event of Default” or any similar event by Seller, however
denominated, shall have occurred and be continuing under any Hedging
Transaction; and
 
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(C)           all representations and warranties shall be true, correct,
complete and accurate in all respects as of the existing Maturity Date.
 
(iii)           Notwithstanding any extension to the Maturity Date as described
in this Article 3, if the Repurchase Date for a Transaction is extended by
agreement of the Buyer and Seller, Buyer and Seller shall execute a new
Confirmation containing the same pricing terms as the original Confirmation and
the extended Repurchase Date for the Transaction.
 
ARTICLE 4.
MARGIN MAINTENANCE
 
(a)           If at any time the Buyer’s Margin Amount for all Purchased Assets
is less than the Repurchase Price for all Purchased Assets (a “Margin Deficit”),
then Buyer may by notice to Sellers in the form of Exhibit X (a “Margin Deficit
Notice”) require Sellers to, at each Seller’s option, no later than one (1)
Business Day following the receipt of a Margin Deficit Notice (the “Margin
Deadline”) to the extent such Margin Deficit equals or exceeds the Minimum
Transfer Amount, (i) repurchase some or all of the Purchased Assets at their
respective Repurchase Prices or (ii) make a payment in reduction of the
Repurchase Price of some or all of the Purchased Assets, or (iii) choose any
combination of the foregoing, such that, after giving effect to such transfers,
repurchases and payments, Buyer’s Margin Amount for all Purchased Assets shall
be equal to or greater than the aggregate Repurchase Price for all Purchased
Assets.
 
(b)           The failure of Buyer, on any one or more occasions, to exercise
its rights hereunder, shall not change or alter the terms and conditions to
which this Agreement is subject or limit the right of Buyer to do so at a later
date.  Sellers and Buyer each agree that a failure or delay by Buyer to exercise
its rights hereunder shall not limit or waive Buyer’s rights under this
Agreement or otherwise existing by law or in any way create additional rights
for Sellers.
 
ARTICLE 5.
INCOME PAYMENTS AND PRINCIPAL PAYMENTS
 
(a)           The Depository Account shall be established at the Depository
pursuant to the Depository Agreement concurrently with the execution and
delivery of this Agreement by Sellers and Buyer.  Buyer shall have sole dominion
and control over the Depository Account, which shall be subject to the
Depository Agreement.  All Income in respect of the Purchased Assets and any
payments made to each Seller in respect of associated Hedging Transactions, as
well as any interest received from the reinvestment of such Income, shall be
deposited directly by Servicer into the Collection Account in accordance with
the Interim Servicing Agreement (or the related Servicer Notice) and funds on
deposit in the Collection Account will then be transferred to Depository by
Servicer for deposit into the Depository Account in accordance with the
applicable provisions of the Interim Servicing Agreement or the related Servicer
Notice and shall be remitted by the Depository in accordance with the applicable
provisions of Articles 5(c) through 5(f) of this Agreement.
 
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(b)           Immediately upon the sale to Buyer of any Purchased Asset that is
serviced primarily by Servicer, the applicable Seller shall deliver to each
Mortgagor, issuer of a participation, servicer and trustee with respect to each
Purchased Asset or borrower under a Purchased Asset an irrevocable direction
letter, instructing, as applicable, the Mortgagor, issuer of a participation,
servicer or trustee with respect to such Purchased Asset or borrower to pay all
amounts payable under the related Purchased Asset to Servicer pursuant to the
Interim Servicing Agreement, for immediate deposit by Servicer into the
Collection Account pursuant to the Interim Servicing Agreement.  If a Mortgagor,
issuer of a participation, servicer or trustee with respect to the Purchased
Asset or borrower forwards any Income with respect to a Purchased Asset to such
Seller or any Affiliate of such Seller rather than directly to Servicer for
immediate deposit into the Collection Account, such Seller shall, or shall cause
such Affiliate to, (i) deliver an additional irrevocable direction letter to the
applicable Mortgagor, issuer of a participation, servicer or trustee with
respect to the Purchased Asset or borrower and make other best efforts to cause
such Mortgagor, issuer of a participation, servicer or trustee with respect to
the Purchased Asset or borrower to forward such amounts directly to the
Collection Account and (ii) immediately deposit in the Collection Account any
such amounts.  Funds on deposit in the Collection Account will then be
transferred to Depository by Servicer for deposit into the Depository Account in
accordance with the applicable provisions of the Interim Servicing Agreement or
the related Servicer Notice.
 
(c)           So long as no Event of Default or Margin Deficit with respect to
the Purchased Asset shall have occurred and be continuing, all Income received
by the Depository in respect of the Purchased Asset (other than scheduled or
unscheduled Principal Payments and net sale proceeds) during each Collection
Period shall be applied by the Depository on the related Remittance Date in the
following order of priority:
 
(i)           first, pro rata, (A) to Buyer, an amount equal to the Price
Differential that has accreted and is outstanding as of such Remittance Date and
(B) to any Affiliated Hedge Counterparty, any amount then due and payable to an
Affiliated Hedge Counterparty under any Hedging Transaction related to a
Purchased Asset;
 
(ii)          second, to Buyer, an amount equal to any other amounts then due
and payable to Buyer or its Affiliates under any Transaction Document; and
 
(iii)         third, to the applicable Seller, the remainder, if any.
 
(d)           So long as no Event of Default or Margin Deficit shall have
occurred and be continuing, any Principal Payments shall be applied by the
Depository on the Business Day following the Business Day on which such funds
are deposited in the Depository Account in the following order of priority:
 
(i)           first, pro rata, (A) to Buyer, until the Purchase Price for such
Purchased Asset has been reduced to the Target Price for such Purchased Asset as
of the date of such payment (as determined by Buyer after giving effect to such
Principal Payment and application of net sales proceeds, if applicable) and (B)
solely with respect to any Hedging Transaction with an Affiliated Hedge
Counterparty related to such Purchased Asset, to such Affiliated Hedge
Counterparty an amount equal to any accrued and unpaid breakage costs under such
Hedging Transaction related to such Purchased Asset;
 
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(ii)          second, to Buyer, an amount equal to any other amounts due and
owing to Buyer or its Affiliates under any Transaction Document; and
 
(iii)         third, to the applicable Seller, the remainder of such Principal
Payments or net sale proceeds, if applicable.
 
(e)           If Buyer shall have determined that a Margin Deficit shall have
occurred, but no Event of Default shall have occurred and be continuing, all
Income (including, without limitation, any Principal Payments or any other
amounts received, without regard to their source) received by the Depository in
respect of the Purchased Asset shall be applied by the Depository on the related
Remittance Date in the following order of priority:
 
(i)           first, pro rata, (A) to Buyer, an amount equal to the Price
Differential that has accreted and is outstanding in respect of all of the
Purchased Assets as of such Business Day and (B) to any Affiliated Hedge
Counterparty, any amounts then due and payable to such Affiliated Hedge
Counterparty under any Hedging Transaction related to such Purchased Asset;
 
(ii)          second, to Buyer, an amount to reduce the Repurchase Price of the
Purchased Asset until the Repurchase Price for the Purchased Asset has been
reduced to the Buyer’s Margin Amount as of the date of such payment (as
determined by Buyer after giving effect to all Principal Payments and
application of net sale proceeds, if any, on such day);
 
(iii)         third, to Buyer, an amount equal to any other amounts due and
owing to Buyer or its Affiliates under any Transaction Document; and
 
(iv)         fourth, to the applicable Seller, any remainder.
 
(f)           If an Event of Default shall have occurred and be continuing, all
Income (including, without limitation, any Principal Payments or any other
amounts received, without regard to their source) received by the Depository in
respect of the Purchased Asset shall be applied by the Depository on the
Business Day next following the Business Day on which such funds are deposited
in the Depository Account in the following order of priority:
 
(i)           first, pro rata, (A) to Buyer, an amount equal to the Price
Differential that has accreted and is outstanding in respect of all of the
Purchased Assets as of such Business Day and (B) to any Affiliated Hedge
Counterparty, any amounts then due and payable to an Affiliated Hedge
Counterparty under any Hedging Transaction related to such Purchased Asset;
 
(ii)          second, to Buyer, on account of the Repurchase Price of the
Purchased Asset until the Repurchase Price has been reduced to zero;
 
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(iii)         third, to Buyer, an amount equal to any other amounts due and
owing to Buyer or its Affiliates under any Transaction Document; and
 
(iv)         fourth, to the applicable Seller, any remainder.
 
 
ARTICLE 6.
SECURITY INTEREST
 
(a)           Buyer and Sellers intend that the Transactions hereunder be sales
to Buyer of the Purchased Assets and not loans from Buyer to Sellers secured by
the Purchased Assets.  However, in order to preserve Buyer’s rights under this
Agreement in the event that a court or other forum re-characterizes the
Transactions hereunder as loans and as security for the performance by Sellers
of all of each 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, each Seller hereby assigns, pledges and grants a
security interest in all of its right, title and interest in, to and under the
Purchased Items (as defined below) to Buyer to secure the payment of the
Repurchase Price on all Transactions to which it is a party and all other
amounts owing by Sellers to Buyer and any of its present or future Affiliates
hereunder, including, without limitation, amounts owing pursuant to Article 25,
and under the other Transaction Documents, including any obligations of Sellers
under any Hedging Transaction entered into with any Affiliated Hedge
Counterparty (including, without limitation, all amounts anticipated to be paid
to Buyer by an Affiliated Hedge Counterparty as provided for in the definition
of Repurchase Price) (collectively, the “Repurchase Obligations”).  All of
Sellers’ right, title and interest in, to and under each of the following items
of property, whether now owned or hereafter acquired, now existing or hereafter
created and wherever located, is hereinafter referred to as the “Purchased
Items”:
 
(i)           the Purchased Assets and all “securities accounts” (as defined in
Article 8-501(a) of the UCC) to which any or all of the Purchased Assets are
credited;
 
(ii)          the Purchased Asset Documents, Servicing Agreements, Servicing
Records, insurance relating to the Purchased Assets, and collection and escrow
accounts and letters of credit relating to the Purchased Assets;
 
(iii)         all “general intangibles”, “accounts”, “chattel paper”,
“investment property”, “instruments” and “deposit accounts”, each as defined in
the UCC, relating to or constituting any and all of the foregoing; and
 
(iv)         all replacements, substitutions or distributions on or proceeds,
payments, Income and profits of, and records (but excluding any financial models
or other proprietary information) and files relating to any and all of any of
the foregoing.
 
(b)           Without limiting Article 6(a) hereto, to secure payment of the
Repurchase Obligations owing to Buyer, each Seller hereby grants to Buyer a
security interest in 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, hereinafter
referred to as the “Collateral”:
 
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(i)           the Depository Account and all monies from time to time on deposit
in the Depository Account;
 
(ii)          the Purchased Items;
 
(iii)         any and all replacements, substitutions, distributions on, income
relating to or proceeds of any and all of the foregoing; and
 
(iv)         each Seller’s right under each Hedging Transaction, if any,
relating to the Purchased Assets to secure the Repurchase Obligations.
 
(c)           Buyer agrees to act as agent for and on behalf of the Affiliated
Hedge Counterparties with respect to the security interest granted hereby to
secure the obligations owing to the Affiliated Hedge Counterparties under any
Hedging Transactions, including, without limitation, with respect to the
Purchased Assets and the Purchased Asset Files held by the Custodian pursuant to
the Custodial Agreement.
 
(d)           Buyer’s security interest in the Collateral shall terminate only
upon termination of each Seller’s obligations under this Agreement, all Hedging
Transactions and the documents delivered in connection herewith and
therewith.  Upon such termination, Buyer shall deliver to each Seller such UCC
termination statements and other release documents as may be commercially
reasonable and return the Purchased Assets to the applicable Seller and reconvey
the Purchased Items to the applicable Seller and release its security interest
in the Collateral.  For purposes of the grant of the security interest pursuant
to this Article 6, this Agreement shall be deemed to constitute a security
agreement under the New York Uniform Commercial Code (the “UCC”).  Buyer shall
have all of the rights and may exercise all of the remedies of a secured
creditor under the UCC and the other laws of the State of New York.  In
furtherance of the foregoing, (a) Buyer, at Sellers’ sole cost and expense,
shall cause to be filed in such locations as may be necessary to perfect and
maintain perfection and priority of the security interest granted hereby, UCC
financing statements and continuation statements (collectively, the “Filings”),
and shall forward copies of such Filings to Sellers upon completion thereof, and
(b) each Seller shall from time to time take such further actions as may be
requested by Buyer to maintain and continue the perfection and priority of the
security interest granted hereby (including marking its records and files to
evidence the interests granted to Buyer hereunder).
 
(e)           Each Seller acknowledges that it has no right to service the
Purchased Assets but only has rights as a party to the current Interim Servicing
Agreement or any other servicing agreement with respect to the Purchased
Assets.  Without limiting the generality of the foregoing and in the event that
a Seller is deemed to retain any residual Servicing Rights, and for the
avoidance of doubt, each Seller grants, assigns and pledges to Buyer a security
interest in the Servicing Rights and proceeds related thereto and in all
instances, whether now owned or hereafter acquired, now existing or hereafter
created.  The foregoing provision is intended to constitute a security agreement
or other arrangement or other credit enhancement related to the Agreement and
Transactions hereunder as defined under Sections 101(47)(v) and 741(7)(x) of the
Bankruptcy Code.
 
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ARTICLE 7.
PAYMENT, TRANSFER AND CUSTODY
 
(a)           On the Purchase Date for each Transaction, ownership of the
Purchased Asset shall be transferred to Buyer or its designee (including the
Custodian) against the simultaneous transfer of the Purchase Price in
immediately available funds to an account of Sellers specified in the
Confirmation relating to such Transaction.
 
(b)           On or before each Purchase Date, the applicable Seller shall
deliver or cause to be delivered to Buyer or its designee the Custodial Delivery
in the form attached hereto as Exhibit IV, provided, that notwithstanding the
foregoing, upon request of such Seller, Buyer in its sole but good faith
discretion may elect to permit such Seller to make such delivery by not later
than the third (3rd) Business Day after the related Purchase Date, so long as
such Seller causes an Acceptable Attorney, Title Company or other Person
acceptable to Buyer to deliver to Buyer and the Custodian a Bailee Letter on or
prior to such Purchase Date.  Subject to Article 7(c), in connection with each
sale, transfer, conveyance and assignment of a Purchased Asset, on or prior to
each Purchase Date with respect to such Purchased Asset, the applicable Seller
shall deliver or cause to be delivered and released to the Custodian the
following original documents (collectively, the “Purchased Asset File”),
pertaining to each of the Purchased Assets identified in the Custodial Delivery
delivered therewith, together with any other documentation in respect of such
Purchased Asset requested by Buyer, in Buyer’s sole but good faith discretion:
 
With respect to each Purchased Asset that is a Senior Mortgage Loan (to the
extent that the applicable Seller is the holder of the senior participation and
is the custodian of the related loan documents):
 
(i)           The original Mortgage Note (and if applicable, one or more
allonges) bearing all intervening endorsements, endorsed “Pay to the order of
_________ without recourse” and signed in the name of the last endorsee (the
“Last Endorsee”) by an authorized Person (in the event that the Purchased Asset
was acquired by the Last Endorsee in a merger, the signature must be in the
following form:  “[Last Endorsee], successor by merger to [name of
predecessor]”; in the event that the Purchased Asset was acquired or originated
by the Last Endorsee while doing business under another name, the signature must
be in the following form:  “[Last Endorsee], formerly known as [previous
name]”).
 
(ii)           An original of any guarantee executed in connection with the
Mortgage Note (if any).
 
(iii)          The original Mortgage with evidence of recording thereon, or a
copy thereof together with an officer’s certificate of such Seller certifying
that such represents a true and correct copy of the original and that such
original has been submitted for recordation in the appropriate governmental
recording office of the jurisdiction where the underlying real estate directly
or indirectly securing or supporting such Purchased Asset is located.
 
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(iv)          The originals of all assumption, modification, consolidation or
extension agreements with evidence of recording thereon, or copies thereof
together with an officer’s certificate of such Seller certifying that such
represent true and correct copies of the originals and that such originals have
each been submitted for recordation in the appropriate governmental recording
office of the jurisdiction where the underlying real estate directly or
indirectly securing or supporting such Purchased Asset is located.
 
(v)           The original assignment of mortgage in blank for each Purchased
Asset, in form and substance acceptable for recording and otherwise acceptable
to Buyer and signed in the name of the Last Endorsee (in the event that the
Purchased Asset was acquired by the Last Endorsee in a merger, the signature
must be in the following form: “[Last Endorsee], successor by merger to [name of
predecessor]”; in the event that the Purchased Asset was acquired or originated
while doing business under another name, the signature must be in the following
form: “[Last Endorsee], formerly known as [previous name]”).
 
(vi)          The originals of all intervening assignments of mortgage with
evidence of recording thereon, or copies thereof together with an officer’s
certificate of such Seller certifying that such represent true and correct
copies of the originals and that such originals have each been submitted for
recordation in the appropriate governmental recording office of the jurisdiction
where the underlying real estate directly or indirectly securing or supporting
such Purchased Asset is located.
 
(vii)         The original attorney’s opinion of title and abstract of title or
the original mortgagee title insurance policy, or if the original mortgagee
title insurance policy has not been issued, the irrevocable marked commitment to
issue the same.
 
(viii)        The original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Purchased Asset.
 
(ix)           The original assignment of leases and rents, if any, with
evidence of recording thereon, or a copy thereof together with an officer’s
certificate of Seller, certifying that such copy represents a true and correct
copy of the original and that such original has been submitted for recordation
in the appropriate governmental recording office of the jurisdiction where the
underlying real estate directly or indirectly securing or supporting such
Purchased Asset is located.
 
(x)            The originals of all intervening assignments of assignment of
leases and rents, if any, or copies thereof, with evidence of recording thereon.
 
(xi)           A copy of the UCC financing statements, certified as true and
correct by such Seller, and all necessary UCC continuation statements with
evidence of filing thereon or copies thereof certified by such Seller that such
financing statements have been sent for filing, and UCC assignments, which UCC
assignments shall be in form and substance acceptable for filing.
 
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(xii)          An environmental indemnity agreement (if any).
 
(xiii)         An omnibus assignment in blank (if any).
 
(xiv)         A disbursement letter from the Mortgagor to the original mortgagee
(if any).
 
(xv)          Mortgagor’s certificate or title affidavit (if any).
 
(xvi)         A survey of the underlying real estate directly or indirectly
securing or supporting such Purchased Asset (if any) as accepted by the title
company for issuance of the Title Policy.
 
(xvii)        A copy of the Mortgagor’s opinion of counsel (if any).
 
(xviii)       An assignment of permits, contracts and agreements (if any).
 
With respect to each Purchased Asset that is a Mezzanine Loan:
 
(i)             The original Mezzanine Note (and if applicable, one or more
allonges) signed in connection with the Purchased Asset bearing all intervening
endorsements, endorsed “Pay to the order of __________ without recourse” and
signed in the name of the Last Endorsee by an authorized Person (in the event
that the Mezzanine Note was acquired by the Last Endorsee in a merger, the
signature must be in the following form: “[Last Endorsee], successor by merger
to [name of predecessor]”; in the event that the Purchased Asset was acquired or
originated by the Last Endorsee while doing business under another name, the
signature must be in the following form:  “[Last Endorsee], formerly known as
[previous name]”).
 
(ii)            The original of the loan agreement and the guarantee, if any,
executed in connection with the Purchased Asset.
 
(iii)           The original intercreditor or loan coordination agreement, if
any, executed in connection with the Purchased Asset.
 
(iv)           The original security agreement executed in connection with the
Purchased Asset.
 
(v)            Copies of all documents relating to the formation and
organization of the borrower of such Purchased Asset, together with all consents
and resolutions delivered in connection with such borrower’s obtaining the
Purchased Asset.
 
(vi)           All other documents and instruments evidencing, guaranteeing,
insuring or otherwise constituting or modifying or otherwise affecting such
Purchased Asset, or otherwise executed or delivered in connection with, or
otherwise relating to, such Purchased Asset, including all documents
establishing or implementing any lockbox pursuant to which such Seller is
entitled to receive any payments from cash flow of the underlying real property.
 
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(vii)          The assignment of Purchased Asset sufficient to transfer to Buyer
all of Seller’s rights, title and interest in and to the Purchased Asset.
 
(viii)         A copy of the borrower’s opinion of counsel (if any).
 
(ix)           A copy of the UCC financing statements, certified as true and
correct by such Seller, and all necessary UCC continuation statements with
evidence of filing thereon or copies thereof certified by such Seller that such
financing statements have been sent for filing, and UCC assignments, which UCC
assignments shall be in form and substance acceptable for filing.
 
(x)            The original certificates representing the pledged equity
interests (if any).
 
(xi)           Stock powers (or their equivalent) relating to each pledged
equity interest, executed in blank, if an original stock certificate (or its
equivalent) is provided.
 
(xii)          Assignment of any agreements among equity interest holders or
other material contracts.
 
(xiii)         If no original stock certificate (or its equivalent) is provided,
evidence (which may be an officer’s certificate confirming such circumstances)
that the pledged ownership interests have been transferred to, or otherwise made
subject to a first priority security interest in favor of, such Seller.
 
With respect to each Purchased Asset that is a B-Note/Junior Interest:
 
(i)            with respect to a B-Note, the original Mortgage Note and
guarantee, if any, described in the second paragraph of this Article 7(b), and
with respect to a B-Note or a junior participation interest, to the extent
applicable, a copy of all of the documents described in clauses (iii), (iv),
(vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii) and
(xviii) of the second paragraph of this Article 7(b) with respect to a Purchased
Asset.
 
(ii)           with respect to a Junior Interest, the original participation
certificate, if any, together with the original of any participation agreement,
intercreditor agreement and/or servicing agreement executed in connection with
the Purchased Asset.
 
(iii)          the assignment of Purchased Asset, in blank, sufficient to
transfer to Buyer all of such Seller’s rights, title and interest in and to the
Purchased Asset.
 
With respect to each Purchased Asset that is a CMBS:
 
(i)           With respect to (A) any CMBS that is in physical form, the
original certificate, bond or other physical form of such CMBS, which shall (1)
be endorsed (either on the face thereof or pursuant to a separate allonge) by
the most recent endorsee prior to such Seller, without recourse, to the order of
such Seller and further reflect a complete, unbroken chain of endorsement from
the originator to such Seller and (2) be accompanied by a separate allonge
pursuant to which such Seller has endorsed such certificate, without recourse,
in blank, or, (B) with respect to any CMBS registered with DTC, evidence of
re-registration to the securities intermediary in Buyer’s name, denoting same
with a “repo” code;
 
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(ii)           to the extent in such Seller’s possession or reasonably
obtainable by such Seller, true and correct copies of the pooling and servicing
agreement or indenture and all other material documents (including, without
limitation, opinions of counsel) or agreements related to the creation or
issuance of the CMBS or otherwise affecting the rights (including, without
limitation, the security interests) of any holder thereof;
 
(iii)          to the extent in such Seller’s possession or reasonably
obtainable by such Seller, as applicable, true and correct copies of any
assignment, assumption, modification, consolidation or extension made prior to
the Purchase Date in respect of any document or agreement referred to in clause
(ii) above, in each case, if the document or agreement being assigned, assumed,
modified, consolidated or extended is recordable, with evidence of recording
thereon (unless the particular item has not been returned from the applicable
recording office);
 
(iv)          as applicable, an original assignment of each agreement referred
to in clause (iii) above, in recordable form if the agreement being assigned is
a recordable document, executed in blank by such Seller;
 
(v)           with respect to any CMBS that is in physical form, a blank
endorsement which, when properly completed and delivered, is sufficient to cause
Buyer to become the registered holder of the CMBS; and
 
(vi)          any other documents that Buyer may reasonably request such Seller
to deliver to Custodian from time to time with respect to any CMBS.
 
With respect to each Purchased Asset that is a CRE CDO:
 
(i)           With respect to any (A) CRE CDO that is in physical form, the
original certificate, bond or other physical form of such CRE CDO, which shall
(1) be endorsed (either on the face thereof or pursuant to a separate allonge)
by the most recent endorsee prior to such Seller, without recourse, to the order
of such Seller and further reflect a complete, unbroken chain of endorsement
from the originator to such Seller and (2) be accompanied by a separate allonge
pursuant to which such Seller has endorsed such certificate, without recourse,
in blank, or, (B) with respect to any CRE CDO registered with DTC, evidence of
re-registration to the securities intermediary in Buyer’s name denoting same
with a “repo” code;
 
(ii)           to the extent in such Seller’s possession or reasonably
obtainable by such Seller, true and correct copies of the indenture and all
other material documents (including, without limitation, opinions of counsel) or
agreements related to the creation or issuance of the CRE CDO or otherwise
affecting the rights (including, without limitation, the security interests) of
any holder thereof;
 
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(iii)          to the extent in such Seller’s possession or reasonably
obtainable by such Seller, as applicable, true and correct copies of any
assignment, assumption, modification, consolidation or extension made prior to
the Purchase Date in respect of any document or agreement referred to in clause
(ii) above, in each case, if the document or agreement being assigned, assumed,
modified, consolidated or extended is recordable, with evidence of recording
thereon (unless the particular item has not been returned from the applicable
recording office);
 
(iv)          as applicable, an original assignment of each agreement referred
to in clause (iii) above, in recordable form if the agreement being assigned is
a recordable document, executed in blank by such Seller;
 
(v)           with respect to any CRE CDO that is in physical form, a blank
endorsement which, when properly completed and delivered, is sufficient to cause
Buyer to become the registered holder of the CRE CDO; and
 
(vi)          any other documents that Buyer may reasonably request such Seller
to deliver to Custodian from time to time with respect to any CRE CDO.
 
With respect to each Purchased Asset that is of the type described in clause
(viii) of the definition of Eligible Asset:  any of the documentation referred
to above in this Article 7(b) or other documentation with respect to such
Eligible Asset that is determined by Buyer to be necessary to effectuate the
sale, transfer, conveyance and assignment of such Eligible Asset.
 
From time to time, the applicable Seller shall forward to the Custodian
additional original documents or additional documents evidencing any assumption,
modification, consolidation or extension of a Purchased Asset approved in
accordance with the terms of this Agreement, and upon receipt of any such other
documents, the Custodian shall hold such other documents as Buyer shall request
from time to time.  With respect to any documents that have been delivered or
are being delivered to recording offices for recording and have not been
returned to such Seller in time to permit their delivery hereunder at the time
required, in lieu of delivering such original documents, such Seller shall
deliver to Buyer a true copy thereof with an officer’s certificate certifying
that such copy is a true, correct and complete copy of the original, which has
been transmitted for recordation.  The applicable Seller shall deliver such
original documents to the Custodian promptly when they are received.  With
respect to all of the Purchased Assets delivered by a Seller to Buyer or its
designee (including the Custodian), such Seller shall execute an omnibus power
of attorney substantially in the form of Exhibit V attached hereto irrevocably
appointing Buyer its attorney-in-fact with full power to (i) complete and record
each assignment of mortgage, (ii) complete the endorsement of each Mortgage Note
or Mezzanine Note, (iii) take any action (including exercising voting and/or
consent rights) with respect to CMBS, Junior Interests, or intercreditor or
participation agreements, (iv) the preparation and filing, in form and substance
satisfactory to Buyer, of such financing statements, continuation statements,
and other UCC forms, as Buyer may from time to time, reasonably consider
necessary to create, perfect, and preserve Buyer’s security interest in the
Purchased Assets, and (v) take such other steps as may be necessary or desirable
to enforce Buyer’s rights against, under or with respect to such Purchased
Assets and the related Purchased Asset Files and the Servicing Records.  Buyer
shall deposit the Purchased Asset Files representing the Purchased Assets, or
direct that the Purchased Asset Files be deposited directly, with the
Custodian.  The Purchased Asset Files shall be maintained in accordance with the
Custodial Agreement.  Any Purchased Asset Files not delivered to Buyer or its
designee (including the Custodian) are and shall be held in trust by the
applicable Seller or its designee for the benefit of Buyer as the owner
thereof.  Such Seller or its designee shall maintain a copy of the Purchased
Asset File and the originals of the Purchased Asset File not delivered to Buyer
or its designee.  The possession of the Purchased Asset File by the applicable
Seller or its designee is at the will of Buyer for the sole purpose of servicing
the related Purchased Asset, and such retention and possession by such Seller or
its designee is in a custodial capacity only.  The books and records (including,
without limitation, any computer records or tapes) of such Seller or its
designee shall be marked appropriately to reflect clearly the sale of the
related Purchased Asset to Buyer.  The applicable Seller or its designee
(including the Custodian) shall release its custody of the Purchased Asset File
only in accordance with written instructions from Buyer, unless such release is
required as incidental to the servicing of the Purchased Assets, is in
connection with a repurchase of any Purchased Asset by such Seller or as
otherwise required by law.
 
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(c)           Upon the occurrence and during the continuation of an Event of
Default, subject to the provisions of the Purchased Asset Documents, Buyer shall
be entitled to exercise all voting and corporate rights with respect to the
Purchased Assets without regard to the applicable Seller’s instructions
(including, but not limited to, if an Act of Insolvency shall occur with respect
to such Seller, to the extent such Seller controls or is entitled to control
selection of any servicer, Buyer may transfer any or all of such servicing to an
entity satisfactory to Buyer).  The applicable Seller shall give prior written
notice to Buyer of its intention to exercise any voting or corporate rights with
respect to a Purchased Asset that could materially impair the Market Value of
the Purchased Asset.
 
(d)           Notwithstanding the provisions of Article 7(b) above requiring the
execution of the Custodial Delivery and corresponding delivery of the Purchased
Asset File to the Custodian on or prior to the related Purchase Date, with
respect to each Transaction involving a Purchased Asset that is identified in
the related Confirmation as a “Table Funded” Transaction, the applicable Seller
shall, in lieu of effectuating the delivery of all or a portion of the Purchased
Asset File on or prior to the related Purchase Date, (i) deliver to the
Custodian by facsimile on or before the related Purchase Date for the
Transaction (A) the promissory note(s), original stock certificate or
participation certificate in favor of such Seller evidencing the making of the
Purchased Asset, with such Seller’s endorsement of such instrument to Buyer, (B)
the mortgage, security agreement or similar item creating the security interest
in the related collateral and the applicable assignment document evidencing the
transfer to Buyer, (C) such other components of the Purchased Asset File as
Buyer may require on a case by case basis with respect to the particular
Transaction, and (D) evidence satisfactory to Buyer that all documents necessary
to perfect such Seller’s (and, by means of assignment to Buyer on the Purchase
Date, Buyer’s) interest in the Collateral for the Purchased Asset, and (ii) not
later than the third (3rd) Business Day following the Purchase Date, deliver to
Buyer the Custodial Delivery and to the Custodian the entire Purchased Asset
File.
 
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ARTICLE 8.
SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS
 
(a)           Title to all Purchased Assets shall pass to Buyer on the
applicable 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, but no such transaction shall relieve Buyer of its
obligations to transfer the Purchased Assets to Sellers pursuant to Article 3 of
this Agreement or of Buyer’s obligation to credit or pay Income to, or apply
Income to the obligations of, Sellers pursuant to Article 5 hereof.
 
(b)           Nothing contained in this Agreement or any other Transaction
Document shall obligate Buyer to segregate any Purchased Assets delivered to
Buyer by a Seller.  Notwithstanding anything to the contrary in this Agreement
or any other Transaction Document, no Purchased Asset shall remain in the
custody of a Seller or an Affiliate of a Seller.
 
ARTICLE 9.
RESERVED
 
 
ARTICLE 10.
REPRESENTATIONS AND WARRANTIES
 
(a)           Buyer and each Seller represents and warrants to the other that
(i) it is duly authorized to execute and deliver this Agreement, to enter into
Transactions contemplated hereunder and to perform its obligations hereunder and
has taken all necessary action to authorize such execution, delivery and
performance, (ii) it will engage in such Transactions as principal (or, if
agreed in writing, in the form of an annex hereto or otherwise, in advance of
any Transaction by the other party hereto, as agent for a disclosed principal),
(iii) the person signing this Agreement on its behalf is duly authorized to do
so on its behalf (or on behalf of any such disclosed principal), (iv) it has
obtained all authorizations of any governmental body required in connection with
this Agreement and the Transactions hereunder and such authorizations are in
full force and effect and (v) the execution, delivery and performance of this
Agreement and the Transactions hereunder will not violate any law, ordinance or
rule applicable to it or its organizational documents or any agreement by which
it is bound or by which any of its assets are affected.  On the Purchase Date
for any Transaction for the purchase of any Purchased Assets by Buyer from any
Seller and any Transaction thereunder and covenants that at all times while this
Agreement and any Transaction thereunder is in effect, Buyer and each Seller
shall each be deemed to repeat all the foregoing representations made by it.
 
(b)           In addition to the representations and warranties in subsection
(a) above, each Seller represents and warrants to Buyer as of the date of this
Agreement and will be deemed to represent and warrant to Buyer as of the
Purchase Date for the purchase of any Purchased Assets by Buyer from each Seller
and any Transaction thereunder and covenants that at all times while this
Agreement and any Transaction thereunder is in effect, unless otherwise stated
herein:
 
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(i)           Organization.  Seller is duly organized, validly existing and in
good standing under the laws and regulations of the jurisdiction of Seller’s
incorporation or organization, as the case may be, and is duly licensed,
qualified, and in good standing in every state where such licensing or
qualification is necessary for the transaction of Seller’s business, except
where failure to so qualify could not be reasonably likely to have a Material
Adverse Effect.  Seller has the power to own and hold the assets it purports to
own and hold, and to carry on its business as now being conducted and proposed
to be conducted, and has the power to execute, deliver, and perform its
obligations under this Agreement and the other Transaction Documents.
 
(ii)          Due Execution; Enforceability.  The Transaction Documents have
been or will be duly executed and delivered by Seller, for good and valuable
consideration.  The Transaction Documents constitute the legal, valid and
binding obligations of Seller, enforceable against Seller in accordance with
their respective terms subject to bankruptcy, insolvency, and other limitations
on creditors’ rights generally and to equitable principles.
 
(iii)         Ability to Perform.  Seller does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every covenant
contained in the Transaction Documents applicable to it to which it is a party.
 
(iv)         Non-Contravention.  Neither the execution and delivery of the
Transaction Documents, nor consummation by Seller of the transactions
contemplated by the Transaction Documents (or any of them), nor compliance by
Seller with the terms, conditions and provisions of the Transaction Documents
(or any of them) will conflict with or result in a breach of any of the terms,
conditions or provisions of (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 are subject or constitute a default
thereunder, or result thereunder in the creation or imposition of any lien upon
any of the assets of Seller, other than pursuant to the Transaction Documents,
any judgment or order, writ, injunction, decree or demand of any court
applicable to Seller, or (iv) any applicable Requirement of Law, in the case of
clauses (ii)-(iv) above, to the extent that such conflict or breach would have a
Material Adverse Effect upon Seller’s ability to perform its obligations
hereunder.
 
(v)          Litigation; Requirements of Law.  As of the date hereof and as of
the Purchase Date for any Transaction hereunder, there is no action, suit,
proceeding, investigation, or arbitration pending or, to the best knowledge of
Seller, threatened against Seller, any Affiliate of Seller or any of their
respective assets, nor is there any action, suit, proceeding, investigation, or
arbitration pending or threatened against Seller or any Affiliate of Seller that
may result in any Material Adverse Effect.  Seller is in compliance in all
material respects with all Requirements of Law.  Neither Seller nor any of its
Affiliates is in default in any material respect with respect to any judgment,
order, writ, injunction, decree, rule or regulation of any arbitrator or
Governmental Authority.
 
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(vi)         No Broker.  Seller has not dealt with any broker, investment
banker, agent, or other Person (other than Buyer or an Affiliate of Buyer) who
may be entitled to any commission or compensation in connection with the sale of
Purchased Assets pursuant to any of the Transaction Documents.
 
(vii)        Good Title to Purchased Assets.  Immediately prior to the purchase
of any Purchased Assets by Buyer from Seller, such Purchased Assets are free and
clear of any lien, encumbrance or impediment to transfer (including any “adverse
claim” as defined in Article 8-102(a)(1) of the UCC), and Seller is the record
and beneficial owner of and has good and marketable title to and the right to
sell and transfer such Purchased Assets to Buyer and, upon transfer of such
Purchased Assets to Buyer, Buyer shall be the owner of such Purchased Assets
free of any adverse claim.  In the event the related Transaction is
recharacterized as a secured financing of the Purchased Assets, the provisions
of this Agreement are effective to create in favor of the Buyer a valid security
interest in all rights, title and interest of Seller in, to and under the
Purchased Assets and the Buyer shall have a valid, perfected first priority
security interest in the Purchased Assets (and without limitation on the
foregoing, the Buyer, as entitlement holder, shall have a “security entitlement”
to the Purchased Assets).
 
(viii)       No Decline in Market Value; No Margin Deficit; No Defaults.  Seller
is not aware of any post-Transaction facts or circumstances that are reasonably
likely to cause or have caused the Market Value of any Purchased Asset to
decline.  No Margin Deficit exists and no Default or Event of Default has
occurred or exists under or with respect to the Transaction Documents.
 
(ix)          Responsible Officers.  The responsible officers of Seller are
listed on, and true signatures of such responsible officers are set forth on,
Exhibit II attached to this Agreement.
 
(x)           Representations and Warranties Regarding Purchased Assets;
Delivery of Purchased Asset File.
 
(A)          As of the date hereof, Seller has not assigned, pledged, or
otherwise conveyed or encumbered any Purchased Asset to any other Person, and
immediately prior to the sale of such Purchased Asset to Buyer, Seller was the
sole owner of such Purchased Asset and had good and marketable title thereto,
free and clear of all liens, in each case except for (1) liens to be released
simultaneously with the sale to Buyer hereunder and (2) liens granted by Seller
in favor of the counterparty to any Hedging Transaction, solely to the extent
such liens are expressly subordinate to the rights and interests of Buyer
hereunder.
 
(B)           The provisions of this Agreement and the related Confirmation are
effective to either constitute a sale of Purchased Items to Buyer or to create
in favor of Buyer a legal, valid and enforceable security interest in all right,
title and interest of Seller in, to and under the Purchased Items.
 
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(C)           Upon receipt by the Custodian of each Mortgage Note, Mezzanine
Note, B-Note or Junior Interest certificate, endorsed in blank by a duly
authorized officer of Seller, either a purchase shall have been completed by
Buyer of such Mezzanine Note, B-Note or Junior Interest certificate, as
applicable, or Buyer shall have a valid and fully perfected first priority
security interest in all right, title and interest of Seller in the Purchased
Items described therein.
 
(D)           Each of the representations and warranties made in respect of the
Purchased Assets pursuant to Exhibit VI are true, complete and correct, except
to the extent disclosed in a Requested Exceptions Report.
 
(E)           Upon the filing of financing statements on Form UCC-1 naming Buyer
as “Secured Party”, Seller as “Debtor” and describing the Purchased Items, in
the jurisdiction and recording office listed on Exhibit XI attached hereto, the
security interests granted hereunder in that portion of the Purchased Items
which can be perfected by filing under the Uniform Commercial Code will
constitute fully perfected security interests under the Uniform Commercial Code
in all right, title and interest of Seller in, to and under such Purchased
Items.
 
(F)           Upon execution and delivery of the Depository Agreement, Buyer
shall either be the owner of, or have a valid and fully perfected first priority
security interest in, the “investment property” and all “deposit accounts” (each
as defined in the Uniform Commercial Code) comprising Purchased Items or any
after-acquired property related to such Purchased Items.  Except to the extent
disclosed in a Requested Exceptions Report, Seller or its designee is in
possession of a complete, true and accurate Purchased Asset File with respect to
each Purchased Asset, except for such documents the originals of which have been
delivered to the Custodian.
 
(xi)           Adequate Capitalization; No Fraudulent Transfer.  Seller has, as
of such Purchase Date, adequate capital for the normal obligations foreseeable
in a business of its size and character and in light of its contemplated
business operations.  Seller is generally able to pay, and as of the date hereof
is paying, its debts as they come due.  Seller has not become, or is presently,
financially insolvent nor will Seller be made insolvent by virtue of Seller’s
execution of or performance under any of the Transaction Documents within the
meaning of the bankruptcy laws or the insolvency laws of any
jurisdiction.  Seller has not entered into any Transaction Document or any
Transaction pursuant thereto in contemplation of insolvency or with intent to
hinder, delay or defraud any creditor.
 
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(xii)          No Conflicts or Consents.  Neither the execution and delivery of
this Agreement and the other Transaction Documents by Seller, nor the
consummation of any of the transactions by it herein or therein contemplated,
nor compliance with the terms and provisions hereof or with the terms and
provisions thereof, will contravene or conflict with or result in the creation
or imposition of (or the obligation to create or impose) any lien upon any of
the property or assets of Seller pursuant to the terms of any indenture,
mortgage, deed of trust, or other agreement or instrument to which Seller is a
party or by which Seller may be bound, or to which Seller may be subject, other
than liens created pursuant to the Transaction Documents.  No consent, approval,
authorization, or order of any third party is required in connection with the
execution and delivery by Seller of the Transaction Documents to which it is a
party or to consummate the transactions contemplated hereby or thereby which has
not already been obtained.
 
(xiii)         Governmental Approvals.  No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
exemption by, any Governmental Authority is required to authorize, or is
required in connection with, the execution, delivery and performance of any
Transaction Document to which Seller is or will be a party, (ii) the legality,
validity, binding effect or enforceability of any such Transaction Document
against Seller or (iii) the consummation of the transactions contemplated by
this Agreement (other than the filing of certain financing statements in respect
of certain security interests).
 
(xiv)         Organizational Documents.  Seller has delivered to Buyer certified
copies of its organization documents, together with all amendments thereto, if
any.
 
(xv)          No Encumbrances.  There are (i) no outstanding rights, options,
warrants or agreements on the part of Seller for a purchase, sale or issuance,
in connection with the Purchased Assets, (ii) no agreements on the part of
Seller to issue, sell or distribute the Purchased Assets, and (iii) no
obligations on the part of Seller (contingent or otherwise) to purchase, redeem
or otherwise acquire any securities or interest therein, except as contemplated
by the Transaction Documents.
 
(xvi)         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.  Seller is not a
“holding company,” or a “subsidiary company of a holding company,” or an
“affiliate” of either a “holding company” or a “subsidiary company of a holding
company,” as such terms are defined in the Public Utility Holding Company Act of
2005, as amended.
 
(xvii)        Taxes.  Seller has filed or caused to be filed all tax returns
that, to the knowledge of Seller, would be delinquent if they had not been filed
on or before the date hereof 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 and all other taxes, fees or other charges imposed on
it and any of its assets by any Governmental Authority except for any such taxes
as (A) are being appropriately contested in good faith by appropriate
proceedings diligently conducted and with respect to which adequate reserves
have been provided in accordance with GAAP or (B) are de minimis in amount; no
tax liens have been filed against any of Seller’s assets and, no claims are
being asserted with respect to any such taxes, fees or other charges.
 
(xviii)       Judgments/Bankruptcy.  Except as disclosed in writing to Buyer,
there are no judgments against Seller unsatisfied of record or docketed in any
court located in the United States of America and no Act of Insolvency has ever
occurred with respect to Seller.
 
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(xix)          Solvency.  Neither the Transaction Documents nor any Transaction
thereunder are entered into in contemplation of insolvency or with intent to
hinder, delay or defraud any of Seller’s creditors.  The transfer of the
Purchased Assets subject hereto and the obligation to repurchase such Purchased
Assets is not undertaken with the intent to hinder, delay or defraud any of
Seller’s creditors.  As of the Purchase Date, Seller is not insolvent within the
meaning of 11 U.S.C. Section 101(32) or any successor provision thereof and the
transfer and sale of the Purchased Assets pursuant hereto and the obligation to
repurchase such Purchased Asset (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.  No petition in bankruptcy has been filed
against Seller in the last ten (10) years, and Seller has not in the last ten
(10) years made an assignment for the benefit of creditors or taken advantage of
any debtors relief laws.  Seller has only entered into agreements on terms that
would be considered arm’s length and otherwise on terms consistent with other
similar agreements with other similarly situated entities.  On the Purchase Date
for each Transaction, the Buyer shall be deemed to repeat all of the foregoing
representations made by it.
 
(xx)           Use of Proceeds; Margin Regulations.  All proceeds of each
Transaction shall be used by Seller for purposes permitted under Seller’s
governing documents, provided that no part of the proceeds of any Transaction
will be used by Seller to purchase or carry any margin stock or to extend credit
to others for the purpose of purchasing or carrying any margin stock.  Neither
the entering into of any Transaction nor the use of any proceeds thereof will
violate, or be inconsistent with, any provision of Regulation T, U or X of the
Board of Governors of the Federal Reserve System.
 
(xxi)          Full and Accurate Disclosure.  No information contained in the
Transaction Documents, or any written statement furnished by or on behalf of
Seller pursuant to the terms of the Transaction Documents, contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained herein or therein not misleading in light of the
circumstances under which they were made.
 
(xxii)         Financial Information.  All financial data concerning Seller and
the Purchased Assets that has been delivered by or on behalf of Seller to Buyer
is true, complete and correct in all material respects.  All financial data
concerning Seller has been prepared fairly in accordance with GAAP.  All
financial data concerning the Purchased Assets has been prepared in accordance
with standard industry practices.  Since the delivery of such data, except as
otherwise disclosed in writing to Buyer, there has been no change in the
financial position of Seller or the Purchased Assets, or in the results of
operations of Seller, which change is reasonably likely to have a Material
Adverse Effect on Seller.
 
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(xxiii)        Hedging Transactions.  To the actual knowledge of Seller, as of
the Purchase Date for any Purchased Asset that is subject to a Hedging
Transaction, each such Hedging Transaction is in full force and effect in
accordance with its terms, each counterparty thereto is an Affiliated Hedge
Counterparty or a Qualified Hedge Counterparty, and no “Termination Event”,
“Event of Default”, “Potential Event of Default” or any similar event, however
denominated, has occurred and is continuing with respect thereto.
 
(xxiv)        Servicing Agreements.  Seller has delivered to Buyer all Servicing
Agreements pertaining to the Purchased Assets and to the actual knowledge of
Seller, as of the date of this Agreement and as of the Purchase Date for the
purchase of any Purchased Assets subject to a Servicing Agreement, each such
Servicing Agreement is in full force and effect in accordance with its terms and
no default or event of default exists thereunder.
 
(xxv)         No Reliance.  Seller has made its own independent decisions to
enter into the Transaction Documents and each Transaction and as to whether such
Transaction is appropriate and proper for it based upon its own judgment and
upon advice from such advisors (including without limitation, legal counsel and
accountants) as it has deemed necessary.  Seller is not relying upon any advice
from Buyer as to any aspect of the Transactions, including without limitation,
the legal, accounting or tax treatment of such Transactions.
 
(xxvi)        Patriot Act.
 
(a)           Seller is in compliance, in all material respects, with the
(i) the Trading with the Enemy Act, as amended, and each of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) 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 (USA
Patriot Act of 2001).  No part of the proceeds of any Transaction will be used,
directly or indirectly, for any payments to any governmental official or
employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as amended.
 
(b)           Seller agrees that, from time to time upon the prior written
request of Buyer, it shall (i) execute and deliver such further documents,
provide such additional information and reports and perform such other acts as
Buyer may reasonably request in order to insure compliance with the provisions
hereof (including, without limitation, compliance with the USA Patriot Act of
2001 and to fully effectuate the purposes of this Agreement and (ii) provide
such opinions of counsel concerning matters relating to this Agreement as Buyer
may reasonably request; provided, however, that nothing in this Section
9(b)(xxvi) shall be construed as requiring Buyer to conduct any inquiry or
decreasing Seller’s responsibility for its statements, representations,
warranties or covenants hereunder.  In order to enable Buyer and its Affiliates
to comply with any anti-money laundering program and related responsibilities
including, but not limited to, any obligations under the USA Patriot Act of 2001
and regulations thereunder, Seller on behalf of itself and its Affiliates makes
the following representations and covenants to Buyer and its Affiliates (for
purposes of this Section 9(b)(xxvi), the “Seller Entities”) that neither Seller,
nor, to Seller’s actual knowledge, any of its Affiliates, is a Prohibited
Investor, and Seller is not acting on behalf of or for the benefit of any
Prohibited Investor.  Seller agrees to promptly notify Buyer or a person
appointed by Buyer to administer their anti-money laundering program, if
applicable, of any change in information affecting this representation and
covenant.
 
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(xxvii)       Environmental Matters.
 
(a)           No properties owned or leased by Seller and no properties formerly
owned or leased by Seller, its predecessors, or any former Subsidiaries or
predecessors thereof (the “Properties”), contain, or have previously contained,
any Materials of Environmental Concern in amounts or concentrations which
constitute or constituted a violation of, or reasonably could be expected to
give rise to liability under, Environmental Laws;
 
(b)           Seller is in compliance with all applicable Environmental Laws,
and there is no violation of any Environmental Laws which reasonably would be
expected to interfere with the continued operations of Seller;
 
(c)           Seller has not received any notice of violation, alleged
violation, non-compliance, liability or potential liability under any
Environmental Law, nor does Seller have knowledge that any such notice will be
received or is being threatened;
 
(d)           Materials of Environmental Concern have not been transported or
disposed by Seller in violation of, or in a manner or to a location which
reasonably would be expected to give rise to liability under, any applicable
Environmental Law, nor has Seller generated, treated, stored or disposed of at,
on or under any of the Properties in violation of, or in a manner that
reasonably would be expected to give rise to liability under, any applicable
Environmental Law;
 
(e)           No judicial proceedings or governmental or administrative action
is pending, or, to the knowledge of Seller, threatened, under any Environmental
Law which Seller is or will be named as a party, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other orders,
or other administrative or judicial requirements arising out of judicial
proceedings or governmental or administrative actions, outstanding under any
Environmental Law to which Seller is a party;
 
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(f)           There has been no release or threat of release of Materials of
Environmental Concern in violation of or in amounts or in a manner that
reasonably would be expected to give rise to liability under any Environmental
Law for which Seller may become liable; and
 
(g)           Each of the representations and warranties set forth in the
preceding clauses (a) through (f) is true and correct with respect to each
parcel of real property owned or operated by Seller.
 
(xxviii)      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
 
(xxix)         Office of Foreign Assets Control.  Seller is not a person (i)
whose property or interest in property is blocked or subject to blocking
pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) who engages in
any dealings or transactions prohibited by Section 2 of such executive order, or
to the best of Seller’s knowledge, is otherwise associated with any such person
in any manner in violation of Section 2 of such executive order, or (iii) on the
current list of Specially Designated Nationals and Blocked Persons or subject to
the limitations or prohibitions under any other U.S. Department of Treasury’s
Office of Foreign Assets Control regulation or executive order.
 
(xxx)          Notice Address; Jurisdiction of Organization.  On the date of
this Agreement, Seller’s address for notices is as specified on Annex
I.  Capital Trust Inc.’s jurisdiction of organization is Maryland and CT BSI
Funding Corp.’s jurisdiction of organization is Delaware.  The location where
Seller keeps its books and records, including all computer tapes and records
relating to the Collateral and Purchased Items, is its notice address.  Seller
may change its address for notices and for the location of its books and records
by giving Buyer written notice of such change.
 
(xxxi)         Anti-Money Laundering Laws.  Seller either (1) is entirely exempt
from or (2) has otherwise fully complied with all applicable anti-money
laundering laws and regulations (collectively, the “Anti-Money Laundering
Laws”), by (A) establishing an adequate anti-money laundering compliance program
as required by the Anti-Money Laundering Laws, (B) conducting the requisite due
diligence in connection with the origination of each Purchased Asset for
purposes of the Anti-Money Laundering Laws, including with respect to the
legitimacy of the related obligor (if applicable) and the origin of the assets
used by such obligor to purchase the property in question, and (C) maintaining
sufficient information to identify the related obligor (if applicable) for
purposes of the Anti-Money Laundering Laws.
 
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(xxxii)        Ownership.  CT BSI Funding Corp. is and shall remain at all times
a wholly owned subsidiary of Capital Trust, Inc..
 
ARTICLE 11.
NEGATIVE COVENANTS OF EACH SELLER
 
On and as of the date hereof and each Purchase Date and until this Agreement is
no longer in force with respect to any Transaction, neither Seller shall,
without the prior written consent of Buyer:
 
(a)           take any action that would directly or indirectly impair or
adversely affect Buyer’s title to the Purchased Assets;
 
(b)           transfer, assign, convey, grant, bargain, sell, set over, deliver
or otherwise dispose of, or pledge or hypothecate, directly or indirectly, any
interest in the Purchased Assets (or any of them) to any Person other than
Buyer, or engage in repurchase transactions or similar transactions with respect
to the Purchased Assets (or any of them) with any Person other than Buyer;
 
(c)           modify in any material respect any Servicing Agreements to which
it is a party, without the consent of Buyer in its sole and absolute discretion;
 
(d)           create, incur or permit to exist any lien, encumbrance or security
interest in or on any of the Purchased Assets, the other Collateral or Purchased
Items, other than the security interest granted by Sellers pursuant to Article 6
of this Agreement;
 
(e)           create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, except
for the following, hereinafter referred to as the “Permitted Liens”:
 
(i)           Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided, that adequate reserves with respect
thereto are maintained on the books of the related borrower or its subsidiaries,
as the case may be, in conformity with GAAP; and
 
(ii)          Liens created pursuant to the Transaction Documents;
 
(f)           enter into any transaction of merger or consolidation or
amalgamation, that is likely to have a material adverse effect on the
creditworthiness or financial condition of Seller, or liquidate, wind up or
dissolve itself (or suffer any liquidation, winding up or dissolution), sell all
or substantially all of its assets without the consent of Buyer in its sole and
absolute discretion;
 
(g)           consent or assent to any amendment or supplement to, or
termination of, any note, loan agreement, mortgage or guarantee relating to the
Purchased Assets or other agreement or instrument relating to the Purchased
Assets other than in accordance with Article 27;
 
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(h)           permit the organizational documents or organizational structure of
either Seller to be amended without the prior written consent of Buyer in its
sole and absolute discretion;
 
(i)            acquire or maintain any right or interest in any Purchased Asset
or Underlying Mortgaged Property that is senior to or pari passu with the rights
and interests of Buyer therein under this Agreement and the other Transaction
Documents unless such right or interest becomes a Purchased Asset hereunder;
 
(j)            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;
 
(k)           enter into any Hedging Transaction with respect to any Purchased
Asset with any entity that is not an Affiliated Hedge Counterparty or a
Qualified Hedge Counterparty;
 
(l)            permit Seller to commit to or enter into (i) any Transaction
hereunder, (ii) the purchase of any other asset, or (iii) incur any Senior
Recourse Indebtedness that is senior to or pari passu with the obligations of
Seller under this Agreement or any other Transaction Document, in the event that
the ratio of Seller’s Liquidity to Senior Recourse Indebtedness is less than
five percent (5.00%);
 
(m)          permit Seller’s EBITDA to Fixed Charge Ratio as of the last day of
any fiscal quarter to be less than 1.20:1.00;
 
(n)           permit Seller’s ratio of Total Indebtedness to Tangible Net Worth
at any time to be greater than 10.00:1.00;
 
(o)           permit Seller’s ratio of Total Non-Securitized Indebtedness to
Tangible Net Worth at any time to be greater than 4.00:1.00; and
 
(p)           permit Seller’s Tangible Net Worth at any time to be less than
$360,500,000.
 
Compliance with covenants (l) through (p) in this Article 11 must be evidenced
by financial statements and by a compliance certificate furnished together
therewith as further provided in Article 12(j)(ii) below, and compliance with
all such covenants are subject to verification by Buyer.  All of the financial
tests and covenants in this Agreement will be measured based on the consolidated
position of Capital Trust, Inc. and its Subsidiaries; provided, however, that
Section 11(e) shall apply only to CT BSI Funding Corp.
 
ARTICLE 12.
AFFIRMATIVE COVENANTS OF EACH SELLER
 
(a)           Seller shall promptly notify Buyer of any material adverse change
in its business operations and/or financial condition; provided, however, that
nothing in this Article 12 shall relieve Seller of its obligations under this
Agreement.
 
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(b)           Seller shall provide Buyer with copies of such documents as Buyer
may reasonably request evidencing the truthfulness of the representations set
forth in Article 10.
 
(c)           Seller shall (1) shall defend the right, title and interest of
Buyer in and to the Collateral and Purchased Items against, and take such other
action as is necessary to remove, the Liens, security interests, claims and
demands of all Persons (other than security interests by or through Buyer) and
(2) at Buyer’s reasonable request, take all action necessary to ensure that
Buyer will have a first priority security interest in the Purchased Assets
subject to any of the Transactions in the event such Transactions are
recharacterized as secured financings.
 
(d)           Seller shall notify Buyer and the Depository of the occurrence of
any Default or Event of Default with respect to Seller as soon as possible but
in no event later than the immediately succeeding Business Day after obtaining
actual knowledge of such event.
 
(e)           Seller shall cause the special servicer rating of the special
servicer with respect to all mortgage loans underlying Purchased Assets to be no
lower than “average” by S&P to the extent Seller controls or is entitled to
control the selection of the special servicer.  In the event the special
servicer rating with respect to any Person acting as special servicer for any
mortgage loans underlying Purchased Assets shall be below “average” by S&P, or
if an Act of Insolvency occurs with respect to Seller, Buyer shall be entitled
to transfer special servicing with respect to all Purchased Assets to an entity
satisfactory to Buyer, to the extent Seller controls or is entitled to control
the selection of the special servicer.
 
(f)           Seller shall promptly (and in any event not later than two (2)
Business Days following receipt) deliver to Buyer (i) any notice of the
occurrence of an event of default under or report received by Seller pursuant to
the Purchased Asset Documents; (ii) any notice of transfer of servicing under
the Purchased Asset Documents and (iii) any other information with respect to
the Purchased Assets that may be requested by Buyer from time to time.
 
(g)           Seller will permit Buyer or its designated representative to
inspect Seller’s records with respect to the Collateral and the Purchased Items
and the conduct and operation of its business related thereto upon reasonable
prior written notice from Buyer or its designated representative, at such
reasonable times and with reasonable frequency, and to make copies of extracts
of any and all thereof, subject to the terms of any confidentiality agreement
between Buyer and Seller.  Buyer shall act in a commercially reasonable manner
in requesting and conducting any inspection relating to the conduct and
operation of Seller’s business.
 
(h)           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 bond power covering such certificate 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.
 
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(i)           At any time from time to time upon the reasonable request of
Buyer, at the sole expense of Seller, Seller will promptly and duly execute and
deliver such further instruments and documents and take such further actions as
Buyer may request for the purposes of obtaining or preserving the full benefits
of this Agreement including the first priority security interest granted
hereunder and of the rights and powers herein granted (including, among other
things, filing such UCC financing statements as Buyer may request).  If any
amount payable under or in connection with any of the Collateral or Purchased
Items shall be or become evidenced by any promissory note, other instrument or
chattel paper, such note, instrument or chattel paper shall be immediately
delivered to Buyer, duly endorsed in a manner satisfactory to Buyer, to be
itself held as a Purchased Item and/or Collateral, as applicable, pursuant to
this Agreement, and the documents delivered in connection herewith.
 
(j)           Seller shall provide, or to cause to be provided, to Buyer the
following financial and reporting information:
 
(i)           Within fifteen (15) calendar days after each month-end, a monthly
reporting package substantially in the form of Exhibit III-A attached hereto
(the “Monthly Reporting Package”);
 
(ii)          Within forty-five (45) calendar days after the last day of each of
the first three fiscal quarters in any fiscal year, a quarterly reporting
package substantially in the form of Exhibit III-B attached hereto (the
“Quarterly Reporting Package”);
 
(iii)         Within ninety (90) calendar days after the last day of its fiscal
year, an annual reporting package substantially in the form of Exhibit III-C
attached hereto (the “Annual Reporting Package”); and
 
(iv)         Upon Buyer’s request:
 
(A)           a listing of any changes in Hedging Transactions with Qualified
Hedge Counterparties, the names of the Qualified Hedge Counterparties and the
material terms of such Hedging Transactions, delivered within ten (10) days
after Buyer’s request; and
 
(B)           copies of Seller’s Federal Income Tax returns, if any, delivered
within thirty (30) days after the earlier of (A) filing or (B) the last filing
extension period.
 
(v)           Notwithstanding anything to the contrary in Article 12, if Seller
fails to deliver the complete Monthly Reporting Package described in clause
(j)(i) above as a result of the failure of the related borrower to deliver any
information as required by the underlying loan documents, then Seller shall
immediately repurchase the related Purchased Asset at the Repurchase Price;
provided, however, that Seller shall have a period of seven (7) calendar days
from the date of delivery of the incomplete Monthly Reporting Package to provide
any missing information.
 
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(k)          Seller shall make a representative available to Buyer every month
for attendance at a telephone conference, the date of which to be mutually
agreed upon by Buyer and Seller, regarding the status of each Purchased Asset,
Seller’s compliance with the requirements of Articles 11 and 12, and any other
matters relating to the Transaction Documents or Transactions that Buyer wishes
to discuss with Seller.
 
(l)           Seller shall at all times keep proper books of records and
accounts in which full, true and correct entries shall be made of its
transactions 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.
 
(m)         Seller shall observe, perform and satisfy all the terms, provisions,
covenants and conditions required to be observed, performed or satisfied by it,
and shall pay when due all costs, fees and expenses required to be paid by it,
under the Transaction Documents.  Seller shall pay and discharge all taxes,
levies, liens and other charges on its assets and on the Collateral that, in
each case, in any manner would create any lien or charge upon the Collateral,
other than any such taxes that are being appropriately contested in good faith
by appropriate proceedings diligently conducted and with respect to which
adequate reserves have been provided in accordance with GAAP.
 
(n)          Seller will maintain records with respect to the Collateral and
Purchased Items and the conduct and operation of its business with no less a
degree of prudence than if the Collateral and Purchased Items were held by
Seller for its own account and will furnish Buyer, upon reasonable request by
Buyer or its designated representative, with reasonable information obtainable
by Seller with respect to the Collateral and Purchased Items and the conduct and
operation of its business.
 
(o)          Seller shall provide Buyer and its Affiliates with reasonable
access plus any such additional reports as Buyer may request.  Upon two (2)
Business Days’ prior notice (unless a Default shall have occurred and is
continuing, in which case, no prior notice shall be required), during normal
business hours, Seller shall allow Buyer to review any operating statements,
occupancy status and other property level information with respect to the
underlying real estate directly or indirectly securing or supporting the
Purchased Asset that either is in Seller’s possession or is available to Seller.
 
(p)          Seller shall:
 
(i)           not (a) cause or permit any change to be made in its name,
organizational identification number, identity or corporate structure, or the
places where the books and records pertaining to the Purchased Asset are held,
(b) cause or permit the opening of any new chief executive office or the closing
of any such office of Seller, or (c) change its jurisdiction of organization,
unless it shall have provided Buyer thirty (30) days’ prior written notice of
such change and shall have first taken all action required by Buyer for the
purpose of perfecting or protecting the lien and security interest of Buyer
established hereunder;
 
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(ii)          pay and discharge all taxes, assessments and governmental charges
or levies imposed on it or on its income or profits or on any of its Property
prior to the date on which penalties attach thereto, except for any such tax,
assessment, charge or levy the payment of which is being contested in good faith
and by proper proceedings and against which adequate reserves are being
maintained; and
 
(iii)         not cause or permit any Change of Control without providing Buyer
with at least ten (10) Business Days prior written notice thereof.
 
(q)           If the Purchased Asset is not serviced by Buyer, then, subject to
the terms of the related Serving Agreement, Seller shall cause each servicer of
the Purchased Asset to provide to Buyer and to the Custodian via electronic
transmission, promptly upon request by Buyer a Servicing Tape for the month (or
any portion thereof) prior to the date of Buyer’s request; provided that to the
extent any servicer does not provide any such Servicing Tape, Seller shall
prepare and provide to Buyer and the Custodian via electronic transmission a
remittance report containing the servicing information that would otherwise be
set forth in the Servicing Tape; provided, further, that regardless of whether
Seller at any time delivers any such remittance report, Seller shall at all
times use commercially reasonable efforts to cause each servicer to provide each
Servicing Tape in accordance with this Article 12(q).
 
(r)           With respect to the Purchased Asset to be purchased hereunder,
Seller shall notify Buyer in writing of the creation of any right or interest in
the Purchased Asset or related Underlying Mortgaged Property that is senior to
or pari passu with the rights and interests that are to be transferred to Buyer
under this Agreement and the other Transaction Documents (other than those
created by Buyer or Buyer’s Affiliates), and whether any such interest will be
held or obtained by Seller or an Affiliate of Seller.
 
(s)           Seller shall be solely responsible for the fees and expenses of
the Custodian, Servicer and Depository.
 
(t)           Seller shall notify Buyer in writing of any margin call in excess
of $7,500,000 that is delivered to it under any other repurchase agreement, such
notice to be provided to Buyer as soon as possible but in no event later than
the immediately succeeding Business Day after obtaining actual knowledge of such
margin call.
 
ARTICLE 13.
EVENTS OF DEFAULT; REMEDIES
 
(a)           Each of the following events shall constitute an “Event of
Default” under this Agreement:
 
(i)            any Seller shall fail to repurchase Purchased Assets upon the
applicable Repurchase Date;
 
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(ii)           Buyer shall fail to receive on any Remittance Date the accreted
value of the Price Differential (less any amount of such Price Differential
previously paid by Seller to Buyer) (including, without limitation, in the event
the Income paid or distributed on or in respect of the Purchased Assets is
insufficient to make such payment and Seller does not make such payment or cause
such payment to be made) (except that such failure shall not be an Event of
Default by any Seller if sufficient Income, including Principal Payments which
would otherwise be remitted to a Seller pursuant to Article 5 of this Agreement,
is on deposit in the Depository Account and the Depository fails to remit such
funds to Buyer);
 
(iii)          any Seller shall fail to cure any Margin Deficit, to the extent
such Margin Deficit equals or exceeds the Minimum Transfer Amount, in accordance
with Article 4 of this Agreement;
 
(iv)          any Seller shall fail to make any payment not otherwise addressed
under this Article 13(a) owing to Buyer that has become due, whether by
acceleration or otherwise under the terms of this Agreement, which failure is
not remedied within five (5) Business Days of notice thereof;
 
(v)           any Seller shall default in the observance or performance of any
agreement contained in Article 11 of this Agreement and such default shall not
be cured within ten (10) Business Days after notice by Buyer to such Seller;
 
(vi)          an Act of Insolvency occurs with respect to a Seller;
 
(vii)         any Seller shall admit to any Person its inability to, or its
intention not to, perform any of its obligations hereunder;
 
(viii)        the Custodial Agreement, the Depository Agreement or any other
Transaction Document or a replacement therefor acceptable to Buyer shall for
whatever reason be terminated or cease to be in full force and effect, or the
enforceability thereof shall be contested by Seller;
 
(ix)           any Seller shall be in default under (i) any Indebtedness of such
Seller, which default (1) involves the failure to pay a matured obligation in
excess of $5,000,000, or (2) permits the acceleration of the maturity of
obligations by any other party to or beneficiary with respect to such
Indebtedness, if the aggregate amount of the Indebtedness in respect of which
such default or defaults shall have occurred is at least $5,000,000; or (ii) any
other material contract to which such Seller is a party which default (1)
involves the failure to pay a matured obligation, or (2) permits the
acceleration of the maturity of obligations by any other party to or beneficiary
of such contract if the aggregate amount of such obligations is $5,000,000;
 
(x)           any Seller shall be in default under any Indebtedness of such
Seller to Buyer or any of its present or future Affiliates, which default (1)
involves the failure to pay a matured obligation, or (2) permits the
acceleration of the maturity of obligations by any other party to or beneficiary
with respect to such Indebtedness;
 
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(xi)           (i) any Seller or an ERISA Affiliate shall engage in any
“prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of
the Code) involving any Plan that is not exempt from such Sections of ERISA and
the Code, (ii) any material “accumulated funding deficiency” (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of
such Seller or any ERISA Affiliate, (iii) a Reportable Event (as referenced in
Section 4043(b)(3) of ERISA) shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of Buyer,
likely to result in the termination of such Plan for purposes of Title IV of
ERISA, (iv) any Plan shall terminate for purposes of Title IV of ERISA, (v) any
Seller or any ERISA Affiliate shall, or in the reasonable opinion of Buyer is
likely to, incur any liability in connection with a withdrawal from, or the
insolvency or reorganization of, a Multiemployer Plan or (vi) any other event or
condition shall occur or exist with respect to a Plan; and in each case in
clauses (i) through (vi) above, such event or condition, together with all other
such events or conditions, if any, could reasonably be expected to have a
Material Adverse Effect;
 
(xii)          either (A) the Transaction Documents shall for any reason not
cause, or shall cease to cause, Buyer to be the owner free of any adverse claim
of any of the Purchased Assets, and such condition is not cured by a Seller
within five (5) Business Days after notice thereof from Buyer to such Seller, or
(B) if a Transaction is recharacterized as a secured financing, and the
Transaction Documents with respect to any Transaction shall for any reason cease
to create and maintain a valid first priority security interest in favor of
Buyer in any of the Purchased Assets;
 
(xiii)         an “Event of Default,” “Termination Event,” “Potential Event of
Default” or other default or breach, however defined therein, occurs under any
Hedging Transaction on the part of a Seller, or the counterparty to such Seller
on any such Hedging Transaction with a Qualified Hedge Counterparty ceases to be
a Qualified Hedge Counterparty, that is otherwise not cured within any
applicable cure period thereunder or, if no cure period exists thereunder, which
is not cured by such Seller within five (5) Business Days after notice thereof
from an Affiliated Hedge Counterparty or Qualified Hedge Counterparty to such
Seller;
 
(xiv)         any governmental, regulatory, or self-regulatory authority shall
have taken any action to remove, limit, restrict, suspend or terminate the
rights, privileges, or operations of a Seller, which suspension has a Material
Adverse Effect in the determination of Buyer and that is not cured by Seller,
within fifteen (15) Business Days after notice thereof from Buyer to Seller;
 
(xv)          any condition shall exist that constitutes a Material Adverse
Effect in Buyer’s sole discretion exercised in good faith and that is not cured
by Seller, within three (3) Business Days after notice thereof from Buyer to
Seller;
 
(xvi)         any representation made by a Seller to Buyer shall have been
incorrect or untrue in any material respect when made or repeated or deemed to
have been made or repeated (other than the representations and warranties of
Seller set forth in Exhibit VI and Article 10(b)(x)(D));
 
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(xvii)        a final non-appealable judgment by any competent court in the
United States of America for the payment of money in an amount greater than
$5,000,000 shall have been rendered against a Seller, and remained undischarged
or unpaid for a period of sixty (60) days, during which period execution of such
judgment is not effectively stayed by bonding over or other means acceptable to
Buyer; and
 
(xviii)       if any Seller shall breach or fail to perform any of the terms,
covenants, obligations or conditions of this Agreement, other than as
specifically otherwise referred to in this definition of “Event of Default”, and
such breach or failure to perform is not remedied within the earlier of fifteen
(15) days after (a) delivery of notice thereof to such Seller by Buyer, or (b)
actual knowledge on the part of such Seller of such breach or failure to
perform; provided, that, if Buyer determines, in its sole discretion, that any
such breach is capable of being cured and such Seller is diligently and
continuously pursuing such a cure in good faith but is not able to do so on a
timely basis, such Seller shall have an additional period of time, not to exceed
thirty (30) additional days, within which to complete such cure.
 
(b)           After the occurrence and during the continuance of an Event of
Default, each Seller hereby appoints Buyer as attorney-in-fact of such Seller
for the purpose of carrying out the provisions of this Agreement and taking any
action and executing or endorsing any instruments that Buyer may deem necessary
or advisable to accomplish the purposes hereof, which appointment as
attorney-in-fact is irrevocable and coupled with an interest.  If an Event of
Default shall occur and be continuing with respect to such Seller, the following
rights and remedies shall be available to Buyer:
 
(i)           At the option of Buyer, exercised by written notice to such Seller
(which option shall be deemed to have been exercised, even if no notice is
given, immediately upon the occurrence of an Act of Insolvency with respect to
such Seller), the Repurchase Date for each Transaction hereunder shall, if it
has not already occurred, be deemed immediately to occur (the date on which such
option is exercised or deemed to have been exercised being referred to
hereinafter as the “Accelerated Repurchase Date”).
 
(ii)           If Buyer exercises or is deemed to have exercised the option
referred to in Article 13(b)(i) of this Agreement:
 
(A)          each Seller’s obligations hereunder to repurchase all Purchased
Assets shall become immediately due and payable on and as of the Accelerated
Repurchase Date; and
 
(B)           to the extent permitted by applicable law, the Repurchase Price
with respect to each Transaction (determined as of the Accelerated Repurchase
Date) shall be increased by the aggregate amount obtained by daily application
of, on a 360 day per year basis for the actual number of days during the period
from and including the Accelerated Repurchase Date to but excluding the date of
payment of the Repurchase Price (as so increased), (x) the Pricing Rate for such
Transaction multiplied by (y) the Repurchase Price for such Transaction
(decreased by (I) any amounts actually remitted to Buyer by the Depository or
each Seller from time to time pursuant to Article 5 of this Agreement and
applied to such Repurchase Price, and (II) any amounts applied to the Repurchase
Price pursuant to Article 13(b)(iii) of this Agreement); and
 
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(C)           the Custodian shall, upon the request of Buyer, deliver to Buyer
all instruments, certificates and other documents then held by the Custodian
relating to the Purchased Assets.
 
(iii)           Upon the occurrence of an Event of Default with respect to a
Seller, Buyer may (A) immediately sell, at a public or private sale in a
commercially reasonable manner and at such price or prices as Buyer may deem
satisfactory any or all of the Purchased Assets, and/or (B) in its sole
discretion elect, in lieu of selling all or a portion of such Purchased Assets,
to give Sellers credit for such Purchased Assets in an amount equal to the
Market Value of such Purchased Assets against the aggregate unpaid Repurchase
Price for such Purchased Assets and any other amounts owing by Sellers under the
Transaction Documents.  The proceeds of any disposition of Purchased Assets
effected pursuant to this Article 13(b)(iii) shall be applied, (u) first, to the
costs and expenses incurred by Buyer in connection with such Seller’s default;
(v) second, to consequential damages, including, but not limited to, costs of
cover and/or Hedging Transactions, if any; (w) third, to the Repurchase Price;
(x) fourth, to any Breakage Costs or any other outstanding obligation of Sellers
to Buyer; and (y) fifth, to return any excess to Sellers.
 
(iv)           The parties recognize that it may not be possible to purchase or
sell all of the Purchased Assets on a particular Business Day, or in a
transaction with the same purchaser, or in the same manner because the market
for such Purchased Assets may not be liquid.  In view of the nature of the
Purchased Assets, the parties agree that liquidation of a Transaction or the
Purchased Assets does not require a public purchase or sale and that a good
faith private purchase or sale shall be deemed to have been made in a
commercially reasonable manner.  Accordingly, Buyer may elect, in its sole
discretion, the time and manner of liquidating any Purchased Assets, and nothing
contained herein shall (A) obligate Buyer to liquidate any Purchased Assets on
the occurrence and during the continuance of an Event of Default or to liquidate
all of the Purchased Assets in the same manner or on the same Business Day or
(B) constitute a waiver of any right or remedy of Buyer.
 
(v)           Each Seller shall be liable to Buyer and its Affiliates and shall
indemnify Buyer and its Affiliates for (A) the amount of all actual
out-of-pocket expenses, including reasonable legal fees and expenses, actually
incurred by Buyer in connection with or as a consequence of an Event of Default
with respect to Seller and (B) all costs incurred by Buyer in connection with
Hedging Transactions in the event that such Seller, from and after an Event of
Default, takes any action to impede or otherwise affect Buyer’s remedies under
this Agreement.
 
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(vi)           Buyer shall have, in addition to its rights and remedies under
the Transaction Documents, all of the rights and remedies provided by applicable
federal, state, foreign (where relevant), and local laws (including, without
limitation, if the Transactions are recharacterized as secured financings, the
rights and remedies of a secured party under the UCC of the State of New York,
to the extent that the UCC is applicable, and the right to offset any mutual
debt and claim), in equity, and under any other agreement between Buyer and each
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 such Seller’s obligations to Buyer under this Agreement, without
prejudice to Buyer’s right to recover any deficiency.
 
(vii)           Subject to the notice and cure periods set forth herein, Buyer
may exercise any or all of the remedies available to Buyer immediately upon the
occurrence of an Event of Default with respect to any Seller and at any time
during the continuance thereof.  All rights and remedies arising under the
Transaction Documents, as amended from time to time, are cumulative and not
exclusive of any other rights or remedies that Buyer may have.
 
(viii)         Buyer may enforce its rights and remedies hereunder without prior
judicial process or hearing, and each Seller hereby expressly waives any
defenses such Seller might otherwise have to require Buyer to enforce its rights
by judicial process.  Each Seller also waives, to the extent permitted by law,
any defense such Seller might otherwise have arising from the use of nonjudicial
process, disposition of any or all of the Purchased Assets, or from any other
election of remedies.  Each Seller recognizes that nonjudicial remedies are
consistent with the usages of the trade, are responsive to commercial necessity
and are the result of a bargain at arm’s length.
 
ARTICLE 14.
SINGLE AGREEMENT
 
Buyer and each Seller acknowledge that, and have entered hereinto and will enter
into each Transaction hereunder in consideration of and in reliance upon the
fact that, all Transactions hereunder constitute a single business and
contractual relationship and have been made in consideration of each
other.  Accordingly, Buyer and each Seller agrees (i) to perform all of its
obligations in respect of each Transaction hereunder, and that a default in the
performance of any such obligations shall constitute a default by it in respect
of all Transactions hereunder, (ii) that each of them shall be entitled to set
off claims and apply property held by them in respect of any Transaction against
obligations owing to them in respect of any other Transactions hereunder and
(iii) that payments, deliveries and other transfers made by either of them in
respect of any Transaction shall be deemed to have been made in consideration of
payments, deliveries and other transfers in respect of any other Transactions
hereunder, and the obligations to make any such payments, deliveries and other
transfers may be applied against each other and netted.
 
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ARTICLE 15.
RECORDING OF COMMUNICATIONS
 
BUYER AND EACH SELLER SHALL HAVE THE RIGHT (BUT NOT THE OBLIGATION) FROM TIME TO
TIME TO MAKE OR CAUSE TO BE MADE TAPE RECORDINGS OF COMMUNICATIONS BETWEEN ITS
EMPLOYEES, IF ANY, AND THOSE OF THE OTHER PARTY WITH RESPECT TO TRANSACTIONS;
PROVIDED, HOWEVER, THAT SUCH RIGHT TO RECORD COMMUNICATIONS SHALL BE LIMITED TO
COMMUNICATIONS OF EMPLOYEES TAKING PLACE ON THE TRADING FLOOR OF THE APPLICABLE
PARTY.  BUYER AND EACH SELLER HEREBY CONSENTS TO THE ADMISSIBILITY OF SUCH TAPE
RECORDINGS IN ANY COURT, ARBITRATION, OR OTHER PROCEEDINGS, AND AGREES THAT A
DULY AUTHENTICATED TRANSCRIPT OF SUCH A TAPE RECORDING SHALL BE DEEMED TO BE A
WRITING CONCLUSIVELY EVIDENCING THE PARTIES’ AGREEMENT.
 
ARTICLE 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 hand delivered or sent by (a) hand delivery,
with proof of delivery, (b) certified or registered United States mail, postage
prepaid, (c) expedited prepaid delivery service, either commercial or United
States Postal Service, with proof of delivery or (d) by telecopier (with
answerback acknowledged) provided that such telecopied notice must also be
delivered by one of the means set forth in (a), (b) or (c) above, to the address
specified in Annex I hereto or at such other address and person as shall be
designated from time to time by any party hereto, as the case may be, in a
written notice to the other parties hereto in the manner provided for in this
Article 16.  A notice shall be deemed to have been given: (w) in the case of
hand delivery, at the time of delivery, (x) in the case of registered or
certified mail, when delivered or the first attempted delivery on a Business
Day, (y) in the case of expedited prepaid delivery upon the first attempted
delivery on a Business Day, or (z) in the case of telecopier, upon receipt of
answerback confirmation, provided that such telecopied notice was also delivered
as required in this Article 16.  A party receiving a notice that does not comply
with the technical requirements for notice under this Article 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.
 
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ARTICLE 18.
NON-ASSIGNABILITY
 
(a)           Subject to Article 18(b) below, Sellers may not assign any of
their respective rights or obligations under this Agreement without the prior
written consent of Buyer (not to be unreasonably withheld or delayed) and any
attempt by a Seller to assign any of its rights or obligations under this
Agreement without the prior written consent of Buyer shall be null and
void.  Buyer may, without consent of either Seller, sell to one or more banks,
financial institutions or other entities (“Participants”) participating
interests in any Transaction, its interest in the Purchased Assets, or any other
interest of Buyer under this Agreement.  Buyer may, at any time and from time to
time, assign to any Person (an “Assignee” and together with Participants, each a
“Transferee” and collectively, the “Transferees”) all or any part of its rights
its interest in the Purchased Assets, or any other interest of Buyer under this
Agreement.  Each Seller agrees to cooperate with Buyer in connection with any
such assignment, transfer or sale of participating interest and to enter into
such restatements of, and amendments, supplements and other modifications to,
this Agreement in order to give effect to such assignment, transfer or sale.
 
(b)           Title to all Purchased Assets and Purchased Items shall pass to
Buyer and Buyer shall have free and unrestricted use of all Purchased
Assets.  Nothing in this Agreement shall preclude Buyer from engaging in
repurchase transactions with the Purchased Assets and Purchased Items or
otherwise selling, pledging, repledging, transferring, hypothecating, or
rehypothecating the Purchased Assets and Purchased Items, all on terms that
Buyer may determine in its sole discretion; provided, however, that Buyer shall
(i) transfer the Purchased Assets to the applicable Seller on the applicable
Repurchase Date free and clear of any pledge, lien, security interest,
encumbrance, charge or other adverse claim on any of the Purchased Assets and
(ii) credit Income and Principal Payments to the applicable Seller in accordance
with Article 5 hereof.  Nothing contained in this Agreement shall obligate Buyer
to segregate any Purchased Assets or Purchased Items transferred to Buyer by a
Seller.
 
ARTICLE 19.
GOVERNING LAW
 
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.
 
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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.  Without limitation on any of the foregoing, the failure to give
a notice pursuant to Articles 4(a) or 4(b) hereof will not constitute a waiver
of any right to do so at a later date.
 
ARTICLE 21.
USE OF EMPLOYEE PLAN ASSETS
 
(a)           If assets of an employee benefit plan subject to any provision of
ERISA are intended to be used by either party hereto (the “Plan Party”) in a
Transaction, the Plan Party shall so notify the other party prior to the
Transaction.  The Plan Party shall represent in writing to the other party that
the Transaction does not constitute a prohibited transaction under ERISA or is
otherwise exempt therefrom, and the other party may proceed in reliance thereon
but shall not be required so to proceed.
 
(b)           Subject to the last sentence of subparagraph (a) of this Article
21, any such Transaction shall proceed only if each Seller furnishes or has
furnished to Buyer its most recent available audited statement of its financial
condition and its most recent subsequent unaudited statement of its financial
condition.
 
(c)           By entering into a Transaction, pursuant to this Article 21, each
Seller shall be deemed (i) to represent to Buyer that since the date of such
Seller’s latest such financial statements, there has been no material adverse
change in such Seller’s financial condition that such Seller has not disclosed
to Buyer, and (ii) to agree to provide Buyer with future audited and unaudited
statements of its financial condition as they are issued, so long as it is such
Seller in any outstanding Transaction involving a Plan Party.
 
ARTICLE 22.
INTENT
 
(a)           The parties recognize that 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 of Title 11 of the United States Code, as amended (except insofar as the
type of assets subject to such Transaction would render such definition
inapplicable).
 
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(b)           It is understood that either party’s right to liquidate Assets
delivered to it in connection with Transactions hereunder or to exercise any
other remedies pursuant to Article 13 hereof is a contractual right to liquidate
such Transaction as described in Sections 555, 559 and 561 of Title 11 of the
United States Code, as amended.
 
(c)           The parties agree and acknowledge that if a party hereto is an
“insured depository institution,” as such term is defined in the Federal Deposit
Insurance Act, as amended (“FDIA”), then each Transaction hereunder is a
“qualified financial contract,” as that term is defined in the FDIA and any
rules, orders or policy statements thereunder (except insofar as the type of
assets subject to such Transaction would render such definition inapplicable).
 
(d)           It is understood that this Agreement constitutes a “netting
contract” as defined in and subject to Title IV of the Federal Deposit Insurance
Corporation Improvement Act of 1991 (“FDICIA”) and each payment entitlement and
payment obligation under any Transaction hereunder shall constitute a “covered
contractual payment entitlement” or “covered contractual payment obligation”,
respectively, as defined in and subject to FDICIA (except insofar as one or both
of the parties is not a “financial institution” as that term is defined in
FDICIA).
 
(e)           It is understood that this Agreement constitutes a “master netting
agreement” as defined in Section 101(38A) of Title 11 of the United States Code,
as amended, and as used in Section 561 of Title 11 of the United States Code, as
amended.
 
(f)           It is the intention of the parties that, for U.S. Federal, state
and local income and franchise tax purposes and for accounting purposes, each
Transaction constitute a financing, and that Sellers 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, Sellers 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 23.
DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS
 
The parties acknowledge that they have been advised that:
 
(a)           in the case of Transactions in which one of the parties is a
broker or dealer registered with the Securities and Exchange Commission (“SEC”)
under Section 15 of the Securities Exchange Act of 1934 (“1934 Act”), the
Securities Investor Protection Corporation has taken the position that the
provisions of the Securities Investor Protection Act of 1970 (“SIPA”) do not
protect the other party with respect to any Transaction hereunder;
 
(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 24.
CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
 
(a)           Each party irrevocably and unconditionally (i) submits to the
non-exclusive jurisdiction of any United States Federal or New York State court
sitting in Manhattan, and any appellate court from any such court, solely for
the purpose of any suit, action or proceeding brought to enforce its obligations
under this Agreement or relating in any way to this Agreement or any Transaction
under this Agreement and (ii) waives, to the fullest extent it may effectively
do so, any defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court and any right of jurisdiction on account of its
place of residence or domicile.
 
(b)           To the extent that either party has or hereafter may acquire any
immunity (sovereign or otherwise) from any legal action, suit or proceeding,
from jurisdiction of any court or from set off or any legal process (whether
service or notice, attachment prior to judgment, attachment in aid of execution
of judgment, execution of judgment or otherwise) with respect to itself or any
of its property, such party hereby irrevocably waives and agrees not to plead or
claim such immunity in respect of any action brought to enforce its obligations
under this Agreement or relating in any way to this Agreement or any Transaction
under this Agreement.
 
(c)           The parties hereby irrevocably waive, to the fullest extent it 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 24 shall affect the right of
Buyer to serve legal process in any other manner permitted by law or affect the
right of Buyer to bring any action or proceeding against each Seller or its
property in the courts of other jurisdictions.
 
(d)           EACH OF THE PARTIES 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.
 
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ARTICLE 25.
NO RELIANCE
 
Buyer and each Seller hereby acknowledges, represents and warrants to the other
that, in connection with the negotiation of, the entering into, and the
performance under, the Transaction Documents and each Transaction thereunder:
 
(a)           It is not relying (for purposes of making any investment decision
or otherwise) upon any advice, counsel or representations (whether written or
oral) of the other party to the Transaction Documents, other than the
representations expressly set forth in the Transaction Documents;
 
(b)           It has consulted with its own legal, regulatory, tax, business,
investment, financial and accounting advisors to the extent that it has deemed
necessary, and it has made its own investment, hedging and trading decisions
(including decisions regarding the suitability of any Transaction) based upon
its own judgment and upon any advice from such advisors as it has deemed
necessary and not upon any view expressed by the other party;
 
(c)           It is a sophisticated and informed Person that has a full
understanding of all the terms, conditions and risks (economic and otherwise) of
the Transaction Documents and each Transaction thereunder and is capable of
assuming and willing to assume (financially and otherwise) those risks;
 
(d)           It is entering into the Transaction Documents and each Transaction
thereunder for the purposes of managing its borrowings or investments or hedging
its underlying assets or liabilities and not for purposes of speculation; and
 
(e)           It is not acting as a fiduciary or financial, investment or
commodity trading advisor for the other party and has not given the other party
(directly or indirectly through any other Person) any assurance, guarantee or
representation whatsoever as to the merits (either legal, regulatory, tax,
business, investment, financial accounting or otherwise) of the Transaction
Documents or any Transaction thereunder.
 
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ARTICLE 26.
INDEMNITY
 
Each Seller hereby agrees to indemnify Buyer, Buyer’s designee, Buyer’s
Affiliates and each of its officers, directors, employees and agents
(“Indemnified Parties”) from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, taxes (including stamp,
excise, sales or other taxes that may be payable or determined to be payable
with respect to any of the Purchased Assets, Purchased Items or Collateral or in
connection with any of the transactions contemplated by this Agreement and the
documents delivered in connection herewith, other than income, withholding or
other taxes imposed upon Buyer), fees, costs, expenses (including attorneys’
fees and disbursements) or disbursements (all of the foregoing, collectively
“Indemnified Amounts”) that may at any time (including, without limitation, such
time as this Agreement shall no longer be in effect and the Transactions shall
have been repaid in full) be imposed on or asserted against any Indemnified
Party in any way whatsoever arising out of or in connection with, or relating
to, this Agreement or any Transactions hereunder or any action taken or omitted
to be taken by any Indemnified Party under or in connection with any of the
foregoing; provided, that neither Seller shall be liable for losses resulting
from the gross negligence or willful misconduct of Buyer or any other
Indemnified Party.  Without limiting the generality of the foregoing, each
Seller agrees to hold Buyer harmless from and indemnify Buyer against all
Indemnified Amounts with respect to all Purchased Assets relating to or arising
out of any violation or alleged violation of any environmental law, rule or
regulation or any consumer credit laws, including without limitation ERISA, the
Truth in Lending Act and/or the Real Estate Settlement Procedures Act; provided,
that neither Seller shall be liable for losses resulting from the gross
negligence or willful misconduct of Buyer or any other Indemnified Party.  In
any suit, proceeding or action brought by Buyer in connection with any Purchased
Asset for any sum owing thereunder, or to enforce any provisions of any
Purchased Asset, each Seller will save, indemnify and hold Buyer harmless from
and against all expense (including attorneys’ fees), loss or damage suffered by
reason of any defense, set-off, counterclaim, recoupment or reduction or
liability whatsoever of the account debtor or obligor thereunder, arising out of
a breach by any Seller of any obligation thereunder or arising out of any other
agreement, indebtedness or liability at any time owing to or in favor of such
account debtor or obligor or its successors from such Seller.  Each Seller also
agrees to reimburse Buyer as and when billed by Buyer for all Buyer’s reasonable
costs and out-of-pocket expenses incurred in connection with Buyer’s due
diligence reviews with respect to the Purchased Assets (including, without
limitation, those incurred pursuant to Article 26 and Article 3 (including,
without limitation, all Pre-Purchase Legal Fees, even if the underlying
prospective Transaction for which they were incurred does not take place for any
reason) and the enforcement or the preservation of Buyer’s rights under this
Agreement, any Transaction Documents or Transaction contemplated hereby,
including without limitation the fees and disbursements of its counsel.  Each
Seller hereby acknowledges that the obligation of such Seller hereunder is a
recourse obligation of such Seller.
 
ARTICLE 27.
DUE DILIGENCE
 
Each Seller acknowledges that Buyer has the right to perform continuing due
diligence reviews with respect to the Purchased Assets, for purposes of
verifying compliance with the representations, warranties and specifications
made hereunder, or otherwise, and each Seller agrees that upon reasonable prior
notice to such Seller, Buyer or its authorized representatives will be permitted
during normal business hours to examine, inspect, and make copies and extracts
of, the Purchased Asset Files, Servicing Records and any and all documents,
records, agreements, instruments or information relating to such Purchased
Assets in the possession or under the control of such Seller, any other servicer
or subservicer and/or the Custodian.  Each Seller agrees to reimburse Buyer for
any and all reasonable out-of-pocket costs and expenses incurred by Buyer with
respect to the Purchased Assets during the term of this Agreement, which shall
be paid by such Seller to Buyer within five (5) days after receipt of an invoice
therefor.  Each Seller also shall make available to Buyer a knowledgeable
financial or accounting officer for the purpose of answering questions
respecting the Purchased Asset Files and the Purchased Assets.  Without limiting
the generality of the foregoing, each Seller acknowledges that Buyer may enter
into Transactions with such Seller based solely upon the information provided by
such 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.  Each Seller agrees to cooperate
with Buyer and any third party underwriter in connection with such underwriting,
including, but not limited to, providing Buyer and any third party underwriter
with access to any and all documents, records, agreements, instruments or
information relating to such Purchased Assets in the possession, or under the
control, of such Seller.  Each Seller further agrees that such Seller shall
reimburse Buyer for any and all reasonable attorneys’ fees, costs and expenses
incurred by Buyer in connection with continuing due diligence on Eligible Assets
and Purchased Assets.
 
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ARTICLE 28.
SERVICING
 
(a)           Notwithstanding the purchase and sale of the Purchased Assets
hereby, Sellers, Servicer or a third party servicer approved by Buyer shall
service the Purchased Assets that are Eligible Loans (such Purchased Assets,
“Serviced Assets”) for the benefit of Buyer and, if Buyer shall exercise its
rights to pledge or hypothecate the Serviced Assets prior to the Repurchase Date
pursuant to Article 8, for the benefit of Buyer’s assigns.  Sellers shall
service or cause Servicer to service the Serviced Assets at Sellers’ sole cost
and for the benefit of Buyer in accordance with Accepted Servicing Practices
approved by Buyer in the exercise of its reasonable business judgment and
maintained by other prudent mortgage or mezzanine lenders with respect to
mortgage and/or mezzanine loans similar to the Serviced Assets, provided,
however, that the obligations of Sellers to service any of the Serviced Assets
shall cease, at Buyer’s option, upon the earliest of (i) an Event of Default, or
(ii) the delivery by Buyer to Sellers of at least five (5) days’ prior written
notice of the decision by Buyer to transfer the servicing rights of any or all
of the Serviced Assets to either Servicer or another third party servicer
selected by Buyer.  In either case, Sellers shall take all actions necessary to
effectuate the underlying servicing transfer as expeditiously as
possible.  Notwithstanding the foregoing, neither Sellers nor Servicer shall
take any action or effect any modification or amendment to any Purchased Asset
without first having given prior notice thereof to Buyer in each such instance
and receiving the prior written consent of Buyer.
 
(b)           Each Seller agrees that Buyer is the owner of all servicing
records, including but not limited to any and all servicing agreements and
pooling and servicing agreements (including, without limitation any “Interim
Servicing Agreement” with Servicer) (collectively, the “Servicing Agreements”),
files, documents, records, data bases, computer tapes, copies of computer tapes,
proof of insurance coverage, insurance policies, appraisals, other closing
documentation, payment history records, and any other records relating to or
evidencing the servicing of Purchased Assets (the “Servicing Records”) so long
as the Purchased Assets are subject to this Agreement.  Each Seller grants Buyer
a security interest in all servicing fees and rights relating to the Purchased
Assets and all Servicing Records to secure the obligation of such Seller or its
designee to service in conformity with this Article 28 and any other obligation
of such Seller to Buyer.  Each Seller covenants to safeguard such Servicing
Records and to deliver them promptly to Buyer or its designee (including the
Custodian) at Buyer’s request.
 
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(c)           Upon the occurrence and during the continuance of an Event of
Default, Buyer may, in its sole discretion, (i) sell its right to the Purchased
Assets on a servicing released basis or (ii) terminate any Seller, Servicer or
any sub-servicer of the Purchased Assets with or without cause, in each case
without payment of any termination fee.
 
(d)           Neither Seller shall employ sub-servicers to service the Purchased
Assets without the prior written approval of Buyer.  If the Purchased Assets are
serviced by a sub-servicer, the applicable Seller shall, irrevocably assign all
rights, title and interest (if any) in the Servicing Agreements in the Purchased
Assets to Buyer.
 
(e)           Each Seller shall cause all servicers (other than Servicer) and
sub-servicers engaged by such Seller to execute a Servicer Notice with Buyer
acknowledging Buyer’s security interest and agreeing that each servicer and/or
sub-servicer shall immediately transfer all Income with respect to the Purchased
Assets to Servicer for deposit into the Collection Account, and so long as a
Purchased Asset is subject to a Transaction, following notice from Buyer to such
Seller of an Event of Default under this Agreement, each such servicer or
sub-servicer shall take no action under this Agreement with regard to such
Purchased Asset other than as specifically directed by Buyer.
 
(f)           The payment of servicing fees shall be subordinate to payment of
amounts outstanding under any Transaction and this Agreement.
 
(g)           For the avoidance of doubt, no Seller retains economic rights to
the servicing, other than such Seller’s rights under the Servicing Agreement or
any other servicing agreement related to the Purchased Assets.  As such, each
Seller expressly acknowledges that the Purchased Assets are sold to Buyer on a
“servicing released” basis with such servicing retained by the Servicer.
 
ARTICLE 29.
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.
 
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(c)           The headings in the Transaction Documents are for convenience of
reference only and shall not affect the interpretation or construction of the
Transaction Documents.
 
(d)           Without limiting the rights and remedies of Buyer under the
Transaction Documents, each Seller shall pay Buyer’s reasonable actual
out-of-pocket costs and expenses, including reasonable fees and expenses of
accountants, attorneys and advisors, incurred in connection with the
preparation, negotiation, execution and consummation of, and any amendment,
supplement or modification to, the Transaction Documents and the Transactions
thereunder, whether or not such Transaction Document (or amendment thereto) or
Transaction is ultimately consummated.  Each Seller agrees to pay Buyer on
demand all costs and expenses (including reasonable expenses for legal services
of every kind) of any subsequent enforcement of any of the provisions hereof, or
of the performance by Buyer of any obligations of any Seller in respect of the
Purchased Assets, or any actual or attempted sale, or any exchange, enforcement,
collection, compromise or settlement in respect of any of the Collateral or
Purchased Items and for the custody, care or preservation of the Collateral or
Purchased Items (including insurance costs) and defending or asserting rights
and claims of Buyer in respect thereof, by litigation or otherwise.  In
addition, each Seller agrees to pay Buyer on demand all reasonable costs and
expenses (including reasonable expenses for legal services) incurred in
connection with the maintenance of the Depository Account and registering the
Collateral and Purchased Items in the name of Buyer or its nominee.  All such
expenses shall be recourse obligations of each Seller to Buyer under this
Agreement.
 
(e)           In addition to any rights now or hereafter granted under
applicable law or otherwise, and not by way of limitation of such rights, each
Seller hereby grants to Buyer and its Affiliates a right of offset, to secure
repayment of all amounts owing to Buyer or its Affiliates by each Seller under
the Transaction Documents, upon any and all monies, securities, collateral or
other property of each Seller and the proceeds therefrom, now or hereafter held
or received by Buyer or its Affiliates or any entity under the control of Buyer
or its Affiliates and its respective successors and assigns (including, without
limitation, branches and agencies of Buyer, wherever located), for the account
of each Seller, whether for safekeeping, custody, pledge, transmission,
collection, or otherwise, and also upon any and all deposits (general or
specified) and credits of each Seller at any time existing.  Buyer and its
Affiliates are hereby authorized at any time and from time to time upon the
occurrence and during the continuance of an Event of Default, without notice to
any Seller, to offset, appropriate, apply and enforce such right of offset
against any and all items hereinabove referred to against any amounts owing to
Buyer or its Affiliates by any Seller thereof under the Transaction Documents or
any other agreement, irrespective of whether Buyer or its Affiliates shall have
made any demand hereunder and although such amounts, or any of them, shall be
contingent or unmatured and regardless of any other collateral securing such
amounts.  Each Seller shall be deemed directly indebted to Buyer and its
Affiliates in the full amount of all amounts owing to Buyer and its Affiliates
by such Seller under the Transaction Documents or any other agreement, and Buyer
and its Affiliates shall be entitled to exercise the rights of offset provided
for above.  ANY AND ALL RIGHTS TO REQUIRE BUYER OR ITS AFFILIATES TO EXERCISE
THEIR RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL OR PURCHASED ITEMS
THAT SECURE THE AMOUNTS OWING TO BUYER OR ITS AFFILIATES BY ANY SELLER UNDER THE
TRANSACTION DOCUMENTS, PRIOR TO EXERCISING THEIR RIGHT OF OFFSET WITH RESPECT TO
SUCH MONIES, SECURITIES, COLLATERAL, DEPOSITS, CREDITS OR OTHER PROPERTY OF ANY
SELLER, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED BY EACH SELLER.
 
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(f)           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.
 
(g)           This Agreement contains a final and complete integration of all
prior expressions by the parties with respect to the subject matter hereof and
thereof and shall constitute the entire agreement among the parties with respect
to such subject matter, superseding all prior oral or written understandings.
 
(h)           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.
 
(i)           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.
 
(j)           Wherever pursuant to this Agreement, Buyer exercises any right
given to it to consent or not consent, or to approve or disapprove, or any
arrangement or term is to be satisfactory to, Buyer in its sole discretion,
Buyer shall decide to consent or not consent, or to approve or disapprove or to
decide that arrangements or terms are satisfactory or not satisfactory, in its
sole and absolute discretion and such decision by Buyer shall be final and
conclusive.
 
(k)           Each Affiliated Hedge Counterparty is an intended third party
beneficiary of this Agreement and the parties hereto agree that this Agreement
shall not be amended or otherwise modified without the written consent of each
Affiliated Hedge Counterparty, such consent not to be unreasonably withheld.
 
ARTICLE 30.
JOINT AND SEVERAL LIABILITY
 
(a)           Each Seller hereby acknowledges and agrees that each Seller shall
be jointly and severally liable to Buyer to the maximum extent permitted by
applicable law for all representations, warranties, covenants, obligations and
indemnities of all of Sellers hereunder.
 
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(b)           Each Seller hereby agrees that, to the extent another Seller shall
have paid more than its proportionate share of any payment made hereunder, the
appropriate Seller shall be entitled to seek and receive contribution from and
against any other Seller which has not paid its proportionate share of such
payment; provided however, that the provisions of this clause shall in no
respect limit the obligations and liabilities of any Seller to Buyer, and,
notwithstanding any payment or payments made by any Seller (“Paying Seller”)
hereunder or any set-off or application of funds of Paying Seller by Buyer,
Paying Seller shall not be entitled to be subrogated to any of the rights of
Buyer against any other Seller or any collateral security or guarantee or right
of offset held by Buyer, nor shall Paying Seller seek or be entitled to seek any
contribution or reimbursement from the other Sellers in respect of payments made
by Paying Seller hereunder, until all amounts owing to Buyer by Sellers under
the Repurchase Documents are paid in full.  If any amount shall be paid to
Paying Seller on account of such subrogation rights at any time when all such
amounts shall not have been paid in full, such amount shall be held by Paying
Seller in trust for Buyer, segregated from other funds of Paying Seller, and
shall, forthwith upon receipt by Paying Seller, be turned over to Buyer in the
exact form received by Paying Seller (duly indorsed by the paying Seller to
Buyer, if required), to be applied against amounts owing to Buyer by Sellers
under the Repurchase Documents, whether matured or unmatured, in such order as
Buyer may determine.
 
(c)           Each Seller shall remain obligated under this Article 30
notwithstanding that, without any reservation of rights against any Seller and
without notice to or further assent by any Seller, any demand by Buyer for
payment of any amounts owing to Buyer by any other Seller under the Repurchase
Documents may be rescinded by Buyer and any the payment of any such amounts may
be continued, and the liability of any other party upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
Buyer, and this Agreement and the other Repurchase Documents and any other
documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as Buyer may deem
advisable from time to time, and any collateral security, guarantee or right of
offset at any time held by Buyer for the payment of amounts owing to Buyer by
Sellers under the Repurchase Documents may be sold, exchanged, waived,
surrendered or released.  Buyer shall not have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for
amounts owing to Buyer by Sellers under the Repurchase Documents, or any
property subject thereto.  When making any demand hereunder against any Seller,
Buyer may, but shall be under no obligation to, make a similar demand on any
other Seller, and any failure by Buyer to make any such demand or to collect any
payments from any other Seller, or any release of such other Seller shall not
relieve any Seller in respect of which a demand or collection is not made or
Sellers not so released of their obligations or liabilities hereunder, and shall
not impair or affect the rights and remedies, express or implied, or as a matter
of law, of the Buyer against Sellers.  For the purposes hereof “demand” shall
include the commencement and continuance of any legal proceedings.
 
73

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(d)           Each Seller waives any and all notice of the creation, renewal,
extension or accrual of any amounts at any time owing to Buyer by any other
Seller under the Repurchase Documents and notice of or proof of reliance by
Buyer upon any Seller or acceptance of the obligations of any Seller under this
Article 30, and all such amounts, and any of them, shall conclusively be deemed
to have been created, contracted or incurred, or renewed, extended, amended or
waived, in reliance upon the obligations of Sellers under this Article 30; and
all dealings between Sellers, on the one hand, and Buyer, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in
reliance upon the obligations of Sellers under this Article 30.  Each Seller
waives diligence, presentment, protest, demand for payment and notice of default
or nonpayment to or upon any Seller with respect to any amounts at any time
owing to Buyer by any Seller under the Repurchase Documents, other than such
notices as are expressly required to be given under this Agreement or any of the
other Repurchase Documents.  Each Seller understands and agrees that it shall
continue to be liable under this Article 30 without regard to (a) the validity,
regularity or enforceability of any other provision of this Agreement or any
other Repurchase Document, any amounts at any time owing to Buyer by Sellers
under the Repurchase Documents, or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by Buyer, (b) any defense, set-off or counterclaim (other than a
defense of payment or performance) which may at any time be available to or be
asserted by any Seller against Buyer, or (c) any other circumstance whatsoever
(with or without notice to or knowledge of Sellers) which constitutes, or might
be construed to constitute, an equitable or legal discharge of Sellers for any
amounts owing to Buyer by Sellers under the Repurchase Documents, or of Sellers
under this Agreement, in bankruptcy or in any other instance.  When pursuing its
rights and remedies hereunder against any Seller, Buyer may, but shall be under
no obligation to, pursue such rights and remedies as it may have against any
Seller or any other Person or against any collateral security or guarantee
related thereto or any right of offset with respect thereto, and any failure by
Buyer to pursue such other rights or remedies or to collect any payments from
any Seller or any such other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any release of
any Seller or any such other Person or any such collateral security, guarantee
or right of offset, shall not relieve any Seller of any liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of Buyer against any Seller.
 
(e)           Anything herein or in any other Repurchase Document to the
contrary notwithstanding, the maximum liability of any Seller hereunder in
respect of the liabilities of the other Sellers under this Agreement and the
other Repurchase Documents shall in no event exceed the amount which can be
guaranteed by each Seller under applicable federal and state laws relating to
the insolvency of debtors.
 
74

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

 
BUYER: 
         
JPMORGAN CHASE FUNDING INC., a Delaware corporation
         
 
By:
/s/ Gerald McCrink       Name: Gerald McCrink        Title:   Authorized
Signatory          

 

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

 
 

 
SELLERS:
         
CAPITAL TRUST, INC., a Maryland corporation
         
 
By:
/s/ Geoffrey G. Jervis       Name: Geoffrey G. Jervis       Title:   Chief
Financial Officer          

 

 
BUYER: 
         
CT BSI FUNDING CORP., a Delaware corporation
         
 
By:
/s/ Geoffrey G. Jervis       Name: Geoffrey G. Jervis       Title:   Chief
Financial Officer          

 

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

 
ANNEXES, EXHIBITS AND SCHEDULES
 
ANNEX I
Names and Addresses for Communications between Parties

 
EXHIBIT I
Form of Confirmation

 
EXHIBIT II
Responsible Officers of Seller

 
EXHIBIT III-A
Monthly Reporting Package

 
EXHIBIT III-B
Quarterly Reporting Package

 
EXHIBIT III-C
Annual Reporting Package

 
EXHIBIT IV
Form of Custodial Delivery

 
EXHIBIT V
Form of Power of Attorney

 
EXHIBIT VI
Representations and Warranties Regarding Individual Purchased Assets

 
EXHIBIT VII
Asset Information

 
EXHIBIT VIII
Advance Procedures

 
EXHIBIT IX
Form of Bailee Letter

 
EXHIBIT X
Form of Margin Deficit Notice

 
EXHIBIT XI
UCC Filing Jurisdictions

 
EXHIBIT XII
Form of Servicer Notice

 
EXHIBIT XIII
Form of Release Letter

 
EXHIBIT XIV
Covenant Compliance Certificate

 

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ANNEX I
 
Names and Addresses for Communications Between Parties
 
Buyer:
 
 
JPMORGAN CHASE FUNDING INC.

 
c/o JPMorgan Chase Bank, N.A.

 
4 New York Plaza, 20th Floor

 
New York, New York 10004-2413

Attention:
Ms. Nancy S Alto

Telephone:
(212) 623-7109

Telecopy:
(212) 623-0353

 
With copies to:
 
 
JPMORGAN CHASE FUNDING INC.

 
c/o JPMorgan Chase Bank, N.A.

 
270 Park Avenue, 10th Floor

 
New York, New York 10017-2014

Attention:
Gerald McCrink/Kunal K. Singh

Telephone:
(212) 834-9003/(212) 834-5467

Telecopy:
(212) 834-6530/(212) 834-6593

 
 
and

 
 
Cadwalader Wickersham & Taft LLP

 
227 West Trade Street

 
Charlotte, North Carolina 28202

Attention:
Stuart N. Goldstein, Esq.

Telephone:
(704) 348-5258

Telecopy:
(704) 348-5200

 
Sellers:
 
 
CAPITAL TRUST, INC.

 
410 Park Avenue

 
New York, New York 10022

Attn:
Geoffrey G. Jervis

Phone:
(212) 655-0247

Fax:
(212) 655-0044

 

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CT BSI FUNDING CORP.

 
c/o Capital Trust, Inc.

 
410 Park Avenue

 
New York, New York 10022

 
Attn: Geoffrey G. Jervis

 
Phone: (212) 655-0247

 
Fax: (212) 655-0044

 
With copies to:
 
 
Paul, Hastings, Janofsky & Walker LLP

 
75 E. 55th Street

 
New York, New York 10022

Attention:
Robert J. Grados, Esq.

Telephone:
(212) 318-6923

Telecopy:
(212) 230-7830

 
-2-

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EXHIBIT I
 
CONFIRMATION STATEMENT
JPMORGAN CHASE FUNDING INC.
 
Ladies and Gentlemen:
 
[SELLER], is pleased to deliver our written CONFIRMATION of our agreement to
enter into the Transaction pursuant to which JPMorgan Chase Funding Inc. shall
purchase from us the Purchased Assets identified on the attached Schedule 1
pursuant to the Master Repurchase Agreement, dated as of November 21, 2008 (the
“Agreement”), between JPMorgan Chase Funding Inc. (the “Buyer”) and Capital
Trust, Inc. and CT BSI Funding Corp. (the “Sellers”) on the following
terms.  Capitalized terms used herein without definition have the meanings given
in the Agreement.
 
Original Purchase Date:
__________, 200_
Purchased Assets:
[____Name]: As identified on attached Schedule 1
Original Principal Balance of Purchased Assets:
[$   ]
Repurchase Date:
 
Purchase Price:
[$   ]
Market Value:
[$   ]
Pricing Rate:
one month LIBOR plus ______%
Maximum Advance Rate:
 

 

 
[SELLER]
         
 
By:
        Name:        Title:           

 

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

 
AGREED AND ACKNOWLEDGED:
 
JPMORGAN CHASE FUNDING INC.
 

         
By:
      Name:      Title:         

 
-2-

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Schedule 1 to Confirmation Statement
 

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

Purchased Assets:
 
Aggregate Principal Amount:
 
-3-

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EXHIBIT II
 
RESPONSIBLE OFFICERS OF SELLERS
 
[SEE ATTACHED]
 

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

 
AUTHORIZED REPRESENTATIVES OF SELLER
 
Name
 
Specimen Signature
     
John R. Klopp
 
/s/ JOHN R. KLOPP
     
Stephen D. Plavin
 
/s/ STEPHEN D. PLAVIN
     
Geoffrey G. Jervis
 
/s/ GEOFFREY G. JERVIS
     
Thomas C. Ruffing
 
/s/ THOMAS C. RUFFING
     
Jeremy FitzGerald
 
/s/ JEREMY FITZGERALD
     
Douglas Armer
 
/s/ DOUGLAS ARMER
     
Jay Thailer
 
/s/ JAY THAILER
     
Ryan Totaro
 
/s/ RYAN TOTARO
     
Robert Brennan
 
/s/ ROBERT BRENNAN
     
Deborah Ginsberg
 
/s/ DEBORAH GINSBERG
     
Peter H. Smith
 
/s/ PETER H. SMITH

 
-2-

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EXHIBIT III-A
 
MONTHLY REPORTING PACKAGE
 
The Monthly Reporting Package shall include, inter alia, the following:
 
 
·
Any and all financial statements, rent rolls or other material information
received from the borrowers related to each Purchased Asset.  To the extent that
Seller fails, after diligent efforts, to obtain on a monthly basis such
financial statements, rent rolls and other material information from the
borrowers, Seller shall provide such information to Buyer on a quarterly basis.

 
 
·
A remittance report containing servicing information, including without
limitation, the amount of each periodic payment due, the amount of each periodic
payment received, the date of receipt, the date due, and whether there has been
any material adverse change to the real property, on a loan by loan basis and in
the aggregate, with respect to the Purchased Assets serviced by any servicer
(such remittance report, a “Servicing Tape”), or to the extent any servicer does
not provide any such Servicing Tape, a remittance report containing the
servicing information that would otherwise be set forth in the Servicing Tape.

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

 
 
·
With respect to a Purchased Asset that is CMBS, B-Note or Junior Interest, the
related securitization report.

 
 
·
A listing of any existing Defaults.

 
 
·
Trustee remittance reports.

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

 
 
·
A certificate substantially in the form attached hereto as Exhibit XV to this
Agreement (the “Covenant Compliance Certificate”), from a Responsible Officer of
Seller.

 

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

 
EXHIBIT III-B
 
QUARTERLY REPORTING PACKAGE
 
The Quarterly Reporting Package shall include, inter alia, the following:
 
 
·
Consolidated unaudited financial statements of Seller presented fairly in
accordance with GAAP or, if such financial statements being delivered have been
filed with the SEC pursuant to the requirements of the 1934 Act, or similar
state securities laws, presented in accordance with applicable statutory and/or
regulatory requirements and delivered to Buyer within the same time frame as are
required to be filed in accordance with such applicable statutory or regulatory
requirements, in either case accompanied by a Covenant Compliance Certificate,
including a statement of operations and a statement of changes in cash flows for
such quarter and statement of net assets as of the end of such quarter, and
certified as being true and correct by a Covenant Compliance Certificate.

 

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

 
EXHIBIT III-C
 
ANNUAL REPORTING PACKAGE
 
The Annual Reporting Package shall include, inter alia, the following:
 
 
·
Seller’s consolidated audited financial statements, prepared by a nationally
recognized independent certified public accounting firm and presented fairly in
accordance with GAAP or, if such financial statements being delivered have been
filed with the SEC pursuant to the requirements of the 1934 Act, or similar
state securities laws, presented in accordance with applicable statutory and/or
regulatory requirements and delivered to Buyer within the same time frame as are
required to be filed in accordance with such applicable statutory and/or
regulatory requirements, in either case accompanied by a Covenant Compliance
Certificate, including a statement of operations and a statement of changes in
cash flows for such quarter and statement of net assets as of the end of such
quarter accompanied by an unqualified report of the nationally recognized
independent certified public accounting firm that prepared them.

 

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

 
EXHIBIT IV
 
FORM OF CUSTODIAL DELIVERY
 
On this ______ of ________, 200__, [SELLER], a [    ] [    ], as Seller
(“Seller”) under that certain Master Repurchase Agreement, dated as of November
21, 2008 (the “Repurchase Agreement”) between JPMorgan Chase Funding Inc.
(“Buyer”) [    ] and Seller, does hereby deliver to LaSalle Bank National
Association (“Custodian”), as custodian under that certain Custodial Agreement,
dated as of November 21, 2008 (the “Custodial Agreement”), among Buyer,
Custodian and Seller, the Purchased Asset Files with respect to the Purchased
Assets to be purchased by Buyer pursuant to the Repurchase Agreement, which
Purchased Assets are listed on the Purchased Asset Schedule attached hereto and
which Purchased Assets shall be subject to the terms of the Custodial Agreement
on the date hereof.
 
With respect to the Purchased Asset Files delivered hereby, for the purposes of
issuing the Trust Receipt, the Custodian shall review the Purchased Asset Files
to ascertain delivery of the documents listed in Article 3 to the Custodial
Agreement.
 
Capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Custodial Agreement.
 
IN WITNESS WHEREOF, Seller has caused its name to be signed hereto by its
officer thereunto duly authorized as of the day and year first above written.
 

 
[SELLER]
         
 
By:
        Name:        Title:           

 

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

 
Purchased Asset Schedule to Custodial Delivery
 
Purchased Assets
 

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

 
EXHIBIT V
 
FORM OF POWER OF ATTORNEY
 
“Know All Men by These Presents, that [SELLER], a [    ] [    ] (“Seller”), does
hereby appoint JPMorgan Chase Funding Inc. (“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 Mortgage Notes and the
Mezzanine Notes and the Assignments of Mortgages, (ii) the recordation of the
Assignments of Mortgages and (iii) the enforcement of Seller’s rights under the
Purchased Assets purchased by Buyer pursuant to the Master Repurchase Agreement
dated as of November 21, 2008 (the “Repurchase Agreement”), among Buyer, [ ] and
Seller, and to take such other steps as may be necessary or desirable to enforce
Buyer’s rights against such Purchased Assets, the related Purchased Asset Files
and the Servicing Records to the extent that Seller is permitted by law to act
through an agent.
 
TO INDUCE ANY THIRD PARTY TO ACT HEREUNDER, SELLER HEREBY AGREES THAT ANY THIRD
PARTY RECEIVING A DULY EXECUTED COPY OR FACSIMILE OF THIS INSTRUMENT MAY ACT
HEREUNDER, AND THAT REVOCATION OR TERMINATION HEREOF SHALL BE INEFFECTIVE AS TO
SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE OR KNOWLEDGE OR SUCH REVOCATION
OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY, AND SELLER ON ITS
OWN BEHALF AND ON BEHALF OF SELLER’S ASSIGNS, HEREBY AGREES TO INDEMNIFY AND
HOLD HARMLESS ANY SUCH THIRD PARTY FROM AND AGAINST ANY AND ALL CLAIMS THAT MAY
ARISE AGAINST SUCH THIRD PARTY BY REASON OF SUCH THIRD PARTY HAVING RELIED ON
THE PROVISIONS OF THIS INSTRUMENT.
 
IN WITNESS WHEREOF Seller has caused this Power of Attorney to be executed as a
deed this [   ] day of November, 2008.
 

 
[SELLER]
         
 
By:
        Name:        Title:           

 

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

 
EXHIBIT VI
 
REPRESENTATIONS AND WARRANTIES
REGARDING EACH INDIVIDUAL PURCHASED ASSET
THAT IS A WHOLE MORTGAGE LOAN, A-NOTE OR
                 SENIOR PARTICIPATION INTEREST                 
 
(a)           As applicable, each Purchased Asset is either a whole loan and not
a participation interest in a whole loan, a senior participation interest in a
whole loan, or an A-Note interest in a whole loan.  The sale of the Purchased
Assets to Buyer or its designee does not require Seller to obtain any
governmental or regulatory approval or consent that has not been obtained.
 
(b)           No Purchased Asset is 30 days or more delinquent in payment of
principal and interest (without giving effect to any applicable grace period)
and no Purchased Asset has been 30 days or more (without giving effect to any
applicable grace period in the related Mortgage Note) past due.
 
(c)           Except with respect to the ARD Loans, which provide that the rate
at which interest accrues thereon increases after the Anticipated Repayment
Date, the Purchased Assets (exclusive of any default interest, late charges or
prepayment premiums) are fixed rate mortgage loans or floating rate mortgage
loans with terms to maturity, at origination or as of the most recent
modification, as set forth in the Purchased Asset Schedule.
 
(d)           The information pertaining to each Purchased Asset set forth on
the Purchased Asset Schedule is true and correct in all material respects as of
the Purchase Date.
 
(e)           At the time of the assignment of the Purchased Assets to Buyer,
Seller had good and marketable title to and was the sole owner and holder of,
each Purchased Asset, free and clear of any pledge, lien, encumbrance or
security interest and such assignment validly and effectively transfers and
conveys all legal and beneficial ownership of the Purchased Assets to Buyer free
and clear of any pledge, lien, encumbrance or security interest, subject to the
rights and obligations of Seller pursuant to the Agreement.
 
(f)           In respect of each Purchased Asset, (A) the related Mortgagor is
an entity organized under the laws of a state of the United States of America,
the District of Columbia or the Commonwealth of Puerto Rico and (B) the
Mortgagor is not a debtor in any bankruptcy, receivership, conservatorship,
reorganization, insolvency, moratorium or similar proceeding.
 

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

 
(g)           Each Purchased Asset is secured by (or in the case of a
Participation, the Underlying Mortgage Loan is secured by) a Mortgage that
establishes and creates a valid and subsisting first priority lien on the
related underlying real estate directly or indirectly securing or supporting
such Purchased Asset, or leasehold interest therein, comprising real estate (the
“Mortgaged Property”), free and clear of any liens, claims, encumbrances,
participation interests, pledges, charges or security interests subject only to
Permitted Encumbrances.  Such Mortgage, together with any separate security
agreement, UCC financing statement or similar agreement, if any, establishes and
creates a first priority security interest in favor of Seller in all personal
property owned by the Mortgagor that is used in, and is reasonably necessary to,
the operation of the related Mortgaged Property and, to the extent a security
interest may be created therein and perfected by the filing of a UCC financing
statement under the Uniform Commercial Code as in effect in the relevant
jurisdiction, the proceeds arising from the Mortgaged Property and other
collateral securing such Purchased Asset, subject only to Permitted
Encumbrances.  There exists with respect to such Mortgaged Property an
assignment of leases and rents provision, either as part of the related Mortgage
or as a separate document or instrument, which establishes and creates a first
priority security interest in and to leases and rents arising in respect of the
related Mortgaged Property subject only to Permitted Encumbrances.  No person
other than the related Mortgagor and the mortgagee owns any interest in any
payments due under the related leases.  The related Mortgage or such assignment
of leases and rents provision provides for the appointment of a receiver for
rents or allows the holder of the related Mortgage to enter into possession of
the related Mortgaged Property to collect rent or provides for rents to be paid
directly to the holder of the related Mortgage in the event of a default beyond
applicable notice and grace periods, if any, under the related Purchased Asset
Documents.  As of the origination date, there are no mechanics’ or other similar
liens or claims that have been filed for work, labor or materials affecting the
related Mortgaged Property that are or may be prior or equal to the lien of the
Mortgage, except those that are insured against pursuant to the applicable Title
Insurance Policy (as defined below).  As of the Purchase Date, there are no
mechanics’ or other similar liens or claims that have been filed for work, labor
or materials affecting the related Mortgaged Property that are or may be prior
or equal in priority to the lien of the Mortgage, except those that are insured
against pursuant to the applicable Title Policy (as defined below).  No
(a) Mortgaged Property secures any mortgage loan not represented on the
Purchased Asset Schedule, (b) Purchased Asset is cross-defaulted with any other
mortgage loan, other than a Mortgage Loan listed on the Purchased Asset
Schedule, or (c) Purchased Asset is secured by property that is not a Mortgaged
Property.
 
(h)           The related Mortgagor under each Purchased Asset has good and
indefeasible fee simple or, with respect to those Purchased Assets described in
clause (cc) hereof, leasehold title to the related Mortgaged Property comprising
real estate subject to any Permitted Encumbrances.
 
(i)           Seller has received an American Land Title Association (ALTA)
lender’s title insurance policy or a comparable form of lender’s title insurance
policy (or escrow instructions binding on the Title Insurer (as defined below)
and irrevocably obligating the Title Insurer to issue such title insurance
policy, a title policy commitment or pro-forma “marked up” at the closing of the
related Purchased Asset and countersigned by the Title Insurer or its authorized
agent) as adopted in the applicable jurisdiction (the “Title Policy”), which was
issued by a nationally recognized title insurance company (the “Title Insurer”)
qualified to do business in the jurisdiction where the applicable Mortgaged
Property is located, covering the portion of each Mortgaged Property comprised
of real estate and insuring that the related Mortgage is a valid first lien in
the original principal amount of the related Purchased Asset on the Mortgagor’s
fee simple interest (or, if applicable, leasehold interest) in such Mortgaged
Property comprised of real estate subject only to Permitted Encumbrances.  Such
Title Policy was issued in connection with the origination of the related
Purchased Asset.  No claims have been made under such Title Policy.  Such Title
Policy is in full force and effect and all premiums thereon have been paid and
will provide that the insured includes the owner of the Purchased Asset and its
successors and/or assigns.  No holder of the related Mortgage has done, by act
or omission, anything that would, and Seller has no actual knowledge of any
other circumstance that would, impair the coverage under such Title Policy.
 
-2-

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(j)           The related Assignment of Mortgage and the related assignment of
the Assignment of Leases and Rents executed in connection with each Mortgage, if
any, have been recorded in the applicable jurisdiction (or, if not recorded,
have been submitted for recording or are in recordable form) and constitute the
legal, valid and binding assignment of such Mortgage and the related assignment
of leases and rents from Seller to Buyer.  The endorsement of the related
Mortgage Note by Seller constitutes the legal, valid, binding and enforceable
(except as such enforcement may be limited by anti-deficiency laws or
bankruptcy, receivership, conservatorship, reorganization, insolvency,
moratorium or other similar laws affecting the enforcement of creditors’ rights
generally, and by general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law)) assignment of
such Mortgage Note, and together with such Assignment of Mortgage and the
related assignment of assignment of leases and rents, legally and validly
conveys all right, title and interest in such Purchased Asset and (except in the
case of an A Note or a Participation) the Purchased Asset Documents to Buyer.
 
(k)           The Purchased Asset Documents for each Purchased Asset (or in the
case of a Participation, the Underlying Mortgage Loan) provide that such
Purchased Asset (or Underlying Mortgage Loan) is non-recourse except that the
related Mortgagor and at least one individual or entity shall be fully liable
for actual losses, liabilities, costs and damages arising from at least the
following acts of the related Mortgagor and/or its principals: (i) fraud or
material misrepresentation, (ii) misapplication or misappropriation of rents,
insurance proceeds or condemnation awards, (iii) any act of actual waste, and
(iv) any breach of the environmental covenants contained in the related
Purchased Asset Documents.
 
(l)           The Purchased Asset Documents for each Purchased Asset contain
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the practical realization against the Mortgaged Property of
the principal benefits of the security intended to be provided thereby,
including realization by judicial or, if applicable, non judicial foreclosure,
and there is no exemption available to the related Mortgagor that would
interfere with such right of foreclosure except (i) any statutory right of
redemption or (ii) any limitation arising under anti deficiency laws or by
bankruptcy, receivership, conservatorship, reorganization, insolvency,
moratorium or other similar laws affecting the enforcement of creditors’ rights
generally, and by general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
 
(m)           Each of the related Mortgage Notes and Mortgages are the legal,
valid and binding obligations of the related Mortgagor named on the Purchased
Asset Schedule and each of the other related Purchased Asset Documents is the
legal, valid and binding obligation of the parties thereto (subject to any non
recourse provisions therein), enforceable in accordance with its terms, except
as such enforcement may be limited by anti deficiency laws or bankruptcy,
receivership, conservatorship, reorganization, insolvency, moratorium or other
similar laws affecting the enforcement of creditors’ rights generally, and by
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law), and except that certain
provisions of such Purchased Asset Documents are or may be unenforceable in
whole or in part under applicable state or federal laws, but the inclusion of
such provisions does not render any of the Purchased Asset Documents invalid as
a whole, and such Purchased Asset Documents taken as a whole are enforceable to
the extent necessary and customary for the practical realization of the
principal rights and benefits afforded thereby.
 
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(n)           The terms of the Purchased Assets or the related Purchased Asset
Documents, (including, in the case of a Participation, the documents evidencing
the Underlying Mortgage Loan) have not been altered, impaired, modified or
waived in any material respect, except prior to the Purchase Date by written
instrument duly submitted for recordation, to the extent required, and as
specifically set forth by a document in the related Purchased Asset File.
 
(o)           With respect to each Mortgage that is a deed of trust, a trustee,
duly qualified under applicable law to serve as such, currently so serves and is
named in the deed of trust or has been substituted in accordance with applicable
law, and no fees or expenses are or will become payable to the trustee under the
deed of trust, except in connection with a trustee’s sale after default by the
Mortgagor other than de minimis fees paid in connection with the release of the
related Mortgaged Property or related security for such Purchased Asset
following payment of such Purchased Asset in full.
 
(p)           No Purchased Asset has been satisfied, canceled, subordinated,
released or rescinded, in whole or in part, and the related Mortgagor has not
been released, in whole or in part, from its obligations under any related
Purchased Asset Document.
 
(q)           Except with respect to the enforceability of any provisions
requiring the payment of default interest, late fees, additional interest,
prepayment premiums or yield maintenance charges, neither the Purchased Asset
nor any of the related Purchased Asset Documents is subject to any right of
rescission, set-off, abatement, diminution, valid counterclaim or defense,
including the defense of usury, nor will the operation of any of the terms of
any such Purchased Asset Documents, or the exercise (in compliance with
procedures permitted under applicable law) of any right thereunder, render any
Purchased Asset Documents subject to any right of rescission, set-off,
abatement, diminution, valid counterclaim or defense, including the defense of
usury (subject to anti-deficiency or one form of action laws and to bankruptcy,
receivership, conservatorship, reorganization, insolvency, moratorium or other
similar laws affecting the enforcement of creditor’s rights generally and by
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law)), and no such right of
rescission, set-off, abatement, diminution, valid counterclaim or defense has
been asserted with respect thereto.  None of the Purchased Asset Documents
provides for a release of a portion of the Mortgaged Property from the lien of
the Mortgage except upon payment or defeasance in full of all obligations under
the Mortgage, provided that, notwithstanding the foregoing, certain of the
Purchased Assets may allow partial release (a) upon payment or defeasance of an
allocated loan amount which may be formula based, but in no event less than 125%
of the allocated loan amount, or (b) in the event the portion of the Mortgaged
Property being released was not given any material value in connection with the
underwriting or appraisal of the related Purchased Asset.
 
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(r)           As of the Purchase Date, there is no payment default, giving
effect to any applicable notice and/or grace period, and there is no other
material default under any of the related Purchased Asset Documents, giving
effect to any applicable notice and/or grace period; no such material default or
breach has been waived by Seller or on its behalf or, by Seller’s predecessors
in interest with respect to the Purchased Assets; and no event has occurred
that, with the passing of time or giving of notice would constitute a material
default or breach under the related Purchased Asset Documents.  No Purchased
Asset has been accelerated and no foreclosure or power of sale proceeding has
been initiated in respect of the related Mortgage.  Seller has not waived any
material claims against the related Mortgagor under any non-recourse exceptions
contained in the Mortgage Note.
 
(s)           The principal amount of the Purchased Asset stated on the
Purchased Asset Schedule has been fully disbursed as of the Purchase Date
(except for certain amounts that were fully disbursed by the mortgagee, but
escrowed pursuant to the terms of the related Purchased Asset Documents) and
there are no future advances required to be made by the mortgagee under any of
the related Purchased Asset Documents.  Any requirements under the related
Purchased Asset Documents regarding the completion of any on-site or off-site
improvements and to disbursements of any escrow funds therefor have been or are
being complied with or such escrow funds are still being held.  The value of the
Mortgaged Property relative to the value reflected in the most recent appraisal
thereof is not materially impaired by any improvements that have not been
completed.  Seller has not, nor, have any of its agents or predecessors in
interest with respect to the Purchased Assets, in respect of such Purchased
Asset, directly or indirectly, advanced funds or induced, solicited or knowingly
received any advance of funds by a party other than the Mortgagor other than (a)
interest accruing on such Purchased Asset from the date of such disbursement of
such Purchased Asset to the date which preceded by thirty (30) days the first
payment date under the related Mortgage Note and (b) application and commitment
fees, escrow funds, points and reimbursements for fees and expenses, incurred in
connection with the origination and funding of the Purchased Asset.
 
(t)           No Purchased Asset has capitalized interest included in its
principal balance, or provides for any shared appreciation rights or other
equity participation therein and no contingent or additional interest contingent
on cash flow or, except for ARD Loans, negative amortization accrues or is due
thereon.
 
(u)           Each Purchased Asset identified in the Purchased Asset Schedule as
an ARD Loan substantially fully amortizes over its stated term, which term is at
least 60 months after the related Anticipated Repayment Date.  Each ARD Loan has
an Anticipated Repayment Date not less than seven years following the
origination of such Purchased Asset.  If the related Mortgagor elects not to
prepay its ARD Loan in full on or prior to the Anticipated Repayment Date
pursuant to the existing terms of the Purchased Asset or a unilateral option (as
defined in Treasury Regulations under Article 1001 of the Code) in the Purchased
Asset exercisable during the term of the Mortgage Loan, (i) the Purchased
Asset’s interest rate will step up to an interest rate per annum as specified in
the related Purchased Asset Documents; provided, however, that payment of such
Excess Interest shall be deferred until the principal of such ARD Loan has been
paid in full; (ii) all or a substantial portion of the Excess Cash Flow
collected after the Anticipated Repayment Date shall be applied towards the
prepayment of such ARD Loan and once the principal balance of an ARD Loan has
been reduced to zero all Excess Cash Flow will be applied to the payment of
accrued Excess Interest; and (iii) if the property manager for the related
Mortgaged Property can be removed by or at the direction of the mortgagee on the
basis of a debt service coverage test, the subject debt service coverage ratio
shall be calculated without taking account of any increase in the related
Mortgage Interest Rate on such Purchased Asset’s Anticipated Repayment Date.  No
ARD Loan provides that the property manager for the related Mortgaged Property
can be removed by or at the direction of the mortgagee solely because of the
passage of the related Anticipated Repayment Date.
 
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(v)           Each Purchased Asset identified in the Purchased Asset Schedule as
an ARD Loan with a hard lockbox requires that tenants at the related Mortgaged
Property shall (and each Purchased Asset identified in the Purchased Asset
Schedule as an ARD Loan with a springing lockbox requires that tenants at the
related Mortgaged Property shall, upon the occurrence of a specified trigger
event, including, but not limited to, the occurrence of the related Anticipated
Repayment Date) make rent payments into a lockbox controlled by the holder of
the Purchased Asset and to which the holder of the Purchased Asset has a first
perfected security interest; provided however, with respect to each ARD Loan
that is secured by a multi-family property with a hard lockbox, or with respect
to each ARD Loan that is secured by a multi-family property with a springing
lockbox, upon the occurrence of a specified trigger event, including, but not
limited to, the occurrence of the related Anticipated Repayment Date, tenants
either pay rents to a lockbox controlled by the holder of the Mortgage Loan or
deposit rents with the property manager who will then deposit the rents into a
lockbox controlled by the holder of the Purchased Asset.
 
(w)           The terms of the Purchased Asset Documents evidencing such
Purchased Asset comply in all material respects with all applicable local, state
and federal laws, and regulations and Seller has complied with all material
requirements pertaining to the origination, funding and servicing of the
Purchased Assets, including but not limited to, usury and any and all other
material requirements of any federal, state or local law to the extent
non-compliance would have a Material Adverse Effect on the Purchased Asset.
 
(x)           The related Mortgaged Property is, in all material respects, in
compliance with, and is used and occupied in accordance with, all restrictive
covenants of record applicable to such Mortgaged Property and applicable zoning
laws and all inspections, licenses, permits and certificates of occupancy
required by law, ordinance or regulation to be made or issued with regard to the
Mortgaged Property have been obtained and are in full force and effect, except
to the extent (a) any material non-compliance with applicable zoning laws is
insured by an ALTA lender’s title insurance policy (or binding commitment
therefor), or the equivalent as adopted in the applicable jurisdiction, or a law
and ordinance insurance policy, or (b) the failure to obtain or maintain such
inspections, licenses, permits or certificates of occupancy does not materially
impair or materially and adversely affect the use and/or operation of the
Mortgaged Property as it was used and operated as of the date of origination of
the Purchased Asset or the rights of a holder of the related Purchased Asset.
 
(y)           All (a) taxes, water charges, sewer rents, assessments or other
similar outstanding governmental charges and governmental assessments that
became due and owing prior to the Purchase Date in respect of the related
Mortgaged Property (excluding any related personal property), and that if left
unpaid, would be, or might become, a lien on such Mortgaged Property having
priority over the related Mortgage and (b) insurance premiums or ground rents
that became due and owing prior to the Purchase Date in respect of the related
Mortgaged Property (excluding any related personal property), have been paid, or
if any such items are disputed, an escrow of funds in an amount sufficient
(together with escrow payments required to be made prior to delinquency) to
cover such taxes and assessments and any late charges due in connection
therewith has been established.  As of the date of origination, the related
Mortgaged Property consisted of one or more separate and complete tax
parcels.  For purposes of this representation and warranty, the items identified
herein shall not be considered due and owing until the date on which interest or
penalties would be first payable thereon.
 
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(z)           None of the 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 lies outside the boundaries and building
restriction lines of such Mortgaged Property, except to the extent that they are
legally nonconforming as contemplated by the representation in clause (48)
below, and no improvements on adjoining properties encroach upon such Mortgaged
Property, with the exception in each case of (a) immaterial encroachments that
do not materially adversely affect the security intended to be provided by the
related Mortgage or the use, enjoyment, value or marketability of such Mortgaged
Property or (b) encroachments affirmatively covered by the related Title
Policy.  With respect to each Purchased Asset, the property legally described in
the survey, if any, obtained for the related Mortgaged Property for purposes of
the origination thereof is the same as the property legally described in the
Mortgage.
 
(aa)           As of the date of the applicable engineering report (which was
performed within 12 months prior to the Purchase Date) related to the Mortgaged
Property and, as of the Purchase Date, the related Mortgaged Property is either
(i) in good repair, free and clear of any damage that would materially adversely
affect the value of such Mortgaged Property as security for such Purchased Asset
or the use and operation of the Mortgaged Property as it was being used or
operated as of the origination date or (ii) escrows in an amount consistent with
the standard utilized by Seller with respect to similar loans it holds for its
own account have been established, which escrows will in all events be not less
than 100% of the estimated cost of the required repairs.  The Mortgaged Property
has not been damaged by fire, wind or other casualty or physical condition
(including, without limitation, any soil erosion or subsidence or geological
condition), which damage has not either been fully repaired or fully insured, or
for which escrows in an amount consistent with the standard utilized by Seller
with respect to loans it holds for its own account have not been established.
 
(bb)           There are no proceedings pending or threatened, for the partial
or total condemnation of the relevant Mortgaged Property.
 
(cc)           The Purchased Assets that are identified as being secured in
whole or in part by a leasehold estate (a “Ground Lease”) (except with respect
to any Purchased Asset also secured by the related fee interest in the Mortgaged
Property), satisfy the following conditions:
 
I.
such Ground Lease or a memorandum thereof has been or will be duly recorded;
such Ground Lease, or other agreement received by the originator of the
Purchased Asset from the ground lessor, provides that the interest of the lessee
thereunder may be encumbered by the related Mortgage and does not restrict the
use of the related Mortgaged Property by such lessee, its successors or assigns,
in a manner that would materially and adversely affect the security provided by
the Mortgage; as of the date of origination of the Purchased Asset (or in the
case of a Participation, the Underlying Mortgage Loan), there was no material
change of record in the terms of such Ground Lease with the exception of written
instruments that are part of the related Purchased Asset File and there has been
no material change in the terms of such Ground Lease since the recordation of
the related Purchased Asset, with the exception of written instruments that are
part of the related Purchased Asset File;

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

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

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

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

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

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

 
VIII.
under the terms of such Ground Lease and the related Mortgage, taken together,
any related insurance proceeds will be applied either to the repair or
restoration of all or part of the related Mortgaged Property, with the mortgagee
under such Mortgage or a financially responsible institution acting as trustee
appointed by it, or consented to by it, or by the lessor having the right to
hold and disburse such proceeds as the repair or restoration progresses (except
in such cases where a provision entitling another party to hold and disburse
such proceeds would not be viewed as commercially unreasonable by a prudent
institutional lender), or to the payment in whole or in part of the outstanding
principal balance of such Purchased Asset together with any accrued and unpaid
interest thereon; and

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

 
(dd)           An Environmental Site Assessment relating to each Mortgaged
Property and prepared no earlier than 12 months prior to the Purchase Date was
obtained and reviewed by Seller in connection with the origination of such
Purchased Asset and a copy is included in the Purchased Asset File.
 
(ee)           There are no adverse circumstances or conditions with respect to
or affecting the Mortgaged Property that would constitute or result in a
material violation of any applicable federal, state or local environmental laws,
rules and regulations (collectively, “Environmental Laws”), other than with
respect to a Mortgaged Property (i) for which environmental insurance is
maintained, or (ii) that would require (x) any expenditure less than or equal to
5% of the outstanding principal balance of the Mortgage Loan to achieve or
maintain compliance in all material respects with any Environmental Laws or (y)
any expenditure greater than 5% of the outstanding principal balance of such
Purchased Asset to achieve or maintain compliance in all material respects with
any Environmental Laws for which, in connection with this clause (y), adequate
sums, but in no event less than 125% of the estimated cost as set forth in the
Environmental Site Assessment, were reserved in connection with the origination
of the Purchased Asset and for which the related Mortgagor has covenanted to
perform, or (iii) as to which the related Mortgagor or one of its affiliates is
currently taking or required to take such actions, if any, with respect to such
conditions or circumstances as have been recommended by the Environmental Site
Assessment or required by the applicable Governmental Authority, or (iv) as to
which another responsible party not related to the Mortgagor with assets
reasonably estimated by Seller at the time of origination to be sufficient to
effect all necessary or required remediation identified in a notice or other
action from the applicable Governmental Authority is currently taking or
required to take such actions, if any, with respect to such regulatory
authority’s order or directive, or (v) as to which the conditions or
circumstances identified in the Environmental Site Assessment were investigated
further and based upon such additional investigation, an environmental
consultant recommended no further investigation or remediation, or (vi) as to
which a party with financial resources reasonably estimated to be adequate to
cure the condition or circumstance that would give rise to such material
violation provided a guarantee or indemnity to the related Mortgagor or to the
mortgagee to cover the costs of any required investigation, testing, monitoring
or remediation, or (vii) as to which the related Mortgagor or other responsible
party obtained a “No Further Action” letter or other evidence reasonably
acceptable to a prudent commercial mortgage lender that applicable federal,
state, or local Governmental Authorities had no current intention of taking any
action, and are not requiring any action, in respect of such condition or
circumstance, or (viii) that would not require substantial cleanup, remedial
action or other extraordinary response under any Environmental Laws reasonably
estimated to cost in excess of 5% of the outstanding principal balance of such
Purchased Asset;
 
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(ff)           Except for any hazardous materials being handled in accordance
with applicable Environmental Laws, (A) there exists either (i) environmental
insurance with respect to such Mortgaged Property or (ii) an amount in an escrow
account pledged as security for such Purchased Asset under the relevant
Purchased Asset Documents equal to no less than 125% of the amount estimated in
such Environmental Site Assessment as sufficient to pay the cost of such
remediation or other action in accordance with such Environmental Site
Assessment or (B) one of the statements set forth in clause (A)(ii) above is
true, (i) such Mortgaged Property is not being used for the treatment or
disposal of hazardous materials; (ii) no hazardous materials are being used or
stored or generated for off-site disposal or otherwise present at such Mortgaged
Property other than hazardous materials of such types and in such quantities as
are customarily used or stored or generated for off-site disposal or otherwise
present in or at properties of the relevant property type; and (iii) such
Mortgaged Property is not subject to any environmental hazard (including,
without limitation, any situation involving hazardous materials) that under the
Environmental Laws would have to be eliminated before the sale of, or that could
otherwise reasonably be expected to adversely affect in more than a de minimis
manner the value or marketability of, such Mortgaged Property.
 
(gg)          The related Mortgage or other Purchased Asset Documents contain
covenants on the part of the related Mortgagor requiring its compliance with any
present or future federal, state and local Environmental Laws and regulations in
connection with the Mortgaged Property.  The related Mortgagor (or an affiliate
thereof) has agreed to indemnify, defend and hold Seller, and its successors and
assigns (or in the case of a Participation, the lender of record), harmless from
and against any and all losses, liabilities, damages, penalties, fines, expenses
and claims of whatever kind or nature (including attorneys’ fees and costs)
imposed upon or incurred by or asserted against any such party resulting from a
breach of the environmental representations, warranties or covenants given by
the related Mortgagor in connection with such Purchased Asset.
 
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(hh)          For each of the Purchased Assets that is covered by environmental
insurance, each environmental insurance policy is in an amount equal to 125% of
the outstanding principal balance of the related Purchased Asset and has a term
ending no sooner than the date that is five years after the maturity date (or,
in the case of an ARD Loan, the final maturity date) of the related Purchased
Asset.  All environmental assessments or updates that were in the possession of
Seller and that relate to a Mortgaged Property as being insured by an
environmental insurance policy have been delivered to or disclosed to the
environmental insurance carrier issuing such policy prior to the issuance of
such policy.
 
(ii)           As of the date of origination of the related Purchased Asset,
and, as of the Purchase Date, the Mortgaged Property is covered by insurance
policies providing the coverage described below and the Purchased Asset
Documents permit the mortgagee to require the coverage described below.  All
premiums with respect to the insurance policies insuring each Mortgaged Property
have been paid in a timely manner or escrowed to the extent required by the
Purchased Asset Documents, and Seller has not received any notice of
cancellation or termination.  The relevant Purchased Asset File contains the
insurance policy required for such Purchased Asset or a certificate of insurance
for such insurance policy.  Each Mortgage requires that the related Mortgaged
Property and all improvements thereon be covered by insurance policies providing
(a) coverage in the amount of the lesser of full replacement cost of such
Mortgaged Property and the outstanding principal balance of the related
Purchased Asset (subject to customary deductibles) for fire and extended perils
included within the classification “All Risk of Physical Loss” in an amount
sufficient to prevent the Mortgagor from being deemed a co-insurer and to
provide coverage on a full replacement cost basis of such Mortgaged Property (in
some cases exclusive of foundations and footings) with an agreed amount
endorsement to avoid application of any coinsurance provision; such policies
contain a standard mortgagee clause naming mortgagee and its successor in
interest as additional insureds or loss payee, as applicable; (b) business
interruption or rental loss insurance in an amount at least equal to (i) 12
months of operations or (ii) in some cases all rents and other amounts
customarily insured under this type of insurance of the Mortgaged Property; (c)
flood insurance (if any portion of the improvements on the Mortgaged Property is
located in an area identified by the Federal Emergency Management Agency
(“FEMA”), with respect to certain Purchased Assets and the Secretary of Housing
and Urban Development with respect to other Mortgage Loans, as having special
flood hazards) in an amount not less than amounts prescribed by FEMA; (d)
workers’ compensation, if required by law; (e) comprehensive general liability
insurance in an amount equal to not less than $1,000,000; all such insurance
policies contain clauses providing they are not terminable and may not be
terminated without thirty (30) days prior written notice to the mortgagee
(except where applicable law requires a shorter period or except for nonpayment
of premiums, in which case not less than ten (10) days prior written notice to
the mortgagee is required).  In addition, each Mortgage permits the related
mortgagee to make premium payments to prevent the cancellation thereof and shall
entitle such mortgagee to reimbursement therefor.  Any insurance proceeds in
respect of a casualty, loss or taking will be applied either to the repair or
restoration of all or part of the related Mortgaged Property or the payment of
the outstanding principal balance of the related Purchased Asset together with
any accrued interest thereon.  The related Mortgaged Property is insured by an
insurance policy, issued by an insurer meeting the requirements of such
Purchased Asset (or in the case of a Participation, of the Underlying Mortgage
Loan) and having a claims-paying or financial strength rating of at least A:X
from A.M. Best Company or “A” (or the equivalent) from S&P, Fitch or
Moody’s.  An architectural or engineering consultant has performed an analysis
of each of the Mortgaged Properties located in seismic zones 3 or 4 in order to
evaluate the structural and seismic condition of such property, for the sole
purpose of assessing the probable maximum loss (“PML”) for the Mortgaged
Property in the event of an earthquake.  In such instance, the PML was based on
a return period of not less than 100 years, an exposure period of 50 years and a
10% probability of exceedence.  If the resulting report concluded that the PML
would exceed 20% of the amount of the replacement costs of the improvements,
earthquake insurance on such Mortgaged Property was obtained by an insurer rated
at least A:X by A.M. Best Company or “A” (or the equivalent) from S&P, Fitch or
Moody’s.  The insurer issuing each of the foregoing insurance policies is
qualified to write insurance in the jurisdiction where the related Mortgaged
Property is located.
 
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(jj)           All amounts required to be deposited by each Mortgagor at
origination under the related Purchased Asset Documents have been deposited at
origination and there are no deficiencies with regard thereto.
 
(kk)         Whether or not a Purchased Asset was originated by Seller, with
respect to each Purchased Asset originated by Seller and each Purchased Asset
originated by any Person other than Seller, as of the date of origination of the
related Purchased Asset, and, with respect to each Purchased Asset originated by
Seller and any subsequent holder of the Purchased Asset, as of the Purchase
Date, there are no actions, suits, arbitrations or governmental investigations
or proceedings by or before any court or other Governmental Authority or agency
now pending against or affecting the Mortgagor under any Purchased Asset or any
of the Mortgaged Properties that, if determined against such Mortgagor or such
Mortgaged Property, would materially and adversely affect the value of such
Mortgaged Property, the security intended to be provided with respect to the
related Purchased Asset, or the ability of such Mortgagor and/or the current use
of such Mortgaged Property to generate net cash flow to pay principal, interest
and other amounts due under the related Purchased Asset; and there are no such
actions, suits or proceedings threatened against such Mortgagor.
 
(ll)           Each Purchased Asset complied at origination, in all material
respects, with all of the terms, conditions and requirements of Seller’s
underwriting standards applicable to such Purchased Asset and since origination,
the Purchased Asset has been serviced in all material respects in a legal manner
in conformance with Seller’s servicing standards.
 
(mm)       The originator of the Purchased Asset or Seller has inspected or
caused to be inspected each related Mortgaged Property within the 12 months
prior to the Purchase Date.
 
(nn)         The Purchased Asset Documents require the Mortgagor to provide the
holder of the Purchased Asset with at least annual operating statements,
financial statements and except for Purchased Assets for which the related
Mortgaged Property is leased to a single tenant, rent rolls.
 
(oo)         All escrow deposits and payments required by the terms of each
Purchased Asset are in the possession, or under the control of Seller (or in the
case of a Participation, the servicer of the related Mortgage Loan), and all
amounts required to be deposited by the applicable Mortgagor under the related
Purchased Asset Documents have been deposited, and there are no deficiencies
with regard thereto (subject to any applicable notice and cure period).  All of
Seller’s interest in such escrows and deposits will be conveyed by Seller to
Buyer hereunder.
 
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(pp)         Each Mortgagor with respect to a Purchased Asset (and, for each
Accommodation Loan, each Mortgagee thereunder) is an entity whose organizational
documents or related Purchased Asset Documents provide that it is, and at least
so long as the Purchased Asset is outstanding will continue to be, a Single
Purpose Entity.  For this purpose, “Single Purpose Entity” shall mean a Person,
other than an individual, whose organizational documents provide that it shall
engage solely in the business of owning and operating the Mortgaged Property and
that does not engage in any business unrelated to such property and the
financing thereof, does not have any assets other than those related to its
interest in the Mortgaged Property or the financing thereof or any indebtedness
other than as permitted by the related Mortgage or other Purchased Asset
Documents, and the organizational documents of which require that it have its
own separate books and records and its own accounts, in each case that are
separate and apart from the books and records and accounts of any other Person,
except as permitted by the related Mortgage or other Purchased Asset Documents.
 
(qq)         Each of the Purchased Assets contain a “due on sale” clause, which
provides for the acceleration of the payment of the unpaid principal balance of
the Purchased Asset (or in the case of an A Note or a Participation, of the
related Mortgage Loan) if, without the prior written consent of the holder of
the Purchased Asset (or in the case of an A Note or a Participation, of the
holder of title to the Underlying Mortgage Loan), the property subject to the
Mortgage, or any controlling interest therein, is directly or indirectly
transferred or sold (except that it may provide for transfers by devise, descent
or operation of law upon the death of a member, manager, general partner or
shareholder of a Mortgagor and that it may provide for assignments subject to
the Purchased Asset holder’s approval of transferee, transfers to affiliates,
transfers to family members for estate planning purposes, transfers among
existing members, partners or shareholders in Mortgagors or transfers of passive
interests so long as the key principals or general partner retains
control).  The Purchased Asset Documents contain a “due on encumbrance” clause,
which provides for the acceleration of the payment of the unpaid principal
balance of the Purchased Asset if the property subject to the Mortgage or any
controlling interest in the Mortgagor is further pledged or encumbered, unless
the prior written consent of the holder of the Purchased Asset is obtained
(except that it may provide for assignments subject to the Purchased Asset
holder’s approval of transferee, transfers to affiliates or transfers of passive
interests so long as the key principals or general partner retains
control).  The Mortgage requires the Mortgagor to pay all reasonable fees and
expenses associated with securing the consent or approval of the holder of the
Mortgage for a waiver of a “due on sale” or “due on encumbrance” clause or a
defeasance provision.  As of the Purchase Date, Seller holds no preferred equity
interest in any Mortgagor and Seller holds no mezzanine debt related to such
Mortgaged Property.
 
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(rr)           Each Purchased Asset containing provisions for defeasance of
mortgage collateral requires either (a) the prior written consent of, and
compliance with the conditions set by, the holder of the Purchased Asset to any
defeasance, or (b)(i) the replacement collateral consist of U.S. “government
securities,” within the meaning of Treasury Regulations Article 1.860
G-2(a)(8)(i), in an amount sufficient to make all scheduled payments under the
Mortgage Note when due (up to the maturity date for the related Purchased Asset,
the Anticipated Repayment Date for ARD Loans or the date on which the Mortgagor
may prepay the related Purchased Asset without payment of any prepayment
penalty); (ii) the loan may be assumed by a Single Purpose Entity approved by
the holder of the Purchased Asset; (iii) counsel provide an opinion that the
trustee has a perfected security interest in such collateral prior to any other
claim or interest; and (iv) such other documents and certifications as the
mortgagee may reasonably require, which may include, without limitation, (A) a
certification that the purpose of the defeasance is to facilitate the
disposition of the mortgaged real property or any other customary commercial
transaction and not to be part of an arrangement to collateralize a REMIC
offering with obligations that are not real estate mortgages and (B) a
certification from an independent certified public accountant that the
collateral is sufficient to make all scheduled payments under the Mortgage Note
when due.  Each Purchased Asset containing provisions for defeasance provides
that, in addition to any cost associated with defeasance, the related Mortgagor
shall pay, as of the date the mortgage collateral is defeased, all scheduled and
accrued interest and principal due as well as an amount sufficient to defease in
full the Purchased Asset.  In addition, if the related Purchased Asset permits
defeasance, then the Mortgage Loan documents provide that the related Mortgagor
shall (x) pay all reasonable fees associated with the defeasance of the
Purchased Asset and all other reasonable expenses associated with the
defeasance, or (y) provide all opinions required under the related Purchased
Asset Documents, including a REMIC opinion, and any applicable rating agency
letters confirming that no downgrade or qualification shall occur as a result of
the defeasance.
 
(ss)          In the event that a Purchased Asset is secured by more than one
Mortgaged Property, then, in connection with a release of less than all of such
Mortgaged Properties, a Mortgaged Property may not be released as collateral for
the related Purchased Asset unless, in connection with such release, an amount
equal to not less than 125% of the Allocated Loan Amount for such Mortgaged
Property is prepaid or, in the case of a defeasance, an amount equal to 125% of
the Allocated Loan Amount is defeased through the deposit of replacement
collateral (as contemplated in clause (34) hereof) sufficient to make all
scheduled payments with respect to such defeased amount, or such release is
otherwise in accordance with the terms of the Purchased Asset Documents.
 
(tt)           Each Mortgaged Property is owned in fee by the related Mortgagor,
with the exception of (i) Mortgaged Properties that are secured in whole or in a
part by a Ground Lease and (ii) out-parcels, and is used and occupied for
commercial or multifamily residential purposes in accordance with applicable
law.
 
(uu)         Any material non-conformity with applicable zoning laws constitutes
a legal non-conforming use or structure that, in the event of casualty or
destruction, may be restored or repaired to the full extent of the use or
structure at the time of such casualty, or for which law and ordinance insurance
coverage has been obtained in amounts consistent with the standards utilized by
Seller.
 
(vv)         Neither Seller nor any affiliate thereof has any obligation to make
any capital contributions to the related Mortgagor under the Purchased
Asset.  The Purchased Asset was not originated for the sole purpose of financing
the construction of incomplete improvements on the related Mortgaged Property.
 
(ww)        The following statements are true with respect to the related
Mortgaged Property:  (a) the Mortgaged Property is located on or adjacent to a
dedicated road or has access to an irrevocable easement permitting ingress and
egress and (b) the Mortgaged Property is served by public or private utilities,
water and sewer (or septic facilities) and otherwise appropriate for the use in
which the Mortgaged Property is currently being utilized.
 
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(xx)           None of the Purchased Asset Documents contain any provision that
expressly excuses the related borrower from obtaining and maintaining insurance
coverage for acts of terrorism and, in circumstances where terrorism insurance
is not expressly required, the mortgagee is not prohibited from requesting that
the related borrower maintain such insurance, in each case, to the extent such
insurance coverage is generally available for like properties in such
jurisdictions at commercially reasonable rates.  Each Mortgaged Property is
insured by an “all-risk” casualty insurance policy that does not contain an
express exclusion for (or, alternatively, is covered by a separate policy that
insures against property damage resulting from) acts of terrorism.
 
(yy)          An appraisal of the related Mortgaged Property was conducted in
connection with the origination of such Purchased Asset (or in the case of a
Participation, the date of origination of the Underlying Mortgage Loan), and
such appraisal satisfied the guidelines in Title XI of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, in either case as in
effect on the date such Purchased Asset (or in the case of a Participation, the
Underlying Mortgage Loan) was originated.
 
Defined Terms
 
As used in this Exhibit:
 
The term “Allocated Loan Amount” shall mean, for each Mortgaged Property, the
portion of principal of the related Purchased Asset allocated to such Mortgaged
Property for certain purposes (including determining the release prices of
properties, if permitted) under such Purchased Asset as set forth in the related
loan documents.  There can be no assurance, and it is unlikely, that the
Allocated Loan Amounts represent the current values of individual Mortgaged
Properties, the price at which an individual Mortgaged Property could be sold in
the future to a willing buyer or the replacement cost of the Mortgaged
Properties.
 
The term “Anticipated Repayment Date” shall mean, with respect to any Purchased
Asset that is indicated on the Purchased Asset Schedule as having a Revised
Rate, the date upon which such Purchased Asset commences accruing interest at
such Revised Rate.
 
The term “Assignment of Leases” shall have the meaning specified in paragraph 10
of this Exhibit VI.
 
The term “Assignment of Mortgage” shall mean, with respect to any Mortgage, an
assignment of the mortgage, notice of transfer or equivalent instrument in
recordable form, sufficient under the laws of the jurisdiction wherein the
related property is located to reflect the assignment and pledge of the
Mortgage, subject to the terms, covenants and provisions of this Agreement.
 
The term “ARD Loan” shall mean any Purchased Asset that provides that if the
unamortized principal balance thereof is not repaid on its Anticipated Repayment
Date, such Purchased Asset will accrue Excess Interest at the rate specified in
the related Mortgage Note and the Mortgagor is required to apply excess monthly
cash flow generated by the related Mortgaged Property to the repayment of the
outstanding principal balance on such Purchased Asset.
 
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The term “Due Date” shall mean the day of the month set forth in the related
Mortgage Note on which each monthly payment of interest and/or principal thereon
is scheduled to be first due.
 
The term “Environmental Site Assessment” shall mean a Phase I environmental
report meeting the requirements of the American Society for Testing and
Materials, and, if in accordance with customary industry standards a reasonable
lender would require it, a Phase II environmental report, each prepared by a
licensed third party professional experienced in environmental matters.
 
The term “Excess Cash Flow” shall mean the cash flow from the Mortgaged Property
securing an ARD Loan after payments of interest (at the Mortgage Interest Rate)
and principal (based on the amortization schedule), and (a) required payments
for the tax and insurance fund and ground lease escrows fund, (b) required
payments for the monthly debt service escrows, if any, (c) payments to any other
required escrow funds and (d) payment of operating expenses pursuant to the
terms of an annual budget approved by the servicer and discretionary (lender
approved) capital expenditures.
 
The term “Excess Interest” shall mean any accrued and deferred interest on an
ARD Loan in accordance with the following terms.  Commencing on the respective
Anticipated Repayment Date each ARD Loan (pursuant to its existing terms or a
unilateral option, as defined in Treasury Regulations under Article 1001 of the
Code, in the Purchased Assets exercisable during the term of the Purchased
Asset) generally will bear interest at a fixed rate (the “Revised Rate”) per
annum equal to the Mortgage Interest Rate plus a percentage specified in the
related Mortgage Loan Documents.  Until the principal balance of each such
Purchased Asset has been reduced to zero (pursuant to its existing terms or a
unilateral option, as defined in Treasury Regulations under Article 1001 of the
Code, in the Purchased Assets exercisable during the term of the Mortgage Loan),
such Purchased Asset will only be required to pay interest at the Mortgage
Interest Rate and the interest accrued at the excess of the related Revised Rate
over the related Mortgage Interest Rate will be deferred (such accrued and
deferred interest and interest thereon, if any, is “Excess Interest”).
 
The term “Mortgage Interest Rate” shall mean the fixed rate, or the formula
applicable to determine the floating rate, of interest per annum that each
Purchased Asset bears as of the Purchase Date.
 
The term “Permitted Encumbrances” shall mean:
 
 
I.
the lien of current real property taxes, water charges, sewer rents and
assessments not yet delinquent or accruing interest or penalties;

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

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

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

 
that together do not materially and adversely affect the related Mortgagor’s
ability to timely make payments on the related Purchased Asset, which do not
materially interfere with the benefits of the security intended to be provided
by the related Mortgage or the use, for the use currently being made, the
operation as currently being operated, enjoyment, value or marketability of such
Mortgaged Property, provided, however, that, for the avoidance of doubt,
Permitted Encumbrances shall exclude all pari passu, second, junior and
subordinated mortgages but shall not exclude mortgages that secure Purchased
Assets that are cross-collateralized with other Purchased Assets.
 
The term “Revised Rate” shall mean, with respect to those Purchased Assets on
the Purchased Asset Schedule indicated as having a revised rate, the increased
interest rate after the Anticipated Repayment Date (in the absence of a default)
for each applicable Purchased Asset, as calculated and as set forth in the
related Purchased Asset.
 
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REPRESENTATIONS AND WARRANTIES
REGARDING EACH INDIVIDUAL PURCHASED ASSET
THAT IS A JUNIOR INTEREST
IN A PERFORMING COMMERCIAL
MORTGAGE LOAN SECURED BY A FIRST LIEN ON
A MULTIFAMILY OR COMMERCIAL PROPERTY
 
(a)           The representations and warranties set forth in this Exhibit VI
regarding the senior mortgage loan from which the Purchased Asset is derived
shall be deemed incorporated herein in respect of such senior mortgage loan,
provided, however, that, in the event that such senior mortgage loan was not
originated by Seller or an Affiliate of Seller, Seller shall be deemed to be
making the representations set forth in this Exhibit VI with respect to such
senior mortgage loan to the best of Seller’s knowledge.
 
(b)           The information set forth in the Purchased Asset Schedule is
complete, true and correct in all material respects.
 
(c)           There exists no material default, breach, violation or event of
acceleration (and no event that, with the passage of time or the giving of
notice, or both, would constitute any of the foregoing) under the documents
evidencing or securing the Purchased Asset, in any such case to the extent the
same materially and adversely affects the value of the Purchased Asset and the
related underlying real property.
 
(d)           Except with respect to the enforceability of any provisions
requiring the payment of default interest, late fees, additional interest,
prepayment premiums or yield maintenance charges, neither the Purchased Asset
nor any of the related Purchased Asset Documents is subject to any right of
rescission, set-off, abatement, diminution, valid counterclaim or defense,
including the defense of usury, nor will the operation of any of the terms of
any such Purchased Asset Documents, or the exercise (in compliance with
procedures permitted under applicable law) of any right thereunder, render any
Purchased Asset Documents subject to any right of rescission, set-off,
abatement, diminution, valid counterclaim or defense, including the defense of
usury (subject to anti-deficiency or one form of action laws and to bankruptcy,
receivership, conservatorship, reorganization, insolvency, moratorium or other
similar laws affecting the enforcement of creditor’s rights generally and by
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law)), and no such right of
rescission, set-off, abatement, diminution, valid counterclaim or defense has
been asserted with respect thereto.
 
(e)           The Purchased Asset Documents have been duly and properly executed
by the originator of the Purchased Asset, and each is the legal, valid and
binding obligation of the parties thereto, enforceable in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other laws relating to or affecting
the rights of creditors generally and by general principles of equity
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).  The Purchased Asset is not usurious.
 

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(f)           The terms of the related Purchased Asset Documents have not been
impaired, waived, altered or modified in any material respect (other than by a
written instrument that is included in the related Purchased Asset File).
 
(g)           The assignment of the Purchased Asset constitutes the legal, valid
and binding assignment of such Purchased Asset from Seller to or for the benefit
of Buyer enforceable in accordance with its terms, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, receivership,
moratorium or other laws relating to or affecting the rights of creditors
generally and by general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
 
(h)           All representations and warranties in the Purchased Asset
Documents and in the underlying documents for the performing commercial mortgage
loan secured by a first lien on a multifamily or commercial property to which
such Purchased Asset relates are true and correct in all material respects.
 
(i)           The servicing and collection practices used by Seller for the
Purchased Asset have complied with applicable law in all material respects and
are consistent with those employed by prudent servicers of comparable Purchased
Assets.
 
(j)           Seller is not a debtor in any state or federal bankruptcy or
insolvency proceeding.
 
(k)           As of the Purchase Date, there is no payment default, giving
effect to any applicable notice and/or grace period, and there is no other
material default under any of the related Purchased Asset Documents, giving
effect to any applicable notice and/or grace period; no such material default or
breach has been waived by Seller or on its behalf or by Seller’s predecessors in
interest with respect to the Purchased Assets; and no event has occurred that,
with the passing of time or giving of notice would constitute a material default
or breach; provided, however, that the representations and warranties set forth
in this sentence do not cover any default, breach, violation or event of
acceleration that specifically pertains to or arises out of any subject matter
otherwise covered by any other representation or warranty made by Seller in this
Exhibit VI.  No Purchased Asset has been accelerated and no foreclosure or power
of sale proceeding has been initiated in respect of the related
Mortgage.  Seller has not waived any material claims against the related
Mortgagor under any non-recourse exceptions contained in the Mortgage Note.
 
(l)           No Purchased Asset has been satisfied, canceled, subordinated
(except to the senior mortgage loan from which the Purchased Asset is derived),
released or rescinded, in whole or in part, and the related Mortgagor has not
been released, in whole or in part, from its obligations under any related
Purchased Asset Document.
 
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REPRESENTATIONS AND WARRANTIES
REGARDING EACH INDIVIDUAL PURCHASED ASSET
THAT IS A CMBS
 
(a)           The CMBS consists of pass-through certificates representing
beneficial ownership interests in one or more REMICs consisting of one or more
first lien mortgage loans secured by commercial and/or multifamily properties.
 
(b)           Immediately prior to the sale, transfer and assignment to Buyer
thereof, Seller had good and marketable title to, and was the sole owner and
holder of, such CMBS, and Seller is transferring such CMBS free and clear of any
and all liens, pledges, encumbrances, charges, security interests or any other
ownership interests of any nature encumbering such CMBS.
 
(c)           Seller has full right, power and authority to sell and assign such
CMBS and such CMBS has not been cancelled, satisfied or rescinded in whole or
part nor has any instrument been executed that would effect a cancellation,
satisfaction or rescission thereof.
 
(d)           Other than consents and approvals obtained as of the related
Purchase Date or those already granted in the related documents governing such
CMBS, no consent or approval by any Person is required in connection with
Buyer’s acquisition of such CMBS, for Buyer’s exercise of any rights or remedies
in respect of such CMBS or for Buyer’s sale or other disposition of such
CMBS.  No third party holds any “right of first refusal”, “right of first
negotiation”, “right of first offer”, purchase option, or other similar rights
of any kind, and no other impediment exists to any such transfer or exercise of
rights or remedies.
 
(e)           Upon consummation of the purchase contemplated to occur in respect
of such CMBS on the Purchase Date therefor, Seller will have validly and
effectively conveyed to Buyer all legal and beneficial interest in and to such
CMBS free and clear of any and all liens, pledges, encumbrances, charges,
security interests or any other ownership interests of any nature.
 
(f)           The CMBS is a physical security in registered form, or is in
book-entry form and held through the facilities of (a) The Depository Trust
Corporation in New York, New York, or
 
(b) another clearing organization or book-entry system reasonably acceptable to
Buyer.
 
(g)          With respect to any CMBS that is a physical security, Seller has
delivered to Buyer or its designee such physical security, along with any and
all certificates and assignments necessary to transfer such security under the
issuing documents of such CMBS.
 
(h)          With respect to any CMBS registered with DTC or another clearing
organization, Seller has delivered to Buyer or its designee evidence of
re-registration to the securities intermediary in Buyer’s name on behalf of
Buyer.
 
(i)           All information contained in the related Purchased Asset File (or
as otherwise provided to Buyer) in respect of such CMBS is accurate and complete
in all material respects.
 
(j)           As of the date of its issuance, such CMBS complied in all material
respects with, or was exempt from, all requirements of federal, state or local
law relating to the issuance thereof including, without limitation, any
registration requirements of the Securities Act of 1933, as amended.
 

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(k)           Except as included in the Purchased Asset File, there is no
document that by its terms modifies or affects the rights and obligations of the
holder of such CMBS, the terms of the related pooling and servicing agreement or
any other agreement relating to the CMBS, and, since issuance, there has been no
material change or waiver to any term or provision of any such document,
instrument or agreement.
 
(l)           There is no (i) monetary default, breach or violation of any
pooling and servicing agreement or other document governing or pertaining to
such CMBS, (ii) material non-monetary default, breach or violation of any such
agreement or other document or other document governing or pertaining to such
CMBS, or (iii) event that, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a default, breach,
violation or event of acceleration under such documents and agreements.
 
(m)          No consent, approval, authorization or order of, or registration or
filing with, or notice to, any court or governmental agency or body having
jurisdiction or regulatory authority over Seller is required for any transfer or
assignment of such CMBS.
 
(n)          Except as included in the Purchased Asset File, (i) no interest
shortfalls have occurred and no realized losses have been applied to any CMBS or
otherwise incurred with respect to any mortgage loan related to such CMBS nor
any class of CMBS issued under the same governing documents as any CMBS, and
(ii) Seller has no knowledge of any circumstances that could have a Material
Adverse Effect on the CMBS.
 
(o)          With respect to CMBS backed by a single mortgaged asset, there are
no circumstances or conditions with respect to the CMBS, the Underlying
Mortgaged Property or the related Mortgagor’s credit standing that can
reasonably be expected to have a Material Adverse Effect on the CMBS.
 
(p)          Seller has not received written notice of any outstanding
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind for which the holder of such CMBS
is or may become obligated.
 
(q)          There is no material inaccuracy in any servicer report or trustee
report delivered to it (and, in turn, delivered pursuant to the terms of this
Agreement) in connection with such CMBS.
 
(r)           No servicer of the CMBS has made any advances, directly or
indirectly, with respect to the CMBS or to any mortgage loan relating to such
CMBS.
 
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REPRESENTATIONS AND WARRANTIES
REGARDING EACH INDIVIDUAL PURCHASED ASSET
THAT IS A CRE CDO
 
(a)           Immediately prior to the sale, transfer and assignment to Buyer
thereof, Seller had good and marketable title to, and was the sole owner and
holder of, such CRE CDO, and Seller is transferring such CRE CDO free and clear
of any and all liens, pledges, encumbrances, charges, security interests or any
other ownership interests of any nature encumbering such CRE CDO.
 
(b)           Seller has full right, power and authority to sell and assign such
CRE CDO and such CRE CDO has not been cancelled, satisfied or rescinded in whole
or part nor has any instrument been executed that would effect a cancellation,
satisfaction or rescission thereof.
 
(c)           Other than consents and approvals obtained as of the related
Purchase Date or those already granted in the related documents governing such
CRE CDO, no consent or approval by any Person is required in connection with
Buyer’s acquisition of such CRE CDO, for Buyer’s exercise of any rights or
remedies in respect of such CRE CDO or for Buyer’s sale or other disposition of
such CRE CDO.  No third party holds any “right of first refusal”, “right of
first negotiation”, “right of first offer”, purchase option, or other similar
rights of any kind, and no other impediment exists to any such transfer or
exercise of rights or remedies.
 
(d)           Upon consummation of the purchase contemplated to occur in respect
of such CRE CDO on the Purchase Date therefor, Seller will have validly and
effectively conveyed to Buyer all legal and beneficial interest in and to such
CRE CDO free and clear of any and all liens, pledges, encumbrances, charges,
security interests or any other ownership interests of any nature.
 
(e)           The CRE CDO is a physical security in registered form, or is in
book-entry form and held through the facilities of (a) The Depository Trust
Corporation in New York, New York, or (b) another clearing organization or
book-entry system reasonably acceptable to Buyer.
 
(f)           With respect to any CRE CDO that is a physical security, Seller
has delivered to Buyer or its designee such physical security, along with any
and all certificates and assignments necessary to transfer such security under
the issuing documents of such CRE CDO.
 
(g)           With respect to any CRE CDO registered with DTC or another
clearing organization, Seller has delivered to Buyer or its designee evidence of
re-registration to the securities intermediary in Buyer’s name on behalf of
Buyer.
 
(h)           All information contained in the related Purchased Asset File (or
as otherwise provided to Buyer) in respect of such CRE CDO is accurate and
complete in all material respects.
 
(i)            To the knowledge of Seller, as of the date of its issuance, such
CRE CDO complied in all material respects with, or was exempt from, all
requirements of federal, state or local law relating to the issuance thereof
including, without limitation, any registration requirements of the Securities
Act of 1933, as amended.
 
(j)            Except as included in the Purchased Asset File, there is no
document that by its terms modifies or affects the rights and obligations of the
holder of such CRE CDO, the terms of the related pooling and servicing agreement
or any other agreement relating to the CRE CDO, and, since issuance, there has
been no material change or waiver to any term or provision of any such document,
instrument or agreement.
 

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(k)           There is no (i) monetary default, breach or violation exists with
respect to any pooling and servicing agreement, indenture, or other document
governing or pertaining to such CRE CDO, (ii) material non-monetary default,
breach or violation exists with respect to any such agreement, indenture, or
other document governing or pertaining to such CRE CDO, or (iii) event that,
with the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of acceleration
under such documents and agreements.
 
(l)            No consent, approval, authorization or order of, or registration
or filing with, or notice to, any court or governmental agency or body having
jurisdiction or regulatory authority over Seller is required for any transfer or
assignment of such CRE CDO.
 
(m)          Except as included in the Purchased Asset File, (i) no interest
shortfalls have occurred and no realized losses have been applied to any CRE CDO
or otherwise incurred with respect to any mortgage loan related to such CRE CDO
nor any class of CRE CDO issued under the same governing documents as any CRE
CDO, and (ii) Seller has no knowledge of any circumstances that could have a
Material Adverse Effect on the CRE CDO.
 
(n)           Seller has not received written notice of any outstanding
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind for which the holder of such CRE
CDO is or may become obligated.
 
(o)           There is no material inaccuracy in any servicer report or trustee
report delivered to it (and, in turn, delivered pursuant to the terms of this
Agreement) in connection with such CRE CDO.
 
(p)           No fraudulent acts were committed by Seller in connection with its
acquisition of such CRE CDO.
 
(q)           No servicer of the CRE CDO has made any advances, directly or
indirectly, with respect to the CRE CDO or to any mortgage loan relating to such
CRE CDO.
 
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REPRESENTATIONS AND WARRANTIES
RE: PURCHASED ASSETS CONSISTING OF MEZZANINE LOANS
 
(a)           The Mezzanine Loan is a performing mezzanine loan secured by a
pledge of all of the Capital Stock of a Mortgagor that owns income producing
commercial real estate.
 
(b)           As of the Purchase Date, such Mezzanine Loan complies in all
material respects with, or is exempt from, all requirements of federal, state or
local law relating to such Mezzanine Loan.
 
(c)           Immediately prior to the sale, transfer and assignment to Buyer
thereof, Seller had good and marketable title to, and was the sole owner and
holder of, such Mezzanine Loan, and Seller is transferring such Mezzanine Loan
free and clear of any and all liens, pledges, encumbrances, charges, security
interests or any other ownership interests of any nature encumbering such
Mezzanine Loan.  Upon consummation of the purchase contemplated to occur in
respect of such Mezzanine Loan on the Purchase Date therefor, Seller will have
validly and effectively conveyed to Buyer all legal and beneficial interest in
and to such Mezzanine Loan free and clear of any pledge, lien, encumbrance or
security interest.
 
(d)           No fraudulent acts were committed by Seller in connection with its
acquisition or origination of such Mezzanine Loan nor were any fraudulent acts
committed by any Person in connection with the origination of such Mezzanine
Loan.
 
(e)           All information contained in the related Underwriting Package (or
as otherwise provided to Buyer) in respect of such Mezzanine Loan is accurate
and complete in all material respects.
 
(f)           Except as included in the Underwriting Package, Seller is not a
party to any document, instrument or agreement, and there is no document, that
by its terms modifies or affects the rights and obligations of any holder of
such Mezzanine Loan and Seller has not consented to any material change or
waiver to any term or provision of any such document, instrument or agreement
and no such change or waiver exists.
 
(g)           Such Mezzanine Loan is presently outstanding, the proceeds thereof
have been fully and properly disbursed and, except for amounts held in escrow by
Seller, there is no requirement for any future advances thereunder.
 
(h)           Seller has full right, power and authority to sell and assign such
Mezzanine Loan and such Mezzanine Loan or any related Mezzanine Note has not
been cancelled, satisfied or rescinded in whole or part nor has any instrument
been executed that would effect a cancellation, satisfaction or rescission
thereof.
 
(i)           Other than consents and approvals obtained as of the related
Purchase Date or those already granted in the documentation governing such
Mezzanine Loan (the “Mezzanine Loan Documents”), no consent or approval by any
Person is required in connection with Seller’s sale and/or Buyer’s acquisition
of such Mezzanine Loan, for Buyer’s exercise of any rights or remedies in
respect of such Mezzanine Loan or for Buyer’s sale, pledge or other disposition
of such Mezzanine Loan.  No third party holds any “right of first refusal”,
“right of first negotiation”, “right of first offer”, purchase option, or other
similar rights of any kind, and no other impediment exists to any such transfer
or exercise of rights or remedies.
 

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(j)           The Mezzanine Collateral is secured by a pledge of equity
ownership interests in the related borrower under the Underlying Mortgage Loan
or a direct or indirect owner of the related borrower and the security interest
created thereby has been fully perfected in favor of Seller as Mezzanine Lender.
 
(k)          The Underlying Property Owner has been duly organized and is
validly existing and in good standing under the laws of its jurisdiction of
organization, with requisite power and authority to own its assets and to
transact the business in which it is now engaged, the sole purpose of the
Underlying Property Owner under its organizational documents is to own, finance,
sell or otherwise manage the Properties and to engage in any and all activities
related or incidental thereto, and the Mortgaged Properties constitute the sole
assets of the Underlying Property Owner.
 
(l)           The Underlying Property Owner has good and marketable title to the
Underlying Mortgaged Property, no claims under the title policies insuring the
Underlying Property Owner’s title to the Properties have been made, and the
Underlying Property Owner has not received any written notice regarding any
material violation of any easement, restrictive covenant or similar instrument
affecting the Underlying Mortgaged Property.
 
(m)         The representations and warranties made by the borrower (the
“Mezzanine Borrower”) in the Mezzanine Loan Documents were true and correct in
all material respects as of the date such representations and warranties were
stated to be true therein, and there has been no adverse change with respect to
the Mezzanine Loan, the Mezzanine Borrower, the Underlying Mortgaged Property or
the Underlying Property Owner that would render any such representation or
warranty not true or correct in any material respect as of the Purchase Date.
 
(n)          The Mezzanine Loan Documents provide for the acceleration of the
payment of the unpaid principal balance of the Mezzanine Loan if (i) the related
borrower voluntarily transfers or encumbers all or any portion of any related
Mezzanine Collateral, or (ii) any direct or indirect interest in the related
borrower is voluntarily transferred or assigned, other than, in each case, as
permitted under the terms and conditions of the related loan documents.
 
(o)          Pursuant to the terms of the Mezzanine Loan Documents: (a) no
material terms of any related Mortgage may be waived, canceled, subordinated or
modified in any material respect and no material portion of such Mortgage or the
Underlying Mortgaged Property may be released without the consent of the holder
of the Mezzanine Loan; (b) no material action may be taken by the Underlying
Property Owner with respect to the Underlying Mortgaged Property without the
consent of the holder of the Mezzanine Loan; (c) the holder of the Mezzanine
Loan is entitled to approve the budget of the Underlying Property Owner as it
relates to the Underlying Mortgaged Property; and (d) the holder of the
Mezzanine Loan's consent is required prior to the Underlying Property Owner
incurring any additional indebtedness.
 
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(p)          There is no (i) monetary default, breach or violation with respect
to such Mezzanine Loan, the Underlying Mortgage Loan or any other obligation of
the owner of the Underlying Mortgaged Property (the “Underlying Property
Owner”), (ii) material non-monetary default, breach or violation with respect to
such Mezzanine Loan, the Underlying Mortgage Loan or any other obligation of the
Underlying Property Owner or (iii) event which, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration.
 
(q)          No default or event of default has occurred under any agreement
pertaining to any lien or other interest that ranks pari passu with or senior to
the interests of the holder of such Mezzanine Loan or with respect to any
Underlying Mortgage Loan or other indebtedness in respect of the related
Underlying Mortgaged Property and there is no provision in any agreement related
to any such lien, interest or loan which would provide for any increase in the
principal amount of any such lien, other interest or loan.
 
(r)           Seller’s security interest in the Mezzanine Loan is covered by a
UCC-9 insurance policy (the “UCC-9 Policy”) in the maximum principal amount of
the Mezzanine Loan insuring that the related pledge is a valid first priority
lien on the collateral pledged in respect of such Mezzanine Loan (the “Mezzanine
Collateral”), subject only to the exceptions stated therein (or a pro forma
title policy or marked up title insurance commitment on which the required
premium has been paid exists which evidences that such UCC-9 Policy will be
issued), such UCC-9 Policy (or, if it has yet to be issued, the coverage to be
provided thereby) is in full force and effect, no material claims have been made
thereunder and no claims have been paid thereunder, Seller has not done, by act
or omission, anything that would materially impair the coverage under the UCC9
Policy and as of the Purchase Date, the UCC-9 Policy (or, if it has yet to be
issued, the coverage to be provided thereby) will inure to the benefit of Buyer
without the consent of or notice to the insurer.
 
(s)          The Mezzanine Loan, and each party involved in the origination of
the Mezzanine Loan, complied as of the date of origination with, or was exempt
from, applicable state or federal laws, regulations and other requirements
pertaining to usury.
 
(t)           Seller has delivered to Buyer or its designee the original
promissory note made in respect of such Mezzanine Loan, together with an
original assignment thereof executed by Seller in blank.
 
(u)          Seller has not received any written notice that the Mezzanine Loan
may be subject to reduction or disallowance for any reason, including without
limitation, any setoff, right of recoupment, defense, counterclaim or impairment
of any kind.
 
(v)          Seller has no obligation to make loans to, make guarantees on
behalf of, or otherwise extend credit to, or make any of the foregoing for the
benefit of, the Mezzanine Borrower or any other person under or in connection
with the Mezzanine Loan.
 
(w)          The servicing and collection practices used by the servicer of the
Mezzanine Loan, and the origination practices of the related originator, have
been in all respects legal, proper and prudent and have met customary industry
standards by prudent institutional commercial mezzanine lenders and mezzanine
loan servicers except to the extent that, in connection with its origination,
such standards were modified as reflected in the documentation delivered to
Buyer.
 
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(x)           If applicable, the ground lessor consented to and acknowledged
that (i) the Mezzanine Loan is permitted / approved, (ii) any foreclosure of the
Mezzanine Loan and related change in ownership of the ground lessee will not
require the consent of the ground lessor or constitute a default under the
ground lease, (iii) copies of default notices would be sent to Mezzanine Lender
and (iv) it would accept cure from Mezzanine Lender on behalf of the ground
lessee.
 
(y)           To the extent the Buyer was granted a security interest with
respect to the Mezzanine Loan, such interest (i) was given for due
consideration, (ii) has attached, (iii) is perfected, (iv) is a first priority
Lien, and (v) has been appropriately assigned to the Buyer by the Underlying
Property Owner.
 
(z)           No consent, approval, authorization or order of, or registration
or filing with, or notice to, any court or governmental agency or body having
jurisdiction or regulatory authority is required for any transfer or assignment
by the holder of such Mezzanine Loan.
 
(aa)         Seller has not received written notice of any outstanding
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind for which the holder of such
Mezzanine Loan is or may become obligated.
 
(bb)         Seller has not advanced funds, or knowingly received any advance of
funds from a party other than the borrower relating to such Mezzanine Loan,
directly or indirectly, for the payment of any amount required by such Mezzanine
Loan.
 
(cc)         All real estate taxes and governmental assessments, or installments
thereof, which would be a lien on any related Underlying Mortgaged Property and
that prior to the Purchase Date for the related Purchased Asset have become
delinquent in respect of such Underlying Mortgaged Property have been paid, or
an escrow of funds in an amount sufficient to cover such payments has been
established.  For purposes of this representation and warranty, real estate
taxes and governmental assessments and installments thereof shall not be
considered delinquent until the earlier of (a) the date on which interest and/or
penalties would first be payable thereon and (b) the date on which enforcement
action is entitled to be taken by the related taxing authority.
 
(dd)         As of the Purchase Date for the related Purchased Asset, each
related Underlying Mortgaged Property was free and clear of any material damage
(other than deferred maintenance for which escrows were established at
origination) that would affect materially and adversely the value of such
Underlying Mortgaged Property as security for the related Underlying Mortgage
Loan and there was no proceeding pending or, based solely upon the delivery of
written notice thereof from the appropriate condemning authority, threatened for
the total or partial condemnation of such Underlying Mortgaged Property.
 
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(ee)          As of the Purchase Date of the Mezzanine Loan, all insurance
coverage required under the Mezzanine Loan Documents and/or any Mortgage Loan
related to the Underlying Mortgaged Property, which insurance covered such risks
as were customarily acceptable to prudent commercial and multifamily mortgage
lending institutions lending on the security of property comparable to the
related Underlying Mortgaged Property in the jurisdiction in which such
Underlying Mortgaged Property is located, and with respect to a fire and
extended perils insurance policy, is in an amount (subject to a customary
deductible) at least equal to the lesser of (i) the replacement cost of
improvements located on such Underlying Mortgaged Property, or (ii) the
outstanding principal balance of the Underlying Mortgage Loan, and in any event,
the amount necessary to prevent operation of any co-insurance provisions; and,
except if such Underlying Mortgaged Property is operated as a mobile home park,
is also covered by business interruption or rental loss insurance, in an amount
at least equal to 12 months of operations of the related Underlying Mortgaged
Property, all of which was in full force and effect with respect to each related
Underlying Mortgaged Property; and, as of the Purchase Date for the related
Purchased Asset, all insurance coverage required under the Mezzanine Loan
Documents and/or any Underlying Mortgage Loan related to the Underlying
Mortgaged Property, which insurance covers such risks and is in such amounts as
are customarily acceptable to prudent commercial and multifamily mortgage
lending institutions lending on the security of property comparable to the
related Underlying Mortgaged Property in the jurisdiction in which such
Underlying Mortgaged Property is located, is in full force and effect with
respect to each related Underlying Mortgaged Property; all premiums due and
payable through the Purchase Date for the related Purchased Asset have been
paid; and no notice of termination or cancellation with respect to any such
insurance policy has been received by Seller; and except for certain amounts not
greater than amounts which would be considered prudent by an institutional
commercial and/or multifamily mortgage lender with respect to a similar mortgage
loan and which are set forth in the Mezzanine Loan Documents and/or any
Underlying Mortgage Loan related to the Underlying Mortgaged Property, any
insurance proceeds in respect of a casualty loss, will be applied either (i) to
the repair or restoration of all or part of the related Underlying Mortgaged
Property or (ii) the reduction of the outstanding principal balance of the
Underlying Mortgage Loan, subject in either case to requirements with respect to
leases at the related Underlying Mortgaged Property and to other exceptions
customarily provided for by prudent institutional lenders for similar
loans.  The Underlying Mortgaged Property is also covered by comprehensive
general liability insurance against claims for personal and bodily injury, death
or property damage occurring on, in or about the related Underlying Mortgaged
Property, in an amount customarily required by prudent institutional
lenders.  An architectural or engineering consultant has performed an analysis
of the Underlying Mortgaged Properties located in seismic zone 3 or 4 in order
to evaluate the structural and seismic condition of such property, for the sole
purpose of assessing the probable maximum loss (“PML”) for the Underlying
Mortgaged Property in the event of an earthquake.  In such instance, the PML was
based on a 475 year lookback with a 10% probability of exceedance in a 50 year
period.  If the resulting report concluded that the PML would exceed 20% of the
amount of the replacement costs of the improvements, earthquake insurance on
such Underlying Mortgaged Property was obtained by an insurer rated at least
A-:V by A.M. Best Company or “BBB-” (or the equivalent) from S&P and Fitch or
“Baa3” (or the equivalent) from Moody’s.  If the Underlying Mortgaged Property
is located in Florida or within 25 miles of the coast of Texas, Louisiana,
Mississippi, Alabama, Georgia, North Carolina or South Carolina such Underlying
Mortgaged Property is insured by windstorm insurance in an amount at least equal
to the lesser of (i) the outstanding principal balance of such Underlying
Mortgage Loan and (ii) 100% of the full insurable value, or 100% of the
replacement cost, of the improvements located on the related Underlying
Mortgaged Property.
 
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(ff)           The insurance policies contain a standard Mortgagee clause naming
the Mortgagee, its successors and assigns as loss payee, in the case of a
property insurance policy, and additional insured in the case of a liability
insurance policy and provide that they are not terminable without 30 days prior
written notice to the Mortgagee (or, with respect to nonpayment, 10 days prior
written notice to the Mortgagee) or such lesser period as prescribed by
applicable law.  Each Mortgage requires that the Mortgagor maintain insurance as
described above or permits the Mortgagee to require insurance as described
above, and permits the Mortgagee to purchase such insurance at the Mortgagor’s
expense if Mortgagor fails to do so.
 
(gg)         There is no material and adverse environmental condition or
circumstance affecting the Underlying Mortgaged Property; there is no material
violation of any applicable Environmental Law with respect to the Underlying
Mortgaged Property; neither Seller nor the Underlying Property Owner has taken
any actions which would cause the Underlying Mortgaged Property not to be in
compliance with all applicable Environmental Laws; the Underlying Mortgage Loan
documents require the borrower to comply with all Environmental Laws; and each
Mortgagor has agreed to indemnify the Mortgagee for any losses resulting from
any material, adverse environmental condition or failure of the Mortgagor to
abide by such Environmental Laws or has provided environmental insurance.
 
(hh)         No borrower under the Mezzanine Loan nor any Mortgagor under any
Underlying Mortgage Loan is a debtor in any state or federal bankruptcy or
insolvency proceeding.
 
(ii)            Each related Underlying Mortgaged Property was inspected by or
on behalf of the related originator or an affiliate during the 12 month period
prior to the related origination date.
 
(jj)           There are no material violations of any applicable zoning
ordinances, building codes and land laws applicable to the Underlying Mortgaged
Property or the use and occupancy thereof which (i) are not insured by an ALTA
lender’s title insurance policy (or a binding commitment therefor), or its
equivalent as adopted in the applicable jurisdiction, or a law and ordinance
insurance policy or (ii) would have a material adverse effect on the value,
operation or net operating income of the Underlying Mortgaged Property.  The
Mezzanine Loan Documents and the Underlying Mortgage Loan documents require the
Underlying Mortgaged Property to comply with all applicable laws and ordinances.
 
(kk)          None of the material improvements which were included for the
purposes of determining the appraised value of any related Underlying Mortgaged
Property at the time of the origination of the Mezzanine Loan or any related
Underlying Mortgage Loan lies outside of the boundaries and building restriction
lines of such property (except Underlying Mortgaged Properties which are legal
non-conforming uses), to an extent which would have a material adverse affect on
the value of the Underlying Mortgaged Property or the related Mortgagor’s use
and operation of such Underlying Mortgaged Property (unless affirmatively
covered by title insurance) and no improvements on adjoining properties
encroached upon such Underlying Mortgaged Property to any material and adverse
extent (unless affirmatively covered by title insurance).
 
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(ll)           As of the Purchase Date for the related Purchased Asset, there
was no pending action, suit or proceeding, or governmental investigation of
which Seller, the Mezzanine Borrower or the Underlying Property Owner has
received notice, against the Mortgagor or the related Underlying Mortgaged
Property the adverse outcome of which could reasonably be expected to materially
and adversely affect the Mezzanine Loan or the Underlying Mortgage Loan.
 
(mm)       The improvements located on the Underlying Mortgaged Property are
either not located in a federally designated special flood hazard area or, if so
located, the Mortgagor is required to maintain or the Mortgagee maintains, flood
insurance with respect to such improvements and such policy is in full force and
effect in an amount no less than the lesser of (i) the original principal
balance of the Underlying Mortgage Loan, (ii) the value of such improvements on
the related Underlying Mortgaged Property located in such flood hazard area or
(iii) the maximum allowed under the related federal flood insurance program.
 
(nn)         Except for Mortgagors under Underlying Mortgage Loans the
Underlying Mortgaged Property with respect to which includes a Ground Lease, the
related Mortgagor (or its affiliate) has title in the fee simple interest in
each related Underlying Mortgaged Property.
 
(oo)         The related Underlying Mortgaged Property is not encumbered, and
none of the Mezzanine Loan Documents or any Underlying Mortgage Loan documents
permits the related Underlying Mortgaged Property to be encumbered subsequent to
the Purchase Date of the related Purchased Asset without the prior written
consent of the holder thereof, by any lien securing the payment of money junior
to or of equal priority with, or superior to, the lien of the related Mortgage
(other than Title Exceptions, taxes, assessments and contested mechanics and
materialmens liens that become payable after such Purchase Date).
 
(pp)         Each related Underlying Mortgaged Property constitutes one or more
complete separate tax lots (or the related Mortgagor has covenanted to obtain
separate tax lots and a Person has indemnified the Mortgagee for any loss
suffered in connection therewith or an escrow of funds in an amount sufficient
to pay taxes resulting from a breach thereof has been established) or is subject
to an endorsement under the related title insurance policy.
 
(qq)         An appraisal of the related Underlying Mortgaged Property was
conducted in connection with the origination of the Underlying Mortgage Loan;
and such appraisal satisfied either (A) the requirements of the “Uniform
Standards of Professional Appraisal Practice” as adopted by the Appraisal
Standards Board of the Appraisal Foundation, or (B) the guidelines in Title XI
of the Financial Institutions Reform, Recovery and Enforcement Act or 1989, in
either case as in effect on the date such Underlying Mortgage Loan was
originated.
 
(rr)           The related Underlying Mortgaged Property is served by public
utilities, water and sewer (or septic facilities) and otherwise appropriate for
the use in which the Underlying Mortgaged Property is currently being utilized.
 
(ss)          With respect to each related Underlying Mortgaged Property
consisting of a Ground Lease, Seller represents and warrants the following with
respect to the related Ground Lease:
 
I.           Such Ground Lease or a memorandum thereof has been or will be duly
recorded no later than 30 days after the Purchase Date of the related Purchased
Asset and such Ground Lease permits the interest of the lessee thereunder to be
encumbered by the related Mortgage or, if consent of the lessor thereunder is
required, it has been obtained prior to the Purchase Date.
 
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II.          Upon the foreclosure of the Underlying Mortgage Loan (or acceptance
of a deed in lieu thereof), the Mortgagor’s interest in such Ground Lease is
assignable to the Mortgagee under the leasehold estate and its assigns without
the consent of the lessor thereunder (or, if any such consent is required, it
has been obtained prior to the Purchase Date).
 
III.         Such Ground Lease may not be amended, modified, canceled or
terminated without the prior written consent of the Mortgagee and any such
action without such consent is not binding on the Mortgagee, its successors or
assigns, except termination or cancellation if (i) an event of default occurs
under the Ground Lease, (ii) notice thereof is provided to the Mortgagee and
(iii) such default is curable by the Mortgagee as provided in the Ground Lease
but remains uncured beyond the applicable cure period.
 
IV.         Such Ground Lease is in full force and effect, there is no material
default under such Ground Lease, and there is no event which, with the passage
of time or with notice and the expiration of any grace or cure period, would
constitute a material default under such Ground Lease.
 
V.          The Ground Lease or ancillary agreement between the lessor and the
lessee requires the lessor to give notice of any default by the lessee to the
Mortgagee.  The Ground Lease or ancillary agreement further provides that no
notice given is effective against the Mortgagee unless a copy has been given to
the Mortgagee in a manner described in the Ground Lease or ancillary agreement.
 
VI.         The Ground Lease (i) is not subject to any liens or encumbrances
superior to, or of equal priority with, the Mortgage, subject, however, to only
the Title Exceptions or (ii) is subject to a subordination, non-disturbance and
attornment agreement to which the Mortgagee on the lessor’s fee interest in the
Underlying Mortgaged Property is subject.
 
VII.        A Mortgagee is permitted a reasonable opportunity (including, where
necessary, sufficient time to gain possession of the interest of the lessee
under the Ground Lease) to cure any curable default under such Ground Lease
before the lessor thereunder may terminate such Ground Lease.
 
VIII.       Such Ground Lease has an original term (together with any extension
options, whether or not currently exercised, set forth therein all of which can
be exercised by the Mortgagee if the Mortgagee acquires the lessee’s rights
under the Ground Lease) that extends not less than 20 years beyond the stated
maturity date.
 
IX.          Under the terms of such Ground Lease, any estoppel or consent
letter received by the Mortgagee from the lessor, and the related Mortgage,
taken together, any related insurance proceeds or condemnation award (other than
in respect of a total or substantially total loss or taking) will be applied
either to the repair or restoration of all or part of the related Underlying
Mortgaged Property, with the Mortgagee or a trustee appointed by it having the
right to hold and disburse such proceeds as repair or restoration progresses, or
to the payment or defeasance of the outstanding principal balance of the
Underlying Mortgage Loan, together with any accrued interest (except in cases
where a different allocation would not be viewed as commercially unreasonable by
any commercial mortgage lender, taking into account the relative duration of the
Ground Lease and the related Mortgage and the ratio of the market value of the
related Underlying Mortgaged Property to the outstanding principal balance of
such Underlying Mortgage Loan).
 
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X.           The Ground Lease does not impose any restrictions on subletting
that would be viewed as commercially unreasonable by a prudent commercial
lender.
 
XI.          The ground lessor under such Ground Lease is required to enter into
a new lease upon termination of the Ground Lease for any reason, including the
rejection of the Ground Lease in bankruptcy.
 
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REPRESENTATIONS AND WARRANTIES
RE:  PURCHASED ASSETS CONSISTING
OF MEZZANINE PARTICIPATIONS
 
(a)           The Mezzanine Participation is a senior participation interest in
a Mezzanine Loan.
 
(b)           As of the Purchase Date, the Mezzanine Participation complies in
all material respects with, or is exempt from, all requirements of federal,
state or local law relating to the Mezzanine Participation.
 
(c)           Immediately prior to the sale, transfer and assignment to Buyer
thereof, Seller had good and marketable title to, and was the sole owner and
holder of, the Mezzanine Participation, and Seller is transferring the Mezzanine
Participation free and clear of any and all liens, pledges, encumbrances,
charges, security interests or any other ownership interests of any nature
encumbering the Mezzanine Participation.  Upon consummation of the purchase
contemplated to occur in respect of the Mezzanine Participation on the Purchase
Date therefor, Seller will have validly and effectively conveyed to Buyer all
legal and beneficial interest in and to the Mezzanine Participation free and
clear of any pledge, lien, encumbrance or security interest.
 
(d)           No fraudulent acts were committed by Seller in connection with its
acquisition or origination of the Mezzanine Participation nor were any
fraudulent acts committed by any Person in connection with the origination of
the Mezzanine Participation.
 
(e)           All information contained in the related Underwriting Package (or
as otherwise provided to Buyer) in respect of the Mezzanine Participation is
accurate and complete in all material respects.
 
(f)            Seller has full right, power and authority to sell and assign the
Mezzanine Participation and the Mezzanine Participation has not been cancelled,
satisfied or rescinded in whole or part nor has any instrument been executed
that would effect a cancellation, satisfaction or rescission thereof.
 
(g)           Other than consents and approvals obtained as of the related
Purchase Date, no consent or approval by any Person is required in connection
with Seller’s sale and/or Buyer’s acquisition of the Mezzanine Participation,
for Buyer’s exercise of any rights or remedies in respect of the Mezzanine
Participation or for Buyer’s sale, pledge or other disposition of the Mezzanine
Participation.  No third party holds any “right of first refusal”, “right of
first negotiation”, “right of first offer”, purchase option, or other similar
rights of any kind, and no other impediment exists to any such transfer or
exercise of rights or remedies.
 
(h)           No consent, approval, authorization or order of, or registration
or filing with, or notice to, any court or governmental agency or body having
jurisdiction or regulatory authority is required for any transfer or assignment
by the holder of the Mezzanine Participation.
 
(i)            Seller has delivered to Buyer or its designee the original
promissory note, certificate or other similar indicia of ownership of the
Mezzanine Participation, however denominated, together with an original
assignment thereof, executed by Seller in blank, or, with respect to a
participation interest, reissued in Buyer’s name (or such other name as
designated by the Buyer).
 

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(j)            No (i) monetary default, breach or violation exists with respect
to any agreement or other document governing or pertaining to the Mezzanine
Participation, (ii) material non-monetary default, breach or violation exists
with respect to the Mezzanine Participation, or (iii) event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration.
 
(k)           The Mezzanine Participation has not been and shall not be deemed
to be a Security within the meaning of the Securities Act of 1933, as amended or
the Securities Exchange Act of 1934, as amended.
 
(l)            Seller has not received written notice of any outstanding
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind for which the holder of the
Mezzanine Participation is or may become obligated.
 
(m)          No issuer of the Mezzanine Participation is a debtor in any state
or federal bankruptcy or insolvency proceeding.
 
(n)           With respect to the Mezzanine Participation, except as set forth
in the related documents delivered to Buyer, the terms of the related documents
have not been waived, modified, altered, satisfied, impaired, canceled,
subordinated or rescinded in any manner which materially interferes with the
security intended to be provided by such documents and no such waiver,
modification, alteration, satisfaction, impairment, cancellation, subordination
or recission has occurred since the date upon which the due diligence file
related to the Mezzanine Participation was delivered to Buyer or its designee.
 
(o)           With respect to the related Mezzanine Loan, the related Mezzanine
Loan documents require the Mezzanine Borrower to provide the Mezzanine Lender
with certain financial information at the times required under the related
Mezzanine Loan documents.
 
(p)           The Mezzanine Loan is secured by a pledge of equity ownership
interests in the related borrower under the Underlying Mortgage Loan or a direct
or indirect owner of the related borrower.
 
(q)           As of the Purchase Date, the related Mezzanine Loan complies in
all material respects with, or is exempt from, all requirements of federal,
state or local law relating to the related Mezzanine Loan.
 
(r)           All information contained in the related Underwriting Package (or
as otherwise provided to Buyer) in respect of the related Mezzanine Loan is
accurate and complete in all material respects.
 
(s)           Except as included in the Underwriting Package, Seller is not a
party to any document, instrument or agreement, and there is no document, that
by its terms modifies or affects the rights and obligations of any holder of the
Mezzanine Participation or the related Mezzanine Loan and Seller has not
consented to any material change or waiver to any term or provision of any such
document, instrument or agreement and no such change or waiver exists.
 
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(t)           The related Mezzanine Loan is presently outstanding, the proceeds
thereof have been fully and properly disbursed and, except for amounts held in
escrow, there is no requirement for any future advances thereunder.
 
(u)           The Underlying Property Owner has been duly organized and is
validly existing and in good standing under the laws of its jurisdiction of
organization, with requisite power and authority to own its assets and to
transact the business in which it is now engaged, the sole purpose of the
Underlying Property Owner under its organizational documents is to own, finance,
sell or otherwise manage the Properties and to engage in any and all activities
related or incidental thereto, and the Mortgaged Properties constitute the sole
assets of the Underlying Property Owner.
 
(v)           The Underlying Property Owner has good and marketable title to the
Underlying Mortgaged Property, no claims under the title policies insuring the
Underlying Property Owner’s title to the Properties have been made, and the
Underlying Property Owner has not received any written notice regarding any
material violation of any easement, restrictive covenant or similar instrument
affecting the Underlying Mortgaged Property.
 
(w)          The representations and warranties made by the borrower (the
“Mezzanine Borrower”) in the Mezzanine Loan Documents were true and correct in
all material respects as of the date such representations and warranties were
stated to be true therein, and there has been no adverse change with respect to
the Mezzanine Loan, the Mezzanine Borrower, the Underlying Mortgaged Property or
the Underlying Property Owner that would render any such representation or
warranty not true or correct in any material respect as of the Purchase Date.
 
(x)           The Mezzanine Loan Documents provide for the acceleration of the
payment of the unpaid principal balance of the Mezzanine Loan if (i) the related
borrower voluntarily transfers or encumbers all or any portion of any related
Mezzanine Collateral, or (ii) any direct or indirect interest in the related
borrower is voluntarily transferred or assigned, other than, in each case, as
permitted under the terms and conditions of the related loan documents.
 
(y)           Pursuant to the terms of the Mezzanine Loan Documents: (a) no
material terms of any related Mortgage may be waived, canceled, subordinated or
modified in any material respect and no material portion of such Mortgage or the
Underlying Mortgaged Property may be released without the consent of the holder
of the Mezzanine Loan; (b) no material action may be taken by the Underlying
Property Owner with respect to the Underlying Mortgaged Property without the
consent of the holder of the Mezzanine Loan; (c) the holder of the Mezzanine
Loan is entitled to approve the budget of the Underlying Property Owner as it
relates to the Underlying Mortgaged Property; and (d) the holder of the
Mezzanine Loan's consent is required prior to the Underlying Property Owner
incurring any additional indebtedness.
 
(z)           There is no (i) monetary default, breach or violation with respect
to such Mezzanine Loan, the Underlying Mortgage Loan or any other obligation of
the owner of the Underlying Mortgaged Property (the “Underlying Property
Owner”), (ii) material non-monetary default, breach or violation with respect to
such Mezzanine Loan, the Underlying Mortgage Loan or any other obligation of the
Underlying Property Owner or (iii) event which, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration.
 
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(aa)         No default or event of default has occurred under any agreement
pertaining to any lien or other interest that ranks pari passu with or senior to
the interests of the Mezzanine Participation or the holder of the related
Mezzanine Loan or with respect to any Underlying Mortgage Loan or other
indebtedness in respect of the related Underlying Mortgaged Property and there
is no provision in any agreement related to any such lien, interest or loan
which would provide for any increase in the principal amount of any such lien,
other interest or loan.
 
(bb)         Seller’s security interest in the Mezzanine Loan is covered by a
UCC-9 insurance policy (the “UCC-9 Policy”) in the maximum principal amount of
the Mezzanine Loan insuring that the related pledge is a valid first priority
lien on the collateral pledged in respect of such Mezzanine Loan (the “Mezzanine
Collateral”), subject only to the exceptions stated therein (or a pro forma
title policy or marked up title insurance commitment on which the required
premium has been paid exists which evidences that such UCC-9 Policy will be
issued), such UCC-9 Policy (or, if it has yet to be issued, the coverage to be
provided thereby) is in full force and effect, no material claims have been made
thereunder and no claims have been paid thereunder, Seller has not done, by act
or omission, anything that would materially impair the coverage under the UCC-9
Policy and as of the Purchase Date, the UCC-9 Policy (or, if it has yet to be
issued, the coverage to be provided thereby) will inure to the benefit of Buyer
without the consent of or notice to the insurer.
 
(cc)          The Mezzanine Loan, and each party involved in the origination of
the Mezzanine Loan, complied as of the date of origination with, or was exempt
from, applicable state or federal laws, regulations and other requirements
pertaining to usury.
 
(dd)          Seller has not received any written notice that the Mezzanine Loan
may be subject to reduction or disallowance for any reason, including without
limitation, any setoff, right of recoupment, defense, counterclaim or impairment
of any kind.
 
(ee)           Seller has no obligation to make loans to, make guarantees on
behalf of, or otherwise extend credit to, or make any of the foregoing for the
benefit of, the Mezzanine Borrower or any other person under or in connection
with the Mezzanine Loan.
 
(ff)            The servicing and collection practices used by the servicer of
the Mezzanine Loan, and the origination practices of the related originator,
have been in all respects legal, proper and prudent and have met customary
industry standards by prudent institutional commercial mezzanine lenders and
mezzanine loan servicers except to the extent that, in connection with its
origination, such standards were modified as reflected in the documentation
delivered to Buyer.
 
(gg)           If applicable, the ground lessor consented to and acknowledged
that (i) the Mezzanine Loan is permitted / approved, (ii) any foreclosure of the
Mezzanine Loan and related change in ownership of the ground lessee will not
require the consent of the ground lessor or constitute a default under the
ground lease, (iii) copies of default notices would be sent to Mezzanine Lender
and (iv) it would accept cure from Mezzanine Lender on behalf of the ground
lessee.
 
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(hh)           To the extent the Buyer was granted a security interest with
respect to the Mezzanine Loan, such interest (i) was given for due
consideration, (ii) has attached, (iii) is perfected, (iv) is a first priority
Lien, and (v) has been appropriately assigned to the Buyer by the Underlying
Property Owner.
 
(ii)             Seller has not received written notice of any outstanding
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind for which the holder of such
Mezzanine Loan is or may become obligated.
 
(jj)             Seller has not advanced funds, or knowingly received any
advance of funds from a party other than the borrower relating to such Mezzanine
Loan, directly or indirectly, for the payment of any amount required by such
Mezzanine Loan.
 
(kk)           All real estate taxes and governmental assessments, or
installments thereof, which would be a lien on any related Underlying Mortgaged
Property and that prior to the Purchase Date for the related Purchased Asset
have become delinquent in respect of such Underlying Mortgaged Property have
been paid, or an escrow of funds in an amount sufficient to cover such payments
has been established.  For purposes of this representation and warranty, real
estate taxes and governmental assessments and installments thereof shall not be
considered delinquent until the earlier of (a) the date on which interest and/or
penalties would first be payable thereon and (b) the date on which enforcement
action is entitled to be taken by the related taxing authority.
 
(ll)            As of the Purchase Date for the related Purchased Asset, each
related Underlying Mortgaged Property was free and clear of any material damage
(other than deferred maintenance for which escrows were established at
origination) that would affect materially and adversely the value of such
Underlying Mortgaged Property as security for the related Underlying Mortgage
Loan and there was no proceeding pending or, based solely upon the delivery of
written notice thereof from the appropriate condemning authority, threatened for
the total or partial condemnation of such Underlying Mortgaged Property.
 
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(mm)        As of the date of origination of the Mezzanine Loan, all insurance
coverage required under the Mezzanine Loan Documents and/or any Mortgage Loan
related to the Underlying Mortgaged Property, which insurance covered such risks
as were customarily acceptable to prudent commercial and multifamily mortgage
lending institutions lending on the security of property comparable to the
related Underlying Mortgaged Property in the jurisdiction in which such
Underlying Mortgaged Property is located, and with respect to a fire and
extended perils insurance policy, is in an amount (subject to a customary
deductible) at least equal to the lesser of (i) the replacement cost of
improvements located on such Underlying Mortgaged Property, or (ii) the
outstanding principal balance of the Underlying Mortgage Loan, and in any event,
the amount necessary to prevent operation of any co-insurance provisions; and,
except if such Underlying Mortgaged Property is operated as a mobile home park,
is also covered by business interruption or rental loss insurance, in an amount
at least equal to 12 months of operations of the related Underlying Mortgaged
Property, all of which was in full force and effect with respect to each related
Underlying Mortgaged Property; and, as of the Purchase Date for the related
Purchased Asset, all insurance coverage required under the Mezzanine Loan
Documents and/or any Underlying Mortgage Loan related to the Underlying
Mortgaged Property, which insurance covers such risks and is in such amounts as
are customarily acceptable to prudent commercial and multifamily mortgage
lending institutions lending on the security of property comparable to the
related Underlying Mortgaged Property in the jurisdiction in which such
Underlying Mortgaged Property is located, is in full force and effect with
respect to each related Underlying Mortgaged Property; all premiums due and
payable through the Purchase Date for the related Purchased Asset have been
paid; and no notice of termination or cancellation with respect to any such
insurance policy has been received by Seller; and except for certain amounts not
greater than amounts which would be considered prudent by an institutional
commercial and/or multifamily mortgage lender with respect to a similar mortgage
loan and which are set forth in the Mezzanine Loan Documents and/or any
Underlying Mortgage Loan related to the Underlying Mortgaged Property, any
insurance proceeds in respect of a casualty loss, will be applied either (i) to
the repair or restoration of all or part of the related Underlying Mortgaged
Property or (ii) the reduction of the outstanding principal balance of the
Underlying Mortgage Loan, subject in either case to requirements with respect to
leases at the related Underlying Mortgaged Property and to other exceptions
customarily provided for by prudent institutional lenders for similar
loans.  The Underlying Mortgaged Property is also covered by comprehensive
general liability insurance against claims for personal and bodily injury, death
or property damage occurring on, in or about the related Underlying Mortgaged
Property, in an amount customarily required by prudent institutional
lenders.  An architectural or engineering consultant has performed an analysis
of the Underlying Mortgaged Properties located in seismic zone 3 or 4 in order
to evaluate the structural and seismic condition of such property, for the sole
purpose of assessing the probable maximum loss (“PML”) for the Underlying
Mortgaged Property in the event of an earthquake.  In such instance, the PML was
based on a 475 year lookback with a 10% probability of exceedance in a 50 year
period.  If the resulting report concluded that the PML would exceed 20% of the
amount of the replacement costs of the improvements, earthquake insurance on
such Underlying Mortgaged Property was obtained by an insurer rated at least
A-:V by A.M. Best Company or “BBB-” (or the equivalent) from S&P and Fitch or
“Baa3” (or the equivalent) from Moody’s.  If the Underlying Mortgaged Property
is located in Florida or within 25 miles of the coast of Texas, Louisiana,
Mississippi, Alabama, Georgia, North Carolina or South Carolina such Underlying
Mortgaged Property is insured by windstorm insurance in an amount at least equal
to the lesser of (i) the outstanding principal balance of such Underlying
Mortgage Loan and (ii) 100% of the full insurable value, or 100% of the
replacement cost, of the improvements located on the related Underlying
Mortgaged Property.
 
(nn)           The insurance policies contain a standard Mortgagee clause naming
the Mortgagee, its successors and assigns as loss payee, in the case of a
property insurance policy, and additional insured in the case of a liability
insurance policy and provide that they are not terminable without 30 days prior
written notice to the Mortgagee (or, with respect to non-payment, 10 days prior
written notice to the Mortgagee) or such lesser period as prescribed by
applicable law.  Each Mortgage requires that the Mortgagor maintain insurance as
described above or permits the Mortgagee to require insurance as described
above, and permits the Mortgagee to purchase such insurance at the Mortgagor’s
expense if Mortgagor fails to do so.
 
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(oo)           There is no material and adverse environmental condition or
circumstance affecting the Underlying Mortgaged Property; there is no material
violation of any applicable Environmental Law with respect to the Underlying
Mortgaged Property; neither Seller nor the Underlying Property Owner has taken
any actions which would cause the Underlying Mortgaged Property not to be in
compliance with all applicable Environmental Laws; the Underlying Mortgage Loan
documents require the borrower to comply with all Environmental Laws; and each
Mortgagor has agreed to indemnify the Mortgagee for any losses resulting from
any material, adverse environmental condition or failure of the Mortgagor to
abide by such Environmental Laws or has provided environmental insurance.
 
(pp)           No borrower under the Mezzanine Loan nor any Mortgagor under any
Underlying Mortgage Loan is a debtor in any state or federal bankruptcy or
insolvency proceeding.
 
(qq)           Each related Underlying Mortgaged Property was inspected by or on
behalf of the related originator or an affiliate during the 12 month period
prior to the related origination date.
 
(rr)            There are no material violations of any applicable zoning
ordinances, building codes and land laws applicable to the Underlying Mortgaged
Property or the use and occupancy thereof which (i) are not insured by an ALTA
lender’s title insurance policy (or a binding commitment therefor), or its
equivalent as adopted in the applicable jurisdiction, or a law and ordinance
insurance policy or (ii) would have a material adverse effect on the value,
operation or net operating income of the Underlying Mortgaged Property.  The
Mezzanine Loan Documents and the Underlying Mortgage Loan documents require the
Underlying Mortgaged Property to comply with all applicable laws and ordinances.
 
(ss)           None of the material improvements which were included for the
purposes of determining the appraised value of any related Underlying Mortgaged
Property at the time of the origination of the Mezzanine Loan or any related
Underlying Mortgage Loan lies outside of the boundaries and building restriction
lines of such property (except Underlying Mortgaged Properties which are legal
non-conforming uses), to an extent which would have a material adverse affect on
the value of the Underlying Mortgaged Property or the related Mortgagor’s use
and operation of such Underlying Mortgaged Property (unless affirmatively
covered by title insurance) and no improvements on adjoining properties
encroached upon such Underlying Mortgaged Property to any material and adverse
extent (unless affirmatively covered by title insurance).
 
(tt)           As of the Purchase Date for the related Purchased Asset, there
was no pending action, suit or proceeding, or governmental investigation of
which Seller, the Mezzanine Borrower or the Underlying Property Owner has
received notice, against the Mortgagor or the related Underlying Mortgaged
Property the adverse outcome of which could reasonably be expected to materially
and adversely affect the Mezzanine Loan or the Underlying Mortgage Loan.
 
(uu)         The improvements located on the Underlying Mortgaged Property are
either not located in a federally designated special flood hazard area or, if so
located, the Mortgagor is required to maintain or the Mortgagee maintains, flood
insurance with respect to such improvements and such policy is in full force and
effect in an amount no less than the lesser of (i) the original principal
balance of the Underlying Mortgage Loan, (ii) the value of such improvements on
the related Underlying Mortgaged Property located in such flood hazard area or
(iii) the maximum allowed under the related federal flood insurance program.
 
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(vv)         With respect to each related Underlying Mortgage Loan, except for
Mortgagors under Underlying Mortgage Loans, the Underlying Mortgaged Property
with respect to which includes a Ground Lease, the related lessor (or its
affiliate) has title in the fee simple interest in each related Underlying
Mortgaged Property.
 
(ww)        The related Underlying Mortgaged Property is not encumbered, and
none of the Mezzanine Loan Documents or any Underlying Mortgage Loan documents
permits the related Underlying Mortgaged Property to be encumbered subsequent to
the Purchase Date of the related Purchased Asset without the prior written
consent of the holder thereof, by any lien securing the payment of money junior
to or of equal priority with, or superior to, the lien of the related Mortgage
(other than Title Exceptions, taxes, assessments and contested mechanics and
materialmens liens that become payable after such Purchase Date).
 
(xx)           Each related Underlying Mortgaged Property constitutes one or
more complete separate tax lots (or the related Mortgagor has covenanted to
obtain separate tax lots and a Person has indemnified the Mortgagee for any loss
suffered in connection therewith or an escrow of funds in an amount sufficient
to pay taxes resulting from a breach thereof has been established) or is subject
to an endorsement under the related title insurance policy.
 
(yy)          An appraisal of the related Underlying Mortgaged Property was
conducted in connection with the origination of the Underlying Mortgage Loan;
and such appraisal satisfied either (A) the requirements of the “Uniform
Standards of Professional Appraisal Practice” as adopted by the Appraisal
Standards Board of the Appraisal Foundation, or (B) the guidelines in Title XI
of the Financial Institutions Reform, Recovery and Enforcement Act or 1989, in
either case as in effect on the date such Underlying Mortgage Loan was
originated.
 
(zz)           The related Underlying Mortgaged Property is served by public
utilities, water and sewer (or septic facilities) and otherwise appropriate for
the use in which the Underlying Mortgaged Property is currently being utilized.
 
(aaa)         With respect to each related Underlying Mortgaged Property
consisting of a Ground Lease, Seller represents and warrants the following with
respect to the related Ground Lease:
 
I.           Such Ground Lease or a memorandum thereof has been or will be duly
recorded no later than 30 days after the Purchase Date of the related Purchased
Asset and such Ground Lease permits the interest of the lessee thereunder to be
encumbered by the related Mortgage or, if consent of the lessor thereunder is
required, it has been obtained prior to the Purchase Date.
 
II.          Upon the foreclosure of the Underlying Mortgage Loan (or acceptance
of a deed in lieu thereof), the Mortgagor’s interest in such Ground Lease is
assignable to the Mortgagee under the leasehold estate and its assigns without
the consent of the lessor thereunder (or, if any such consent is required, it
has been obtained prior to the Purchase Date).
 
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III.         Such Ground Lease may not be amended, modified, canceled or
terminated without the prior written consent of the Mortgagee and any such
action without such consent is not binding on the Mortgagee, its successors or
assigns, except termination or cancellation if (i) an event of default occurs
under the Ground Lease, (ii) notice thereof is provided to the Mortgagee and
(iii) such default is curable by the Mortgagee as provided in the Ground Lease
but remains uncured beyond the applicable cure period.
 
IV.         Such Ground Lease is in full force and effect, there is no material
default under such Ground Lease, and there is no event which, with the passage
of time or with notice and the expiration of any grace or cure period, would
constitute a material default under such Ground Lease.
 
V.          The Ground Lease or ancillary agreement between the lessor and the
lessee requires the lessor to give notice of any default by the lessee to the
Mortgagee.  The Ground Lease or ancillary agreement further provides that no
notice given is effective against the Mortgagee unless a copy has been given to
the Mortgagee in a manner described in the Ground Lease or ancillary agreement.
 
VI.         The Ground Lease (i) is not subject to any liens or encumbrances
superior to, or of equal priority with, the Mortgage, subject, however, to only
the Title Exceptions or (ii) is subject to a subordination, non-disturbance and
attornment agreement to which the Mortgagee on the lessor’s fee interest in the
Underlying Mortgaged Property is subject.
 
VII.        A Mortgagee is permitted a reasonable opportunity (including, where
necessary, sufficient time to gain possession of the interest of the lessee
under the Ground Lease) to cure any curable default under such Ground Lease
before the lessor thereunder may terminate such Ground Lease.
 
VIII.       Such Ground Lease has an original term (together with any extension
options, whether or not currently exercised, set forth therein all of which can
be exercised by the Mortgagee if the Mortgagee acquires the lessee’s rights
under the Ground Lease) that extends not less than 20 years beyond the stated
maturity date.
 
IX.          Under the terms of such Ground Lease, any estoppel or consent
letter received by the Mortgagee from the lessor, and the related Mortgage,
taken together, any related insurance proceeds or condemnation award (other than
in respect of a total or substantially total loss or taking) will be applied
either to the repair or restoration of all or part of the related Underlying
Mortgaged Property, with the Mortgagee or a trustee appointed by it having the
right to hold and disburse such proceeds as repair or restoration progresses, or
to the payment or defeasance of the outstanding principal balance of the
Underlying Mortgage Loan, together with any accrued interest (except in cases
where a different allocation would not be viewed as commercially unreasonable by
any commercial mortgage lender, taking into account the relative duration of the
Ground Lease and the related Mortgage and the ratio of the market value of the
related Underlying Mortgaged Property to the outstanding principal balance of
such Underlying Mortgage Loan).
 
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X.           The Ground Lease does not impose any restrictions on subletting
that would be viewed as commercially unreasonable by a prudent commercial lender
 
XI.          The ground lessor under such Ground Lease is required to enter into
a new lease upon termination of the Ground Lease for any reason, including the
rejection of the Ground Lease in bankruptcy.
 
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EXHIBIT VII
 
ASSET INFORMATION
 
Loan ID #:
Borrower Name:
Borrower Address:
Borrower City:
Borrower State:
Borrower Zip Code:
Recourse?
Guaranteed?
Related Borrower Name(s):
Original Principal Balance:
Note Date:
Loan Date:
Loan Type (e.g. fixed/arm):
Current Principal Balance:
Current Interest Rate (per annum):
Paid to date:
Annual P&I:
Next Payment due date:
Index (complete whether fixed or arm):
Gross Spread/Margin (complete whether fixed or arm):
Life Cap:
Life Floor:
Periodic Cap:
Periodic Floor:
Rounding Factor:
Lookback (in days):
Interest Calculation Method (e.g., Actual/360):
Interest rate adjustment frequency:
P&I payment frequency:
First P&I payment due:
First interest rate adjustment date:
First payment adjustment date:
Next interest rate adjustment date:
Next payment adjustment date:
Conversion Date:
Converted Interest Rate Index:
Converted Interest Rate Spread:
Maturity date:
Loan term:
Amortization term:
Hyper-Amortization Flag:
Hyper-Amortization Term:
Hyper-Amortization Rate Increase:
 

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ASSET INFORMATION (continued)
 
Balloon Amount:
Balloon LTV:
Prepayment Penalty Flag:
Prepayment Penalty Text:
Lockout Period:
Lien Position:
Fee/Leasehold:
Ground Lease Expiration Date:
CTL (Yes/No):
CTL Rating (Moody’s):
CTL Rating (Duff):
CTL Rating (S&P):
CTL Rating (Fitch):
Lease Guarantor:
CTL Lease Type (NNN, NN, Bondable):
Property Name:
Property Address:
Property City:
Property Zip Code:
Property Type (General):
Property Type (Specific):
Cross-collateralized (Yes/No)*:
Property Size:
Year built:
Year renovated:
Actual Average Occupancy:
Occupancy Rent Roll Date:
Underwritten Average Occupancy:
Largest Tenant:
Largest Tenant SF:
Largest Tenant Lease Expiration:
2nd Largest Tenant:
2nd Largest Tenant SF:
2nd Largest Tenant Lease Expiration:
3rd Largest Tenant:
3rd Largest Tenant SF:
3rd Largest Tenant Lease Expiration:
Underwritten Average Rental Rate/ADR:
Underwritten Vacancy/Credit Loss:
Underwritten Other Income:
Underwritten Total Revenues:
 
_______________________
 
* If yes, give property information on each property covered and in aggregate as
appropriate.  Loan ID’s should be denoted with a suffix letter to signify
loans/collateral.
 
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ASSET INFORMATION (continued)
 
Underwritten Replacement Reserves:
Underwritten Management Fees:
Underwritten Franchise Fees:
Underwritten Total Expenses:
Underwritten Leasing Commissions:
Underwritten Tenant Improvement Costs:
Underwritten NOI:
Underwritten NCF:
Underwritten Debt Service Constant:
Underwritten DSCR at NOI:
Underwritten DSCR at NCF:
Underwritten NOI Period End Date:
Hotel Franchise:
Hotel Franchise Expiration Date:
Appraiser Name:
Appraised Value:
Appraisal Date:
Appraisal Cap Rate:
Appraisal Discount Rate:
Underwritten LTV:
Environmental Report Preparer:
Environmental Report Date:
Environmental Report Issues:
Architectural and Engineering Report Preparer:
Architectural and Engineering Report Date:
Deferred Maintenance Amount:
Ongoing Replacement Reserve Requirement per A&E Report:
Immediate Repairs Escrow % (e.g. [___]%):
Replacement Reserve Annual Deposit:
Replacement Reserve Balance:
Tenant Improvement/Leasing Commission Annual Deposits:
Tenant Improvement/Leasing Commission Balance:
Taxes paid through date:
Monthly Tax Escrow:
Tax Escrow Balance:
Insurance paid through date:
Monthly Insurance Escrow:
Insurance Escrow Balance:
Reserve/Escrow Balance as of Date:
Probable Maximum Loss %:
Covered by Earthquake Insurance (Yes/No):
Number of times 30 days late in last 12 months:
Number of times 60 days late in last 12 months:
Number of times 90 days late in last 12 months:
Servicing Fee:
Notes:
 
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EXHIBIT VIII
 
ADVANCE PROCEDURES
 
(a)           Submission of Due Diligence Package.  No less than fifteen (15)
Business Days prior to the proposed Purchase Date, Seller shall deliver to Buyer
a due diligence package for Buyer’s review and approval, which shall contain the
following items (the “Due Diligence Package”):
 
 
1.
Delivery of Purchased Asset Documents.  With respect to a New Asset that is a
Pre-Existing Asset, each of the Purchased Asset Documents.

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

 
A.           With respect to each Eligible Asset that is an Eligible Loan,
 
(ii)           the Asset Information and, if available, maps and photos;
 
(iii)          a current rent roll and roll over schedule, if applicable;
 
(iv)          a cash flow pro-forma, plus historical information, if available;
 
(v)           copies of appraisal, environmental, engineering and any other
third-party reports; provided, that, if same are not available to Seller at the
time of Seller’s submission of the Due Diligence Package to Buyer, Seller shall
deliver such items to Buyer promptly upon Seller’s receipt of such items;
 
(vi)
 
(vii)         a description of the underlying real estate directly or indirectly
securing or supporting such Purchased Asset and the ownership structure of the
borrower and the sponsor (including, without limitation, the board of directors,
if applicable) and, to the extent that real property does not secure such
Eligible Loan, the related collateral securing such Eligible Loan, if any;
 
(viii)        indicative debt service coverage ratios;
 
(ix)           indicative loan-to-value ratios;
 
(x)            a term sheet outlining the transaction generally;
 

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

 
(xi)           a description of the Mortgagor, including experience with other
projects (real estate owned), its ownership structure and financial statements;
 
(xii)          a description of Seller’s relationship with the Mortgagor, if
any;
 
(xiii)         copies of documents evidencing such New Asset, or current drafts
thereof, including, without limitation, underlying debt and security documents,
guaranties, the underlying borrower’s and guarantor’s organizational documents,
warrant agreements, and loan and collateral pledge agreements, as applicable,
provided that, if same are not available to Seller at the time of Seller’s
submission of the Due Diligence Package to Buyer, Seller shall deliver such
items to Buyer promptly upon Seller’s receipt of such items;
 
(xiv)         in the case of Subordinate Eligible Assets, all information
described in this section 2(A) that would otherwise be provided for the
Underlying Mortgage Loan if it were an Eligible Asset, and in addition, all
documentation evidencing such Subordinate Eligible Asset; and
 
(xv)          any exceptions to the representations and warranties set forth in
Exhibit VI to this Agreement.
 
B.           With respect to each Eligible Asset that is CMBS,
 
(xvi)         the related prospectus or offering circular;
 
(xvii)        all structural and collateral term sheets and all other
computational or other similar materials provided to Seller in connection with
its acquisition of such CMBS;
 
(xviii)       all distribution date statements issued in respect thereof during
the immediately preceding 12 months (or, if less, since the date such CMBS was
issued);
 
(xix)          all monthly CMSA reporting packages issued in respect of such
CMBS during the immediately preceding 12 months (or, if less, since the date
such CMBS was issued);
 
(xx)           all Rating Agency pre-sale reports;
 
(xxi)          all asset summaries and any other due diligence materials,
including, without limitation, reports prepared by third parties, provided to
Seller in connection with its acquisition of such CMBS; and
 
(xxii)         the related pooling and servicing agreement.
 
-2-

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

 
 
4.
Credit Memorandum.  A credit memorandum, asset summary or other similar document
that details cash flow underwriting, historical operating numbers, underwriting
footnotes, rent roll and lease rollover schedule.

 
 
5.
Appraisal.  Either an appraisal approved by Buyer or a Draft Appraisal, each by
an MAI appraiser, if applicable.  If Buyer receives only a Draft Appraisal prior
to entering into a Transaction, Seller shall deliver an appraisal approved by
Buyer by an MAI appraiser on or before ten (10) calendar days after the Purchase
Date.  The related appraisal shall (i) be dated less than twelve (12) months
prior to the proposed financing date and (ii) not be ordered by the related
borrower or an Affiliate of the related borrower.

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

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

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

 
(b)           Submission of Legal Documents.  With respect to a New Asset that
is an Originated Asset, no less than seven (7) calendar days prior to the
proposed Purchase Date, Seller shall deliver, or cause to be delivered, to
counsel for Buyer the following items, where applicable:
 
 
1.
Copies of all draft Purchased Asset Documents in substantially final form,
blacklined against the approved form Purchased Asset Documents.

 
 
2.
Certificates or other evidence of insurance demonstrating insurance coverage in
respect of the underlying real estate directly or indirectly securing or
supporting such Purchased Asset of types, in amounts, with insurers and
otherwise in compliance with the terms, provisions and conditions set forth in
the Purchased Asset Documents.  Such certificates or other evidence shall
indicate that Seller (or, as to Subordinate Eligible Assets, the lead lender on
the whole loan in which Seller is a participant or holder of a note or has an
equity interest in the Mortgagor, as applicable), will be named as an additional
insured as its interest may appear and shall contain a loss payee endorsement in
favor of such additional insured with respect to the policies required to be
maintained under the Purchased Asset Documents.

 
-3-

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

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

 
 
4.
As reasonably requested by Buyer, satisfactory reports of UCC, tax lien,
judgment and litigation searches and title updates conducted by search firms
and/or title companies reasonably acceptable to Buyer with respect to the
Eligible Loan, underlying real estate directly or indirectly securing or
supporting such Eligible Loan, Seller and Mortgagor, such searches to be
conducted in each location Buyer shall reasonably designate.

 
 
5.
An unconditional commitment to issue a Title Policy in favor of Buyer and
Buyer’s successors and/or assigns with respect to Buyer’s interest in the
related real property and insuring the assignment of the Eligible Asset to
Buyer, with an amount of insurance that shall be not less than the maximum
principal amount of the Eligible Asset (taking into account the proposed
Advance), or an endorsement or confirmatory letter from the title insurance
company that issued the existing title insurance policy, in favor of Buyer and
Buyer’s successors and/or assigns, that amends the existing title insurance
policy by stating that the amount of the insurance is not less than the maximum
principal amount of the Eligible Asset (taking into account the proposed
Advance).

 
 
6.
Certificates of occupancy and letters certifying that the property is in
compliance with all applicable zoning laws, each issued by the appropriate
Governmental Authority.

 
(c)           Approval of Eligible Asset.  Conditioned upon the timely and
satisfactory completion of Seller’s requirements in clauses (a) through (c)
above, Buyer shall, no less than five (5) calendar days prior to the proposed
Purchase Date (1) notify Seller in writing (which may take the form of
electronic mail format) that Buyer has not approved the proposed Eligible Asset
as a Purchased Asset or (2) notify Seller in writing (which may take the form of
electronic mail format) that Buyer has approved the proposed Eligible Asset as a
Purchased Asset.  Buyer’s failure to respond to Seller on or prior to five (5)
calendar days prior to the proposed Purchase Date, shall be deemed to be a
denial of Seller’s request that Buyer approve the proposed Eligible Loan, unless
Buyer and Seller has agreed otherwise in writing.
 
(d)           Assignment Documents.  No less than two (2) business days prior to
the proposed Purchase Date, Seller shall have executed and delivered to Buyer,
in form and substance reasonably satisfactory to Buyer and its counsel, all
applicable assignment documents assigning to Buyer the proposed Eligible Asset
(and in any Hedging Transactions held by Seller with respect thereto) that shall
be subject to no liens except as expressly permitted by Buyer.  Each of the
assignment documents shall contain such representations and warranties in
writing concerning the proposed Eligible Asset and such other terms as shall be
satisfactory to Buyer in its sole discretion.
 
-4-

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EXHIBIT IX
 
FORM OF BAILEE LETTER
 
_______________ __, 20__
 
__________________________

 
__________________________
 
__________________________
 
 
 
Re:
Bailee Agreement (the “Bailee Agreement”) in connection with the pledge by[ ]
(the “Seller”) to JPMorgan Chase Funding Inc. (the “Buyer”)

 
Ladies and Gentlemen:
 
In consideration of the mutual promises set forth herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Seller, Buyer and [ ] (the “Bailee”) hereby agree as follows:
 
(a)           Seller shall deliver to the Bailee in connection with any
Purchased Assets delivered to the Bailee hereunder an Identification Certificate
in the form of Attachment 1 attached hereto to which shall be attached a
Purchased Asset Schedule identifying which Purchased Assets are being delivered
to the Bailee hereunder.  Such Purchased Asset Schedule shall contain the
following fields of information:  (a) the loan identifying number; (b) the
Purchased Asset obligor’s name; (c) the street address, city, state and zip code
for the applicable real property; (d) the original balance; and (e) the current
principal balance if different from the original balance.
 
(b)           On or prior to the date indicated on the Custodial Identification
Certificate delivered by Seller (the “Funding Date”), Seller shall have
delivered to the Bailee, as bailee for hire, the original documents set forth on
Schedule A attached hereto (collectively, the “Purchased Asset File”) for each
of the Purchased Assets (each a “Purchased Asset” and collectively, the
“Purchased Assets”) listed in Exhibit A to Attachment 1 attached hereto (the
“Purchased Asset Schedule”).
 
(c)           The Bailee shall issue and deliver to Buyer and LaSalle Bank
National Association (the “Custodian”) on or prior to the Funding Date by
facsimile (a) in the name of Buyer, an initial trust receipt and certification
in the form of Attachment 2 attached hereto (the “Bailee’s Trust Receipt and
Certification”) which Bailee’s Trust Receipt and Certification shall state that
the Bailee has received the documents comprising the Purchased Asset File as set
forth in the Custodial Identification Certificate (as defined in that certain
Custodial Agreement dated as of November 21, 2008, among [  ], Seller, Buyer and
Custodian (as defined in Article 5 below), in addition to such other documents
required to be delivered to Buyer and/or Custodian pursuant to the Master
Repurchase Agreement dated as of November 21, 2008, between [ ], Seller and
Buyer (the “Repurchase Agreement”).
 

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

 
(d)           On the applicable Funding Date, in the event that Buyer fails to
purchase from Seller the Purchased Assets identified in the related Custodial
Identification Certificate, Buyer shall deliver by facsimile to the Bailee at
[  ] to the attention of [  ], an authorization (the “Facsimile Authorization”)
to release the Purchased Asset Files with respect to the Purchased Assets
identified therein to Seller.  Upon receipt of such Facsimile Authorization, the
Bailee shall release the Purchased Asset Files to Seller in accordance with
Seller’s instructions.
 
(e)           Following the Funding Date, the Bailee shall forward the Purchased
Asset Files to the Custodian at 135 S. LaSalle Street, Suite 1640, Chicago,
Illinois 60603, Attention: Ann Dolezal, by insured overnight courier for receipt
by the Custodian no later than 1:00 p.m. on the third Business Day following the
applicable Funding Date (the “Delivery Date”).
 
(f)           From and after the applicable Funding Date until the time of
receipt of the Facsimile Authorization or the applicable Delivery Date, as
applicable, the Bailee (a) shall maintain continuous custody and control of the
related Purchased Asset Files as bailee for Buyer and (b) is holding the related
Purchased Assets as sole and exclusive bailee for Buyer unless and until
otherwise instructed in writing by Buyer.
 
(g)           Seller agrees to indemnify and hold the Bailee and its partners,
directors, officers, agents and employees harmless against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever, including
reasonable attorney’s fees, that may be imposed on, incurred by, or asserted
against it or them in any way relating to or arising out of this Bailee
Agreement or any action taken or not taken by it or them hereunder unless such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements (other than special, indirect, punitive or
consequential damages, which shall in no event be paid by the Bailee) were
imposed on, incurred by or asserted against the Bailee because of the breach by
the Bailee of its obligations hereunder, which breach was caused by negligence,
lack of good faith or willful misconduct on the part of the Bailee or any of its
partners, directors, officers, agents or employees.  The foregoing
indemnification shall survive any resignation or removal of the Bailee or the
termination or assignment of this Bailee Agreement.
 
(h)           In the event that the Bailee fails to produce a Mortgage Note,
assignment of collateral or any other document related to a Purchased Asset that
was in its possession within ten (10) business days after required or requested
by Seller or Buyer (a “Delivery Failure”), the Bailee shall indemnify Seller or
Buyer in accordance with the succeeding paragraph of this Article 8.
 
(i)           Seller agrees to indemnify and hold Buyer and its respective
affiliates and designees harmless against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever, including reasonable attorney’s
fees, that may be imposed on, incurred by, or asserted against it or them in any
way relating to or arising out of a Custodial Delivery Failure or the Bailee’s
negligence, lack of good faith or willful misconduct.  The foregoing
indemnification shall survive any termination or assignment of this Bailee
Agreement.
 
(j)           Seller hereby represents, warrants and covenants that the Bailee
is not an affiliate of or otherwise controlled by Seller.  Notwithstanding the
foregoing, the parties hereby acknowledge that the Bailee hereunder may act as
Counsel to Seller in connection with a proposed transaction and [  ], if acting
as Bailee, has represented Seller in connection with negotiation, execution and
delivery of the Repurchase Agreement.
 
-2-

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(k)           In connection with a pledge of the Purchased Assets as collateral
for an obligation of Buyer, Buyer may pledge its interest in the corresponding
Purchased Asset Files held by the Bailee for the benefit of Buyer from time to
time by delivering written notice to the Bailee that Buyer has pledged its
interest in the identified Purchased Assets and Purchased Asset Files, together
with the identity of the party to whom the Purchased Assets have been pledged
(such party, the “Pledgee”).  Upon receipt of such notice from Buyer, the Bailee
shall mark its records to reflect the pledge of the Purchased Assets by Buyer to
the Pledgee.  The Bailee’s records shall reflect the pledge of the Purchased
Assets by Buyer to the Pledgee until such time as the Bailee receives written
instructions from Buyer that the Purchased Assets are no longer pledged by Buyer
to the Pledgee, at which time the Bailee shall change its records to reflect the
release of the pledge of the Purchased Assets and that the Bailee is holding the
Purchased Assets as custodian for, and for the benefit of, Buyer.
 
(l)           The agreement set forth in this Bailee Agreement may not be
modified, amended or altered, except by written instrument, executed by all of
the parties hereto.
 
(m)         This Bailee Agreement may not be assigned by Seller or the Bailee
without the prior written consent of Buyer.
 
(n)          For the purpose of facilitating the execution of this Bailee
Agreement as herein provided and for other purposes, this Bailee Agreement may
be executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute and be one and the same instrument.
 
(o)          This Bailee Agreement shall be construed in accordance with the
laws of the State of New York, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
 
(p)          Capitalized terms used herein and defined herein shall have the
meanings ascribed to them in the Repurchase Agreement.
 

 
Very truly yours,
         
[SELLER]
         
 
By:
        Name:        Title:           

 
-3-

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ACCEPTED AND AGREED:
 
[BAILEE]

 
By:
      Name:      Title:         

 

 
ACCEPTED AND AGREED:
 
JPMORGAN CHASE FUNDING INC., Buyer

 
By:
      Name:      Title:         

 
-4-

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Schedule A
 
[List of Purchased Asset Documents]
 

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

 
Attachment 1
 
IDENTIFICATION CERTIFICATE
 
On this ____ day of ____________, 200_, [SELLER] (the “Seller”), under that
certain Bailee Agreement of even date herewith (the “Bailee Agreement”), among
Seller, [  ] (the “Bailee”), and JPMORGAN CHASE FUNDING INC., as Buyer, does
hereby instruct the Bailee to hold, in its capacity as Bailee, the Purchased
Asset Files with respect to the Purchased Assets listed on Exhibit A hereto,
which Purchased Assets shall be subject to the terms of the Bailee Agreement as
of the date hereof.
 
Capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Bailee Agreement.
 
IN WITNESS WHEREOF, Seller has caused this Identification Certificate to be
executed and delivered by its duly authorized officer as of the day and year
first above written.
 

 
[SELLER]
         
 
By:
        Name:        Title:           

 

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

 
Exhibit A to Attachment 1
 
PURCHASED ASSET SCHEDULE
 

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

 
Attachment 2
 
FORM OF BAILEE’S TRUST RECEIPT AND CERTIFICATION
 
____________, 200_
 
JPMORGAN CHASE FUNDING INC.
c/o JPMorgan Chase Bank, N.A.
4 New York Plaza, 20th Floor
New York, New York 10004-2413
Attention:     Ms. Nancy S. Alto
Telephone:    (212) 623-7109
Telecopy:      (212) 623-0353
 
 
Re:
Bailee Agreement, dated as of ___________ __, 200_ (the “Bailee Agreement”)
among [SELLER] (the “Seller”), JPMorgan Chase Funding Inc. (the “Buyer”) and
[    ] (the “Bailee”)

 
Ladies and Gentlemen:
 
In accordance with the provisions of Paragraph 3 of the above-referenced Bailee
Agreement, the undersigned, as the Bailee, hereby certifies that as to each
Purchased Asset described in the Purchased Asset Schedule (Exhibit A to
Attachment 1), a copy of which is attached hereto, it has reviewed the Purchased
Asset File and has determined that (i) all documents listed in Schedule A
attached to the Bailee Agreement are in its possession and (ii) such documents
have been reviewed by it and appear regular on their face and relate to such
Purchased Asset, and (iii) based on its examination, the foregoing documents on
their face satisfy the requirements set forth in Paragraph 2 of the Bailee
Agreement.
 
The Bailee hereby confirms that it is holding each such Purchased Asset File as
agent and bailee for the exclusive use and benefit of Buyer pursuant to the
terms of the Bailee Agreement.
 
All initially capitalized terms used herein shall have the meanings ascribed to
them in the above-referenced Bailee Agreement.
 

 
[      ], BAILEE
         
 
By:
        Name:        Title:           

 

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

 
EXHIBIT X
 
FORM OF MARGIN DEFICIT NOTICE
 
[DATE]/[TIME]
 
VIA ELECTRONIC TRANSMISSION
 
[SELLER]
[     ]
[     ]
Attn: [     ]
 
 
Re:
Master Repurchase Agreement, dated as of November 21, 2008 (as amended,
restated, supplemented, or otherwise modified and in effect from time to time,
the “Master Repurchase Agreement”; capitalized terms used but not otherwise
defined herein shall have the meanings assigned thereto in the Master Repurchase
Agreement) by and among JPMorgan Chase Funding Inc. (“Buyer”) and CT BSI Funding
Corp., a Delaware corporation and Capital Trust, Inc., a Maryland corporation
(“Sellers”).

 
Pursuant to Article 4(a) of the Master Repurchase Agreement, Buyer hereby
notifies Seller of the existence of a Margin Deficit as of the date hereof as
follows:
 
[Repurchase Price for specific Purchased Asset: Asset
Value of such Purchased Asset:
$______________  
$______________  
   
MARGIN DEFICIT:
[Aggregate Repurchase Price of all Purchased Assets:
Maximum Amount: $__________
$______________ ]
$______________  
$______________  
   
MARGIN DEFICIT:
$______________ ]
   

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

 
JPMORGAN CHASE FUNDING INC.
         
 
By:
        Name:        Title:           

 

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EXHIBIT XI
 
UCC FILING JURISDICTIONS
 
Maryland
 
and
 
Delaware
 

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

 
EXHIBIT XII
 
FORM OF SERVICER NOTICE
 
[DATE]
 
[SERVICER], as Special Servicer
[ADDRESS]
Attention:  ___________
 
 
Re:
Master Repurchase Agreement, dated as of November 21, 2008 by and between
JPMorgan Chase Funding Inc. (“Buyer”) and CT BSI Funding Corp. and Capital
Trust, Inc. (“Sellers”) (as amended, restated, supplemented, or otherwise
modified and in effect from time to time, the “Master Repurchase Agreement”);
(capitalized terms used but not otherwise defined herein shall have the meanings
assigned thereto in the Master Repurchase Agreement).

 
Ladies and Gentlemen:
 
[SERVICER] (the “Servicer”) is servicing certain mortgage assets for Sellers
pursuant to one or more Servicing Agreements between Servicer and Sellers (the
“Purchased Assets”).  Pursuant to the Master Repurchase Agreement, Servicer is
hereby notified that Seller has granted a security interest to Buyer in the
Purchased Assets which are serviced by Servicer.
 
Servicer shall segregate all amounts collected on account of the Purchased
Assets sold to Buyer under the Master Repurchase Agreement, hold them in trust
for the sole and exclusive benefit of Buyer, and remit such collections to the
following account which has been established at PNC Bank, National Association,
ABA# 043-000-096, Account # [ ], (the “Depository Account”).  Servicer
acknowledges that the Depository Account is held for the benefit of Buyer
pursuant to the Depository Agreement, dated as of November 21, 2008, by and
between Sellers, Buyer, Midland Loan Services, Inc. and PNC Bank, National
Association.  Upon receipt of a notice of Event of Default from Buyer, Servicer
shall follow the instructions of Buyer with respect to the Purchased Assets, and
shall deliver to Buyer any information with respect to the Purchased Assets
reasonably requested by Buyer.
 
Servicer hereby agrees that, notwithstanding any provision to the contrary in
any Servicing Agreement which exists between Servicer and Sellers in respect of
any Purchased Asset, (i) Servicer is servicing the Purchased Assets for the
joint benefit of Seller and Buyer, (ii) Buyer is expressly intended to be a
third-party beneficiary under each Servicing Agreement and (iii) Buyer may, at
any time, terminate any such Servicing Agreement immediately upon the delivery
of written notice thereof to Servicer and/or in any event transfer servicing to
Buyer’s designee, at no cost or expense to Buyer, it being agreed that Sellers
will pay any and all fees required to terminate any Servicing Agreement and to
effectuate the transfer of servicing to the designee of Buyer.
 

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

 
Notwithstanding any contrary information or direction which may be delivered to
Servicer by Sellers, Servicer may conclusively rely on any information,
direction or notice of an Event of Default delivered by Buyer, and Sellers shall
indemnify and hold Servicer harmless for any and all claims asserted against
Servicer for any actions taken in good faith by Servicer in connection with the
delivery of such information or notice of Event of Default.
 
No provision of this letter may be amended, countermanded or otherwise modified
without the prior written consent of Buyer.  Buyer is an intended third party
beneficiary of this letter.
 
Please acknowledge receipt and your agreement to the terms of this instruction
letter by signing in the signature block below and forwarding an executed copy
to Buyer promptly upon receipt.  Any notices to Buyer should be delivered to the
following address: 4 New York Plaza, 20th Floor, New York, NY 10004-2413  Attn:
Nancy S. Alto, Telephone: (212) 623-7109, Fax:  (212) 623-0353.
 

 
Very truly yours, 
         
[SERVICER]
         
 
By:
        Name:        Title:           

 
ACKNOWLEDGED AND AGREED TO:
 
[SELLER]

 
By:
      Name:      Title:         

 

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

 
EXHIBIT XIII
 
FORM OF RELEASE LETTER
 
[Date]
 
JPMorgan Chase Funding Inc.
c/o JP Morgan Chase Bank, N.A.
4 New York Plaza, 20th Floor
New York, New York 100004-2413
Attention: 
Ms. Nancy S. Alto

 
 
Re:
Master Repurchase Agreement, dated as of November 21, 2008 by and between
JPMorgan Chase Funding Inc. (“Buyer”) and CT BSI Funding Corp. and Capital
Trust, Inc. (“Sellers”) (as amended, restated, supplemented, or otherwise
modified and in effect from time to time, the “Master Repurchase Agreement”);
(capitalized terms used but not otherwise defined herein shall have the meanings
assigned thereto in the Master Repurchase Agreement).

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

 
Very truly yours, 
         
[SERVICER]
         
 
By:
        Name:        Title:           

 

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

 
Schedule A
 
[List of Purchased Asset Documents]
 

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

 
EXHIBIT XIV
 
FORM OF COVENANT COMPLIANCE CERTIFICATE
 
[      ] [  ], 200[ ]
 
JPMorgan Chase Funding Inc.
c/o JPMorgan Chase Bank, N.A.
270 Park Avenue, 7th Floor
New York, New York 10017-2014
Attention:  Kunal K. Singh
 
 
This Compliance Certificate is furnished pursuant to that certain Master
Repurchase Agreement, dated as of November 21, 2008 (as amended, restated,
supplemented, or otherwise modified and in effect from time to time, the “Master
Repurchase Agreement”) by and among JPMorgan Chase Funding Inc. (“Buyer”) and CT
BSI Funding Corp. and Capital Trust, Inc. (“Sellers”).  Unless otherwise defined
herein, capitalized terms used in this Compliance Certificate have the
respective meanings ascribed thereto in the Master Repurchase Agreement.
 
THE UNDERSIGNED HEREBY CERTIFIES THAT:
 
 
1.
I am a duly elected Responsible Officer of [ ] (“Seller”).

 
 
2.
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 as of the date hereof.

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

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

 
 
5.
As of the date hereof, and since the date of the certificate most recently
delivered pursuant to Article 12(j) of the Master Repurchase Agreement, Seller
has observed or performed all of its covenants and other agreements in all
material respects, and satisfied in all material respects, every condition,
contained in the Master Repurchase Agreement and the related documents to be
observed, performed or satisfied by it.

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

 

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7.
As of the date hereof, each of the representations and warranties made by Seller
in the Master Repurchase Agreement are true, correct and complete in all
material respects with the same force and effect as if made on and as of the
date hereof, except as to the extent of any approved exceptions.

 
 
8.
No condition or event that constitutes a “Termination Event”, “Event of
Default”, “Potential Event of Default” or any similar event by Seller, however
denominated, has occurred or is continuing under any Hedging Transaction.

 
 
9.
Attached as Exhibit 2 hereto is a description of all interests of Affiliates of
each Seller in any Underlying Mortgaged Property (including without limitation,
any lien, encumbrance or other debt or equity position or other interest in the
Underlying Mortgaged Property that is senior or junior to, or pari passu with, a
Mortgage Asset in right of payment or priority).

 
 
10. Attached as Exhibit 3 hereto are the financial statements required to be
delivered pursuant to Article 12 of the Master Repurchase Agreement (or, if none
are required to be delivered as of the date of this Compliance Certificate, the
financial statements most recently delivered pursuant to Article 12 of the
Master Repurchase Agreement), which financial statements, to the best of my
knowledge after due inquiry, fairly and accurately present in all material
respects, the financial condition and operations of Seller as of the date or
with respect to the period therein specified, determined in accordance with the
requirements set forth in Article 12.

 
 
11. Attached as Exhibit 4 hereto are the calculations demonstrating compliance
with the financial covenants set forth in Article 11 of the Master Repurchase
Agreement.

 
To the best of my knowledge, Seller has, during the period since the delivery of
the immediately preceding Compliance Certificate, observed or performed all of
its covenants and other agreements in all material respects, and satisfied in
all material respects every condition, contained in the Master Repurchase
Agreement and the related documents to be observed, performed or satisfied by
it, and I have no knowledge of the occurrence during such period, or present
existence, of any condition or event which constitutes an Event of Default or
Default (including after giving effect to any pending Transactions requested to
be entered into), except as set forth below.
 
Described below are the exceptions, if any, to paragraph 10, listing, in detail,
the nature of the condition or event, the period during which it has existed and
the action which the Parent or any Seller has taken, is taking, or proposes to
take with respect to each such condition or event:
 

 
 
         
 
         
 
 
               
 
         

 

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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 this [ ] day of [ ], 200[ ].
 

    Name:    Title:       

 
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