Exhibit 10.1

EXECUTION VERSION

MASTER REPURCHASE AGREEMENT

Dated as of October 23, 2018

by and among

DB LOAN NT-II, LLC

and

CLNC CREDIT 5, LLC

individually and/or collectively, as the context requires, as Master Seller,

and

DEUTSCHE BANK AG, CAYMAN ISLANDS BRANCH,

as Buyer

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

TABLE OF CONTENTS

 

            Page  

1.

    

APPLICABILITY

     1  

2.

    

DEFINITIONS

     1  

3.

    

INITIATION; CONFIRMATION; TERMINATION; FEES; EXTENSION

     33  

4.

    

MARGIN MAINTENANCE

     41  

5.

    

INCOME PAYMENTS AND PRINCIPAL PAYMENTS

     43  

6.

    

SECURITY INTEREST

     46  

7.

    

PAYMENT, TRANSFER AND CUSTODY

     48  

8.

    

SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED LOANS

     54  

9.

    

REPRESENTATIONS

     54  

10.

    

NEGATIVE COVENANTS OF SELLER

     60  

11.

    

AFFIRMATIVE COVENANTS OF SELLER

     62  

12.

    

SINGLE-PURPOSE ENTITY

     67  

13.

    

EVENTS OF DEFAULT; REMEDIES

     70  

14.

    

LIMITATIONS ON RECOURSE AGAINST SERIES SELLERS

     79  

15.

    

RECORDING OF COMMUNICATIONS

     79  

16.

    

NOTICES AND OTHER COMMUNICATIONS

     79  

17.

    

ENTIRE AGREEMENT; SEVERABILITY

     80  

18.

    

ASSIGNABILITY

     80  

19.

    

GOVERNING LAW

     82  

20.

    

NO WAIVERS, ETC.

     82  

21.

    

USE OF EMPLOYEE PLAN ASSETS

     82  

22.

    

INTENT

     82  

23.

    

DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

     84  

24.

    

CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

     84  

25.

    

NO RELIANCE

     85  

26.

    

INDEMNITY; SET-OFF

     87  

27.

    

DUE DILIGENCE

     89  

28.

    

SERVICING

     89  

29.

    

TAXES

     91  

30.

    

MISCELLANEOUS

     94  

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

31.

    

ACKNOWLEDGEMENT AND CONSENT TO BAIL-IN OF EEA FINANCIAL INSTITUTIONS

     96  

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

ANNEXES, EXHIBITS AND SCHEDULES

 

ANNEX I

  

Names and Addresses for Communications between Parties

EXHIBIT I

  

Form of Confirmation

EXHIBIT II

  

Authorized Representatives of Seller

EXHIBIT III

  

Financial Reporting Website

EXHIBIT IV

  

Form of Custodial Delivery

EXHIBIT V

  

Form of Power of Attorney

EXHIBIT VI

  

Representations and Warranties Regarding Individual Purchased Loans

EXHIBIT VII

  

Organizational Chart

EXHIBIT VIII

  

Transaction Procedures

EXHIBIT IX

  

Form of Servicer Notice and Agreement

EXHIBIT X

  

Prohibited Transferees

EXHIBIT XI

  

Form of Joinder Agreement

EXHIBIT XII

  

Permitted Fund Managers

EXHIBIT XIII

  

Form of Bailee Letter

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

THIS MASTER REPURCHASE AGREEMENT (this “Agreement”) is dated as of October 23,
2018, by and among DB LOAN NT-II, LLC and CLNC CREDIT 5, LLC, each a Delaware
limited liability company organized in series (individually and/or collectively
as the context may require, “Master Seller”) and DEUTSCHE BANK AG, CAYMAN
ISLANDS BRANCH, a branch of a foreign banking institution (“Buyer”).

WHEREAS, the limited liability company agreement of the Master Seller provides
for the establishment of one or more designated series of limited liability
company interests and assets of the Master Seller (each, a “Series”, each such
Series that executes and delivers a Joinder Agreement (as hereinafter defined)
pursuant to Section 3(n), a “Series Seller”) which may have separate rights,
powers or duties with respect to specified property, including rights to profits
and losses associated with such specified property and obligations under this
Agreement with respect to such specified property, with the assets and
obligations of each such Series Seller accounted for separately in the records
of Master Seller and such Series Seller from the other assets of the Master
Seller and the assets of each other Series Seller; and the debts, liabilities,
obligations and expenses incurred, contracted for or otherwise existing with
respect to each Series Seller shall be enforceable solely against the assets of
such Series Seller except to the extent expressly provided for hereunder. Upon
its execution of a Joinder Agreement pursuant to Section 3(n) of this Agreement,
each such Series Seller shall be bound by all provisions herein with respect to
the assets of such Series Seller and its related obligations in respect of any
Transactions. As used herein, the term “Seller” shall mean the Master Seller
and/or each Series Seller, individually or collectively, as the context may
require.

1.    APPLICABILITY

Subject to the terms and conditions of this Agreement, from time to time the
parties hereto may enter into transactions in which Seller agrees to transfer to
Buyer certain Eligible Loans (as hereinafter defined) on a servicing-released
basis against the transfer of funds by Buyer, with a simultaneous agreement by
Buyer to transfer to Seller such Eligible Loans at a date certain or on demand,
against the transfer of funds by Seller. Master Seller shall designate a Series
Seller for each such transaction in accordance with Section 3(n) of this
Agreement. Each such transaction shall be referred to herein as a “Transaction”
and, unless otherwise agreed in writing, shall be governed by this Agreement,
including any supplemental terms or conditions contained in any exhibits
identified herein as applicable hereunder.

2.    DEFINITIONS

(a)    As used in this Agreement, the following terms shall have the following
meanings:

“1934 Act” shall have the meaning specified in Section 23(a).

“A-Note” shall mean a Mortgage Note evidencing a senior position (or pari passu
senior position) in a Mortgage Loan. Payments with respect to an A-Note shall
not be junior to any other Mortgage Note.

 

1

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

“Accelerated Repurchase Date” shall have the meaning specified in
Section 13(b)(i) of this Agreement.

“Accelerated Transaction Repurchase Date” shall have the meaning specified in
Section 13(c)(i) of this Agreement.

“Accepted Servicing Practices” shall mean with respect to any Purchased Loan,
those mortgage servicing practices of prudent commercial mortgage lending
institutions which service commercial mortgage loans of a substantially similar
type as such Purchased Loan in the jurisdiction where the related Mortgaged
Property is located or as otherwise defined in the applicable Servicing
Agreement.

“Act of Insolvency” shall mean with respect to any Person, (i) the commencement
by such Person as debtor of any case or proceeding under any Bankruptcy Law, or
such Person seeking the appointment or election of a receiver, conservator,
trustee, custodian or similar official for such Person or any substantial part
of its property, (ii) the commencement of any such case or proceeding against
such Person, seeking such an appointment or election, or the filing against such
Person of an application for a protective decree under the provisions of SIPA,
which (A) is consented to or not timely contested by such Person, (B) results in
the entry of an order for relief, such an appointment or election, the issuance
of such a protective decree or the entry of an order having a similar effect
against such Person, or (C) is not dismissed within 60 days, (iii) the making by
such Person of a general assignment for the benefit of its creditors, (iv) the
admission in writing by such Person of such Person’s inability to pay such
Person’s debts as they become due or (v) the taking of action by such Person in
furtherance of any of the foregoing.

“Actual Original Purchase Percentage” shall mean, with respect to any
Transaction, a percentage equal to the lesser of (x) the Maximum Original
Purchase Percentage for such Transaction and (y) a percentage designated by
Seller in its sole and absolute discretion, and set forth in the Confirmation
for such Transaction.

“Additional Confirmation Conditions” shall mean, with respect to each Purchased
Loan, the Additional Confirmation Conditions (if any) set forth in the
Confirmation for the related Transaction.

“Affiliate” shall mean, (i) when used with respect to Seller, Pledgor, Guarantor
or Parent, Parent and its Subsidiaries, or (ii) when used with respect to any
other specified Person, any other Person directly or indirectly Controlling,
Controlled by, or under common Control with, such Person.

“Agreement” shall mean this Master Repurchase Agreement, dated as of October
    , 2018 by and among Seller and Deutsche Bank AG, Cayman Islands Branch, as
same may be amended, modified and/or restated from time to time.

“Allocable Percentage” shall mean, with respect to any Principal Payment on any
Purchased Loan, a fraction (expressed as a percentage) the numerator of which is
the Repurchase Price with respect to such Purchased Loan as in effect
immediately prior to such Principal Payment (net of any accrued Price
Differential and, unless a Facility Event of Default or a Transaction Event of
Default related to such Purchased Loan has occurred and is continuing, excluding
any other

 

2

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

amounts then owing to Buyer), and the denominator of which is the outstanding
principal balance of such Purchased Loan immediately prior to such Principal
Payment.

“Alternate Index” shall mean the floating rate index selected by Buyer that
Buyer intends to use as an alternative to LIBOR for Seller and all similarly
situated counterparties in commercial real estate repurchase facilities;
provided that in no event shall Buyer be required to disclose confidential
information concerning other customers.

“Alternate Index Rate” shall mean, with respect to each Pricing Rate Period, the
per annum rate of interest of the Alternate Index, determined as of the Pricing
Rate Determination Date immediately preceding the commencement of such Pricing
Rate Period; provided that in no event will the Alternate Index Rate be less
than zero.

“Alternate Rate” shall mean, with respect to each Pricing Rate Period, the per
annum rate of interest equal to the sum of the Alternate Index Rate plus the
Alternate Rate Spread.

“Alternate Rate Spread” shall mean, in connection with any conversion of any
Transaction in accordance with the terms hereof to an Alternate Rate
Transaction, the difference (expressed as the number of basis points and
determined at the time of such conversion) between (a) the sum of (i) LIBOR,
determined as of the Pricing Rate Determination Date for which LIBOR was last
applicable to the Transaction, plus (ii) the Applicable Spread minus (b) the
Alternate Index Rate as of such Pricing Rate Determination Date; provided,
however, that if such difference is a negative number, then the Alternate Rate
Spread shall be zero.

“Alternate Rate Transaction” shall mean, with respect to any Pricing Rate
Period, any Transaction with respect to which the Pricing Rate for such Pricing
Rate Period is determined with reference to the Alternate Index.

“Applicable Servicer Account” shall mean, with respect to each Purchased Loan,
the account(s) established by the applicable Servicer into which the related
Mortgagor or other obligor shall be required to remit principal, interest and
other payments due with respect to such Purchased Loan under the related
Purchased Loan Documents.

“Applicable Spread” shall mean, with respect to each Purchased Loan:

 

  (i)

so long as no Event of Default shall have occurred and be continuing, the per
annum rate designated by Buyer in its sole and absolute discretion as the
“Applicable Spread” for such Purchased Loan as set forth in the Confirmation for
such Purchased Loan; and

 

  (ii)

after the occurrence and during the continuance of an Event of Default, the per
annum rate for such Purchased Loan set forth in clause (i) plus 500 basis points
(5.00%).

“Appraisal” shall mean an appraisal of the related underlying Mortgaged Property
from an Independent Appraiser, complying with the requirements of Title XI of
the Federal Financial Institutions Reform, Recovery and Enforcement Act of 1989,
as amended from time to time, and conducted in accordance with the standards of
the American Appraisal Institute.

 

3

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

“Approved Future Funding Amounts” shall have the meaning specified in
Section 3(p) of this Agreement.

Asset Management Agreement” shall mean that certain Management Agreement, dated
as of January 31, 2018, by and among Parent, Guarantor and Manager, or such
other asset management or advisory agreement with respect to CLNS Credit RE
acceptable to Buyer in its reasonable discretion, in each case, as same shall be
amended, modified and/or restated from time to time.

“Assignment of Leases” shall mean, with respect to any Purchased Loan, an
assignment of leases thereunder, notice of transfer or equivalent instrument in
recordable form, sufficient under the laws of the jurisdiction wherein the
Mortgaged Property is located to reflect the assignment of leases.

“Assignment of Mortgage” shall mean, with respect to any Purchased Loan, an
assignment or notice of transfer (or equivalent instrument) of the applicable
Mortgage, in recordable form and otherwise sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
assignment and pledge of the Mortgage, subject to the terms, covenants and
provisions of this Agreement.

“Authorized Representative of Seller” shall mean the individuals listed on
Exhibit II attached hereto, as the same may be revised by Master Seller by
notice to Buyer from time to time.

“Available Income” shall mean, all Income other than (a) the Underlying
Purchased Loan Reserves, (b) Qualified Servicing Expenses, (c) origination fees
and expense deposits paid by Mortgagors in connection with the origination and
closing of the Purchased Loans, (d) any reimbursements by the related Mortgagors
of costs and expenses, and (e) insurance proceeds and condemnation awards from
any Mortgaged Property that are not permitted to be applied to amounts due under
the applicable Purchased Loan pursuant to the applicable Purchased Loan
Documents.

“Bailee” shall mean Ropes & Gray LLP or any other law firm reasonably acceptable
to Buyer that has delivered a Bailee Letter with respect to a Purchased Loan.

“Bailee Letter” shall mean a letter from Seller and acknowledged by Bailee and
Buyer substantially in the form attached hereto as Exhibit XIII.

“Bankruptcy Code” shall mean the United States Bankruptcy Code (11 U.S.C. § 101
et seq.), as amended from time to time or any successor statute or rule
promulgated thereto.

“Bankruptcy Laws” shall mean the Bankruptcy Code or any other United States
bankruptcy, insolvency, reorganization, liquidation, moratorium, dissolution,
delinquency or any similar statute, law, rules, regulations or similar legal
requirements of any other applicable jurisdiction from time to time in effect,
and in each case, as amended from time to time.

“Blocked by Operation of Law” shall mean, with respect to OFAC’s SDN List, any
Person that is in the aggregate owned, directly or indirectly, 50 percent or
greater by a Person or Persons that are either identified on the SDN List or
themselves blocked Persons.

 

4

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

“Business Day” shall mean a day other than (i) a Saturday or Sunday, or (ii) a
day in which the New York Stock Exchange or banks in the State of New York are
authorized or obligated by law or executive order to be closed. When used with
respect to a Pricing Rate Determination Date, “Business Day” shall mean any day
other than a Saturday, a Sunday or a day on which banks in London, England are
closed for interbank or foreign exchange transactions.

“Buyer” shall mean Deutsche Bank AG, Cayman Islands Branch, or any successor or
assignee thereof.

“Cash Flow Deficiency” shall mean, with respect to any Purchased Loan as of any
Remittance Date, the amount (if any) by which (i) the total of all amounts due
to Buyer, its Affiliates and Custodian under Sections 5(c)(i)-(iv), 5(d)(i)-(v)
or 5(e), as applicable, in respect of such Purchased Loan as of such Remittance
Date exceed (ii) the amount of Available Income (including Principal Payments)
received by Buyer or Depository in respect of all the Purchased Loans during
such Collection Period.

“Cash Management Account” shall mean a segregated interest bearing account,
entitled “DB Loan NT-II, LLC, as Master Seller, for the benefit of Deutsche Bank
AG, Cayman Islands Branch, as Buyer”, established at the Depository, bearing
account number ########.

“Cause” means, with respect to an Independent Manager, (i) acts or omissions by
such Independent Manager that constitute willful disregard of or bad faith or
gross negligence with respect to, such Independent Manager’s duties, (ii) such
Independent Manager has engaged in or has been charged with, indicted or
convicted for any crime or crimes of moral turpitude, fraud, or dishonesty or
for any violation of any Requirement of Law, (iii) such Independent Manager no
longer satisfies the requirements set forth in the definition of “Independent
Manager”, (iv) the fees charged for the services of such Independent Manager are
materially in excess of the fees charged by the other providers of Independent
Managers listed in the definition of “Independent Manager”, (v) such Independent
Manager is unable to perform his or her duties due to death, disability or
incapacity or (vi) any other reason for which the prior written consent of Buyer
shall have been obtained.

“CDO Asset Manager” shall mean, with respect to any Securitization Vehicle that
is a CDO, the entity that is responsible for managing or administering the
underlying assets of such Securitization Vehicle or, if applicable, the assets
of any Intervening Trust Vehicle (including, without limitation, the right to
exercise any consent and control rights available to the holder of the
applicable Related Interest).

“Change of Control” shall mean the occurrence of any of the following events
shall have occurred without the prior written approval of Buyer: (i) prior to an
internalization of management by Parent or Guarantor, if Manager or an Affiliate
thereof shall cease to act as the external manager of Parent pursuant to a
Management Agreement; (ii) any “person” or “group” (within the meaning of
Section 13(d) or 14(d) of the 1934 Act) (other than the Manager or any Affiliate
of CLNY) shall become, or obtain rights (whether by means of warrants, options
or otherwise) to become, the beneficial owner, directly or indirectly, of 49% or
more of the total voting power of all classes of ownership interests of Parent,
Guarantor or Manager entitled to vote generally in the election of the directors
(or the applicable equivalent) of such Person; (iii) Parent or CLNY shall cease
to be

 

5

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

the sole managing member of Guarantor or Parent shall cease to directly or
indirectly own, of record and beneficially, 51% or more of the ownership
interests of Guarantor and Control Guarantor; (iv) Guarantor shall cease to
directly or indirectly own, of record and beneficially, 100% of the ownership
interests in Member and Control Member; or (v) Member shall cease to own, of
record and beneficially, 100% of the ownership interests in Seller and Control
Seller. Notwithstanding the foregoing, Buyer shall not be deemed to approve or
to have approved any internalization of management by Parent.

“CLNY” shall mean Colony Capital Inc., a Maryland corporation.

“Closing Date” shall mean the date hereof.

“Code” shall mean the Internal Revenue Code of 1986, and the regulations
promulgated and rulings issued thereunder, in each case as amended, modified or
replaced from time to time.

“Collateral” shall have the meaning specified in Section 6 of this Agreement.

“Collection Period” shall mean with respect to the Remittance Date in any month,
the period beginning on but excluding the Cut-off Date in the month preceding
the month in which such Remittance Date occurs and continuing to and including
the Cut-off Date immediately preceding such Remittance Date.

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

“Connection Income Taxes” shall mean Other Connection Taxes that are imposed on
or measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

“Control” shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise and
“Controlling,” “Controlled” and “under common Control” shall have meanings
correlative thereto. For purposes of this definition, debt securities that are
convertible into common stock will be treated as voting securities only when
converted.

“Controlled Account Agreement” shall mean that certain Controlled Account
Agreement, dated as of the date hereof, among Buyer, Master Seller (on behalf of
itself and each Series Seller) and the Depository, relating to the Cash
Management Account, as the same may be amended, modified and/or restated from
time to time.

“Credit Event” shall mean, with respect to any Purchased Loan, the occurrence of
any of the following with respect to such individual Purchased Loan, in each
case, as determined by Buyer in its sole and absolute discretion exercised in
good faith; provided, however, that in no event shall a Credit Event exist
solely by reason of fluctuations in current interest rates or current spreads:

 

6

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

  (i)

the occurrence and continuance of a Purchased Loan Event of Default or a
monetary or material non-monetary Purchased Loan Default with respect to such
Purchased Loan;

 

  (ii)

the occurrence of an Act of Insolvency with respect to any Mortgagor or any
obligor or guarantor for such Purchased Loan;

 

  (iii)

a material deterioration in (A) the Mortgaged Property Value of the related
Mortgaged Property, (B) the underwritten or actual net operating income, cash
flows, or debt service coverage ratio of such Mortgaged Property at actual
financing terms, or (C) the condition of the related Mortgaged Property, in each
case, other than changes contemplated by the related business plan as set forth
in the credit memorandum delivered by Seller to Buyer as of the related Purchase
Date;

 

  (iv)

the occurrence of a material adverse change in the financial condition of the
Mortgagor, any underlying guarantor or underlying sponsor, taken as a whole,
with respect to such Purchased Loan;

 

  (v)

the occurrence of a material breach of a Purchased Loan Representation relating
to such Purchased Loan;

 

  (vi)

the existence of any pending litigation, action, suit, arbitration,
investigation or other legal or arbitration proceeding affecting any Mortgagor
or guarantor for the Purchased Loan or the applicable Mortgaged Property which
if adversely determined could reasonably be expected to have a material adverse
effect on such Mortgagor, or guarantor, taken in the aggregate;

 

  (vii)

the loss or impairment of any lien or security interest (or the priority
thereof) securing such Purchased Loan or securing the Repurchase Obligations
hereunder; or

 

  (viii)

the (a) occurrence of any event or condition specifically designated as a Credit
Event in the applicable Confirmation for such Purchased Loan, or (b) a failure
to satisfy any Additional Confirmation Conditions, if any, applicable to such
Purchased Loan.

“Custodial Agreement” shall mean the Amended and Restated Custodial Agreement,
dated as of the date hereof, by and among the Custodian, Master Seller (on
behalf of itself and each Series Seller) and Buyer, as the same may be amended,
modified and/or restated from time to time.

“Custodial Delivery” shall mean the form executed by Seller in order to deliver
the Purchased Loan Schedule and the Purchased Loan File with respect to any
Purchased Loan to Buyer or its designee (including the Bailee or the Custodian,
as applicable) pursuant to Section 7, a form of which is attached hereto as
Exhibit IV.

 

7

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

“Custodian” shall mean Wells Fargo Bank, National Association, or any successor
Custodian appointed by Buyer with the prior written consent of Master Seller
(which consent shall not be unreasonably withheld or delayed).

“Cut-off Date” shall mean the second (2nd) Business Day preceding each
Remittance Date.

“Default” shall mean a Facility Default or a Transaction Default.

“Depository” shall mean Wells Fargo Bank, National Association, or any successor
Depository appointed by Buyer with the prior written consent of Seller (which
consent shall not be unreasonably withheld or delayed).

“Diligence Materials” shall mean, collectively, (i) the Preliminary Due
Diligence Package furnished by Seller to Buyer, and (ii) any other diligence
materials delivered by Seller to Buyer in connection with Buyer’s review of any
New Collateral, whether pursuant to a Supplemental Due Diligence List or
otherwise.

“Division/Series Transaction” shall mean, with respect to any Person that is a
limited liability company organized under the laws of the State of Delaware,
that any such Person (a) divides into two or more Persons (whether or not the
original Person or Subsidiary thereof survives such division) or (b) creates, or
reorganizes into, one or more series, in each case, as contemplated under the
laws of the State of Delaware, including without limitation Section 18-217 of
the Delaware LLC Act.

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

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

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

“Eligibility Requirements” shall mean, with respect to any Person, that such
Person has at least $200,000,000 in capital/statutory surplus or shareholders’
equity (except with respect to a pension advisory firm or similar fiduciary) and
at least $600,000,000 in total assets (in name or under management), and is
regularly engaged in the business of making or owning commercial real estate
loans (or interests therein), mezzanine loans (or interests therein) or
commercial loans (or interests therein) similar to the applicable Purchased
Loan.

“Eligible Loan” shall mean a whole Mortgage Loan or Senior Interest in a whole
mortgage loan secured by a first mortgage lien or liens on one or more
multifamily, office, retail, industrial, hospitality and/or other commercial
properties (including, without limitation, a leasehold interest therein), as to
which each of the Purchased Loan Representations are true and correct as of the
Purchase Date (except for any exceptions disclosed in writing by Seller which
are approved by Buyer, in its sole and absolute discretion and set forth in the
Confirmation for the applicable Purchased Loan) and which Mortgage Loan or
Senior Interest is approved by Buyer as of the Purchase Date, in its sole and
absolute discretion, based upon all facts and circumstances considered relevant
by Buyer or any other asset approved by Buyer, in its sole and absolute

 

8

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

discretion. An “Eligible Loan” that is a Purchased Loan hereunder may, in
Buyer’s sole and absolute discretion, include a junior Related Interest provided
that, and only for so long as, the corresponding Senior Interest with respect to
any such junior Related Interest also remains subject to the applicable
Transaction for such Purchased Loan.

“Environmental Law” shall mean any present or future federal, state or local
law, statute, regulation or ordinance, any judicial or administrative order or
judgment thereunder, pertaining to health, industrial hygiene, hazardous
substances or the environment, including, but not limited to, each of the
following, as enacted as of the date hereof or as hereafter amended: the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. §§ 9601 et seq.; the Resource Conservation and Recovery Act of 1976,
42 U.S.C. §§ 6901 et seq.; the Toxic Substance Control Act, 15 U.S.C. §§ 2601 et
seq.; the Water Pollution Control Act (also known as the Clean Water Act, 22
U.S.C. §§ 1251 et seq.), the Clean Air Act, 42 U.S.C. §§ 7401 et seq. and the
Hazardous Materials Transportation Act, 49 U.S.C. §§ 1801 et seq.

“Equity Interests” shall mean, with respect to any Person, (a) any share,
interest, participation and other equivalent (however denominated) of capital
stock of (or other ownership, equity or profit interests in) such Person,
(b) any warrant, option or other right for the purchase or other acquisition
from such Person of any of the foregoing, (c) any security convertible into or
exchangeable for any of the foregoing, and (d) any other ownership or profit
interest in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such share, warrant,
option, right or other interest is authorized or otherwise existing on any date.

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

“ERISA Affiliate” shall mean any corporation or trade or business that is a
member of any group of organizations (i) described in Section 414(b) or (c) of
the Code of which Seller is a member and (ii) solely for purposes of potential
liability under Section 302(b) of ERISA and Section 412(b) of the Code and the
lien created under Section 303(k) of ERISA and Section 430(k)(4) of the Code,
described in Section 414(m) or (o) of the Code of which Seller is a member.

“Excluded Taxes” shall mean any of the following Taxes imposed on or with
respect to Buyer or required to be withheld or deducted from a payment to Buyer:
(a) Taxes imposed on or measured by net income (however denominated), franchise
Taxes, and branch profits Taxes, in each case, (i) imposed as a result of Buyer
being organized under the laws of, or having its principal office or the office
from which it books a Transaction located in, the jurisdiction imposing such Tax
(or any political subdivision thereof) or (ii) that are Other Connection Taxes,
(b) U.S. federal withholding Taxes imposed on amounts payable to or for the
account of Buyer with respect to an interest in a Transaction pursuant to a law
in effect as of the date on which such Person (i) acquires such interest in a
Transaction or (ii) changes its principal office or the office from which it
books such interest in a Transaction, except to the extent that, pursuant to
Section 29, amounts with respect to such Taxes were payable either to such
Person’s assignor immediately before such Person became a party hereto or to
such Person immediately before it changed its applicable office,

 

9

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

(c) Taxes attributable to such Buyer’s failure to comply with Section 29(e) of
this Agreement, and (d) any U.S. federal withholding Taxes imposed under FATCA.

“Event of Default” shall mean a Facility Event of Default or a Transaction Event
of Default.

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

“Facility Amount” shall mean the amount specified in the Letter Agreement.

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

“Facility Event of Default” shall have the meaning specified in
Section 13(a)(II) of this Agreement.

“Facility Termination Date” shall have the meaning specified in the Letter
Agreement.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with) and any current or future
regulations or official interpretations thereof and any agreements entered into
pursuant thereto, including any intergovernmental agreements and any rules or
guidance implementing such intergovernmental agreements.

“FDIA” shall have the meaning specified in Section 22(c) of this Agreement.

“FDICIA” shall have the meaning specified in Section 22(d) of this Agreement.

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

“Financing Fee” shall mean, with respect to any Transaction as of any date, the
aggregate amount obtained by daily application of the Financing Fee Rate to the
then outstanding Purchase Price for such Transaction on a 360-day-per-year basis
for the actual number of days during the period commencing on (and including)
the Purchase Date for such Transaction and ending on the date of determination
(reduced by any amount of such Financing Fee previously paid by Seller to Buyer
with respect to such Transaction).

“Financing Fee Cap” shall have the meaning specified in Section 3(o) of this
Agreement.

“Financing Fee Rate” shall have the meaning specified in Section 3(o) of this
Agreement.

“Financing Fee Payee” shall have the meaning specified in Section 3(o) of this
Agreement.

“Future Funding Amount” shall have the meaning specified in Section 3(p) of this
Agreement.

“Future Funding Date” shall have the meaning specified in Section 3(p) of this
Agreement.

 

10

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

“Future Funding Purchased Loan” shall mean any Purchased Loan with respect to
which there exists a continuing obligation on the part of the holder of the
Purchased Loan after the related closing date of such Purchased Loan to provide
additional funding to the Mortgagor upon the terms and conditions in the
applicable Purchased Loan Documents and which is approved by Buyer as a “Future
Funding Purchased Loan” as of the Purchase Date for such Purchased Loan and set
forth in the Confirmation therefor or as may be approved by Buyer from time to
time pursuant to a Future Funding Transaction Request made by Seller under
Section 3(p) hereof.

“Future Funding Transaction Request” shall have the meaning specified in
Section 3(p).

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

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

“Guarantor” shall mean Credit RE Operating Company, LLC, a Delaware limited
liability company.

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

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

“Hazardous Materials” shall mean oil, flammable explosives, asbestos, urea
formaldehyde insulation, radioactive materials, hazardous wastes, toxic or
contaminated substances or similar materials or gases, including any substances
which are “hazardous substances,” “hazardous wastes,” “hazardous materials,”
“toxic substances,” “wastes,” “regulated substances,” “industrial solid wastes,”
or “pollutants” under Environmental Laws and including arsenic, perchlorate,
methane and carbon monoxide.

“Income” shall mean, with respect to any Purchased Loan at any time, the sum of
(x) payments of principal, interest, dividends or other distributions or
collections (including, without limitation, all funds received for deposit in
any Underlying Purchased Loan Reserves) and (y) all net sale proceeds received
by Seller or any Affiliate of Seller in connection with a sale of such Purchased
Loan, other than any origination fees that were earned and paid on or prior to
the related Purchase Date.

“Indemnified Amounts” shall have the meaning specified in Section 26 of this
Agreement.

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

“Indemnified Parties” shall have the meaning specified in Section 26 of this
Agreement.

 

11

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

“Independent Appraiser” shall mean an independent professional real estate
appraiser who is a member in good standing of the American Appraisal Institute,
and, if the state in which the subject Mortgaged Property is located certifies
or licenses appraisers, is certified or licensed in such state, and in each such
case, who has a minimum of five years’ experience in the subject property type
and is acceptable to Buyer in its sole and absolute discretion, applied in good
faith.

“Independent Manager” shall mean an individual who has prior experience as an
independent director, independent manager or independent member with at least
three years of employment experience and who is provided by CT Corporation,
Corporation Service Company, National Registered Agents, Inc., Wilmington Trust
Company, Stewart Management Company, Lord Securities Corporation or, if none of
those companies is then providing professional Independent Managers, another
nationally-recognized company reasonably approved by Buyer, in each case that is
not an Affiliate of Seller and that provides professional Independent Managers
and other corporate services in the ordinary course of its business, and which
individual is duly appointed as an Independent Manager and is not, and has never
been, and will not while serving as Independent Manager be, any of the
following:

(A)    a member, partner, equityholder, manager, director, officer or employee
of Seller or any of its equityholders or Affiliates (other than as an
Independent Manager of Seller or an Affiliate of Seller that is not in the
direct chain of ownership of the Seller and that is required by a creditor to be
a single purpose bankruptcy remote entity, provided that such Independent
Manager is employed by a company that routinely provides professional
Independent Managers or managers in the ordinary course of its business);

(B)    a creditor, supplier or service provider (including provider of
professional services) to Seller or any of its equityholders or Affiliates
(other than a nationally-recognized company that routinely provides professional
Independent Managers and other corporate services to Seller or any of its
Affiliates in the ordinary course of its business);

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

(D)    a Person that controls (whether directly, indirectly or otherwise) any of
the entities described in (A), (B) or (C) above.

A natural person who otherwise satisfies the foregoing definition except for
subparagraph (A) by reason of being the Independent Manager of a “special
purpose entity” affiliated with Seller shall be qualified to serve as an
Independent Manager of Seller, provided that the fees that such individual earns
from serving as an Independent Manager of affiliates of Seller in any given year
constitute in the aggregate less than five percent (5%) of such individual’s
annual income for that year. For purposes of this paragraph, a “special purpose
entity” is an entity, whose organizational documents contain restrictions on its
activities and impose requirements intended to preserve such entity’s
separateness that are substantially similar to those contained in Section 12 of
this Agreement.

 

12

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

“Initial Buyer” shall mean Deutsche Bank AG, Cayman Islands Branch.

“Intervening Trust Vehicle” shall mean, with respect to any Securitization
Vehicle that is a CDO, a trust vehicle or entity which holds the applicable
Related Interest as collateral securing (in whole or in part) any obligation or
security held by such Securitization Vehicle as collateral for the CDO.

“Joinder Agreement” shall have the meaning specified in Section 3(n).

“Last Endorsee” shall have the meaning specified in Section 7(b)(i).

“Letter Agreement” shall mean that certain letter agreement, dated as of the
date hereof, among Buyer and Master Seller, as the same may be amended, modified
and/or restated from time to time.

“LIBO Rate” shall mean, with respect to any Pricing Rate Period pertaining to a
Transaction, a rate per annum determined for such Pricing Rate Period in
accordance with the following formula (rounded upward to the nearest 1/100th of
1%):

 

LIBOR            

                                                                  
                                                

            1     

Requirement

  –   

Reserve

“LIBOR” shall mean, with respect to each Pricing Rate Period, the rate
(expressed as a percentage per annum and rounded upward, if necessary, to the
next nearest 1/1000 of 1%) for deposits in U.S. dollars, for a one-month period,
that appears on Reuters Screen LIBOR01 (or the successor thereto) as of 11:00
a.m., London time, on the related Pricing Rate Determination Date. If such rate
does not appear on Reuters Screen LIBOR01 as of 11:00 a.m., London time, on such
Pricing Rate Determination Date, Buyer shall request the principal London office
of any four major reference banks in the London interbank market selected by
Buyer to provide such bank’s offered quotation (expressed as a percentage per
annum) to prime banks in the London interbank market for deposits in U.S.
dollars for a one-month period as of 11:00 a.m., London time, on such Pricing
Rate Determination Date for amounts of not less than the Repurchase Price of the
Transaction. If at least two such offered quotations are so provided, LIBOR
shall be the arithmetic mean of such quotations. If fewer than two such
quotations are so provided, Buyer shall request any three major banks in New
York City selected by Buyer to provide such bank’s rate (expressed as a
percentage per annum) for loans in U.S. dollars to leading European banks for a
one-month period as of approximately 11:00 a.m., New York City time on the
applicable Pricing Rate Determination Date for amounts of not less than the
Repurchase Price of the Transaction. If at least two such rates are so provided,
LIBOR shall be the arithmetic mean of such rates. LIBOR shall be determined by
Buyer or its agent pursuant to the terms of this Agreement, which determination
shall be conclusive absent manifest error. Notwithstanding the foregoing, in no
event shall LIBOR be less than zero. “Manager” shall mean CLNC Manager, LLC, a
Delaware limited liability company.

“LIBOR Floor” shall mean zero percent (0%).

 

13

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

“LIBOR Rate” shall mean, with respect to each Pricing Rate Period, the per annum
rate equal to (i) the greater of LIBO Rate and the LIBOR Floor plus (ii) the
Applicable Spread.

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

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

“Management Agreement” shall mean the Management Agreement, dated as of
January 31, 2018, by and between Manager, Guarantor and Parent, or such other
agreement acceptable to Buyer in its reasonable discretion, in each case, as the
same may be amended, modified, waived, supplemented, extended, replaced or
restated from time to time.

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

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

“Mandatory Early Repurchase Event” shall mean, with respect to any Purchased
Loan, the occurrence of any of the following:

 

  (i)

a payment default on such Purchased Loan which remains uncured for the lesser of
(A) ten (10) Business Days or (B) the cure period specified in the applicable
Purchased Loan Documents;

 

  (ii)

an Act of Insolvency with respect to the related Mortgagor or guarantor of such
Purchased Loan;;

 

  (iii)

the maturity or acceleration of such Purchased Loan;

 

  (iv)

any other Purchased Loan Event of Default with respect to such Purchased Loan
(including any other payment default other than a payment default described in
clause (i) on such Purchased Loan) but excluding circumstances which would only
be a breach of an MTM Representation;

 

  (v)

the occurrence and continuance of any material breach of a Purchased Loan
Representation (other than an MTM Representation) relating to such Purchased
Loan, subject to exceptions approved by Buyer in writing;

 

  (vi)

all or any material portion of the Mortgaged Property securing such Purchased
Loan shall be (A) materially damaged or destroyed by fire, flood, wind,
earthquake, decay, environmental condition or other casualty or (B) taken by any
Governmental Authority having jurisdiction over such Mortgaged Property as the
result of or in lieu of the exercise of the right of condemnation or eminent
domain;

 

14

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

  (vii)

such Purchased Loan ceases to be an Eligible Loan;

 

  (viii)

if any Purchased Loan includes a junior Related Interest and the corresponding
Senior Interest with respect to such Purchased Loan is repurchased by Seller,
such repurchase of the related Senior Interest shall constitute a Mandatory
Early Repurchase Event with respect to such junior Related Interest; or

 

  (ix)

any other event or condition specifically designated as a Mandatory Early
Repurchase Event in the applicable Confirmation for such Purchased Loan.

“Margin Deadline” shall mean 2:00 p.m. (New York City time).

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

“Margin Excess” shall have the meaning specified in Section 4(a) of this
Agreement.

“Margin Notice” shall have the meaning specified in Section 4(b) of this
Agreement.

“Market Value” shall mean, with respect to any Eligible Loan or Purchased Loan,
as of any relevant date, the lesser of (i) the price at which such Eligible Loan
or Purchased Loan may be sold, assigned or participated in an arms’ length
transaction to a third party (without regard to any unpaid interest which has
accrued but is not yet due and payable), determined by Buyer in its sole and
absolute discretion exercised in good faith, and (ii) the Principal Balance
thereof; provided, however, that Buyer shall not reduce the Market Value for any
Purchased Loan unless a Credit Event has occurred and is continuing with respect
to such Purchased Loan. For purposes of Section 4, changes in the Market Value
of the Purchased Loan shall be determined solely in relation to material
positive or negative changes relative to Buyer’s initial underwriting or the
most recent determination of Market Value relating to (I) any breach of an MTM
Representation or (II) the performance or condition of (x) the Mortgaged
Property securing the Purchased Loan or other collateral securing or related to
the Purchased Loan, (y) the Purchased Loan’s borrower (including obligors,
guarantors, participants and sponsors) and the borrower on any Mortgaged
Property or other collateral securing the Purchased Loan, or (z) the commercial
real estate market relevant to the Mortgaged Property, considered in the
aggregate.

“Market Value Percentage” shall mean, with respect to any Eligible Loan or
Purchased Loan, as of any date, the fraction, expressed as a percentage and
rounded to the next highest hundredth of a percent, the numerator of which is
the then current Market Value of such Eligible Loan or Purchased Loan, and the
denominator of which is the then current Principal Balance of such Eligible Loan
or Purchased Loan.

“Master Seller” shall mean, individually or collectively, as the context may
require, DB Loan NT-II, LLC and CLNC Credit 5, LLC, each a Delaware series
limited liability company.

“Master Seller LLC Agreement” shall mean the limited liability company agreement
of each Master Seller, as applicable, as each of the same may be amended,
modified and/or restated with Buyer’s prior written consent, and together with
each completed Schedule C thereto hereafter executed with respect to each Series
Seller.

 

15

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

“Material Action” shall mean any material extension, amendment, waiver,
termination, rescission, cancellation, release or other modification to the
terms of, or any collateral, guaranty or indemnity for, or the exercise of any
material right or remedy of a holder (including all lending, corporate and
voting rights, remedies, consents, approvals and waivers) of, any Purchased Loan
or the related Purchased Loan Documents, and which, in each case, would have the
effect of:

(a)    In the case of a whole Mortgage Loan:

(i)    decreasing the principal of, or interest on, the Purchased Loan, other
than with respect to a principal prepayment to the extent such principal
prepayment is distributed pursuant to Section 5;

(ii)    postponing or extending any scheduled date fixed for any payment of
principal of, or interest on, the Purchased Loan (other than postponements or
extension required by the terms of the underlying Purchased Loan Documents and
for which no material lender consent is applicable);

(iii)    releasing any material portion of the collateral securing the Purchased
Loan (other than any release required by and expressly in accordance with the
terms of the related underlying Purchased Loan Documents, including, without
limitation, releases of condominium units as and when the same are sold);

(iv)    releasing any borrower in respect of the Purchased Loan or underlying
Mortgage Loan (other than any release required by and expressly in accordance
with the terms of the related underlying Purchased Loan Documents);

(v)    waiving any default or event of default, or modifying or amending any
default provision, including the definition of “Default” or “Event of Default”
or other similar term under the related Purchased Loan Documents;

(vi)    exercising any consent or approval right of Seller relating to the
termination or appointment of any Servicer in respect of any Purchased Loan (or
underlying Mortgage Loan related thereto);

(vii)    waiving any “due-on-sale” or “due-on-encumbrance” clause with respect
to the Purchased Loan (or the Mortgage Loan or Mezzanine Loan, as applicable) or
consenting to (i) such a waiver, (ii) a transfer of all or any portion of a
Mortgaged Property or interests in the Mortgagor or (iii) the incurrence of
additional debt, other than any such transfer or incurrence of debt as may be
effected without the consent of the lender under the related Purchased Loan
Documents;

(viii)    accepting an assumption agreement releasing a Mortgagor from liability
under a Purchased Loan (or related Mortgage Loan, as applicable) other than
pursuant to the specific terms of such Purchased Loan (or the Mortgage Loan or
Mezzanine Loan, as applicable) and for which lender’s consent is not required
and there is no material lender discretion;

(ix)    consenting to the incurrence of additional debt by a Mortgagor or any
mezzanine financing by any beneficial owner of a Mortgagor other than pursuant
to the express

 

16

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

terms of such Purchased Loan and for which lender’s consent is not required and
there is no material lender discretion;

(x)    entering into, amending, modifying or terminating any franchise agreement
(except, in each of the foregoing cases, entering into, amending, modifying or
terminating any franchise agreement pursuant to the express terms of the
Purchased Loan Documents and for which lender’s consent is not required and
there is no material lender discretion);

(xi)    releasing any material amounts from any escrow accounts, reserve funds
or letters of credit, in each case, held as “performance”, “earn-out”, or
“holdback” escrows or reserves, other than those required pursuant to the
specific terms of the related Purchased Loan Documents and for which there is no
material lender discretion (and, in each case, excluding releases of any escrows
or reserves held for taxes and insurance capital expenditures, tenant
improvement and leasing costs, “PIP”, debt service and similar escrows and
reserves pursuant to the express terms of the Purchased Loan Documents and for
which there is no material lender discretion);

(xii)    waiving, amending or modifying in a material manner, in Seller’s
reasonable judgment, any cash management or reserve account requirements of such
Purchased Loan, or any other material change to the manner, timing, or method of
the application of payments under the Purchased Loan Documents, other than
changes required under the related Purchased Loan Documents for which lender’s
consent is not required and there is no material lender discretion;

(xiii)    modifying, waiving, amending or terminating any ground lease, or any
lease of all or substantially all of the Mortgaged Property relating to any
Purchased Loan, or the execution of any new ground lease or a lease of all or
substantially all of the Mortgaged Property relating to any Purchased Loan;

(xiv)    modifying or waiving any material provision in the related Purchased
Loan Documents governing the type, nature or amount of insurance coverage
required to be obtained and maintained by the related Mortgagor;

(xv)    approving any material alteration or improvement to the Mortgaged
Property other than as contemplated under the Purchased Loan Documents (and in
accordance with the terms and conditions thereof including the delivery of any
additional collateral or security required thereunder), to the extent the lender
has such approval right under the Purchased Loan Documents;

(xvi)    approving or modifying or waiving the Purchased Loan Documents in a
manner that would result in any discounted pay-off or deed-in-lieu of
foreclosure relating to any Purchased Loan, Purchased Loan Document or Mortgaged
Property;

(xvii)    modifying any release prices or any provisions of the Purchased Loan
Documents relating to the release of any properties; or

 

17

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

(xviii)    modifying or amending in any material respect any condominium
documents relating to the Mortgaged Property;

(b)    in the case of any Senior Interest, any consent, modification, waiver,
forbearance, appointment, right or other action to which the Senior Interest
holder has any such right under the related co-lender agreement, participation
agreement or intercreditor agreement to the extent that such action would, be a
Material Action under clauses (a) through (s) of this definition.

“Material Adverse Effect” shall mean a material adverse effect on or material
adverse change in or to (a) the property, assets, business, operations or
financial condition of Seller, Member or Guarantor, taken as a whole, (b) the
ability of Seller, Member or Guarantor to pay or perform its obligations under
any of the Transaction Documents to which it is a party, (c) the validity or
enforceability of any of the Transaction Documents, or (d) the rights and
remedies of Buyer under any of the Transaction Documents.

“Maximum Original Purchase Percentage” shall mean, with respect to any
Transaction, the percentage specified as the Maximum Original Purchase
Percentage in the Confirmation for such Transaction as determined by Buyer in
its sole and absolute discretion as of the related Purchase Date.

“Member” shall mean, individually or collectively as the context may require, DB
Loan Member NT-II, LLC, a Delaware limited liability company, which is the sole
member of DB Loan NT-II, LLC, and CLNC Credit 5 Member Guarantor, LLC, a
Delaware limited liability company, which is the sole member of CLNC Credit 5,
LLC.

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

“Mezzanine Borrower” shall mean the obligor on any applicable Mezzanine Note.

“Mezzanine Loan” shall mean a loan made by Seller or its Affiliate secured by
the direct or indirect ownership interest in a Mortgagor in connection with the
origination of a Purchased Loan.

“Mezzanine Loan Documents” shall mean, respect to any Purchased Loan that is a
Mezzanine Loan, the Mezzanine Note, those documents executed in connection with,
evidencing or governing such Mezzanine Loan, including, without limitation,
those documents which are required to be delivered to Custodian under the
Custodial Agreement.

“Mezzanine Note” shall mean the original executed promissory note or other
tangible evidence of the Mezzanine Loan indebtedness.

“Mortgage” shall mean a mortgage, deed of trust, deed to secure debt or other
instrument, creating a valid and enforceable first lien on or a first priority
ownership interest in an estate in fee simple or ground leasehold interest in
real property and the improvements thereon, securing a mortgage note or similar
evidence of indebtedness.

 

18

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

“Mortgage Loan” shall mean a loan made by Seller or its Affiliate to a Mortgagor
and secured by a Mortgage.

“Mortgage Note” shall mean a note or other evidence of indebtedness of a
Mortgagor secured by a Mortgage in connection with a Purchased Loan.

“Mortgaged Property” shall mean (i) with respect to any Mortgage Loan, Senior
Interest or Related Interest (other than a Mezzanine Loan), the mortgaged
property securing such Mortgage Loan, Senior Interest or Related Interest and
(ii) with respect to any Mezzanine Loan, the mortgaged property owned by the
Person the Equity Interests of which is pledged as collateral for such Mezzanine
Loan.

“Mortgaged Property Value” shall mean, with respect to any Mortgaged Property,
the market value of such Mortgaged Property as determined by Buyer in its sole
and absolute discretion applied in good faith.

“Mortgagee” shall mean the record holder of a Mortgage Note secured by a
Mortgage.

“Mortgagor” shall mean, with respect to any Purchased Loan, the obligor on a
Mortgage Note and the mortgagor/grantor under the related Mortgage.

“MTM Representation” shall mean each of the representations and warranties set
forth as items (11), (12), (15), (21), (26), (28), (35)(f) (provided that the
representations in item 35(f) shall only be MTM Representations to the extent
that any breach of same is cured within ten (10) Business Days after the
occurrence of such breach and such breach does not otherwise constitute a
Purchased Loan Event of Default), (36) and (41) (with respect to the last
sentence only) in Part I of Exhibit VI attached hereto.

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

“Net Market Value Decrease” shall mean, with respect to any Purchased Loan, as
of any date of determination, an amount equal to the greater of (i) zero and
(ii) the product of (1) the then current Principal Balance of such Purchased
Loan and (2) (x) the Purchase Date Market Value Percentage of such Purchased
Loan, less (y) the then current Market Value Percentage of such Purchased Loan.

“New Collateral” shall mean an Eligible Loan that Seller proposes to be included
as Collateral.

“OFAC” shall mean the U.S. Department of the Treasury’s Office of Foreign Assets
Control.

“Other Connection Taxes” means Taxes imposed as a result of a present or former
connection between Buyer and the jurisdiction imposing such Taxes (other than
connections arising from Buyer having executed, delivered, become a party to,
performed its obligations under, received payments under, received or perfected
a security interest under, engaged in any other

 

19

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

transaction pursuant to or enforced any Transaction Document, or sold or
assigned an interest in any Transaction or any Transaction Document, other than
any assignment made at Seller’s request).

“Other Taxes” shall mean any and all present or future stamp, court or
documentary, intangible, recording, filing or similar Taxes that may arise from
any payment made under any Transaction Document or from the execution, delivery,
performance, or enforcement or registration of, from the receipt or perfection
of a security interest under, or otherwise with respect to, any Transaction
Document, except any such Taxes that are Other Connection Taxes imposed with
respect to an assignment, transfer or sale of participation or other interest in
or with respect to the Transaction Document.

“Parent” shall mean Colony Credit Real Estate, Inc., a Maryland corporation.

“Participant Register” shall have the meaning specified in Section 18(d) of this
Agreement.

“Participation Interest” shall mean a participation interest in a Mortgage Loan.

“Permitted Fund Manager” shall mean any Person that on the date of determination
is (i) one of the entities listed on Exhibit XII annexed hereto and made a part
hereof, (ii) investing through a fund with committed capital of at least
$250,000,000 and (iii) not subject to a proceeding relating to the bankruptcy,
insolvency, reorganization or relief of debtors.

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

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

“Plan Assets” shall have the meaning specified in Section 21(a) of this
Agreement.

“Plan Party” shall have the meaning specified in Section 21(a).

“Pledge Agreements” shall mean (i) that certain Pledge Agreement, dated as of
the date hereof, from NT Member, as pledgor, in favor of Buyer and (ii) that
certain Pledge Agreement, dated as of the date hereof, from CLNC Member, as
pledgor, in favor of Buyer, as each may be amended, modified and/or restated
from time to time.

“Pledged Collateral” shall have the meaning specified in the Pledge Agreements.

“Portfolio Interest Certificate” shall have the meaning specified in
Section 29(e)(ii)(B)(3) of this Agreement.

 

20

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

“Preliminary Due Diligence Package” shall mean with respect to any New
Collateral, Seller’s summary memorandum outlining the proposed transaction,
including, to the best knowledge of Seller, potential transaction benefits and
all material underwriting risks, all Underwriting Issues and all other
characteristics of the proposed transaction that a reasonable buyer would
consider material, together with the following due diligence information
relating to the New Collateral to be provided by Seller to Buyer pursuant to
this Agreement (in each case, to the extent applicable and in Seller’s
possession or reasonably obtainable by Seller):

 

  (i)

all material documents that relate to such Eligible Loan;

 

  (ii)

current rent roll for the Mortgaged Property, if applicable, together with the
following information: (A) recent leasing activity including related tenant
improvement and leasing commission obligations, (B) a delinquency report,
(C) outstanding rent abatements and concessions and (D) a description of all
percentage rent, additional rent and escalations payable by tenants for taxes,
operating expenses, electricity and other expenses, as applicable;

 

  (iii)

(a) most recent audited financial statements, (b) three (3) years of operating
statements, including current trailing twelve (12) month operating statement,
and (c) Seller’s preliminary underwritten cash flow pro-forma for the Mortgaged
Property, in each case, if available;

 

  (iv)

description of the Mortgaged Property and the ownership structure of the
borrower and the sponsor (including, without limitation, the board of directors,
if applicable);

 

  (v)

Seller’s indicative debt service coverage ratios;

 

  (vi)

Seller’s indicative debt yield ratios;

 

  (vii)

Seller’s indicative loan-to-value ratio;

 

  (viii)

term sheet outlining the transaction generally including an abstract of the
final terms of the proposed Eligible Loan (to the extent such information is not
included in other “Preliminary Due Diligence Package” documents);

 

  (ix)

final sources and uses schedule for the proceeds of the proposed Eligible Loan
delivered in connection with the closing of the Eligible Loan;

 

  (x)

an organizational chart of the Mortgagor showing all ownership interests in the
Mortgagor (and disclosing any direct or indirect ownership interests of Seller
or its Affiliates in the Mortgagor, if any);

 

  (xi)

an Appraisal of the Mortgaged Property, dated within six (6) months of the
proposed Purchase Date;

 

  (xii)

Seller’s credit memorandum, in a form reasonably acceptable to Buyer;

 

21

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

  (xiii)

Seller’s underwriting model (in Excel);

 

  (xiv)

any exceptions to the Purchased Loan Representations for such Eligible Loan,
which may be contained in an internal memorandum or offering document prepared
by a third party; and

 

  (xv)

Seller’s relationship with the Mortgagor, if any;

 

  (xvi)

current and, to the extent available, historical real estate tax bills, or an
estimate of expected taxes, for the Mortgaged Property; and

 

  (xvii)

any other information reasonably requested by Buyer.

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

“Pricing Rate” shall mean for each Pricing Rate Period, an annual rate equal to
(a) for a LIBOR Transaction, the LIBOR Rate for such Pricing Rate Period,
(b) for a Prime Rate Transaction, the Prime Rate for such Pricing Rate Period
and (c) for an Alternate Rate Transaction, the Alternate Rate for such Pricing
Rate Period.

“Pricing Rate Determination Date” shall mean with respect to any Pricing Rate
Period with respect to (i) any Transaction, other than a LIBOR Transaction, the
second (2nd) Business Day, and (ii) any LIBOR Transaction, the second (2nd)
London Business Day, in each case, preceding the first day of such Pricing Rate
Period.

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

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

“Prime Index Rate” shall mean, with respect to each Pricing Rate Period, the per
annum rate of interest of the Prime Index, determined as of the Pricing Rate
Determination Date immediately preceding the commencement of such Pricing Rate
Period; provided that in no event will the Prime Index Rate be less than zero.

 

22

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

“Prime Rate” shall mean, with respect to each Pricing Rate Period, the per annum
rate of interest equal to the sum of the Prime Index Rate plus the Prime Rate
Spread.

“Prime Rate Transaction” shall mean, with respect to any Pricing Rate Period,
any Transaction with respect to which the Pricing Rate for such Pricing Rate
Period is determined with reference to the Prime Index Rate.

“Prime Rate Spread” shall mean, in connection with any conversion of the
Transaction in accordance with the terms hereof to a Prime Rate Transaction, the
difference (expressed as the number of basis points and determined at the time
of such conversion) between (a)(i) if the Transaction is converted from a LIBOR
Transaction to a Prime Rate Transaction, the sum of (x) the LIBO Rate,
determined as of the Pricing Rate Determination Date for which LIBOR was last
applicable to the Transaction, plus (y) the Applicable Spread, or (ii) if the
Transaction is converted from an Alternate Rate Transaction to a Prime Rate
Transaction, the Alternate Rate, determined as on the Pricing Rate Determination
Date for which the Alternate Rate was last applicable to the Transaction, minus
(b) the Prime Index Rate as of such Pricing Rate Determination Date; provided,
however, that if such difference is a negative number, then the Prime Rate
Spread shall be zero.

“Principal Balance” shall mean, at any date of determination, the lesser of
(i) the then current outstanding principal balance of an Eligible Loan or a
Purchased Loan and (ii) if Seller intends to acquire or acquires an Eligible
Loan or Purchased Loan at a discount, (A) the purchase price paid or to be paid
by Seller for such Eligible Loan or Purchased Loan less (B) all Principal
Payments received thereon plus all future advances funded by or on behalf of
Seller therefor.

“Principal Payment” shall mean, with respect to any Purchased Loan, any payment
or prepayment of principal received by Seller or Depository in respect thereof
and the proceeds of any sale of such Purchased Loan or any interest therein
received by Seller or Depository.

“Prohibited Person” shall mean, at any time, any Person with whom dealings are
restricted or prohibited under the Sanctions Laws, including but not limited to
any Person: (1) identified on any Sanctions Laws-related list of restricted
Persons maintained by the U.S. Government (including, but not limited to OFAC’s
SDN List); (2) blocked by operation of law, or controlled or acting on behalf of
a Person that is either described in clause (1) or blocked by operation of law;
(3) otherwise subject to the Sanctions Laws administered by OFAC (“OFAC
Sanctions”) such that the entry into this Agreement or the performance of the
obligation contemplated hereby would be prohibited; or (4) subject to the
Sanctions Laws administered by any other applicable Governmental Authority.

“Prohibited Transferees” shall have the meaning specified in Section 18(b).

“Purchase Date” shall mean the date on which a Purchased Loan is to be
transferred by Seller to Buyer.

“Purchase Date Market Value” shall mean, with respect to any Purchased Loan, the
Market Value of such Purchased Loan as of the related Purchase Date, and which
Purchase Date Market Value shall be set forth in the Confirmation for the
related Transaction.

 

23

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

“Purchase Date Market Value Percentage” shall mean, with respect to any
Purchased Loan, the fraction, expressed as a percentage and rounded to the next
highest hundredth of a percent, the numerator of which is the Purchase Date
Market Value of such Purchased Loan, and the denominator of which is the
Principal Balance as of the related Purchase Date, and which Purchase Date
Market Value Percentage shall be set forth in the Confirmation for the related
Transaction.

“Purchase Price” shall mean, with respect to any Purchased Loan, (a) as of the
applicable Purchase Date, the price at which such Purchased Loan is transferred
by Seller to Buyer on such Purchase Date as set forth in the Confirmation for
such Purchased Loan, which initial Purchase Price shall not exceed the product
of (i) the Market Value of such Purchased Loan as of the Purchase Date and
(ii) the Maximum Original Purchase Percentage, and (b) as of any other date of
determination, an amount (expressed in dollars) equal to the Purchase Price set
forth in the foregoing clause (a) as increased by any Future Funding Amounts
paid by Buyer and funds remitted by Buyer to or on account of Seller with
respect to Margin Excess, and decreased by any payments made to Buyer to be
applied (or allocated, as applicable) in reduction of the Repurchase Price
(other than Price Differential) of such Purchased Loan pursuant to the terms of
this Agreement, including Sections 3(e), 3(k), 4(b), 4(c), 5(c)(iii), 5(d)(iii),
5(d)(v) and 5(e)(iii) of this Agreement.

“Purchased Loan” or “Purchased Loans” shall mean (i) with respect to any
Transaction, the Eligible Loan or Eligible Loans sold by the applicable Series
Seller to Buyer in such Transaction and (ii) with respect to the Transactions in
general, all Eligible Loans sold by Seller to Buyer, together with all related
(i) Purchased Loan Documents, (ii) Servicing Agreements, (iii) Servicing
Records, (iv) Servicing Rights, (v) Income, (vi) insurance policies and payments
and proceeds thereunder, (vii) collection, escrow, reserve, collateral or
lock-box accounts and all amounts and property from time to time on deposit
therein, to the extent of Seller’s or the holder’s interests therein,
(viii) supporting obligations of any kind, and (ix) proceeds relating to the
sale, securitization or other disposition of such Eligible Loans. Any Purchased
Loan that is repurchased by Seller in accordance with this Agreement shall cease
to be a Purchased Loan.

“Purchased Loan Default” shall mean for any Purchased Loan, any event which,
with (or without) the giving of notice, the passage of time, or both, could give
rise to a Purchased Loan Event of Default.

“Purchased Loan Documents” shall mean, with respect to a Purchased Loan, all
documents and agreements evidencing and/or securing such Purchased Loan, as each
of same may be amended, modified and/or restated in accordance with the terms of
this Agreement.

“Purchased Loan Event of Default” shall mean for any Purchased Loan, an “Event
of Default” as defined in the Purchased Loan Documents for such Purchased Loan
(or such other term as is used in such documents to describe events the
occurrence of which gives the lender the right to accelerate (or causes the
automatic acceleration of) such Purchased Loan); provided, however, that no
“Event of Default” as defined in the Purchased Loan Documents for such Purchased
Loan shall become a Purchased Loan Event of Default until the expiration of all
grace periods and cure rights related thereto under the Purchased Loan
Documents.

 

24

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

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

“Purchased Loan Representations” shall mean with respect to any Purchased Loan
or prospective Purchased Loan, the representations and warranties set forth on
Exhibit VI attached hereto or, if different, the representations and warranties
applicable to such Purchased Loan as set forth on Schedule 2 to the Confirmation
for such Purchased Loan, in each case, as modified by any exceptions to such
representations and warranties disclosed in writing by Seller which are approved
by Buyer in its sole and absolute discretion and set forth on Schedule 3 to the
related Confirmation. It is acknowledged and agreed that Buyer, in its sole and
absolute discretion, may from time to time, upon delivery of at least ten
(10) Business Days prior written notice to Seller, amend the representations and
warranties set forth on Exhibit VI attached hereto applicable to any Purchased
Loan prior to the related Purchase Date therefor. Any such amendment of the
representations and warranties set forth on Exhibit VI shall not be effective
with respect to any Purchased Loan for which the Purchase Date has occurred
hereunder prior to the effective date of such amendment. Buyer may elect, in its
sole and absolute discretion, to require any such amendment of the
representations and warranties set forth on Exhibit VI to apply to all Purchased
Loans with Purchase Dates occurring from and after the effective date of such
amendment and, in such event, Seller and Buyer will each execute and deliver a
supplement to this Agreement to provide for such amended version of Exhibit VI
with respect to such Purchased Loans.

“Purchased Loan Schedule” shall mean a schedule of Purchased Loans attached to
each Trust Receipt and Custodial Delivery, which may but is not required to,
contain information substantially similar to the Collateral Information.

“Qualified Institutional Lender” shall mean one or more of the following:

(a)    an insurance company, bank, savings and loan association, investment
bank, trust company, commercial credit corporation, pension plan, pension fund,
pension fund advisory firm, mutual fund, real estate investment trust,
governmental entity or plan, in any case, which satisfies the Eligibility
Requirements, or

(b)    an investment company, money management firm or a “qualified
institutional buyer” within the meaning of Rule 144A under the Securities Act of
1933, as amended, or an institutional “accredited investor” within the meaning
of Regulation D under the Securities Act of 1933, as amended, in any case, which
satisfies the Eligibility Requirements, or

(c)    an institution substantially similar to any of the foregoing entities
described in clauses (a) or (b) of this definition which satisfies the
Eligibility Requirements, or

(d)    any entity Controlled by any of the entities described in clauses (a),
(b) or (c) of this definition, or

(e)    a Qualified Trustee (or in the case of a CDO, a single purpose
bankruptcy-remote entity that contemporaneously pledges its interest in a
Related Interest to a Qualified Trustee) in connection with (i) a securitization
of, (ii) the creation of collateralized debt obligations (“CDO”) secured by, or
(iii) a financing through an “owner trust” of, a Related Interest (any of the
foregoing,

 

25

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

a “Securitization Vehicle”), provided that either (1) one or more classes of
securities issued by such Securitization Vehicle is initially rated at least
investment grade by each of the applicable Rating Agencies, (2) in the case of a
Securitization Vehicle that is not a CDO, the special servicer for such
Securitization Vehicle has the applicable required special servicer ratings from
each of the applicable Rating Agencies at the time of the Transfer (such entity,
an “Approved Servicer”), and such Approved Servicer is required to service and
administer the applicable Related Interest in accordance with servicing
arrangements for the assets held by the Securitization Vehicle, which require
that such Approved Servicer act in accordance with a servicing standard
notwithstanding any contrary direction or instruction from any other Person; or
(3) in the case of a Securitization Vehicle that is a CDO, the CDO Asset Manager
and, if applicable, each Intervening Trust Vehicle that is not administered and
managed by a Qualified Trustee or a CDO Asset Manager that is a Qualified
Institutional Lender, are each a Qualified Institutional Lender under clause
(a), (b), (c) or (d) of this definition.

(f)    an investment fund, limited liability company, limited partnership or
general partnership in which a Permitted Fund Manager or an entity that is
otherwise a Qualified Institutional Lender under clauses (a), (b), (c) or (d) of
this definition investing through a fund with committed capital of at least
$250,000,000 acts as the general partner, managing member, or the fund manager
responsible for the day to day management and operation of such investment
vehicle and provided that at least fifty percent (50%) of the equity interests
in such investment vehicle are owned, directly or indirectly, by one or more
entities that are otherwise Qualified Institutional Lenders, or

(g)    any Person that is a Qualified Institutional Lender (pursuant to any of
the foregoing clauses) but is acting in any agency capacity in connection with a
lending syndicate, so long as more than fifty percent (50%) of the lenders in
such lending syndicate (by loan balance or committed loan amounts) are Qualified
Institutional Lenders under clause (a), (b), (c) or (d) of this definition.

“Qualified Servicing Expenses” shall mean any fees and expenses payable to any
third-party Servicer that is not an Affiliate of Seller, which fees and expenses
are netted by such Servicer out of collections pursuant to a Servicing Agreement
that has been approved by Buyer in its reasonable discretion, and which Servicer
shall have entered into a Servicer Notice and Agreement substantially in the
form attached hereto as Exhibit IX attached hereto.

“Qualified Transferee” shall mean a transferee that (1) has never been indicted
or convicted of, or pled guilty or no contest to, a felony and (2) has never
been indicted or convicted of, or pled guilty or no contest to, a Patriot Act
Offense and is not on any Government List.

“Qualified Trustee” shall mean (i) a corporation, national bank, national
banking association or a trust company, organized and doing business under the
laws of any state or the United States of America, authorized under such laws to
exercise corporate trust powers and to accept the trust conferred, having a
combined capital and surplus of at least $100,000,000 and subject to supervision
or examination by federal or state authority, (ii) an institution insured by the
Federal Deposit Insurance Corporation, or (iii) an institution whose long-term
senior unsecured debt is rated in either of the then in effect top two rating
categories of each of the applicable Rating Agencies.

 

26

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

“Rating Agencies” shall mean Morningstar Credit Ratings, LLC, DBRS, Inc.,
Standard & Poor’s Ratings Services, Moody’s Investor Services, Inc., Kroll Bond
Ratings and Fitch Ratings, in each case, together with their respective
successors-in-interest, or, if any of such entities shall for any reason no
longer perform the function of a securities rating agency, any other nationally
recognized statistical rating agency designated by Buyer.

“Real Estate Settlement Procedures Act” shall mean the Real Estate Settlement
Procedures Act of 1974, 12 U.S.C. §§ 2601 et seq.

“Register” shall have the meaning specified in Section 18(c) of this Agreement.

“Registrar” shall have the meaning specified in Section 18(c) of this Agreement.

“REIT” shall mean a Person satisfying the conditions and limitations set forth
in Sections 856(b) and 856(c) of the Code and qualifying as a “real estate
investment trust,” as defined in Section 856(a) of the Code.

“Related Interest” shall mean (a) a pari passu or junior participation interest
in a commercial mortgage loan, (b) a “B note” or other subordinate note in an
“A/B” or similar structure or pari passu “A note” in a commercial mortgage loan,
(c) a Mezzanine Loan or (d) a preferred equity interest or any other subordinate
debt or equity interest relating to a Mortgaged Property or Mortgagor for any
Transaction, with respect to which, in each such case, the Senior Interest or
related Mortgage Loan is a Purchased Loan hereunder.

“Remittance Date” shall mean the nineteenth (19th) calendar day of each month,
or the next succeeding Business Day, if such calendar day shall not be a
Business Day, or such other day as is mutually agreed to by Seller and Buyer.

“Repurchase Date” shall mean, for any Purchased Loan, the earliest of (i) the
Facility Termination Date as same may be extended pursuant to Section 3 of the
Letter Agreement, (ii) the date specified in the Confirmation for such Purchased
Loan as may be extended pursuant to Section 3 of the Letter Agreement, and
(iii) if applicable, the related Early Repurchase Date, Mandatory Early
Repurchase Date or Accelerated Repurchase Date.

“Repurchase Obligations” shall have the meaning specified in Section 6 of this
Agreement.

“Repurchase Price” shall mean, with respect to any Purchased Loan as of any
date, the price at which such Purchased Loan is to be transferred from Buyer to
Seller upon termination of the related Transaction; such price will be
determined in each case as the sum of (i) the then outstanding Purchase Price of
such Purchased Loan and (ii) the accrued but unpaid Price Differential with
respect to such Purchased Loan as of the date of such determination.

“Repurchase Price Cap” shall mean, with respect to any Purchased Loan as of any
date of determination, an amount equal to (i) the product of (x) the then
current Principal Balance of such Purchased Loan (excluding any additional
advances of principal funded by Seller to the Mortgagor for any Purchased Loan
after the Purchase Date for such Purchased Loan, unless such Purchased Loan has
been approved by Buyer as a Future Funding Purchased Loan or such advances have
otherwise been approved by Buyer as Future Funding Amounts), (y) the Purchase
Date Market

 

 

27

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

Value Percentage of such Purchased Loan, and (z) the Maximum Original Purchase
Percentage of such Purchased Loan, less (ii) the Net Market Value Decrease of
such Purchased Loan and less (iii) any mandatory reductions of the Repurchase
Price for such Purchased Loan required under the Confirmation therefor.

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

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

“S&P” shall mean Standard & Poor’s Ratings Services, a Division of The
McGraw-Hill Companies.

“Sanctions Laws” shall mean economic or financial sanctions, trade embargoes, or
other restrictive economic or financial measures enacted, imposed, administered
or enforced from time to time pursuant to statute, executive order, or
regulation by: (1) the U.S. Government, including those administered by OFAC,
the U.S. Department of State, and the U.S. Department of Commerce; (2) the
United Nations Security Council; (3) the European Union or any of its member
states; (4) Her Majesty’s Treasury; (5) the Swiss Government; (6) the Canadian
Government; or (7) Governmental Authorities of any other country in which Buyer,
Seller or Guarantor operates.

“SDN List” shall mean OFAC’s List of Specially Designated Nationals and Blocked
Persons.

“SEC” shall have the meaning specified in Section 23(a).

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

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

“Senior Interest” shall mean (a) a senior (or pari passu senior) Participation
Interest, or (b) an A-Note.

“Senior Interest Documents” shall mean, for any Senior Interest, the A-Note or
participation certificate, as applicable, together with any co-lender
agreements, participation agreements and/or other intercreditor agreements or
other documents governing or otherwise relating to the priority, rights or
obligations of such Senior Interest and the applicable Related

 

28

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

Interest, including, without limitation, those documents which are required to
be delivered to Custodian under the Custodial Agreement.

“Senior Interest Side Letter” shall mean, with respect to any Mortgage Loan or
Senior Interest proposed to be included in a Transaction hereunder, if Seller,
Parent or an Affiliate of Seller that is a wholly-owned (direct or indirect)
subsidiary of Parent shall hold any other Related Interest related to such
Mortgage Loan or Senior Interest, and such other Related Interest is not also a
Purchased Loan, a letter agreement to be entered into on or before the Purchase
Date of such Mortgage Loan or Senior Interest hereunder (unless Buyer agrees, in
writing, in its sole discretion to waive such requirement with respect to such
Senior Interest) among Seller, Parent or any such Affiliate of Seller that holds
the Related Interest (or any portion thereof) and Buyer, in form and substance
reasonably acceptable to Buyer, pursuant to which the parties shall agree:
(a) that any Transfer by such holder of the Related Interest (or such portion
thereof) or any interest therein shall be subject to the provisions of
Section 10(q) hereof; (b) that for so long as the Related Interest (or such
portion thereof) is held by Seller or an Affiliate of Seller, notwithstanding
anything to the contrary contained in the Senior Interest Documents, upon
Buyer’s exercise of any of its remedies with respect to the applicable Mortgage
Loan or Senior Interest pursuant to Sections 13(b)(iii) or 13(c)(iii) of this
Agreement after the occurrence and during the continuance of an Event of
Default, such holder of the Related Interest (or portion thereof) shall not be
entitled to (i) appoint or replace, or consent to the appointment or replacement
of, the servicer or special servicer for the related Mortgage Loan, (ii) consent
or approve of any major decisions with respect to the related Mortgage Loan or
exercise any other rights of a “controlling holder” or “operating advisor” under
the Senior Interest Documents, (iii) exercise any additional cure rights with
respect to any Purchased Loan Event of Default or default under any Purchased
Loan Documents that are granted to the holder of the Related Interest pursuant
to the applicable Senior Interest Documents; provided that the foregoing shall
not restrict Seller from exercising any of Seller’s cure rights with respect
thereto provided under this Agreement or the other Transaction Documents or
(iv) exercise any right to purchase the related Senior Interest at a purchase
price that is less than the sum of all amounts which would be payable by the
Mortgagor to the holder of the Senior Interest pursuant to the Purchased Loan
Documents during the continuance of a Purchased Loan Event of Default; and
(c) to such other matters with respect to such Mortgage Loan or Senior Interest
as Buyer may require in its sole discretion.

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

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

“Servicer” shall have the meaning specified in Section 28(a) of this Agreement.

“Servicer Notice and Agreement” shall have the meaning specified in
Section 28(a) of this Agreement.

“Servicing Agreement” shall have the meaning specified in Section 28(a) of this
Agreement.

“Servicing Records” shall have the meaning specified in Section 28(b) of this
Agreement.

 

29

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

“Servicing Rights” shall mean Seller’s right, title and interest in and to any
and all of the following, in each case as the same may be subject to the terms
of any applicable Servicing Agreements and the provisions of the documentation
for the applicable Purchased Loans: (a) any and all rights of Seller to service
the Purchased Loans or to appoint (or terminate the appointment of) any third
party as servicer of the Purchased Loans; (b) any payments to or monies received
by or payable to Seller (as opposed to any third-party servicer) as compensation
for servicing the Purchased Loans (including, without limitation, workout fees,
consent fees, liquidation fee, late fees, penalties or similar amounts payable
to Seller); (c) all agreements or documents creating, defining or evidencing any
such servicing rights to the extent they relate to such servicing rights and all
rights of Seller (individually or as servicer) thereunder (including all rights
to set the compensation of any third-party servicer); (d) the right, if any, to
appoint a special servicer or liquidator of the Purchased Loans; and (e) all
rights of Seller to give directions with respect to the management and
distribution of any collections, escrow accounts, reserve accounts or other
similar payments or accounts in connection with the Purchased Loans.

“Single-Purpose Entity” shall mean a corporation, limited partnership, limited
liability company or trust that, since the date of its formation (unless
otherwise indicated in this Agreement) and at all times on and after the date
hereof, has complied with and shall at all times comply with the provisions of
Section 12 hereof.

“SIPA” shall have the meaning specified in Section 23(a).

“Supplemental Due Diligence List” shall mean, with respect to any New
Collateral, information or deliveries concerning the New Collateral that Buyer
shall reasonably request in addition to the Preliminary Due Diligence Package.

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

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

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

“Transaction Conditions Precedent” shall mean, with respect to each proposed
Transaction,

 

  (i)

no Default or Event of Default under this Agreement shall have occurred and be
continuing and no uncured Margin Deficit shall exist, in each case, as of the
Purchase Date for such proposed Transaction (unless any such Default, Event of
Default or Margin Deficit is cured simultaneously with the consummation of such
Transaction as determined by Buyer in its sole discretion);

 

  (ii)

Seller shall have provided Buyer with evidence of the acquisition cost of each
Mortgage Loan or Senior Interest proposed to be sold in such

 

30

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

 

Transaction (or, in the case of any Mortgage Loan or Senior Interest purchased
from an Affiliate, the original acquisition cost of such Mortgage Loan or Senior
Interest at the time it was acquired by an Affiliate of Seller from a
non-Affiliate) (including therein reasonable supporting documentation required
by Buyer, if any) or if the related Mortgage Loan was originated by Seller, the
outstanding principal balance of such Mortgage Loan or Senior Interest;

 

  (iii)

Seller shall have delivered to Buyer all information which Seller believes to be
reasonably necessary for Buyer to make an informed business decision with
respect to the purchase of each such Mortgage Loan or Senior Interest and Seller
shall have certified to Buyer that Seller has no knowledge of any material
information concerning any such Mortgage Loan or Senior Interest which is not
reflected in the related Diligence Materials or otherwise disclosed to Buyer in
writing;

 

  (iv)

the representations and warranties made by Seller or Guarantor in any of the
Transaction Documents (excluding Section 9(b)(viii) and Purchased Loan
Representations with respect to existing Purchased Loans, but including the
Purchased Loan Representations with respect to the Eligible Loans then being
transferred), subject to any exceptions to such representations and warranties
disclosed in writing by Seller to Buyer which are approved by Buyer in its sole
and absolute discretion and set forth on an Exhibit or Schedule to the
Confirmation for such Eligible Loan) shall be true and correct in all material
respects as of the Purchase Date for such Transaction (except to the extent such
representations and warranties are made as of a particular date, in which case
such representations and warranties shall be true and correct in all material
respects as of such particular date);

 

  (v)

Seller has paid all fees and expenses of Buyer (subject to Section 27 below)
then due and payable (which, upon the agreement of Buyer and Seller, may be held
back from funds remitted to Seller by Buyer), including without limitation the
applicable fees specified in the Letter Agreement;

 

  (vi)

Seller has satisfactorily completed its “Know Your Customer” and OFAC diligence
(as to the related Mortgagor, guarantor and all other related parties, as
determined by Buyer) and the results of such diligence shall be acceptable to
Buyer in its sole discretion;

 

  (vii)

if applicable and not previously delivered, the Servicer of the proposed
Mortgage Loan or Senior Interest shall have entered into a Servicer Notice and
Agreement substantially in the form attached hereto as Exhibit IX;

 

  (viii)

Buyer shall have (A) determined, in accordance with the applicable provisions of
Section 3(a) of this Agreement, that each Mortgage Loan or Senior Interest
proposed to be sold to Buyer by Seller in the related

 

31

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

 

Transaction is an Eligible Loan and (B) obtained internal credit approval for
the inclusion of each such Eligible Loan as a Purchased Loan in a Transaction,
and in each case, such approval shall be evidenced by Buyer’s execution of a
related Confirmation;

 

  (ix)

Buyer shall have received a Custodial Delivery and a Trust Receipt with respect
to the assets proposed to be sent to Buyer by Seller in the related Transaction
pursuant to Section 7(b) of this Agreement;

 

  (x)

Master Seller shall have established the Series Seller which will be entering
the proposed Transaction and such Series Seller shall have executed and/or
delivered to Buyer (1) a Joinder Agreement with respect to such Series Seller,
(2) any organizational documents and amendments and (3) any other documents and
agreements required in connection with such new Series Seller or the proposed
Transaction under Section 3(n) of this Agreement;

 

  (xi)

With respect to the initial Transaction only, Buyer shall have received from
Master Seller any additional opinions of outside counsel to Master Seller as
Buyer may reasonably require and in form reasonably acceptable to Buyer
(including, but not limited to, those relating to enforceability, bankruptcy
safe harbor, corporate matters, applicability of the Investment Company Act of
1940 to Seller or any Affiliate of Seller, and security interests).;and

 

  (xii)

any other conditions as may be reasonably required by Buyer

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

“Transaction Documents” shall mean, collectively, this Agreement, the Letter
Agreement, the Guaranty, the Member Guaranty, the Custodial Agreement, the
Controlled Account Agreement, the Pledge Agreements, all Confirmations and
Joinder Agreements executed pursuant to this Agreement in connection with
specific Purchased Loans, each Servicing Agreement, each Servicer Notice and
Agreement, each Senior Interest Side Letter, and any and all other documents and
agreements executed and delivered by Seller, Member and/or Guarantor as required
by this Agreement or any Transactions hereunder, as each may be amended,
modified and/or restated from time to time.

“Transaction Event of Default” shall have the meaning set forth in
Section 13(a)(II) of this Agreement.

“Transfer” shall have the meaning specified in Section 10(b) of this Agreement.

“Treasury Regulations” shall mean the income tax regulations, including
temporary regulations, promulgated under the Code, as such regulations are
amended from time to time.

“Trust Receipt” shall mean a trust receipt issued by Custodian to Buyer
confirming the Custodian’s possession of certain Purchased Loan Files which are
the property of and held by

 

32

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

Custodian for the benefit of Buyer (or any other holder of such trust receipt)
or a bailment arrangement with counsel or other third party reasonably
acceptable to Buyer.

“Truth in Lending Act” shall mean the Truth in Lending Act of 1968, 15 U.S.C.
§§1601 et seq.

“UCC” shall have the meaning specified in Section 6 of this Agreement.

“Underlying Purchased Loan Reserves” shall mean, with respect to any Purchased
Loan, the escrows, reserve funds or other similar amounts properly retained in
accounts maintained by the Servicer (or a third-party control bank) of such
Purchased Loan unless and until such funds are, pursuant to and in accordance
with the terms of the related Purchased Loan Documents, either (i) released or
otherwise available to Seller (but not if such funds are used for the purpose
for which they were maintained), or (ii) released to the related Mortgagor.

“Underwriting Issues” shall mean, with respect to any Collateral as to which
Seller intends to request a Transaction, all material information known by
Seller that, based on the making of reasonable inquiries and the exercise of
reasonable care and diligence under the circumstances, would be considered a
materially “negative” factor (either separately or in the aggregate with other
information), or a material defect in loan documentation or closing deliveries
(such as any absence of any material Purchased Loan Document(s)), to a reputable
nationally recognized institutional commercial mortgage buyer in determining
whether to originate or acquire the Collateral in question.

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

(b)    Under this Agreement, all accounting terms not specifically defined
herein shall be construed in accordance with GAAP and all accounting
determinations made and all financial statements prepared hereunder shall be
made and prepared in accordance with GAAP. 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. The words “herein,” “hereof,” and
“hereunder” and other words of similar import refer to this Agreement as a
whole, including the exhibits and schedules hereto, as the same may from time to
time be amended or supplemented and not to any particular paragraph, section,
subsection, or clause contained in this Agreement. Each of the definitions set
forth in Section 2 hereof shall be equally applicable to both the singular and
plural forms of the defined terms. Unless specifically stated otherwise, all
references herein to any agreements, documents or instruments shall be
references to the same as amended, restated, supplemented or otherwise modified
from time to time.

3.    INITIATION; CONFIRMATION; TERMINATION; FEES; EXTENSION

(a)    Subject to the terms and conditions set forth in this Agreement
(including, without limitation, the satisfaction of the Transaction Conditions
Precedent set forth herein), Buyer may enter into Transactions from time to time
in its sole and absolute discretion pursuant to written request at the
initiation of Master Seller as provided in this Agreement. Seller shall give
Buyer written notice of each proposed Transaction and Buyer shall inform Master
Seller of its determination with respect to any assets proposed to be sold to
Buyer by Seller in accordance with

 

33

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

Exhibit VIII attached hereto, which may be amended from time to time. Buyer
shall have the right to review all Eligible Loans proposed to be sold to Buyer
in any Transaction and to conduct its own due diligence investigation of such
Eligible Loans as Buyer determines in its sole and absolute discretion. Buyer
shall be entitled to make a determination, in its sole and absolute discretion,
whether it shall or shall not purchase any or all of the Eligible Loans proposed
to be sold to Buyer by Seller. In addition, Buyer shall not be required to enter
into any Transaction if an Event of Default has occurred and is continuing with
respect to any Transaction Documents.

(b)    Upon agreeing to enter into a Transaction hereunder, provided each of the
Transaction Conditions Precedent shall have been either satisfied, as determined
by Buyer in its sole and absolute discretion exercised in good faith, or
affirmatively waived by Buyer in writing (which waiver unless otherwise provided
in writing, shall be evidenced by Buyer’s execution of the related
Confirmation), Buyer shall promptly deliver to Master Seller a written
confirmation (which shall also be in electronic form) in the form of Exhibit I
attached hereto of each Transaction (a “Confirmation”). Such Confirmation shall
describe each Purchased Loan to be included in such Transaction, shall identify
Buyer and the applicable Series Seller for such Transaction, and shall set
forth:

 

  (i)

the Purchase Date,

 

  (ii)

the Principal Balance,

 

  (iii)

the Purchase Date Market Value;

 

  (iv)

the Purchase Date Market Value Percentage;

 

  (v)

the Actual Original Purchase Percentage,

 

  (vi)

the Maximum Original Purchase Percentage,

 

  (vii)

the Purchase Price,

 

  (viii)

the Repurchase Date,

 

  (ix)

the initial Pricing Rate (including the Applicable Spread) applicable to the
Transaction,

 

  (x)

the Approved Future Funding Amounts;

 

  (xi)

each Additional Confirmation Condition (if applicable); and

 

  (xii)

any additional terms or conditions not inconsistent with this Agreement.

With respect to any Transaction, the Pricing Rate shall be determined initially
on the Pricing Rate Determination Date applicable to the first Pricing Rate
Period for such Transaction, and shall be reset on each Pricing Rate
Determination Date for the next succeeding Pricing Rate Periods for such
Transaction. Buyer or its agent shall, in accordance with the terms of this
Agreement,

 

34

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

determine the Pricing Rate on each Pricing Rate Determination Date for the
related Pricing Rate Period and notify Seller of such rate for such period on
such Pricing Rate Determination Date.

(c)    Each Confirmation that has been agreed to and executed by Buyer and
Seller, together with this Agreement, shall be conclusive evidence of the terms
of the Transactions covered thereby. In the event of any conflict between the
terms of such Confirmation and the terms of this Agreement, the Confirmation
shall prevail.

(d)    Except upon the occurrence and during the continuance of an Event of
Default, Master Seller, on behalf of the applicable Series Seller, shall be
entitled to terminate any Transaction on demand, in whole or in part, and
repurchase any or all of the Purchased Loans subject to such Transaction (each
an “Early Repurchase”) on any Business Day prior to the Repurchase Date therefor
(an “Early Repurchase Date”); provided, however, that:

 

  (i)

Seller notifies Buyer in writing of its intent to terminate such Transaction and
repurchase such Purchased Loan(s) no later than three (3) Business Days prior to
such Early Repurchase Date, which notice shall be revocable by Seller at any
time up to one (1) Business Day prior to such Early Repurchase Date; and

 

  (ii)

on such Early Repurchase Date, the applicable Series Seller (or Master Seller on
behalf of such Series Seller) pays to Buyer an amount equal to the sum of the
Repurchase Price for such Transaction, and any other amounts payable under this
Agreement or the Transaction Documents (including, without limitation, any
amounts payable under Section 3(h) of this Agreement and any Exit Fees payable
pursuant to Section 2(b) of the Letter Agreement) with respect to such
Transaction against transfer to the applicable Series Seller or its designee of
such Purchased Loan(s);

 

  (iii)

if such Early Repurchase Date is during the Third Extension Term, the applicable
Series Seller (or Master Seller on behalf of such Series Seller) pay to Buyer an
amount equal to the Release Payment, if any, for such Transaction;

 

  (iv)

no Margin Deficit or Default exists which is not cured by or simultaneously with
such repurchase or would exist as a result of such repurchase; and

 

  (v)

on such Early Repurchase Date, Seller shall have paid any amounts then due and
owing to Buyer under this Agreement and the other Transaction Documents.

(e)    On the applicable Repurchase Date for any Transaction, termination of
such Transaction will be effected by transfer to the applicable Series Seller or
its agent of the applicable Purchased Loan(s) and any Income in respect thereof
received by Buyer (and not previously credited or transferred to, or applied to
the obligations of, Master Seller, such Series Seller or any other Series Seller
pursuant to Section 5 of this Agreement), against the simultaneous transfer of
the Repurchase Price for such Transaction to an account of Buyer or the Cash
Management Account.

 

35

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

(f)    LIBOR Unavailability; Prime Rate Transactions; Alternate Rate
Transactions.

(i)    Subject to the terms and conditions of this Section 3(f), all
Transactions shall be LIBOR Transactions. If prior to the first day of any
Pricing Rate Period with respect to any Transaction, Buyer shall have determined
in its sole and absolute discretion exercised in good faith (which determination
shall be conclusive and binding upon Seller) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist for
ascertaining the LIBO Rate for such Pricing Rate Period and such Transaction
cannot be converted to an Alternate Rate Transaction in accordance with
Section 3(f)(ii) because adequate and reasonable means do not exist for
ascertaining an Alternative Index, Buyer shall give written notice thereof
(which notice may be via email) to Seller as soon as practicable thereafter;
provided, however, that in making any such determination Buyer shall not treat
Seller differently than similarly situated customers in Buyer’s other commercial
real estate repurchase facilities; provided that in no event shall Buyer be
required to disclose confidential information concerning other customers. If
such notice is given, the Pricing Rate with respect to such Transaction for such
Pricing Rate Period, and for any subsequent Pricing Rate Periods until such
notice has been withdrawn by Buyer, shall be a per annum rate equal to the Prime
Index plus the Applicable Spread (the “Prime Rate”).

(ii)    If, prior to a Transaction being converted from a LIBOR Transaction to a
Prime Rate Transaction, Buyer shall have determined in its sole and absolute
discretion exercised in good faith that (i) by reason of circumstances affecting
the relevant market, adequate and reasonable means do not exist for ascertaining
LIBOR, (ii) LIBOR is no longer the industry standard floating rate index or has
become an inappropriate index for the calculation of floating rates on loans, or
(ii) LIBOR has been succeeded by an Alternate Index and such Alternate Index can
be determined, then Buyer shall give written notice thereof (which notice may be
via email) to Seller as soon as practicable thereafter and such Transaction
shall be converted, as of the first day of the next succeeding Pricing Rate
Period, from a LIBOR Transaction to an Alternate Rate Transaction; provided,
however, that in making any such determination Buyer shall not treat Seller
differently than similarly situated customers in Buyer’s other commercial real
estate repurchase facilities; provided that in no event shall Buyer be required
to disclose confidential information concerning other customers.

(iii)    If, pursuant to Section 3(f)(i) hereof, any Transaction has been
converted to a Prime Rate Transaction and adequate and reasonable means
subsequently exist for ascertaining the LIBO Rate or an Alternative Index, as
applicable, Buyer shall give notice thereof (which notice may be via email) to
Seller as soon as practicable thereafter and such Transaction shall be
converted, as of the first day of the next succeeding Pricing Rate Period, from
a Prime Rate Transaction to a LIBOR Transaction or Alternate Rate Transaction,
as applicable.

(iv)     If, pursuant to the terms of Section 3(f)(ii) hereof, any Transaction
has been converted to an Alternate Rate Transaction but thereafter Buyer shall
determine in its sole and absolute discretion exercised in good faith that the
Alternate Index Rate cannot be ascertained (including based on any other
replacement Alternate Index), or that the adoption of any requirement of law or
any change therein or in the interpretation or application thereof, shall

 

36

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

make it unlawful for Buyer to maintain an Alternate Rate Transaction as
contemplated hereunder (including based on any other replacement Alternate
Index), or the Alternate Rate (including based on any other replacement
Alternate Index) would be in excess of the maximum interest rate that Seller may
by law pay, Buyer shall give notice thereof (which notice may be via email) to
Seller and such Alternate Rate Transaction shall be converted, as of the first
day of the next succeeding Pricing Rate Period, to a Prime Rate Transaction. If,
pursuant to the terms of this Section 3(f)(iv), any Transaction has been
converted to a Prime Rate Transaction and Buyer shall determine in its sole and
absolute discretion exercised in good faith that the event(s) or circumstance(s)
which resulted in such conversion shall no longer be applicable, Buyer shall
give notice thereof (which notice may be via email) to Seller as soon as
practicable thereafter and such Transaction shall be converted, as of the first
day of the next succeeding Pricing Rate Period, to an Alternate Rate
Transaction.

(g)    Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
shall make it unlawful for Buyer to effect or continue Transactions as
contemplated by the Transaction Documents, the Buyer shall give notice (which
notice may be by email) thereof to Seller as soon as practicable thereafter, and
(a) the commitment of Buyer hereunder to enter into new Transactions and to
continue Transactions as such shall forthwith be canceled, and (b) the
Transactions then outstanding shall be converted automatically to Alternate Rate
Transactions (or, if an Alternate Index Rate cannot be ascertained, Prime Rate
Transactions) on the last day of the then current Pricing Rate Period or within
such earlier period as may be required by law. If any such conversion of a
Transaction occurs on a day which is not the last day of the then current
Pricing Rate Period with respect to such Transaction, Seller shall pay to Buyer
such amounts, if any, as may be required pursuant to Section 3(i) of this
Agreement. Buyer agrees to exercise its rights and remedies under this
Section 3(g) in a manner substantially similar to Buyer’s exercise of similar
remedies in commercial real estate loan repurchase facility agreements with
similarly situated customers where Buyer has a comparable contractual right;
provided that in no event shall Buyer be required to disclose confidential
information concerning other customers.

(h)    Upon written demand by Buyer, Seller shall indemnify Buyer and hold Buyer
harmless from any net actual, out of pocket loss or expense (not to include any
lost profit or opportunity) (including, without limitation, reasonable actual
attorneys’ fees and disbursements) which Buyer may sustain or incur as a
consequence of (i) default by Seller in terminating any Transaction after Seller
has given a notice in accordance with Section 3(d) of this Agreement of a
termination of a Transaction, (ii) any payment of the Repurchase Price for any
Purchased Loan on any day other than a Remittance Date or the applicable
Repurchase Date for such Purchased Loan (including, without limitation, any
actual out-of-pocket loss or expense arising from the reemployment of funds
obtained by Buyer to maintain Transactions hereunder or from customary and
reasonable fees payable to terminate the deposits from which such funds were
obtained) or (iii) conversion of the Transaction to an Alternate Rate
Transaction pursuant to Section 3(f) of this Agreement on a day which is not the
last day of the then current Pricing Rate Period. A certificate as to such
actual costs, losses, damages and expenses, setting forth the calculations
therefor shall be submitted promptly by Buyer to Seller and shall be prima facie
evidence of the information set forth therein.

 

37

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

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

 

  (i)

shall subject Buyer to any Taxes (other than (A) Indemnified Taxes, (B) Taxes
described in clauses (b) through (d) of the definition of Excluded Taxes, or
(C) Connection Income Taxes) on its loan, loan principal, letters of credit,
commitments, or other obligations, or its deposits, reserves, other liabilities
or capital attributable thereto;

 

  (ii)

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

 

  (iii)

shall impose on Buyer any other condition (other than Taxes);

and the result of any of the foregoing is to increase the cost to Buyer of
entering into, continuing or maintaining Transactions or to reduce any amount
receivable under the Transaction Documents in respect thereof; then, in any such
case, Seller shall promptly pay Buyer, upon its demand, any additional amounts
necessary to compensate Buyer for such increased cost or reduced amount
receivable; provided, however, that in determining whether to make any demand
for payment of any additional amounts by Seller under this Section 3(i), Buyer
shall not treat Seller differently that similarly situated customers in Buyer’s
other commercial real estate repurchase facilities; provided that in no event
shall Buyer be required to disclose confidential information concerning other
customers. If Buyer becomes entitled to claim any additional amounts pursuant to
this Section 3(i), it shall, within ten (10) Business Days of such event, notify
Seller in writing of the event by reason of which it has become so entitled.
Such notification as to the calculation of any additional amounts payable
pursuant to this subsection shall be submitted by Buyer to Seller and shall be
prima facie evidence of such additional amounts. This covenant shall survive the
termination of this Agreement and the repurchase by Seller of any or all of the
Purchased Loans. Failure or delay on the part of any Buyer to demand
compensation pursuant to this Section shall not constitute a waiver of such
Buyer’s right to demand such compensation; provided that Seller shall not be
required to compensate Buyer pursuant to this Section for any increased costs or
reduced amounts receivable suffered more than nine (9) months prior to the date
that Buyer notifies Seller of the adoption or any change in any Requirement of
Law giving rise to such increased costs or reductions and of Buyer’s intention
to claim compensation therefor (except that, if the adoption or change in the
Requirement of Law giving rise to such increased costs or reductions is
retroactive, then the nine (9) month period referred to above shall be extended
to include the period of retroactive effect thereof).

(j)    If Buyer shall have determined that the adoption of or any change in any
Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by Buyer or any corporation controlling Buyer
with any request or directive regarding

 

38

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

capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof does or shall have the effect of
increasing the amount of capital to be held by Buyer in respect of any
Transaction hereunder or reducing the rate of return on Buyer’s or such
corporation’s capital as a consequence of its obligations hereunder to a level
below that which Buyer or such corporation could have achieved but for such
adoption, change or compliance (taking into consideration Buyer’s or such
corporation’s policies with respect to capital adequacy) by an amount deemed by
Buyer, in the exercise of its reasonable business judgment, to be material, then
from time to time, after submission by Buyer to Seller of a written request
therefor, Seller shall pay to Buyer such additional amount or amounts as will
compensate Buyer for such reduction; provided, however, that in determining
whether to make any demand for payment of additional amounts by Seller under
this Section 3(j), Buyer shall not treat Seller differently than similarly
situated customers in Buyer’s other commercial real estate repurchase
facilities; provided that in no event shall Buyer be required to disclose
confidential information concerning other customers. Such notification as to the
calculation of any additional amounts payable pursuant to this subsection shall
be submitted by Buyer to Seller and shall be prima facie evidence of such
additional amounts. Seller shall not be required to compensate Buyer pursuant to
this Section for any increased costs or reduced rate of return suffered more
than nine (9) months prior to the date that Buyer notifies Seller of the
adoption or any change in any Requirement of Law giving rise to such increased
costs or reductions and of Buyer’s intention to claim compensation therefor
(except that, if the adoption or change in the Requirement of Law giving rise to
such increased costs or reductions is retroactive, then the nine (9) month
period referred to above shall be extended to include the period of retroactive
effect thereof).

(k)    Master Seller, on behalf of any Series Seller, shall have the right at
any time, upon one (1) Business Day prior notice to Buyer, to transfer cash to
Buyer for the purpose of reducing the Repurchase Price of, but not terminating,
the Transaction to which such Series Seller is a party.

(l)    Upon the occurrence of a Mandatory Early Repurchase Event with respect to
any Purchased Loan, Buyer may, upon written notice to the applicable Series
Seller, accelerate the Repurchase Date of such Purchased Loan to the date (the
“Mandatory Early Repurchase Date”) which is three (3) Business Days following
such notice; provided that such notice is received by 3:00 p.m. (New York City
time), or four (4) Business Days following such notice if such notice is
received after 3:00 p.m. (New York City time) (or such earlier date as may be
required pursuant to the last sentence of this Section 3(l)), and require that
the applicable Series Seller repurchase such Purchased Loan from Buyer on such
Mandatory Early Repurchase Date (a “Mandatory Early Repurchase”), which
repurchase by the applicable Series Seller shall be conducted pursuant to and in
accordance with Section 3(d).

(m)    If Buyer shall exercise its rights under Sections 3(f), 3(g), 3(i), 3(j)
or Section 29, then Seller shall have the right, at any time thereafter (unless
Buyer has at such time waived any claims pursuant to such Sections or such
Sections no longer apply) to terminate this Agreement or all Transactions
hereunder and, in connection with any such termination, notwithstanding anything
to the contrary contained herein or in any other Transaction Document, there
shall be no Exit Fee or prepayment fee or premium due.

(n)    On or before the Purchase Date for any Transaction, Member shall
establish, pursuant to the provisions of the Master Seller LLC Agreement and in
accordance with Delaware

 

39

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

law, a new Series Seller to enter into such Transaction pursuant to the related
Confirmation, and deliver copies of the completed Schedule C to the Master
Seller LLC Agreement with respect to such Series Seller and same shall be
reasonably acceptable to Buyer. On or prior to the Purchase Date for any
Transaction, (i) Master Seller and such new Series Seller shall execute and
deliver to Buyer a joinder agreement substantially in form attached hereto as
Exhibit XI (a “Joinder Agreement”) pursuant to which such Series Seller shall be
added as a party hereto and to the other Transaction Documents and any other
documents and agreements as Buyer may reasonably require with respect to such
Series Seller or in connection with such Transaction and (ii) if required by
Buyer in its sole discretion, Buyer shall have filed UCC financing statements in
all applicable filing offices with respect to such new Series Seller, which UCC
financing statements shall be in form and substance satisfactory to Buyer and
may describe the collateral as “All assets of such new Series Seller, whether
now owned or existing or hereafter acquired or arising and wheresoever located,
and all proceeds and products thereof” or words to that effect, and any
limitations on such collateral description.

(o)    Without limiting the provisions of Sections 5(c), 5(d), 5(e), 26, 27 or
30(d) hereof or any other provisions hereof or of the other Transaction
Documents, unless otherwise expressly set forth in a Confirmation with respect
to a specific Purchased Loan, Master Seller, on behalf of itself and each Series
Seller that may be a party to a Transaction hereunder, and Buyer hereby agree
that Seller shall be obligated to pay Buyer, for each Transaction, a Financing
Fee at a rate specified by Buyer in its sole and absolute discretion (for each
Transaction, the “Financing Fee Rate”) as set forth in the Confirmation related
to such Transaction, which Financing Fee Rate shall not exceed the cap specified
in such Confirmation (the “Financing Fee Cap”). The accrued but unpaid Financing
Fee with respect to a Purchased Loan shall be payable on each Remittance Date,
and, unless otherwise paid by Seller or its Affiliates, shall be remitted by
Depository to Buyer (or to such other party as may be designated by Buyer for
such Purchased Loan in the relevant Confirmation (the “Financing Fee Payee”)
from the Cash Management Account on each Remittance Date pursuant to the
provisions of Sections 5(c)(iv), 5(d)(iv) or 5(e)(iv), as applicable. For the
avoidance of doubt: (i) if no Financing Fee Rate is specified in the applicable
Confirmation, the amount of corresponding Financing Fee shall be zero, (ii) if a
Financing Fee Rate is specified in the applicable Confirmation for a
Transaction, it shall be expressed as a percentage or as basis points, and
(iii) in no event shall Seller be obligated to pay Financing Fees in excess of
the Financing Fee Cap with respect to any Transaction.

(p)    With respect to any Transaction involving a Purchased Loan with future
advances, in the event a future advance is made or is to be made by Seller
pursuant to the Purchased Loan Documents for such Purchased Loan, Seller may
submit to Buyer a request (a “Future Funding Transaction Request”) that Buyer
transfer cash to Seller in an amount (the “Future Funding Amount”) not to exceed
the Maximum Original Purchase Percentage multiplied by the amount of such future
advance. Other than with respect to Future Funding Amounts relating to Purchased
Loans approved by Buyer in its sole and absolute discretion as Future Funding
Purchased Loans as of the related Purchase Date and set forth in the
Confirmation therefor or otherwise approved in writing for the applicable
Purchased Loan (“Approved Future Funding Amounts”), Buyer shall have no
obligation to fund Future Funding Amounts. With respect to Approved Future
Funding Amounts that are approved by Buyer, Buyer shall transfer cash in the
amount of the Future Funding Amount, which funding shall increase the
outstanding Purchase Price for the related Future Funding Purchased Loan, on the
date requested by Seller in the related Future Funding Transaction

 

40

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

Request (each a “Future Funding Date”) and in accordance with the wire
instructions provided by Seller therein subject to satisfaction (or, in Buyer’s
sole discretion, waiver in writing) of the following conditions precedent:

(i)    The related Future Funding Transaction Request shall have been delivered
no later than five (5) Business Days prior to the related Future Funding Date;

(ii)    Seller shall have demonstrated to Buyer’s reasonable satisfaction that
all related conditions precedent to the related future funding advance under the
related Purchased Loan Documents, have been satisfied;

(iii)    no Margin Deficit, monetary or material non-monetary Default or Event
of Default has occurred and is continuing under this Agreement (unless same
shall be cured in connection with the funding of such Future Funding Amount);
and

(iv)    previously or simultaneously with Buyer’s funding of the requested
Future Funding Amount, Seller shall have funded or caused to be funded to the
Mortgagor (or to an escrow agent or as otherwise directed by the Mortgagor) all
or its pro rata portion (taking into account Buyer’s advance of the related
Future Funding Amount) in respect of such Future Funding Purchased Loan, as
applicable.

(q)    Notwithstanding anything to the contrary contained herein, Buyer shall
not be required to purchase any Eligible Loan proposed by Seller for sale under
this Agreement if, after giving effect to such Transaction, the aggregate
Repurchase Price (other than Price Differential) for all Transactions then
outstanding would exceed the Facility Amount.

(r)    All amounts payable by Seller under the Transaction Documents shall be
paid without notice, demand, counterclaim, set-off, deduction or defense (as to
any Person and for any reason whatsoever) and without abatement, suspension,
deferment, diminution or reduction (as to any Person and for any reason
whatsoever), and the Repurchase Obligations shall not be released, discharged or
otherwise affected, except as expressly provided herein, by reason of: (i) any
Act of Insolvency relating to Seller, any Mortgagor or any other loan
participant under a Related Interest, or any action taken with respect to any
Transaction Document, Purchased Loan Document by any trustee or receiver of
Seller, any Mortgagor or any other loan participant under a Related Interest, or
by any court in any such proceeding, (ii) any claim that Seller has or might
have against Buyer under any Transaction Document or otherwise, (iii) any
default or failure on the part of Buyer to perform or comply with any
Transaction Document or other agreement with Seller, or (iv) the invalidity or
unenforceability of any Purchased Loan, Transaction Document or Purchased Loan
Document. The Repurchase Obligations shall be full recourse to Seller and
recourse to Guarantor as and to the extent set forth in the Guaranty. This
Section 3(r) shall survive the termination of the Transaction Documents and the
payment in full of the Repurchase Obligations.

4.    MARGIN MAINTENANCE

(a)    Buyer shall determine the Market Value of each Purchased Loan on each
Business Day and shall determine (i) the amount, if any, by which the Repurchase
Price (excluding Price Differential) exceeds the Repurchase Price Cap for such
Purchased Loan (a “Margin Deficit”) and

 

41

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

(ii) the amount, if any, by which the Repurchase Price Cap exceeds the
Repurchase Price (excluding Price Differential) (“Margin Excess”).

(b)    Subject to Section 4(f) hereunder, if at any time an aggregate Margin
Deficit exists with respect to one or more Purchased Loans in an amount greater
than $100,000 and only to the extent that a Credit Event then exists with
respect to such Purchased Loan or Purchased Loans, then Buyer may, by written
notice (which notice shall include a copy sent by electronic mail in accordance
with Section 16 hereof) (a “Margin Notice”) to Master Seller on behalf of the
applicable Series Seller(s), require the applicable Series Seller(s) to, by no
later than the date that is three (3) Business Days following the date of
receipt of such Margin Notice, (i) transfer cash to Buyer to be applied in
reduction of the Repurchase Price of some or all of the Purchased Loans, as
directed by Seller, (ii) repurchase one or more Purchased Loans (provided, that
no Purchased Loan shall be released unless no Margin Deficit shall remain
outstanding immediately after such release), (iii) subject to the conditions in
Section 4(c ), apply Margin Excess from another Purchased Loan, or
(iv) effectuate any combination of the foregoing, such that, after giving effect
thereto, no Margin Deficit shall exist. The applicable Series Seller’s failure
to cure any Margin Deficit as required by this paragraph within the time periods
set forth herein shall constitute a Transaction Event of Default with respect to
the applicable Transaction under the Transaction Documents and shall entitle
Buyer to exercise its remedies under Section 13(c) of this Agreement.

(c)    If at any time a Margin Excess exists with respect to a Purchased Loan,
then Master Seller may by notice delivered to Buyer require Buyer to
(i) transfer to Master Seller on behalf of the applicable Series Seller cash in
an amount up to the Margin Excess by the date that is three (3) Business Days
following Buyer’s receipt of such notice from Master Seller or (ii) apply all or
a portion of such Margin Excess to reduce any Margin Deficit; provided, however,
that (1) any such transfer of cash shall not cause the Repurchase Price for the
applicable Purchased Loan to exceed the Repurchase Price Cap for such
Transaction and (2) no Default or Event of Default under this Agreement shall
have occurred and be continuing unless such Default or Event of Default would be
cured simultaneously with such transfer of cash.

(d)    The failure of, or delay by, Buyer or Seller, on any one or more
occasions, to exercise its rights under Section 4(b) or 4(c) of this Agreement
shall not (i) change or alter the terms and conditions to which this Agreement
is subject, (ii) limit the right of such party to do so at a later date,
(iii) limit such party’s rights under this Agreement or otherwise existing by
law, or (iv) in any way create additional rights for such party.

(e)    If Master Seller and/or any applicable Series Sellers transfer cash to
Buyer on account of Margin Deficits relating to more than one Purchased Loan,
but such cash is insufficient to fully satisfy such Margin Deficits (after
giving effect to any netting pursuant to Section 4(f)), Buyer shall have the
right to designate the Purchased Loan(s) and Margin Deficit(s) to which such
payments shall be applied, in its sole and absolute discretion.

(f)    Buyer and Master Seller acknowledge and agree that, so long as no Default
or Event of Default shall have occurred and be continuing, then notwithstanding
the provisions of Sections 4(a) through 4(c) hereof, Margin Excess and Margin
Deficit shall be netted for all the Transactions under this Agreement, and the
aggregate amount of the Margin Excess (if any) for all Transactions shall be
credited against the aggregate Margin Deficit owed under Section 4(b) and only
the net

 

42

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

amount need be paid; provided, that any net payment to Master Seller shall be
subject to the conditions set forth in Section 4(c).

(g)    Notwithstanding anything contained in Section 16 to the contrary, notice
of a Margin Deficit or request for a transfer of cash pursuant to Margin Excess
may be delivered by Buyer or Seller, respectively, via email, without the need
to also deliver such notice by one of the other means set forth in Section 16,
and shall be deemed received upon the sending of such email; provided, that any
such email notice to Master Seller shall be required to (i) be sent to the
parties designated by Master Seller as “Margin Notice Parties” on Annex I
attached hereto or such other parties as may be substituted for such parties
listed on Annex I by Master Seller from time to time by written notice to Buyer
delivered in accordance with Section 16, (ii) be marked “high priority”, and
(iii) include in the subject line thereof the following caption: “MARGIN
NOTICE”; provided, further, that the transmitting party did not receive an
electronic notice of a delivery failure to two (2) or more of such parties (or,
if fewer, all of such parties).

5.    INCOME PAYMENTS AND PRINCIPAL PAYMENTS

(a)    On each Remittance Date, each Series Seller shall be obligated to pay to
Buyer (to the extent not paid on such date through the distributions required
pursuant to Sections 5(c), (d),(e) and (f) hereof) the accrued but unpaid Price
Differential for its applicable Transaction(s) due as of such Remittance Date
(along with any other amounts then due and payable), by wire transfer in
immediately available funds. A Cash Management Account shall be established by
Master Seller, on behalf of itself and each Series Seller, at the Depository.
Buyer shall have sole dominion and control over the Cash Management Account
until the termination of Seller’s obligations under this Agreement and the
documents delivered in connection herewith and therewith. All Available Income
in respect of the Purchased Loans shall be deposited by Master Seller and each
Series Seller or the applicable Servicer directly into the Cash Management
Account without any further action of Buyer. Buyer shall cause all such amounts
transferred into the Cash Management Account to be remitted by the Depository in
accordance with the applicable provisions of Sections 5(b), 5(c), 5(d), 5(e),
13(b)(iii) and 13(c)(iii) of this Agreement.

(b)    Seller shall cause the Servicer of each Purchased Loan to enter into a
Servicer Notice and Agreement in the form attached as Exhibit IX to this
Agreement, which provides, inter alia, that the Servicer shall deposit all
Available Income with respect to such Purchased Loan into the Cash Management
Account. If a Servicer forwards any Available Income with respect to a Purchased
Loan to Master Seller or any Series Seller rather than directly to the Cash
Management Account, Master Seller shall (i) redeliver an executed copy of the
Servicer Notice and Agreement to the applicable Servicer, and/or make other
commercially reasonable efforts to cause such Servicer to forward such amounts
directly to the Cash Management Account, (ii) hold such amounts in trust for the
benefit of Buyer and (iii) immediately deposit in the Cash Management Account
any such amounts.

(c)    So long as no Event of Default shall have occurred and be continuing,
Buyer shall cause all Available Income received by the Depository in respect of
the Purchased Loans (other than Principal Payments and net sale proceeds) during
each Collection Period to be applied by the Depository on the related Remittance
Date in the following order of priority:

 

43

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

  (i)

first, to remit to (a) the Custodian an amount equal to any accrued and unpaid
custodial fees and expenses due and payable under the Custodial Agreement, and
(b) the Depository an amount equal to any accrued and unpaid fees and expenses
due and payable under the Controlled Account Agreement;

 

  (ii)

second, to remit to Buyer an amount equal to the aggregate Price Differential
which is due and payable in respect of all of the Purchased Loans as of such
Remittance Date;

 

  (iii)

third, after giving effect to Section 4(f), to make a payment to Buyer on
account of any outstanding and unpaid Margin Deficit required to be paid
pursuant to Section 4(b) hereof;

 

  (iv)

fourth, to remit to Buyer on account of any unpaid fees, costs, expenses,
indemnity amounts and any and all other amounts due and payable from Seller to
Buyer under this Agreement or the other Transaction Documents, including accrued
but unpaid Financing Fees (which may be paid directly to the Financing Fee
Payee) and including but not limited to any amounts that remain unpaid after
application of Principal Payments as provided in Section 5(d) below; and

 

  (v)

fifth, to remit to Master Seller, on behalf of all applicable Series Sellers,
the remainder, if any.

(d)    So long as no Event of Default shall have occurred and be continuing,
(A) Buyer shall cause any unscheduled Principal Payments or net sale proceeds in
respect of the Purchased Loans received by the Depository during each Collection
Period to be applied by the Depository on the Business Day following the day on
which such funds are deposited in the Cash Management Account and (B) Buyer
shall cause any scheduled Principal Payment in respect of the Purchased Loans to
be applied by the Depository on the earlier of two (2) Business Days from the
date received in the Cash Management Account or the related Remittance Date in
the following order of priority:

 

  (i)

first, to remit to (a) the Custodian an amount equal to any accrued and unpaid
custodial fees and expenses due and payable under the Custodial Agreement, and
(b) the Depository an amount equal to any accrued and unpaid fees and expenses
due and payable under the Controlled Account Agreement (in each case, to the
extent not paid pursuant to Section 5(c)(i) above);

 

  (ii)

second, to remit to Buyer an amount equal to the aggregate Price Differential
which has accrued and is outstanding in respect of all of the Purchased Loans as
of such date of remittance (to the extent not paid pursuant to Section 5(c)(ii)
above);

 

  (iii)

third, after giving effect to Section 4(f), to make a payment to Buyer on
account of any outstanding and unpaid Margin Deficit and required to be

 

44

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

 

paid pursuant to Section 4(b) hereof (to the extent not paid pursuant to
Section 5(c)(iii) above);

 

  (iv)

fourth, to remit to Buyer on account of any unpaid fees, costs, expenses,
indemnity amounts and any and all other amounts due and payable from Seller to
Buyer under this Agreement or the other Transaction Documents including but not
limited to accrued but unpaid Financing Fees (which may be paid directly to the
Financing Fee Payee) (to the extent not paid pursuant to Section 5(c)(iv)
above);

 

  (v)

fifth, to make a payment to Buyer on account of the Repurchase Price of each of
the Purchased Loans in respect of which such Principal Payment(s) have been
received, in an amount equal to such Principal Payment(s) multiplied by the
respective Allocable Percentages applicable thereto; and

 

  (vi)

sixth, to remit to Master Seller the remainder, if any.

(e)    If an Event of Default shall have occurred and be continuing, all
Available Income (including Principal Payments) received by Buyer or the
Depository in respect of the Purchased Loans during each Collection Period shall
be applied by Buyer or the Depository on the Business Day following the day on
which such funds are deposited in the Cash Management Account as follows:

 

  (i)

first, to remit to (a) the Custodian in an amount equal to any accrued and
unpaid custodial fees and expenses due and payable under the Custodial
Agreement, and (b) the Depository in an amount equal to any accrued and unpaid
fees and expenses due and payable under the Controlled Account Agreement;

 

  (ii)

second, to remit to Buyer an amount equal to the aggregate Price Differential
which has accrued and is outstanding in respect of all of the Purchased Loans as
of such Business Day;

 

  (iii)

third, to make a payment to Buyer in an amount equal to (a) the Repurchase Price
of each of the Purchased Loans if a Facility Event of Default exists (which
amount may be allocated by Buyer to one or more of the Purchased Loans in such
amounts as Buyer may determine in its sole and absolute discretion), or (b) the
Repurchase Price of each of the Purchased Loans with respect to which a
Transaction Event of Default has occurred and is continuing (but no Facility
Event of Default then exists), in each case until the Repurchase Price for each
of such Purchased Loans has been reduced to zero; provided, however, that any
amounts under this Section 5(e)(iii) representing Principal Payments received by
Buyer or Depository shall be allocated (x) first, to the Repurchase Price of the
applicable Purchased Loan in respect of which such Principal Payment has been
received, until the Repurchase Price for such Purchased Loan has been reduced to
zero, and (y) second, any remaining portion of such Principal Payment shall be

 

45

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

 

allocated in accordance with clause (a) or (b), as applicable, of this
Section 5(e)(iii);

 

  (iv)

fourth, to remit to Buyer in an amount equal to any unpaid fees, costs,
expenses, indemnity amounts and any and all other amounts due and payable from
Seller under this Agreement or the other Transaction Documents including but not
limited to accrued but unpaid Financing Fees (which may be paid directly to the
Financing Fee Payee); and

 

  (v)

fifth, to remit to Master Seller the remainder, if any.

(f)    Notwithstanding that each Series Seller shall be responsible for its own
Available Income, the distribution and allocation of Available Income in
accordance with the foregoing provisions of this Section 5 may, for
administrative convenience, be accomplished on an aggregate basis for all Series
Sellers. In the event that the amounts remitted pursuant to Sections 5(c), (d)
and (e) above on any Remittance Date are insufficient to pay the accrued Price
Differential due with respect to each of the Transactions at the respective
Pricing Rates as of such Remittance Date, then Buyer, in its sole and absolute
discretion, shall determine each Series Seller which had insufficient Available
Income to pay all accrued and unpaid Price Differential at the applicable
Pricing Rate as of such Remittance Date and any applicable Margin Deficit
payments related to the Transaction(s) to which such Series Seller is a party
(together with such Series Seller’s share of the custodial fees and any other
joint expenses allocated ratably according to the Available Income received by
each of the Series Sellers) and deliver notice (which may be delivered via
email) to Master Seller, on behalf of each of the Series Sellers, on the
Remittance Date of the portion of such Cash Flow Deficiency payable by the
respective Series Sellers. Each applicable Series Seller shall be required to
pay the portion of the Cash Flow Deficiency allocable to such Series Seller (as
set forth in such notice from Buyer) to Buyer by wire transfer in immediately
available funds within one (1) Business Day after such Remittance Date. If any
Series Seller shall fail to pay the portion of the Cash Flow Deficiency due from
such Series Seller within one (1) Business Day after such Remittance Date, such
failure shall constitute a Transaction Event of Default with respect to the
Transaction(s) to which each such Series Seller is a party.

(g)    All Underlying Purchased Loan Reserves for any Purchased Loan must be
held with the applicable Servicer in accordance with Section 28 in segregated
accounts held for the benefit of Seller or otherwise subject to control
agreements approved by the Buyer. In the event that no Servicer holds any such
Underlying Purchased Loan Reserves for a Purchased Loan and Seller would
otherwise hold the Underlying Purchased Loan Reserves directly, it shall forward
such Underlying Purchased Loan Reserves to the Cash Management Account to be
held and applied in accordance with the applicable Purchased Loan Documents.

6.    SECURITY INTEREST

Buyer and Seller intend, for all purposes other than those described in
Section 22(e), that all Transactions hereunder be sales to Buyer of the
Purchased Loans and not loans from Buyer to Seller secured by the Purchased
Loans. However, in the event any such Transaction is deemed to be a loan (except
in the case of the grant of security interests by Seller under clause (b) below,
which shall be unconditional as of the date hereof), Master Seller, on behalf of
itself and with

 

46

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

respect to each Series Seller, hereby pledges all of its right, title, and
interest in, to and under and grants a lien on, and security interest in (which
lien and security interest shall be of first priority), all of its right, title,
and interest in the Collateral (as defined below) to Buyer to secure the payment
and performance of all other amounts or obligations owing to Buyer pursuant to
this Agreement and the other Transaction Documents (the “Repurchase
Obligations”) (it being understood that the grant of security interest in any
items described below which are otherwise sold to Buyer pursuant to any
Transaction hereunder is made to secure Buyer’s interest therein in the event
any such Transaction is deemed to be a loan). Without limiting the generality of
the foregoing, Seller hereby pledges, assigns and grants to Buyer as further
security for Seller’s obligations to Buyer hereunder, a continuing first
priority security interest in and Lien upon all of its right, title and interest
in, to and under each Mezzanine Loan related to a Purchased Loan, if any, as
additional security and as a credit enhancement for payment and performance of
the Repurchase Obligations with respect to the related Purchased Loan hereunder,
and Buyer shall have all the rights and remedies of a “secured party” under the
Uniform Commercial Code with respect thereto. For purposes of this Agreement,
“Collateral” shall mean all of the following property, whether now owned or
hereafter acquired, now existing or hereafter created and wherever located:

(a)    the Purchased Loans and all Related Interests;

(b)    the Servicing Rights related to the Purchased Loans and all Related
Interests;

(c)    all Purchased Loan Documents, Related Interest Documents, Servicing
Agreements and Servicing Records related to the Purchased Loans and Related
Interests;

(d)    all insurance policies related to the Purchased Loans and Related
Interests and payments and proceeds thereof;

(e)    all Income relating to the Purchased Loans and all Related Interests;

(f)    the Cash Management Account and all monies from time to time on deposit
therein and all collection and escrow accounts relating to the Purchased Loans
and Related Interests;

(g)    all “general intangibles”, “accounts”, “chattel paper”, “deposit
accounts”, “securities accounts”, “instruments”, “securities”, “financial
assets”, “uncertificated securities”, “security entitlements” and “investment
property” (as each such term is defined in the UCC) relating to or constituting
any and all of the foregoing; and

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

For purposes of the grant of the security interest pursuant to Section 6 of this
Agreement, this Agreement shall be deemed to constitute a security agreement
under the New York Uniform Commercial Code (the “UCC”). Buyer shall have all of
the rights and may exercise all of the remedies of a secured creditor under the
UCC and the other laws of the State of New York. In furtherance of the
foregoing, (a) Buyer, at Seller’s sole cost and expense, shall cause to be filed
in such locations as may be necessary to perfect and maintain perfection and
priority of the security interest granted hereby, UCC financing statements and
continuation statements (collectively, the

 

47

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

“Filings”), and shall forward copies of such Filings to Seller upon the filing
thereof, and (b) Seller shall from time to time take such further actions as may
be reasonably requested by Buyer to maintain and continue the perfection and
priority of the security interest granted hereby.

Seller hereby irrevocably authorizes Buyer at any time and from time to time to
file in any filing office in any appropriate jurisdiction any initial financing
statements and amendments thereto that (1) indicate the Collateral (i) as all
Purchased Loans or words of similar effect, regardless of whether the
description of the Purchased Loans in such financing statements includes every
component set forth in the definition, or (ii) as being of an equal or lesser
scope or with greater detail, and (2) contain any other information required by
part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance
of any financing statement or amendment, including whether Seller is an
organization, the type of organization and any organization identification
number issued to Seller. Seller also ratifies its authorization for Buyer to
have filed in any jurisdiction any initial financing statements or amendments
thereto if filed prior to the date hereof. Without limiting the foregoing,
Seller also hereby irrevocably authorizes the Buyer and its counsel to file UCC
financing statements in form and substance satisfactory to the Buyer, describing
the collateral as “All assets of Seller and all assets of each series of
interests now or hereafter established by Seller or its member, in each case,
whether now owned or existing or hereafter acquired or arising and wheresoever
located, and all proceeds and products thereof” or words to that effect, and any
limitations on such collateral description.

Buyer’s security interest in a Purchased Loan, or the Collateral as a whole,
shall terminate only upon (i) in the case of an individual Purchased Loan and
all Collateral related to such Purchased Loan, the repurchase thereof in
accordance with this Agreement and (ii) in the case of the Collateral as a
whole, the termination of Seller’s obligations under this Agreement and the
documents delivered in connection herewith and therewith. Upon any such
termination, Buyer shall deliver to Seller such UCC termination statements and
other release documents as may be commercially reasonable to evidence the
release of Buyer’s lien on and security interest in the applicable Purchased
Loan, or the Collateral, as applicable and to return the Purchased Loan
Documents for the applicable Purchased Loan to Seller.

7.    PAYMENT, TRANSFER AND CUSTODY

(a)    On the Purchase Date for each Transaction, ownership of the Purchased
Loans shall be transferred to Buyer or its designee (including the Custodian)
against the simultaneous transfer to an account of Seller or as otherwise
specified in the Confirmation relating to such Transaction of the difference
between (i) the Purchase Price for the Purchased Loan(s) minus (ii) any and all
fees, costs and expenses including, without limitation, reasonable out-of-pocket
attorneys’ fees and disbursements then due and payable to Buyer pursuant to
Section 27 or Section 30(d) in connection with such Transaction (if and to the
extent that Buyer requires that Seller pay such fees, costs and expenses on the
Purchase Date for such Transaction).

(b)    On or before such Purchase Date, Seller shall deliver or cause to be
delivered to Buyer or its designee (including the Bailee or the Custodian, as
applicable) the Custodial Delivery in the form attached hereto as Exhibit IV. In
connection with each sale, transfer, conveyance and assignment of a Purchased
Loan, on or prior to each Purchase Date with respect to such Purchased Loan,
Seller shall deliver or cause to be delivered and released to the Custodian or
Bailee, as

 

48

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

applicable, and shall cause the Custodian or Bailee, as applicable, to deliver a
Trust Receipt on the Purchase Date concerning the receipt of, the following
documents (collectively, the “Purchased Loan File”) pertaining to each of the
Purchased Loans identified in the Custodial Delivery delivered therewith;
provided, that Seller shall deliver a certificate of an Authorized
Representative of Seller certifying that any copies of documents delivered
represent true and correct copies of the originals of such documents:

(A)    With respect to each Purchased Loan that is a Mortgage Loan or a Senior
Interest:

 

  (i)

The original Mortgage Note (or A-Note with respect to any Senior Interest) (and
if applicable, one or more allonges) bearing all intervening endorsements,
endorsed “Pay to                      without recourse” and signed in the name
of the last endorsee (the “Last Endorsee”) by an authorized Person (in the event
that the Purchased Loan was acquired by the Last Endorsee in a merger, the
signature must be in the following form: “[Last Endorsee], successor by merger
to [name of predecessor]”; in the event that the Purchased Loan was acquired or
originated by the Last Endorsee while doing business under another name, the
signature must be in the following form: “[Last Endorsee], formerly known as
[previous name]”).

 

  (ii)

An original or a copy of each guarantee executed in connection with the Mortgage
Note (if any).

 

  (iii)

The original Mortgage with evidence of recording thereon, or a copy thereof
together with an officer’s certificate of Seller certifying that such represents
a true and correct copy of the original and, that such original has been
submitted for recordation in the appropriate governmental recording office of
the jurisdiction where the Mortgaged Property is located.

 

  (iv)

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

 

  (v)

The original Assignment of Mortgage in blank for each Purchased Loan, in form
and substance acceptable for recording in the relevant jurisdiction, and in form
and substance otherwise acceptable to Buyer and signed in the name of the Last
Endorsee (in the event that the Purchased Loan was acquired by the Last Endorsee
in a merger, the signature must be in the following form: “[Last Endorsee],
successor by merger to [name of predecessor]”; in the event that the Purchased
Loan was acquired or originated while doing business under another name, the
signature must be in the following form: “[Last Endorsee], formerly known as
[previous name]”).

 

49

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

  (vi)

The originals of all intervening assignments of mortgage (if any) with evidence
of recording thereon, or copies thereof together with an officer’s certificate
of Seller certifying that such represent true and correct copies of the
originals and that such originals have each been submitted for recordation in
the appropriate governmental recording office of the jurisdiction where the
Mortgaged Property is located.

 

  (vii)

The original or a copy of the attorney’s opinion of title and abstract of title
or a copy of the original mortgagee title insurance policy, or if the mortgagee
title insurance policy has not been issued, the irrevocable marked commitment to
issue the same or irrevocable signed proforma policy.

 

  (viii)

The original or copy of any security agreement, chattel mortgage or equivalent
document executed in connection with the Purchased Loan (if any).

 

  (ix)

The original assignment of leases and rents, if any, with evidence of recording
thereon, or a copy thereof together with an officer’s certificate of Seller,
certifying that such copy represents a true and correct copy of the original and
that such original has been submitted for recordation in the appropriate
governmental recording office of the jurisdiction where the Mortgaged Property
is located.

 

  (x)

The originals of all intervening assignments of assignment of leases and rents,
if any, or copies thereof, with evidence of recordation, or submission for
recordation, from the appropriate governmental recording office of the
jurisdiction where the Mortgaged Property is located.

 

  (xi)

A copy of the UCC financing statements, certified as true and correct by Seller,
and all necessary UCC continuation statements with evidence of filing thereon or
copies thereof certified by Seller that such financing statements have been sent
for filing, and UCC assignments, which UCC assignments shall be in form and
substance acceptable for filing.

 

  (xii)

An original or a copy of the environmental indemnity agreement (if any).

 

  (xiii)

The originals or copies of all lockbox agreements, cash management agreements
and other Purchased Loan Documents, and other material documents including legal
opinions, officers’ certificates, organizational documents and other documents
delivered by Mortgagor, any guarantor or other party in connection with the
closing of such Purchased Loan.

 

  (xiv)

An original omnibus assignment in blank (if any).

 

  (xv)

For any Senior Interest which is a Participation Interest, the original
participation certificate evidencing such Senior Interest endorsed “Pay to
                     without recourse” and signed in the name of the Last
Endorsee by an authorized Person (in the event that the Purchased Loan was
acquired by

 

50

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

 

the Last Endorsee in a merger, the signature must be in the following form:
“[Last Endorsee], successor by merger to [name of predecessor]”; in the event
that the Senior Interest was acquired or originated by the Last Endorsee while
doing business under another name, the signature must be in the following form:
“[Last Endorsee], formerly known as [previous name]”).

 

  (xvi)

For any Senior Interest, the original or a copy of the participation agreement
or co-lender agreement, as applicable, and all other Senior Interest Documents
executed in connection with the Senior Interest.

 

  (xvii)

For any Senior Interest, the original Senior Interest Side Letter (if
applicable).

 

  (xviii)

The original or a copy of the intercreditor or co-lender agreement (if any)
executed in connection with the Purchased Loan to the extent the subject
borrower, or an affiliate thereof, has encumbered its assets with mezzanine or
other subordinate financing in addition to the Purchased Loan.

 

  (xix)

A survey of the Mortgaged Property (if any) as accepted by the title company for
issuance of the mortgagee title policy.

 

  (xx)

A copy of the Mortgagor’s and (if applicable) any guarantor’s opinions of
counsel and any other legal opinions delivered with respect to the Purchased
Loan.

 

  (xxi)

An original or a copy of assignment of permits, contracts and agreements (if
any).

 

  (xxii)

The original of all letters of credit issued and outstanding in connection with
such Purchased Loan, with any modifications, amendments or endorsements
necessary to permit Buyer to draw upon them when and if it is contractually
permitted to do so pursuant to this Agreement (if any).

(B)    With respect to each Purchased Loan that is a Mezzanine Loan:

 

  (i)

The original Mezzanine Note (and if applicable, one or more allonges) bearing
all intervening endorsements, endorsed “Pay to                      without
recourse” and signed in the name of the Last Endorsee (in the event that the
Purchased Loan was acquired by the Last Endorsee in a merger, the signature must
be in the following form: “[Last Endorsee], successor by merger to [name of
predecessor]”; in the event that the Purchased Loan was acquired or originated
by the Last Endorsee while doing business under another name, the signature must
be in the following form: “[Last Endorsee], formerly known as [previous name]”).

 

  (ii)

As applicable, an original or copy of the related intercreditor agreement and
the related Mezzanine Pledge Agreement.

 

51

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

  (iii)

As applicable, an original or copy of any intervening assignment, assumption,
modification, consolidation or extension made in respect of such Mezzanine Note
or any document or agreement referred to in clause (B)(ii) above, evidencing a
complete chain of assignment and transfer from the originating Person to Seller,
as applicable.

 

  (iv)

As applicable, each original certificate, representing the related Pledged
Stock, together with an undated stock power covering each such certificate,
executed in blank.

 

  (v)

As applicable, copies of all UCC financing statements filed in respect of such
Mezzanine Loan, including all amendments and assignments related thereto, which
are necessary to show a complete chain of title from the originating Person to
Seller, in each case with evidence of recording or copies thereof certified by
Seller that such financing statements have been sent for filing, and UCC
assignments.

 

  (vi)

As applicable, an original assignment of each UCC financing statement filed in
respect of such Mezzanine Loan, prepared in blank by the Seller.

 

  (vii)

As applicable, the related original omnibus assignment, executed in blank by the
Seller.

 

  (viii)

As applicable, the original or copy of an Eagle 9, UCC title insurance policy or
substantially similar insurance policy, or if such insurance policy has not been
issued, the irrevocable marked commitment to issue the same or irrevocable
signed proforma policy.

 

  (ix)

As applicable, any additional documents identified on the related Purchased Loan
File Checklist (as such term is defined in the Custodial Agreement) delivered to
Custodian in accordance with Section 2 of the Custodial Agreement.

(c)    In addition, with respect to each Purchased Loan, Seller shall deliver an
instruction letter from Seller to the borrower under each Purchased Loan
instructing the borrower to remit all sums required to be remitted to the holder
of the Purchased Loan under the related Purchased Loan Documents to the Servicer
for deposit in the Applicable Servicer Account or as otherwise directed in a
written notice signed by Seller and Buyer; provided, however, no such notice
shall be required if the applicable borrower has been instructed to direct all
such sums to the Servicer for deposit in the Applicable Servicer Account prior
to the applicable Purchase Date for such Purchased Loan. If the borrower under
any Purchased Loan remits any sums required to be remitted to the holder of such
Purchased Loan under the related Purchased Loan Documents to Seller or its
Affiliate, Seller shall, within two (2) Business Day after receipt thereof,
(i) remit such sums (other than Underlying Purchased Loan Reserves) to the
Depository for deposit in the Cash Management Account as set forth in Section 5
hereof or as otherwise directed in the written notice signed by Seller and Buyer
(if any), and (ii) deliver (or cause Servicer to deliver) an additional
instruction letter from Seller or Servicer, as applicable, to the borrower under
the applicable Purchased Loan,

 

52

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

instructing the borrower to remit all sums required to be remitted to the holder
of the Purchased Loan under the related Purchased Loan Documents to the Servicer
for deposit in the Applicable Servicer Account or as otherwise directed in a
written notice signed by Seller and Buyer.

(d)    From time to time, Seller shall forward to the Custodian additional
original documents or additional copies of documents evidencing any assumption,
modification, consolidation or extension of a Purchased Loan approved in
accordance with the terms of this Agreement, and upon receipt of any such other
documents, the Custodian shall hold such other documents as Custodian shall
request from time to time. With respect to any documents which have been
delivered or are being delivered to recording offices for recording and have not
been returned to Seller in time to permit their delivery hereunder at the time
required, in lieu of delivering such original documents, Seller shall deliver to
Buyer or its designee (including the Custodian) a true copy thereof with an
officer’s certificate certifying that such copy is a true, correct and complete
copy of the original, which has been transmitted for recordation. Seller shall
deliver such original documents to Buyer or its designee (including the
Custodian) promptly when they are received. With respect to all of the Purchased
Loans delivered by Seller to Buyer or its designee (including the Custodian),
Seller shall execute an omnibus power of attorney substantially in the form of
Exhibit V attached hereto irrevocably appointing Buyer its attorney-in-fact with
full power to, during the continuance of an Event of Default, (i) complete and
record the Assignment of Mortgage, (ii) complete the endorsement of the Mortgage
Note and (iii) take such other steps as may be reasonably necessary or desirable
to enforce Buyer’s rights against such Purchased Loans and the related Purchased
Loan Files and the Servicing Records. Buyer shall deposit the Purchased Loan
Files representing the Purchased Loans, or direct that the Purchased Loan Files
be deposited directly, with the Custodian. The Purchased Loan Files shall be
maintained in accordance with the Custodial Agreement. Any Purchased Loan Files
not delivered to Buyer or its designee (including the Custodian) are and shall
be held in trust by Seller or its designee for the benefit of Buyer as the owner
thereof. Seller or its designee shall maintain a copy of the Purchased Loan File
and the originals of the Purchased Loan Files not delivered to Buyer or its
designee. The possession of the Purchased Loan Files by Seller or its designee
is at the will of Buyer for the sole purpose of servicing the related Purchased
Loan, and such retention and possession by Seller or its designee is in a
custodial capacity only. The books and records (including, without limitation,
any computer records or tapes) of Seller or its designee shall be marked
appropriately to reflect clearly the sale of the related Purchased Loan to
Buyer. Seller or its designee (including the Custodian) shall release its
custody of the Purchased Loan Files only in accordance with written instructions
from Buyer and in accordance with the provisions of the Custodial Agreement,
unless such release is required as incidental to the servicing of the Purchased
Loans, is in connection with a repurchase of any Purchased Loan by Seller or as
otherwise required by law.

(e)    Unless an Event of Default shall have occurred and be continuing, Seller
shall exercise all voting, consent, corporate and decision-making rights with
respect to the Purchased Loans, provided that Seller shall not enter into or
take any Material Action with respect to any Purchased Loan or Purchased Loan
Document without Buyer’s prior written consent thereto, which consent may be
given or withheld by Buyer in its sole and absolute discretion; provided, that,
to the extent the Purchased Loan Documents require that the holder of the
related Purchased Loan exercise a certain standard of discretion with respect to
any such Material Action, Buyer shall exercise the same standard of discretion
in providing or withholding its consent to the same.

 

53

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

Seller shall not be required to obtain Buyer’s prior consent for any action
which is not a Material Action, provided that, promptly after effectuating any
such action, Seller shall send Buyer notice thereof together with copies of all
amendments or modifications of the Purchased Loan Documents entered into with
respect thereto. During the continuation of a Facility Event of Default, Buyer
shall be entitled to exercise all voting, consent, corporate, and
decision-making rights with respect to any or all of the Purchased Loans without
regard to Seller’s instructions. Upon the occurrence and during the continuation
of a Transaction Event of Default, Buyer shall be entitled to exercise all
voting, consent, corporate and decision-making rights with respect to the
applicable Purchased Loan(s) in respect of which such Transaction Event of
Default exists.

8.    SALE, TRANSFER, HYPOTHECATION OR PLEDGE OF PURCHASED LOANS

(a)    Title to all Purchased Loans shall pass to Buyer on the applicable
Purchase Date, and Buyer shall have free and unrestricted use of all Purchased
Loans, subject, however, to the terms of this Agreement. Subject to Section 18
of this Agreement, nothing in this Agreement or any other Transaction Document
shall preclude Buyer from engaging in repurchase transactions with the Purchased
Loans or otherwise selling, transferring, pledging, repledging, hypothecating,
or rehypothecating the Purchased Loans; provided, however, that (i) no such
transaction shall relieve Buyer of its obligations to transfer the Purchased
Loans to Seller pursuant to Section 3 of this Agreement or of Buyer’s obligation
to credit or pay Available Income to, or apply Available Income to the
obligations of, Seller pursuant to Section 5 hereof, and (ii) so long as no
Event of Default has occurred and is continuing, Buyer may only engage in
repurchase transactions or sell, transfer, pledge, repledge, hypothecate or
rehypothecate the Purchased Assets with Persons who are not Prohibited
Transferees.

(b)    Nothing contained in this Agreement or any other Transaction Document
shall obligate Buyer to segregate any Purchased Loans delivered to Buyer by
Seller. Notwithstanding anything to the contrary in this Agreement or any other
Transaction Document, no Purchased Loan shall remain in the custody of Seller or
an Affiliate of Seller.

9.    REPRESENTATIONS

(a)    Buyer represents and warrants to Seller as follows:

 

  (i)

Organization. Buyer has the power and authority to execute, deliver, and perform
its obligations under this Agreement and the other Transaction Documents, and
the Transactions contemplated hereunder and thereunder.

 

  (ii)

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

 

  (iii)

Consents. No consent, approval or other action of, or filing with, any
Governmental Authority or any other Person (internal or external) is required to
authorize, or is otherwise required in connection with, the

 

54

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

 

execution, delivery and performance by Buyer of any of the Transaction Documents
(other than consents, approvals and filings that have been obtained or made, as
applicable).

 

  (iv)

Non-Contravention. None of the execution and delivery of the Transaction
Documents, the consummation by Buyer of the transactions contemplated by the
Transaction Documents (or any of them), nor compliance by Buyer with the terms,
conditions and provisions of the Transaction Documents (or any of them) will
conflict with or result in a breach of any of the terms, conditions or
provisions of (i) the organizational documents of Buyer, (ii) any contractual
obligation to which Buyer is now a party or by which it is otherwise bound or to
which the assets of Buyer are subject or constitute a default thereunder, or
result thereunder in the creation or imposition of any lien upon any of the
assets of Buyer, (iii) any judgment or order, writ, injunction, decree or demand
of any court applicable to Buyer, or (iv) any applicable Requirement of Law, in
the case of clauses (ii)-(iv) above, to the extent that such conflict or breach
would have a Material Adverse Effect upon Buyer’s ability to perform its
obligations hereunder.

(b)    Seller represents and warrants to Buyer that as of the Closing Date, as
of each Purchase Date and as of each date of funding by Buyer of any advances of
Margin Excess (and, in the case of the representations and warranties made in
Section 9(b)(viii), at all times while this Agreement and any Transaction is in
effect); provided that, for purposes hereof, all references to the term “Seller”
in this Section 9(b) shall be deemed to mean and refer to Master Seller together
with each Series Seller which is a party to this Agreement as of the date the
applicable representation and warranty is made or deemed made:

 

  (i)

Organization. Master Seller is duly formed, validly existing and in good
standing under the laws and regulations of the state of Seller’s formation.
Master Seller is duly licensed, qualified, and in good standing in every state
where such licensing or qualification is necessary for the transaction of
Seller’s business, except to the extent such failure would not reasonably be
expected to result in a Material Adverse Effect. Seller has the power to own and
hold the assets it purports to own and hold, to carry on its business as now
being conducted and proposed to be conducted, and to execute, deliver, and
perform its obligations under this Agreement and the other Transaction
Documents.

 

  (ii)

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

 

  (iii)

Non-Contravention. None of the execution and delivery of the Transaction
Documents, the consummation by Seller of the transactions contemplated

 

55

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

 

by the Transaction Documents (or any of them), nor compliance by Seller with the
terms, conditions and provisions of the Transaction Documents (or any of them)
will conflict with or result in a breach of any of the terms, conditions or
provisions of (i) the organizational documents of Seller, (ii) any contractual
obligation to which Seller is now a party or to which the assets of Seller are
subject or constitute a default thereunder, or result thereunder in the creation
or imposition of any lien upon any of the assets of Seller, other than pursuant
to the Transaction Documents, (iii) any judgment or order, writ, injunction,
decree or demand of any court applicable to Seller, or (iv) any applicable
Requirement of Law, in the case of clauses (ii)-(iv) above, to the extent that
such conflict or breach is reasonably likely to result in a Material Adverse
Effect. Seller has all necessary licenses, permits and other consents from
Governmental Authorities necessary to acquire, own and sell the Purchased Loans
and for the performance of its obligations under the Transaction Documents,
except to the extent the failure to have any such licenses, permits, or consents
would not result in a Material Adverse Effect.

 

  (iv)

Litigation; Requirements of Law. Except as otherwise disclosed in writing to
Buyer from time to time, there is no action, suit, proceeding, investigation, or
arbitration pending or, to the knowledge of Seller, threatened in writing
against Seller, the Guarantor or any of their respective assets, which is
reasonably likely to result in a Material Adverse Effect. Seller is in
compliance in all material respects with all Requirements of Law applicable to
Seller. Neither Seller nor the Guarantor is in default in any material respect
with respect to any judgment, order, writ, injunction, decree, rule or
regulation of any arbitrator or Governmental Authority.

 

  (v)

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

 

  (vi)

Good Title to Purchased Loans. Immediately prior to the purchase of any
Purchased Loan by Buyer from Seller, Seller owned such Purchased Loan free and
clear of any lien, encumbrance or impediment to transfer (including any “adverse
claim” as defined in Section 8-102(a)(1) of the UCC), and Seller is the record
and beneficial owner of and has good and marketable title to and the right to
sell and transfer such Purchased Loan to Buyer and, upon transfer of such
Purchased Loan to Buyer, Buyer shall be the owner of such Purchased Loan free of
any adverse claim, subject to the rights of Seller and obligations of Buyer
pursuant to the terms of this Agreement and the Transaction Documents, in each
case except for liens to be released simultaneously with the sale of a Purchased
Loan to Buyer hereunder, and subject to the terms and conditions of any
participation agreement, co-lender agreement, intercreditor agreement or similar
agreement with respect to any Purchased Loan. In the event that any Transaction
is characterized

 

56

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

 

as a secured financing of the related Purchased Loans, the provisions of this
Agreement are effective to create in favor of Buyer a valid “security interest”
(as defined in Section 1-201(b)(37) of the UCC) in all rights, title and
interest of Seller in, to and under the Collateral and Buyer shall have a valid
perfected first priority security interest in such Purchased Loans.

 

  (vii)

No Default. No Event of Default or, to Seller’s knowledge, Default exists under
or with respect to the Transaction Documents unless disclosed to Buyer in
writing.

 

  (viii)

Representations and Warranties Regarding the Purchased Loans; Delivery of
Purchased Loan File. Seller represents and warrants to Buyer, with respect to
each Purchased Loan sold in a Transaction hereunder, that each of the Purchased
Loan Representations applicable to such Purchased Loan are true and correct,
except as disclosed to Buyer in writing prior to the Purchase Date for the
applicable Purchased Loan and approved by Buyer in its sole and absolute
discretion (and, if approved, set forth on an Exhibit or Schedule to the
Confirmation for such Purchased Loan). With respect to each Purchased Loan, the
Mortgage Note the Mortgage, the Assignment of Mortgage and any other documents
required to be delivered under this Agreement and the Custodial Agreement for
such Purchased Loan have been delivered to Buyer or its designee (including the
Custodian or a Bailee, as applicable) on its behalf. Seller or its designee is
in possession of a complete, true and accurate Purchased Loan File with respect
to each Purchased Loan, except for such documents the originals of which have
been delivered to the Custodian or a Bailee and except as otherwise approved by
Buyer in writing.

 

  (ix)

Adequate Capitalization; No Fraudulent Transfer. Seller has, as of the Purchase
Date, adequate capital for the normal obligations reasonably foreseeable in a
business of its size and character and in light of its contemplated business
operations. Seller is generally able to pay, and as of the date hereof is
paying, its debts as they come due. Seller is not insolvent nor will Seller be
made insolvent by virtue of Seller’s execution of or performance under any of
the Transaction Documents within the meaning of the bankruptcy laws or the
insolvency laws of the United States, the State of New York or any other
jurisdiction under which Seller is organized or qualified to do business. Seller
has not entered into any Transaction Document or any Transaction pursuant
thereto in contemplation of insolvency or with intent to hinder, delay or
defraud any creditor.

 

  (x)

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

 

57

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

  (xi)

Ownership. As of the Closing Date or as most recently disclosed to Buyer in
writing, the direct, and to the extent depicted, the indirect, ownership
interests in Seller and Guarantor are as set forth on the organizational chart
attached hereto as Exhibit VII hereto.

 

  (xii)

Organizational Documents. Seller has delivered to Buyer certified copies of its
organizational documents, together with all amendments thereto, if any.

 

  (xiii)

No Encumbrances. Subject to the terms of this Agreement, and subject to the
terms and conditions of any participation agreement, co-lender agreement,
intercreditor agreement with respect to any Purchased Loan that is a Senior
Interest, there are (i) no outstanding rights, options, warrants or agreements
on the part of Seller for a purchase, sale or issuance, in connection with the
Purchased Loans, and (ii) no agreements on the part of Seller to issue, sell or
distribute the Purchased Loans.

 

  (xiv)

Federal Regulations. None of Seller, Guarantor or Member is required to register
as an “investment company” under the Investment Company Act of 1940, as amended.

 

  (xv)

Taxes. Seller has filed or caused to be filed all federal and other material Tax
returns which would be delinquent if they had not been filed on or before the
date hereof and has paid all Taxes shown to be due and payable on or before the
date hereof on such returns or on any assessments made against it or any of its
property and all other Taxes, fees or other charges imposed on it and any of its
assets by any Governmental Authority except for any such Taxes as are being
appropriately contested in good faith by appropriate proceedings diligently
conducted and with respect to which adequate reserves have been provided in
accordance with GAAP or are otherwise de minimis; no Tax liens have been filed
against any of Seller’s assets except for such Tax liens for Taxes not yet due
and payable or for Taxes being appropriately contested in good faith by
appropriate proceedings and with respect to which adequate reserve have been
provided in accordance with GAAP or are otherwise de minimis; and, to the
knowledge of Seller, no claims are being asserted with respect to any such
Taxes, fees or other charges.

 

  (xvi)

ERISA. Seller does not sponsor any Plans and does not make contributions or have
any obligations to make contributions to any Plans or Multiemployer Plans.

 

  (xvii)

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

 

58

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

  (xviii)

Full and Accurate Disclosure. No information contained in the Transaction
Documents, or any written statement furnished to Buyer by or on behalf of Seller
pursuant to the terms of the Transaction Documents, contains any untrue
statement of a material fact or, to the knowledge of Seller, omits to state a
material fact necessary to make the statements contained herein or therein not
misleading when taken as a whole and in light of the circumstances under which
they were made.

 

  (xix)

Financial Information. All financial data concerning Master Seller that has been
delivered by or on behalf of Master Seller to Buyer is true, complete and
correct in all material respects and, other than financial models and
projections with respect to which GAAP is inapplicable, has been prepared in
accordance with GAAP. Since the delivery of such data, except as otherwise
disclosed in writing to Buyer, there has been no change in the financial
position of Master Seller, or in the results of operations of Master Seller,
which change is reasonably likely to result in a Material Adverse Effect.

 

  (xx)

Reserved.

 

  (xxi)

Notice Address; Jurisdiction of Organization. On the date of this Agreement,
Seller’s address for notices is as set forth on Annex I attached hereto.
Seller’s jurisdiction of formation is Delaware. The location where Seller keeps
its books and records, including all computer tapes and records relating to the
Collateral, is its notice address.

 

  (xxii)

Prohibited Person. (a) None of the funds or other assets of Seller or Guarantor
constitute property of, or are, to the knowledge of Seller, beneficially owned,
directly or indirectly, by a Prohibited Person such that the investment in
Seller or Guarantor, as applicable (whether directly or indirectly), is
prohibited by Sanctions Laws or the entering into this Agreement by Buyer is in
violation of Sanctions Laws; (b) to the knowledge of Seller, no Prohibited
Person has any interest in Seller or Guarantor, as applicable, such that the
investment in Seller or Guarantor, as applicable (whether directly or
indirectly), is prohibited by Sanctions Laws or the entering into this Agreement
is in violation of Sanctions Laws; (c) to the knowledge of Seller, none of the
funds of Seller or Guarantor, as applicable, have been derived from any unlawful
activity such that the investment in Seller or Guarantor, as applicable (whether
directly or indirectly), is prohibited by Sanctions Laws or the entering into
this Agreement is in violation of Sanctions Laws; (d) to the knowledge of
Seller, neither Seller nor Guarantor has conducted or will conduct any business
or has engaged or will engage in any transaction or dealing with any Prohibited
Person; and (e) neither Seller nor Guarantor is a Prohibited Person or has been
convicted of a crime under Sanctions Laws which is a felony or, if prosecuted
under the laws of the United States of America, would be a felony.

 

59

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

  (xxiii)

Federal Income Tax Status. Seller is, and always has been, a disregarded entity
for U.S. federal income tax purposes.

(c)    As of the Closing Date, as of each Purchase Date and as of the date of
funding by Buyer of any advances of Margin Excess, Master Seller and each Series
Seller party to any Transaction hereunder (including the Transaction closing on
such Purchase Date) shall be deemed to have made all of the representations set
forth in this Section 9 as of such Purchase Date (except to the extent such
representations and warranties are made as of a particular date, in which case
such representations and warranties shall be true and correct in all material
respects as of such particular date).

10.    NEGATIVE COVENANTS OF SELLER

During the term of this Agreement and so long as any Transaction is in effect
hereunder, Seller shall not without the prior written consent of Buyer (for
purposes hereof, all references to the term “Seller” in this Section 10 shall be
deemed to mean and refer to Master Seller together with each Series Seller which
is a party to this Agreement as of the applicable date):

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

(b)    except for any Purchased Loan which has been repurchased by Seller in
accordance with this Agreement, transfer, assign, convey, grant, bargain, sell,
set over, deliver or otherwise dispose of, or pledge, encumber or hypothecate,
directly or indirectly (any of the foregoing, a “Transfer”), any interest in the
Purchased Loans (or any of them) to any Person other than Buyer, or engage in
repurchase transactions or similar transactions with respect to the Purchased
Loans (or any of them) with any Person other than Buyer;

(c)    change its name or its jurisdiction of organization from the jurisdiction
referred to in Section 9(b)(xxi) unless it shall have provided Buyer at least
thirty (30) days’ prior written notice of such change;

(d)    create, incur or permit to exist any lien, encumbrance or security
interest in or on Seller’s interest in any of the Purchased Loans or the other
Collateral, except for any liens created in favor of Buyer under this Agreement
or the other Transaction Documents;

(e)    modify or terminate the Master Seller LLC Agreement or any of the
organizational documents of Seller, provided that Buyer shall not unreasonably
withhold or delay its consent to any proposed modification to the Master Seller
LLC Agreement (excluding any modification to the SPE provisions set forth
therein);

(f)    enter into, consent or assent to or take any Material Action, subject to
Section 7(e) hereof;

(g)    transfer or permit to be transferred (excluding transfers of publicly
traded shares of any indirect equity owner in Seller on a nationally or
internationally recognized stock exchange) any direct or indirect ownership
interests in Seller, or take any action or permit any action to be taken, if any
such transfers and/or actions, individually or in the aggregate, would result in
a

 

60

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

Change of Control or would cause the transferee, together with its Affiliates,
to increase its direct or indirect interest in Seller to an amount which equals
or exceeds ten percent (10%), unless such transferee shall be a Qualified
Transferee;

(h)    take any action, file any Tax return, or make any election inconsistent
with the treatment of Seller, for purposes of U.S. federal, state and local
income taxes, as a disregarded entity, including making an election under
Section 301.7701-3(a) of the Treasury Regulations to be treated as an
association taxable as a corporation for U.S. federal income tax purposes;

(i)    during the continuation of any Event of Default which has occurred, make
any distribution, payment on account of, or set apart assets for, a sinking or
other analogous fund for the purchase, redemption, defeasance, retirement or
other acquisition of any equity or ownership interest of Seller, whether now or
hereafter outstanding, or make any other distribution in respect thereof, either
directly or indirectly, whether in cash or property or in obligations of Seller
(unless the same is necessary for Parent to maintain its status as a REIT under
the Code);

(j)    send a payment redirection letter to the Mortgagor of any Purchased Loan,
or otherwise instruct any Mortgagor, to make any payment due on a Purchased Loan
to any account, other than the Applicable Servicer Account or Cash Management
Account;

(k)    sponsor or maintain any Plans or make any contributions to, or have any
liability or obligation (direct or contingent) with respect to, any Plan or
permit any ERISA Affiliate to sponsor or maintain any Plans or make any
contributions to, or have any liability or obligation (direct or contingent)
with respect to, any Plan, in each case, which could reasonably be likely to
have a Material Adverse Effect;

(l)    engage in any transaction that would cause the assets of Seller to be
deemed to constitute “plan assets” for purposes of ERISA;

(m)    make any future advances under any Purchased Loan to any underlying
obligor that are not (i) protective advances or (ii) future advances which are
(x) permitted or contemplated by the related Purchased Loan Documents and (y) in
accordance with the budgets and capital expenditure plans approved under the
Purchased Loan Documents;

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

(o)    incur any Indebtedness except as provided in Section 12(i) or otherwise
cease to be a Single-Purpose Entity.

(p)    other than as set forth in a separate written agreement between Seller
and Buyer, exercise any remedies under the Purchased Loan Documents for any
Purchased Loan as to which a Purchased Loan Event of Default has occurred
including, without limitation, the commencement or prosecution of any
foreclosure proceeding, the exercise of any power of sale, the taking of a
deed-in-lieu of foreclosure or other realization upon the security for any
Purchased Loan;

(q)    except as otherwise expressly permitted without Seller’s consent in any
intercreditor agreement, co-lender agreement or participation agreement for the
applicable Purchased Loan as in effect on the Purchase Date, or any such similar
agreement or amendment

 

61

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

thereto entered into subsequent to the applicable Purchase Date that has been
approved by Buyer, or as otherwise expressly agreed by Buyer pursuant to the
terms of the Confirmation and/or the Senior Interest Side Letter for the
applicable Purchased Loan, Transfer or permit to be Transferred, in whole or in
part, any Related Interest with respect to any Purchased Loan held by Seller or
any Affiliate of Seller or consent to the Transfer, in whole or in part, of any
Related Interest with respect to any Purchased Loan held by any other Person,
except to a Qualified Institutional Lender;

(r)    consent to, or grant any waiver with respect to, any incurrence of
additional debt by the Mortgagor or any mezzanine loan by any direct or indirect
beneficial owner of the Mortgagor, except for any additional debt or mezzanine
loan expressly permitted under the Purchased Loan Documents without Seller’s
consent;

(s)    knowingly: (i) conduct any business, nor engage in any transaction or
dealing, with any Prohibited Person, including, but not limited to, the making
or receiving of any contribution of funds, goods, or services, to or for the
benefit of a Prohibited Person; or (ii) engage in or conspire to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in Executive Order 13224
issued on September 24, 2001. Seller further covenants and agrees to deliver
(from time to time) to Buyer any such certification or other evidence as may be
requested by Buyer in its sole and absolute discretion, confirming that neither
of Seller nor Guarantor has, to the knowledge of Seller, engaged in any
business, transaction or dealings with a Prohibited Person, including, but not
limited to, the making or receiving of any contribution of funds, goods, or
services, to or for the benefit of a Prohibited Person;

(t)    cause any Purchased Loan to be serviced by any servicer other than a
Servicer, unless expressly approved in writing by Buyer pursuant to Section 28
hereof;

(u)    permit the internalization of management of Parent or Guarantor without
Buyer’s prior written approval, which approval shall not be unreasonably
withheld, conditioned or delayed; or

(v)    notwithstanding anything to the contrary contained in this Agreement or
any other Transaction Document, (i) Seller shall not enter into (or agree to
enter into) any Division/Series Transaction and (ii) none of the provisions in
this Agreement nor any other Transaction Document, shall be deemed to permit any
Division/Series Transaction, except for the establishment of any new Series
Seller in connection with any Transaction in accordance with the provisions of
Section 3(n) hereof.

11.    AFFIRMATIVE COVENANTS OF SELLER

During the term of this Agreement and so long as any Transaction is in effect
hereunder (for purposes hereof, all references to the term “Seller” in this
Section 11 shall be deemed to mean and refer to Master Seller together with each
Series Seller which is a party to this Agreement as of the applicable date):

 

62

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

(a)    Seller shall notify Buyer of any Material Adverse Effect promptly
following receipt by Seller of notice or obtaining actual knowledge thereof;
provided, however, that nothing in this Section 11 shall relieve Seller of its
obligations under this Agreement.

(b)    Seller shall provide Buyer with copies of such documents as Buyer may
reasonably request evidencing the truthfulness of the representations set forth
in Section 9, to the extent such documents are in Seller’s possession or
reasonably obtainable by Seller.

(c)    Seller (i) shall defend the right, title and interest of Buyer in and to
the Collateral against, and take such other action as is necessary to remove,
the liens, security interests, claims and demands of all Persons (other than
security interests by or through Buyer) and (ii) shall, at Buyer’s reasonable
request, take all action necessary to ensure that Buyer will have a first
priority security interest in the Purchased Loans subject to any of the
Transactions in the event such Transactions are recharacterized as secured
financings.

(d)    Seller shall notify Buyer of the occurrence of any Default or Event of
Default of which Seller has knowledge as soon as possible but in no event later
than the second (2nd) Business Day after obtaining actual knowledge of such
event.

(e)    Seller shall give notice to Buyer of the following (accompanied by
details of the occurrence referred to therein and stating what actions Seller
has taken or proposes to take with respect thereto, as applicable):

 

  (i)

with respect to any Purchased Loan subject to a Transaction hereunder, promptly
(and in any event within two (2) Business Days) following receipt by Seller or
its Affiliates (as opposed to Servicer or the Depository) of any unscheduled
Principal Payment (in full or in part);

 

  (ii)

with respect to any Purchased Loan subject to a Transaction hereunder, promptly
following receipt by Seller of notice or knowledge that the related Mortgaged
Property has been damaged by waste, fire, earthquake or earth movement,
windstorm, flood, tornado or other casualty, or otherwise damaged so as, in each
case, to materially adversely affect the value of such Mortgaged Property;

 

  (iii)

promptly (and in any event within two (2) Business Days) following receipt of
notice received by Seller or Seller’s knowledge of (i) the occurrence of any
payment default or other material default under the Purchased Loan Documents for
any Purchased Loan, (ii) any lien or security interest (other than security
interests created hereby) on, or claim asserted against, any Purchased Loan or,
to the knowledge of Seller, the underlying collateral therefor (other than liens
permitted under the Purchased Loan Documents) or (iii) any event or change in
circumstances that has or could reasonably be expected to have a material
adverse effect on the Market Value of a Purchased Loan; and

 

  (iv)

promptly (and in any event within two (2) Business Days) after service of
process on any of the following, give to Buyer notice of all litigation,

 

63

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

 

actions, suits, arbitrations, investigations (including, without limitation, any
of the foregoing which are pending or threatened) or other legal or arbitrable
proceedings naming Seller or affecting any of the assets of Seller before any
Governmental Authority that (i) questions or challenges the validity or
enforceability of any of the Transaction Documents or any action to be taken in
connection with the transactions contemplated hereby, (ii) makes a claim or
claims in an aggregate amount greater than $100,000, or (iii) which,
individually or in the aggregate, if adversely determined could reasonably be
likely to have a Material Adverse Effect; and

 

  (v)

promptly following receipt of notice by Seller, or Seller having knowledge of
the loss of Parent’s status as a REIT.

(f)    Seller shall deliver to Buyer (i) notice of the occurrence of any
Purchased Loan Event of Default promptly (and in any event not later than two
(2) Business Days) after the earlier of the date that Seller receives notice or
has actual knowledge thereof and (ii) any other information with respect to any
Purchased Loan as may be reasonably requested by Buyer from time to time.

(g)    Seller will permit Buyer or its designated representative to inspect
Seller’s records with respect to the Collateral and the conduct and operation of
its business related thereto upon reasonable prior written notice from Buyer or
its designated representative, at such reasonable times and with reasonable
frequency, and to make copies of extracts of any and all thereof, subject to the
terms of any confidentiality agreement between Buyer and Seller. Buyer shall act
in a commercially reasonable manner in requesting and conducting any inspection
relating to the conduct and operation of Seller’s business.

(h)    At any time from time to time upon the reasonable request of Buyer, at
the sole expense of Seller, Seller will promptly and duly execute and deliver to
Buyer such further instruments and documents and take such further actions as
Buyer may reasonably request for the purposes of obtaining or preserving the
full benefits of this Agreement including the security interests granted
hereunder and of the rights and powers herein granted (including, among other
things, filing such UCC financing statements as Buyer may reasonably request).
If any amount payable under or in connection with any of the Collateral shall be
or become evidenced by any promissory note, other instrument or chattel paper,
such note, instrument or chattel paper shall be immediately delivered to Buyer
or its designee (including the Custodian or a Bailee), duly endorsed in a manner
reasonably satisfactory to Buyer, to be held as Collateral pursuant to this
Agreement, and the documents delivered in connection herewith.

(i)    Seller (or Servicer on its behalf) shall provide Buyer with the following
financial and reporting information:

 

  (i)

Within 45 days after the last day of each of the first three fiscal quarters in
any fiscal year, Guarantor’s unaudited, consolidated statements of income and
statements of changes in cash flow for such quarter and balance sheets as of the
end of such quarter, in each case presented fairly in accordance with GAAP and
certified as being true and correct by an officer’s certificate;

 

64

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

  (ii)

Within 120 days after the last day of its fiscal year, Guarantor’s audited,
consolidated statements of income and statements of changes in cash flow for
such year and balance sheets as of the end of such year, in each case presented
fairly in accordance with GAAP, and accompanied, in all cases, by an unqualified
report of a nationally recognized independent certified public accounting firm
reasonably acceptable to Buyer;

 

  (iii)

Within 30 days after the last day of each calendar month, any and all property
level financial information (including without limitation rent rolls and
operating statements) received with respect to the Purchased Loan by Seller or
an Affiliate during such calendar month; and

 

  (iv)

Within 45 days after the last day of each quarter in any fiscal year, an
officer’s certificate from Master Seller addressed to Buyer certifying that, as
of the end of such quarter, (x) no Default or Event of Default exists (or any
exceptions thereto, if applicable) and (y) Guarantor is in compliance with the
financial covenants set forth in Section 5 of the Guaranty (including a
calculation of each such financial covenant).

Documents required to be delivered pursuant to the foregoing provisions of this
Section 11(i) may be delivered by electronic communication (including email or
otherwise) and if so delivered, shall be deemed to have been delivered on the
date (i) on which the applicable party transmits such documents via email,
(ii) on which the applicable party posts such documents, or provides a link
thereto, on the applicable party’s website on the Internet at the website
address listed on Exhibit III attached hereto (which website address may be
updated by Seller by written notice to Buyer), or (iii) on which such documents
are posted on the applicable party’s behalf on an Internet or intranet website,
if any, to which Buyer has access (whether a commercial, third-party website or
whether sponsored by Buyer). Seller shall use reasonable efforts to deliver
electronic notice to Buyer promptly after the posting of any financial
statements or documents required to be delivered hereunder to the applicable
party’s Internet or intranet website together with a link to such posted or
filed financial statements or documents.

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

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

(l)    Seller shall observe, perform and satisfy all the terms, provisions,
covenants and conditions required to be observed, performed or satisfied by it,
and shall pay when due all costs, fees and expenses required to be paid by it,
under the Transaction Documents. Seller shall pay and discharge all Taxes,
levies, liens and other charges on its assets and on the Collateral that, in

 

65

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

each case, in any manner would create any lien or charge upon the Collateral,
except for any such Taxes as are being appropriately contested in good faith by
appropriate proceedings diligently conducted and with respect to which adequate
reserves have been provided in accordance with GAAP in all material respects.
Seller shall timely file all Tax returns required to be filed by it.

(m)    Seller shall advise Buyer in writing of the opening of any new chief
executive office or the closing of any such office and of any change in Seller’s
name or organizational structure or the places where the books and records
pertaining to the Purchased Loan are held not less than fifteen (15) Business
Days prior to taking any such action. Seller shall also give Buyer written
notice promptly after Seller has knowledge of (i) any Person domiciled in the
United States (which previously held less than a 25% direct or indirect
ownership interest in Seller) obtaining 25% or more of the direct or indirect
ownership interests in Seller (including, without limitation, any direct or
indirect ownership interests in Guarantor) and (ii) any Person domiciled outside
of the United States (which previously held less than a 10% direct or indirect
ownership interest in Seller) obtaining 10% or more of the direct or indirect
ownership interests in Seller (including, without limitation, any direct or
indirect ownership interests in Guarantor).

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

(o)    Seller shall provide Buyer with reasonable access to any operating
statements, any occupancy status and any other property level information with
respect to the Mortgaged Properties, plus any such additional reports as Buyer
may reasonably request, in each case to the extent in Seller’s possession or
reasonably obtainable by Seller.

(p)    Intentionally omitted.

(q)    Master Seller, and to the extent applicable, each Series Seller, shall
maintain its existence as a limited liability company, organized solely and in
good standing under the law of the State of Delaware (unless Seller shall have
given Buyer at least ten (10) Business Days’ prior written notice that Seller
intends to change the jurisdiction of its organization) and shall not dissolve,
liquidate, merge with or into any other Person or otherwise change its
organizational structure or documents or incorporate or organize in any other
jurisdiction, without the prior written approval of Buyer, which approval shall
not be unreasonably withheld, conditioned or delayed.

(r)    Seller may propose, and Buyer will consider, but shall be under no
obligation to approve, strategies for the foreclosure or other realization upon
the security for any Purchased Loan with respect to which a Purchased Loan Event
of Default has occurred.

(s)    Seller shall at all times be a disregarded entity for U.S. federal income
tax purposes.

 

66

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

12.    SINGLE-PURPOSE ENTITY

Seller hereby represents and warrants to Buyer, and covenants with Buyer, that
as of the date hereof and so long as this Agreement or any of the Transaction
Documents shall remain in effect (for purposes hereof, all references to the
term “Seller” in this Section 12 shall be deemed to mean and refer to Master
Seller together with each Series Seller which is a party to this Agreement as of
the applicable date):

(a)    It is and intends to remain solvent and it has paid and will pay its
debts and liabilities (including employment and overhead expenses) from its own
assets as the same shall become due; provided, however, that nothing contained
in this Section 12 or otherwise in this Agreement shall require any direct or
indirect owners of Seller to make any additional capital contributions to
Seller.

(b)    It has complied and will comply with the provisions of its organizational
documents.

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

(d)    It has maintained and will maintain all of its books, records, financial
statements and bank accounts separate from those of its Affiliates that are not
a Seller, its members and any other Person that is not a Seller, and Master
Seller will file consolidated Tax returns, if any, which are required by
applicable law (except to the extent consolidation between Master Seller and
Series Sellers is not required or permitted under GAAP or as a matter of law
(such as in the case of a disregarded entity), or to the extent that
consolidation with any of Seller’s Affiliates, its members, or any other Person
is required or permitted under GAAP or as a matter of law).

(e)    It will, and will at all times hold itself out to the public as, in the
case of Master Seller, a legal entity separate and distinct from any other
entity (including any Affiliate), and, in the case of any Series Seller,
distinct from any other entity (including any Affiliate, Master Seller or any
other Series), it will correct any known misunderstanding regarding such status,
it will conduct business in its own name, it will not identify itself or any of
its Affiliates as a division or part of the other (except any Series Seller may
refer to itself as a “series” of Master Seller), it will maintain and utilize
separate stationary, invoices and checks, and Master Seller or any Series Seller
will pay to any Affiliate that incurs costs for office space and administrative
services that it uses, the amount of such costs allocable to its use of such
office space and administrative services.

(f)    It has not owned and will not own any property or any other assets other
than the Purchased Loans, cash and other assets including New Collateral
incidental to the origination, acquisition, ownership, hedging, administering,
financing and disposition of Purchased Loans.

(g)    It has not engaged and will not engage in any business other than the
origination, acquisition, reacquisition, ownership, hedging, administering,
financing, refinancing, securitizing and disposition of the Purchased Loans or
New Collateral in accordance with the applicable provisions of the Transaction
Documents.

 

67

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

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

(i)    It has not incurred and will not incur any indebtedness or obligation,
secured or unsecured, direct or indirect, absolute or contingent (including
guaranteeing any obligation), other than (A) obligations under the Transaction
Documents and (B) unsecured trade payables, in an aggregate amount not to exceed
the Seller Threshold at any one time outstanding, incurred in the ordinary
course of originating, acquiring, owning, financing, securitizing and disposing
of Eligible Loans or New Collateral; provided, however, that any such trade
payables incurred by Seller shall be paid within sixty (60) days of the date
invoiced.

(j)    Except to the extent expressly permitted under this Agreement, it has not
made and will not make any loans or advances (other than Eligible Loans) to any
other Person, and shall not acquire obligations or securities of any member or
any Affiliate of any member (other than in connection with the acquisition,
financing or refinancing of the Eligible Loans or New Collateral) or any other
Person.

(k)    It has maintained and intends to maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character and
in light of its contemplated business operations; provided, however, that
nothing contained in this Section 12 or otherwise in this Agreement shall
require any direct or indirect owners of Seller to make any additional capital
contributions to Seller.

(l)    It has not commingled and will not commingle its funds and other assets
with those of any of its Affiliates that are not a Seller or any other Person
(except with Master Seller and other Series Sellers as contemplated under
Section 5 hereof).

(m)    It has maintained and will maintain its assets in such a manner that it
will not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any of its Affiliates that are not a Seller or
any other Person (except with Master Seller and other Series Sellers).

(n)    Except as contemplated under the Transaction Documents, it has not held
and will not hold itself out to be responsible for the debts or obligations of
any other Person (except with Master Seller and other Series Sellers).

(o)    It shall not take any of the following actions without the affirmative
vote of the Independent Manager: (i) permit its members to dissolve or liquidate
Seller, in whole or in part; (ii) consolidate or merge with or into any other
entity or convey or transfer all or substantially all of its properties and
assets to any entity; or (iii) institute any proceeding to be adjudicated as
bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against it, or file a petition or answer or consent seeking
reorganization or relief under the Bankruptcy Laws, or effect any similar
procedure under any similar law, or consent to the filing of any such petition
or to the appointment of a receiver, rehabilitator, conservator, liquidator,
assignee, trustee or sequestrator (or other similar official) of Seller or of
any substantial part of its property, or

 

68

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

ordering the winding up or liquidation of its affairs, or make an assignment for
the benefit of creditors, or admit in writing in a legal proceeding its
inability to pay its debts generally as they become due, or take any action in
furtherance of any of the foregoing.

(p)    It has no liabilities, contingent or otherwise, other than those normal
and incidental to the origination, acquisition, ownership, hedging, financing,
securitizing and disposition of the Purchased Loans or New Collateral.

(q)    It is an entity disregarded as a separate entity or treated as a
partnership for U.S. federal income tax purposes and has not made any election
under Section 301.7701-3(a) of the Treasury Regulations to be treated as an
association taxable as a corporation for U.S. federal income tax purposes.

(r)    It has not and shall not maintain any employees.

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

(t)    Except as contemplated under the Transaction Documents, it has not
pledged and will not pledge its assets to secure the obligations of any other
Person (other than Master Seller or any Series Seller).

(u)    Except as contemplated under the Transaction Documents, it has not and
will not guarantee any obligation of any Person, including any Affiliate or
become obligated for the debts of any other Person or hold out its credit as
being available to pay the obligations of any other Person (other than Master
Seller or any Series Seller).

(v)    It will not, to the fullest extent permitted by law, engage in any
dissolution, liquidation, consolidation, merger, sale or transfer of all or
substantially all of its assets.

(w)    It will not form, acquire or hold any subsidiary (whether corporate,
partnership, limited liability company or other) or own any equity interest in
any other entity (other than any Series Seller).

(x)    The Master Seller LLC Agreement shall provide that (i) no Independent
Manager of Seller may be removed or replaced without Cause, (ii) Buyer be given
at least two (2) Business Days prior notice of the removal and/or replacement of
the Independent Manager, together with the name and contact information of the
replacement Independent Manager and evidence of the replacement’s satisfaction
of the definition of Independent Manager and (iii) any Independent Manager of
Seller shall not have any fiduciary duty to anyone including the holders of the
equity interests in Seller and any Affiliates of Seller except Seller and the
creditors of Seller with respect to taking of, or otherwise voting on, any of
the actions contemplated by Section 12(o) above; provided, that the foregoing
shall not eliminate the implied contractual covenant of good faith and fair
dealing.

 

69

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

Notwithstanding anything to the contrary contained herein or in any other
Transaction Document, so long as this Agreement shall remain in effect, Seller
may enter into one or more asset transfer agreements to transfer assets to a
securitization seller, depositor, trust, issuer or other similar Person;
provided that (i) prior to entering into any such asset transfer agreement,
Buyer shall have reviewed such asset transfer agreement and confirmed that
Seller does not have any liability or obligation under any such asset transfer
agreement, and (ii) either (A) one or more Guarantors or (B) another Person
other than Seller agrees to be responsible and liable for the performance of any
and all obligations of Seller under any such asset transfer agreement or arising
in connection therewith.

13.    EVENTS OF DEFAULT; REMEDIES

(a)    During the continuance of an Event of Default which has occurred, Seller
hereby appoints Buyer as attorney-in-fact of Seller for the purpose of carrying
out the provisions of this Agreement and taking any action and executing or
endorsing any instruments that Buyer may deem necessary or advisable to
accomplish the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest.

(I)    Each of the following shall constitute a “Facility Event of Default”:

 

  (i)

an Act of Insolvency occurs with respect to Seller, Guarantor or Member;

 

  (ii)

Seller, Guarantor or Member shall admit in writing to any Person in an external
and unprivileged communication its inability to, or its intention not to,
perform any of its material obligations hereunder or under any of the
Transaction Documents,

 

  (iii)

either (A) the Transaction Documents shall for any reason not cause, or shall
cease to cause, Buyer to be the owner free of any adverse claim (other than the
rights of Seller pursuant to this Agreement) of any of the Purchased Loans and
such condition is not cured by Seller within three (3) Business Days after the
earlier of notice thereof from Buyer or Seller obtaining actual knowledge of
same, (B) if a Transaction is recharacterized as a secured financing, the
Transaction Documents with respect to any Transaction shall for any reason cease
to create a valid first priority security interest in favor of Buyer in any of
the Purchased Loans (except to the extent resulting from the actions of Buyer)
and such condition is not cured by Seller within three (3) Business Days after
the earlier of notice thereof from Buyer or Seller obtaining actual knowledge of
same, or (C) any provision of the Transaction Documents, any right or remedy of
Buyer or obligation, covenant, agreement or duty of Seller thereunder, or any
lien, security interest or control granted under in connection with the
Transaction Documents or Purchased Loans terminates, is declared null and void,
ceases to be valid and effective, ceases to be the legal, valid, binding and
enforceable obligation of Seller or any other Person, or the validity,
effectiveness, binding nature or enforceability thereof is contested,
challenged, denied or

 

70

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

 

repudiated by Seller or any Affiliate thereof, in each case directly,
indirectly, in whole or in part;

 

  (iv)

failure of Master Seller to make any payment owing to Buyer which has become due
and payable under this Agreement or any other Transaction Document (other than
any monetary Transaction Event of Default by any Series Seller under Sections
13(a)(II)(i)-(iv) of this Agreement), whether by acceleration or otherwise under
the terms of this Agreement or the other Transaction Documents, which failure is
not remedied within five (5) Business Days;

 

  (v)

any governmental, regulatory, or self-regulatory authority shall have taken any
action to remove, limit, restrict, suspend or terminate the rights, privileges,
or operations of Seller, which removal, suspension, restriction or termination
results in a Material Adverse Effect;

 

  (vi)

a Change of Control shall have occurred that has not been consented to by Buyer
in writing;

 

  (vii)

any representation made by Seller or Guarantor in this Agreement or the other
Transaction Documents shall have been incorrect or untrue in any material
respect when made or repeated or deemed to have been made or repeated, which
incorrect or untrue representation or the condition giving rise to such
incorrect or untrue representation, to the extent such breach or condition is
reasonably susceptible to cure, is not cured within ten (10) Business Days after
the earlier of notice thereof from Buyer or Seller obtaining actual knowledge of
such breach (unless Seller shall have made any such representation with actual
knowledge that it was materially incorrect or untrue at the time made, in which
case such breach shall constitute an immediate Facility Event of Default);
provided, however, that the breach of Section 9(b)(viii) or any Purchased Loan
Representation made by Seller with respect to any Purchased Loan in any
Transaction Document shall not be considered a Facility Event of Default if
incorrect or untrue;

 

  (viii)

either (A) Guarantor (1) shall fail to observe any of the financial covenants
set forth in the Guaranty or (2) shall have defaulted or failed to perform any
other covenant under the Guaranty in any material respect subject to all
applicable notice and cure periods, (B) Member shall have defaulted or failed to
perform under the Member Guaranty subject to all applicable notice and cure
periods or (C) the Guaranty or Member Guaranty shall have been revoked,
rescinded or otherwise cease to be in full force and effect;

 

  (ix)

a final non-appealable judgment by any competent court in the United States of
America having jurisdiction over Seller or Guarantor, as applicable for the
payment of money in an amount greater than the Seller Threshold (in the case of
Seller) or the Guarantor Threshold (in the case of the Guarantor) shall have
been rendered against Seller or the Guarantor, and remained

 

71

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

 

undischarged or unpaid for a period of sixty (60) days, during which period
execution of such judgment is not effectively stayed by bonding over or other
means reasonably acceptable to Buyer;

 

  (x)

Guarantor shall have defaulted or failed to perform under any note, indenture,
loan agreement, guaranty, repurchase agreement, short sale, futures contract
(including Eurodollar futures) or options contract or any interest rate swap,
cap or collar agreement or derivatives transaction to which it is a party (other
than a Transaction Document), which default (A) involves the failure to pay a
matured monetary obligation in an amount greater than or equal to the Guarantor
Threshold, or (B) permits the acceleration of the maturity of obligations, or
the declaration of a mandatory early repurchase date or termination date with
respect to indebtedness or obligations in an amount greater than or equal to the
Guarantor Threshold, by any other party to or beneficiary of such note,
indenture, loan agreement, guaranty, repurchase agreement, swap agreement or
other contract agreement or transaction due to the failure to observe the
financial covenants, if any, set forth therein; provided, however, that any such
default, failure to perform or breach shall not constitute a Facility Event of
Default if Guarantor cures such default, failure to perform or breach, as the
case may be, within the grace period, notice, or cure period, if any, provided
under the applicable agreement;

 

  (xi)

Seller shall have defaulted or failed to perform under any note, indenture, loan
agreement, guaranty, repurchase agreement, short sale, futures contract
(including Eurodollar futures) or options contract or any interest rate swap,
cap or collar agreement or derivatives transaction to which it is a party (other
than a Transaction Document), which default (A) involves the failure to pay a
matured monetary obligation in an amount greater than or equal to the Seller
Threshold, or (B) permits the acceleration of the maturity of obligations, or
the declaration of a mandatory early repurchase date or termination date with
respect to indebtedness or obligations in an amount greater than or equal to the
Seller Threshold, by any other party to or beneficiary of such note, indenture,
loan agreement, guaranty, repurchase agreement, swap agreement or other contract
agreement or transaction due to the failure to observe the financial covenants,
if any, set forth therein; provided, however, that any such default, failure to
perform or breach shall not constitute a Facility Event of Default if Guarantor
cures such default, failure to perform or breach, as the case may be, within the
grace, notice, or cure period, if any, provided under the applicable agreement;

 

  (xii)

if Seller or Guarantor defaults beyond any applicable grace, notice or cure
periods in paying any amount or performing any obligation due to Buyer or any
Affiliate of Buyer under any other financing, swap, hedging, security or credit
agreement between Seller or Guarantor and Buyer or any Affiliate of Buyer; or

 

72

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

  (xiii)

if Seller or Guarantor shall breach or fail to perform any of the terms,
covenants, obligations or conditions of this Agreement or any other Transaction
Document, other than as specifically otherwise referred to in this definition of
“Facility Event of Default”, and such breach or failure to perform is not
remedied within ten (10) Business Days after written notice thereof to Seller by
Buyer, or its successors or assigns, or such other (shorter or longer) cure
period (if any) as may be expressly provided herein or in such Transaction
Document (unless the Agreement or such other Transaction Document expressly
provides that such breach or failure constitutes an immediate Facility Event of
Default); provided, however, that if such default is susceptible of cure but
cannot reasonably be cured within such ten (10) Business Day period (or shorter
period, as applicable) and, provided further, that Seller has commenced to cure
such default within such ten (10) Business Day period (or short period, as
applicable) and thereafter diligently proceeds to cure the same, such cure
period shall be extended for such time as is reasonably necessary for Seller to
cure such default (such extension not to exceed ten (10) additional Business
Days);

 

  (xiv)

Seller or any Servicer, as applicable, fails to deposit to the Cash Management
Account all Available Income from such Purchased Loan as required by Section 5
and other provisions of this Agreement when due and such failure of Seller or
any Servicer to deposit to the Cash Management Account is not cured within two
(2) Business Days;

 

  (xv)

any breach under Sections 10(b), (d), (e), (g), (i), (n), (o), (p), (q), (r),
(s) or (v);

 

  (xvi)

any breach under Section 10(f); provided, however, that any such breach by
Seller under Section 10(f) shall not be considered an Event of Default hereunder
provided Seller cures such breach if the breach is reasonably susceptible to
cure or terminates the related Transaction and repurchases the related Purchased
Loan(s) pursuant to Section 3(e), in each case, no later than five (5) Business
Days after the earlier of (A) Seller’s having knowledge of such breach or
(B) notice from Buyer to Seller of such breach; or

 

  (xvii)

Guarantor’s audited annual financial statements or the notes thereto or other
opinions or conclusions stated therein are qualified or limited by reference to
the status of Guarantor’ as a “going concern” or a reference of similar import,
other than a qualification or limitation expressly related to Buyer’s rights in
the Purchased Loans.

(II)    Each of the following, as to a Purchased Loan, shall constitute a
“Transaction Event of Default” for such Purchased Loan:

 

  (i)

the applicable Series Seller fails to repurchase such Purchased Loan upon the
applicable Repurchase Date therefor;

 

73

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

  (ii)

the applicable Series Seller fails to pay any Margin Deficit with respect to
such Purchased Loan when required pursuant to Section 4 hereof;

 

  (iii)

the applicable Series Seller fails to repurchase such Purchased Loan which is
the subject of a Mandatory Early Repurchase, as and when required pursuant to
Section 3(l); or

 

  (iv)

the failure of Buyer to receive on any Remittance Date any amount due to Buyer
for a Transaction pursuant to Section 5(c) or 5(d) hereof; provided, that if
sufficient funds were on deposit in the Cash Management Account on such
Remittance Date, it shall not be a Transaction Event of Default if Buyer fails
to instruct the Depository to or the Depository fails to make the relevant
remittances.

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

 

  (i)

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

 

  (ii)

If Buyer exercises or is deemed to have exercised the option referred to in
Section 13(b)(i) of this Agreement:

 

  (A)

Seller’s obligations hereunder to repurchase all Purchased Loans shall become
immediately due and payable on and as of the Accelerated Repurchase Date; and

 

  (B)

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

 

  (C)

the Custodian shall, upon the request of Buyer, deliver to Buyer all Purchased
Loan Documents, instruments, certificates and other documents then held by the
Custodian relating to the Purchased Loans.

 

  (iii)

Upon the occurrence of a Facility Event of Default, Buyer may, following one
(1) Business Day’s prior notice to Seller, (A) immediately sell, at a public or
private sale in a commercially reasonable manner and at such price or prices as
Buyer may reasonably deem satisfactory any or all of the Purchased Loans or
(B) in its sole and absolute discretion elect, in lieu of

 

74

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

 

selling all or a portion of such Purchased Loans, to give Seller credit for such
Purchased Loans in an amount equal to the Market Value of such Purchased Loans
against the aggregate unpaid Repurchase Price for such Purchased Loans and any
other amounts owing by Seller under this Agreement or the Transaction Documents.
The proceeds of any disposition of Purchased Loans effected pursuant to this
Section 13(b)(iii) shall be applied, (v) first, to the actual, out-of-pocket
costs and expenses incurred by Buyer in connection with Seller’s default;
(w) second, without duplication, to any and all amounts due under Section 3(h),
including, without limitation, costs of cover, if any; (x) third, to the
Repurchase Price; and (y) fourth, to return any excess to Seller.

 

  (iv)

The parties acknowledge and agree that (1) the Purchased Loans subject to
Transactions hereunder are not instruments traded in a recognized market, and,
in the absence of a generally recognized source for prices or bid or offer
quotations for any Purchased Loans, Buyer may establish the source therefor in
its sole and absolute discretion and (2) all prices, bids and offers shall be
determined together with accrued Available Income (except to the extent contrary
to market practice with respect to the relevant Purchased Loans). The parties
recognize that it may not be possible to purchase or sell all of the Purchased
Loans on a particular Business Day, or in a transaction with the same purchaser,
or in the same manner because the market for such Purchased Loans may not be
liquid at such time. In view of the nature of the Purchased Loans, to the extent
permitted by applicable law, the parties agree that liquidation of a Transaction
or the Purchased Loans pursuant to this Section 13(b) or Section 13(c) does not
require a public purchase or sale and that a good faith private purchase or sale
shall be deemed to have been made in a commercially reasonable manner.
Accordingly, Buyer may elect, in its sole and absolute discretion (but upon not
less than one (1) Business Day’s prior notice to Seller), the time and manner of
liquidating any Purchased Loans pursuant to this Section 13(b) or Section 13(c),
and nothing contained herein shall (A) obligate Buyer to liquidate any Purchased
Loans on the occurrence and during the continuance of an Event of Default or to
liquidate all of the Purchased Loans in the same manner or on the same Business
Day or (B) constitute a waiver of any right or remedy of Buyer.

 

  (v)

Seller shall be liable to Buyer for (A) the amount of all actual out-of-pocket
expenses, including reasonable legal fees and expenses of external counsel,
actually incurred by Buyer in connection with or as a consequence of an Event of
Default, (B) all out-of-pocket costs actually incurred in connection with
covering transactions, and (C) any other actual out-of-pocket loss, damage, cost
or expense directly arising or resulting from the occurrence of an Event of
Default.

 

  (vi)

Buyer shall have, in addition to its rights and remedies under the Transaction
Documents, all of the rights and remedies provided by

 

75

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

 

applicable federal, state and local laws (including, without limitation, if the
Transactions are characterized as secured financings, the rights and remedies of
a secured party under the UCC of the State of New York, to the extent that the
UCC is applicable, and the right to offset any mutual debt and claim), in
equity, and under any other agreement between Buyer and Seller. Without limiting
the generality of the foregoing, Buyer shall be entitled to set off the proceeds
of the liquidation of the Purchased Loans against all of Seller’s obligations to
Buyer under this Agreement, whether or not such obligations are then due,
without prejudice to Buyer’s right to recover any deficiency.

 

  (vii)

Subject to the notice and grace periods set forth herein, Buyer may exercise any
or all of the remedies available to Buyer immediately upon the occurrence of an
Event of Default and at any time during the continuance thereof. Except as
expressly required herein or in the other Transaction Documents, Buyer shall not
be required, to give notice to Seller or any other Person prior to exercising
any remedy in respect of an Event of Default. All rights and remedies arising
under the Transaction Documents, as amended from time to time, are cumulative
and not exclusive of any other rights or remedies which Buyer may have.

 

  (viii)

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

 

  (ix)

Upon the designation of any Accelerated Repurchase Date, Buyer may, without
prior notice to Seller, set off any sum or obligation (whether or not arising
under this Agreement, whether matured or unmatured, whether or not contingent
and irrespective of the currency, place of payment or booking office of the sum
or obligation) owed by Seller to Buyer or any Affiliate of Buyer against any sum
or obligation (whether or not arising under this Agreement, whether matured or
unmatured, whether or not contingent and irrespective of the currency, place of
payment or booking office of the sum or obligation) owed by Buyer or any
Affiliate of Buyer to Seller. Buyer will give written notice to the other party
of any set off effected under this Section 13(b)(ix). If a sum or obligation is
unascertained, Buyer may, in good faith, estimate that obligation and set-off in
respect of the estimate, subject to the relevant party accounting to the other
when the obligation is ascertained. Nothing in this Section 13(b)(ix) shall be
effective to create a charge or other security interest. This Section 13(b)(ix)
shall be without prejudice and in addition to any right of set-off, combination
of accounts,

 

76

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

 

lien or other rights to which any party is at any time otherwise entitled
(whether by operation of law, contract or otherwise).

 

  (x)

Seller shall within two (2) Business Days following Buyer’s written request, to
execute and deliver to Buyer such documents, instruments, certificates,
assignments and other writings, and do such other acts as Buyer may reasonably
request for the purposes of assuring, perfecting and evidencing Buyer’s
ownership of the Purchased Loans, including without limitation: (i) forwarding,
to Buyer or Buyer’s designee (including, if applicable, the Custodian), any
payments Seller may hereafter receive on account of the Purchased Loans, in each
case promptly upon receipt thereof; (ii) delivering to Buyer or such designee
any originals of certificates, instruments, documents, notices or files
evidencing or relating to the Purchased Loans which are in Seller’s possession
or under its control; (iii) delivering to Buyer underwriting summaries, credit
memos, assets summaries, status reports or similar documents relating to the
Purchased Loans and in Sellers possession or under its control.

 

  (xi)

Buyer may complete and record and/or file, as applicable, any assignments,
allonges, endorsements, powers or other documents or instruments executed in
blank with respect to any or all of the Purchased Loans and otherwise obtain
physical possession of all Purchased Loan Documents and all other instruments,
certificates and documents then held by or on behalf of Custodian under the
Custodial Agreement. Buyer may obtain physical possession of all Servicing
Records, Servicing Agreements and other files and records of Seller or Servicer.
Seller shall deliver to Buyer such assignments and other documents with respect
thereto as Buyer shall request. It is acknowledged and agreed that Buyer shall
not complete, record and/or file, as applicable, any assignments, allonges,
endorsements, powers or other documents or instruments executed in blank with
respect to any Purchased Loan unless and until a Facility Event of Default has
occurred and is continuing or a Transaction Event of Default has occurred and is
continuing with respect to such Purchased Loan..

(c)    Without limiting Buyer’s rights and remedies under Section 13(b) of this
Agreement or otherwise available under the Transaction Documents, at law or in
equity, if a Transaction Event of Default shall occur and be continuing, the
following rights and remedies shall be available to Buyer with respect to the
applicable Series Seller and Purchased Loan:

 

  (i)

At the option of Buyer, exercised by written notice to Seller, the Repurchase
Date for the applicable Transaction shall, if it has not already occurred, be
deemed immediately to occur (the “Accelerated Transaction Repurchase Date”).

 

  (ii)

If Buyer exercises or is deemed to have exercised the option referred to in
Section 13(c)(i) of this Agreement:

 

77

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

  (A)

the applicable Series Seller’s obligations hereunder to repurchase the
applicable Purchased Loan shall become immediately due and payable on and as of
the Accelerated Transaction Repurchase Date; and

 

  (B)

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

 

  (C)

the Custodian shall, upon the request of Buyer, deliver to Buyer all Purchased
Loan Documents, instruments, certificates and other documents then held by the
Custodian relating to the applicable Purchased Loan.

 

  (iii)

Upon the occurrence of a Transaction Event of Default, Buyer may following one
(1) Business Day’s notice to Seller, (A) immediately sell, at a public or
private sale in a commercially reasonable manner and at such price or prices as
Buyer may reasonably deem satisfactory the applicable Purchased Loan or (B) in
its sole and absolute discretion elect, in lieu of selling all or a portion of
such Purchased Loan, to give Seller credit for such Purchased Loan in an amount
equal to the Market Value of such Purchased Loan against the aggregate unpaid
Repurchase Price for such Purchased Loan and any other amounts owing by Seller
under this Agreement or the Transaction Documents. The proceeds of any
disposition of Purchased Loan effected pursuant to this Section 13(c)(iii) shall
be applied, (v) first, to the actual, out-of-pocket costs and expenses incurred
by Buyer in connection with Seller’s default; (w) second, without duplication,
to any and all amounts due under Section 3(h), including, without limitation,
costs of cover, if any; (x) third, to the Repurchase Price; and (y) fourth, to
return any excess to Seller.

 

  (iv)

Buyer may complete and record and/or file, as applicable, any assignments,
allonges, endorsements, powers or other documents or instruments executed in
blank with respect to the applicable Purchased Loan and otherwise obtain
physical possession of all Purchased Loan Documents and all other instruments,
certificates and documents then held by or on behalf of Custodian under the
Custodial Agreement relating to such Purchased Loan. Buyer may obtain physical
possession of all Servicing Records, Servicing Agreements and other files and
records of Seller or Servicer relating to such Purchased Loan. Seller shall
deliver to Buyer such assignments and other documents with respect to the
applicable Purchased Loan as Buyer shall request. It is acknowledged and agreed
that Buyer shall not complete, record and/or file, as applicable, any
assignments, allonges, endorsements, powers or other documents or instruments
executed in blank with respect to any Purchased Loan unless and until a Facility
Event of Default has occurred and is continuing or a Transaction Event of
Default has occurred and is continuing with respect to such Purchased Loan..

 

78

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

14.    LIMITATIONS ON RECOURSE AGAINST SERIES SELLERS

Buyer acknowledges that Master Seller is organized as a series limited liability
company under Section 18-215 of the Delaware Limited Liability Company Act.
Notwithstanding that this Agreement and the other Transaction Documents have
been executed on behalf of Seller without reference to any particular Series
Seller, Buyer agrees to treat each Transaction under this Agreement as the
obligation of the particular Series Seller of Master Seller that enters into the
Transaction for the related Purchased Loan(s). Provided that no Facility Event
of Default shall have occurred and be continuing hereunder, the Repurchase
Obligations of any Series Seller relating to or arising from the Transaction(s)
to which such Series Seller is a party shall be enforceable only against such
Series Seller and with respect to the Purchased Loan(s) relating to such
Transaction(s) and not against any other Series Seller or any other Purchased
Loan. Notwithstanding the foregoing or anything to the contrary contained in
this Agreement or any other Transaction Document, Buyer shall be entitled to
exercise any and all remedies available to Buyer under Section 13(b) against
Seller and any and all Purchased Loans subject to Transactions hereunder upon
the occurrence and continuance of a Facility Event of Default.

15.    RECORDING OF COMMUNICATIONS

EACH OF BUYER AND SELLER SHALL HAVE THE RIGHT (BUT NOT THE OBLIGATION) FROM TIME
TO TIME TO MAKE OR CAUSE TO BE MADE TAPE RECORDINGS OF COMMUNICATIONS BETWEEN
ITS EMPLOYEES, IF ANY, AND THOSE OF THE OTHER PARTY WITH RESPECT TO
TRANSACTIONS; PROVIDED, HOWEVER, THAT SUCH RIGHT TO RECORD COMMUNICATIONS SHALL
BE LIMITED TO COMMUNICATIONS OF EMPLOYEES TAKING PLACE ON THE TRADING FLOOR OF
THE APPLICABLE PARTY. EACH OF BUYER AND SELLER HEREBY CONSENTS TO THE
ADMISSIBILITY OF SUCH TAPE RECORDINGS IN ANY COURT, ARBITRATION, OR OTHER
PROCEEDINGS, IF AND TO THE EXTENT CONSISTENT WITH APPLICABLE LAW AND THE RULES
OF COURT AND EVIDENCE.

16.    NOTICES AND OTHER COMMUNICATIONS

Unless otherwise provided in this Agreement, all notices, consents, approvals
and requests required or permitted hereunder shall be given in writing and shall
be effective for all purposes if hand delivered or sent by (a) hand delivery,
with proof of attempted delivery, (b) certified or registered United States
mail, postage prepaid, (c) expedited prepaid delivery service, either commercial
or United States Postal Service, with proof of attempted delivery, or (d) by
email, to the address specified in Annex I hereto or at such other address and
person as shall be designated from time to time by any party hereto, as the case
may be, in a written notice to the other parties hereto in the manner provided
for in this Section 16. A notice shall be deemed to have been given: (a) in the
case of hand delivery, at the time of delivery, (b) in the case of registered or
certified mail, when delivered on a Business Day, (c) in the case of expedited
prepaid delivery upon delivery on a Business Day, or (d) in the case of email,
upon delivery; provided that the transmitting party did not receive an
electronic notice of a transmission failure. A party receiving a notice which

 

79

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

does not comply with the technical requirements for notice under this Section 16
may elect to waive any deficiencies and treat the notice as having been properly
given.

17.    ENTIRE AGREEMENT; SEVERABILITY

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

18.    ASSIGNABILITY

(a)    The rights and obligations of Seller under this Agreement and the other
Transaction Documents and under any Transaction shall not be assigned by Seller
without the prior written consent of Buyer, which consent may be granted or
withheld in Buyer’s sole discretion.

(b)    Buyer may assign its rights and obligations under this Agreement and the
other Transaction Documents and/or under any Transaction or may issue one or
more participation interests with respect to any or all of the Transactions,
without the consent of, and without prior notice to, Seller, to any other
Person, and, in connection therewith, may bifurcate or allocate (i.e.
senior/subordinate) amounts owed to Buyer, in each case, to the extent same
constitutes an assignment of a Purchased Loan, in conformity with any
restrictions on transfer under the Purchased Loan Documents for such Purchased
Loan including eligibility requirements, qualified transferee requirements or
the like, if applicable; provided, however, that, with respect to any such
participation or assignment, unless and until a Facility Event of Default has
occurred and is continuing or initial Buyer has assigned 100% of its rights and
obligations under this Agreement and the other Transaction Documents,
(i) initial Buyer shall act as exclusive agent for all participants or assignees
in any dealings with Seller in connection with such Transactions (it being
acknowledged and agreed that, notwithstanding the foregoing, and subject in any
event to clause (ii) below, Buyer may grant to any participants or assignees
consent or approval rights with respect to certain material decisions or actions
under this Agreement or the Transaction Documents but shall not transfer initial
Buyer’s rights to (A) sole decision making to determine whether to purchase any
Eligible Loan in a Transaction and (B) determine the Market Value of the
Purchased Loans) and (ii) Seller shall not be obligated to deal directly with
any party other than Buyer or its Affiliate in connection with such
Transactions, or, with respect to assignments and participations, to pay or
reimburse Buyer, assignee or participant for any costs or other amounts that
would not have been incurred had no assignment or participation been issued or
made, as applicable; and provided, further, that so long as no Event of Default
has occurred and is continuing, Buyer shall not assign or grant participations
in its rights and obligations hereunder to any of the parties listed on Exhibit
X attached hereto or their respective Affiliates (collectively, the “Prohibited
Transferees”) or assign or grant any participations in the Transaction Documents
or any Purchased Loan to the Mortgagor for such Purchased Loan or any Affiliate
of any Mortgagor (to the extent Buyer shall have had actual knowledge that such
Person was an Affiliate of such Mortgagor). Notwithstanding the foregoing, if an
Event of Default shall have occurred and be continuing, Buyer may assign and/or
grant participations in any and all of its rights and obligations to any
Prohibited Transferee without notice to or consent of Seller. Seller shall
reasonably cooperate at

 

80

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

Buyer’s sole cost and expense with Buyer in connection with any assignment or
participation, provided Seller’s obligations under the Transaction Documents are
not increased and its rights under the Transaction Documents are not impaired.
Seller agrees that any assignee or participant shall be entitled to the benefits
of Section 3(i) and Section 29 (subject to the limitations and requirements
under Section 29(e) (it being understood that the applicable documentation
required under Section 29(e) shall be delivered to the participating Buyer));
provided that, no assignee or participant will be entitled to any greater
payment of amounts under Section 3(i) or Section 29, than its assignor or
participating Buyer would have been entitled to receive with respect to the
applicable assigned or participated rights and obligations, except to the extent
such entitlement to receive a greater payment or amounts results from the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof by any Governmental Authority or compliance by Buyer with
any request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority having jurisdiction over Buyer made
subsequent to the date hereof.

(c)    Buyer shall, acting solely for this purpose as a non-fiduciary agent of
Seller (the “Registrar”), maintain a record of ownership (the “Register”) on
which is entered the name and address of Buyer and all assignees of Buyer and
Buyer’s and each such assignee’s interest in the rights and obligations under
this Agreement and the other Transaction Documents. All assignments pursuant to
Section 18 hereof shall be recorded on the Register. This provision is intended
to be interpreted so that the indebtedness (for federal income tax purposes, as
set forth in Section 22(e)) evidenced by the Transaction Documents is treated as
being in registered form in accordance with Section 5f.103-1(c) of the Treasury
Regulations. The Register shall be available for inspection by Seller at any
reasonable time and from time to time upon reasonable prior notice. Subject to
the limitations of Section 18(b) on permitted assignees and participants, the
entries in the Register shall be conclusive absent manifest error and Buyer and
Seller shall treat each Person whose name is recorded in the Register pursuant
to the terms hereof as a Buyer hereunder for all purposes of this Agreement and
the other Transaction Documents. Buyer may, at any time, designate any other
Person, including, subject to Seller’s consent in its sole discretion, Seller,
to be the successor Registrar.

(d)    Each Buyer that sells a participation shall, acting solely for this
purpose as a non-fiduciary agent of Seller, maintain a register on which is
entered the name and address of each participant and such participant’s interest
in the rights and obligations under this Agreement and the other Transaction
Documents (the “Participant Register”); provided that, no Buyer shall have any
obligation to disclose all or any portion of the Participant Register (including
the identity of any participant or any information relating to a participant’s
interest in any rights or obligations under this Agreement and the other
Transaction Documents) to any Person except to the extent that such disclosure
is necessary to establish that such rights or obligations are in registered form
in accordance with Section 5f.103-1(c) of the Treasury Regulations. The entries
in each Participant Register shall be conclusive absent manifest error, and the
applicable Buyer shall treat each Person whose name is recorded in such
Participant Register as the owner of the related rights and obligations for all
purposes of this Agreement notwithstanding notice to the contrary.

(e)    Subject to the foregoing, this Agreement and the other Transaction
Documents and any Transactions shall be binding upon and shall inure to the
benefit of the parties and their respective successors and permitted assigns.
Nothing in this Agreement or the other Transaction

 

81

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

Documents, express or implied, shall give to any Person, other than the parties
to the Transaction Documents and their respective successors and permitted
assigns, any benefit or any legal or equitable right, power, remedy or claim
under the Transaction Documents.

19.    GOVERNING LAW

This Agreement shall be governed by the laws of the State of New York without
giving effect to the conflict of law principles thereof.

20.    NO WAIVERS, ETC.

No express or implied waiver of any Default or Event of Default by Buyer shall
constitute a waiver of any other Default or Event of Default and no exercise of
any right or remedy hereunder by Buyer shall constitute a waiver of its right to
exercise any other right or remedy hereunder. No modification or waiver of any
provision of this Agreement and no consent by any party to a departure herefrom
shall be effective unless and until such shall be in writing and duly executed
by both of the parties hereto. Without limitation of the foregoing, the failure
to give a notice pursuant to Section 4(b) or 4(c) hereof will not constitute a
waiver of any right to do so at a later date.

21.    USE OF EMPLOYEE PLAN ASSETS

(a)    No assets of any Plan subject to any provision of ERISA or Section 4975
of the Code shall be used in connection with any Transaction. If any such assets
are intended to be used by either party hereto (the “Plan Party”) in the
Transaction, the Plan Party shall so notify the other party prior to the
Transaction. The Plan Party shall represent in writing to the other party that
the Transaction does not constitute a prohibited transaction under ERISA or is
otherwise exempt therefrom, and the other party may proceed in reliance thereon
but shall not be required so to proceed.

(b)    Subject to the last sentence of subparagraph (a) of this Section 21, any
such Transaction shall proceed only if Seller furnishes or has furnished to
Buyer its most recent available audited statement of its financial condition and
its most recent subsequent unaudited statement of its financial condition.

(c)    By entering into a Transaction pursuant to this Section 21, Seller shall
be deemed (i) to represent to Buyer that since the date of Seller’s latest such
financial statements, there has been no material adverse change in Seller’s
financial condition which Seller has not disclosed to Buyer, and (ii) to agree
to provide Buyer with future audited and unaudited statements of its financial
condition as they are issued, so long as it is a Seller in any outstanding
Transaction involving a Plan Party.

22.    INTENT

(a)    The parties intend, agree and acknowledge that: (i) each Transaction with
a Repurchase Date less than one year after the Purchase Date or that provides
for repurchase on demand qualifies as a “repurchase agreement” as that term is
defined in Section 101(47) of the Bankruptcy Code, (ii) each Transaction
qualifies as a “securities contract” as that term is defined

 

82

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

in Section 741(7) of the Bankruptcy Code, (iii) each payment under this
Agreement has been made by, to or for the benefit of a financial institution as
defined in section 101(22) of the Bankruptcy Code, a financial participant as
defined in section 101(22A) of the Bankruptcy Code or repo participant as
defined in section 101(46) of the Bankruptcy Code, and thus Buyer (for so long
as Buyer is a “financial institution,” “financial participant” or other entity
listed in Section 555, 559 or 362(b)(6) of the Bankruptcy Code) shall be
entitled to the “safe harbor” benefits and protections afforded under the
Bankruptcy Code with respect to a “repurchase agreement” a “securities
contract,” and a “master netting agreement” including (x) the rights, set forth
in Section 13 and in Sections 555, 559 and 561 of the Bankruptcy Code, to
liquidate the Purchased Loans and terminate this Agreement, and (y) the right to
offset or net out as set forth in Section 13 and in Sections 362(b)(6),
362(b)(7), 362(b)(27), 362(o) and 546 of the Bankruptcy Code, (iv) the grant of
a security interest set forth in Sections 6 and 28(b) hereof to secure the
rights of Buyer hereunder also constitutes a “repurchase agreement” as
contemplated by Section 101(47)(A)(v) of the Bankruptcy Code and a “securities
contract” as contemplated by Section 741(7)(A)(xi) of the Bankruptcy Code and
are a part of this Agreement and (v) each of the Purchased Loans shall
constitute a “security” as defined in Section 101(49) of the Bankruptcy Code, a
mortgage loan or an interest in a mortgage loan. It is further understood that
this Agreement is intended to constitute a “master netting agreement” as defined
in Section 101(38A) of the Bankruptcy Code, as amended, with respect to each
Transaction so constituting a “repurchase agreement” (where applicable) or
“securities contract”. Each party hereto hereby further agrees that it shall not
challenge the characterization of this Agreement as a “repurchase agreement,”
“securities contract” and/or “master netting agreement” within the meaning of
the Bankruptcy Code.

(b)    The parties intend, agree and acknowledge that either party’s right to
accelerate or terminate this Agreement or to liquidate Purchased Loans delivered
to it in connection with the Transaction hereunder or to exercise any other
remedies pursuant to Section 13 hereof is a contractual right to liquidate such
Transaction as described in Sections 555 and 559 of Title 11 of the United
States Code, as amended. It is further understood and agreed that either party’s
right to cause the termination, liquidation, or acceleration of, or to offset
net termination values, payment amounts or other transfer obligations arising
under or in connection with, this Agreement or any Transaction hereunder is a
contractual right to cause the termination, liquidation, or acceleration of, or
to offset net termination values, payment amounts or other transfer obligations
arising under or in connection with, this Agreement as described in Section 561
of the Bankruptcy Code.

(c)    The parties intend, agree and acknowledge that if a party hereto is an
“insured depository institution,” as such term is defined in the Federal Deposit
Insurance Act, as amended (“FDIA”), then each Transaction hereunder is a
“qualified financial contract,” as that term is defined in FDIA and any rules,
orders or policy statements thereunder (except insofar as the type of assets
subject to such Transaction would render such definition inapplicable).

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

 

83

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

(e)    Notwithstanding anything to the contrary in this Agreement (including
Section 6(a) and Section 7(a)) or any other Transaction Document, each party
intends, agrees and acknowledges that it is its intent for U.S. federal, state
and local income and franchise Tax purposes to treat the Transactions as
(including, for the avoidance of doubt, for purposes of Section 3(i) of this
Agreement) indebtedness of Seller that is secured by the Purchased Loans, and
the Purchased Loans as (in the absence of an Event of Default by Seller and the
corresponding foreclosure on such Purchased Loans by Buyer) owned by Seller for
such purposes. Each party agrees to take no action inconsistent with the
treatment described in this Section 22(e), unless required by applicable law, in
which case such party shall promptly notify the other party of such requirement.

(f)    In light of the intent set forth above in this Section 22, Seller agrees
that, from time to time upon the written request of Buyer, Seller will execute
and deliver any supplements, modifications, addendums or other documents as may
be necessary, in Buyer’s reasonable discretion, in order to cause this Agreement
and the Transactions contemplated hereby to qualify for, comply with the
provisions of, or otherwise satisfy, maintain or preserve the criteria for safe
harbor treatment under the Bankruptcy Code for “repurchase agreements”,
“securities contracts” and “master netting agreements”; provided, however, that
Buyer’s failure to request, or Buyer’s or Seller’s failure to execute, such
supplements, modifications, addendums or other documents does not in any way
alter or otherwise change the intention of the parties hereto that this
Agreement and the Transactions hereunder constitute “repurchase agreements”
(where applicable), “securities contracts” and/or a “master netting agreement”
as such terms are defined in the Bankruptcy Code.

23.    DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS

The parties acknowledge that they have been advised that:

(a)    in the case of Transactions in which one of the parties is a broker or
dealer registered with the Securities and Exchange Commission (“SEC”) under
Section 15 of the Securities Exchange Act of 1934 (“1934 Act”), the Securities
Investor Protection Corporation has taken the position that the provisions of
the Securities Investor Protection Act of 1970 (“SIPA”) do not protect the other
party with respect to any Transaction hereunder;

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

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

24.    CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

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

 

84

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

Transaction under this Agreement and (ii) waives, to the fullest extent it may
effectively do so, any defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court and any right of jurisdiction on
account of its place of residence or domicile.

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

(c)    The parties hereby irrevocably waive, to the fullest extent it may
effectively do so, the defense of an inconvenient forum to the maintenance of
such action or proceeding and irrevocably consent to the service of any summons
and complaint and any other process by the mailing of copies of such process to
them at their respective address specified herein. The parties hereby agree that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Section 24 shall affect the right of Buyer or
Seller to serve legal process in any other manner permitted by law or to bring
any action or proceeding against the other party or its property in the courts
of other jurisdictions.

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

25.    NO RELIANCE

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

 

  (i)

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

 

  (ii)

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

 

  (iii)

It is a sophisticated and informed Person that has a full understanding of all
the terms, conditions and risks (economic and otherwise) of the Transaction

 

85

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

 

Documents and each Transaction thereunder and is capable of assuming and willing
to assume (financially and otherwise) those risks;

 

  (iv)

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

 

  (v)

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

 

  (vi)

No partnership or joint venture exists or will exist as a result of the
Transactions or entering into and performing the Transaction Documents.

(b)    Each determination by Buyer of the Market Value with respect to each
Purchased Loan or the communication to Seller of any information pertaining to
Market Value under this Agreement shall be subject to the following disclaimers;
provided, however, that Buyer hereby agrees that none of the disclaimers
contained in this Section 25(b) shall be construed as expanding or modifying the
method by which Buyer must determine Market Value as set forth in the definition
of Market Value herein:

(i)    Buyer has assumed and relied upon, with Seller’s consent and without
independent verification, the accuracy and completeness of the information
provided by Seller and reviewed by Buyer. Buyer has not made any independent
inquiry of any aspect of the New Collateral or Purchased Loans or the underlying
collateral. Buyer’s view is based on economic, market and other conditions as in
effect on, and the information made available to Buyer as of, the date of any
such determination or communication of information, and such view may change at
any time without prior notice to Seller.

(ii)    Market Value determinations and other information provided to Seller
constitute a statement of Buyer’s view of the value of one or more loans or
other assets at a particular point in time and neither (A) constitute a bid for
a particular trade, (B) indicate a willingness on the part of Buyer or any
Affiliate thereof to make such a bid, nor (C) reflect a valuation for
substantially similar assets at the same or another point in time, or for the
same assets at another point in time.

(iii)    Market Value determinations and other information provided to Seller
may vary significantly from valuation determinations and other information that
may be obtained from other sources.

(iv)    Market Value determinations and other information provided to Seller are
communicated to Seller solely for its use and may not be relied upon by any
other person and may not be disclosed or referred to publicly or to any third
party without the prior

 

86

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

written consent of Buyer, which consent Buyer may withhold or delay in its sole
and absolute discretion.

(v)    Buyer makes no representations or warranties with respect to any Market
Value determinations or other information provided to Seller. Buyer shall not be
liable for any incidental or consequential damages arising out of any inaccuracy
in such valuation determinations and other information provided to Seller.

(vi)    Market Value determinations and other information provided to Seller in
connection therewith are only indicative of the Market Value of the Purchased
Loan at the time of such determinations, and may change without notice to Seller
prior to, or subsequent to, the transfer by Seller of the Purchased Loan to
Buyer on the Purchase Date. No indication is provided as to Buyer’s expectation
of the future value of such Purchased Loan or the underlying collateral.

(vii)    Initial Market Value determinations and other information provided to
Seller in connection therewith are to be used by Seller for the sole purpose of
determining whether to proceed in accordance with Section 3 hereof and for no
other purpose.

26.    INDEMNITY; SET-OFF

(a)    Seller hereby agrees to indemnify, defend and hold harmless Buyer,
Buyer’s Affiliates and each of its officers, directors, employees and agents
(“Indemnified Parties”) from and against any and all liabilities, obligations,
actual out-of-pocket losses, actual out-of-pocket damages, actual out-of-pocket
penalties, actions, judgments, suits, actual out-of-pocket fees, actual
out-of-pocket costs, actual out-of-pocket expenses (including reasonable
attorneys fees and disbursements) or disbursements (all of the foregoing,
collectively “Indemnified Amounts”) which may at any time (including, without
limitation, such time as this Agreement shall no longer be in effect and the
Transactions shall have been repaid in full) be imposed on or asserted against
any Indemnified Party in any way whatsoever arising out of or in connection
with, or relating to, this Agreement, the Transaction Documents or any
Transactions hereunder or thereunder or any action taken or omitted to be taken
by any Indemnified Party under or in connection with any of the foregoing;
provided, that Seller shall not be liable for Indemnified Amounts resulting from
the bad faith, gross negligence or willful misconduct of any Indemnified Party.
Without limiting the generality of the foregoing, Seller agrees to hold Buyer
and the other Indemnified Parties harmless from and indemnify Buyer against all
Indemnified Amounts with respect to all Purchased Loans relating to or arising
out of any (A) breach of any representation or warranty relating to
Environmental Law or Hazardous Materials made by Seller hereunder or under any
Transaction Document or any violation or alleged violation of any Environmental
Law or (B) any violation or alleged violation of any consumer credit laws,
including without limitation ERISA, the Truth in Lending Act and/or the Real
Estate Settlement Procedures Act, except to the extent such violation or alleged
violation results from Buyer’s bad faith, gross negligence or willful
misconduct. In any suit, proceeding or action brought by Buyer in connection
with any Purchased Loan for any sum owing thereunder, or to enforce any
provisions of any Purchased Loan, Seller will save, indemnify and hold Buyer
harmless from and against all actual, out-of-pocket expenses (including
reasonable attorneys’ fees), actual, out-of-pocket loss or damage suffered by
reason of any defense, set-off, counterclaim, recoupment or reduction or
liability whatsoever of the account debtor or obligor

 

87

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

thereunder, arising out of a breach by Seller of any obligation thereunder or
arising out of any other agreement, indebtedness or liability at any time owing
to or in favor of such account debtor or obligor or its successors from Seller.
Seller also agrees to reimburse Buyer as and when billed by Buyer for (i) all
Buyer’s reasonable costs and out-of-pocket expenses actually incurred in
connection with the initial preparation and negotiation of this Agreement and
the Transaction Documents and the closing of the transactions contemplated
hereby and thereby, (ii) all Buyer’s reasonable costs and out-of-pocket expenses
actually incurred in connection with Buyer’s due diligence reviews with respect
to the Purchased Loans or any loan which is proposed by Seller as a Purchased
Loan, including without limitation, those incurred under Section 27 and the
reasonable fees and disbursements of its outside counsel, subject in all cases
under this clause (ii) to the terms and conditions of Section 27 and (iii) all
of Buyer’s costs and expenses incurred in connection with ongoing servicing and
asset management services engaged by Buyer (to the extent of any reduction in
the Pricing Rate). Additionally, Seller also agrees to reimburse Buyer as and
when billed by Buyer for all of Buyer’s reasonable costs and out-of-pocket
expenses actually incurred in connection with the enforcement or the
preservation of Buyer’s rights under this Agreement and the Transaction
Documents or any Transaction contemplated hereby or thereby, including, without
limitation, the reasonable fees and disbursements of its outside counsel. Seller
hereby acknowledges that, the obligation of Seller hereunder is a recourse
obligation of Seller. This Section 26 shall not apply with respect to Taxes
other than any Taxes that represent losses, claims, damages, etc. arising from
any non-Tax claim.

(b)    In addition to any rights now or hereafter granted under the Transaction
Documents, Requirements of Law, Seller hereby grants to Buyer and each of the
Indemnified Parties, to secure repayment of the Repurchase Obligations, a right
of set-off upon any and all of the following: monies, securities, collateral or
other property of Seller and any proceeds from the foregoing, now or hereafter
held or received by Buyer, any Affiliate of Buyer or any Indemnified Party, for
the account of Seller, whether for safekeeping, custody, pledge, transmission,
collection or otherwise, and also upon any and all deposits (general, specified,
special, time, demand, provisional or final) and credits, claims or indebtedness
of Seller at any time existing, and any obligation owed by Buyer or any
Affiliate of Buyer to Seller and to set–off against any Repurchase Obligations
or indebtedness owed by Seller and any indebtedness owed by Buyer or any
Affiliate of Buyer to Seller, in each case whether direct or indirect, absolute
or contingent, matured or unmatured, whether or not arising under the
Transaction Documents and irrespective of the currency, place of payment or
booking office of the amount or obligation and in each case at any time held or
owing by Buyer, any Affiliate of Buyer or any Indemnified Party to or for the
credit of Seller, without prejudice to Buyer’s right to recover any deficiency.
Each of Buyer, each Affiliate of Buyer and each Indemnified Party is hereby
authorized upon any amount becoming due and payable by Seller to Buyer or any
Indemnified Party under the Transaction Documents or the Repurchase Obligations
or upon the occurrence of a Facility Event of Default, without notice to Seller,
any such notice being expressly waived by Seller and each such Affiliate to the
extent permitted by any Requirements of Law, to set–off, appropriate, apply and
enforce such right of set–off against any and all items hereinabove referred to
against any amounts owing to Buyer or any Indemnified Party by Seller under the
Transaction Documents and the Repurchase Obligations, irrespective of whether
Buyer, any Affiliate of Buyer or any Indemnified Party shall have made any
demand under the Transaction Documents and regardless of any other collateral
securing such amounts, and in all cases without waiver or prejudice of Buyer’s
rights to recover a deficiency. ANY AND ALL RIGHTS TO REQUIRE BUYER OR OTHER
INDEMNIFIED PARTIES TO EXERCISE THEIR

 

88

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

RIGHTS OR REMEDIES WITH RESPECT TO THE PURCHASED LOANS OR OTHER INDEMNIFIED
PARTIES UNDER THE TRANSACTION DOCUMENTS, PRIOR TO EXERCISING THE FOREGOING RIGHT
OF SET–OFF, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED BY SELLER.

27.    DUE DILIGENCE

Seller acknowledges that Buyer has the right to perform continuing due diligence
reviews with respect to the Purchased Loans, for purposes of verifying
compliance with the representations, warranties and specifications made
hereunder, or otherwise, and Seller agrees that upon reasonable prior written
notice to Seller, Buyer or its authorized representatives will be permitted
during normal business hours to examine, inspect, and make copies and extracts
of, the Purchased Loan Files, Servicing Records and any and all documents,
records, agreements, instruments or information relating to such Purchased Loans
in the possession or under the control of Seller, any other servicer or
subservicer and/or the Custodian. Seller also shall make available to Buyer a
knowledgeable financial or accounting officer for the purpose of answering
financial or accounting questions respecting the Purchased Loan Files and the
Purchased Loans. Seller acknowledges that Buyer has the right to request, at
Seller’s expense, a new Appraisal for any Mortgaged Property securing a
Purchased Loan upon the occurrence of a Credit Event relating to such Purchased
Loan. Prior to the occurrence of a Credit Event, Buyer may also request one
(1) Appraisal per calendar year for the related Mortgaged Property at Seller’s
expense. Without limiting the generality of the foregoing, Seller acknowledges
that Buyer may enter into Transactions with Seller based solely upon the
information provided by Seller to Buyer and the representations, warranties and
covenants contained herein, and that Buyer, at its option, has the right at any
time to conduct a partial or complete due diligence review on some or all of the
Purchased Loans. Buyer may underwrite such Purchased Loans itself or engage a
third party underwriter to perform such underwriting. Seller agrees to
reasonably cooperate with Buyer and any third party underwriter reasonably
acceptable to Seller in connection with such underwriting, including, but not
limited to, providing Buyer and any third party underwriter with access to any
and all documents, records, financial models, agreements, instruments or
information relating to such Purchased Loans in the possession, or under the
control, of Seller.

28.    SERVICING

(a)    Master Seller, on behalf of itself and each Series Seller, and Buyer
agree that all Servicing Rights with respect to the Purchased Loans will be
transferred hereunder to Buyer on the applicable Purchase Date and such
Servicing Rights shall be transferred by Buyer to Master Seller or the
applicable Series Seller upon the applicable Series Seller’s payment of the
Repurchase Price for such Purchased Loans, in each case subject to the terms of
the applicable Servicing Agreement. Notwithstanding the transfer of Servicing
Rights to Buyer, Master Seller, on behalf of itself and each Series Seller,
shall be entitled to exercise all discretion with respect to any directions or
consents to be given to the Servicer of the Purchased Loans (other than as
provided below) and to appoint a servicer for each Purchased Loan subject to the
prior written consent of Buyer, which consent may be given by Buyer in its
reasonable discretion; provided, however, that (i) during the continuance of a
Facility Event of Default, Master Seller’s and each Series Seller’s rights to
exercise such discretion with respect to all of the Purchased Loans shall
automatically terminate and be of no further force and effect, and (ii) during
the continuance of a Transaction

 

89

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

Event of Default with respect to any Purchased Loan, Master Seller’s and the
applicable Series Seller’s rights to exercise such discretion with respect to
such Purchased Loan shall automatically terminate and be of no further force and
effect. Buyer hereby agrees that Wells Fargo Bank, National Association or any
other third party servicer otherwise approved by Buyer in writing (a “Servicer”)
may service the Purchased Loans for the benefit of Buyer in accordance with the
terms and conditions of the servicing agreement in effect for each such
Servicer, provided that each such servicing agreement shall have been approved
in writing by Buyer in its commercially reasonable discretion (each such
servicing agreement approved by Buyer, a “Servicing Agreement” and,
collectively, the “Servicing Agreements”); and provided, further, that any such
Servicer shall have entered into a Servicer Notice and Agreement substantially
in the form of Exhibit IX attached hereto (a “Servicer Notice and Agreement”)
acknowledging Buyer’s interests in the related Purchased Loans and its rights to
sell such Purchased Loans on a servicing-released basis and to terminate the
term of such Servicing Rights with respect to any Purchased Loans sold by Buyer
from and after an Event of Default pursuant to its exercise of remedies pursuant
to Section 13 hereof. Master Seller shall cause the Purchased Loans to be
serviced in accordance with Accepted Servicing Practices approved by Buyer in
its reasonable discretion and practiced by other prudent mortgage lenders with
respect to mortgage loans similar to the Purchased Loans. Master Seller shall
not, and shall not direct or permit any Servicer to, enter into, consent to or
approve any amendment, modification or termination, or waiver of any term or
provision, of any Purchased Loan or Purchased Loan Documents which constitutes a
Material Action or take any other Material Action without Buyer’s prior written
consent; provided, that, to the extent the Purchased Loan Documents require that
the holder of the related Purchased Loan exercise a certain standard of
discretion with respect to any such Material Action, Buyer shall exercise the
same standard of discretion in providing or withholding its consent to the same.

(b)    Master Seller, on behalf of itself and each Series Seller, agrees that
Buyer is the owner of all of Seller’s right, title and interest, if any, in and
to all servicing records, including but not limited to any and all Servicing
Agreements, files, documents, records, data bases, computer tapes, copies of
computer tapes, proof of insurance coverage, insurance policies, appraisals,
other closing documentation, payment history records, and any other records
relating to or evidencing the servicing of Purchased Loans (collectively, the
“Servicing Records”) so long as the Purchased Loans are subject to Transactions
under this Agreement. Master Seller, on behalf of itself and each Series Seller,
grants Buyer a security interest in all of Seller’s interest (if any) in
servicing fees and rights relating to the Purchased Loans and all Servicing
Records to secure the obligation of Seller or its designee to service in
conformity with this Section 28 and any other obligation of Seller to Buyer.
Seller covenants to safeguard such Servicing Records (if any are in Seller’s
possession) and, upon Buyer’s request, to deliver them promptly to Buyer or its
designee (including the Custodian) upon the occurrence and during the
continuance of an Event of Default.

(c)    Upon the occurrence and during the continuance of an Event of Default,
Buyer may, in its sole and absolute discretion, subject to Section 13 and any
terms in the applicable Servicing Agreements approved by Buyer (i) in the case
of a Facility Event of Default, sell its rights to any or all of the Purchased
Loans (or in the case of a Transaction Event of Default, sell its rights to the
affected Purchased Loan(s)) on a servicing released basis or (ii) in the case of
a Facility Event of Default, terminate any Servicer or sub-servicer of any or
all of the Purchased Loans (or in the case of a Transaction Event of Default,
terminate the Servicer and sub-servicer, if any, for the affected Purchased
Loan(s)), with or without cause, in each case without payment of

 

90

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

any termination fee. Seller shall cause each Servicer to cooperate with Buyer in
effecting such termination and transferring all authority to service such
Purchased Loans to the successor servicer, including requiring such Servicer to
(i) promptly transfer all data in its possession relating to the applicable
Purchased Loans to the successor servicer in such electronic format as the
successor servicer may reasonably request, (ii) promptly transfer to the
successor servicer, Buyer or Buyer’s designee, the Purchased Loan File and all
other files, records, correspondence and documents in its possession relating to
the applicable Purchased Loans and (iii) use commercially reasonable efforts to
cooperate and coordinate with the successor servicer and/or Buyer to comply with
any applicable so-called “goodbye” letter requirements or other applicable
requirements of the Real Estate Settlement Procedures Act or other applicable
legal or regulatory requirement associated with the transfer of the servicing of
the applicable Purchased Loans. Seller agrees that if either Seller or any such
Servicer fails to cooperate with Buyer or any successor servicer in effecting
the termination of such Servicer as servicer of any Purchased Loan or the
transfer of all authority to service such Purchased Loan to such successor
servicer in accordance with the terms hereof and the applicable Servicing
Agreement, Buyer shall be entitled to injunctive relief.

(d)    Seller shall not employ any Servicers rated below “above average” by S&P,
unless such Servicer is otherwise approved by Buyer to service the Purchased
Loans (it being acknowledged and agreed that Wells Fargo Bank, National
Association is deemed approved by Buyer). Seller shall collaterally assign to
Buyer all of its rights, title and interest under any Servicing Agreements as a
condition of allowing the Purchased Loans to be serviced by such Servicer and
shall cause each such Servicer engaged by Seller to execute a Servicer Notice
and Agreement with Buyer acknowledging Buyer’s security interest, agreeing that
it shall deposit all Available Income and any other sums required to be remitted
to the holder of the Purchased Loans under related Purchased Loan Documents to
the Depository for deposit in the Cash Management Account as set forth in
Section 5 hereof or as otherwise directed in a written notice signed by Buyer
for so long as such Purchased Loan is subject to this Agreement, and
acknowledging Buyer’s rights to terminate servicing as otherwise set forth above
in this Section 28.

(e)    If Servicer is an Affiliate of Seller or Guarantor, the payment of
servicing fees shall be subordinate to payment of amounts outstanding under any
Transaction and this Agreement.

29.    TAXES

(a)    Any and all payments by or on account of any obligation of Seller under
this Agreement shall be made without deduction or withholding for any Taxes,
except as required by applicable law. If any applicable Requirement of Law
requires the deduction or withholding of any Tax from any such payment, then
Seller shall make (or cause to be made) such deduction or withholding and shall
timely pay (or cause to be timely paid) the full amount deducted or withheld to
the relevant Governmental Authority in accordance with applicable Requirements
of Law and, if such Tax is an Indemnified Tax, then the sum payable by Seller
shall be increased as necessary so that after such deduction or withholding has
been made (including such deductions and withholdings applicable to additional
sums payable under this Section 29), Buyer receives an amount equal to the sum
it would have received had no such deduction or withholding been made.

 

91

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

(b)    Seller shall timely pay, without duplication, to the relevant
Governmental Authority in accordance with applicable Requirements of Law, or at
the option of Buyer timely reimburse it for the payment of, any Other Taxes.

(c)    Seller shall indemnify Buyer, within ten (10) days after demand therefor,
for the full amount of any Indemnified Taxes (including Indemnified Taxes
imposed or asserted on or attributable to amounts payable under this Section)
payable or paid by Buyer or required to be withheld or deducted from a payment
to Buyer, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to Seller by Buyer shall be conclusive
absent manifest error.

(d)    As soon as practicable after any payment of Taxes by Seller to a
Governmental Authority pursuant to this Section, Seller shall deliver to Buyer
the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment
or other evidence of such payment reasonably satisfactory to Buyer.

(e)    Status of Buyer.

(i)     Any Buyer that is entitled to an exemption from or reduction of
withholding Tax with respect to payments made under any Transaction Document
shall deliver to Seller, at the time or times reasonably requested by Seller,
such properly completed and executed documentation reasonably requested by
Seller as will permit such payments to be made without withholding or at a
reduced rate of withholding. In addition, Buyer, if reasonably requested by
Seller, shall deliver such other documentation prescribed by applicable
Requirements of Law or reasonably requested by Seller as will enable Seller to
determine whether or not Buyer is subject to backup withholding or information
reporting requirements. Notwithstanding anything to the contrary in the
preceding two sentences, the completion, execution and submission of such
documentation (other than such documentation set forth in Section 29(e)(ii)(A),
(ii)(B) and (ii)(D) below) shall not be required if in Buyer’s reasonable
judgment such completion, execution or submission would subject such Buyer to
any material unreimbursed cost or expense or would materially prejudice the
legal or commercial position of such Buyer.

(ii)    Without limiting the generality of the foregoing,

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

(B)    if the Buyer is not a U.S. Person, it shall, to the extent it is legally
entitled to do so, deliver to Seller (in such number of copies as shall be
requested by Seller) on or about the date on which Buyer becomes a party under
this Agreement (and from time to time thereafter upon the reasonable request of
Seller), whichever of the following is applicable:

 

92

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

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

(2)    executed copies of IRS Form W-8ECI;

(3)    in the case of a Buyer claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, a certificate reasonably
satisfactory to Seller to the effect that such Buyer is not a “bank” within the
meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of
Seller within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled
foreign corporation” related to the Seller as described in Section 881(c)(3)(C)
of the Code (the “Portfolio Interest Certificate”)) and executed copies of IRS
Form W-8BEN or W-8BEN-E;

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

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

(D)    if a payment made to Buyer under any Transaction Document would be
subject to U.S. federal withholding Tax imposed by FATCA if Buyer were to fail
to comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), Buyer shall
deliver to Seller at the time or times prescribed by law and at such time or
times reasonably requested by Seller such documentation prescribed by applicable
Requirements of Law (including as prescribed by Section 1471(b)(3)(C)(i) of the

 

93

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

Code) and such additional documentation reasonably requested by Seller as may be
necessary for Seller to comply with its obligations under FATCA and to determine
that such Buyer has complied with such Buyer’s obligations under FATCA or to
determine the amount to deduct and withhold from such payment. Solely for
purposes of this clause (D), “FATCA” shall include any amendments made to FATCA
after the date of this Agreement.

Buyer agrees that if any form or certification it previously delivered expires
or becomes obsolete or inaccurate in any respect, it shall update such form or
certification and provide such successor form to Seller, or promptly notify
Seller in writing of its legal inability to do so. For the avoidance of doubt,
Initial Buyer shall provide to Seller a properly executed United States Internal
Revenue Service Form W-9, dated on or before the Closing Date, evidencing a
complete exemption from withholding or deduction of Tax from amounts payable by
Seller to Initial Buyer under the Transaction Documents pursuant to applicable
Requirements of Law in effect on the Closing Date.

(f)    If any party determines, in its sole discretion exercised in good faith,
that it has received a refund of any Taxes as to which it has been indemnified
pursuant to this Section 29 (including by the payment of additional amounts
pursuant to this Section 29), it shall pay to the indemnifying party an amount
equal to such refund (but only to the extent of indemnity payments made under
this Section 29 with respect to the Taxes giving rise to such refund), net of
all out of pocket costs and expenses (including Taxes) of such indemnified party
and without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund). Such indemnifying party, upon the
request of such indemnified party, shall repay to such indemnified party the
amount paid over pursuant to this Section 29(f) (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) in the event that
such indemnified party is required to repay such refund to such Governmental
Authority. Notwithstanding anything to the contrary in this Section 29(f), in no
event will the indemnified party be required to pay any amount to an
indemnifying party pursuant to this Section 29(f) the payment of which would
place the indemnified party in a less favorable net after Tax position than the
indemnified party would have been in if the Tax subject to indemnification and
giving rise to such refund had not been deducted, withheld or otherwise imposed
and the indemnification payments or additional amounts with respect to such Tax
had never been paid. This paragraph shall not be construed to require any
indemnified party to make available its Tax returns (or any other information
relating to its Taxes that it deems confidential) to the indemnifying party or
any other Person.

(g)    Survival. Each party’s obligations under this Section 29 shall survive
any assignment of rights by Buyer, the termination of this Agreement and the
repayment, satisfaction or discharge of all obligations under any Transaction
Document.

30.    MISCELLANEOUS

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

 

94

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

create a security interest, Buyer shall have all rights and remedies of a
secured party under the UCC.

(b)    This Agreement may be executed in counterparts, each of which so executed
shall be deemed to be an original, but all of such counterparts shall together
constitute but one and the same instrument. Delivery by electronic transmission
(including a .pdf e-mail transmission) of an executed counterpart of a signature
page to this Agreement or any other Transaction Document shall be effective as
delivery of an original executed counterpart of such Transaction Document.

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

(d)    Without limiting the rights and remedies of Buyer under this Agreement or
the other Transaction Documents, Seller shall pay Buyer’s reasonable actual
out-of-pocket costs and expenses, including reasonable actual fees and expenses
of accountants, attorneys, consultants and advisors, incurred in connection with
the preparation, negotiation, execution and consummation of and any amendment,
supplement or modification to, this Agreement and/or the other Transaction
Documents and the Transactions thereunder. Except as otherwise set forth in this
Agreement, Seller agrees to pay Buyer on demand all out-of-pocket costs and
expenses (including reasonable actual attorneys’ fees and disbursements of
outside counsel) (i) incurred in connection with the consummation and
administration of the transactions contemplated thereby and (ii) of any
subsequent enforcement of any of the provisions of this Agreement and/or the
other Transaction Documents, or, of the performance by Buyer of any obligations
of Seller in respect of the Purchased Loans, or any actual or attempted sale, or
any exchange, enforcement, collection, compromise or settlement in respect of
the Collateral and for the custody, care or preservation of the Collateral
(including insurance costs) and defending or asserting rights and claims of
Buyer in respect thereof, by litigation or otherwise. In addition, Seller agrees
to pay Buyer on demand all reasonable costs and expenses (including reasonable
attorneys’ fees and disbursements of outside counsel) actually incurred in
connection with the maintenance of the Cash Management Account. All such
expenses shall be recourse obligations of Seller to Buyer under this Agreement.

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

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

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

 

95

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

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

(i)    Buyer and Seller hereby agree that neither party shall assert any claims
against the other or against any Affiliate of the other for special, indirect,
consequential or punitive damages under this Agreement, any Transaction Document
or any Transaction, all such damages and claims being hereby irrevocably waived.

31.    ACKNOWLEDGEMENT AND CONSENT TO BAIL-IN OF EEA FINANCIAL INSTITUTIONS

(a)    Notwithstanding anything to the contrary in any Transaction Document or
in any other agreement, arrangement or understanding among the respective
parties thereto, each party hereto acknowledges that any liability of any EEA
Financial Institution arising under any Transaction Document, to the extent such
liability is unsecured, may be subject to the write-down and conversion powers
of an EEA Resolution Authority and agrees and consents to, and acknowledges and
agrees to be bound by:

(i)    the application of any Write-Down and Conversion Powers by an EEA
Resolution Authority to any such liabilities arising hereunder which may be
payable to it by any party hereto that is an EEA Financial Institution; and

(ii)    the effects of any Bail-In Action on any such liability, including, if
applicable:

(A)    a reduction in full or in part or cancellation of any such liability;

(B)    a conversion of all, or a portion of, such liability into shares or other
instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Transaction Document; or

(C)    the variation of the terms of such liability in connection with the
exercise of the write-down and conversion powers of any EEA Resolution
Authority.

 

96

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

(b)    As used in this Section 31 the following terms have the following
meanings ascribed thereto: (i) “Bail-In Action” means the exercise of any
Write-Down and Conversion Powers by the applicable EEA Resolution Authority in
respect of any liability of an EEA Financial Institution; (ii)“Bail-In
Legislation” means, with respect to any EEA Member Country implementing Article
55 of Directive 2014/59/EU of the European Parliament and of the Council of the
European Union, the implementing law for such EEA Member Country from time to
time which is described in the EU Bail-In Legislation Schedule; (iii) “EEA
Financial Institution” means (x) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority; (y) any entity established in an EEA Member Country
which is a parent of an institution described in clause (x) of this definition,
or (x) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clauses (x) or (y) of this definition
and is subject to consolidated supervision with its parent; (iv) “EEA Member
Country” means any of the member states of the European Union, Iceland,
Liechtenstein, and Norway or any other member state of the European Economic
Area; (v) “EEA Resolution Authority” means any public administrative authority
or any person entrusted with public administrative authority of any EEA Member
Country (including any delegee) having responsibility for the resolution of any
EEA Financial Institution; (vi) “EU Bail-In Legislation Schedule” means the EU
Bail-In Legislation Schedule published by the Loan Market Association (or any
successor person), as in effect from time to time; and (vii) “Write-Down and
Conversion Powers” means, with respect to any EEA Resolution Authority, the
write-down and conversion powers of such EEA Resolution Authority from time to
time under the Bail-In Legislation for the applicable EEA Member Country, which
write-down and conversion powers are described in the EU Bail-In Legislation
Schedule.

[NO FURTHER TEXT ON THIS PAGE]

 

97

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

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

 

MASTER SELLER: DB LOAN NT-II, LLC, a Delaware limited liability company

By:

 

/s/ David A. Palamé

 

Name:

 

David A. Palamé

 

Title:

 

Vice President

CLNC CREDIT 5, LLC, a Delaware limited liability company

By:

 

/s/ David A. Palamé

 

Name:

 

David A. Palamé

 

Title:

 

Vice President

[Signatures Continue on Following Page]

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

BUYER: DEUTSCHE BANK AG, CAYMAN ISLANDS BRANCH By:  

/s/ Robert Christopher Jones

 

Name:

 

Robert Christopher Jones

 

Title:

 

Director

By:

 

/s/ Thomas Rugg

 

Name:

 

Thomas Rugg

 

Title:

 

Managing Director

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

ANNEXES, EXHIBITS AND SCHEDULES

 

ANNEX I

  

Names and Addresses for Communications between Parties

EXHIBIT I

  

Form of Confirmation

EXHIBIT II

  

Authorized Representatives of Seller

EXHIBIT III

  

Form of Bailee Letter

EXHIBIT IV

  

Form of Custodial Delivery

EXHIBIT V

  

Form of Power of Attorney

EXHIBIT VI

  

Representations and Warranties Regarding Individual Purchased Loans

EXHIBIT VII

  

Organizational Chart

EXHIBIT VIII

  

Transaction Procedures

EXHIBIT IX

  

Form of Servicer Notice and Agreement

EXHIBIT X

  

Prohibited Transferees

EXHIBIT XI

  

Form of Joinder Agreement

EXHIBIT XII

  

Permitted Fund Managers

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

ANNEX I

Names and Addresses for Communications Between Parties

Buyer:

Deutsche Bank AG, Cayman Islands Branch

60 Wall Street

New York, New York 10005

Attention:            Tom Rugg

Telephone:          #######

Telecopy:            #######

Email:                 #######

With copies to:

Deutsche Bank AG, Cayman Islands Branch

60 Wall Street

New York, New York 10005

Attention: General Counsel

and

Deutsche Bank AG, Cayman Islands Branch

60 Wall Street

New York, New York 10005

Attention:            Robert W. Pettinato Jr.

Telephone:          #######

Telecopy:            #######

Email:                 #######

and

Sidley Austin LLP

787 Seventh Avenue

New York, New York 10019

Attention:            Robert L. Boyd, Esq.

Telephone:          #######

Fax:                     #######

Email:                 #######

Seller:

c/o CLNC Manager, LLC

590 Madison Avenue, 34th Floor

New York, New York 10022

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

Attention:            David Palamé

Telephone:                       #######

Email: #######

With copies to (such copies not to constitute notice):

Ropes & Gray LLP

1211 Avenue of the Americas

New York, New York 10036-8704

Attention:       #######

Telephone:                    #######

Email: #######

Seller Margin Notice Parties:

c/o CLNC Manager, LLC

590 Madison Avenue, 34th Floor

New York, New York 10022

Attention:            David Palamé, Brett Tonks and Matthew Heslin

Email:                  #######

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

EXHIBIT I

CONFIRMATION STATEMENT

DEUTSCHE BANK AG,

Cayman Islands Branch

Ladies and Gentlemen:

Deutsche Bank AG, Cayman Islands Branch, is pleased to deliver our written
CONFIRMATION of our agreement to enter into the Transaction pursuant to which
Deutsche Bank AG, Cayman Islands Branch shall purchase from you the Purchased
Loans identified on Schedule 1 attached hereto, pursuant to the terms of that
certain Master Repurchase Agreement, dated as of October 23, 2018 (as amended,
modified and/or restated, the “Agreement”), between Deutsche Bank AG, Cayman
Islands Branch (“Buyer”) and DB Loan NT-II, LLC and CLNC Credit 5, LLC, each a
Delaware limited liability company organized in series (individually and/or
collectively as the context may require, “Master Seller”); together with the
Series Seller (as defined in the Agreement) identified below, collectively,
“Seller”). Capitalized terms used herein without definition have the meanings
given in the Agreement.

 

Series Seller:

  

[                                         ]

Purchase Date:

  

[                    ]

Purchased Loan:

  

[                    ]

Principal Balance of Purchased Loan:

  

[                    ]

Repurchase Date:

   [                    ] (provided, if the Facility Termination Date is
extended pursuant to Section 3 of the Letter Agreement, the Repurchase Date
shall automatically be extended to such date)

Purchase Date Market Value:

 

Purchase Date Market Value Percentage:

 

Actual Original Purchase Percentage:

 

Maximum Original Purchase Percentage:

 

Purchase Price:

  

[                    ]

 

[                    ]

 

[                    ]

 

[                    ]

 

[                    ]

Initial Pricing Rate:

  

[                    ]

Approved Future Funding Amount:

  

[                    ]

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

Applicable Spread:    [                    ] Financing Fee:   
[                    ] Financing Fee Cap:    [                    ] Financing
Fee Payee:    [                    ] Additional Confirmation Conditions:   
[                    ] Representations and Warranties:    See Schedule 2
attached hereto Exceptions to Representations and Warranties:    See Schedule 3
attached hereto Name and address for communications:    Buyer:   

Deutsche Bank AG, Cayman Islands Branch

  

60 Wall Street

  

New York, New York 10005

  

Attention:         Tom Rugg

  

Telephone:        #######

  

Telecopy:          #######

  

Email:               #######

   With copies to:   

Deutsche Bank AG, Cayman Islands Branch

  

60 Wall Street

  

New York, New York 10005

  

Attention: General Counsel

  

and

  

Deutsche Bank AG, Cayman Islands Branch

  

60 Wall Street

  

New York, New York 10005

  

Attention:         Robert W. Pettinato Jr.

  

Telephone:       #######

  

Telecopy:         #######

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

 

Email:               #######

 

and

 

Deutsche Bank AG, Cayman Islands Branch

 

60 Wall Street

 

New York, New York 10005

 

Attention:

 

Telephone:        #######

 

Telecopy:          #######

 

Email:

  Seller:  

c/o CLNC Manager, LLC

 

590 Madison Avenue, 34th Floor

 

New York, New York 10022

 

Attention:         David Palamé

 

Telephone: #######

 

Email: #######

  With copies to:  

Ropes & Gray LLP

 

1211 Avenue of the Americas

 

New York, New York 10036-8704

 

Attention:         Daniel L. Stanco, Esq.

 

Telephone: #######

 

Email: #######

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

Additional Terms and Conditions:

[ADD FOR PURCHASED LOANS WITH MEZZANINE LOANS:]

[Pledge of Mezzanine Loan as Additional Security.    As additional security and
a credit enhancement for Buyer’s purchase of the Purchased Loan pursuant to the
terms and conditions of this Confirmation and the Agreement, Seller hereby
assigns, pledges and grants a security interest to Buyer, subject to the terms
and conditions of this Confirmation and the Agreement, in all of its right,
title and interest in, to and under the Mezzanine Loan (as defined on Schedule 1
attached hereto) including, without limitation, all of its right, title and
interest in, to and under the Mezzanine Loan Documents (as defined on Schedule 1
attached hereto), to secure the payment by Seller of the Repurchase Price with
respect to the Purchased Loan and the payment and performance of all of Seller’s
obligations with respect to the Transaction relating to the Purchased Loan and
all other Repurchase Obligations under the Agreement. Seller acknowledges that
Buyer would not have entered into the Transaction without such additional
security arrangement and credit enhancement. Buyer’s acceptance of the Mezzanine
Loan as additional security for the Transaction shall not create any obligation
on behalf of Buyer to accept any mezzanine loans or subordinate debt as
additional security for any future Transactions. Buyer’s security interest in
the Mezzanine Loan shall be released only upon Seller’s repurchase of the
Purchased Loan in accordance with the Agreement. For purposes of the grant of
the security interest hereunder, this paragraph shall be deemed to constitute a
security agreement under the New York Uniform Commercial Code (the “UCC”). Buyer
shall have all of the rights and, upon the occurrence and during the continuance
of an Event of Default, may exercise all of the remedies of a secured creditor
under the UCC and the other laws of the State of New York.

Transaction Documents Applicable to Mezzanine Loan. For all purposes under the
Agreement and the Transaction Documents, the Mezzanine Loan shall be treated as
part of the Purchased Loan except that, for purposes of application to the
Mezzanine Loan, whenever the Agreement refers to (i) “Purchased Loan” same shall
be deemed to refer to the Mezzanine Loan, (ii) “Mortgagor” same shall be deemed
to refer to Mezzanine Borrower (as defined on Schedule 1), (iii) “Purchased Loan
Documents” same shall be deemed to refer to the Mezzanine Loan Documents and the
Intercreditor Agreement (as defined on Schedule 1); provided that, if there is
any conflict between this Confirmation and any Transaction Document, this
Confirmation shall control. For the avoidance of doubt, all collections with
respect to the Mezzanine Loan shall constitute Income with respect to the
Purchased Loan and Article 28 (Servicing) of the Agreement shall apply to the
Mezzanine Loan. Notwithstanding the foregoing, for purposes of the definitions
of “Market Value”, “Market Value Percentage”, “Net Market Value Decrease” and
“Principal Balance” the term “Purchased Loan” shall be deemed to refer only to
the Mortgage Loan.

Mezzanine Representations and Warranties. In addition to the representations and
warranties with respect to the Purchased Loan as set forth on Part I of Exhibit
VI to the Agreement, Seller hereby represents and warrants to Buyer that the
representations and warranties set forth on Part I of Exhibit VI to the
Agreement are true and correct with respect to the Mezzanine Loan except as set
forth on Schedule [    ] hereto.]

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

BUYER: DEUTSCHE BANK AG, CAYMAN ISLANDS BRANCH

By:

 

                      

Name:

 

                      

Title:

 

                      

By:

 

                      

Name:

 

                      

Title:

 

                      

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

AGREED AND ACKNOWLEDGED:

MASTER SELLER:   [DB LOAN NT-II, LLC/ CLNC CREDIT 5, LLC]  

By:

 

                      

   

Name:

     

Title:

  SERIES SELLER:

[DB LOAN NT-II, LLC/ CLNC CREDIT 5, LLC] – SERIES [                    ],

a series of [DB LOAN NT-II, LLC/ CLNC CREDIT 5, LLC], a Delaware limited
liability company

 

By:

 

                      

 

Name:

   

Title:

 

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

SCHEDULE 1 TO CONFIRMATION

(PURCHASED LOAN)

Description of Purchased Loan: [                    ]

Future Advance Obligations: [                    ]

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

SCHEDULE 2 TO CONFIRMATION

(REPRESENTATIONS AND WARRANTIES)

[** Exhibit VI to Master Repurchase Agreement then in effect to be attached.**]

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

SCHEDULE 3 TO CONFIRMATION

(EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES)

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

EXHIBIT II

AUTHORIZED REPRESENTATIVES OF SELLER

 

Name

  

Specimen Signature

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

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

EXHIBIT III

GUARANTOR’S WEBSITE / FINANCIAL REPORTING

http://ir.clncredit.com/financial-information/sec-filings

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

EXHIBIT IV

FORM OF CUSTODIAL DELIVERY

On this      day of             , 20    , DB LOAN NT-II, LLC and CLNC CREDIT 5,
LLC, each a Delaware limited liability company organized in series (individually
and/or collectively as the context may require, “Master Seller”), on behalf of
itself and [SERIES SELLER] (collectively with Master Seller, “Seller”), pursuant
to (i) that certain Custodial Agreement, dated as of October 23, 2018, among
Seller, Wells Fargo Bank, National Association, as custodian (“Custodian”), and
Deutsche Bank AG, Cayman Islands Branch (“Buyer”) (as amended, modified or
supplemented from time to time, the “Custodial Agreement”) and (ii) that certain
Master Repurchase Agreement, dated as of October 23, 2018, between Seller and
Buyer (as amended, modified or supplemented from time to time, the “Repurchase
Agreement”), does hereby deliver the documents comprising the Purchased Loan
File(s) to (a) the Bailee pursuant to that certain Bailee Agreement dated as of
the date hereof by and among Seller, Buyer, and Bailee (the “Bailee Agreement”),
for Bailee to hold and deliver to Custodian as set forth therein, and (b) the
Custodian (through the Bailee aforesaid). Seller hereby instructs Bailee to
comply with the terms of the Bailee Agreement, and hereby instructs Custodian to
comply with the terms of the Custodial Agreement, in each case, holding the
Purchased Loan File(s) for the benefit of Buyer.

With respect to the Purchased Loan Files delivered hereby, for the purposes of
issuing the Trust Receipt, the Custodian shall review the Purchased Loan Files
to ascertain delivery of the documents listed in 2.01(a) to the Custodial
Agreement.

Capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Custodial Agreement.

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

IN WITNESS WHEREOF, each of Master Seller and Series Seller have caused its name
to be signed hereto by its officer thereunto duly authorized as of the day and
year first above written.

 

 

MASTER SELLER:

  [DB LOAN NT-II, LLC/ CLNC CREDIT 5, LLC]  

By:

 

 

   

Name:

   

Title:

 

SERIES SELLER:

  [DB LOAN NT-II, LLC/ CLNC CREDIT 5, LLC] - SERIES] - [                    ], a
series of [DB LOAN NT-II, LLC/ CLNC CREDIT 5, LLC], a Delaware limited liability
company  

By:

 

                                          

   

Name:

   

Title:

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

EXHIBIT V

FORM OF POWER OF ATTORNEY

“Know All Men by These Presents, that DB LOAN NT-II, LLC and CLNC CREDIT 5, LLC,
each a Delaware limited liability company organized in series (individually
and/or collectively as the context may require, “Master Seller”), on behalf of
itself and each Series Seller (as defined in the Repurchase Agreement
(hereinafter defined)) (Master Seller together with each Series Seller which may
hereafter be a party to the Repurchase Agreement, collectively, “Seller”) does
hereby appoint Deutsche Bank AG, Cayman Islands Branch (“Buyer”), its
attorney-in-fact, during the continuance of an Event of Default, to act in
Seller’s name, place and stead in any way which Seller could do with respect to
(i) the completion of the endorsements of the Mortgage Notes and the Assignments
of Mortgages, (ii) the recordation of the Assignments of Mortgages and (iii) the
enforcement of Seller’s rights under the Purchased Loans purchased by Buyer
pursuant to that certain Master Repurchase Agreement, dated as of October 23,
2018 (as amended, modified and/or restated, the “Repurchase Agreement”), between
Buyer and Master Seller, and to take such other steps as may be necessary or
desirable to enforce Buyer’s rights against such Purchased Loans, the related
Purchased Loan Files and the Servicing Records to the extent that Seller is
permitted by law to act through an agent; provided, however, that, in the case
of a Transaction Event of Default, such appointment shall be limited to actions
to be taken only with respect to the applicable Series Seller and the applicable
Purchased Loan which is the subject of such Transaction Event of Default.
Capitalized terms used and not otherwise defined herein shall have the meanings
ascribed thereto in the Repurchase Agreement.

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

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

IN WITNESS WHEREOF, Master Seller has caused this Power of Attorney to be
executed as of             , 2018.

 

[DB LOAN NT-II, LLC/ CLNC CREDIT 5, LLC]

By:

 

 

 

Name:

 

Title:

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

EXHIBIT VI

PART I: REPRESENTATIONS AND WARRANTIES

REGARDING INDIVIDUAL PURCHASED LOANS

With respect to each Purchased Loan, the Seller hereby represents and warrants,
as of the date herein specified or, if no such date is specified, as of the
Purchase Date, that:

1.    Whole Loan; Ownership of Purchased Loans. Except with respect to any
Purchased Loan that is a Senior Interest, each Purchased Loan is a whole loan
and not a participation interest in a mortgage loan. Each Senior Interest which
is a Purchased Loan is a senior portion (or a pari passu portion of a senior
portion) of a whole mortgage loan evidenced by a senior note or a participation
certificate, as applicable. At the time of the sale, transfer and assignment to
Buyer, no Mortgage Note or Mortgage was subject to any assignment (other than
assignments to the Seller), participation (other than with respect to any
Purchased Loan that is a Participation Interest) or pledge, and the Seller had
good title to, and was the sole owner of, each Purchased Loan free and clear of
any and all liens, charges, pledges, encumbrances, participations (other than
with respect to a Purchased Loan that is a Participation Interest), any other
ownership interests (other than with respect to a Purchased Loan that is a
Senior Interest) on, in or to such Purchased Loan other than any servicing
rights appointment or similar agreement. Seller has full right and authority to
sell, assign and transfer each Purchased Loan, and, upon the completion of the
assignee information therein and Buyer’s countersignature where applicable, the
assignment to Buyer constitutes a legal, valid and binding assignment of such
Purchased Loan free and clear of any and all liens, pledges, charges or security
interests of any nature encumbering such Purchased Loan.

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

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

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

3.    Mortgage Provisions. Subject to the limitations in the Standard
Qualifications, the Purchased Loan Documents for each Purchased Loan contain
provisions that render the rights and remedies of the holder thereof adequate
for the practical realization against the Mortgaged Property of the principal
benefits of the security intended to be provided thereby, including realization
by judicial or, if applicable, non-judicial foreclosure.

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

5.    Hospitality Provisions. The Purchased Loan Documents for each Purchased
Loan that is secured by a hospitality property operated pursuant to a franchise
or license agreement includes an executed comfort letter or similar agreement
signed by the related Mortgagor and franchisor or licensor of such property
that, subject to the applicable terms of such franchise or license agreement and
comfort letter or similar agreement, is enforceable by the holder of the
Purchased Loan against such franchisor or licensor either (A) directly or as an
assignee of the originator, (B) upon the Seller’s or its designee’s providing
notice of the transfer of the Purchased Loan in accordance with the terms of
such executed comfort letter or similar agreement, or (C) pursuant to a
replacement comfort letter or similar agreement. The Mortgage or related
security agreement for each Purchased Loan secured by a hospitality property
creates a security interest in the revenues of such Mortgaged Property for which
a UCC financing statement has been filed in the appropriate filing office. For
the avoidance of doubt, no representation is made as to the perfection of any
security interest in revenues to the extent that possession or control of such
items or actions other than the filing of Uniform Commercial Code financing
statements is required to effect such perfection.

6.    Lien; Valid Assignment. Subject to the Standard Qualifications and upon
the completion of the assignee information therein and assignee’s
countersignature where applicable, each assignment of Mortgage and assignment of
Assignment of Leases from the Seller will constitute a legal, valid and binding
assignment from the Seller. Each related Mortgage and Assignment of Leases is
freely assignable without the consent of the related Mortgagor. Each related
Mortgage is a legal, valid and enforceable first lien on the related Mortgagor’s
fee (or if identified on the Purchased Loan Schedule, leasehold) interest in the
Mortgaged Property in the

 

2

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

principal amount of such Purchased Loan or allocated loan amount (subject only
to Permitted Encumbrances (as defined below)), except as the enforcement thereof
may be limited by the Standard Qualifications. Such Mortgaged Property (subject
to and excepting Permitted Encumbrances) as of origination was, and as of the
Purchase Date, to the actual knowledge of Seller (as defined in the Agreement to
which this Exhibit VI is attached), is free and clear of any recorded mechanics’
liens, recorded materialmen’s liens and other recorded encumbrances which are
prior to or equal with the lien of the related Mortgage, except those which are
bonded over, escrowed for or insured against by a lender’s title insurance
policy (as described below), and, to the actual knowledge of Seller (subject to
and excepting Permitted Encumbrances), no rights exist which under law could
give rise to any such lien or encumbrance that would be prior to or equal with
the lien of the related Mortgage, except those which are bonded over, escrowed
for or insured against by a lender’s title insurance policy (as described
below). Notwithstanding anything herein to the contrary, no representation is
made as to the perfection of any security interest in rents or other personal
property to the extent that possession or control of such items or actions other
than the filing of Uniform Commercial Code financing statements is required in
order to effect such perfection.

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

 

3

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

8.    Junior Liens. It being understood that B notes secured by the same
Mortgage as a Purchased Loan are not subordinate mortgages or junior liens,
except for any Purchased Loan that is cross-collateralized and cross-defaulted
with another Purchased Loan, there are, as of origination, and to the actual
knowledge of Seller, as of the Purchase Date, no subordinate mortgages or junior
liens securing the payment of money encumbering the related Mortgaged Property
(other than Permitted Encumbrances, taxes and assessments, mechanics and
materialmen’s liens (which are the subject of the representation in paragraph
(5) above), and equipment and other personal property financing. Except as set
forth in the related Purchased Loan File, the Seller has no actual knowledge of
any mezzanine debt secured by direct interests in the related Mortgagor.

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

10.    UCC Filings. If the related Mortgaged Property is operated as a
hospitality property, the Seller has filed and/or recorded or caused to be filed
and/or recorded (or, if not filed and/or recorded, have been submitted in proper
form for filing and/or recording), UCC financing statements in the appropriate
public filing and/or recording offices necessary at the time of the origination
of the Purchased Loan to perfect a valid security interest in all items of
physical personal property reasonably necessary to operate such Mortgaged
Property owned by such Mortgagor and located on the related Mortgaged Property
(other than any non-material personal property, any personal property subject to
a purchase money security interest, a sale and leaseback financing arrangement
as permitted under the terms of the related Purchased Loan Documents or any
other personal property leases applicable to such personal property), to the
extent perfection may be effected pursuant to applicable law by recording or
filing, as the case may be. Subject to the Standard Qualifications, each related
Mortgage (or equivalent document) creates a valid and enforceable lien and
security interest on the items of personalty described above. No representation
is made as to the perfection of any security interest in rents or other personal
property to the extent that possession or control of such items or actions other
than the filing of UCC financing statements are required in order to effect such
perfection.

11.    Condition of Property. Seller or the originator of the Purchased Loan
inspected or caused to be inspected each related Mortgaged Property within six
(6) months of origination of the Purchased Loan and within twelve (12) months of
the Purchase Date.

An engineering report or property condition assessment was prepared in
connection with the origination of each Purchased Loan no more than twelve
months prior to the Purchase Date

 

4

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

which indicates that the related Mortgaged Property is free of any material
damage, except to the extent that such material damage (i) would not have a
material adverse effect on the use, operation or value of such Mortgaged
Property as security for the related Purchased Loan, (ii) has been repaired in
all material respects or (iii) has not yet been repaired but is addressed by the
escrow of funds established in an aggregate amount consistent with the standards
utilized by Seller with respect to similar loans it holds for its own account,
which escrowed amount will in all events be in an aggregate amount not less than
the estimated cost of the necessary repairs. Seller has no actual knowledge of
any issues with the physical condition of the Mortgaged Property that Seller
believes would have a material adverse effect on the use, operation or value of
the Mortgaged Property other than those disclosed in the engineering report or
property condition assessment and those addressed in sub-clauses (i), (ii) and
(iii) of the preceding sentence.

12.    Taxes and Assessments. All taxes, governmental assessments and other
outstanding governmental charges (including, without limitation, water and
sewage charges), or installments thereof, that could be a lien on the related
Mortgaged Property that would be of equal or superior priority to the lien of
the Mortgage and that prior to the Purchase Date have become delinquent in
respect of each related Mortgaged Property have been paid, or an escrow of funds
has been established in an amount sufficient to cover such payments and
reasonably estimated interest and penalties, if any, thereon. For purposes of
this representation and warranty, real estate taxes and governmental assessments
and other outstanding governmental charges and installments thereof shall not be
considered delinquent until the earlier of (a) the date on which interest and/or
penalties would first be payable thereon and (b) the date on which enforcement
action is entitled to be taken by the related taxing authority.

13.    Condemnation. As of the date of origination and to the Seller’s actual
knowledge as of the Purchase Date, there is no proceeding pending, and, to the
Seller’s actual knowledge as of the date of origination and as of the Purchase
Date, there is no proceeding threatened, for the total or partial condemnation
of such Mortgaged Property that would have a material adverse effect on the
value, use or operation of the Mortgaged Property.

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

15.    Escrow Deposits. All escrow deposits and payments required to be escrowed
with lender pursuant to each Purchased Loan are in the possession, or under the
control, of the Seller, its servicer or, in the case of a Senior Interest, the
Servicer of the Mortgage Loan to which the Purchased Loan relates, and there are
no deficiencies (subject to any applicable grace or cure periods) in connection
therewith, and all such escrows and deposits (or the right thereto) that are
required to be escrowed with lender under the related Purchased Loan Documents
are being conveyed by the Seller to Buyer or its servicer (although the same may
be held by the related

 

5

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

Servicer in accordance with the related Servicing Agreement and the related
Servicer Notice and Agreement).

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

17.    Insurance. Each related Mortgaged Property is, and is required pursuant
to the related Purchased Loan Documents to be, insured by a property insurance
policy providing coverage for loss in accordance with coverage found under a
“special cause of loss form” or “all risk form” that includes replacement cost
valuation issued by an insurer meeting the requirements of the related Purchased
Loan Documents and having a claims-paying or financial strength rating meeting
the Insurance Rating Requirements (as defined below), in an amount (subject to a
customary deductible) not less than the lesser of (1) the original principal
balance of the Purchased Loan and (2) the full insurable value on a replacement
cost basis of the improvements, furniture, furnishings, fixtures and equipment
owned by the Mortgagor and included in the Mortgaged Property (with no deduction
for physical depreciation), but, in any event, not less than the amount
necessary or containing such endorsements as are necessary to avoid the
operation of any coinsurance provisions with respect to the related Mortgaged
Property.

“Insurance Ratings Requirements” means either (i) a claims paying or financial
strength rating of any of the following; (a) at least “A-:VIII” from A.M. Best
Company, (b) at least “A3” (or the equivalent) from Moody’s Investors Service,
Inc. or (c) at least “A-” from S&P Global Ratings or (ii) the Syndicate
Insurance Ratings Requirements. “Syndicate Insurance Ratings Requirements” means
insurance provided by a syndicate of insurers, as to which (i) if such syndicate
consists of 5 or more members, at least 60% of the coverage is provided by
insurers that meet the Insurance Ratings Requirements (under clause (1) of the
definition of such term) and up to 40% of the coverage is provided by insurers
that have a claims paying or financial strength rating of at least “BBB-” by S&P
Global Ratings or at least “Baa3” by Moody’s Investors Service, Inc., and
(ii) if such syndicate consists of 4 or fewer members, at least 75% of the
coverage is provided by insurers that meet the Insurance Ratings Requirements
(under clause (1) of the definition of such term) and up to 25% of the coverage
is provided by insurers that have a claims paying or financial strength rating
of at least “BBB-” by S&P Global Ratings or at least “Baa3” by Moody’s Investors
Service, Inc.

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

If any material part of the improvements, exclusive of a parking lot, located on
a Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management

 

6

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

Agency as having special flood hazards, the related Mortgagor is required to
maintain insurance in the maximum amount available under the National Flood
Insurance Program, plus such additional excess flood coverage in an amount as is
generally required by the prudent lenders originating commercial mortgage loans
for securitization.

If the Mortgaged Property is located within 25 miles of the coast of the Gulf of
Mexico or the Atlantic coast of Florida, Georgia, South Carolina or North
Carolina, the related Mortgagor is required to maintain coverage for windstorm
and/or windstorm related perils and/or “named storms” issued by an insurer
meeting the Insurance Rating Requirements or endorsement covering damage from
windstorm and/or windstorm related perils and/or named storms, in an amount not
less than the lesser of (1) the original principal balance of the Purchased Loan
and (2) 100% of the full insurable value on a replacement cost basis of the
improvements and personalty and fixtures owned by the Mortgagor and included in
the related Mortgaged Property by an insurer meeting the Insurance Rating
Requirements.

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

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

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

All premiums on all insurance policies referred to in this section required to
be paid as of the Purchase Date have been paid, and such insurance policies name
the lender under the Purchased Loan and its successors and assigns as a loss
payee under a mortgagee endorsement clause or, in the case of the general
liability insurance policy, as named or additional insured. Such insurance
policies will inure to the benefit of Buyer. Each related Purchased Loan
obligates the related

 

7

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

Mortgagor to maintain all such insurance and, at such Mortgagor’s failure to do
so, authorizes the lender to maintain or cause to be maintained such insurance
at the Mortgagor’s cost and expense and to charge such Mortgagor for related
premiums. All such insurance policies (other than commercial liability policies)
require at least 10 days’ prior notice to the lender of termination or
cancellation arising because of nonpayment of a premium and at least 30 days
prior notice to the lender of termination or cancellation (or such lesser
period, not less than 10 days, as may be required by applicable law) arising for
any reason other than non-payment of a premium and no such notice has been
received by Seller.

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

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

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

21.    REMIC. The issue price of the Purchased Loan (or related whole loan) at
origination did not exceed the non-contingent principal amount of the Purchased
Loan and either:

 

8

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

(a) such Purchased Loan is secured by an interest in real property (including
buildings and structural components thereof, but excluding personal property and
going concern value) having a fair market value that either (i) on the date of
origination was at least equal to 80% of the issue price of the Purchased Loan
or (ii) on the Purchase Date was at least equal to 80% of the adjusted issue
price of the Purchased Loan on such date; provided that for purposes hereof, the
fair market value of such interest in real property must be determined after it
is first reduced by (A) the amount of any lien on such real property interest
that is senior to the Purchased Loan and (B) a proportionate amount of any lien
that is in parity with the Purchased Loan; or (b) substantially all of the
proceeds of such Purchased Loan were used to acquire, improve or protect the
real property which served as the only security for such Purchased Loan (other
than a recourse feature or other third-party credit enhancement within the
meaning of Section 1.860G-2(a)(1)(ii) of the Treasury Regulations, such as a
government guarantee).

If the Purchased Loan (or related whole loan) was “significantly modified” prior
to the Purchase Date so as to result in a “deemed” taxable exchange under
Section 1001 of the Code, it either: (x) was modified as a result of the default
or reasonably foreseeable default of such Purchased Loan; or (y) the interest in
real property satisfied the 80% fair market value test on either (i) the date
the Purchased Loan was “significantly modified” (and ignoring such value on the
date of origination) or (ii) the Purchase Date; provided that for purposes of
clause (y) hereof, the fair market value of such real property interest must be
determined after it is first reduced by (A) the amount of any lien on such real
property interest that is senior to the Purchased Loan and (B) a proportionate
amount of any lien that is in parity with the Purchased Loan.

Any prepayment premium and yield maintenance charges applicable to the Purchased
Loan (or related whole loan) constitute “customary prepayment penalties” for
mortgage loans secured by similar collateral and subject to similar terms. All
terms used in this paragraph shall have the same meanings as set forth in the
Treasury Regulations interpreting Sections 860A through 860G of the Code.

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

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

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

 

9

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

25.    Local Law Compliance. To the Seller’s actual knowledge, based upon any of
a letter from any governmental authorities, a legal opinion, an architect’s
letter, a zoning consultant’s report, an endorsement to the related Title
Policy, or other affirmative investigation of local law compliance consistent
with the investigation conducted by the Seller for similar commercial,
multifamily or, if applicable, manufactured housing community mortgage loans
intended for securitization, with respect to the improvements located on or
forming part of each Mortgaged Property securing a Purchased Loan as of the date
of origination of such Purchased Loan and as of the Purchase Date, there are no
material violations of applicable zoning ordinances, building codes and land
laws (collectively “Zoning Regulations”) other than those which (i) constitute a
legal non-conforming use or structure, as to which the Mortgaged Property may be
restored or repaired to the full extent necessary to maintain the use of the
structure immediately prior to a casualty or the inability to restore or repair
to the full extent necessary to maintain the use or structure immediately prior
to the casualty would not materially and adversely affect the use or operation
of the Mortgaged Property, (ii) are insured by the Title Policy or other
insurance policy, (iii) are insured by law and ordinance insurance coverage in
amounts customarily required by the prudent lenders for commercial mortgage
loans originated for securitization that provided coverage for additional costs
to rebuild and/or repair the property to current Zoning Regulations, (iv) the
cost of performing repairs or alterations to the Mortgaged Property necessary to
cure such violations have been escrowed or reserved in accordance with the
Purchased Loan Documents or (v) would not have a material adverse effect on the
current use of the Mortgaged Property or the security intended to be provided by
the related Mortgage. The terms of the Purchased Loan Documents require the
Mortgagor to comply in all material respects with all applicable governmental
regulations, zoning and building laws.

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

27.    Recourse Obligations. The Purchased Loan Documents for each Purchased
Loan provide that such Purchased Loan is non-recourse to the related parties
thereto except (a) the related Mortgagor and at least one individual or entity
shall be fully liable for actual losses, liabilities, costs and damages arising
from certain acts of the related Mortgagor and/or its principals specified in
the related Purchased Loan Documents, which acts generally include the
following: (i) acts of fraud or intentional material misrepresentation,
(ii) misapplication or misappropriation of rents, insurance proceeds or
condemnation awards, (iii) intentional material physical waste of the Mortgaged
Property, and (iv) any breach of the environmental covenants contained in the
related Purchased Loan Documents, and (b) the Purchased Loan shall become full
recourse to the related Mortgagor and at least one individual or entity, if the
related Mortgagor files a voluntary petition under federal or state bankruptcy
or insolvency law.

 

10

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

28.    Mortgage Releases. The terms of the Loan Documents governing the related
Mortgage or related Purchased Loan (or related whole loan) do not allow for
release of any material portion of the Mortgaged Property from the lien of the
Mortgage unless (a) in the case of a partial release, such release is
conditioned on a principal repayment of not less than the lesser of (i) 110% of
the related allocated loan amount of such portion of the Mortgaged Property or
(ii) the outstanding principal balance of the Purchased Loan, (b) in the case of
a complete release, such release is conditioned on either (i) repayment in full
of such Purchased Loan or (ii) a full Defeasance (as defined in (33)), (c) in
the case of a release of an out-parcel that is unimproved or other portion of
the Mortgaged Property that is similar, both (i) such release will not have a
material adverse effect on the underwritten value of the Mortgaged Property and
(ii) the released property was not afforded any material value in the appraisal
obtained at the origination of the Mortgage Loan and is not necessary for
physical access to the Mortgaged Property or compliance with zoning
requirements, or (d) such release is required pursuant to an order of
condemnation or taking by a State or any political subdivision or authority
thereof.

In the case of any release of less than all the property described above:
(x) such release is not allowed unless it would neither (i) constitute a
“significant modification” of the subject Purchased Loan so as to result in a
“deemed” taxable exchange under Section 1001 of the Code, subject to the
exceptions described in Section 1.860G-2(b)(3) of the Treasury Regulations (such
as because the Purchased Loan continues to be principally secured by an interest
in real property following the release, substitution, addition, or other
alteration of a substantial amount of the collateral for such Purchased Loan),
nor (ii) cause the subject Purchased Loan to fail to meet the 80% fair market
value test as described (together with adjustments) in section 21 above, with
such fair market value measured on the day immediately after such release; or
(y) the mortgagee or servicer can, in accordance with the related Purchased Loan
Documents, condition such release of collateral on the related Mortgagor’s
delivery of an opinion of tax counsel to the effect that such release will not
cause the Purchased Loan to fail to be a “qualified mortgage” within the meaning
of section 860G of the Code after the release.

In the event of a condemnation or taking of any portion of a Mortgaged Property
by a State or any political subdivision or authority thereof, whether by legal
proceeding or by agreement, the Mortgagor can be required to pay down the
principal balance of the Purchased Loan (or related whole loan) so that the
Purchased Loan satisfies the 80% fair market value requirement as described
(together with adjustments) in section 21 above after such condemnation or
taking: provided that for purposes hereof, the fair market value of such
interest in real property can be increased by the fair market of any realistic,
proposed restoration.

No Purchased Loan (or related whole loan) that is secured by more than one
Mortgaged Property or that is cross-collateralized with another Purchased Loan
permits the release of cross-collateralization of the related Mortgaged
Properties or a portion thereof including due to a partial condemnation, unless
on the date following such release the Purchased Loan satisfies the 80% fair
market value requirement as described (together with adjustments) in section 21
above.

29.    Financial Reporting and Rent Rolls. The Purchased Loan Documents for each
Mortgage require the Mortgagor to provide the owner or holder of the Mortgage
with quarterly (other than for single-tenant properties) and annual operating
statements, and quarterly (other than

 

11

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

for single-tenant properties) rent rolls for properties that have leases
contributing more than 5% of the in-place base rent and annual financial
statements.

30.    Acts of Terrorism Exclusion. With respect to each Purchased Loan with a
Purchase Date Principal Balance over $20 million, the related special-form
all-risk insurance policy and business interruption policy (issued by an insurer
meeting the Insurance Rating Requirements) do not specifically exclude Acts of
Terrorism, as defined in the Terrorism Risk Insurance Act of 2002, as amended by
the Terrorism Risk Insurance Program Reauthorization Act of 2007 and the
Terrorism Risk Insurance Program Reauthorization Act of 2015 (collectively
referred to as “TRIA”), from coverage, or if such coverage is excluded, it is
covered by a separate terrorism insurance policy. With respect to each other
Purchased Loan, the related special-form all-risk insurance policy and business
interruption policy (issued by an insurer meeting the Insurance Rating
Requirements) did not, as of the date of origination of the Purchased Loan, and,
to the Seller’s actual knowledge, do not, as of the Purchase Date, specifically
exclude Acts of Terrorism, as defined in TRIA, from coverage, or if such
coverage is excluded, it is covered by a separate terrorism insurance policy.
With respect to each Purchased Loan, the related Purchased Loan Documents do not
expressly waive or prohibit the mortgagee from requiring coverage for Acts of
Terrorism, as defined in TRIA, or damages related thereto except to the extent
that any right to require such coverage may be limited by commercial
availability on commercially reasonable terms; provided, however, that if TRIA
or a similar or subsequent statute is not in effect, then, provided that
terrorism insurance is commercially available, the Mortgagor under each
Purchased Loan is required to carry terrorism insurance, but in such event the
Mortgagor shall not be required to spend on terrorism insurance coverage more
than two times the amount of the insurance premium that is payable in respect of
the property and business interruption/rental loss insurance required under the
related Purchased Loan Documents (without giving effect to the cost of terrorism
and earthquake components of such casualty and business interruption/rental loss
insurance) at the time of the origination of the Purchased Loan, and if the cost
of terrorism insurance exceeds such amount, the Mortgagor is required to
purchase the maximum amount of terrorism insurance available with funds equal to
such amount.

31.    Due on Sale or Encumbrance. Subject to specific exceptions set forth
below, each Purchased Loan contains a “due on sale” or other such provision for
the acceleration of the payment of the unpaid principal balance of such
Purchased Loan if, without the consent of the holder of the Mortgage (which
consent, in some cases, may not be unreasonably withheld) and/or complying with
the requirements of the related Purchased Loan Documents (which provide for
transfers without the consent of the lender which are customarily acceptable to
the Seller lending on the security of property comparable to the related
Mortgaged Property, including, without limitation, transfers of worn-out or
obsolete furnishings, fixtures, or equipment promptly replaced with property of
equivalent value and functionality and transfers by leases entered into in
accordance with the Purchased Loan Documents), (a) the related Mortgaged
Property, or any equity interest of greater than 50% in the related Mortgagor,
is directly or indirectly pledged, transferred or sold, other than as related to
(i) family and estate planning transfers or transfers upon death or legal
incapacity, (ii) transfers to certain affiliates as defined in the related
Purchased Loan Documents, (iii) transfers of less than, or other than, a
controlling interest in the related Mortgagor, (iv) transfers to another holder
of direct or indirect equity in the Mortgagor, a specific Person designated in
the related Purchased Loan Documents or a Person satisfying specific criteria
identified in the related Purchased Loan Documents, such as a qualified
equityholder, (v) transfers

 

12

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

of stock or similar equity units in publicly traded companies or (vi) a
substitution or release of collateral within the parameters of paragraphs
(28) and (33) herein by reason of any mezzanine debt that existed at the
origination of the related Purchased Loan (and which is disclosed in writing to
Buyer and approved by Buyer in its sole discretion prior to the Purchase Date of
such Purchased Loan), or (b) the related Mortgaged Property is encumbered with a
subordinate lien or security interest against the related Mortgaged Property,
other than (i) any subordinate debt that existed at origination and is permitted
under the related Purchased Loan Documents, (ii) purchase money security
interests, (iii) any Purchased Loan that is cross-collateralized and
cross-defaulted with another Purchased Loan, or (iv) Permitted Encumbrances. The
Mortgage or other Purchased Loan Documents provide that to the extent any rating
agency fees are incurred in connection with the review of and consent to any
transfer or encumbrance, the Mortgagor is responsible for such payment along
with all other reasonable fees and expenses incurred by the Mortgagee relative
to such transfer or encumbrance.

32.    Single-Purpose Entity Each Purchased Loan requires the Mortgagor to be a
Single-Purpose Entity for at least as long as the Purchased Loan is outstanding.
Both the Purchased Loan Documents and the organizational documents of the
Mortgagor with respect to each Purchased Loan with a Principal Balance as of the
Purchase Date in excess of $5 million provide that the Mortgagor is a
Single-Purpose Entity, and each Purchased Loan with a Principal Balance as of
the Purchase Date of $20 million or more has a counsel’s opinion regarding
non-consolidation of the Mortgagor. For this purpose, a “Single-Purpose Entity”
shall mean an entity, other than an individual, whose organizational documents
(or if the Purchased Loan has a Principal Balance as of the Purchase Date equal
to $5 million or less, its organizational documents or the related Purchased
Loan Documents) provide substantially to the effect that it was formed or
organized solely for the purpose of owning and operating one or more of the
Mortgaged Properties securing the Purchased Loans and prohibit it from engaging
in any business unrelated to such Mortgaged Property or Properties, and whose
organizational documents further provide, or which entity represented in the
related Purchased Loan Documents, substantially to the effect that it does not
have any assets other than those related to its interest in and operation of
such Mortgaged Property or Properties, or any indebtedness other than as
permitted by the related Mortgage(s) or the other related Purchased Loan
Documents, that it has its own books and records and accounts separate and apart
from those of any other person (other than a Mortgagor for a Purchased Loan that
is cross-collateralized and cross-defaulted with the related Purchased Loan),
and that it holds itself out as a legal entity, separate and apart from any
other person or entity.

33.    Defeasance. With respect to any Purchased Loan that, pursuant to the
Purchased Loan Documents, can be defeased (a “Defeasance”), (i) the Purchased
Loan Documents provide for defeasance as a unilateral right of the Mortgagor,
subject to satisfaction of conditions specified in the Purchased Loan Documents;
(ii) the Purchased Loan cannot be defeased within two years after the Closing
Date; (iii) the Mortgagor is permitted to pledge only United States “government
securities” within the meaning of Section 1.860G-2(a)(8)(ii) of the Treasury
Regulations, the revenues from which will, in the case of a full Defeasance, be
sufficient to make all scheduled payments under the Purchased Loan when due,
including the entire remaining principal balance on the maturity date (or on or
after the first date on which payment may be made without payment of a yield
maintenance charge or prepayment premium) or, if the Purchased Loan is an ARD
Loan, the entire principal balance outstanding on the Anticipated Repayment Date
(or on or after the first date on which payment may be made without payment of a
yield maintenance charge or

 

13

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

prepayment premium), and if the Purchased Loan permits partial releases of real
property in connection with partial defeasance, the revenues from the collateral
will be sufficient to pay all such scheduled payments calculated on a principal
amount equal to a specified percentage at least equal to the lesser of (a) 110%
of the allocated loan amount for the real property to be released and (b) the
outstanding principal balance of the Purchased Loan; (iv) the Mortgagor is
required to provide a certification from an independent certified public
accountant that the collateral is sufficient to make all scheduled payments
under the Mortgage Note as set forth in clause (iii) above; (v) if the Mortgagor
would continue to own assets in addition to the defeasance collateral, the
portion of the Purchased Loan secured by defeasance collateral is required to be
assumed (or the mortgagee may require such assumption) by a Single-Purpose
Entity; (vi) the Mortgagor is required to provide an opinion of counsel that the
mortgagee has a perfected security interest in such collateral prior to any
other claim or interest; and (vii) the Mortgagor is required to pay all rating
agency fees associated with defeasance (if rating confirmation is a specific
condition precedent thereto) and all other reasonable expenses associated with
defeasance, including, but not limited to, accountant’s fees and opinions of
counsel.

34.    Intentionally Omitted.

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

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

 

  (a)

The Ground Lease or a memorandum regarding such Ground Lease has been duly
recorded or submitted for recordation in a form that is acceptable for recording
in the applicable jurisdiction. The Ground Lease or an estoppel or other
agreement received from the ground lessor permits the interest of the lessee to
be encumbered by the related Mortgage and does not restrict the use of the
related Mortgaged Property by such lessee, its successors or assigns in a manner
that would materially adversely affect the security provided by the related
Mortgage;

 

  (b)

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

 

14

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

  (c)

The Ground Lease has an original term (or an original term plus one or more
optional renewal terms, which, under all circumstances, may be exercised, and
will be enforceable, by either borrower or the mortgagee) that extends not less
than 20 years beyond the stated maturity of the related Purchased Loan, or 10
years past the stated maturity if such Purchased Loan fully amortizes by the
stated maturity (or with respect to a Purchased Loan that accrues on an actual
360 basis, substantially amortizes);

 

  (d)

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

 

  (e)

The Ground Lease does not place commercially unreasonable restrictions on the
identity of the Mortgagee and the Ground Lease is assignable to the holder of
the Purchased Loan and its successors and assigns without the consent of the
lessor thereunder, and in the event it is so assigned, it is further assignable
by the holder of the Purchased Loan and its successors and assigns without the
consent of the lessor;

 

  (f)

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

 

  (g)

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

 

  (h)

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

 

  (i)

The Ground Lease does not impose any restrictions on subletting that would be
viewed as commercially unreasonable by the Seller in connection with loans
originated for securitization;

 

  (j)

Under the terms of the Ground Lease, an estoppel or other agreement received
from the ground lessor and the related Mortgage (taken together), any related
insurance proceeds or the portion of the condemnation award allocable to the
ground lessee’s interest (other than (i) de minimis amounts for minor casualties
or (ii) in respect of a total or substantially total loss or taking as addressed
in clause (k) below) will be applied either to the repair or to restoration of
all or part of the related Mortgaged

 

15

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

 

Property with (so long as such proceeds are in excess of the threshold amount
specified in the related Purchased Loan Documents) the lender or a trustee
appointed by it having the right to hold and disburse such proceeds as repair or
restoration progresses, or to the payment of the outstanding principal balance
of the Purchased Loan, together with any accrued interest;

 

  (k)

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

 

  (l)

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

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

37.    Origination and Underwriting. The origination practices of the Seller, or
any Affiliate of Seller (or, to Seller’s actual knowledge, the related
originator if the Seller or an Affiliate of Seller was not the originator) with
respect to each Purchased Loan have been, in all material respects, legal and as
of the date of its origination, such Purchased Loan and the origination thereof
complied in all material respects with, or was exempt from, all requirements of
federal, state or local law relating to the origination of such Purchased Loan;
provided that such representation and warranty does not address or otherwise
cover any matters with respect to federal, state or local law otherwise covered
in this Exhibit VI.

38.    No Material Default; Payment Record. No Purchased Loan has been more than
30 days delinquent, without giving effect to any grace or cure period, in making
required payments since origination, and as of the date hereof, no Purchased
Loan is more than 30 days delinquent (beyond any applicable grace or cure
period) in making required payments as of the Purchase Date. To the actual
knowledge of Seller, there is (a) no material default, breach, violation or
event of acceleration existing under the related Purchased Loan, or (b) no event
(other than payments due but not yet delinquent) which, with the passage of time
or with notice and the expiration of any grace or cure period, would constitute
a material default, breach, violation or event of acceleration, which default,
breach, violation or event of acceleration, in the case of either clause (a) or
clause (b), materially and adversely affects the value of the Purchased Loan or
the value, use or operation of the related Mortgaged Property, provided,
however, that this representation and warranty does not cover any default,
breach, violation or event of acceleration that specifically pertains to or
arises out of an exception scheduled to any other representation and warranty
made by the Seller in this Exhibit VI. No person other than the holder of such
Purchased Loan may declare any event

 

16

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

of default under the Purchased Loan or accelerate any indebtedness under the
Purchased Loan Documents.

39.    Bankruptcy. As of the date of origination of the related Purchased Loan
and to the Seller’s actual knowledge as of the Purchase Date, no Mortgagor,
guarantor or tenant occupying a single-tenant property is a debtor in state or
federal bankruptcy, insolvency or similar proceeding.

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

41.    Environmental Conditions. A Phase I environmental site assessment (or
update of a previous Phase I and or Phase II site assessment) and, with respect
to certain Purchased Loans, a Phase II environmental site assessment
(collectively, an “ESA”) meeting ASTM requirements conducted by a reputable
environmental consultant in connection with such Purchased Loan within 12 months
prior to its origination date (or an update of a previous ESA was prepared), and
such ESA either (i) did not identify the existence of recognized environmental
conditions (as such term is defined in ASTM E1527-05 or its successor,
hereinafter “Environmental Condition”) at the related Mortgaged Property or the
need for further investigation with respect to any Environmental Condition that
was identified, or (ii) if the existence of an Environmental Condition or need
for further investigation was indicated in any such ESA, then at least one of
the following statements is true: (A) an amount reasonably estimated by a
reputable environmental consultant to be sufficient to cover the estimated cost
to cure any material noncompliance with applicable Environmental Laws or the
Environmental Condition has been escrowed by the related Mortgagor and is held
or controlled by the related lender; (B) if the only Environmental Condition
relates to the presence of asbestos-containing materials, radon in indoor air,
lead based paint or lead in drinking water, and the only recommended action in
the ESA is the institution of such a plan, an operations or maintenance plan has
been required to be instituted by the related Mortgagor that can reasonably be
expected to mitigate the identified risk; (C) the Environmental Condition
identified in the related environmental report was remediated or abated in all
material respects prior to the Purchase Date, and, if and as appropriate, a no
further action or closure letter was obtained from the applicable governmental
regulatory authority (or the Environmental Condition affecting the related
Mortgaged Property was otherwise listed by such governmental authority as
“closed” or a reputable environmental consultant has concluded that no further
action is required); (D) a secured creditor environmental policy or a lender’s
pollution legal liability insurance policy that covers liability for the
Environmental Condition was obtained from an insurer rated no less than A- (or
the equivalent) by Moody’s Investor Service, Inc., S&P Global Ratings and/or
Fitch Ratings, Inc.; (E) a party not related to the Mortgagor was identified as
the responsible party for such Environmental Condition and such responsible
party has financial resources reasonably estimated to be adequate to address the
situation; or (F) a party related to the Mortgagor having financial resources
reasonably estimated to be adequate to address the situation is required to take
action. To the Seller’s actual knowledge, except as set forth in the ESA, there
is no Environmental Condition (as such term is defined in ASTM E1527-05 or its
successor) at the related Mortgaged Property.

 

17

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

42.    Appraisal. The Purchased Loan File contains an appraisal of the related
Mortgaged Property with an appraisal date within six (6) months of the Purchased
Loan origination date, and within six (6) months of the Purchase Date. The
appraisal is signed by an appraiser who is either a Member of the Appraisal
Institute (“MAI”) and/or has been licensed and certified to prepare appraisals
in the state where the Mortgaged Property is located. Each appraiser has
represented in such appraisal or in a supplemental letter that the appraisal
satisfies the requirements of the “Uniform Standards of Professional Appraisal
Practice” as adopted by the Appraisal Standards Board of the Appraisal
Foundation and has certified that such appraiser had no interest, direct or
indirect, in the Mortgaged Property or the Mortgagor or in any loan made on the
security thereof, and its compensation is not affected by the approval or
disapproval of the Purchased Loan.

43.    Purchased Loan Schedule. The information pertaining to each Purchased
Loan which is set forth in the Purchased Loan Schedule is true and correct in
all material respects as of the Purchase Date.

44.    Cross-Collateralization. No Purchased Loan is cross-collateralized or
cross-defaulted with any other mortgage loan that is not a Purchased Loan.

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

46.    Compliance with Anti-Money Laundering Laws. Seller has complied in all
material respects with all applicable anti-money laundering laws and
regulations, including without limitation the USA Patriot Act of 2001 with
respect to the origination of the Purchased Loan, the failure to comply with
which would have a material adverse effect on the Purchased Loan.

For purposes of this Exhibit VI, the following terms shall have the following
meanings:

“Anticipated Repayment Date”: With respect to any Purchased Loan that is
indicated on the Purchased Loan Schedule as having a Revised Rate, the date upon
which such Purchased Loan commences accruing interest at such Revised Rate.

“ARD Loan”: Any Purchased Loan the terms of which provide that if, after an
Anticipated Repayment Date, the Mortgagor has not prepaid such Purchased Loan in
full, any principal outstanding on that date will accrue interest at the Revised
Rate rather than the Initial Rate.

“REMIC Provisions”: Provisions of the federal income tax law relating to real
estate mortgage investment conduits, which appear at Section 860A through 860G
of Subchapter M of

 

18

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

Chapter 1 of the Code, and related provisions, and regulations (including any
applicable proposed regulations) and rulings promulgated thereunder, as the
foregoing may be in effect from time to time.

“Revised Rate”: With respect to those Purchased Loans on the Purchased Loan
Schedule indicated as having a revised rate, the increased interest rate after
the Anticipated Repayment Date (in the absence of a default) for each applicable
Purchased Loan, as calculated and as set forth in the related Purchased Loan
Documents.

 

19

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

EXHIBIT VI

PART II: REPRESENTATIONS AND WARRANTIES

REGARDING MEZZANINE LOANS

With respect to each Mezzanine Loan, the Seller hereby represents and warrants,
as of the date herein specified or, if no such date is specified, as of the
Purchase Date, that:

 

  1.

The Mezzanine Loan is a mezzanine loan secured by a pledge of all (or such
lesser percentage as Buyer may agree to) of the Equity Interests of the owner of
the Mortgaged Property (the “Underlying Property Owner”).

 

  2.

The Mezzanine Loan complies in all material respects with, or is exempt from,
all requirements of federal, state or local law relating to such Mezzanine Loan.

 

  3.

Immediately prior to the sale, transfer and assignment to Buyer thereof, Seller
had good and marketable title to, and was the sole owner and holder of, such
Mezzanine Loan, and Seller is transferring such Mezzanine Loan free and clear of
any and all liens, pledges, encumbrances, charges, security interests or any
other ownership interests of any nature encumbering such Mezzanine Loan. Upon
consummation of the purchase contemplated to occur in respect of such Mezzanine
Loan on the Purchase Date therefor, Seller will have validly and effectively
conveyed to Buyer all legal and beneficial interest in and to such Mezzanine
Loan free and clear of any pledge, lien, encumbrance or security interest.

 

  4.

No fraudulent acts were committed by Seller in connection with its acquisition
or origination of such Mezzanine Loan nor were any fraudulent acts committed by
any Person in connection with the origination of such Mezzanine Loan.

 

  5.

All information contained in the related Preliminary Due Diligence Package (or
as otherwise provided to Buyer) in respect of such Mezzanine Loan is accurate
and complete in all material respects.

 

  6.

Except as included in the Preliminary Due Diligence Package, Seller is not a
party to any document, instrument or agreement, and there is no document, that
by its terms modifies or affects the rights and obligations of any holder of
such Mezzanine Loan and Seller has not consented to any material change or
waiver to any term or provision of any such document, instrument or agreement
and no such change or waiver exists.

 

  7.

Such Mezzanine Loan is presently outstanding, the proceeds thereof have been
fully and properly disbursed and, except for amounts held in escrow by Seller or
identified to Buyer as future advances and only to the extent of future advances
set forth in the related Confirmation, there is no requirement for any future
advances thereunder.

 

  8.

Seller has full right, power and authority to sell and assign such Mezzanine
Loan and such Mezzanine Loan or any related Mezzanine Note has not been
cancelled, satisfied or

 

20

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

 

rescinded in whole or part nor has any instrument been executed that would
effect a cancellation, satisfaction or rescission thereof.

 

  9.

Other than consents and approvals obtained as of the related Purchase Date
(including, without limitation under any intercreditor agreement with the holder
of an Underlying Mortgage Loan) or those already granted in the documentation
governing such Mezzanine Loan (the “Mezzanine Loan Documents”), no consent or
approval by any Person is required in connection with Seller’s sale and/or
Buyer’s acquisition of such Mezzanine Loan, for Buyer’s exercise of any rights
or remedies in respect of such Mezzanine Loan or for Buyer’s sale, pledge or
other disposition of such Mezzanine Loan. No third party holds any “right of
first refusal”, “right of first negotiation”, “right of first offer”, purchase
option, or other similar rights of any kind, and no other impediment exists to
any such transfer or exercise of rights or remedies.

 

  10.

The Mezzanine Collateral is secured by a pledge of equity ownership interests in
the related borrower under the Mortgage Loan or a direct or indirect owner of
the related borrower and the security interest created thereby has been fully
perfected in favor of Seller as Mezzanine Lender.

 

  11.

The Mezzanine Loan Documents provide for the acceleration of the payment of the
unpaid principal balance of the Mezzanine Loan if (i) the related borrower
voluntarily transfers or encumbers all or any portion of any related Mezzanine
Collateral, or (ii) any direct or indirect interest in the related borrower is
voluntarily transferred or assigned, other than, in each case, as permitted
under the terms and conditions of the related loan documents.

 

  12.

Pursuant to the terms of the Mezzanine Loan Documents: (a) no material terms of
any related Mortgage may be waived, canceled, subordinated or modified in any
material respect and no material portion of such Mortgage or the Mortgaged
Property may be released without the consent of the holder of the Mezzanine
Loan; (b) no action in furtherance of an Act of Insolvency may be taken by the
Underlying Property Owner with respect to the Mortgaged Property without the
consent of the holder of the Mezzanine Loan; (c) the holder of the Mezzanine
Loan is entitled to approve the budget of the Underlying Property Owner as it
relates to the Mortgaged Property; and (d) the holder of the Mezzanine Loan’s
consent is required prior to the Underlying Property Owner incurring any
additional indebtedness.

 

  13.

No Mezzanine Loan has been more than 30 days delinquent, without giving effect
to any grace or cure period, in making required payments since origination, and
as of the date hereof, no Mezzanine Loan is more than 30 days delinquent (beyond
any applicable grace or cure period) in making required payments as of the
Purchase Date. To the actual knowledge of Seller, there is (a) no material
default, breach, violation or event of acceleration existing under the related
Mezzanine Loan, or (b) no event (other than payments due but not yet delinquent)
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a material default, breach, violation or event
of acceleration, which default, breach, violation or event of acceleration, in
the case of either clause (a) or clause (b), materially and adversely affects
the value of the Mezzanine Loan or the value, use or operation of the related
Mortgaged Property,

 

21

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

 

provided, however, that this representation and warranty does not cover any
default, breach, violation or event of acceleration that specifically pertains
to or arises out of an exception scheduled to any other representation and
warranty made by the Seller in this Exhibit VI. No person other than the holder
of such Mezzanine Loan may declare any event of default under the Mezzanine Loan
or accelerate any indebtedness under the Mezzanine Loan Documents.

 

  14.

Seller’s security interest in the Mezzanine Loan is covered by a UCC-9 insurance
policy (the “UCC-9 Policy”) in the maximum principal amount of the Mezzanine
Loan insuring that the related pledge is a valid first priority lien on the
collateral pledged in respect of such Mezzanine Loan (the “Mezzanine
Collateral”), subject only to the exceptions stated therein (or a pro forma
title policy or marked up title insurance commitment on which the required
premium has been paid exists which evidences that such UCC-9 Policy will be
issued), such UCC-9 Policy (or, if it has yet to be issued, the coverage to be
provided thereby) is in full force and effect, no material claims have been made
thereunder and no claims have been paid thereunder, Seller has not done, by act
or omission, anything that would materially impair the coverage under the UCC-9
Policy and as of the Purchase Date, the UCC-9 Policy (or, if it has yet to be
issued, the coverage to be provided thereby) will inure to the benefit of any
assignee of Seller without the consent of or notice to the insurer.

 

  15.

No borrower under the Mezzanine Loan nor any Mortgagor under any Mortgage Loan
is a debtor in any state or federal bankruptcy or insolvency proceeding.

 

  16.

There was no pending action, suit or proceeding, or governmental investigation
of which the Seller, the Mezzanine Borrower or the Underlying Property Owner has
received notice, against the Mortgagor or the related Mortgaged Property the
adverse outcome of which could reasonably be expected to materially and
adversely affect the Mezzanine Loan or the Mortgage Loan.

 

  17.

Other than the Mortgage and the Permitted Encumbrances, the related Mortgaged
Property is not encumbered, and none of the Mezzanine Loan Documents or any
Mortgage Loan documents permits the related Mortgaged Property to be encumbered
subsequent to the Purchase Date of the related Purchased Loan without the prior
written consent of the holder thereof, by any lien securing the payment of money
junior to or of equal priority with, or superior to, the lien of the related
Mortgage (other than title exceptions, Permitted Encumbrances, taxes,
assessments and contested mechanics and materialmens liens that become payable
after such Purchase Date).

 

22

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

EXHIBIT VII

ORGANIZATIONAL CHART

 

23

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

EXHIBIT VIII

TRANSACTION PROCEDURES

I.    Preliminary Approval of New Collateral Which is an Eligible Loan.

(a)    Seller may, from time to time, submit to Buyer a Preliminary Due
Diligence Package for Buyer’s review and approval in order to enter into
discussions regarding a Transaction with respect to any New Collateral that
Seller proposes to be included as Collateral under the Agreement.

(b)    Upon Buyer’s receipt of a complete Preliminary Due Diligence Package,
Buyer shall have the right to request (one or more times), additional diligence
materials and deliveries that Buyer shall specify on a Supplemental Due
Diligence List. Upon Buyer’s receipt of all of the Diligence Materials or
Buyer’s waiver thereof, Buyer shall within ten (10) Business Days, or if later,
following receipt of internal credit approval, either (i) notify Seller of
Buyer’s preliminary determination of Purchase Price and Market Value for the New
Collateral or (ii) deny, in Buyer’s sole and absolute discretion exercised in
good faith, Seller’s request for a Transaction. Buyer’s failure to respond to
Seller within ten (10) Business Days shall be deemed to be a denial of Seller’s
request to enter into a Transaction.

II.    Final Approval of New Collateral which is an Eligible Loan. Upon Buyer’s
notification to Seller of Buyer’s preliminary determination of Purchase Price
and the Market Value for any New Collateral which is an Eligible Loan, Seller
shall, if Seller desires to enter into a Transaction with respect to such New
Collateral, satisfy the conditions set forth below (in addition to satisfying
the conditions precedent to obtaining each advance, as set forth in Section 3(b)
of this Agreement) as a condition precedent to Buyer’s approval of such New
Collateral as Collateral, all in a manner and pursuant to documentation in form
and substance reasonably satisfactory to Buyer:

 

  a.

Delivery of Purchased Loan Documents. Buyer shall have received, reviewed and
approved each of the Purchased Loan Documents (including for any Senior
Interest, the Senior Interest Documents), except Purchased Loan Documents that
Seller expressly and specifically disclosed in the Diligence Materials were not
in Seller’s possession;

(c)    Environmental and Engineering. Buyer shall have received, reviewed and
approved a “Phase 1” (and, if necessary, “Phase 2”) environmental report, an
asbestos survey and operation and maintenance plan, if applicable, an
engineering report, and a seismic/PML report, if applicable, each in form
reasonably satisfactory to Buyer, by an engineer or environmental consultant as
may be reasonably approved by Buyer.

(d)    Appraisal. Buyer shall have received, reviewed and approved an appraisal
from an Independent Appraiser as may be reasonably approved by Buyer, dated
within six (6) months of the proposed Purchase Date.

(e)    Insurance. Buyer shall have received, reviewed and approved certificates
or other evidence of insurance demonstrating insurance coverage in respect of
the

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

Mortgaged Property of types, in amounts, with insurers and otherwise in
compliance with the terms, provisions and conditions set forth in the Purchased
Loan Documents. Such certificates or other evidence shall indicate that Seller
(or its Affiliate) will be named as an additional insured as its interest may
appear and shall contain a loss payee endorsement in favor of such additional
insured with respect to the policies required to be maintained under the
Purchased Loan Documents.

(f)    Survey. Buyer shall have received, reviewed and approved all surveys of
the Mortgaged Property that are in Seller’s possession, and which surveys shall
contain flood zone certification.

(g)    Lien, Judgment and Litigation Search Reports. Buyer or Buyer’s counsel
shall have received, reviewed and approved, satisfactory reports of UCC, tax
lien, judgment, litigation searches and title updates as Buyer may reasonably
require from Seller conducted by search firms and/or title companies acceptable
to Buyer with respect to the Eligible Loan, Mortgaged Property, and Mortgagor,
and their respective affiliates, such searches to be conducted in each location
Buyer shall reasonably designate.

(h)    Credit and “Know Your Client” Searches. Buyer shall have received from
Seller, reviewed and approved a credit agency report, Lexis-Nexis (or similar)
searches and OFAC and “Know Your Client” searches conducted by search firms
and/or title companies acceptable to Buyer with respect to Mortgagor and any
guarantor (if applicable).

(i)    Opinions of Counsel. Buyer shall have received copies of all legal
opinions in Seller’s possession with respect to the Eligible Loan which shall be
in form and substance reasonably satisfactory to Buyer.

(j)    Additional Real Estate Matters. Seller shall have delivered to Buyer, in
each case to the extent in Seller’s possession, such other real estate related
certificates and documentation as may have been requested by Buyer, such as:
(i) certificates of occupancy issued by the appropriate Governmental Authority
and either letters certifying that the Mortgaged Property is in compliance with
all applicable zoning laws issued by the appropriate Governmental Authority or
evidence that the related title policy includes a zoning endorsement,
(ii) abstracts of any ground leases and all space leases in effect at the
Mortgaged Property (including a description of any co-tenancy/go-dark clauses,
if applicable) and estoppel certificates, in form and substance acceptable to
Buyer, from any ground lessor and from any tenant that occupies 7.5% or more of
the rentable space at the Mortgaged Property, and in any event from tenants
whose occupancies aggregate not less than 70% of the occupied rentable square
footage at the Mortgaged Property, (iii) copies of any management agreements and
service agreements in effect relating to the Mortgaged Property, (iv) a copy of
the title policy (or, if the final printed version of the title policy has not
been issued, the irrevocable marked commitment to issue the same) together with
copies of all reciprocal easement agreements and operating agreements, if
applicable, and all other recorded documents and agreements affecting title to
the Mortgaged Property, (v) a copy of the purchase and sale agreement for the
Mortgaged Property in connection with a Purchased Loan used to acquire a
Mortgaged Property, if applicable, (vi) a copy of the marketing and leasing plan
for the Mortgaged Property, if applicable, (vii) copies of tenant

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

sales reports, if applicable, (viii) a copy of any franchise agreement relating
to the Mortgaged Property, if applicable; and (ix) STR/PACE reports, if
applicable; (x) Low Income Housing Tax Credit information, if applicable, and
all of the foregoing documents and information shall be in form and substance
satisfactory to Buyer.

(k)    Other Documents. Buyer shall have received such other documents as Buyer
or its counsel shall reasonably deem necessary.

Within five (5) Business Days of Seller’s satisfaction of all of the conditions
enumerated in clauses (a) through (j) above, Buyer shall either (i) if the
Purchased Loan Documents with respect to the New Collateral are not reasonably
satisfactory in form and substance to Buyer, notify Seller that Buyer has not
approved the New Collateral as Collateral or (ii) notify Seller that Buyer has
approved the New Collateral as Collateral (which notice shall specify any
changes in the Purchase Price resulting from such further review). Buyer’s
failure to respond to Seller within five (5) Business Days shall be deemed to be
a denial of Seller’s request that Buyer approve the New Collateral, unless Buyer
and Seller have agreed otherwise in writing.

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

EXHIBIT IX

FORM OF SERVICER NOTICE AND AGREEMENT

October [    ], 2018

Wells Fargo Bank, National Association

Commercial Mortgage Servicing

MAC D1050-084

Three Wells Fargo

401 South Tryon Street, 8th Floor

Charlotte, North Carolina 28202

Attention: DB Loan NT-II, LLC and CLNC Credit 5, LLC – Relationship Manager

 

  RE:

Master Repurchase Agreement, dated as of October 23, 2018 (as amended, modified
and/or restated, the “Repurchase Agreement”) among DB Loan NT-II, LLC and CLNC
Credit 5, LLC, as Master Seller (individually and/or collectively as the context
may require, “Master Seller”), and Deutsche Bank AG, Cayman Islands Branch, as
Buyer (“Buyer”)

Ladies and Gentlemen:

Wells Fargo Bank, National Association (“Servicer”) has entered into that
certain Servicing Agreement, dated as of October 23, 2018 (the “Servicing
Agreement”), with Master Seller (together with any Series Seller (as defined in
the Repurchase Agreement) party thereto, collectively, “Seller”) pursuant to
which Servicer will be servicing certain commercial mortgage loans which loans
are subject to Transactions with Buyer under the Repurchase Agreement.
Capitalized terms used but not defined herein shall have the meaning set forth
in the Repurchase Agreement. Servicer is hereby notified of, and agrees to
comply with, the following:

The Purchased Loan Documents of each Purchased Loan provide, or Seller or
Servicer has delivered a notice to the Mortgagor under each Purchased Loan
and/or to the applicable sub-servicer with respect to each Purchased Loan which
provides, that such Mortgagor or other obligor under a Purchased Loan, or such
sub-servicer, shall pay all amounts payable under the related Purchased Loan to
that certain account of Servicer more particularly described on Exhibit A hereof
(the “Servicer Account”). Notwithstanding anything contained in the Servicing
Agreement to the contrary, Servicer hereby acknowledges and agrees that Servicer
shall cause all Available Income received by the Servicer on account of the
Purchased Loans to be remitted to that certain account held at Wells Fargo Bank,
National Association entitled “DB LOAN NT-II, LLC, as Master Seller, for the
benefit of Deutsche Bank AG, Cayman Islands Branch, as Buyer”, which account is
more particularly described on Exhibit A hereof (the “Cash Management Account”),
on the Remittance Date (as defined in the Servicing Agreement). Notwithstanding
the foregoing, any funds received by Servicer in connection with a payoff of any
Purchased Loan shall be remitted by Servicer to the Cash Management Account by
wire transfer of immediately available federal funds within two (2) Business
Days after receipt. Subject to Servicer’s right to

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

receive any fees payable to Servicer under the Servicing Agreement, Servicer
acknowledges that all Income collected on account of the Purchased Loans,
whether or not deposited into the Servicer Account is held for the benefit of
Buyer.

Servicer agrees to deliver directly to Buyer, at the notice address provided
herein, all servicing statements, reports and other information with respect to
the Purchased Loans that Servicer is required to deliver to Seller under the
Servicing Agreement, on the same date such information is required to be
delivered to Seller.

Buyer is the owner of all servicing records, including but not limited to any
and all servicing agreements, files, documents, records, data bases, computer
tapes, copies of computer tapes, proof of insurance coverage, insurance
policies, appraisals, other closing documentation, payment history records, and
any other records relating to or evidencing the servicing of Purchased Loans
(the “Servicing Records”) so long as the Purchased Loans are subject to the
Repurchase Agreement. Pursuant to the Repurchase Agreement, Seller has granted
Buyer a security interest in all servicing rights relating to the Purchased
Loans and all Servicing Records to secure the obligation of Seller or its
designee to service in conformity with the Repurchase Agreement and any other
obligation of Seller to Buyer. Seller has covenanted to safeguard such Servicing
Records and to deliver them promptly to Buyer or its designee at Buyer’s request
upon the occurrence and during the continuance of an Event of Default.

Upon the occurrence and continuance of a Facility Event of Default (or a
Transaction Event of Default affecting the Purchased Loans under the Servicing
Agreement) under the Repurchase Agreement, Buyer shall deliver notice of such
Facility Event of Default or Transaction Event of Default to Servicer and Buyer
may, in its sole discretion, (i) in the case of a Facility Event of Default,
sell its right to the Purchased Loans (or for a Transaction Event of Default,
the affected Purchased Loans) on a servicing released basis or (ii) in the case
of a Facility Event of Default, terminate Servicer as the servicer of the
Purchased Loans (or for a Transaction Event of Default, the affected Purchased
Loans), with or without cause, in each case without payment of any termination
fee. Upon receipt of a notice of a Facility Event of Default or Transaction
Event of Default from Buyer, Servicer shall follow the instructions of Buyer,
without any further consent from Seller or any other Person, with respect to the
Purchased Loans (or affected Purchased Loans) and shall deliver to Buyer any
information with respect to the Purchased Loans requested by Buyer to the extent
such information is in the possession of or otherwise reasonably available to
Servicer.

Notwithstanding any contrary information or direction which may be delivered to
Servicer by Seller, Servicer may conclusively rely on any information, direction
or notice of an Event of Default delivered by Buyer without any independent
investigation or inquiry, and Seller shall indemnify and hold Servicer harmless
for any and all claims asserted against Servicer for any actions taken in good
faith by Servicer in connection with the delivery of such information or notice
of an Event of Default.

No provision of this Servicer Notice and Agreement or the Servicing Agreement
may be amended, countermanded or otherwise modified without the prior written
consent of Seller, Servicer and Buyer. Buyer is an intended third party
beneficiary of this letter.

 

-2-

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

Please acknowledge receipt and your agreement to the terms of this instruction
letter by signing in the signature block below and forwarding an executed copy
to Buyer promptly upon receipt. Any notices should be delivered to the following
address:

 

  (a)

if to Buyer:

Deutsche Bank AG, Cayman Islands Branch

60 Wall Street

New York, New York 10005

Attention:      Tom Rugg

Telephone:    #######

Telecopy:      #######

Email:           #######

with a copy to:

Deutsche Bank AG, Cayman Islands Branch

60 Wall Street

New York, New York 10005

Attention:      Robert W. Pettinato Jr.

Telephone:    #######

Telecopy:      #######

Email:           #######

and

Sidley Austin LLP

787 Seventh Avenue

New York, New York 10019

Attention:      Robert L. Boyd, Esq.

Telephone:    #######

Fax:               #######

Email:           #######

 

  (b)

if to Servicer:

Wells Fargo Bank, National Association

Commercial Mortgage Servicing

MAC D1050-084

Three Wells Fargo

401 South Tryon Street, 8th Floor

Charlotte, North Carolina 28202

Attention: DB Loan NT-II, LLC and CLNC Credit 5, LLC – Relationship Manager

Facsimile Number: #######

 

-3-

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

with a copy to:

Wells Fargo Bank, National Association

Law Department

MAC D1053-300

One Wells Fargo Bank Center

301 South College Street

Charlotte, North Carolina 28288

Attention: Commercial Mortgage Servicing Legal Support

In the event of a conflict between the terms and conditions of this Servicer
Notice and Agreement and the Servicing Agreement, this Servicer Notice and
Agreement shall prevail. Except as specifically set forth in this Servicer
Notice and Agreement with respect to the Purchased Loans, all terms and
conditions of the Servicing Agreement shall remain in full force and effect.

This Servicer Notice may be executed in counterparts, each of which so executed
shall be deemed to be an original, but all of such counterparts shall together
constitute but one and the same instrument. Delivery by electronic transmission
(including a .pdf e-mail transmission) of an executed counterpart of a signature
page to this Servicer Notice shall be effective as delivery of an original
executed counterpart of this Servicer Notice.

This Servicer Notice shall be governed by the laws of the State of New York
without giving effect to the conflict of law principles thereof.

[Reminder of page intentionally blank]

 

-4-

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

Very truly yours,

[DB LOAN NT-II, LLC/ CLNC CREDIT 5, LLC]

By:

 

 

 

Name:

 

Title:

 

ACKNOWLEDGED AND AGREED TO:

WELLS FARGO BANK, NATIONAL ASSOCIATION

By:

 

                                          

 

Name:

 

Title:

 

-5-

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

EXHIBIT A

Description of Accounts

Servicer Account

 

Bank:

  

########

ABA:

  

########

Account Name:

  

########

Account #:

  

########

Attention:

  

########

Cash Management Account

 

Bank:

  

########

City/State:

  

########

ABA:

  

########

Account Name:

  

########

Account #:

  

########

Attention:

  

########

 

-6-

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

EXHIBIT X

PROHIBITED TRANSFEREES

The following entities and their Affiliates including each of their respective
successors and assigns shall be Prohibited Transferees:

########

 

-7-

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

EXHIBIT XI

FORM OF JOINDER AGREEMENT

JOINDER AND MODIFICATION AGREEMENT

This JOINDER AND MODIFICATION AGREEMENT (this “Agreement”), dated as of
                    , 20     by [            ] (“New Series Seller”) and DB LOAN
NT-II, LLC and CLNC CREDIT 5, LLC, each a Delaware limited liability company
organized in series (individually and/or collectively as the context may
require, “Master Seller”).

BACKGROUND

A.     Master Seller and Deutsche Bank AG, Cayman Islands Branch, a branch of a
foreign banking institution (“Buyer”), entered into that certain Master
Repurchase Agreement, dated as of October 23, 2018 (as amended, modified and/or
restated from time to time, the “Repurchase Agreement”), pursuant to which
Master Seller, on behalf of each Series Seller (as defined therein) heretofore
or hereafter established thereunder (Master Seller, together with each such
Series Seller, collectively, “Seller”), agreed to sell to Buyer certain Eligible
Loans upon the terms and subject to the conditions set forth therein (each such
transaction, a “Transaction”). Capitalized terms used but not otherwise defined
herein shall have the respective meanings given to such terms in the Repurchase
Agreement.

B.    Pursuant to Section 3(n) of the Repurchase Agreement, on or prior to the
Purchase Date for any Transaction, Member is required to establish a new Series
Seller to enter into such Transaction and Master Seller and such new Series
Seller are required to execute and deliver a Joinder Agreement pursuant to which
such new Series Seller shall be added as a party to the Repurchase Agreement and
the other Transaction Documents.

C.    On or prior to the date hereof, Member has established New Series Seller
in accordance with the terms of the Master Seller LLC Agreement and applicable
Delaware law for the purpose of entering into a Transaction with Buyer with
respect to the Purchased Loan[s] described on Exhibit A attached hereto and New
Series Seller wishes to execute and deliver this Agreement pursuant to which New
Series Seller shall become a party to and agree to be bound as a Series Seller
for all purposes under the Repurchase Agreement and the other Transaction
Documents.

AGREEMENT

NOW, THEREFORE, in order to induce Buyer to enter into a Transaction with New
Series Seller, and in consideration of the substantial benefit New Series Seller
will derive from Buyer entering into such Transaction, and other good and
valuable consideration, the receipt and

 

-8-

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

sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, New Series Seller hereby agrees as follows:

1.    In consideration of New Series Seller becoming a Series Seller entitled to
enter into a Transaction with Buyer under and subject to the terms and
conditions of the Repurchase Agreement, New Series Seller hereby agrees that,
effective as of the date hereof, New Series Seller is, and shall be deemed to
be, a Series Seller under the Repurchase Agreement and each of the other
Transaction Documents to which the Seller is a party, and agrees that from the
date hereof and so long as the Repurchase Obligations remain outstanding, New
Series Seller hereby assumes the obligations of a Series Seller under, and New
Series Seller shall perform, comply with and be subject to and bound by each of
the terms, covenants and conditions of the Repurchase Agreement and each of the
other Transaction Documents which are stated to apply to or are made by a Series
Seller. Without limiting the generality of the foregoing, New Series Seller
hereby represents and warrants that (i) each of the representations and
warranties set forth in Section 9(b) of the Repurchase Agreement are true and
correct as to New Series Seller and its related Purchased Loan on and as of the
date hereof and (ii) New Series Seller has heretofore received true and correct
copies of the Repurchase Agreement and each of the other Transaction Documents
as in effect on the date hereof. Master Seller hereby confirms, on behalf of
itself and the New Series Seller, its pledge and grant of a security interest in
the Collateral.

2.    Without limiting the foregoing, New Series Seller agrees that it is and
shall be obligated to pay the Repurchase Price applicable to its Purchased Loan
on the Repurchase Date therefor and perform and pay all of the other Repurchase
Obligations applicable to New Series Seller and such Purchased Loan as if it
were an original party to the Repurchase Agreement and agrees to execute and
deliver such documents, instruments and other things as Buyer may reasonably
request in connection with such New Series Seller’s obligations hereunder and
under the Repurchase Agreement and the other Transaction Documents.

3.    In furtherance of the foregoing, New Series Seller shall execute and
deliver or cause to be executed and delivered, at any time and from time to
time, such further instruments and documents, and shall do or cause to be done
such further acts, as may be reasonably necessary or proper in the opinion of
Buyer to carry out more effectively the provisions and purposes of this
Agreement and the Repurchase Agreement.

4.    Master Seller, on behalf of itself and each Series Seller that has become
a party to the Repurchase Agreement on or prior to the date hereof, and New
Series Seller acknowledge and agree that, except as modified hereby, the
Repurchase Agreement and each of the other Transaction Documents remains
unmodified and in full force and effect and all of the terms, covenants and
conditions thereof are hereby ratified and confirmed in all respects.

5.    This Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York, without regard to
conflicts of law principles.

[SIGNATURES ON FOLLOWING PAGES]

 

-9-

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

IN WITNESS WHEREOF, each of New Seller and Master Seller, on behalf of itself
and each Series Seller that has heretofore become a party to the Repurchase
Agreement, has duly executed this Agreement and delivered the same to the Buyer,
as of the date and year first above written.

 

NEW SERIES SELLER:

[CLNY SPE SELLER] – SERIES [                    ], a series of [CLNY SPE
SELLER], a Delaware limited liability company

By:

 

 

 

Name:

 

Title:

MASTER SELLER:

[[DB LOAN NT-II, LLC/ CLNC CREDIT 5, LLC], a Delaware limited liability company,
on behalf of itself and each Series Seller that has become a party to the
Repurchase Agreement prior to the date hereof

By:

 

 

 

Name:

 

Title:

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

EXHIBIT A

NEW SERIES SELLER/PURCHASED LOAN

 

New Series Seller:

  

                                                                
                 

Purchased Loan:

  

                                                                 
                

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

EXHIBIT XII

PERMITTED FUND MANAGERS

########

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

EXHIBIT XIII

FORM OF BAILEE LETTER

[DB LOAN NT-II, LLC/CLNC CREDIT 5, LLC]

c/o CLNC Manager, LLC

590 Madison Avenue, 34th Floor

New York, New York 10022

             , 20    

Deutsche Bank AG, Cayman Islands Branch

60 Wall Street

New York, New York 10005

Attention: Tom Rugg

Email: ########

Ropes & Gray LLP

1211 Avenue of the Americas

New York, NY 10036-8704

Attn: Daniel L. Stanco, Esq.

Email: ########

 

  Re:

Bailee Agreement (the “Bailee Agreement”) in connection with the sale of [Name
of Purchased Loan(s)] by [DB LOAN NT-II, LLC/CLNC CREDIT 5, LLC], a Delaware
limited liability company organized in series (“Master Seller”), on behalf of
itself and [SERIES SELLER] (collectively, “Seller”) to DEUTSCHE BANK AG, CAYMAN
ISLANDS BRANCH, as buyer (“Buyer”)

Ladies and Gentlemen:

Reference is made to that certain Master Repurchase Agreement dated as of
October 23, 2018, by and between Master Seller, [DB LOAN NT-II, LLC/CLNC CREDIT
5, LLC], and Buyer (as the same may be amended, modified or supplemented from
time to time, the “Repurchase Agreement”). In consideration of the mutual
promises set forth herein and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Seller, Buyer and Ropes & Gray
LLP (“Bailee”) hereby agree as follows:

1.    Seller shall deliver to Bailee and Bailee shall hold, in connection with
the Purchased Loan[s] delivered to Bailee hereunder (for Bailee’s delivery to
the Custodian), the custodial delivery certificate (the “Custodial Delivery
Certificate”) attached hereto as Attachment 1, in connection with the Purchased
Loan[s] identified thereon.

2.    On or prior to the date indicated on the Custodial Delivery Certificate
delivered by Seller (the “Funding Date”), Seller shall have delivered to Bailee,
as bailee for hire, the documents set forth on Exhibit B to the Custodial
Delivery Certificate (collectively, the “Purchased Loan

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

File[s]”) for the Eligible Loan[s] (the “Purchased Loan[s]”) listed in Exhibit A
to the Custodial Delivery Certificate.

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

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

5.    Following the Funding Date and the funding of the Purchase Price for the
applicable Purchased Loan[s], Bailee shall forward the Purchased Loan File[s] to
Wells Fargo Bank, N.A. (the “Custodian”), at 1055 10th Avenue SE, Minneapolis,
Minnesota 55414, Attention: CMBS DBCI-NSIncome warehouse, by insured overnight
courier for receipt by the Custodian no later than 1:00 p.m. on the third (3rd)
Business Day following the applicable Funding Date (the “Delivery Date”).

6.    From and after the applicable Funding Date until the time of receipt of
Buyer’s written confirmation as described in Section 4 hereof or the applicable
Delivery Date, as applicable, Bailee (a) shall maintain continuous custody and
control of the related Purchased Loan File[s] as bailee for Buyer (excluding any
period when the same [is/are] under the delivery process described in Section 5
hereof) and (b) shall hold the related Purchased Loan File[s] as sole and
exclusive bailee for Buyer unless and until otherwise instructed in writing by
Buyer.

7.    In the event that Bailee fails to deliver to Buyer a Mortgage Note or
Mezzanine Note, as applicable, or other material portion of a Purchased Loan
File[s] that was in its possession to the Custodian within five (5) Business
Days following the applicable Funding Date and the funding of the Purchase Price
for the applicable Purchased Loan[s], the same shall constitute a “Bailee
Delivery Failure” under this Bailee Agreement.

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

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

9.    Seller hereby represents, warrants and covenants that Bailee is not an
affiliate of or otherwise controlled by Seller. Notwithstanding the foregoing,
the parties hereby acknowledge that Bailee hereunder may act as counsel to
Seller in connection with a proposed Transaction and may represent Seller in
connection with any dispute related to this Bailee Agreement or the Transaction
Documents.

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

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

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

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

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

[SIGNATURES COMMENCE ON NEXT PAGE]

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

Very truly yours,

[DB LOAN NT-II, LLC, as Seller

By:

 

 

 

Name:

 

Title:]

[CLNC CREDIT 5, LLC, as Seller

By:

 

 

 

Name:

 

Title:]

 

ACCEPTED AND AGREED: ROPES & GRAY LLP, as Bailee

By:

 

 

 

Name:

 

Title:

ACCEPTED AND AGREED:

DEUTSCHE BANK AG, CAYMAN ISLANDS BRANCH, as Buyer

By:

 

 

 

Name:

 

Title:

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

Attachment 1 to Bailee Agreement

CUSTODIAL DELIVERY CERTIFICATE

[See attached]

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

ATTACHMENT 2 TO BAILEE AGREEMENT

FORM OF BAILEE TRUST RECEIPT

            , 201    

Deutsche Bank AG, Cayman Islands Branch

60 Wall Street

New York, New York 10005

Attention: Tom Rugg

Email: ########

 

  Re:

Bailee Agreement, dated             , 201     (the “Bailee Agreement”) among [DB
LOAN NT-II, LLC/CLNC CREDIT 5, LLC], a Delaware limited liability company
organized in series (“Master Seller”), on behalf of itself and [SERIES SELLER]
(collectively, “Seller”), Deutsche Bank AG, Cayman Islands Branch, as buyer
(“Buyer”) and Ropes & Gray LLP (“Bailee”)

Ladies and Gentlemen:

In accordance with the provisions of Section 3 of the above-referenced Bailee
Agreement, the undersigned, as Bailee, hereby certifies that as to the Purchased
Loan[s] described in Exhibit A to the Custodial Delivery Certificate, it has
reviewed the Purchased Loan File[s] and has determined that all documents listed
in Exhibit B to the Custodial Delivery Certificate are in its possession.

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

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

 

ROPES & GRAY LLP,

      as Bailee

By:

 

 

 

Name:

 

Title: