Exhibit 10.2

 

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COMMERCIAL LOAN SALE AGREEMENT

by and between

NEWSTAR FINANCIAL, INC.,

as the Originator

and

NEWSTAR COMMERCIAL LOAN LLC 2007-1,

as the Trust Depositor

Dated as of June 5, 2007

 

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NewStar Trust 2007-1

Class A-1, Class A-2, Class B, Class C, Class D, Class E and Class F Notes

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TABLE OF CONTENTS

 

          Page

ARTICLE I

   DEFINITIONS    2

Section 1.01

   Definitions    2

Section 1.02

   Other Terms    4

Section 1.03

   Computation of Time Periods    4

Section 1.04

   Interpretation    4

Section 1.05

   References    5

Section 1.06

   Calculations    5

ARTICLE II

   TRANSFER OF LOAN ASSETS    5

Section 2.01

   Transfer of Loan Assets    5

Section 2.02

   Conditions to Transfer of Loan Assets to the Trust Depositor    7

Section 2.03

   Acceptance by the Trust Depositor    8

Section 2.04

   Conveyance of Substitute Loans    8

Section 2.05

   Conveyance of Additional Loans    11

Section 2.06

   Release of Excluded Amounts    13

Section 2.07

   Delivery of Documents in the Loan File; Recording of Assignments of Mortgage
   13

ARTICLE III

   REPRESENTATIONS AND WARRANTIES    14

Section 3.01

   Representations and Warranties Regarding the Originator    14

Section 3.02

   Representations and Warranties Regarding Each Loan and as to Certain Loans in
the Aggregate    18

Section 3.03

   Representations and Warranties Regarding the Initial Loans in the Aggregate
   18

Section 3.04

   Representations and Warranties Regarding the Required Loan Documents    19

Section 3.05

   [Reserved]    19

Section 3.06

   Representations and Warranties Regarding the Trust Depositor    19

ARTICLE IV

   PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS    21

Section 4.01

   Custody of Loans    21

Section 4.02

   Filing    21

Section 4.03

   Changes in Name, Corporate Structure or Location    21

Section 4.04

   Costs and Expenses    21

 

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TABLE OF CONTENTS

(continued)

 

          Page

Section 4.05

   Sale Treatment    22

Section 4.06

   Separateness from Trust Depositor    22

ARTICLE V

   COVENANTS OF THE ORIGINATOR    22

Section 5.01

   Corporate Existence    22

Section 5.02

   Loans Not to Be Evidenced by Promissory Notes    22

Section 5.03

   Security Interests    22

Section 5.04

   Compliance with Law    23

Section 5.05

   Liability of Originator    23

Section 5.06

   Limitation on Liability of Originator and Others    23

Section 5.07

   Reserved    23

Section 5.08

   Merger or Consolidation of Originator; Change-in-Control    23

Section 5.09

   Delivery of Collections    24

Section 5.10

   Underlying Custodial Agreements    24

Section 5.11

   Payments from Concentration Account    24

ARTICLE VI

   REMEDIES UPON MISREPRESENTATION; REPURCHASE OPTION    24

Section 6.01

   Repurchases of, or Substitution for, Loans for Breach of Representations and
Warranties    24

Section 6.02

   Reassignment of Repurchased or Substituted Loans    25

ARTICLE VII

   INDEMNIFICATION BY THE ORIGINATOR    25

Section 7.01

   Indemnification    25

Section 7.02

   Liabilities to Obligors    26

Section 7.03

   Operation of Indemnities    26

ARTICLE VIII

   MISCELLANEOUS    26

Section 8.01

   Amendment    26

Section 8.02

   Governing Law    27

Section 8.03

   Notices    28

Section 8.04

   Severability of Provisions    30

Section 8.05

   Third Party Beneficiaries    30

Section 8.06

   Counterparts    31

Section 8.07

   Headings    31

 

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TABLE OF CONTENTS

(continued)

 

          Page

Section 8.08

   No Bankruptcy Petition; Disclaimer    31

Section 8.09

   Jurisdiction    31

Section 8.10

   Prohibited Transactions with Respect to the Issuer    31

Section 8.11

   No Partnership    32

Section 8.12

   Successors and Assigns    32

Section 8.13

   Duration of Agreement    32

Section 8.14

   Limited Recourse    32

 

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COMMERCIAL LOAN SALE AGREEMENT

THIS COMMERCIAL LOAN SALE AGREEMENT, dated as of June 5, 2007 (as amended,
modified, restated, waived, or supplemented from time to time, the “Agreement”),
is between NEWSTAR FINANCIAL, INC., a Delaware corporation (together with its
successors and assigns, “NewStar”, and in its capacity as originator, together
with its successors and assigns, the “Originator”) and NEWSTAR COMMERCIAL LOAN
LLC 2007-1, a Delaware limited liability company (together with its successors
and assigns, the “Trust Depositor”).

WHEREAS, in the regular course of its business, the Originator originates and/or
otherwise acquires Loans;

WHEREAS, the Trust Depositor desires to acquire the Initial Loans from the
Originator and may acquire from time to time thereafter certain Substitute
Loans;

WHEREAS, during the Ramp-Up Period and the Reinvestment Period, the Trust
Depositor intends to acquire Additional Loans from the Originator from time to
time and the Originator wishes to convey any such Additional Loans to the Trust
Depositor;

WHEREAS, it is a condition to the Trust Depositor’s acquisition of the Initial
Loans, any Additional Loans and any Substitute Loans from the Originator that
the Originator make certain representations and warranties regarding the Loan
Assets for the benefit of the Trust Depositor as well as the Issuer;

WHEREAS, the Trust Depositor is willing to purchase and accept assignment of the
Loan Assets from the Originator pursuant to the terms hereof; and

WHEREAS, on the Closing Date, the Trust Depositor will sell, convey and assign
all its right, title and interest in the Initial Loan Assets to NewStar
Commercial Loan Trust 2007-1, a Delaware statutory trust (the “Issuer”),
pursuant to a Sale and Servicing Agreement, dated as of the date hereof (as
amended, modified, restated, replaced, waived, substituted, supplemented or
extended from time to time, the “Sale and Servicing Agreement”), among NewStar,
as the originator and the servicer, the Trust Depositor, as the trust depositor,
the Issuer, as the issuer, U.S. Bank National Association, as the trustee, Lyon
Financial Services, Inc. (d/b/a U.S. Bank Portfolio Services), as the backup
servicer and Wilmington Trust Company, as the owner trustee.

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NOW, THEREFORE, based upon the above recitals, the mutual promises and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01 Definitions.

Capitalized terms used but not defined in this Agreement shall have the meanings
attributed to such terms in the Sale and Servicing Agreement, unless the context
otherwise requires. In addition, as used herein, the following defined terms,
unless the context otherwise requires, shall have the following meanings:

“Additional Loan Assets” means any assets acquired by the Trust Depositor from
the Originator during the Ramp-Up Period or the Reinvestment Period pursuant to
Section 2.05(a), which assets shall include the Originator’s right, title and
interest in the following:

(i) the Additional Loans listed in the related Subsequent List of Loans, all
payments paid in respect thereof and all monies due, to become due or paid in
respect thereof accruing on and after the applicable Cut-Off Date and all
Liquidation Proceeds and recoveries thereon, in each case as they arise after
the applicable Cut-Off Date;

(ii) all security interests and Liens and Related Property subject thereto from
time to time purporting to secure payment by Obligors under such Loans;

(iii) all guaranties, indemnities and warranties, and other agreements or
arrangements of whatever character from time to time supporting or securing
payment of such Loans;

(iv) all collections and records (including Computer Records) with respect to
the foregoing;

(v) all documents relating to the applicable Loan Files; and

(vi) all income, payments, proceeds and other benefits of any and all of the
foregoing, including but not limited to, all accounts, cash and currency,
chattel paper, electronic chattel paper, tangible chattel paper, copyrights,
copyright licenses, equipment, fixtures, general intangibles, instruments,
commercial tort claims, deposit accounts, inventory, investment property, letter
of credit rights, software, supporting obligations, accessions, and other
property consisting of, arising out of, or related to the foregoing, but
excluding any Excluded Amount with respect thereto.

“Indemnified Party” shall have the meaning provided in Section 7.01.

“Ineligible Loan” shall have the meaning provided in Section 6.01.

“Initial Loan Assets” means any assets acquired by the Trust Depositor from the
Originator on the Closing Date pursuant to Section 2.01, which assets shall
include the Originator’s right, title and interest in the following:

(i) the Initial Loans, all payments paid in respect thereof and all monies due,
to become due or paid in respect thereof accruing on and after the Closing Date;

 

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(ii) all security interests and Liens and Related Property subject thereto from
time to time purporting to secure payment by Obligors under such Loans;

(iii) all guaranties, indemnities and warranties, and other agreements or
arrangements of whatever character from time to time supporting or securing
payment of such Loans;

(iv) the Transaction Accounts, and the Concentration Account and together with
all cash and investments in each of the foregoing but only to the extent, in
respect of the Concentration Account, relating to the Initial Loans;

(v) all collections and records (including Computer Records) with respect to the
foregoing;

(vi) all documents relating to the applicable Loan Files; and

(vii) all income, payments, proceeds and other benefits of any and all of the
foregoing, including but not limited to, all accounts, cash and currency,
chattel paper, electronic chattel paper, tangible chattel paper, copyrights,
copyright licenses, equipment, fixtures, general intangibles, instruments,
commercial tort claims, deposit accounts, inventory, investment property, letter
of credit rights, software, supporting obligations, accessions, and other
property consisting of, arising out of, or related to the foregoing, but
excluding any Excluded Amount with respect thereto.

“Loan Assets” means, collectively and as applicable, the Initial Loan Assets,
the Substitute Loan Assets and the Additional Loan Assets, as applicable.

“Notice of Substitution” shall have the meaning provided in Section 2.04(a)(ii).

“Substitute Loan Assets” means any assets acquired by the Trust Depositor in
connection with a substitution of one or more Substitute Loans pursuant to
Section 2.04, which assets shall include the Originator’s right, title and
interest in the following:

(i) the Substitute Loans listed in the related Subsequent List of Loans, all
payments paid in respect thereof and all monies due, to become due or paid in
respect thereof accruing on and after the applicable Cut-Off Date and all
Liquidation Proceeds and recoveries thereon, in each case as they arise after
the applicable Cut-Off Date;

(ii) all security interests and Liens and Related Property subject thereto from
time to time purporting to secure payment by Obligors under such Loans;

(iii) all guaranties, indemnities and warranties, and other agreements or
arrangements of whatever character from time to time supporting or securing
payment of such Loans;

 

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(iv) all collections and records (including Computer Records) with respect to
the foregoing;

(v) all documents relating to the applicable Loan Files; and

(vi) all income, payments, proceeds and other benefits of any and all of the
foregoing, including but not limited to, all accounts, cash and currency,
chattel paper, electronic chattel paper, tangible chattel paper, copyrights,
copyright licenses, equipment, fixtures, general intangibles, instruments,
commercial tort claims, deposit accounts, inventory, investment property, letter
of credit rights, software, supporting obligations, accessions, and other
property consisting of, arising out of, or related to the foregoing, but
excluding any Excluded Amount with respect thereto.

“Substitution Period” shall have the meaning provided in Section 2.04(a)(ii)(3).

Section 1.02 Other Terms.

All accounting terms used but not specifically defined herein shall be construed
in accordance with generally accepted accounting principles in the United
States. The symbol “$” shall mean the lawful currency of the United States of
America. All terms used in Article 9 of the UCC in the State of New York, and
not specifically defined herein, are used herein as defined in such Article 9.

Section 1.03 Computation of Time Periods.

Unless otherwise stated in this Agreement, in the computation of a period of
time from a specified date to a later specified date, the word “from” means
“from and including”, the words “to” and “until” each mean “to but excluding”,
and the word “within” means “from and excluding a specified date and to and
including a later specified date”.

Section 1.04 Interpretation.

In this Agreement, unless a contrary intention appears:

(i) the singular number includes the plural number and vice versa;

(ii) reference to any Person includes such Person’s successors and assigns but,
if applicable, only if such successors and assigns are permitted by the
Transaction Documents;

(iii) reference to any gender includes each other gender;

(iv) reference to day or days without further qualification means calendar days;

(v) unless otherwise stated, reference to any time means New York, New York
time;

 

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(vi) references to “writing” include printing, typing, lithography, electronic
or other means of reproducing words in a visible form;

(vii) reference to any agreement (including any Transaction Document), document
or instrument means such agreement, document or instrument as amended, modified,
supplemented, replaced, restated, waived or extended and in effect from time to
time in accordance with the terms thereof and, if applicable, the terms of the
other Transaction Documents, and reference to any promissory note includes any
promissory note that is an extension or renewal thereof or a substitute or
replacement therefor; and

(viii) reference to any Applicable Law means such Applicable Law as amended,
modified, codified, replaced or reenacted, in whole or in part, and in effect
from time to time, including rules and regulations promulgated thereunder and
reference to any Section or other provision of any Applicable Law means that
provision of such Applicable Law from time to time in effect and constituting
the substantive amendment, modification, codification, replacement or
reenactment of such Section or other provision.

Section 1.05 References.

All section references (including references to the Preamble), unless otherwise
indicated, shall be to Sections (and the Preamble) in this Agreement.

Section 1.06 Calculations.

Except as otherwise provided herein, all interest rate and basis point
calculations hereunder will be made on the basis of a 360 day year and the
actual days elapsed in the relevant period and will be carried out to at least
three decimal places.

ARTICLE II

TRANSFER OF LOAN ASSETS

Section 2.01 Transfer of Loan Assets.

(a) The Originator shall sell, assign and convey Loan Assets to the Trust
Depositor pursuant to the terms and provisions hereof.

(b) Subject to and upon the terms and conditions set forth herein, the
Originator hereby sells, transfers, assigns, sets over and otherwise conveys to
the Trust Depositor, for a purchase price consisting of $546,000,000 in cash,
all the right, title and interest of the Originator in and to the Initial Loan
Assets.

To the extent the purchase price paid to the Originator for any Loan is less
than the fair market value of such Loan, the difference between such fair market
value and the purchase price shall be deemed to be a capital contribution made
by the Originator to the Trust Depositor on the Closing Date in the case of the
Initial Loans and as of the related Cut-Off Date in the case of any Additional
Loans or Substitute Loans.

 

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(c) The Originator and the Trust Depositor each acknowledge with respect to
itself that the representations and warranties of the Originator in Sections
3.01 through 3.04 hereof and of the Trust Depositor in the Sale and Servicing
Agreement and in Section 3.06 hereof will run to and be for the benefit of the
Issuer and the Trustees, and the Issuer and the Trustees may enforce directly
(without joinder of the Trust Depositor when enforcing against the Originator),
the repurchase obligations of the Originator or the Trust Depositor, as
applicable, with respect to breaches of such representations and warranties as
set forth in the Sale and Servicing Agreement or in this Agreement.

(d) The sale, transfer, assignment, set-over and conveyance of the Loan Assets
by the Originator to the Trust Depositor pursuant to this Agreement does not
constitute and is not intended to result in a creation or an assumption by the
Trust Depositor or the Issuer of any obligation of the Originator as lead agent,
collateral agent or paying agent under any Agented Loan.

(e) The Originator and the Trust Depositor intend and agree that (i) the
transfer of the Loan Assets by the Originator to the Trust Depositor hereunder
and the transfer of the Loan Assets by the Trust Depositor to the Issuer under
the Sale and Servicing Agreement are intended to be a sale, conveyance and
transfer of ownership of the applicable Loan Assets, as the case may be, rather
than the mere granting of a security interest to secure a borrowing and
(ii) such Loan Assets shall not be part of the Originator’s or the Trust
Depositor’s estate in the event of a filing of a bankruptcy petition or other
action by or against such Person under any Insolvency Law. In the event,
however, that notwithstanding such intent and agreement, such transfers are
deemed to be a mere granting of a security interest to secure indebtedness, the
Originator shall be deemed to have granted (and as of the Closing Date hereby
grants) to the Trust Depositor and the Trust Depositor shall be deemed to have
granted (and as of the Closing Date hereby grants) to the Issuer, as the case
may be, a perfected first priority security interest in all right, title and
interest of the Originator or of the Trust Depositor, respectively, in such Loan
Assets, and this Agreement shall constitute a security agreement under
Applicable Law, securing the repayment of the purchase price paid hereunder, the
obligations and/or interests represented by the Securities, in the order and
priorities, and subject to the other terms and conditions of, this Agreement,
the Sale and Servicing Agreement, the Indenture and the Trust Agreement,
together with such other obligations or interests as may arise hereunder and
thereunder in favor of the parties hereto and thereto.

(f) If any such transfer of the Loan Assets is deemed to be the mere granting of
a security interest to secure a borrowing, the Trust Depositor may, to secure
the Trust Depositor’s own borrowing under the Sale and Servicing Agreement (to
the extent that the transfer of the Loan Assets thereunder is deemed to be a
mere granting of a security interest to secure a borrowing), repledge and
reassign (i) all or a portion of the Loan Assets pledged to the Trust Depositor
by the Originator and with respect to which the Trust Depositor has not released
its security interest at the time of such pledge and assignment, and (ii) all
proceeds thereof. Such repledge and reassignment may be made by the Trust
Depositor with or without a repledge and reassignment by the Trust Depositor of
its rights under any agreement with the Originator, and without further notice
to or acknowledgment from the Originator. The Originator waives, to the extent
permitted by Applicable Law, all claims, causes of action and remedies, whether
legal or equitable (including any right of setoff), against the Trust Depositor
or any assignee of the Trust Depositor relating to such action by the Trust
Depositor in connection with the transactions contemplated by this Agreement and
the Transaction Documents.

 

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(g) The Originator and the Trust Depositor acknowledge and agree (and the
Trustee is hereby directed to acknowledge and does acknowledge) that, solely for
administrative convenience, any assignment agreement required to be executed and
delivered in connection with the transfer of a Loan in accordance with the terms
of related Underlying Loan Agreements may reflect that the Originator is
assigning such Loan directly to the Issuer. Nothing in such assignment
agreements shall be deemed to impair the transfers of the Loan Assets by the
Originator to the Trust Depositor in accordance with the terms of this Agreement
and the subsequent transfer of the Loan Assets by the Trust Depositor to the
Issuer in accordance with the terms of the Sale and Servicing Agreement.

Section 2.02 Conditions to Transfer of Loan Assets to the Trust Depositor.

On or before the Closing Date, the Originator shall deliver or cause to be
delivered to the Trust Depositor, the Owner Trustee and the Trustee each of the
documents, certificates and other items as follows:

(a) a certificate of an officer of the Originator substantially in the form of
Exhibit C to the Sale and Servicing Agreement;

(b) copies of resolutions of the Board of Directors of the Originator and the
Servicer or of the Executive Committee of the Board of Directors of the
Originator and the Servicer approving the execution, delivery and performance of
this Agreement, the Transaction Documents to which it is a party and the
transactions contemplated hereunder and thereunder, certified in each case by
the Secretary or an Assistant Secretary of the Originator and the Servicer;

(c) officially certified evidence dated within 30 days of the Closing Date of
due formation and good standing of the Originator under the laws of the State of
Delaware;

(d) the initial List of Loans, certified by an officer of the Originator,
together with an Assignment substantially in the form of Exhibit A (along with
the delivery of any instruments and Loan Files as required under Section 2.07);

(e) a letter from KPMG or another nationally recognized accounting firm,
addressed to the Originator and the Trust Depositor (with a copy to the Trustee,
Moody’s, Fitch & S&P), stating that such firm has reviewed a sample of the
Initial Loans and performed specific procedures for such sample with respect to
certain loan terms and that identifies those Initial Loans that do not conform;

(f) evidence of proper filing with appropriate offices in the State of Delaware
of UCC financing statements listing the Originator, as debtor and naming the
Trustee as total assignee and identifying the Loan Assets as collateral;

(g) an Officer’s Certificate listing the Servicer’s Servicing Officers; and

 

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(h) a fully executed copy of each of the Transaction Documents.

Section 2.03 Acceptance by the Trust Depositor.

Within three Business Days after the Closing Date, if the conditions set forth
in Section 2.02 have been satisfied, the Originator shall deliver, on behalf of
the Trust Depositor, to the Trustee the Initial Loan Assets and such delivery to
and acceptance by the Trustee shall be deemed to be delivery to and acceptance
by the Trust Depositor.

Section 2.04 Conveyance of Substitute Loans.

(a) (i) Subject to Sections 2.01(d) and (e) and, as applicable, the satisfaction
of the conditions set forth in Section 2.04(c), the Originator may, at its
option (but shall not be obligated to) either:

(1) contemporaneously convey to the Trust Depositor one or more Loans as
described in Section 2.04(b); or

(2) deposit to the Principal Collection Account the Transfer Deposit Amount with
respect to any Loan as to which a Substitution Event has occurred and then,
prior to the expiry of the Substitution Period, convey to the Trust Depositor
one or more Loans as described in Section 2.04(b) in exchange for the funds or
portion thereof so deposited.

(ii) Any substitution pursuant to this Section 2.04 shall be initiated by
delivery of written notice (a “Notice of Substitution”) to the Trustee from the
Servicer that the Originator intends to substitute a Loan pursuant to this
Section 2.04 and shall be completed prior to the earlier of:

(1) the expiration of 90 days after delivery of such notice;

(2) delivery of written notice to the Trustee from the Originator stating that
it does not intend to use any remaining deposit to purchase Substitute Loans; or

(3) in the case of a Loan which has become subject to a Material Modification,
the effective date set forth in such Material Modification (such period
described in clause (ii)(1), (2) or (3), as applicable, being the “Substitution
Period”).

(iii) Each Notice of Substitution shall specify the Loan to be substituted, the
reasons for such substitution and the Transfer Deposit Amount with respect to
the Loan. On the last day of any Substitution Period, any amounts previously
deposited in accordance with clause (a)(i)(2) above which relate to such
Substitution Period that have not been applied to acquire one or more Substitute
Loans shall be deemed to constitute Principal Collections and shall be
transferred on the next Distribution Date to the Note Distribution Account and
distributed in accordance with the Priority of Payments set forth in the Sale
and Servicing Agreement; provided that no such distribution shall be made during
the Reinvestment Period if the Special Redemption criteria

 

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are not satisfied with respect to such amount; provided further that prior to
the expiration of the related Substitution Period any such amounts shall not be
deemed to be Principal Collections and shall remain in the Principal Collection
Account until applied to acquire Substitute Loans or distributed in accordance
with the Priority of Payments. The price paid (or, in the case of a
contemporaneous conveyance of a Substitute Loan pursuant to clause (a)(i)(1)
above, deemed paid) by the Trust Depositor for any Substitute Loan shall be an
amount equal to (x) in the case of a Loan originated by the Originator, the
Outstanding Loan Balance thereof, and (y) in the case of a Loan acquired by the
Originator from a third party, the purchase price paid for such Loan, plus, in
each case, accrued interest thereon.

(b) With respect to any Substitute Loans to be conveyed to the Trust Depositor
by the Originator as described in Section 2.04(a), the Originator hereby sells,
transfers, assigns, sets over and otherwise conveys to the Trust Depositor,
without recourse other than as expressly provided herein (and the Trust
Depositor shall purchase through cash payment or by exchange of one or more
related Loans released by the Issuer to the Trust Depositor on the related
Cut-Off Date), all the right, title and interest of the Originator in and to the
Substitute Loan Assets.

To the extent the purchase price paid to the Originator for any Substitute Loan
is less than the fair market value of such Substitute Loan, the difference
between such fair market value and the purchase price shall be deemed to be a
capital contribution made by the Originator to the Trust Depositor on the
relevant Cut-Off Date.

(c) Subject to Sections 2.01(d) and (e), and the conditions set forth in
Section 2.04(d), the Originator shall sell, transfer, assign, set over and
otherwise convey to the Trust Depositor, without recourse other than as
expressly provided herein and therein, (i) all the right, title and interest of
the Originator in and to the Substitute Loans sold pursuant to Sections 2.04(a)
and (b), and (ii) all other rights and property interests consisting of
Substitute Loan Assets related to such Substitute Loans (the property in clauses
(i) and (ii) above, upon such transfer, becoming part of the Collateral).

(d) The Originator shall transfer to the Trust Depositor and the Trust Depositor
shall transfer to the Issuer the Substitute Loans and the other property and
rights related thereto described in Sections 2.04(b) and (c) only upon the
satisfaction of each of the following conditions on or prior to the related
Cut-Off Date (and the delivery of a related Addition Notice by the Trust
Depositor shall be deemed a representation and warranty by the Trust Depositor
and of the Originator that such conditions have been or will be, as of the
related Cut-Off Date, satisfied):

(i) the Trust Depositor shall have provided the Trustee with a timely Addition
Notice complying with the definition thereof (a copy of which shall be provided
to S&P promptly after it is delivered to the Trustee), which Addition Notice
shall be delivered no later than 11:00 a.m. on the related Cut-Off Date;

(ii) there shall have occurred, with respect to each such Substitute Loan, a
corresponding Substitution Event with respect to one or more Loans then in the
Collateral;

 

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(iii) after giving effect to the inclusion of the applicable Substitute Loans in
the Collateral, (x) the Portfolio Acquisition and Disposition Requirements are
satisfied, (y) the Portfolio Criteria are satisfied and (z) the Substitute
Loan(s) being conveyed to the Trust Depositor and in turn to the Issuer satisfy
the Substitute Loan Qualification Conditions; provided that (A) if any component
of the Portfolio Criteria is not satisfied prior to giving effect to the
inclusion of a Substitute Loan, the Portfolio Criteria shall be deemed satisfied
with respect to such component if the component is maintained or improved by the
inclusion of such Substitute Loan and (B) clause (A) above shall not be
applicable if, but for the operation of such clause, such substitution would not
have been permitted in light of the Issuer’s failure to meet the new testing
levels set forth in the applicable Zone of the Collateral Quality Table as a
result of the substitution of such Substitute Loan; provided further that for
purposes of determining compliance with the Portfolio Criteria, any Substitute
Loan which does not have a rating from each Rating Agency as of the applicable
Cut-Off Date will be deemed to have an S&P Rating as determined by the Servicer
in accordance with the criteria set forth in the definition of “S&P Rating”, a
Moody’s Rating of “Caa1” and a Fitch Rating of “CCC” pending receipt of a rating
estimate from the applicable Rating Agency;

(iv) the Originator and the Trust Depositor shall have delivered a Subsequent
List of Loans listing the applicable Substitute Loans and an assignment
agreement as required by the related Underlying Loan Agreement indicating that
the Issuer is the holder of the related Substitute Loan;

(v) the Trust Depositor shall have deposited or caused to be deposited in the
Principal and Interest Account all Collections received with respect to the
Substitute Loans on and after the related Cut-Off Date;

(vi) each of the representations and warranties made by the Originator pursuant
to Sections 3.02 (including without limitation that each such Substitute Loan is
an Eligible Loan) and 3.04 applicable to the Substitute Loans shall be true and
correct as of the related Cut-Off Date;

(vii) the Originator shall bear all incidental transactions costs incurred in
connection with a substitution effected pursuant to this Agreement and shall, at
its own expense, on or prior to the related Cut-Off Date, indicate in its
Computer Records that ownership of the Substitute Loans identified on the
Subsequent List of Loans has been sold by the Originator to the Trust Depositor
and by the Trust Depositor to the Issuer pursuant to the Transfer and Servicing
Agreements; and

(viii) prior to such substitution the Originator shall provide written notice to
each Rating Agency; provided, however, that Fitch shall be entitled to receive
from the Originator financial statements, credit committee papers and such other
information relating to such Substitute Loan as is reasonably requested by Fitch
in connection with the proposed substitution of a Loan.

 

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(e) Notwithstanding anything in this Section 2.04 to the contrary, in connection
with any substitution to be effected pursuant to this Section 2.04:

(1) the aggregate Outstanding Loan Balance of all (i) Charged-Off Loans,
(ii) Delinquent Loans, (iii) Loans that have a material covenant default, and
(iv) Loans which have become subject to a Material Modification of the type
specified in clause (ii) of the definition thereof (without regard to whether
such Material Modification may otherwise constitute a Material Modification of a
type specified in clause (i) of the definition thereof), substituted pursuant to
this Section 2.04, when combined with the aggregate Outstanding Loan Balance of
all Loans repurchased by the Originator or sold to an Affiliate of the Issuer
pursuant to Sections 2.09(a) and 2.05, respectively, of the Sale and Servicing
Agreement shall not exceed an amount equal to, as of any date of determination,
10% of the Net Purchased Loan Balance; and

(2) the aggregate Outstanding Loan Balance of all Loans substituted pursuant to
this Section 2.04, when combined with the aggregate Outstanding Loan Balance of
all Loans repurchased by the Originator or sold to an Affiliate of the Issuer
pursuant to Sections 2.09(a) and 2.05, respectively, of the Sale and Servicing
Agreement, shall not exceed an amount equal to, as of any date of determination,
20% of the Net Purchased Loan Balance; provided that the foregoing limitation
shall not apply to Loans substituted by reason of the occurrence of a
Substitution Event of the type specified in clause (f) of the definition of such
term.

Section 2.05 Conveyance of Additional Loans.

(a) The Trust Depositor may, at any time during the Ramp-Up Period and the
Reinvestment Period and subject to the conditions set forth in this
Section 2.05, purchase Additional Loan Assets from the Originator. The purchase
price paid by the Trust Depositor for any Additional Loan shall be an amount
equal to (x) in the case of a Loan originated by the Originator, the Outstanding
Loan Balance thereof, and (y) in the case of a Loan acquired by the Originator
from a third party, the purchase price paid for such Loan.

(b) Upon the acquisition of any Additional Loan Assets pursuant to and in
accordance with this Section 2.05, the Trust Depositor will convey such
Additional Loan Assets to the Issuer pursuant to Section 2.06 of the Sale and
Servicing Agreement and, upon the pledge by the Issuer of such Loan Assets to
the Trustee for the benefit of the Noteholders, such Additional Loan Assets
shall become part of the Collateral subject to the Lien of the Indenture.

(c) The Originator shall transfer to the Trust Depositor and the Trust Depositor
shall transfer to the Issuer the applicable Additional Loan Assets only upon the
satisfaction of each of the following conditions on or prior to the related
Cut-Off Date (and the delivery of a related Addition Notice by the Trust
Depositor shall be deemed a representation and warranty by the Issuer, Trust
Depositor and the Originator that such conditions are satisfied as of the
related Cut-Off Date):

(i) the Trust Depositor shall have provided the Issuer and the Trustee with a
timely Addition Notice complying with the definition thereof, which Addition
Notice shall be delivered no later than 11:00 a.m. on the related Cut-Off Date;

(ii) after giving effect to the sale of the applicable Additional Loan Assets to
the Issuer under the Sale and Servicing Agreement and the inclusion of the
applicable Additional Loans in the Collateral, (x) the Portfolio Acquisition and
Disposition

 

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Requirements are satisfied and (y) the Portfolio Criteria are satisfied;
provided that (A) if any component of the Portfolio Criteria is not satisfied
prior to giving effect to the inclusion of such Additional Loans, the Portfolio
Criteria shall be deemed satisfied with respect to such component if the
component is maintained or improved by the inclusion of such Additional Loans
and (B) clause (A) above shall not be applicable if, but for the operation of
such clause, such acquisition would not have been permitted as a result of the
Issuer’s failure to meet the new testing levels set forth in the applicable Zone
of the Collateral Quality Table as a result of the acquisition of such
Additional Loans; provided, further, that (x) the Servicer and the Issuer hereby
expressly agree that each sale of Loans shall be undertaken in accordance with
the Portfolio Acquisition and Disposition Requirements and (y) any sale of Loans
to an Affiliate of the Issuer as described above shall be subject to the limit
set forth in Section 2.09(c) of the Sale and Servicing Agreement.

(iii) the Originator and the Trust Depositor shall have delivered to the Issuer
and the Trustee a Subsequent List of Loans listing the applicable Additional
Loans and an assignment agreement as required by the related Underlying Loan
Agreement indicating that the Issuer is the holder of the related Additional
Loan;

(iv) the Trust Depositor shall have deposited or caused to be deposited in the
Principal and Interest Account all Collections received with respect to the
Additional Loans on and after the related Cut-Off Date;

(v) as of each Cut-Off Date, the Originator is not insolvent nor will it be
rendered insolvent by the transfer of the applicable Additional Loan Assets to
the Trust Depositor on such Cut-Off Date nor is it aware of any pending
insolvency;

(vi) no selection procedures believed by the Originator to be adverse to the
interests of the Holders shall have been utilized in selecting the Additional
Loans; and

(vii) each of the representations and warranties made by the Originator pursuant
to Sections 3.02 (including without limitation that each such Additional Loan is
an Eligible Loan) and 3.04 applicable to the Additional Loans shall be true and
correct as of the related Cut-Off Date.

(d) The Originator shall, at its own expense, on or prior to the related Cut-Off
Date, indicate in its Computer Records that ownership of the applicable
Additional Loans identified on the Subsequent List of Loans has been sold by the
Originator to the Trust Depositor and by the Trust Depositor to the Issuer
pursuant to the Transfer and Servicing Agreements.

(e) The Originator shall deliver prior written notice of the inclusion of an
Additional Loan to Moody’s, Fitch and S&P.

 

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Section 2.06 Release of Excluded Amounts.

The parties acknowledge and agree that the Trust Depositor has no interest in
the Excluded Amounts. Immediately upon the release to the Trust Depositor by the
Issuer of the Excluded Amounts, the Trust Depositor hereby irrevocably agrees to
release to the Originator such Excluded Amounts, which release shall be
automatic and shall require no further act by the Trust Depositor; provided that
the Trust Depositor shall execute and deliver such instruments of release and
assignment, or otherwise confirming the foregoing release of any Excluded
Amounts, as may be reasonably requested by the Originator.

Section 2.07 Delivery of Documents in the Loan File; Recording of Assignments of
Mortgage.

(a) Subject to the delivery requirements set forth in Section 2.07(b), the
Originator shall deliver, on behalf of the Trust Depositor, possession of all
the Loan Files to the Trustee on behalf of and for the account of the
Noteholders. The Originator shall also identify on the List of Loans (including
any deemed amendment thereof associated with any Additional Loans or Substitute
Loans), whether by attached schedule or marking or other effective identifying
designation, all Loans that are evidenced by such instruments.

(b) With respect to each Loan in the Collateral, on at least two Business Days
before the Closing Date in the case of the Initial Loans and two Business Days
before the related Cut-Off Date in the case of any Additional Loans or
Substitute Loans (or, in each case, such lesser time as shall be acceptable to
the Trustee), the Originator, on behalf of the Trust Depositor, will deliver or
cause to be delivered to the Trustee, to the extent not previously delivered,
each of the documents in the Loan File with respect to such Loan, except that
(i) to the extent required to be delivered pursuant to the Sale and Servicing
Agreement as part of the Required Loan Documents with respect to such Loan, the
original recorded Mortgage, in those instances where a copy thereof certified by
a Responsible Officer of the Originator was delivered to the Trustee as a
Required Loan Document pursuant to clause (b)(iii)(x) of the definition thereof,
will be delivered or caused to be delivered within ten Business Days after
receipt thereof, and in any event within one year after the Closing Date in the
case of the Initial Loans and the related Cut-Off Date in the case of any
Additional Loans or Substitute Loans, and (ii) to the extent required to be
delivered pursuant to the Sale and Servicing Agreement as part of the Required
Loan Documents with respect to such Loan, any intervening Assignments of
Mortgage, in those instances where copies thereof certified by a Responsible
Officer the Originator were delivered to the Trustee as a Required Loan Document
pursuant to clause (b)(iii)(y) of the definition thereof, will be delivered or
caused to be delivered within ten Business Days after the receipt thereof, and
in any event, within one year after the Closing Date in the case of the Initial
Loans and the related Cut-Off Date in the case of any Additional Loans of
Substitute Loans. Notwithstanding the foregoing in clauses (i) and (ii) of this
Section 2.07(b), in those instances where the public recording office retains
the original Mortgage or the intervening Assignments of Mortgage after it has
been recorded, the Originator shall be deemed to have satisfied its obligations
hereunder upon delivery to the Trustee of a copy of such Mortgage or Assignments
of Mortgage certified by the public recording office to be a true copy of the
recorded original thereof.

 

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ARTICLE III

REPRESENTATIONS AND WARRANTIES

The Originator makes, and upon each conveyance of Additional Loans or Substitute
Loans, as applicable, is deemed to make, the representations and warranties in
Section 3.01 through Section 3.04, on which the Trust Depositor will rely in
conveying the Initial Loan Assets on the Closing Date (and, except for the
representations and warranties in Section 3.03 which only apply to the Initial
Loans as of the Closing Date, Additional Loan Assets and Substitute Loan Assets,
as the case may be, on any Cut-Off Date) to the Issuer, and on which the Issuer
and the Securityholders will rely. The Trust Depositor acknowledges that such
representations and warranties are being made by the Originator for the benefit
of the Issuer and the Securityholders.

Such representations and warranties are given as of the execution and delivery
of this Agreement and as of the Closing Date (or Cut-Off Date, as applicable),
but shall survive the sale, transfer and assignment of the Loan Assets to the
Issuer. The repurchase obligation or substitution obligation of the Originator
set forth in Section 6.01 constitutes the sole remedy available for a breach of
a representation or warranty of the Originator set forth in Section 3.01 through
Section 3.04 of this Agreement.

Section 3.01 Representations and Warranties Regarding the Originator.

The Originator represents and warrants that:

(a) Organization and Good Standing. The Originator is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the power to own its assets and to transact the business in
which it is currently engaged. The Originator is duly qualified to do business
as a foreign corporation and is in good standing in each jurisdiction in which
the character of the business transacted by it or properties owned or leased by
it requires such qualification and in which the failure so to qualify would have
a material adverse effect on the business, properties, assets, or condition
(financial or otherwise) of the Originator.

(b) Authorization; Valid Sale; Binding Obligations. The Originator has the power
and authority to make, execute, deliver and perform this Agreement and the other
Transaction Documents to which it is a party and all of the transactions
contemplated under this Agreement and the other Transaction Documents to which
it is a party, and to create the Trust Depositor and cause it to make, execute,
deliver and perform its obligations under this Agreement and the other
Transaction Documents to which it is a party and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Agreement and the other Transaction Documents to which it is a party and to
cause the Trust Depositor to be created. This Agreement shall effect a valid
sale, transfer and assignment of or grant of a security interest in the Loan
Assets from the Originator to the Trust Depositor, enforceable against the
Originator and creditors of and purchasers from the Originator. This Agreement
and the other Transaction Documents to which the Originator is a party
constitute the legal, valid and binding obligation of the Originator enforceable
in accordance with their terms, except as enforcement of such terms may be
limited by applicable Insolvency Laws and general principles of equity, whether
considered in a suit at law or in equity.

 

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(c) No Consent Required. The Originator is not required to obtain the consent of
any other party (other than those that it has already obtained) or any consent,
license, approval or authorization from, or registration or declaration with,
any Governmental Authority (other than those that it has already obtained) in
connection with the execution, delivery, performance, validity or enforceability
of this Agreement or the other Transaction Documents to which it is a party.

(d) No Violations. The execution, delivery and performance by the Originator of
this Agreement and the other Transaction Documents to which it is a party, and
the consummation of the transactions contemplated hereby and thereby, will not
violate in any material respect any Applicable Law applicable to the Originator,
or conflict with, result in a default under or constitute a breach of the
Originator’s organizational documents or the Contractual Obligations to which
the Originator is a party or by which the Originator or any of the Originator’s
properties may be bound, or result in the creation or imposition of any Lien of
any kind upon any of its properties pursuant to the terms of any such
Contractual Obligations, other than as contemplated by the Transaction
Documents.

(e) Litigation. No litigation or administrative proceeding of or before any
court, tribunal or governmental body is currently pending, or to the knowledge
of the Originator threatened, against the Originator or any of its properties or
with respect to this Agreement, the other Transaction Documents to which it is a
party or the Securities (1) that, if adversely determined, would in the
reasonable judgment of the Originator be expected to have a material adverse
effect on the business, properties, assets or condition (financial or otherwise)
of the Originator or the transactions contemplated by this Agreement or the
other Transaction Documents to which the Originator is a party or (2) seeking to
adversely affect the federal income tax or other federal, state or local tax
attributes of the Certificate or Notes.

(f) Solvency. The Originator, at the time of and after giving effect to each
conveyance of Loan Assets hereunder, is Solvent on and as of the date thereof.

(g) Taxes. The Originator has filed or caused to be filed all tax returns which,
to its knowledge, are required to be filed and has paid all taxes shown to be
due and payable 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 or any of
its property by any Governmental Authority (other than any amount of tax due,
the validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which reserves in accordance with generally
accepted accounting principles have been provided on the books of the
Originator); no tax Lien has been filed and, to the Originator’s knowledge, no
claim is being asserted, with respect to any such tax, fee or other charge.

(h) Place of Business; No Changes. The Originator’s location (within the meaning
of Article 9 of the UCC) is the State of Delaware. The Originator has not
changed its name, whether by amendment of its Certificate of Incorporation, by
reorganization or otherwise, and has not changed its location within the four
months preceding the Closing Date.

(i) Not an Investment Company. Neither the Originator nor the pool of Loan
Assets is required to be registered as an “investment company” within the
meaning of the 1940 Act.

 

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(j) Sale Treatment. Other than for accounting and tax purposes, the Originator
has treated the transfer of Loan Assets to the Trust Depositor for all purposes
as a sale and purchase on all of its relevant books and records.

(k) Security Interest.

(i) This Agreement creates a valid and continuing security interest (as defined
in the applicable UCC) in favor of the Trust Depositor in all right, title and
interest of the Originator in the Loan Assets, which security interest is prior
to all other Liens (except for Permitted Liens), and is enforceable as such
against creditors of and purchasers from the Originator;

(ii) the Loans, along with the related Loan Files, constitute either a “general
intangible,” an “instrument,” an “account,” “investment property,” or “chattel
paper,” within the meaning of the applicable UCC;

(iii) the Originator owns and has, and upon the sale and transfer thereof by the
Originator to the Trust Depositor, the Trust Depositor will have good and
marketable title to such Loan Assets free and clear of any Lien (other than
Permitted Liens), claim or encumbrance of any Person;

(iv) the Originator has received all consents and approvals required by the
terms of the Loan Assets to the sale of the Loan Assets hereunder to the Trust
Depositor;

(v) the Originator has caused the filing of all appropriate financing statements
in the proper filing office in the appropriate jurisdictions under Applicable
Law in order to perfect the security interest in such Loan Assets granted to the
Trust Depositor under this Agreement to the extent perfection can be achieved by
filing a financing statement;

(vi) other than the security interest granted to the Trust Depositor pursuant to
this Agreement, the Originator has not pledged, assigned, sold, granted a
security interest in or otherwise conveyed any of such Loan Assets, except in
connection with the Warehouse Facilities, which security interests will be
terminated and released on or prior to the applicable Transfer Date. The
Originator has not authorized the filing of and is not aware of any financing
statements naming the Originator as debtor that include a description of
collateral covering such Loan Assets other than any financing statement
(A) relating to the security interest granted to the Trust Depositor under this
Agreement, or (B) that has been terminated or for which a release or partial
release has been filed. The Originator is not aware of the filing of any
judgment or tax Lien filings against the Originator;

(vii) all original executed copies of each Underlying Note (if any) that
constitute or evidence the Loan Assets have been delivered to the Trustee and,
in the case of Noteless Loans, the documents required pursuant to clause
(b)(i)(y)(A) of the definition of Required Loan Documents have been delivered to
the Trustee;

(viii) except with respect to Noteless Loans, the Originator has received a
written acknowledgment from the Trustee that the Trustee or its bailee is
holding any Underlying Notes that constitute or evidence any Loan Assets solely
on behalf of and for the benefit of the Securityholders; and

 

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(ix) none of the Underlying Notes that constitute or evidence any Loan Assets
has any marks or notations indicating that they have been pledged, assigned or
otherwise conveyed to any Person other than the Trust Depositor.

(l) Value Given. The cash payment and the corresponding increase in the
Originator’s equity interest in the Trust Depositor received by the Originator
in respect of the purchase price the Loans sold hereunder constitutes reasonably
equivalent value in consideration for the transfer to the Trust Depositor of
such Loans under this Agreement, such transfer was not made for or on account of
an antecedent debt owed by the Originator to the Trust Depositor, and such
transfer was not and is not voidable or subject to avoidance under any
Insolvency Law.

(m) No Defaults. The Originator is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency, which default might have consequences that
would materially and adversely affect the condition (financial or otherwise) or
operations of the Originator or its respective properties or might have
consequences that would materially and adversely affect its performance
hereunder.

(n) Bulk Transfer Laws. The transfer, assignment and conveyance of the Loans by
the Originator pursuant to this Agreement are not subject to the bulk transfer
laws or any similar statutory provisions in effect in any applicable
jurisdiction.

(o) Origination and Collection Practices. The origination and collection
practices used by the Originator and any of its Affiliates with respect to each
Loan have been consistent with the Servicing Standard and comply in all material
respects with the Credit and Collection Policy.

(p) [Reserved].

(q) Lack of Intent to Hinder, Delay or Defraud. Neither the Originator nor any
of its Affiliates sold, or will sell, any interest in any Loan with any intent
to hinder, delay or defraud any of their respective creditors.

(r) Nonconsolidation. The Originator conducts its affairs such that the Trust
Depositor would not be substantively consolidated in the estate of the
Originator and their respective separate existences would not be disregarded in
the event of the Originator’s bankruptcy.

(s) Accuracy of Information. All written factual information heretofore
furnished by the Originator for purposes of or in connection with this Agreement
or the other Transaction Documents to which the Originator is a party, or any
transaction contemplated hereby or thereby is, and all such written factual
information hereafter furnished by the Originator to any party to the
Transaction Documents will be, true and accurate in all material respects, on
the date such information is stated or certified.

 

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The representations and warranties set forth in Section 3.01(k) may not be
waived by any Person and shall survive the termination of this Agreement. The
Originator and the Trust Depositor (i) shall not, without satisfaction of the
S&P Rating Condition with respect thereto, waive any breach of the
representations and warranties in Section 3.01(k), and (ii) shall provide S&P
with prompt written notice upon obtaining knowledge of any breach of the
representations and warranties set out in Section 3.01(k).

Section 3.02 Representations and Warranties Regarding Each Loan and as to
Certain Loans in the Aggregate.

The Originator represents and warrants (x) with respect to Sections 3.02(a) and
(b) as to each Loan as of the Closing Date, and as of each Cut-Off Date with
respect to each Additional Loan and each Substitute Loan, and (y) with respect
to Section 3.02(c), as to the Initial Loans in the aggregate as of the Closing
Date, and as of each Cut-Off Date with respect to Additional Loans and
Substitute Loans (after giving effect to the addition of such Additional Loans
and Substitute Loans to the Collateral), that:

(a) List of Loans. The information set forth in the List of Loans attached to
the Sale and Servicing Agreement as Exhibit G (as the same may be amended or
deemed amended in respect of a conveyance of Additional Loans or Substitute
Loans on a Cut-Off Date) is true, complete and correct as of the Closing Date,
in the case of the Initial Loans, or the applicable Cut-Off Date in the case of
Additional Loans or Substitute Loans.

(b) Eligible Loan. Such Loan satisfies the criteria for the definition of
Eligible Loan as of the date of its conveyance hereunder; provided that this
representation and warranty is made to the Originator’s actual knowledge with
respect to clause (y) and clauses (vi), (vii), (x) and (xiv) of clause (hh) of
the definition of Eligible Loan; provided further that this representation and
warranty is made to the Originator’s actual knowledge as it relates to the
origination and servicing practices of the servicers primarily responsible for
servicing Third Party Agented Loans with respect to clauses (g), (h), (z), (cc)
and clauses (ii), (v), (vi), (vii) and (xx) of clause (hh) of the definition of
Eligible Loan.

(c) Loans Secured by Real Property. Less than 40% of the Aggregate Outstanding
Loan Balance of the Initial Loans as of the Closing Date consists of Loans
principally secured by real property, and the Originator will not effectuate the
transfer of an Additional Loan or a Substitute Loan if such transfer would cause
more than 40% of the Aggregate Outstanding Loan Balance of the Loans included in
the Collateral as of any Cut-Off Date to consist of Loans principally secured by
real property.

Section 3.03 Representations and Warranties Regarding the Initial Loans in the
Aggregate.

The Originator represents and warrants, on the Closing Date, that as of the
Closing Date, the Initial Loans have the following additional characteristics:
(i) no Loan has a remaining maturity of more than 120 months; (ii) the date of
the final Scheduled Payment on the Loan with the latest maturity is not later
than December 31, 2013 and (iii) no Loan was originated after the Closing Date.

 

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Section 3.04 Representations and Warranties Regarding the Required Loan
Documents.

The Originator represents and warrants on the Closing Date with respect to the
Initial Loans (or as of the related Cut-Off Date, with respect to Additional
Loans and Substitute Loans), that except as otherwise provided in Section 2.07,
the Required Loan Documents and each other item identified on each Loan
Checklist with respect to the Loan File for each Loan are in the possession of
the Trustee.

Section 3.05 [Reserved].

Section 3.06 Representations and Warranties Regarding the Trust Depositor.

By its execution of this Agreement, the Trust Depositor represents and warrants
to the Originator that:

(a) Organization and Good Standing. The Trust Depositor is a limited liability
company duly organized, validly existing and in good standing under the laws of
Delaware and has the power to own its assets and to transact the business in
which it is currently engaged. The Trust Depositor is duly qualified to do
business as a foreign entity and is in good standing in each jurisdiction in
which the character of the business transacted by it or properties owned or
leased by it requires such qualification and in which the failure so to qualify
would have a material adverse effect on the business, properties, assets or
condition (financial or other) of the Trust Depositor or the Issuer.

(b) Authorization; Valid Sale; Binding Obligations. The Trust Depositor has the
power and authority to make, execute, deliver and perform this Agreement and the
other Transaction Documents to which it is a party and all of the transactions
contemplated under this Agreement and the other Transaction Documents to which
it is a party, and to create the Issuer and cause it to make, execute, deliver
and perform its obligations under this Agreement and the other Transaction
Documents to which the Issuer is a party, and the Trust Depositor has taken all
necessary limited liability company action to authorize the execution, delivery
and performance of this Agreement and the other Transaction Documents to which
it is a party and to cause the Issuer to be created. This Agreement shall effect
a valid sale, transfer and assignment of or grant a security interest in the
Loan Assets from the Trust Depositor to the Issuer. This Agreement and the other
Transaction Documents to which the Trust Depositor is a party constitute the
legal, valid and binding obligation of the Trust Depositor enforceable in
accordance with their respective terms, except as enforcement of such terms may
be limited by applicable Insolvency Laws and general principles of equity,
whether considered in a suit at law or in equity.

(c) No Consent Required. The Trust Depositor is not required to obtain the
consent of any other party (other than those that it has already obtained) or
any consent, license, approval or authorization from, or registration or
declaration with, any Governmental Authority (other than those that it has
already obtained) in connection with the execution, delivery, performance,
validity or enforceability of this Agreement or the other Transaction Documents
to which it is a party.

 

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(d) No Violations. The execution, delivery and performance by the Trust
Depositor of this Agreement and the other Transaction Documents to which it is a
party by the Trust Depositor, and the consummation of the transactions
contemplated hereby and thereby, will not violate in any material respect any
Applicable Law applicable to the Trust Depositor, or conflict with, result in a
default under or constitute a breach of the Trust Depositor’s organizational
documents or any Contractual Obligations to which the Trust Depositor is a party
or by which the Trust Depositor or any of the Trust Depositor’s properties may
be bound, or result in the creation or imposition of any Lien of any kind upon
any of its properties pursuant to the terms of any such Contractual Obligations,
other than as contemplated by the Transaction Documents.

(e) Litigation. No litigation or administrative proceeding of or before any
court, tribunal or governmental body is currently pending, or to the knowledge
of the Trust Depositor threatened, against the Trust Depositor or any of its
properties or with respect to this Agreement, the other Transaction Documents to
which it is a party or the Securities (i) that, if adversely determined, would
in the reasonable judgment of the Trust Depositor be expected to have a material
adverse effect on the business, properties, assets or condition (financial or
otherwise) of the Trust Depositor or the Issuer or the transactions contemplated
by this Agreement or the other Transaction Documents to which the Trust
Depositor is a party or (ii) seeking to adversely affect the federal income tax
or other federal, state or local tax attributes of the Securities.

(f) Solvency. The Trust Depositor, at the time of, and after giving effect to
each conveyance of Loan Assets under the Sale and Servicing Agreement, is as of
the date hereof and as of such other dates, Solvent.

(g) Taxes. The Trust Depositor has filed or caused to be filed all tax returns
which, to its knowledge, are required to be filed and has put all taxes shown to
be due and payable 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 or any
of its property by any Governmental Authority (other than any amount of tax due,
the validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which reserves in accordance with generally
accepted accounting principles have been provided on the books of the Trust
Depositor); no tax Lien has been filed and, to the Trust Depositor’s knowledge,
no claim is being asserted, with respect to any such tax, fee or other charge.

(h) Place of Business; No Changes. The Trust Depositor’s location (within the
meaning of Article 9 of the UCC) is the State of Delaware. The Trust Depositor
has not changed its name, whether by amendment of its certificate of formation,
by reorganization or otherwise, and has not changed its location, within the
four months preceding the Closing Date.

(i) Not an Investment Company. The Trust Depositor is not and, after giving
effect to the transactions contemplated by the Transaction Documents, will not
be required to be registered as an “investment company” within the meaning of
the 1940 Act.

(j) Sale Treatment. Other than for accounting and tax purposes, the Trust
Depositor has treated the transfer of Loan Assets to the Issuer for all purposes
as a sale and purchase on all of its relevant books and records and other
applicable documents.

 

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ARTICLE IV

PERFECTION OF TRANSFER AND

PROTECTION OF SECURITY INTERESTS

Section 4.01 Custody of Loans.

The contents of each Loan File shall be held in the custody of the Trustee under
the terms of the Sale and Servicing Agreement for the benefit of, and as agent
for, the Securityholders.

Section 4.02 Filing.

On or prior to the Closing Date, the Originator shall cause the UCC financing
statement(s) referred to in Section 2.02(f) hereof to be filed. Notwithstanding
the obligations of the Originator set forth in the preceding sentence, the Trust
Depositor hereby authorizes the Servicer to prepare and file, at the expense of
the initial Servicer, UCC financing statements (including but not limited to
renewal, continuation or in lieu statements) and amendments or supplements
thereto or other instruments as the Servicer may from time to time deem
necessary or appropriate in order to perfect and maintain the security interest
granted hereunder in accordance with the UCC.

Section 4.03 Changes in Name, Corporate Structure or Location.

(a) During the term of this Agreement, the Originator shall not change its name,
principal place of business, form of organization, existence, state of formation
or location without first giving at least 30 days’ prior written notice to the
Trust Depositor and Servicer.

(b) If any change in the Originator’s name, form of organization, existence,
state of formation, location or other action would make any financing or
continuation statement or notice of ownership interest or Lien relating to any
Loan Asset seriously misleading within the meaning of applicable provisions of
the UCC or any title statute, the Originator, or the Servicer on its behalf, no
later than five Business Days after the effective date of such change, shall
file such amendments as may be required (including, but not limited to, any
filings and other acts necessary or advisable under the UCC of each relevant
jurisdiction) to preserve and protect the Trust Depositor’s and the Issuer’s
interests in the Loan Assets and the proceeds thereof.

Section 4.04 Costs and Expenses.

The initial Servicer will be obligated to pay all reasonable costs and
disbursements in connection with the perfection and the maintenance of
perfection, as against all third parties, of the Trust Depositor’s and Issuer’s
right, title and interest in and to the Loan Assets (including, without
limitation, the security interests in the Related Property related thereto and
the security interests provided for in the Indenture); provided, however, to the
extent permitted by the Underlying Loan Agreements, the Servicer may seek
reimbursement for such costs and disbursements from the related Obligors.

 

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Section 4.05 Sale Treatment.

Other than for accounting and tax purposes, the Originator shall treat the
transfer of Loan Assets made hereunder for all purposes as a sale and purchase
on all of its relevant books and records.

Section 4.06 Separateness from Trust Depositor.

The Originator agrees to take or refrain from taking or engaging in with respect
to the Trust Depositor, each of the actions or activities specified in the
“substantive consolidation” opinion of Winston & Strawn LLP (including any
certificates of the Originator delivered in connection therewith) delivered on
the Closing Date, upon which the conclusions therein are based.

ARTICLE V

COVENANTS OF THE ORIGINATOR

Section 5.01 Corporate Existence.

During the term of this Agreement, the Originator will keep in full force and
effect its existence, rights and franchises as a corporation under the laws of
the jurisdiction of its formation and will obtain and preserve its qualification
to do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, the
other Transaction Documents and each other instrument or agreement necessary or
appropriate to the proper administration of this Agreement and the transactions
contemplated hereby. In addition, all transactions and dealings between the
Originator and the Trust Depositor will be conducted on an arm’s-length basis.

Section 5.02 Loans Not to Be Evidenced by Promissory Notes.

The Originator will take no action to cause any Loan not originally evidenced by
an Underlying Note to be evidenced by an instrument (as defined in the UCC),
except in connection with the enforcement or collection of such Loan.

Section 5.03 Security Interests.

The Originator will not sell, pledge, assign or transfer to any Person other
than the Trust Depositor, or grant, create, incur, assume or suffer to exist any
Lien on any Loan in the Collateral or its interest in any Related Property,
other than the Lien granted to the Trust Depositor, whether now existing or
hereafter transferred to the Trust Depositor, or any interest therein. The
Originator will promptly notify the Trust Depositor upon obtaining knowledge of
the existence of any Lien on any Loan in the Collateral or its interest in any
Related Property; and the Originator shall defend the right, title and interest
of the Trust Depositor in, to and under the Loans in the Collateral and the
Trust Depositor’s interest in any Related Property, against all claims of third
parties; provided that nothing in this Section 5.03 shall prevent or be deemed
to prohibit the Originator from suffering to exist Permitted Liens upon any of
the Loans in the Collateral or its interest in any Related Property.

 

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Section 5.04 Compliance with Law.

The Originator hereby agrees to comply in all material respects with all
Applicable Law applicable to the Originator except where the failure to do so
would not have a material adverse effect on the Securityholders.

Section 5.05 Liability of Originator.

The Originator shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Originator under this Agreement.

Section 5.06 Limitation on Liability of Originator and Others.

The Originator and any director, officer, employee or agent of the Originator
may rely in good faith on any document of any kind, prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Originator and any director, officer, employee or agent of the Originator
shall be reimbursed by the Trust Depositor for any liability or expense incurred
by reason of the Trust Depositor’s willful misfeasance, bad faith or negligence
(except errors in judgment) in the performance of its respective duties
hereunder, or by reason of reckless disregard of its obligations and duties
hereunder. The Originator shall not be under any obligation to appear in,
prosecute or defend any legal action that shall not be incidental to its
obligations under this Agreement, and that in its opinion may involve it in any
expense or liability.

Section 5.07 Reserved.

Section 5.08 Merger or Consolidation of Originator; Change-in-Control.

(a) The Originator will keep in full force and effect its existence, rights and
franchise as a Delaware corporation, and the Originator will obtain and preserve
its qualification to do business as a foreign corporation in each jurisdiction
in which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement and of any of the Loans and to perform its
duties under this Agreement.

(b) Any Person into which the Originator may be merged or consolidated, or any
Person resulting from such merger, conversion or consolidation to which the
Originator is a party, or any Person succeeding to substantially all of the
business of the Originator shall be the successor to the Originator hereunder,
without execution or filing of any paper or any further act on the part of any
of the parties hereto, notwithstanding anything herein to the contrary; provided
that no such merger, conversion or consolidation of the Originator or transfer
of all or substantially all of its assets or its business shall be permitted
hereunder unless the Rating Agency Condition is satisfied with respect thereto
or unless the Originator, so long as the Originator is the Servicer, appoints a
Successor Servicer which meets the requirements to become a Successor Servicer
and such Successor Servicer accepts such appointment to become Servicer and the
Rating Agency Condition is satisfied with respect thereto. Such Successor
Servicer shall be a permitted assignee of the Servicer.

 

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Section 5.09 Delivery of Collections.

The Originator agrees to deliver to the Servicer promptly (but in no event later
than two Business Days after receipt) all Collections received by the Originator
in respect of a Loan, for application in accordance with Section 7.05 of the
Sale and Servicing Agreement.

Section 5.10 Underlying Custodial Agreements.

The Originator agrees to fully cooperate with the Trust Depositor, the Issuer
and the Trustee, and from and after the occurrence and during the continuance of
an Event of Default or Servicer Default to take such actions as may be requested
in the sole and absolute discretion of the Trust Depositor, the Issuer or the
Trustee, under any Underlying Loan Agreements, including taking any and all
actions that may be requested by the Trust Depositor, the Issuer or the Trustee
in connection with the preparation, filing and recording of any Assignments of
Mortgage held by any underlying custodians. The Originator further agrees to
fully cooperate with the Trust Depositor, the Issuer and the Trustee, and from
and after the occurrence and during the continuance of an Event of Default or
Servicer Default to take such actions as may be requested in the sole and
absolute discretion of the Trust Depositor, the Issuer or the Trustee to cause
to be defended, enforced, preserved and protected the rights and privileges of
the Trust Depositor, the Issuer, the Trustee and the Secured Parties under or
with respect to the Underlying Loan Agreements and any underlying loan documents
or other collateral held by the underlying custodians.

Section 5.11 Payments from Concentration Account.

The Originator agrees not to make, or consent to, any change in the direction
of, or instructions with respect to, any payments to be made by an Obligor in
any manner that would diminish, impair, delay or otherwise adversely affect the
timing or receipt of such payments into a Concentration Account without the
prior written consent of the Trustee and with the consent of the Majority
Noteholders; provided that if the Originator changes the Qualified Institution
in which the Concentration Account is held, the Originator may provide
instructions to Obligors to make payments to such new Concentration Account.

ARTICLE VI

REMEDIES UPON MISREPRESENTATION; REPURCHASE OPTION

Section 6.01 Repurchases of, or Substitution for, Loans for Breach of
Representations and Warranties.

Upon a discovery by a Responsible Officer of the Servicer or any subservicer, a
Responsible Officer of the Owner Trustee or a Responsible Officer of the Trustee
of a breach of (i) a representation or warranty as set forth in Sections 3.01,
3.02, 3.03 or 3.04 or as made or deemed made relating to Additional Loans or
Substitute Loans that materially and adversely affects the value of the Loans or
the interests of the Securityholders therein or which materially and adversely
affects the interests of the Securityholders in the related Loan in the case of
a representation or warranty relating to a particular Loan (notwithstanding that
such representation or warranty was made to the Originator’s actual knowledge)
or (ii) the failure of any Participated Loan (other than a Qualified
Participated Loan) to be converted to a full assignment within 60 days following
the Closing Date (or related Cut-Off Date, if applicable) (each Loan in

 

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clauses (i) and (ii) above, an “Ineligible Loan”), the party discovering the
breach shall give prompt written notice to the other parties and to the
Originator; provided that neither the Owner Trustee nor the Trustee shall have a
duty or obligation to inquire or to investigate the breach of any of such
representations or warranties. Within 30 days of the earlier of (x) its
discovery or (y) its receipt of notice of any breach of a representation or
warranty or a failure of any Participated Loan (other than a Qualified
Participated Loan) to be converted to a full assignment, the Originator shall
(a) promptly cure such breach in all material respects, (b) repurchase each such
Ineligible Loan by depositing on behalf of the Trust Depositor in the Principal
and Interest Account, within such 30 day period, an amount equal to the Transfer
Deposit Amount, or (c) remove such Loan from the Collateral and effect a
substitution for such affected Loan with a Substitute Loan in accordance with
the substitution requirements set forth in Section 2.04 not later than the date
a repurchase of such affected Loan would be required hereunder or otherwise
within the time period required by Section 2.04; provided that with respect to a
breach of a representation or warranty relating to the Loans in the aggregate
and not to any particular Loan, the Originator may select Loans (without adverse
selection) to repurchase (or substitute for) such that had such Loans not been
included as part of the Loan Assets (and, in the case of a substitution, had
such Substitute Loan been included as part of the Loan Assets instead of the
selected Loan) there would have been no breach of such representation or
warranty.

Section 6.02 Reassignment of Repurchased or Substituted Loans.

Upon receipt by the Trustee for deposit in the Principal and Interest Account of
the amounts described in Section 6.01, (or upon the Cut-Off Date related to a
Substitute Loan described in Section 6.01), and upon receipt of an Officer’s
Certificate of the Servicer in the form attached as Exhibit F to the Sale and
Servicing Agreement, the Trustee shall assign to the Trust Depositor and the
Trust Depositor shall assign to the Originator all of the Issuer’s (or Trust
Depositor’s, as applicable) right, title and interest in the repurchased or
substituted Loan and related Loan Assets without recourse, representation or
warranty. Such reassigned Loan shall no longer thereafter be included in any
calculations of Outstanding Loan Balances or otherwise be deemed a part of the
Collateral.

ARTICLE VII

INDEMNIFICATION BY THE ORIGINATOR

Section 7.01 Indemnification.

The Originator agrees to indemnify, defend and hold the Trust Depositor, its
officers, directors, employees and agents (any one of which is an “Indemnified
Party”) harmless from and against any and all claims, losses, penalties, fines,
forfeitures, reasonable legal fees and related costs, judgments (provided that
any indemnification for damages is limited to actual damages, not consequential,
special or punitive damages), reasonable legal fees and related costs and any
other reasonable costs, fees and expenses that such Person may sustain as a
result of the Originator’s fraud or the failure of the Originator to perform its
duties in compliance with the terms of this Agreement, except to the extent
arising from the gross negligence, willful misconduct or fraud by the Person
claiming indemnification. Any Person seeking indemnification hereunder shall
promptly notify the Originator if such Person receives a

 

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complaint, claim, compulsory process or other notice of any loss, claim, damage
or liability giving rise to a claim of indemnification hereunder but failure to
provide such notice shall not relieve the Originator of its indemnification
obligations hereunder unless the Originator is deprived of material substantive
or procedural rights or defenses as a result thereof. The Originator shall
assume (with the consent of the Indemnified Party, such consent not to be
unreasonably withheld) the defense and any settlement of any such claim and pay
all expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against the Indemnified Party in respect of such claim. If the consent of the
Indemnified Party required in the immediately preceding sentence is unreasonably
withheld, the Originator is relieved of its indemnification obligations
hereunder with respect to such Person. The parties agree that the provisions of
this Section 7.01 shall not be interpreted to provide recourse to the Originator
against loss by reason of the bankruptcy, insolvency or lack of creditworthiness
of an Obligor with respect to a Loan. The Originator shall have no liability for
making indemnification hereunder to the extent any such indemnification
constitutes recourse for uncollectible or uncollected Loans.

Section 7.02 Liabilities to Obligors.

Except with respect to the funding commitment assumed by the Issuer with respect
to any Delayed Draw Term Loan or Revolving Loan, no obligation or liability to
any Obligor under any of the Loans is intended to be assumed by the Trustees,
the Issuer or the Securityholders under or as a result of this Agreement and the
transactions contemplated hereby.

Section 7.03 Operation of Indemnities.

If the Originator has made any indemnity payments to an Indemnified Party
pursuant to this Article VII and such Indemnified Party thereafter collects any
such amounts from others, such Indemnified Party will repay such amounts
collected to the Originator, except that any payments received by such
Indemnified Party from an insurance provider as a result of the events under
which the Originator’s indemnity payments arose shall be repaid prior to any
repayment of the Originator’s indemnity payment.

ARTICLE VIII

MISCELLANEOUS

Section 8.01 Amendment.

(a) This Agreement may be amended from time to time by the parties hereto by
written agreement, with the prior written consent of the Trustee but without
notice to or consent of the Securityholders, to cure any ambiguity, to correct
or supplement any provisions herein, to comply with any changes in the Code, to
conform this Agreement to the Offering Memorandum, or to make any other
provisions with respect to matters or questions arising under this Agreement
which shall not be inconsistent with the provisions of this Agreement; provided
that such action shall not, as evidenced by an Opinion of Counsel delivered to
the Trustee, materially adversely affect the interests of any Securityholder
(which Opinion of Counsel may rely upon an Officer’s Certificate with respect to
the effect

 

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of any such amendment on the economic interests of any Securityholders); and
further, provided, that no such amendment shall reduce in any manner the amount
of, or delay the timing of, any amounts received on Loans which are required to
be distributed on any Note or Certificate without the consent of the Holder of
such Note or Certificate, or change the rights or obligations of any other party
hereto without the consent of such party.

(b) Except as provided in Section 8.01(a) hereof, this Agreement may be amended
from time to time by the parties hereto by written agreement, with the prior
written consent of the Trustee and with the consent of the Majority Noteholders,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of the Notes or Certificates; provided,
however, that (i) no such amendment shall reduce in any manner the amount of, or
delay the timing of, any amounts which are required to be distributed on any
Note or Certificate without the consent of the Holder of such Note or
Certificate or reduce the percentage of Holders of any Note or Certificate which
are required to consent to any such amendment without the consent of the Holders
of 100% of the Notes affected thereby and (ii) no amendment affecting only one
Class shall require the approval of the Holders of any other Class.

(c) Prior to the execution of any amendment pursuant to this Section 8.01, the
Originator shall obtain written confirmation from Moody’s and S&P that entry
into such amendment satisfies the Moody’s Rating Condition and the S&P Rating
Condition.

(d) Promptly after the execution of any such amendment or consent, the
Originator shall cause written notification of the substance of such amendment
or consent to be furnished to the Noteholders and Fitch by the Trustee and to
the Certificateholders by the Owner Trustee. It shall not be necessary for the
consent of any Securityholders required pursuant to Section 8.01(b) to approve
the particular form of any proposed amendment or consent, but it shall be
sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization by the
Securityholders of the execution thereof shall be subject to such reasonable
requirements as the Trustee may prescribe for the Noteholders and as the Owner
Trustee may prescribe for the Certificateholders.

(e) Prior to the execution of any amendment to this Agreement, the Owner Trustee
and the Trustee shall be entitled to receive and rely upon an Opinion of Counsel
(which Opinion of Counsel may rely upon an Officer’s Certificate with respect to
the effect of any such amendment on the economic interests of any
Securityholders) stating that the execution of such amendment is authorized or
permitted by this Agreement. Each of the Trustee and the Owner Trustee may, but
shall not be obligated to, enter into or consent to any such amendment that
affects such Person’s own rights, duties or immunities under this Agreement or
otherwise.

Section 8.02 Governing Law.

(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE
PARTIES UNDER THE AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS,
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS.

 

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(b) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT. EACH PARTY HERETO (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 8.02(B).

Section 8.03 Notices.

All notices, demands, certificates, requests and communications hereunder
(“notices”) shall be in writing and shall be effective (a) upon receipt when
sent through the U.S. mails, registered or certified mail, return receipt
requested, postage prepaid, with such receipt to be effective the date of
delivery indicated on the return receipt, (b) one Business Day after delivery to
an overnight courier, (c) on the date personally delivered to a Responsible
Officer of the party to which sent, or (d) on the date transmitted by legible
telecopier or electronic mail transmission with a confirmation of receipt, in
all cases addressed to the recipient as follows:

 

  (i) if to the Servicer and the Originator:

NewStar Financial, Inc.

500 Boylston Street

Boston, Massachusetts 02116

Attention: David K. Roberts

Facsimile No.: (617) 848-4300

 

  (ii) if to the Trust Depositor:

NewStar Commercial Loan LLC 2007-1

500 Boylston Street

Boston, Massachusetts 02116

Attention: David K. Roberts

Facsimile No.: (617) 848-4300

 

  (iii) if to the Trustee:

U.S. Bank National Association

One Federal Street, 3rd Floor

Boston, Massachusetts 02110

Attention: Corporate Trust Services

Facsimile No.: (503) 258-6028

 

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  (iv) if to the Owner Trustee:

Wilmington Trust Company

1100 North Market Street

Wilmington, Delaware 19890

Attention: Corporate Trust Administration

Facsimile No.: (302) 636-4140

with a copy to:

the Originator and the Servicer as provided in clause (i) above

 

  (v) if to the Issuer:

NewStar Commercial Loan Trust 2007-1

c/o Wilmington Trust Company

1100 North Market Street

Wilmington, Delaware 19890

Attention: Corporate Trust Administration

Facsimile No.: (302) 636-4140

with a copy to:

the Originator and the Servicer as provided in clause (i) above

 

  (vi) if to S&P:

Standard and Poor’s Inc.

55 Water Street

41st Floor

New York, New York 10041

Attention: CDO Surveillance

Facsimile No.: (212) 438-2662

with an electronic copy to:

Email: cdo_surveillance@sandp.com

 

  (vii) if to Moody’s:

Moody’s Investors Service

99 Church Street

New York, New York 10007

Attention: ABS Monitoring Department

Facsimile No.: (212) 553-0344

Email: cdomonitoring@moodys.com

 

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  (viii) if to Fitch:

Derivative Fitch, Inc.

One State Street Plaza – 28th Floor

New York, New York 10004

Attention: CDO Surveillance

Facsimile No.: (212) 514-6501

Email: cdo.surveillance@derivativefitch.com

 

  (ix) if to the Initial Purchasers:

Citigroup Global Markets Inc.

390 Greenwich Street

New York, New York 10013

Attention: Asset-Backed Finance

Facsimile No.: (212) 723-8591; and

Wachovia Capital Markets, LLC

One Wachovia Center, Mail Code: NC0602

301 South College Street

Charlotte, North Carolina 28288-0610

Attention: Structured Credit Products

Facsimile No.: (704) 374-6495

Each party hereto may, by notice given in accordance herewith to each of the
other parties hereto, designate any further or different address to which
subsequent notices shall be sent.

Section 8.04 Severability of Provisions.

If one or more of the covenants, agreements, provisions or terms of this
Agreement shall be for any reason whatsoever prohibited or held invalid or
unenforceable, then such covenants, agreements, provisions or terms shall be
deemed severable from the remaining covenants, agreements, provisions or terms
of this Agreement and shall in no way affect the validity or enforceability of
the other provisions of this Agreement, the Notes or Certificates or the rights
of the Securityholders, and any such prohibition, invalidity or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such covenant,
agreement, provision or term in any other jurisdiction.

Section 8.05 Third Party Beneficiaries.

Except as otherwise specifically provided herein, the parties hereto hereby
manifest their intent that no third party (other than the Issuer, the Trustee
and the Owner Trustee) shall be deemed a third party beneficiary of this
Agreement, and specifically that the Obligors are not third party beneficiaries
of this Agreement.

 

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Section 8.06 Counterparts.

This Agreement may be executed by facsimile signature and in several
counterparts, each of which shall be an original and all of which shall together
constitute but one and the same instrument.

Section 8.07 Headings.

The headings of the various Articles and Sections herein are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.

Section 8.08 No Bankruptcy Petition; Disclaimer.

(a) Each of the Originator and the Trust Depositor covenants and agrees that,
prior to the date that is one year and one day (or, if longer, the preference
period then in effect and one day) after the payment in full of all amounts
owing in respect of all outstanding Classes of Notes rated by any Rating Agency,
it will not institute against the Trust Depositor (in the case of the
Originator), or the Issuer, or join any other Person in instituting against the
Trust Depositor or the Issuer, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceedings under the
laws of the United States or any state of the United States. This Section 8.08
will survive the termination of this Agreement.

(b) The provisions of this Section 8.08 shall be for the third party benefit of
those entitled to rely thereon, including the Securityholders, and shall survive
the termination of this Agreement.

Section 8.09 Jurisdiction.

Any legal action or proceeding with respect to this Agreement may be brought in
the courts of the United States for the Southern District of New York, and by
execution and delivery of this Agreement, each party hereto consents, for itself
and in respect of its property, to the non-exclusive jurisdiction of those
courts. Each such party irrevocably waives any objection, including any
objection to the laying of venue or based on the grounds of forum non
conveniens, which it may now or hereafter have to the bringing of any action or
proceeding in such jurisdiction in respect of this Agreement or any document
related hereto.

Section 8.10 Prohibited Transactions with Respect to the Issuer.

The Originator shall not:

(a) Provide credit to any Noteholder or Certificateholder for the purpose of
enabling such Noteholder or Certificateholder to purchase Notes or Certificates,
respectively;

(b) Purchase any Notes or Certificates in an agency or trustee capacity; or

(c) Except in its capacity as Servicer as provided in the Sale and Servicing
Agreement, lend any money to the Issuer.

 

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Section 8.11 No Partnership.

Nothing herein contained shall be deemed or construed to create a co-partnership
or joint venture between the parties hereto.

Section 8.12 Successors and Assigns.

This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns.

Section 8.13 Duration of Agreement.

This Agreement shall continue in existence and effect until the termination of
the Sale and Servicing Agreement.

Section 8.14 Limited Recourse.

The obligations of the Trust Depositor and the Originator under this Agreement
and the other Transaction Documents are solely the corporate obligations of the
Trust Depositor and the Originator, respectively. No recourse shall be had for
the payment of any amount owing by the Trust Depositor or the Originator or
otherwise under this Agreement, any other Transaction Document or for the
payment by the Trust Depositor or the Originator of any fee in respect hereof or
thereof or any other obligation or claim of or against the Trust Depositor or
the Originator arising out of or based upon this Agreement or any other
Transaction Document, against any Affiliate, shareholder, partner, manager,
member, director, officer, employee, representative or agent of the Trust
Depositor or the Originator or of any Affiliate of such Person. The provisions
of this Section 8.14 shall survive the termination of this Agreement.

[Remainder of Page Intentionally Left Blank.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers as of the day and year first above
written.

 

NEWSTAR FINANCIAL, INC.,

as the Originator

By:   /s/ John J. Frishkopf Name:   John J. Frishkopf Title:   Treasurer

NEWSTAR COMMERCIAL LOAN LLC 2007-1,

as the Trust Depositor

By:   NewStar Financial, Inc., its designated manager By:   /s/ John J.
Frishkopf Name:   John J. Frishkopf Title:   Treasurer

NewStar Commercial Loan Trust 2007-1

Commercial Loan Sale Agreement

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Exhibit A

Form of Assignment

June 5, 2007

In accordance with the Commercial Loan Sale Agreement (the “Agreement”), dated
as of June 5, 2007, made by and between the undersigned, NewStar Financial,
Inc., as the Originator, and NewStar Commercial Loan LLC 2007-1, as the Trust
Depositor (the “Trust Depositor”), as assignee thereunder, the undersigned does
hereby sell, transfer, convey and assign, set over and otherwise convey to the
Issuer, on behalf of the Trust Depositor, all of the Originator’s right, title
and interest in and to the following:

(i) the Initial Loans, all payments paid in respect thereof and all monies due,
to become due or paid in respect thereof accruing on and after the Closing Date;

(ii) all security interests and Liens and Related Property subject thereto from
time to time purporting to secure payment by Obligors under such Loans;

(iii) all guaranties, indemnities and warranties, and other agreements or
arrangements of whatever character from time to time supporting or securing
payment of such Loans;

(iv) the Transaction Accounts, and the Concentration Account and together with
all cash and investments in each of the foregoing but only to the extent, in
respect of the Concentration Account, relating to the Initial Loans;

(v) all collections and records (including Computer Records) with respect to the
foregoing;

(vi) all documents relating to the applicable Loan Files; and

(vii) all income, payments, proceeds and other benefits of any and all of the
foregoing, including but not limited to, all accounts, cash and currency,
chattel paper, electronic chattel paper, tangible chattel paper, copyrights,
copyright licenses, equipment, fixtures, general intangibles, instruments,
commercial tort claims, deposit accounts, inventory, investment property, letter
of credit rights, software, supporting obligations, accessions, and other
property consisting of, arising out of, or related to the foregoing, but
excluding any Excluded Amount with respect thereto.

Capitalized terms used herein have the meaning given such terms in the
Agreement.

This Assignment is made pursuant to and in reliance upon the representations and
warranties on the part of the undersigned contained in Article III of the
Agreement and no others.

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IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed on the date written above.

 

NEWSTAR FINANCIAL, INC. By:      Name:      Title:     

 

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