Document:

EX-10.3

 

EXHIBIT 10.3

WARRANT REGISTRATION RIGHTS AGREEMENT

     THIS WARRANT REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of
August 11, 2006, by and between Martha Stewart Living Omnimedia, Inc., a Delaware Corporation (the
“Company”), and Mark Burnett (the “Holder”).

     WHEREAS, the Company issued to Holder the original warrant (the “Original Warrant”) on
September 17, 2004, pursuant to which Holder had the right to exercise the Original Warrant to
purchase up to 2,500,000 shares of Class A Common Stock, par value $.01 per share of the Company
(the “Class A Common Stock”), if certain vesting terms and other conditions were satisfied;

     WHEREAS, pursuant to the terms of the Original Warrant, Holder’s right to purchase 1,666,667
shares of Class A Common Stock has vested, but Holder’s rights with respect to 833,333 shares have
not vested and will not vest;

     WHEREAS, the Company and Holder have agreed to terms with respect to their ongoing
relationship, which terms include the issuance of a new warrant to purchase up to 833,333 shares
(the “Warrant”) and this grant to Holder of the registration rights described herein with respect
to Warrant Shares issuable in respect of the Original Warrant or the Warrant.

     NOW, THEREFORE, the parties hereto, in consideration of the foregoing, the mutual covenants
and agreements hereinafter set forth, and for other good and valuable consideration, the receipt
and sufficiency of which hereby are acknowledged, hereby agree, intending to be legally bound
hereby, as follows:

     1. Certain Definitions.

     In addition to the other terms defined in this Agreement, the following terms shall have the
following meanings:

          “Commission” means the United States Securities and Exchange Commission, or such other federal
agency at the time having the principal responsibility for administering the Securities Act.

          “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at the relevant time.

          “Koppelman Rights Agreement” means the Registration Rights Agreement between Charles A.
Koppelman and the Company dated January 24, 2005.

          “NASD” means National Association of Securities Dealers, Inc.

          “Person” means an individual, a partnership (general or limited), corporation, limited
liability company, joint venture, business trust, cooperative, association or other form of
business organization, whether or not regarded as a legal entity under applicable law, a trust

 

 

(inter vivos or testamentary), an estate, a quasi-governmental entity, a government or any
agency, authority, political subdivision or other instrumentality thereof, or any other entity.

          “Registrable Securities” means (i) any Warrant Shares issued or issuable by the Company to
Holder upon exercise of the Original Warrant and/or the Warrant, and (ii) any additional shares of
Class A Common Stock or other equity securities of the Company issued by the Company in respect of
Warrant Shares described in subclause (i) after the issuance of such Warrant Shares, in connection
with a stock dividend, stock split, combination, exchange, reorganization, recapitalization or
similar reclassification of the Company’s securities; provided that, as to any particular
Registrable Securities, such securities shall cease to constitute Registrable Securities when: (w)
a registration statement with respect to the sale of such securities shall have become effective
under the Securities Act and such securities shall have been disposed of thereunder; (x) such
securities shall have been sold in satisfaction of all applicable conditions to the resale
provisions of Rule 144 under the Securities Act (or any similar provision then in force); (y) such
securities are eligible to be publicly sold without limitation as to amount or manner of sale
pursuant to Rule 144(k) under the Securities Act (or any successor provision to such Rule); or (z)
such securities shall have ceased to be issued and outstanding.

          “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations
of the Commission thereunder, all as the same shall be in effect from time to time.

          “Warrant Shares” means shares of Class A Common Stock issuable pursuant to the terms of the
Original Warrant or the Warrant.

     2. Shelf Registration.

          (a) At any time during which Holder owns Registrable Securities, Holder may request in writing
that the Company effect a shelf registration under the Securities Act registering for resale by
Holder of all of the Registrable Securities eligible for registration pursuant to a shelf
registration statement on Form S-3 (or any similar short-form registration statement that is a
successor to Form S-3) or, in the Company’s sole discretion, any other appropriate form. Subject
to Section 2(b) of this Agreement, the Company shall use its reasonable best efforts to prepare and
file a shelf registration statement under the Securities Act as soon as practicable after receipt
by the Company of such request from Holder. The Company shall use its reasonable best efforts to
cause such shelf registration statement to be declared effective by the Commission as promptly as
shall be reasonably practicable after it has been filed. The Company shall not be required to
effect more than one shelf registration pursuant to this Section 2. Subject to Sections 2(c) and
2(e) of this Agreement, the Company shall use its reasonable best efforts to keep such shelf
registration statement effective until all securities included in such registration statement have
ceased to constitute Registrable Securities.

          (b) Notwithstanding Section 2(a) above, the Company may defer the filing of or effectiveness
of any shelf registration statement required by this Section 2 if the Company is, at such time, in
the process of pursuing an underwritten public offering of equity securities and is advised by its
managing underwriter(s) that such offering would in its or their opinion be adversely affected by
such filing or (ii) the Board of Directors of the Company in its good faith

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judgment, determines that any such filing or the offering of any Registrable Securities would
materially impede, delay or interfere with any proposed financing, offer or sale of securities,
acquisition, corporate reorganization or other transaction involving the Company or any of its
subsidiaries (a “Valid Business Reason”). The Company may defer filing a shelf registration
statement until such Valid Business Reason no longer exists, provided that notwithstanding anything
to the contrary herein, in no event shall the Company defer the filing or effectiveness of any such
registration statement more than 180 days.

          (c) At any time when a shelf registration statement effected pursuant to this Section 2 is
effective, upon written notice from the Company to Holder that the Board of Directors of the
Company has determined in good faith that the sale of Registrable Securities pursuant to such shelf
registration statement would require disclosure of non-public material information not otherwise
required to be disclosed under applicable law having a material adverse effect on the Company (an
“Information Blackout”), Holder shall suspend sales of Registrable Securities pursuant to such
shelf registration statement until such time as the Company notifies Holder that such material
information has been disclosed to the public or has ceased to be material or that sales pursuant to
such shelf registration statement may otherwise be resumed (the number of days from such suspension
of sales by Holder until the day when such sale may be resumed hereunder is hereinafter called a
“Sales Blackout Period”).

          (d) Notwithstanding the provisions of Section 2(c): (i) there shall be no more than two (2)
Information Blackouts during any fiscal year of the Company and (ii) in no event shall the
aggregate Sales Blackout Periods during any 365 day period exceed 180 days in the aggregate.

          (e) The Company shall bear all Registration Expenses in connection with any shelf registration
pursuant to this Section 2, whether or not such shelf registration becomes effective; provided,
however, that if Holder requests a shelf registration and subsequently withdraws his request,
then such Holder either shall pay all Registration Expenses reasonably incurred in connection with
such shelf registration or forfeit the right to request another shelf registration unless the
withdrawal of such request is the result of facts or circumstances relating to the Company that
arise after the date on which such request was made and would have a material adverse effect on the
offering of the Registrable Securities.

          (f) Inclusion of Additional Securities. If the Holder elects to request a Shelf
Registration, the Company may include in such registration any additional securities of the
Company, including without limitation, shares of Class A Common Stock requested and permitted to be
included pursuant to the terms of the Koppelman Rights Agreement.

     3. Incidental or “Piggy-Back” Registration.

          (a) If, at any time Holder owns Registrable Securities, the Company proposes to file a
Registration Statement under the Securities Act covering an underwritten offering by the Company
for its own account (other than a Registration Statement on Form S-4 or S-8 or any successor
thereto), then the Company shall promptly give written notice of such proposed filing to Holder.
Upon the written request of Holder received by the Company within 10 days after the delivery of
such notice by the Company (but in any event prior to 10 days following the

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expiration of the Registration Rights Period), the Company shall use commercially reasonable
efforts to cause a registration statement covering those Registrable Securities that Holder has
requested to be registered to become effective under the Securities Act.

          (b) The Company shall not be required under this Section 3 to include any of the Holder’s
securities in an underwriting unless he accepts the terms of the underwriting as agreed upon
between the Company and the underwriters selected by the Company. If the managing underwriter for
the offering shall advise the Company that marketing factors require a limitation of the number of
shares to be underwritten, then the Company shall so advise Holder and the number of shares of
Registrable Securities that may be included in the underwriting shall be allocated in accordance
with Section 3(c) below.

          (c) If the managing underwriters of an underwritten offering notify the Company or such other
parties that in their opinion the number of shares of securities requested to be including in such
offering exceeds the number which can be sold in such offering in an orderly manner within a price
range acceptable to the Company, the Company will include in such offering (i) first, the greatest
number of shares of Common Stock requested to be included by the Company or by any party to the
Koppelman Rights Agreement and permitted to be included pursuant to the terms thereof and (ii)
second, other shares of Class A Common Stock, including the Warrant Shares as requested by the
Holder, in each case up to the greatest number of shares of Class A Common Stock which, in the
opinion of such managing underwriters, can be sold in an orderly manner in the price range of such
offering.

          (d) The Company shall bear all Registration Expenses in connection with any incidental
registration pursuant to this Section 3, whether or not such incidental registration statement
becomes effective.

     4. Restrictions on Public Sale; Rule 144

          (a) In the event the Company is issuing equity securities to the public in an underwritten
offering, and, if requested by the managing underwriter or underwriters for such underwritten
offering, the Holder shall not effect any public sale or distribution of Registrable Securities or
any securities convertible into or exchangeable or exercisable for such Registrable Securities,
including a sale pursuant to Rule 144 (or any similar provision then in force) under the Securities
Act, for a period commencing on the tenth (10th) day prior to the date such underwritten offering
commences (such offering being deemed to commence for this purpose on the later of the effective
date for the registration statement for such offering or, if applicable, the date of the prospectus
supplement for such offering) and ending 90 days after the closing of such underwritten offering,
or such other period as the managing underwriters may require;

          (b) The Holder shall not, during any period in which any of his Registrable Securities are
included in any effective registration statement: (i) effect any stabilization transactions or
engage in any stabilization activity in connection with the Warrant Shares or other equity
securities of the Company in contravention of Rule 104 of Regulation M under the Exchange Act; or
(ii) permit any Affiliated Purchaser (as that term is defined in Rule 101 of Regulation M under the
Exchange Act) to bid for or purchase for any account in which Holder

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has a beneficial interest, or attempt to induce any other person to purchase, any Warrant
Shares in contravention of Rule 102 of Regulation M under the Exchange Act.

          (c) The Company shall make and keep information publicly available relating to the Company so
as to satisfy the requirements of Rule 144 under the Securities Act (or any successor or
corresponding rule) and file with the SEC all reports and other documents required of the Company
under the Securities Act and the Exchange Act in a timely manner. If requested by the Holder, the
Company shall provide the Holder certificates or other reasonable assurances of its compliance with
the foregoing requirements.

     5. Registration Procedures.

          (a) In connection with any registration contemplated by Sections 2 or 3 the Company shall:

               (i) prepare and file with the Commission, a registration statement, which registration
statement shall (x) be available for the sale of the Registrable Securities in accordance with the
intended method or methods of distribution by Holder, and (y) comply as to form in all material
respects with the requirements of the applicable form and include all financial statements required
by the Commission to be filed therewith; provided that, before filing a
registration statement, the Company shall upon request furnish to Holder copies of such
registration statement as proposed to be filed and thereafter such number of copies of such
registration statement (including all exhibits thereto), and any documents incorporated by
reference after the initial filing of any registration statement as Holder may reasonably request
on a case by case basis after each such filing to the extent such documents are not otherwise
publicly available in order to facilitate the disposition of the Registrable Securities owned by
Holder, and shall revise the registration statement as it specifically relates to Holder based on
information received by Holder as determined by the Company;

               (ii) prepare and file with the Commission such amendments, post-effective amendments and
supplements to such registration statement and the prospectus used in connection therewith as may
be necessary to keep such registration statement effective for such period of time as is necessary
to allow the distribution of the Registrable Securities contemplated therein and to comply with the
provisions of the Securities Act with respect to the disposition of all securities covered by such
registration statement during the period during which any such registration statement is required
to be effective; provided that, before filing any amendments or supplements to such
registration statement or the prospectus, the Company shall upon request furnish to Holder copies
of such amendments and supplements (in each case including all exhibits thereto) and the prospectus
(including each preliminary prospectus) as proposed to be filed and thereafter such number of
copies of such amendments, supplements, prospectuses and any documents incorporated by reference
after the initial filing of any registration statement as Holder may reasonably request on a case
by case basis after each such filing to the extent such documents are not otherwise publicly
available in order to facilitate the disposition of the Registrable Securities owned by Holder, and
revise such documents as they specifically relate to Holder based on information received by Holder
as determined by the Company;

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               (iii) use its reasonable best efforts to cause the Registrable Securities covered by such
registration statement to be registered with, or approved by, such other public, governmental or
regulatory authorities as may be necessary to facilitate the disposition of such Registrable
Securities in accordance with the methods of disposition intended herein;

               (iv) notify Holder (A) when a prospectus or any prospectus supplement has been filed with the
Commission, and, with respect to such registration statement or any post-effective amendment
thereto, when the same has been declared effective by the Commission, (B) of any request by the
Commission for amendments or supplements to such registration statement or related prospectus, or
for additional information, (C) of the issuance by the Commission of any stop order or the
initiation of any proceedings for such or a similar purpose (and the Company shall use commercially
reasonable efforts to obtain the withdrawal of any such order at the earliest practicable moment),
(D) of the receipt by the Company of any notification with respect to the suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose (and the Company shall use its commercially
reasonable efforts to obtain the withdrawal of any such suspension at the earliest practicable
moment), (E) of the occurrence of any event that requires the making of any changes to such
registration statement or related prospectus so that such documents will not contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under which they were made,
not misleading (and the Company shall promptly prepare and furnish to Holder a reasonable number of
copies of a supplemented or amended prospectus such that, as thereafter delivered to the purchasers
of such Registrable Securities, such prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they are made, not misleading), and
(F) of the Company’s determination that the filing of a post-effective amendment to such
registration statement shall be necessary or appropriate. Holder shall be deemed to have agreed by
acquisition of Registrable Securities that, upon the receipt of any notice from the Company of the
occurrence of any event of the kind described in clause (E) of this Section 5(a)(iv), Holder shall
forthwith discontinue his or its offer and disposition of Registrable Securities pursuant to the
registration statement covering such Registrable Securities until the Company notifies the Holder
otherwise. In addition, if so directed by the Company, the Holder shall deliver to the Company, at
the Company’s expense, all copies (other than permanent file copies) of any defective prospectus as
contemplated by clause (E) of this Section 5(a)(iv) covering such Registrable Securities which are
then in its possession;

               (v) use its reasonable best efforts to cause the Registrable Securities to be listed on the
principal exchange or exchanges or qualified for trading on the principal over-the-counter market
or listed on the automated quotation market on which securities of the same class and series as the
Registrable Securities (or into which such Registrable Securities will be or have been converted)
are then listed, traded, or quoted upon the sale of such Registrable Securities pursuant to the
registration statement;

               (vi) enter into customary agreements (including an underwriting agreement in customary form
including customary indemnification provisions) and perform its obligations under any such
agreements and shall take such other actions as are reasonably required in order to expedite or
facilitate the disposition of such Registrable Securities;

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               (vii) make available for inspection by the Holder, any underwriter selected by a Holder
participating in any disposition pursuant to such Registration Statement, and any attorney,
accountant, or other professional retained by any such Holder or underwriter, all financial and
other records, pertinent corporate documents, and properties of the Company as shall be reasonably
necessary to enable them to exercise their due diligence responsibility in connection therewith,
and cause the Company’s officers, directors, and employees to supply all information reasonably
requested by any of such parties in connection with such registration statement;

               (viii) furnish, in the case of an underwritten public offering, to Holder and to each
underwriter a signed counterpart of (i) an opinion or opinions of counsel to the Company addressed
to Holder and underwriters (on which opinion both Holder and each such underwriter shall be
entitled to rely) and (ii) a comfort letter or comfort letters from the Company’s independent
public accountants, each in customary form and covering such matters of the type customarily
covered by opinions or comfort letters, as the case may be, as the Holder or the managing
underwriter therefor reasonably requests;

               (ix) otherwise use commercially reasonable efforts to comply with all applicable rules and
regulations of the Commission, as the same may hereafter be amended; and

               (x) cooperate with the Holder to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold; and use commercially reasonable
efforts to cause the Registrar and Transfer Agent for the Company to issue, upon request of the
Holder, certificates for such numbers of Registrable Securities registered in such names as the
Holder may reasonably request at least two business days prior to any sale of Registrable
Securities.

          (b) In connection with any registration contemplated by Sections 2 or 3, Holder shall:

               (i) cooperate with the Company in connection with the preparation of the registration
statement to be filed by the Company pursuant to this Agreement, and for so long as the Company is
obligated to keep such registration statement effective, shall (a) respond within five (5) business
days to any request by the Company to provide or verify information regarding such Holder or such
Holder’s Registrable Securities (including the proposed manner of sale) that may be required to be
included in such registration statement pursuant to the rules and regulations of the Commission,
and (b) provide in a timely manner information regarding the proposed distribution by such Holder
of the Registrable Securities and such other information as may reasonably be requested by the
Company from time to time in connection with the preparation of and for inclusion in a shelf
registration statement pursuant to Section 2 and/or any related prospectus or supplement thereto;
and

               (ii) if requested by the Company, before using any registration statement or any prospectus
contained therein or any amendment or supplement thereto, deliver to the Company a certification
that he or it has reviewed the information contained therein and representing and warranting to the
Company that the information relating to such Holder and his or its plan of distribution is as set
forth in the related prospectus, that the prospectus does not, as

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of the time of such sale, contain any untrue statement of a material fact relating to or
provided by such Holder or his or its plan of distribution and that the prospectus does not, as of
the time of such sale, omit to state any material fact relating to such Holder or his or its plan
of distribution required to be stated in the prospectus or necessary to make the statements in such
prospectus, in the light of the circumstances under which they were made, not misleading.

     6. Registration Expenses.

     Whether or not any registration statement prepared and filed pursuant to Sections 2 or 3 of
this Agreement is declared effective by the Commission, the Company shall pay all of the following
expenses (“Registration Expenses”) arising in connection with any registrations pursuant to this
Agreement (except as specified in the following sentence): (a) all Commission and any NASD
registration and filing fees and expenses; (b) any and all expenses incident to the Company’s
performance of, or compliance with, this Agreement, including, without limitation, any allocation
of salaries and expenses of Company personnel or other general overhead expenses of the Company, or
other expenses for the preparation of historical and pro forma financial statements or other data
prepared by the Company; (c) all listing, NASD, transfer and/or exchange agent and registrar fees;
(d) fees and expenses in connection with the qualification of the Registrable Securities under
securities or “blue sky” laws; (e) printing and delivery expenses; (f) fees and out-of-pocket
expenses of counsel for the Company and its independent certified public accountants and other
persons, including special experts, retained by the Company; and (g) all reasonable fees and
disbursements of one (1) counsel for the Holder attributable to the distribution of the Registrable
Securities of such Holder included in such registration (provided the amounts payable pursuant to
this clause (g) shall not exceed $10,000 in the aggregate). Notwithstanding the
foregoing, the Company shall not be required to pay any discounts or commissions of selling
brokers, dealers and underwriters relating to the distribution of the Registrable Securities.

     7. Indemnification; Contribution.

          (a) The Company hereby indemnifies and holds harmless, to the fullest extent permitted by law,
Holder and each Person, if any, who controls Holder within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act, against all losses, claims, damages, liabilities
(or proceedings in respect thereof) and expenses (under the Securities Act, common law and
otherwise), joint or several, which arise out of or are based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the registration statement contemplated
hereby or in any prospectus, preliminary prospectus, free-writing prospectus, any amendment or
supplement thereto or any document incorporated by reference relating thereto or in any filing made
in connection with the registration or qualification of the offering under “blue sky” or other
securities laws of jurisdictions in which the Registrable Securities are offered, or any omission
or alleged omission to state therein a material fact required to be stated therein, or necessary to
make the statements therein, in light of the circumstances under which they were made, not
misleading, and the Company shall reimburse Holder for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss, claim, damage,
liability or proceeding, and (ii) any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus or free-writing prospectus, if used prior to
the effective date of such registration statement or contained in the final prospectus (as amended

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or supplemented if the Company shall have filed with the Commission any amendment thereof or
supplement thereto) if used within the period during which the Company is required to keep the
registration statement to which such prospectus relates current, or the omission or alleged
omission to state therein a material fact necessary in order to make the statements therein in
light of the circumstances under which they were made, not misleading; provided, however, that such
indemnification shall not extend to any such losses, claims, damages, liabilities (or proceedings
in respect thereof) or expenses that are caused by any untrue statement or alleged untrue statement
contained in, or by any omission or alleged omission from, information furnished in writing to the
Company by such Holder in such capacity specifically and expressly for use in any such registration
statement or prospectus.

          (b) The Holder hereby indemnifies and hold harmless, to the fullest extent permitted by law,
the Company, its officers, directors, employees, agents and each Person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act,
against any losses, claims, damages, liabilities (or proceedings in respect thereof) and expenses
resulting from any untrue statement, or alleged untrue statement of a material fact, or any
omission or alleged omission of a material fact required to be stated, or necessary to make the
statements in the registration statement or prospectus, or any amendment thereof or supplement
thereto, not misleading; provided, however, that Holder shall be liable hereunder if and only to
the extent that any such loss, claim, damage, liability (or proceeding in respect thereof) or
expense arises out of or is based upon an untrue statement, or alleged untrue statement or omission
or alleged omission, made in reliance upon and in conformity with information pertaining to Holder
which is requested by the Company and furnished in writing to the Company by such Holder
specifically and expressly for use in any such registration statement or prospectus.

          (c) Any Person seeking indemnification under the provisions of this Section 7 shall, promptly
after receipt by such Person of notice of the commencement of any action, suit, claim or
proceeding, notify in writing each party against whom indemnification is to be sought of the
commencement thereof; provided, however, that the failure so to notify an indemnifying party shall
not relieve the indemnifying party from any liability which it or he may have under this Section 7
(except to the extent that it has been prejudiced in any material respect by such failure) or from
any liability which the indemnifying party may otherwise have. In case any such action, suit,
claim or proceeding is brought against any indemnified party, and it notifies an indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to participate therein and,
to the extent it or he may elect by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party shall have the right to employ its own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party unless (i) the
employment of such counsel shall have been authorized in writing by the indemnifying party in
connection with the defense of such suit, action, claim or proceeding, (ii) the indemnifying party
shall not have employed counsel (reasonably satisfactory to the indemnified party) to take charge
of the defense of such action, suit, claim or proceeding within a reasonable time after notice of
commencement of the action, suit, claim or proceeding, or (iii) such indemnified party shall have
reasonably concluded, based on the advice of counsel, that there may be defenses available to it
which are different from or additional to those available

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to the indemnifying party which, if the indemnifying party and the indemnified party were to
be represented by the same counsel, would result in a conflict of interest for such counsel or
materially prejudice the prosecution of the defenses available to such indemnified party. If any
of the events specified in clauses (i), (ii) or (iii) of the preceding sentence shall have occurred
or shall otherwise be applicable, then the fees and expenses of one counsel selected by a majority
in interest of the indemnified parties shall be borne by the indemnifying party. If, in any case,
the indemnified party employs separate counsel, the indemnifying party shall not have the right to
direct the defense of such action, suit, claim or proceeding on behalf of the indemnified party.
Anything in this paragraph to the contrary notwithstanding, an indemnifying party shall not be
liable for the settlement of any action, suit, claim or proceeding effected without its prior
written consent (which consent in the case of an action, suit, claim or proceeding exclusively
seeking monetary relief shall not be unreasonably withheld or delayed). Such indemnification shall
remain in full force and effect irrespective of any investigation made by or on behalf of an
indemnified party.

          (d) If the indemnification from the indemnifying party as provided in this Section 7 is
unavailable or is otherwise insufficient to hold harmless an indemnified party in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then the indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a result of such
losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect
the relative fault of the indemnifying party and indemnified parties in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses. The relative fault of
such indemnifying party shall be determined by reference to, among other things, whether any action
in question, including any untrue (or alleged untrue) statement of a material fact or omission (or
alleged omission) to state a material fact, has been made, or relates to information supplied by
such indemnifying party or such indemnified party, and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such action. The amount paid or
payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in Section 7(d) hereof, any
legal or other fees or expenses reasonably incurred by such party in connection with any such
investigation or proceeding.

          The parties hereto acknowledge that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation or by any other method of
allocation other than as described above. Notwithstanding the provisions of this Section 7(d), the
Holder shall not be required to contribute any aggregate amount in excess of the amount by which
the total price at which the Registrable Securities of such Holder were offered to the public
exceed the amount of any damages which such Holder otherwise would have been required to pay or
become liable to pay by reason of such untrue statement or omission unless such loss, claim,
damage, liability (or proceeding in respect thereof) or expense arises out of or is based upon an
untrue statement, or alleged untrue statement or omission or alleged omission, made in reliance
upon and in conformity with information pertaining to Holder which is requested by the Company and
furnished in writing to the Company by such Holder specifically and expressly for use in any such
registration statement or prospectus. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.

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          If, however, indemnification is available under this Section 7, the indemnifying parties shall
indemnify each indemnified party to the fullest extent provided in Sections 7(a) through 7(d)
hereof without regard to the relative fault of said indemnifying party or indemnified party or any
other equitable consideration.

     8. Miscellaneous

          (a) Notices. Except as otherwise provided below, whenever it is provided in this
Agreement that any notice, demand, request, consent, approval, declaration or other communication
shall or may be given to or served upon any of the parties hereto, or whenever any of the parties
hereto, desires to provide to or serve upon any person any other communication with respect to this
Agreement, each such notice, demand, request, consent, approval, declaration or other communication
shall be in writing and either shall be delivered in person or sent by telecopy, addressed as
follows:

     if to the Company:

Martha Stewart Living Omnimedia, Inc.

11 West 42nd Street

New York, New York 10019

Attention:     General Counsel

Telecopy:     (864) 987-9903

     with a copy to:

Hogan & Hartson L.L.P.

Columbia Square

555 13th Street, N.W.

Washington, D.C. 20004-1109

Attention:     Stuart A. Barr, Esq.

Telecopy:     (202) 637-5910

     if to the Holder:

Mark Burnett

PMB 208

9899 Santa Monica Boulevard

Beverly Hills, CA 90212

     with a copy to:

Conrad Riggs

201 Wilshire Boulevard

2nd Floor

Santa Monica, CA 90401

Telecopy: (301) 471-7647

     and:

- 11 -

 

Irell & Manella LLP

1800 Avenue of the Stars

Sutie 900

Los Angeles, CA 90067

Attention: Richard C. Wirthlin, Esq.

Telecopy: (310) 203-7199

          (b) Entire Agreement. This Agreement represents the entire agreement and
understanding among the parties hereto with respect to the subject matter hereof and supersedes any
and all prior oral and written agreements, arrangements and understandings among the parties hereto
with respect to such subject matter. This Agreement can be amended, supplemented or changed, and
any provision hereof can be waived, only by a written instrument making specific reference to this
Agreement signed by the Company on the one hand, and Holder on the other hand.

          (c) Assignment; Successors and Assigns. Except as set forth in the next sentence,
this Agreement and the rights granted hereunder may not be assigned by Holder without the prior
written consent of the Company, which may be granted or withheld by the Company in its sole and
absolute discretion. Notwithstanding the foregoing, this Agreement and Holder’s rights hereunder
may be assigned to any party to which Holder’s rights under the Warrant or Original Warrant are
assigned in whole or in part.

          (d) Headings. Section headings contained in this Agreement are inserted for
convenience of reference only, shall not be deemed to be a part of this Agreement for any purpose,
and shall not in any way define or affect the meaning, construction or scope of any of the
provisions hereof.

          (e) Applicable Law. This Agreement, the rights and obligations of the parties hereto,
and any claims or disputes relating thereto, shall be governed by and construed in accordance with
the internal laws of the State of New York.

          (f) Severability. If fulfillment of any provision of this Agreement, at the time such
fulfillment shall be due, shall transcend the limit of validity prescribed by law, then the
obligation to be fulfilled shall be reduced to the limit of such validity; and if any clause or
provision contained in this Agreement operates or would operate to invalidate this Agreement, in
whole or in part, then such clause or provision only shall be held ineffective, as though not
herein contained, and the remainder of this Agreement shall remain operative and in full force and
effect.

          (g) Equitable Remedies. The parties hereto agree that irreparable harm would occur in
the event that any of the agreements and provisions of this Agreement were not performed fully by
the parties hereto in accordance with their specific terms or conditions or were otherwise
breached, and that money damages are an inadequate remedy for breach of this Agreement because of
the difficulty of ascertaining and quantifying the amount of damage that will be suffered by the
parties hereto in the event that this Agreement is not performed in accordance with its terms or
conditions or is otherwise breached. It is accordingly hereby agreed that the parties hereto shall
be entitled to an injunction or injunctions to restrain, enjoin and

- 12 -

 

prevent breaches of this Agreement by the other parties and to enforce specifically the terms
and provisions hereof in any court of the United States or any state having jurisdiction, such
remedy being in addition to and not in lieu of, any other rights and remedies to which the other
parties are entitled to at law or in equity.

          (h) No Waiver. No waiver by a party hereto shall be effective unless made in a
written instrument duly executed by the party against whom such waiver is sought to be enforced,
and only to the extent set forth in such instrument. Neither the waiver by any of the parties
hereto of a breach or a default under any of the provisions of this Agreement, nor the failure of
any of the parties, on one or more occasions, to enforce any of the provisions of this Agreement or
to exercise any right or privilege hereunder shall thereafter be construed as a waiver of any
subsequent breach or default of a similar nature, or as a waiver of any such provisions, rights or
privileges hereunder.

          (i) Counterparts. To facilitate execution, this Agreement may be executed in as many
counterparts as may be required. It shall not be necessary that the signature of or on behalf of
each party appear on each counterpart, but it shall be sufficient that the signature of or on
behalf of each party appear on one or more of the counterparts. All counterparts shall
collectively constitute a single agreement. It shall not be necessary in any proof of this
Agreement to produce or account for more than a number of counterparts containing the respective
signatures of or on behalf of all of the parties.

          (j) Company Assets. The Holder acknowledges that no officer, director or shareholder
of the Company is liable to such Holder in respect of this Agreement and that such Holder shall
look only to the income and assets of the Company in respect of any payments or claims related to
this Agreement.

          (k) Pronouns. All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, neuter, singular or plural, as the identity of the person or entity may
require.

(SIGNATURES APPEAR ON FOLLOWING PAGE)

- 13 -

 

     IN WITNESS WHEREOF, each of the parties hereto has duly executed and delivered this
Warrant Registration Rights Agreement, or has caused this Warrant Registration Rights Agreement to
be duly executed and delivered in their names and on their behalf, as of the date first written
above.

	 	 	 	 	 	 	 
	 	 	Martha Stewart Living Omnimedia, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/  John
R. Cuti
	 	 
	 

	 	 	 	Name: John R. Cuti	 	 
	 

	 	 	 	Title:   Secretary
and General Counsel	 	 
	 
	 	 	 	 	 	 
	 	 	Mark Burnett	 	 
	 
	 	 	 	 	 	 
	 
	 	 	/s/  Mark
BurnettEX-10.23

 

Exhibit 10.23

MASTER REPURCHASE AGREEMENT

COLUMN FINANCIAL, INC., as buyer (the “Buyer”) and

ARBOR REALTY SR, INC., as a seller (“Seller”), and

ARBOR TRS HOLDING COMPANY INC., as a seller (“Seller”), and

ARBOR REALTY TRUST INC. (“ART”), as a guarantor (a “Guarantor”), and

ARBOR REALTY LIMITED PARTNERSHIP, as a guarantor (a “Guarantor”, and together with

ARBOR REALTY TRUST INC., the “Guarantors”), and

ARBOR REALTY MEZZANINE LLC (“Mezzanine Loan Subsidiary”)

Dated October 26, 2006

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	1.

	 	APPLICABILITY
	 	 	1	 
	 
	 	 	 	 	 	 
	2.

	 	DEFINITIONS
	 	 	1	 
	 
	 	 	 	 	 	 
	3.

	 	PROGRAM; INITIATION OF TRANSACTIONS
	 	 	22	 
	 
	 	 	 	 	 	 
	4.

	 	REPURCHASE
	 	 	24	 
	 
	 	 	 	 	 	 
	5.

	 	PRICE DIFFERENTIAL
	 	 	26	 
	 
	 	 	 	 	 	 
	6.

	 	MARGIN MAINTENANCE
	 	 	26	 
	 
	 	 	 	 	 	 
	7.

	 	INCOME PAYMENTS
	 	 	28	 
	 
	 	 	 	 	 	 
	8.

	 	SECURITY INTEREST
	 	 	30	 
	 
	 	 	 	 	 	 
	9.

	 	PAYMENT AND TRANSFER
	 	 	32	 
	 
	 	 	 	 	 	 
	10.

	 	CONDITIONS PRECEDENT
	 	 	32	 
	 
	 	 	 	 	 	 
	11.

	 	PROGRAM; COSTS
	 	 	36	 
	 
	 	 	 	 	 	 
	12.

	 	SERVICING
	 	 	37	 
	 
	 	 	 	 	 	 
	13.

	 	REPRESENTATIONS AND WARRANTIES
	 	 	38	 
	 
	 	 	 	 	 	 
	14.

	 	COVENANTS
	 	 	45	 
	 
	 	 	 	 	 	 
	15.

	 	EVENTS OF DEFAULT; TERMINATION EVENTS
	 	 	50	 
	 
	 	 	 	 	 	 
	16.

	 	REMEDIES UPON DEFAULT
	 	 	53	 
	 
	 	 	 	 	 	 
	17.

	 	REPORTS
	 	 	56	 
	 
	 	 	 	 	 	 
	18.

	 	REPURCHASE TRANSACTIONS
	 	 	58	 

- i -

 

	 	 	 	 	 	 	 
	 	 	 	 	 
	19.

	 	SINGLE AGREEMENT
	 	 	59	 
	 
	 	 	 	 	 	 
	20.

	 	NOTICES AND OTHER COMMUNICATIONS
	 	 	59	 
	 
	 	 	 	 	 	 
	21.

	 	ENTIRE AGREEMENT; SEVERABILITY
	 	 	61	 
	 
	 	 	 	 	 	 
	22.

	 	NON ASSIGNABILITY
	 	 	61	 
	 
	 	 	 	 	 	 
	23.

	 	SET-OFF
	 	 	62	 
	 
	 	 	 	 	 	 
	24.

	 	BINDING EFFECT; GOVERNING LAW; JURISDICTION
	 	 	62	 
	 
	 	 	 	 	 	 
	25.

	 	NO WAIVERS, ETC.
	 	 	63	 
	 
	 	 	 	 	 	 
	26.

	 	INTENT
	 	 	63	 
	 
	 	 	 	 	 	 
	27.

	 	DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS
	 	 	64	 
	 
	 	 	 	 	 	 
	28.

	 	POWER OF ATTORNEY
	 	 	64	 
	 
	 	 	 	 	 	 
	29.

	 	BUYER MAY ACT THROUGH AFFILIATES
	 	 	64	 
	 
	 	 	 	 	 	 
	30.

	 	INDEMNIFICATION; OBLIGATIONS; RECOURSE
	 	 	64	 
	 
	 	 	 	 	 	 
	31.

	 	COUNTERPARTS
	 	 	65	 
	 
	 	 	 	 	 	 
	32.

	 	CONFIDENTIALITY
	 	 	66	 
	 
	 	 	 	 	 	 
	33.

	 	RECORDING OF COMMUNICATIONS
	 	 	66	 
	 
	 	 	 	 	 	 
	34.

	 	EXIT FEE
	 	 	66	 
	 
	 	 	 	 	 	 
	35.

	 	ADMINISTRATION FEE
	 	 	67	 
	 
	 	 	 	 	 	 
	36.

	 	PERIODIC DUE DILIGENCE REVIEW
	 	 	67	 
	 
	 	 	 	 	 	 
	37.

	 	RESERVED
	 	 	67	 
	 
	 	 	 	 	 	 
	38.

	 	AUTHORIZATIONS
	 	 	67	 

- ii -

 

	 	 	 	 	 	 	 
	 	 	 	 	 
	39.

	 	DOCUMENTS MUTUALLY DRAFTED
	 	 	68	 
	 
	 	 	 	 	 	 
	40.

	 	GENERAL INTERPRETIVE PRINCIPLES
	 	 	68	 

SCHEDULES

	 	 	 	 	 
	Schedule 1 – Representations and Warranties with Respect to Purchased Assets
	 
	 	 	 	 
	Schedule 2 – Authorized Representatives
	 
	 	 	 	 
	EXHIBITS
	 
	 	 	 	 
	Exhibit A –	 	Form of Transaction Request
	 
	 	 	 	 
	 	 	Annex 1 – Purchased Asset Schedule
	 
	 	 	 	 
	 	 	Annex 2 – Summary Diligence Materials
	 
	 	 	 	 
	Exhibit B –	 	Form of Purchase Confirmation
	 
	 	 	 	 
	Exhibit C –	 	Form of Closing Data Tape
	 
	 	 	 	 
	Exhibit D –	 	Form of Officer’s Compliance Certificate
	 
	 	 	 	 
	Exhibit E –	 	Form of Custodial Delivery Letter
	 
	 	 	 	 
	Exhibit F –	 	Form of Opinion of Sellers’ and Guarantors’ and
Mezzanine Loan Subsidiary’s counsel
	 
	 	 	 	 
	Exhibit G –	 	Officer’s Certificate of the Sellers, Guarantors and
Mezzanine Loan Subsidiary and Corporate Resolutions of
Sellers, Guarantor, and Mezzanine Loan Subsidiary
	 
	 	 	 	 
	Exhibit H –	 	Form of Servicer Notice
	 
	 	 	 	 
	Exhibit I –	 	Form of Asset File
	 
	 	 	 	 
	Exhibit J –	 	Form of Trust Receipt
	 
	 	 	 	 
	Exhibit K –	 	Form of Distribution Worksheet
	 
	 	 	 	 
	Exhibit L –	 	Form of Servicing Report
	 
	 	 	 	 
	Exhibit M –	 	Form of Mezzanine Loan Subsidiary Acknowledgment
	 
	 	 	 	 
	Exhibit N –	 	Form of Notice to Borrower
	 
	 	 	 	 
	Exhibit O –	 	Form of Irrevocable Instruction Letter

- iii -

 

1. Applicability

          From time to time the parties hereto may enter into transactions in which a Seller agrees to
transfer to Buyer Purchased Assets and the Mezzanine Loan Subsidiary Interests (valued from time to
time based on the Mezzanine Loans owned by the Mezzanine Loan Subsidiary) (as hereinafter defined)
against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to such
Seller such Purchased Assets, Mezzanine Loan Subsidiary Interests and Mezzanine Loans at a date
certain or on demand, against the transfer of funds by such Seller. 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 annexes identified
herein, as applicable hereunder.

          On the initial Purchase Date, Buyer will purchase the Mezzanine Loan Subsidiary Interests from
the applicable Seller in connection with the initial Transaction.

          After the initial Purchase Date, as part of separate Transactions Sellers may request and
Buyer will fund, subject to the terms and conditions of this Repurchase Agreement, an increase in
the Purchase Price for the Mezzanine Loan Subsidiary Interests based upon the acquisition of
additional Mezzanine Loans by the Mezzanine Loan Subsidiary.

2. Definitions

          Whenever used in this Agreement, the following words and phrases, unless the context otherwise
requires, shall have the following meanings:

          “1933 Act” has the meaning set forth in Section 16(l) hereof.

          “1934 Act” means the Securities Exchange Act of 1934, as amended from time to time.

          “Accepted Servicing Practices” means, with respect to any Purchased Asset, those
servicing practices of prudent institutions which service assets of the same type as such Purchased
Asset in the jurisdiction where the related Mortgaged Property or underlying asset is located.

          “Accrual Period” means, with respect to the first Price Differential Payment Date, the
period from and including the applicable Purchase Date to but excluding such first Price
Differential Payment Date, and, with respect to any subsequent Price Differential Payment Date, the
period from and including the previous Price Differential Payment Date to but excluding such
subsequent Price Differential Payment Date.

          “Act of Insolvency” means, with respect to any Person or its Affiliates, (i) the
filing of a petition, commencing, or authorizing the commencement of any case or proceeding, or the
voluntary joining of any case or proceeding under any bankruptcy, insolvency, reorganization,
liquidation, dissolution or similar law relating to the protection of creditors, or suffering any
such petition or proceeding to be commenced by another which is consented to, not

 

 

timely contested or results in entry of an order for relief; (ii) the seeking of the
appointment of a receiver, trustee, custodian or similar official for such party or an Affiliate or
any substantial part of the property of either; (iii) the appointment of a receiver, conservator,
or manager for such party or an Affiliate by any governmental agency or authority having the
jurisdiction to do so; (iv) the making or offering by such party or an Affiliate of a composition
with its creditors or a general assignment for the benefit of creditors; (v) the admission by such
party or an Affiliate of such party of its inability to pay its debts or discharge its obligations
as they become due or mature; or (vi) that any governmental authority or agency or any person,
agency or entity acting or purporting to act under governmental authority shall have taken any
action to condemn, seize or appropriate, or to assume custody or control of, all or any substantial
part of the property of such party or of any of its Affiliates, or shall have taken any action to
displace the management of such party or of any of its Affiliates or to curtail its authority in
the conduct of the business of such party or of any of its Affiliates.

          “Adjusted Tangible Net Worth” means, for any Person, Net Worth of such Person plus
Subordinated Debt, minus all intangible assets, including capitalized servicing rights, goodwill,
patents, tradenames, trademarks, copyrights, franchises, any organizational expenses, deferred
expenses, prepaid expenses, prepaid assets, receivables from shareholders, Affiliates or employees,
and any other asset as shown as an intangible asset on the balance sheet of such Person on a
consolidated basis as determined at a particular date in accordance with GAAP.

          “Administration Fee” has the meaning set forth in the Fee Letter.

          “Affiliate” means, with respect to any Person, any “affiliate” of such Person, as such
term is defined in the Bankruptcy Code. Notwithstanding the foregoing, an entity in which such
Person holds only a preferred equity interest shall not be deemed an Affiliate of such Person.

          “Agent” means Column Financial, Inc. or any affiliate or successor thereto.

          “Agreement” means this Master Repurchase Agreement, as it may be amended, supplemented
or otherwise modified from time to time.

          “ALTA” means the American Land Title Association or any successor in interest thereto.

          “Appraised Value” means the value set forth in an appraisal made in connection with
the origination of the related Mortgage Loan as the value of the Mortgaged Property or Underlying
Mortgaged Property, as applicable.

          “Asset File” means, the documents specified on Exhibit I, together with any
additional documents and information required to be delivered to Buyer or its designee (including
the Custodian) pursuant to this Agreement.

          “Asset Value” means with respect to each Eligible Asset, the applicable Purchase Price
Percentage for the related Purchased Asset multiplied by the lesser of (a) the Market Value of such
Purchased Asset and (b) the outstanding principal balance of such Purchased Asset.

- 2 -

 

          (a) Without limiting the generality of the foregoing, each Seller acknowledges that the Asset
Value of a Purchased Asset may be reduced to zero by Buyer if:

     (i) such Purchased Asset ceases to be an Eligible Asset;

     (ii) such Purchased Asset (other than a Purchased Asset that is a Physical
Security) has been released from the possession of the Custodian under the Custodial
Agreement (other than to a Bailee pursuant to a Bailee Agreement) for a period in
excess of 10 calendar days;

     (iii) such Purchased Asset (other than a Purchased Asset that is a Physical
Security) has been released from the possession of the Custodian under the Custodial
Agreement to a Bailee pursuant to a Bailee Agreement for a period in excess of 20
calendar days;

     (iv) such Purchased Asset is a Non-Performing Asset;

     (v) such Purchased Asset contains a breach of a representation or warranty made
by a Seller in this Agreement or the Custodial Agreement;

     (vi) on or after the Concentration Limit Trigger Date, when the Purchase Price
for such Purchased Asset is added to other Purchased Assets, a breach of a
Concentration Limit occurs;

     (vii) when the Purchase Price for such Purchased Asset is added to any two (2)
other Purchased Assets, such Purchased Assets shall have a combined Purchase Price
greater than $125 million; or

     (viii) which is a Table Funded Purchased Asset in respect of which the Asset
Files have not been delivered to the Custodian within three (3) Business Days
following the Purchase Date.

          “Asset Value Margin Call” has the meaning specified in Section 6(a) hereof.

          “Asset Value Margin Deficit” has the meaning specified in Section 6(a) hereof.

          “Assignment and Acceptance” has the meaning set forth in Section 22 hereof.

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

          “Assignment of Mortgage” means an assignment of the Mortgage, notice of transfer or
equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the
related Mortgaged Property is located to reflect the sale of the Mortgage to Buyer.

- 3 -

 

          “Backup Servicer” means KeyCorp Real Estate Capital Markets, Inc. d/b/a KeyBank Real
Estate Capital or any other servicer approved by Buyer and Sellers in accordance with the terms of
the Backup Servicing Agreement.

          “Backup Servicing Agreement” means that certain backup servicing agreement, dated as
of the date hereof, among the Buyer, the Sellers and the Backup Servicer as the same may be amended
from time to time.

          “Bailee” means, with respect to each Table Funded Purchased Asset, the related title
company or other settlement agent, in each case, approved in writing by the Buyer in its sole
discretion.

          “Bailee Agreement” means the Bailee Agreement among the Sellers, the Buyer and the
Bailee in the form of Exhibit 11 to the Custodial Agreement.

          “Bailee’s Trust Receipt” means a Trust Receipt in the form of Attachment 2 to the
Bailee Agreement.

          “Balloon Payment” means, for any Purchased Asset for which the final principal payment
is substantially greater than periodic scheduled principal payments due thereunder, the payment due
on its maturity date.

          “Bank” means North Folk Bank or such other party specified by Buyer and agreed to by
Sellers, which approval shall not be unreasonably withheld.

          “Bankruptcy Code” means the United States Bankruptcy Code of 1978, as amended from
time to time.

          “Basic Mortgage Asset Document” means respect to (i) any Commercial Mortgage Loan, the
original executed Mortgage Note and the original Assignment of Mortgage, (ii) any Mezzanine Loan,
the original executed Mezzanine Loan note, the second mortgage and pledge agreement, the original
stock certificates or other evidence of the pledged interests (if applicable) and the assignment of
the foregoing, and (iii) any Junior Interest, the original executed note.

          “Breakage Costs” has the meaning set forth in Section 4(d) hereof.

          “Business Day” means any day other than (i) a Saturday or Sunday; (ii) a public or
bank holiday in New York City or (iii) any day on which the New York Stock Exchange is closed.

          “Buyer” means Column Financial, Inc., and any successor or assign hereunder.

          “Capital Lease Obligations” means, for any Person, all obligations of such Person to
pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property
to the extent such obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP, and, for purposes of this Agreement, the

- 4 -

 

amount of such obligations shall be the capitalized amount thereof, determined in accordance
with GAAP.

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

          “Care Facility” means a congregate care facility or assisted living facility, nursing
home, hospice, hospital or other healthcare facility.

          “CDO Transaction” means a CDO transaction of a Seller or an Affiliate of a Seller with
respect to any of the Purchased Assets for which Credit Suisse First Boston or an Affiliate thereof
acts as co-lead manager/underwriter.

          “Change in Control” means:

(A) any transaction or event as a result of which any Guarantor ceases to own,
beneficially or of record, 100% of the stock interests any Seller;

(B) any transaction or event as a result of which Ivan Kaufman, members of his
immediate family and/or entities owned by, or trusts established for the benefit of,
Ivan Kaufman and the members of his immediate family cease to own greater than 50%
of Arbor Commercial Mortgage LLC;

(C) any transaction or event as a result of which ART and/or Arbor Commercial
Mortgage LLC, collectively, cease to own, beneficially or of record, 100% of the
membership interests of Arbor Realty Limited Partnership;

(D) any transaction or event as a result of which Arbor Commercial Mortgage LLC
ceases to be the manager of ART;

(E) the sale, transfer, or other disposition of all or substantially all any
Seller’s or any Guarantor’s assets (excluding any such action taken in connection
with this Agreement or any securitization transaction); or

(F) any transaction or event as a result of which a “person” or “group” (within the
meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) other than Arbor Commercial Mortgage LLC shall become,
or obtain rights (whether by means of warrants, options or otherwise) to become, the
“beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, of a percentage of the total voting power of all classes of
capital stock of ART entitled to vote generally in the election of directors of 20%
or more.

- 5 -

 

          “Closed Asset” means an asset as to which (a) the related note and mortgaged have been
delivered to a Seller and (b) funds have been disbursed to the mortgagor, in each case, prior to
the related Purchase Date.

          “Closing Data Tape” means, with respect to any Transaction as of any Purchase Date, a
computer tape or other electronic medium generated by a Seller or any of its Affiliates and
delivered to Buyer and Custodian, which provides, with respect to each Purchased Asset that is the
subject of such Transaction, each of the data fields set forth on Exhibit C attached hereto
and the information responsive to each such field, as well as any and all new, modified or updated
information with respect to such Purchased Asset that has been provided to Buyer prior to the
applicable Purchase Date and as to which the Purchase Price or any other information set forth in
the Purchase Confirmation for such Transaction has been based, in each case in a format that has
previously been approved by Buyer and is otherwise acceptable to Buyer.

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

          “Column Assets” means any Eligible Asset issued or extended by Buyer or an Affiliate
of Buyer.

          “Commercial Mortgage Loan” means a Mortgage Loan (a) secured by a first mortgage lien
on an Office Building, a Retail property, a Hotel or Motel or other commercial or Multifamily
property, (b) with a Loan-to-Value Ratio of 82% or less and (c) as to which the representations and
warranties in Schedule 1(a) hereof are correct.

          “Complete Submission” means with respect to any Transaction, the Summary Diligence
Materials together with a Preliminary Data Tape.

          “Concentration Limit” means:

          (a) The aggregate Purchase Price of all Mezzanine Loans that are Purchased Assets shall not
exceed 35% of the Maximum Aggregate Purchase Price; or

          (b) The aggregate Purchase Price of all Purchased Assets that are secured by Office Buildings
that are Eligible Assets shall not exceed 60% of the aggregate outstanding Purchase Price; or

          (c) The aggregate Purchase Price of all Purchased Assets that are secured by Retail properties
that are Eligible Assets shall not exceed 60% of the aggregate outstanding Purchase Price; or

          (d) The aggregate Purchase Price of all Purchased Assets that are secured by Multifamily
properties that are Eligible Assets shall not exceed 75% of the aggregate outstanding Purchase
Price; or

          (e) The aggregate Purchase Price of all Purchased Assets that are secured by Hotels or Motels
that are Eligible Assets shall not exceed 40% of the aggregate outstanding Purchase Price; or

- 6 -

 

          (f) The aggregate Purchase Price of all Purchased Assets that are secured by Condo Conversion
properties that are Eligible Assets shall not exceed 15% of the aggregate outstanding Purchase
Price; or

          (g) The aggregate Purchase Price of all Purchased Assets that are secured by properties other
than Office Buildings, Retail, Multifamily, Hotels, Motels or Condo Conversion properties that are
expressly approved by Buyer in its sole discretion shall not exceed 10% of the aggregate
outstanding Purchase Price; or

          (h) The aggregate Purchase Price of all Purchased Assets with Underlying Mortgaged Property
located in the State of New York shall not exceed 60% of the aggregate outstanding Purchase Price;
or

          (i) The aggregate Purchase Price of all Purchased Assets with Underlying Mortgaged Property
located in the State of California shall not exceed 50% of the aggregate outstanding Purchase
Price; or

          (j) The aggregate Purchase Price of all Purchased Assets with Underlying Mortgaged Property
located in the District of Columbia shall not exceed 30% of the aggregate outstanding Purchase
Price; or

          (k) The aggregate Purchase Price of all Purchased Assets with Underlying Mortgaged Property
located in the State of Florida shall not exceed 25% of the aggregate outstanding Purchase Price;
or

          (l) The aggregate Purchase Price of all Purchased Assets with Underlying Mortgaged Property
located in any one State (other than New York, California, Florida or the District of Columbia)
shall not exceed 20% of the aggregate outstanding Purchase Price; or

          (m) The aggregate Purchase Price of all Table Funded Purchased Assets that are Purchased
Assets shall not exceed the greater of (a) 25% of the Maximum Aggregate Purchase Price and (b) the
Purchase Price of a single Purchased Asset.

          “Concentration Limit Margin Call” has the meaning specified in Section 6(b) hereof.

          “Concentration Limit Margin Deficit” has the meaning specified in Section 6(b) hereof.

          “Concentration Limit Trigger Date” means the date which follows the date hereof, and
follows the date of any CDO Transaction which is the earlier of (a) six (6) months from the date
hereof or the date of any CDO Transaction, as applicable, and (b) the first date on which the
outstanding Purchase Price exceeds 50% of the Maximum Aggregate Purchase Price.

          “Condo Conversion” means a Multifamily which is secured by a Mortgaged Property that
is in the process of being converted to and/or sold as condominium units in a condominium project.

- 7 -

 

          “Control Account Agreement” means that certain Control Account Agreement, dated as of
the date hereof, among Buyer, the Sellers, the Servicer and Bank, as amended.

          “Custodial Agreement” means the custodial agreement dated as of the date hereof, among
Sellers, Buyer and Custodian as the same may be amended from time to time.

          “Custodial Delivery Letter” means the form executed by Sellers in order to deliver the
Purchased Asset Schedule and the Purchased Assets to the Custodian pursuant to Section 10(b)(4), a
form of which is attached hereto as Exhibit E.

          “Custodian” means LaSalle Bank, National Association or such other party specified by
Buyer and agreed to by Sellers, which approval shall not be unreasonably withheld.

          “Default” means an Event of Default or an event that with notice or lapse of time or
both would become an Event of Default.

          “Distribution Worksheet” means a worksheet setting forth the amounts and recipients of
remittances to be made on the next succeeding Price Differential Payment Date, substantially in the
form of Exhibit K.

          “Dollars” and “$” means dollars in lawful currency of the United States of
America.

          “Due Diligence Costs” has the meaning specified in Section 36 hereof.

          “Effective Date” means the date upon which the conditions precedent set forth in
Section 10 shall have been satisfied.

          “Eligible Asset” means any Commercial Mortgage Loan, Mezzanine Loan or Junior
Interest that, in each case, is acceptable to Buyer in its sole discretion, and conforms with the
applicable representations and warranties on Schedule 1.

          “Environmental Law” means any federal, state, foreign or local statute, law, rule,
regulation, ordinance, code, guideline, written policy and rule of common law now or hereafter in
effect and in each case as amended, and any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree or judgment, relating to the
environment, employee health and safety or hazardous materials, including, without limitation,
CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.;
the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.; the Clean Air Act, 42
U.S.C. § 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. § 3803 et
seq.; the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq.; the
Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C. § 11001 et
seq.; the Hazardous Material Transportation Act, 49 U.S.C. § 1801 et seq.
and the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq.; and any state
and local or foreign counterparts or equivalents, in each case as amended from time to time.

          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time.

- 8 -

 

          “ERISA Affiliate” means 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 a Seller is a
member and (ii) solely for purposes of potential liability under Section 302(c)(11) of ERISA and
Section 412(c)(11) of the Code and the lien created under Section 302(f) of ERISA and Section
412(n) of the Code, described in Section 414(m) or (o) of the Code of which a Seller is a member.

          “Event of Default” has the meaning specified in Section 15 hereof.

          “Event of Termination” means with respect to any Seller or any Guarantor (i) with
respect to any Plan, a reportable event, as defined in Section 4043 of ERISA, as to which the PBGC
has not by regulation waived the requirement of Section 4043(a) of ERISA that it be notified with
30 days of the occurrence of such event, or (ii) the withdrawal of any Seller, any Guarantor or any
ERISA Affiliate thereof from a Plan during a plan year in which it is a substantial employer, as
defined in Section 4001(a)(2) of ERISA, or (iii) the failure by any Seller, any Guarantor or any
ERISA Affiliate thereof to meet the minimum funding standard of Section 412 of the Code or Section
302 of ERISA with respect to any Plan, including, without limitation, the failure to make on or
before its due date a required installment under Section 412(m) of the Code or Section 302(e) of
ERISA, or (iv) the distribution under Section 4041 of ERISA of a notice of intent to terminate any
Plan or any action taken by any Seller, any Guarantor or any ERISA Affiliate thereof to terminate
any plan, or (v) the adoption of an amendment to any Plan that, pursuant to Section 401(a)(29) of
the Code or Section 307 of ERISA, would result in the loss of tax-exempt status of the trust of
which such Plan is a part if any Seller, any Guarantor or any ERISA Affiliate thereof fails to
timely provide security to the Plan in accordance with the provisions of said sections, or (vi) the
institution by the PBGC of proceedings under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or (vii) the receipt by any Seller, any Guarantor
or any ERISA Affiliate thereof of a notice from a Multiemployer Plan that action of the type
described in the previous clause (vi) has been taken by the PBGC with respect to such Multiemployer
Plan, or (viii) any event or circumstance exists which may reasonably be expected to constitute
grounds for any Seller, any Guarantor or any ERISA Affiliate thereof to incur liability under Title
IV of ERISA or under Sections 412(c)(11) or 412(n) of the Code with respect to any Plan.

          “Exit Fee” has the meaning set forth in the Fee Letter.

          “Facility Fee” has the meaning set forth in the Fee Letter.

          “Fannie Mae” means Fannie Mae, the government sponsored enterprise formerly known as
the Federal National Mortgage Association.

          “FDIA” has the meaning set forth in Section 26(c) hereof.

          “FDICIA” has the meaning set forth in Section 26(d) hereof.

          “Fee Letter” means the Fee Letter, dated as of even date herewith, between Buyer, the
Guarantors and Sellers, as amended, modified, waived, supplemented, extended, restated or replaced
from time to time.

- 9 -

 

          “Fidelity Insurance” means insurance coverage with respect to employee errors,
omissions, dishonesty, forgery, theft, disappearance and destruction, robbery and safe burglary,
property (other than money and securities) and computer fraud in an aggregate amount acceptable to
Sellers’ regulators.

          “Fitch” means Fitch Ratings, Inc., or any successor thereto.

          “Freddie Mac” means the Federal Home Loan Mortgage Corporation or any successor
thereto.

          “GAAP” means generally accepted accounting principles in effect from time to time in
the United States of America and applied on a consistent basis.

          “Governmental Authority” means any nation or government, any state or other political
subdivision thereof, or any entity exercising executive, legislative, judicial, regulatory or
administrative functions over any Seller, Servicer, any Guarantor or Buyer, as applicable.

          “Ground Lease” means a lease for all or any portion of the real property comprising
the Mortgaged Property, the lessee’s interest in which is held by the Mortgagor of the related
Mortgage Loan.

          “Ground Lessee” means the ground lessee under a Ground Lease.

          “Guarantee” means, as to any Person, any obligation of such Person directly or
indirectly guaranteeing any Indebtedness of any other Person or in any manner providing for the
payment of any Indebtedness of any other Person or otherwise protecting the holder of such
Indebtedness against loss (whether by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or services, or to take-or-pay or otherwise);
provided that the term “Guarantee” shall not include (i) endorsements for
collection or deposit in the ordinary course of business, or (ii) obligations to make servicing
advances for delinquent taxes and insurance or other obligations in respect of a Mortgaged
Property, to the extent required by Buyer. The amount of any Guarantee of a Person shall be deemed
to be an amount equal to the stated or determinable amount of the primary obligation in respect of
which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by such Person in good faith. The terms
“Guarantee” and “Guaranteed” used as verbs shall have correlative meanings.

          “Guarantor” means each of Arbor Realty Trust Inc. and Arbor Realty Limited
Partnership, in its capacity as guarantor under the Guaranty.

          “Guaranty” means the guaranty of the Guarantors dated as of the date hereof as the
same may be amended from time to time.

          “Hotel” or “Motel” means a real estate development owned by the Mortgagor or
for which the Mortgagor is a Ground Lessee, which constitutes a full operational hotel or motel
which is part of a national reservation system (determined by the Buyer in its sole good faith
discretion), including all land, amenities and improvements, with individual rooms principally for
short-term rental to tenants occupying same.

- 10 -

 

          “Income” means with respect to any Purchased Asset at any time until repurchased by
the Sellers, any principal received thereon or in respect thereof and all interest, dividends or
other distributions thereon.

          “Indebtedness” means, for any Person: (a) obligations created, issued or incurred by
such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the
sale of Property to another Person subject to an understanding or agreement, contingent or
otherwise, to repurchase such Property from such Person); (b) obligations of such Person to pay the
deferred purchase or acquisition price of Property or services, other than trade accounts payable
(other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of
business, so long as such trade accounts payable are payable within 90 days of the date the
respective goods are delivered or the respective services are rendered; (c) Indebtedness of others
secured by a Lien on the Property of such Person, whether or not the respective Indebtedness so
secured has been assumed by such Person, provided, if such Person has not assumed or become liable
for the payment of such Indebtedness, then for the purposes of this definition the amount of such
Indebtedness shall not exceed the market value of the property subject to such Lien; (d)
obligations (contingent or otherwise) of such Person in respect of letters of credit or similar
instruments issued or accepted by banks and other financial institutions for the account of such
Person; (e) Capital Lease Obligations of such Person; (f) obligations of such Person under
repurchase agreements, sale/buy-back agreements or like arrangements; (g) Indebtedness of others
Guaranteed by such Person; (h) all obligations of such Person incurred in connection with the
acquisition or carrying of fixed assets by such Person; and (i) Indebtedness of general
partnerships of which such Person is a general partner.

          “Indemnified Party” has the meaning set forth in Section 30(a) hereof.

          “Industrial Property” means a property owned by the Mortgagor or for which the
Mortgagor is a Ground Lessee, which constitutes a full operational property, held partially or
principally for lease to commercial tenants in connection with manufacturing.

          “Interest Rate Protection Agreement” means, with respect to any or all of the
Purchased Assets, any short sale of a US Treasury Security, or futures contract, or mortgage
related security, or Eurodollar futures contract, or options related contract, or interest rate
swap, cap or collar agreement, or similar arrangement providing for protection against fluctuations
in interest rates or the exchange of nominal interest obligations, either generally or under
specific contingencies, entered into by a Seller and a party acceptable to Buyer in its sole
discretion, which agreement is acceptable to Buyer in its sole discretion.

          “Irrevocable Instruction Letter” means an irrevocable instruction letter substantially
in the form of Exhibit O hereto.

          “Junior Interest” means (a) a junior “B” participation interest or certificate in a
Commercial Mortgage Loan or Mezzanine Loan or (b) a “B note” in an A/B structure of a Commercial
Mortgage Loan or Mezzanine Loan, in each case with a Loan-to-Value Ratio of 85% or less and as to
which the representations and warranties in Schedule 1(b) hereof are correct.

- 11 -

 

          “LIBOR Period” means, the period from and including the immediately preceding Price
Differential Payment Date (or, with respect to the first LIBOR Period for the Transaction, from and
including the Purchase Date) to but excluding such Price Differential Payment Date, unless
otherwise agreed to by the Buyer and the Sellers in writing.

          “LIBOR” means, with respect to each day during the applicable LIBOR Period, the rate
per annum equal to the one month London Inter-Bank Offered Rate for United States Dollar deposits
as reported on the display designated as “BBAM” “Page 1229a” on Bloomberg (or such other display as
may replace “BBAM” “Page 1229a” on Bloomberg), as of 8:00 a.m., New York City time, on the date two
(2) Business Days prior to the commencement of such LIBOR Period, and if such rate shall not be so
quoted, the rate per annum at which the Buyer or its Affiliate is offered dollar deposits at or
about 8:00 a.m., New York City time, on the date two (2) Business Days prior to the commencement of
the such LIBOR Period, by prime banks in the interbank eurodollar market where the eurodollar and
foreign currency exchange operations in respect of its Transactions are then being conducted for
delivery on such day for a period corresponding to that set forth above or such other period as
agreed upon in writing by the Buyer and the Sellers and in an amount comparable to the amount of
the Transactions outstanding on such day.

          “Lien” means any mortgage, lien, pledge, charge, security interest or similar
encumbrance.

          “Limited Liability Company Agreement” means the organizational documents governing any
Mezzanine Loan Subsidiary as contemplated by this Repurchase Agreement.

          “Loan Security Agreement” means as to any Purchased Asset, any contract, instrument or
other document related to security for repayment thereof (other than in the case of a Mortgage
Loan, the related Mortgage and Mortgage Note), executed by the obligor and/or others in connection
with such Mortgage Loan, including without limitation, any security agreement, guaranty, title
insurance policy, hazard insurance policy, chattel mortgage, letter of credit or certificate of
deposit or other pledged accounts, and any other documents and records relating to any of the
foregoing.

          “Loan-to-Value Ratio” means with respect to any Eligible Asset, the ratio of the
current outstanding principal amount of the Eligible Asset to the lesser of (a) the Appraised Value
of the Mortgaged Property or Underlying Mortgaged Property at origination or (b) if the Mortgaged
Property or Underlying Mortgaged Property was purchased within 12 months of the origination of the
Eligible Asset, the purchase price of the Mortgaged Property or Underlying Mortgaged Property.

          “Margin Call” has the meaning specified in Section 6(c) hereof.

          “Margin Deadline” has the meaning specified in Section 6(d) hereof.

          “Margin Deficit” has the meaning specified in Section 6(c) hereof.

          “Market Value” means, as of any date with respect to any Purchased Asset, the price at
which such Purchased Asset could readily be sold as determined by the Buyer in its good

- 12 -

 

faith discretion. For purposes of determining the Market Value of the Mezzanine Loan
Subsidiary Interests, the Buyer shall use the Market Value of the Mezzanine Loans owned by the
Mezzanine Loan Subsidiary. Without limiting the generality of the foregoing, Buyer will deem the
Market Value for any Purchased Asset no greater than its outstanding principal balance.

          “Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, condition (financial or otherwise) or
prospects of any Seller, any Guarantor or any Affiliate that is a party to any Program Agreement
taken as a whole; (b) a material impairment of the ability of any Seller, any Guarantor or any
Affiliate that is a party to any Program Agreement to perform under any Program Agreement and to
avoid any Event of Default; or (c) a material adverse effect upon the legality, validity, binding
effect or enforceability of any Program Agreement against any Seller, any Guarantor or any
Affiliate that is a party to any Program Agreement.

          “Maximum Aggregate Purchase Price” means ONE HUNDRED FIFTY MILLION DOLLARS
($150,000,000). Subject to the terms hereof, the Maximum Aggregate Purchase Price may increase in
accordance with the terms of Section 3(g) hereof.

          “Mezzanine Borrower” has the meaning set forth in paragraph 13 of Schedule 1(c).

          “Mezzanine Collateral” means the collateral pledged in respect of a Mezzanine Loan.

          “Mezzanine Loan” means a loan (a)(i) secured by a second mortgage lien on commercial
real property to an entity that directly owns such commercial real property or (ii) to an entity
owning an interest in a special purpose entity that directly owns commercial real property and such
loan is secured by a pledge of excess cash flow after first mortgage debt service or equity
interests in the owner of such commercial real property (b) with a Loan-to-Value Ratio of 90% or
less and (c) as to which the representations and warranties in Schedule 1(c) hereof are correct.

          “Mezzanine Loan Documents” means the documentation governing a Mezzanine Loan.

          “Mezzanine Loan Subsidiary” shall mean Arbor Realty Mezzanine LLC, a wholly owned
Subsidiary of the Sellers that is a Special Purpose Entity formed for the sole purpose of holding
Mezzanine Loans.

          “Mezzanine Loan Subsidiary Agreement” shall mean that certain Mezzanine Loan
Subsidiary Agreement, dated as of the date hereof, executed and delivered by a duly authorized
officer of the Mezzanine Loan Subsidiary in favor of the Buyer.

          “Mezzanine Loan Subsidiary Interests” shall mean any and all of each Seller’s
interests, including units of membership interest, in Mezzanine Loan Subsidiary including, without
limitation, all its rights to participate in the operation or management of Mezzanine Loan
Subsidiary and all its rights to properties, assets, member interests and distributions under the
Limited Liability Company Agreement in respect of such member interests. “LLC Interests”

- 13 -

 

also include (i) all accounts receivable arising out of the applicable Limited Liability
Company Agreement; (ii) all general intangibles arising out of the applicable Limited Liability
Company Agreement; and (iii) to the extent not otherwise included, all proceeds of any and all the
foregoing (including within proceeds, whether or not otherwise included therein, and any and all
contractual rights of the Sellers under any revenue sharing or similar agreement to receive all or
any portion of the revenues or profits of such Mezzanine Loan Subsidiary ).

          “Moody’s” means Moody’s Investors Service, Inc. or any successors thereto.

          “Mortgage” means, with respect to each Mortgage Loan, each mortgage, assignment of
rents, security agreement and fixture filing, or deed of trust, assignment of rents, security
agreement and fixture filing, deed to secure debt, assignment of rents, security agreement and
fixture filing, or similar instrument creating and evidencing a lien on real property and other
property and rights incidental thereto.

          “Mortgage Interest Rate” means the rate of interest borne on a Mortgage Loan from time
to time in accordance with the terms of the related Mortgage Note.

          “Mortgage Loan” means a Commercial Mortgage Loan or a Junior Interest in a Commercial
Mortgage Loan.

          “Mortgage Note” means the promissory note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.

          “Mortgaged Property” means the real property securing repayment of the debt evidenced
by a Mortgage Note.

          “Mortgagor” means the obligor or obligors on a Mortgage Note, including any person who
has assumed or guaranteed the obligations of the obligor thereunder.

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

          “Multifamily” means a Commercial Mortgage Loan secured by a first mortgage lien on a
five-or-more family residential property, as to which the representations and warranties in
Schedule 1(a) hereof are correct.

          “Net Income” means, for any Person for any period, the Net Income of such Person for
such period as determined in accordance with GAAP.

          “Non-Performing Asset” means (i) any Eligible Asset for which any payment of principal
or interest is (or has been in the preceding 12 months) more than twenty-nine (29) days past due,
(ii) any Eligible Asset with respect to which the related obligor is in bankruptcy or (iii) any
Eligible Asset with respect to which the related Mortgaged Property is in foreclosure.

          “Notice Date” has the meaning given to it in Section 3(b) hereof.

- 14 -

 

          “Notice to Borrower” means a notice, substantially in the form of Exhibit N
hereto, which the Buyer may instruct the Backup Servicer to send to each borrower of a Purchased
Asset subject to a Transaction after the occurrence and continuance of an Event of Default.

          “Obligations” means (a) all of a Seller’s indebtedness, obligations to pay the
Repurchase Price on the Repurchase Date, the Price Differential on each Price Differential Payment
Date, and other obligations and liabilities, to Buyer, its Affiliates or Custodian arising under,
or in connection with, the Program Agreements, whether now existing or hereafter arising; (b) any
and all sums paid by Buyer or on behalf of Buyer in order to preserve any Purchased Asset or its
interest therein; (c) in the event of any proceeding for the collection or enforcement of any of a
Seller’s indebtedness, obligations or liabilities referred to in clause (a), the reasonable
expenses of retaking, holding, collecting, preparing for sale, selling or otherwise disposing of or
realizing on any Purchased Asset, or of any exercise by Buyer of its rights under the Program
Agreements, including, without limitation, attorneys’ fees and disbursements and court costs; and
(d) all of a Seller’s indemnity obligations to Buyer or Custodian or both pursuant to the Program
Agreements.

          “OFAC” has the meaning set forth in Section 13(a)(26) hereof.

          “Office Building” means a building owned by the Mortgagor or for which the Mortgagor
is a Ground Lessee, which constitutes a full operational office building, including all land,
amenities and improvements, with individual office space held principally for lease to commercial
tenants and not principally for lease to recreational or residential tenants.

          “PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any
or all of its functions under ERISA.

          “Permitted Amount” means, the lesser of (a) one percent (1%) of the aggregate
outstanding Purchase Price and (b) ONE MILLION DOLLARS ($1,000,000).

          “Permitted Investments” means any one or more of the following obligations or
securities having at the time of purchase, or at such other time as may be specified, the required
ratings, if any, provided for in this definition:

          (a) direct obligations of, or guaranteed as to timely payment of principal and interest by,
the United States of America or any agency or instrumentality thereof; provided that such
obligations are backed by the full faith and credit of the United States of America;

          (b) direct obligations of, or guaranteed as to timely payment of principal and interest by,
Freddie Mac, Fannie Mae or the Federal Farm Credit System, provided that any such
obligation, at the time of purchase or contractual commitment providing for the purchase thereof,
is qualified by any rating agency as an investment of funds backing securities rated at least “AA”
(or such comparable rating);

          (c) demand and time deposits in or certificates of deposit of, or bankers’ acceptances issued
by, any bank or trust company, savings and loan association or savings bank, provided that,
in the case of obligations that are not fully FDIC-insured deposits, the commercial

- 15 -

 

paper or long-term unsecured debt obligations of such depository institution or trust company
(or in the case of the principal depository institution in a holding company system, the commercial
paper or long-term unsecured debt obligations of such holding company) have one of the two highest
rating available for such securities by any rating agency;

          (d) general obligations of or obligations guaranteed by any state of the United States or the
District of Columbia receiving one of the two highest long-term debt rating available for such
securities by any rating agency; and

          (e) commercial or finance company paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a specified date not more than
one year after the date of issuance hereof) that is rated by any rating agency in highest
short-term unsecured rating category at the time of such investment, and is issued by a corporation
the outstanding senior long-term debt obligations of which are then rated by any such rating agency
in one of its two highest short-term unsecured rating category and its highest long-term unsecured
rating category.

          provided, however, that no instrument shall be a Permitted Investment if it
represents, (1) the right to receive only interest payments with respect to the underlying debt
instrument, (2) the right to receive both principal and interest payments derived from obligations
underlying such instrument and the principal and interest payments with respect to such instrument
provide a yield to maturity greater than 120% of the yield to maturity at par of such underlying
obligations, (3) an obligation that has a remaining maturity of greater than three hundred
sixty-five (365) days from the date of acquisition thereof. If an obligation is rated by S&P, then
such obligation must be limited to those instruments that have a predetermined fixed dollar of
principal due at maturity that cannot vary or change or, if rated, the obligation should not have
an “r” highlighter affixed to its rating, and interest thereon may either be fixed or variable and
should be tied to a single interest rate index plus a single fixed spread (if any) and move
proportionately with that index.

          “Person” means an individual, partnership, corporation (including a business trust),
limited liability company, joint stock company, trust, unincorporated association, joint venture or
other entity, or a government or any political subdivision or agency thereof.

          “Plan” means an employee benefit or other plan established or maintained by any Seller
or any ERISA Affiliate and covered by Title IV of ERISA, other than a Multiemployer Plan.

          “PML” has the meaning set forth in paragraph 22 of Schedule 1(a).

          “Pool Advance Rate” means an amount equal to the aggregate Purchase Price of all
Purchased Assets divided by the aggregate Market Value of all Purchased Assets.

          “Pool Advance Rate Margin Call” has the meaning specified in Section 6(c) hereof.

- 16 -

 

          “Pool Advance Rate Margin Deficit” means the Pool Advance Rate is greater than the
percentages below relating to the percentage of Purchased Assets that are Commercial Mortgage
Loans:

	 	 	 	 	 
	Percentage of all Purchased Assets (measured by Market	 	 
	Value) that are Commercial Mortgage Loans	 	Pool Advance Rate
	20% or less
	 	 	80.0	%
	21% - 30%
	 	 	81.0	%
	31% - 40%
	 	 	82.0	%
	41% - 50%
	 	 	83.5	%
	51% - 65%
	 	 	85.0	%
	66% - 80%
	 	 	88.5	%
	81% or more
	 	 	91.5	%

          “Post Default Rate” means an annual rate of interest equal to the greater of (a) the
Pricing Rate plus 4% or (b) the Mortgage Interest Rate.

          “Preliminary Data Tape” means a preliminary version of the Closing Data Tape, which
shall be attached to the Summary Diligence Materials as part of the Complete Submission.

          “Price Differential” means with respect to any Transaction as of any date of
determination, an amount equal to the product of (a) the Pricing Rate for such Transaction and (b)
the Purchase Price for such Transaction, calculated daily on the basis of a 360-day year for the
actual number of days during the Accrual Period.

          “Price Differential Payment Date” means, with respect to a Purchased Asset, the
18th day of the month following the related Purchase Date and each succeeding 18th day
of the month thereafter; provided, that, with respect to such Purchased Asset, the final
Price Differential Payment Date shall be the related Repurchase Date; and provided,
further, that if any such day is not a Business Day, the Price Differential Payment Date
shall be the next succeeding Business Day.

          “Pricing Rate” has the meaning set forth in the Fee Letter.

          “Principal Prepayment” means, for any Purchased Asset, (i) any amount applied to
reduce the principal or other invested amount of such Purchased Asset, other than a scheduled
principal payment, including (i) principal prepayments from any source and of any nature
whatsoever, (ii) net insurance or net condemnation proceeds, to the extent applied to reduce the
principal amount or other invested amount of the related Purchased Asset, and (iii) any net
proceeds from any sale, refinancing, liquidation or other disposition of the underlying real

- 17 -

 

property or interest relating to such Purchased Asset to the extent applied to reduce the
principal amount or the invested amount of the related Purchased Asset.

          “Program Agreements” means, collectively, the Backup Servicing Agreement, the
Servicing Agreement, the Servicer Notice, the Custodial Agreement, this Agreement, the Guaranty,
the Mezzanine Loan Subsidiary Acknowledgement, the Mezzanine Loan Subsidiary Agreement, the Control
Account Agreement and all executed Purchase Confirmations.

          “Prohibited Person” has the meaning set forth in Section 13(a)(26) hereof.

          “Property” means any right or interest in or to property of any kind whatsoever,
whether real, personal or mixed and whether tangible or intangible.

          “Purchase Confirmation” means a confirmation of a Transaction, in the form attached as
Exhibit B hereto.

          “Purchase Date” means the date on which Purchased Assets are to be transferred by a
Seller to Buyer.

          “Purchase Price” means:

          (a) on the Purchase Date, the price at which each Purchased Asset is transferred by a Seller
to Buyer which shall equal the Asset Value of such Purchased Asset on such Purchase Date minus any
amounts required to be applied pursuant to Sections 6(b) or (c); and

          (b) on any day after the Purchase Date, except where Buyer and the Sellers agree otherwise,
the amount determined under the immediately preceding clauses (a) decreased by the amount of any
cash transferred by the Sellers to Buyer pursuant to Sections 4(c) and (d) hereof or applied to
reduce the Sellers’ obligations under clause (ii) of Section 4(c) and Section 4(f) hereof or under
Section 6 hereof.

          “Purchase Price Decrease” means a decrease in the Purchase Price for a Purchased Asset
related to the removal of a Mezzanine Loan from the Mezzanine Loan Subsidiary, and the decrease in
value of the Mezzanine Loan Subsidiary Interests related thereto.

          “Purchase Price Increase” shall mean an increase in the Purchase Price for the
Mezzanine Loan Subsidiary Interests based upon Mezzanine Loan Subsidiary acquiring additional
Mezzanine Loan , as requested by Sellers pursuant to Section 3(b) hereof.

          “Purchase Price Percentage” has the meaning set forth in the Fee Letter.

          “Purchased Asset Schedule” means with respect to any Transaction as of any date, a
schedule in the form of Annex 1 to Exhibit A attached hereto. The Purchased Asset
Schedule shall be attached to each Trust Receipt and Custodial Delivery Letter.

          “Purchased Assets” means the collective reference to Eligible Assets (other than
Mezzanine Loans) and Mezzanine Loan Subsidiary Interests, together with the Repurchase

- 18 -

 

Assets related to such Eligible Assets transferred by a Seller to Buyer in a Transaction
hereunder, listed on the related Closing Data Tape attached to the related Transaction Request;
provided, that for purposes other than the sale or pledge of the Purchased Assets, in the
case of the Mezzanine Loan Subsidiary Interests, Purchased Assets shall be deemed to include any
and all Mezzanine Loans owned by the Mezzanine Loan Subsidiary.

          “Rated” means the rating of an Eligible Asset by a Rating Agency without regard to any
pluses and minuses reflecting gradations within any generic grades.

          “Rating Agency” means any of S&P, Moody’s or Fitch.

          “Records” means all instruments, agreements and other books, records, and reports and
data generated by other media for the storage of information maintained by Sellers, Guarantors,
Servicer or any other person or entity with respect to a Purchased Asset. Records shall include
the Mortgage Notes, any Mortgages, the Asset Files, the credit files related to the Purchased Asset
and any other instruments necessary to document or service a Mortgage Loan.

          “REIT” means a real estate investment trust, as defined in Section 856 of the Code.

          “REMIC” means a real estate mortgage investment conduit, within the meaning of Section
860D(a) of the Code.

          “REMIC Provisions” means provisions of the federal income tax law relating to real
estate mortgage investment conduits, which appear at Sections 860A through 860G of subchapter M of
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.

          “Reporting Date” means the day prior to the Payment Date of each month or, if such day
is not a Business Day, the next succeeding Business Day.

          “Repurchase Assets” has the meaning assigned thereto in Section 8 hereof.

          “Repurchase Date” means the earlier of (i) the Termination Date, (ii) the date set
forth in the applicable Purchase Confirmation or (iii) the date determined by application of
Section 16 hereof.

          “Repurchase Price” means the price at which Purchased Assets are to be transferred
from Buyer to Sellers upon termination of a Transaction, which will be determined in each case
(including Transactions terminable upon demand) as the sum of the Purchase Price and the accrued
but unpaid Price Differential as of the date of such determination.

          “Requirement of Law” means, with respect to any Person, any law, treaty, rule or
regulation or determination of an arbitrator, a court or other governmental authority, applicable
to or binding upon such Person or any of its property or to which such Person or any of its
property is subject.

- 19 -

 

          “Reset Date” shall mean the last day of the related LIBOR Period.

          “Responsible Officer” means as to any Person, the chief executive officer or, with
respect to financial matters, the chief financial officer of such Person.

          “Retail” means a property owned by the Mortgagor or for which the Mortgagor is a
Ground Lessee, which constitutes a full operational retail store, held principally for lease to a
commercial retail tenant within a shopping center or mall and not principally for lease to
recreational or residential tenants.

          “Rolling Termination Date” means, with respect to any date, the date which is 364 days
from such date not to exceed three (3) years from the Effective Date; unless, the Buyer delivers to
the Sellers written notice that the Buyer shall no longer roll the Rolling Termination Date forward
(the “Rolling Termination Notice Date”), at which point the Rolling Termination Date shall
be fixed at 364 days following the Rolling Termination Notice Date.

          “S&P” means Standard & Poor’s Ratings Services, or any successor thereto.

          “SEC” means the Securities and Exchange Commission, or any successor thereto.

          “Securities Account” means the account established by the Servicer for the benefit of
Buyer, into which all collections and proceeds on or in respect of the Purchased Assets shall be
deposited by Servicer, and which is subject to the Control Account Agreement.

          “Seller” means each of Arbor Realty SR, Inc. and Arbor TRS Holding Company Inc. or its
permitted successors and assigns.

          “Servicer” means Arbor Commercial Mortgage LLC or any other servicer approved by Buyer
in its sole discretion, which may be a Seller.

          “Servicer Notice” means the notice acknowledged by the Servicer substantially in the
form of Exhibit H hereto.

          “Servicing Agreement” means the Amended and Restated Management and Advisory Agreement
dated as of January 18, 2005 by and among Guarantors, Arbor Realty SR, Inc., and Servicer as the
same may be amended from time to time.

          “Servicing Report” means a report remitted by the Servicer monthly, substantially in
the form of Exhibit L hereto.

          “SIPA” means the Securities Investor Protection Act of 1970, as amended from time to
time.

          “Special Purpose Entity” means a Person, other than an individual, which is formed or
organized solely for the purpose of holding, directly or indirectly, an ownership interest in one
or more Mezzanine Loans, does not engage in any business unrelated to the Mezzanine Loans, does not
have any assets other than as otherwise expressly permitted by this Repurchase Agreement, has its
own separate books and records and will not commingle its funds

- 20 -

 

in each case which are separate and apart from the books and records of any other Person, and
is subject to all of the limitations on the powers set forth in the organizational documentation of
the Sellers or such Mezzanine Loan Subsidiary, as the case may be, as in effect on each Purchase
Date, and holds itself out as a Person separate and apart from any other Person and otherwise
complies with all of the covenants set forth in Section 14(v).

          “Statement Date” has the meaning set forth in Section 13(a)(5) hereof.

          “Subordinated Debt” means, Indebtedness of Sellers which is (i) unsecured, (ii) no
part of the principal of such Indebtedness is required to be paid (whether by way of mandatory
sinking fund, mandatory redemption, mandatory prepayment or otherwise) prior to the date which is
one year following the Termination Date and (iii) the payment of the principal of and interest on
such Indebtedness and other obligations of Sellers in respect of such Indebtedness are subordinated
to the prior payment in full of the principal of and interest (including post-petition obligations)
on the Transactions and all other obligations and liabilities of Sellers to Buyer hereunder on
terms and conditions approved in writing by Buyer and all other terms and conditions of which are
satisfactory in form and substance to Buyer.

          “Subsidiary” means, with respect to any Person, any corporation, partnership or other
entity of which at least a majority of the securities or other ownership interests having by the
terms thereof ordinary voting power to elect a majority of the board of directors or other persons
performing similar functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other class or classes of
such corporation, partnership or other entity shall have or might have voting power by reason of
the happening of any contingency) is at the time directly or indirectly owned or controlled by such
Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person.

          “Summary Diligence Materials” means the items described on Annex 2 to
Exhibit A hereto for each Eligible Asset proposed to be sold to Buyer in accordance with,
and subject to the terms and conditions of, this Agreement.

          “Table Funded Purchased Asset” means a Purchased Asset which is sold to the Buyer (and
held by a Bailee pursuant to a Bailee Agreement) simultaneously with the origination or acquisition
thereof, which origination or acquisition, pursuant to the Sellers’ request, is financed with the
Purchase Price and paid directly to a title company or other settlement agent, in each case,
approved in writing by the Buyer in its sole discretion, for disbursement to the parties entitled
thereto in connection with such origination or acquisition. A Purchased Asset shall cease to be a
Table Funded Purchased Asset after the Custodian has delivered a Trust Receipt to the Buyer
certifying its receipt of the Asset File therefor.

          “Table Funded Trust Receipt” means a Trust Receipt in the form of Exhibit 12 to the
Custodial Agreement.

          “Term” means the period commencing on the date hereof and ending on the Termination
Date.

          “Termination Event” shall have the meaning set forth in Section 15.02 hereof.

- 21 -

 

          “Termination Date” means the earlier of (a) the Rolling Termination Date, and (b) the
date of the occurrence of an Event of Default.

          “Testing Date” has the meaning set forth in paragraph 26 of Schedule 1(a).

          “Third Party Servicer” means any servicer of the Purchased Assets or a portion
thereof, other than the Servicer who is the primary servicer and administrator of the Purchased
Assets.

          “Title Exceptions” has the meaning set forth in paragraph 17 of Schedule 1(a).

          “Transaction” has the meaning set forth in Section 1 hereof.

          “Transaction Request” means a request from a Seller to Buyer, in the form attached as
Exhibit A hereto, to enter into a Transaction.

          “Trust Receipt” means a trust receipt, substantially in the form attached hereto as
Exhibit J, issued by Custodian to Buyer confirming the Custodian’s possession of certain
Asset Files which are the property of and held by Custodian for the benefit of Buyer (or any other
holder of such trust receipt) or a bailment arrangement with counsel or other third party
acceptable to Buyer in its sole and absolute discretion.

          “Underlying Mortgage Loan” means, with respect to any Junior Interest or Mezzanine
Loan, a mortgage loan made in respect of the related Underlying Mortgaged Property.

          “Underlying Mortgaged Property” means in the case of any:

          (a) Commercial Mortgage Loan, the Mortgaged Property securing such Commercial Mortgage Loan;

          (b) Junior Interest, the Mortgaged Property securing the Mortgage Loan in which such Junior
Interest represents a junior participation (if the Junior Interest is of the type described in
clause (a) of the definition thereof) or the Mortgaged Property securing such Junior Interest (if
the Junior Interest is of the type described in clause (b) of the definition thereof); and

          (c) Mezzanine Loan, the real property that is directly or indirectly owned by the Person the
Capital Stock of which is pledged as collateral security for such Mezzanine Loan.

          “Uniform Commercial Code” means the Uniform Commercial Code as in effect on the date
hereof in the State of New York or the Uniform Commercial Code as in effect in the applicable
jurisdiction.

3. Program; Initiation of Transactions

a. From time to time, in the sole discretion of Buyer, Buyer may purchase from
Sellers certain Eligible Assets that have been originated or purchased by Sellers.
All Purchased Assets shall be serviced by Servicer subject to the Buyer’s rights

- 22 -

 

herein or in the Servicing Agreement. The aggregate Purchase Price of Purchased
Assets subject to outstanding Transactions shall not exceed the Maximum Aggregate
Purchase Price.

b. With respect to each Transaction Sellers shall give Buyer, Backup Servicer and
Custodian at least seven (7) Business Days’ prior notice of any proposed Purchase
Date (the date on which such notice is given, the “Notice Date”). On the
Notice Date, Sellers shall (i) request that Buyer enter into a Transaction by
furnishing to Buyer and Backup Servicer a Transaction Request accompanied by a
Complete Submission and (ii) deliver to Buyer, Backup Servicer and Custodian a
proposed Purchased Asset Schedule. In the event the Purchased Asset Schedule
provided by Sellers contains erroneous computer data, is not formatted properly or
the computer fields are otherwise improperly aligned, Buyer shall provide written or
electronic notice to Sellers describing such error and Sellers shall correct the
computer data, reformat the Eligible Assets or properly align the computer fields.

c. Following receipt of a Transaction Request and a Complete Submission, Buyer
shall, as hereinafter provided, inform Sellers of its election to purchase any
Eligible Assets proposed to be sold to Buyer by Sellers hereunder. Buyer shall have
the right to review all Eligible Assets proposed to be sold to Buyer and conduct its
own due diligence investigation of such Eligible Assets as Buyer determines. Buyer
shall conduct its diligence review within the following time frame beginning on the
Business Day following receipt of the Complete Submission: in the case of a
proposed Transaction of (i) up to five (5) Eligible Assets, ten (10) Business Days;
(ii) more than five (5) but no more than twenty-five (25) Eligible Assets, twenty
(20) Business Days, and (iii) more than twenty-five (25) Eligible Assets, a time
frame to be mutually agreed upon by Buyer and Sellers. If, with respect to any
Eligible Asset, Buyer does not respond to Sellers within the time frames specified
in the preceding sentence, Buyer shall be deemed to have elected not to purchase
such Eligible Asset. Upon completion of its review, Buyer shall in its sole
discretion determine whether to purchase such Eligible Assets and consistent with
this Agreement, specify the terms for such proposed Transaction, including the
Purchase Price or Purchase Price Increase, Purchase Price Percentage, the Asset
Value, the Pricing Rate, and the Repurchase Date for such Transaction. The terms
thereof shall be set forth in the Purchase Confirmation to be delivered to Sellers
on or prior to the Purchase Date.

d. Upon the satisfaction of the applicable conditions precedent set forth in Section
10 hereof, all of each Seller’s interest in the Repurchase Assets shall pass to
Buyer on the Purchase Date, against the transfer of the Purchase Price or Purchase
Price Increase to Sellers. Upon transfer of the Purchased Assets to Buyer as set
forth in this Section and until termination of any related Transactions as set forth
in Sections 4 or 16 of this Agreement, ownership of each Purchased Asset, including
each document in the related Asset File and Records, is vested in Buyer;
provided that, prior to the recordation by the Custodian as provided for in
the Custodial Agreement record title in the name of the applicable Seller to each

- 23 -

 

Purchased Asset shall be retained by such Seller in trust, for the benefit of Buyer,
for the sole purpose of facilitating the servicing and the supervision of the
servicing of the Purchased Assets.

e. Upon transfer of the Mezzanine Loan Subsidiary Interests to Buyer as set forth
herein and until termination of any related Transactions as set forth herein,
ownership of the Mezzanine Loan Subsidiary Interests is vested in the Buyer, and
record title to each Mezzanine Loan shall be retained by the Mezzanine Loan
Subsidiary or a Servicer for liquidation purposes, for the benefit of Buyer.

f. This Agreement is not a commitment by Buyer to enter into Transactions with
Sellers but rather sets forth the procedures to be used in connection with periodic
requests for Buyer to enter into Transactions with Sellers. Each Seller hereby
acknowledges that Buyer is under no obligation to agree to enter into, or to enter
into, any Transaction pursuant to this Agreement.

g. The Sellers may by written notice to the Buyer elect to request at any time prior
to the Termination Date an increase to the existing Maximum Aggregate Purchase Price
by an amount equal to $50,000,000. Such written notice shall be delivered to the
Buyer at least fifteen (15) days before the requested effective date thereof. Such
request shall only be effective (i) if there exists no Default or Event of Default
and (ii) the Sellers shall have paid to Buyer in consideration of such increase in
the existing Maximum Aggregate Purchase Price, in Dollars, in immediately available
funds, without deduction, set-off or counterclaim, an amount equal to the product of
(a) 0.125% and (b) the amount of such increase to the Maximum Aggregate Purchase
Price and (c) a fraction, the numerator of which is the number of days remaining in
the Term and the denominator of which is the total number of days in the Term.

4. Repurchase

a. Sellers shall repurchase the related Purchased Assets from Buyer on each related
Repurchase Date. Such obligation to repurchase exists without regard to any prior
or intervening liquidation or foreclosure with respect to any Purchased Asset (but
liquidation or foreclosure proceeds received by Buyer shall be applied to reduce the
Repurchase Price for such Purchased Asset on each Price Differential Payment Date
except as otherwise provided herein). Sellers are obligated to repurchase and take
physical possession of the Purchased Assets from Buyer or its designee (including
the Custodian) at Sellers’ expense on the related Repurchase Date. If any Purchased
Asset is repurchased on any date other than the Reset Date for such Transaction, the
Sellers shall pay to the Buyer any Breakage Costs (as defined below) relating
thereto.

b. Provided that no Default or Event of Default shall have occurred and is
continuing, and Buyer has received the related Repurchase Price upon repurchase of
the Purchased Assets, Buyer agrees to release its ownership interest hereunder

- 24 -

 

in the Purchased Assets (including, the Repurchase Assets related thereto) at the
request of Sellers.

c. With respect to prepayments in full or part by the related Mortgagor or obligor
of a Purchased Asset or Mezzanine Loan, Sellers agree to (i) provide Buyer with a
copy of a report from the related Servicer indicating that such Purchased Asset or
Mezzanine Loan has been paid in full or part, (ii) pay to Buyer the portion of the
Repurchase Price payable pursuant to Paragraph 4(a) above within one Business Day of
receipt of such prepayment and (iii) provide Buyer a notice specifying each
Purchased Asset or Mezzanine Loan that has been prepaid. With respect to Purchased
Assets or Mezzanine Loan being serviced by Third Party Servicers, any Seller or
Mezzanine Loan Subsidiary, as applicable, and Servicer shall forward all payments to
the Buyer to the extent received from the underlying obligor and Third Party
Servicer. Buyer agrees to release its ownership interest in Purchased Assets or
Mezzanine Loans which have been prepaid in full after receipt of evidence of
compliance with clauses (i) through (iii) of the immediately preceding sentence.

d. The Sellers may voluntarily repurchase Purchased Mortgage Loans or request a
Purchase Price Decrease without penalty or premium on any Business Day. If the
Sellers intends to make such a repurchase or Purchase Price Decrease, the Sellers
shall give two (2) Business Days’ prior written notice thereof to the Buyer,
designating the Purchased Assets to be repurchased or Mezzanine Loans to be
reconveyed, which notice is irrevocable if not revoked prior to the date one (1)
Business Day prior to the proposed Repurchase Date or date of the Purchase Price
Decrease. If such notice is given, the amount specified in such notice shall be due
and payable on the date specified therein, and, on receipt, such amount shall be
applied to the Repurchase Price for the designated Purchased Assets.

e. If the Sellers repurchase, in whole or in part, Purchased Assets or causes a
Purchase Price Decrease on any day which is not the Repurchase Date or a Price
Differential Payment Date (as determined at the time the Buyer locked in the rate of
LIBOR) for such Purchased Assets, the Sellers shall indemnify the Buyer and hold the
Buyer harmless from any losses, costs and/or expenses which the Buyer sustains or
incurs arising from the reemployment of funds obtained by the Buyer hereunder or
from fees payable to terminate the deposits from which such funds were obtained, in
each case for the remainder of the applicable LIBOR Period (“Breakage
Costs”). The Buyer shall deliver to the Sellers a statement setting forth the
amount and basis of determination of any Breakage Costs in such detail as determined
in good faith by the Buyer to be adequate, it being agreed that such statement and
the method of its calculation shall be adequate and shall be conclusive and binding
upon the Sellers, absent manifest error.

f. Sellers may at any time, and from time to time, effectuate a decrease in Purchase
Price (a “Purchase Price Reduction”) by sending a Transaction Request to the
Buyer at least one (1) Business Day prior to the date that the Sellers intend to
effectuate such Purchase Price Reduction, specifying the date of the Purchase

- 25 -

 

Price Reduction (a “Purchase Price Reduction Date”). The Purchase Price
Reduction amount shall be due and payable in cash on the Purchase Price Reduction
Date specified therein. Notwithstanding the foregoing, any Purchase Price Reduction
must be in an amount not less than $1,000,000.

5. Price Differential

a. On the beginning of each LIBOR Period that a Transaction is outstanding, the
Pricing Rate shall be reset and, unless otherwise agreed, the accrued and unpaid
Price Differential shall be settled in cash on each related Price Differential
Payment Date. Two Business Days prior to the Price Differential Payment Date, Buyer
shall give Sellers written or electronic notice of the amount of the Price
Differential due on such Price Differential Payment Date. On the Price Differential
Payment Date, Sellers shall pay to Buyer (to the extent not paid on such date
through the distributions required pursuant to Sections 7(d) or 7(e) hereof) the
accrued but unpaid Price Differential and the accrued but unpaid Administration Fee
for such Price Differential Payment Date (along with any other amounts to be paid
pursuant to Section 7 and Section 34), by wire transfer in immediately available
funds.

b. If Sellers fail to pay all or part of the Price Differential by 3:00 p.m. (New
York City time) on the related Price Differential Payment Date, with respect to any
Purchased Asset, Sellers shall be obligated to pay to Buyer (in addition to, and
together with, the amount of such Price Differential) interest on the unpaid
Repurchase Price at a rate per annum equal to the Post Default Rate until the Price
Differential is received in full by Buyer.

6. Margin Maintenance.

a. If at any time the Asset Value of the Purchased Assets subject to Transactions is
less than the Purchase Price for then outstanding Transactions (an “Asset Value
Margin Deficit”), then, if such Asset Value Margin Deficit (combined with any
Concentration Limit Margin Deficit and any Pool Advance Rate Margin Deficit) is
greater than the Permitted Amount, Buyer may by notice to Sellers require Sellers to
transfer to Buyer cash or other Eligible Assets acceptable to Buyer in its
discretion in an amount at least equal to the Margin Deficit (such requirement, an
“Asset Value Margin Call”). Notwithstanding the foregoing, in the event
that Sellers dispute an Asset Value Margin Deficit because it disagrees with Buyer’s
determination of Asset Value, Buyer will enter into good faith discussions with
Sellers regarding such Asset Value Margin Deficit so long as Sellers have already
transferred to Buyer cash in an amount at least equal to such Asset Value Margin
Deficit.

b. If at any time after the Concentration Limit Trigger Date, the Concentration
Limit is exceeded (the amount of such excess, a “Concentration Limit Margin
Deficit”), then, if such Concentration Limit Margin Deficit (combined with any
Asset Value Margin Deficit and any Pool Advance Rate Margin Deficit) is greater

- 26 -

 

than the Permitted Amount, Buyer may by notice to Sellers require Sellers to
transfer to Buyer cash or other Eligible Assets acceptable to Buyer in its
discretion in an amount such that the Purchased Assets would be in compliance with
such Concentration Limit (such requirement, a “Concentration Limit Margin
Call”) and the Buyer shall apply such cash to the outstanding Purchase Price of
all Purchased Assets on a weighted average, pro rata, basis in the category of the
Purchased Assets that exceeded its respective Concentration Limit.

c. If at any time after the Concentration Limit Trigger Date the Buyer determines in
its sole good faith discretion that a Pool Advance Rate Margin Deficit exists
(together with an Asset Value Margin Deficit and a Concentration Limit Margin
Deficit, a “Margin Deficit”), then, if such Pool Advance Rate Margin Deficit
(combined with any Concentration Limit Margin Deficit and any Asset Value Margin
Deficit) is greater than the Permitted Amount, Buyer may by notice to Sellers
require Sellers to transfer to Buyer cash or other Eligible Assets acceptable to
Buyer in its sole discretion in an amount such that no Pool Advance Rate Margin
Deficit exists, as determined by Buyer (such requirement, a “Pool Advance Rate
Margin Call” and together with an Asset Value Margin Call and a Concentration
Limit Margin Call a “Margin Call”) and the Buyer shall apply such cash or
other Eligible Assets to the outstanding Purchase Price of all Purchased Assets on a
weighted average, pro rata, basis.

d. Notice delivered pursuant to Section 6(a) may be given by any written means. Any
notice given before 5:00 p.m. (New York City time) on a Business Day shall be met,
and the related Margin Call satisfied, no later than 5:00 p.m. (New York City time)
on the next Business Day; notice given after 5:00 p.m. (New York City time) on a
Business Day shall be met, and the related Margin Call satisfied, no later than 5:00
p.m. (New York City time) on the following (2) Business Days (the foregoing time
requirements for satisfaction of a Margin Call are referred to as the “Margin
Deadlines”). The failure of Buyer, on any one or more occasions, to exercise
its rights hereunder, shall not change or alter the terms and conditions to which
this Agreement is subject or limit the right of Buyer to do so at a later date.
Sellers and Buyer each agree that a failure or delay by Buyer to exercise its rights
hereunder shall not limit or waive Buyer’s rights under this Agreement or otherwise
existing by law or in any way create additional rights for Sellers.

e. To the extent that the aggregate Asset Value of the Purchased Assets subject to
Transactions exceeds the then outstanding aggregate Purchase Price of all
Transactions (a “Margin Excess”), so long as no Margin Call, Default or
Event of Default has occurred and is continuing or will result therefrom, the Buyer
shall, upon receipt of a Transaction Request from a Seller sent at least one (1)
Business Day prior to such date, remit cash in amount equal to the lesser of (i) the
amount requested by the Sellers and (ii) such Margin Excess to Sellers. To the
extent that the Buyer remits cash to the Sellers, such cash shall be additional
Purchase Price with respect to the Transactions, subject in all respects to the
Maximum Aggregate Purchase Price.

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f. Buyer shall not be obligated to remit an amount requested pursuant to a request
for Margin Excess which (i) Buyer determines is based on erroneous information or
would result in a Transaction other than in accordance with the terms of this
Repurchase Agreement, (ii) does not reflect the current determination of Asset Value
as provided in the definition thereof or (iii) exceeds the Maximum Aggregate
Purchase Price.

7. Income Payments

a. The Securities Account shall be established by the Servicer in accordance with
the terms and conditions of the Control Account Agreement concurrently with the
execution and delivery of this Agreement by Sellers and Buyer. Buyer shall have
sole dominion and control over the Securities Account. All Income (other than
amounts deposited in escrow accounts pursuant to the Servicing Agreement) in respect
of the Purchased Assets and any payments in respect of associated Interest Rate
Protection Agreements, as well as any interest received from the reinvestment of
such Income, shall be deposited into the Securities Account within two (2) Business
Days of receipt by Servicer and shall be remitted by Servicer from the Securities
Account in accordance with this Agreement and the Servicing Agreement. All such
Income shall be held in trust for Buyer, shall constitute the property of Buyer and
once deposited into the Securities Account shall not be commingled with other
property of any Seller, any Affiliate of any Seller, or Servicer. Servicer shall
have the right at all times, subject to the provisions of the Control Account
Agreement, to access and remove funds in the Securities Account to the extent
permitted by the Servicing Agreement. Such amounts may be invested in Permitted
Investments that mature on the succeeding Price Differential Payment Date.

b. Servicer shall deposit all Income (other than amounts deposited in escrow
accounts), derived from the Purchased Assets, whether constituting collections
thereon or proceeds of sale thereof, into the Securities Account within two (2)
Business Days of receipt by Servicer.

c. In addition, with respect to each Purchased Asset, Sellers shall deliver to the
Custodian an instruction letter from Buyer, signed by the Servicer, with respect to
such Purchased Asset, instructing the Servicer, as applicable, to remit all sums
required to be remitted to the holder of such Purchased Asset under the loan
documents to the Securities Account or as otherwise directed in a written notice
signed by Buyer. Upon the occurrence of an Event of Default, Buyer may deliver such
instruction letter to the Servicer. With respect to Third Party Servicers, the
parties shall comply with Section 12(d) hereof.

d. Unless an Event of Default shall have occurred, all Balloon Payments and
Principal Prepayments deposited into the Securities Account shall, after notice to
Buyer, be applied by Buyer on the date of such deposit or, if such deposit is made
after 3:00 p.m. (New York time), on the following Business Day, to reduce the
Purchase Price of the related Purchased Asset by an amount equal to the lesser of

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(i) the amount of such payment and (ii) the Purchase Price of the related Purchased
Asset. The balance of such Balloon Payments and Principal Prepayments in excess of
the Repurchase Price of the related Purchased Asset shall be paid to Sellers on such
date.

e. Funds deposited in the Securities Account during any LIBOR Period (except as
provided in Section 7(d) above) shall be held therein until the next Price
Differential Payment Date. On or before 3:00 p.m. (New York time) on the day prior
to the Price Differential Payment Date, Servicer shall deliver to Buyer and the Bank
a Distribution Worksheet. Subject to the terms of the Control Account Agreement,
Sellers or Servicer shall withdraw any funds on deposit in the Securities Account
and distribute such funds as follows:

     (1) first, to Buyer in payment of any accrued and unpaid Price Differential to
the extent not paid by Sellers to Buyer pursuant to Section 5;

     (2) second, to Buyer in payment of any accrued and unpaid Administration Fee to
the extent not paid by Sellers and Buyer pursuant to Section 5;

     (3) third, without limiting the rights of Buyer under Section 6 of this
Agreement, to Buyer, in the amount of any unpaid Margin Deficit;

     (4) fourth, to Buyer in reduction of the Purchase Price of each Purchased
Asset, the full amount of any payments of principal or other invested amount
received on or with respect to such Purchased Asset;

     (5) fifth, to the payment of all other costs and fees payable to Buyer pursuant
to this Agreement; and

     (6) sixth, any remainder shall be paid to Sellers.

f. Notwithstanding the preceding provisions, if an Event of Default shall have
occurred hereunder, all funds in the Securities Account shall be withdrawn and
applied:

     (1) first, in the same order of priority as Sections (e)(1), (2), (3) and (4)
above;

     (2) second, to reduction of the Repurchase Price until reduced to zero;

     (3) third, to payment of all costs and fees and any other Obligations payable
to Buyer pursuant to this Agreement; and

     (4) fourth, any remainder shall be paid to Sellers.

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g. Buyer shall offset against the accrued and outstanding Price Differential all
Price Differential payments actually received by Buyer pursuant to Section 5,
excluding the portion in excess of the Pricing Rate with respect to any amounts paid
pursuant to any Price Differential payments made at the Post Default Rate.

8. Security Interest

a. Although the parties intend that all Transactions hereunder be sales and
purchases and not loans, in the event any such Transactions are deemed to be loans,
each Seller hereby pledges to Buyer as security for the performance by such Seller
of its Obligations and hereby grants, assigns and pledges to Buyer a fully perfected
first priority security interest in the Purchased Assets, the Records, and all
related servicing rights, the Program Agreements (to the extent such Program
Agreements and any Seller’s right thereunder relate to the Purchased Assets), any
Property relating to the Purchased Assets, all insurance policies and insurance
proceeds relating to any Purchased Asset or the related Mortgaged Property,
including, but not limited to, any payments or proceeds under any related primary
insurance, hazard insurance and, Income, the Securities Account, Interest Rate
Protection Agreements, Loan Security Agreements, accounts (including any interest of
any Seller in escrow accounts) and any other contract rights, instruments, accounts,
payments, rights to payment (including payments of interest or finance charges)
general intangibles and other assets relating to the Purchased Assets (including,
without limitation, any other accounts) or any interest in the Purchased Assets, and
any proceeds (including the related securitization proceeds) and distributions with
respect to any of the foregoing and any other property, rights, title or interests
as are specified on a Transaction Request and/or Trust Receipt, in all instances,
whether now owned or hereafter acquired, now existing or hereafter created
(collectively, the “Repurchase Assets”). Sellers agree to execute, deliver
and/or file such documents and perform such acts as may be reasonably necessary to
fully perfect Buyer’s security interest created hereby. Furthermore, each Seller
hereby authorizes the Buyer to file financing statements relating to the Repurchase
Assets, as the Buyer, at its option, may deem appropriate. The Sellers shall pay
the filing costs for any financing statement or statements prepared pursuant to this
Section.

b. The parties acknowledge and agree that the Mezzanine Loan Subsidiary Interests
constitute “general intangibles” (as defined in Section 9-102(a)(42) of the Uniform
Commercial Code); and each Seller therefore covenants and agrees that (a) the
Mezzanine Loan Subsidiary Interests are not and will not be dealt in or traded on
securities exchanges or securities markets, (b) the terms of the Mezzanine Loan
Subsidiary Interests do not and will not provide that they are securities governed
by the Uniform Commercial Code and (c) the Mezzanine Loan Subsidiary Interests are
not and will not be investment company securities within the meaning of Section 8
103 of the Uniform Commercial Code.

If any Seller shall, as a result of its interest in the Mezzanine Loan Subsidiary Interests,
becomes entitled to receive or shall receive any certificate evidencing any limited liability
company

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interest or other equity interest, any option rights, or any equity interest in Mezzanine Loan
Subsidiary , whether in addition to, in substitution for, as a conversion of, or in exchange for
the Mezzanine Loan Subsidiary Interests, or otherwise in respect thereof, such Seller shall accept
the same as the Buyer’s agent, hold the same in trust for the Buyer and deliver the same forthwith
to the Buyer in the exact form received, duly endorsed by such Seller to the Buyer, if required,
together with an undated transfer power, if required, covering such certificate duly executed in
blank, to be held by the Buyer subject to the terms hereof as additional security for the
Obligations. Any sums paid upon or in respect of the Mezzanine Loan Subsidiary Interests upon the
liquidation or dissolution of Mezzanine Loan Subsidiary shall be paid over to the Buyer as
additional security for any outstanding Obligations. If following the occurrence and during the
continuation of an Event of Default any sums of money or property so paid or distributed in respect
of the Mezzanine Loan Subsidiary Interests shall be received by Sellers, Sellers shall, until such
money or property is paid or delivered to the Buyer, hold such money or property in trust for the
Buyer segregated from other funds of Sellers, as additional security for the Obligations.

Unless an Event of Default shall have occurred and be continuing, Sellers shall be permitted to
receive all cash dividends or other cash distributions paid in respect of the Mezzanine Loan
Subsidiary Interests and to exercise all voting and member rights with respect to the Mezzanine
Loan Subsidiary Interests; provided, however, that no vote shall be cast or member
right exercised or other action taken which would impair the Mezzanine Loan Subsidiary Interests or
which would be inconsistent with or result in a violation of any provision of this Repurchase
Agreement. Without the prior consent of the Buyer, Sellers will not (i) vote to enable, or take
any other action to permit Mezzanine Loan Subsidiary to issue any membership interests of any
nature or to issue any other membership interests convertible into or granting the right to
purchase or exchange for any membership interests of Mezzanine Loan Subsidiary, or (ii) sell,
assign, transfer, exchange or otherwise dispose of, or grant any option with respect to, the
Mezzanine Loan Subsidiary Interests or (iii) create, incur or permit to exist any Lien or option in
favor of, or any claim of any Person with respect to, the Mezzanine Loan Subsidiary Interests, or
any interest therein, except for the Lien provided for by this Repurchase Agreement, or (iv) enter
into any agreement (other than the Limited Liability Company Agreement and this Repurchase
Agreement) or undertaking restricting the right or ability of Sellers to sell, assign or transfer
any of the Mezzanine Loan Subsidiary Interests.

The Sellers agree to pay, and to save the Buyer harmless from, any and all liabilities with respect
to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which
may be payable or determined to be payable with respect to any of the Mezzanine Loan Subsidiary
Interests.

c. The Buyer, Sellers and Mezzanine Loan Subsidiary each hereby agrees that in order
to further secure each Seller’s Obligations hereunder, each Seller and Mezzanine
Loan Subsidiary each hereby pledges to Buyer as security for the performance by each
Seller of its Obligations and hereby grants, assigns and pledges to Buyer a security
interest in the Mezzanine Loans, the Records related to such Mezzanine Loans, and
all related servicing rights, the Program Agreements (to the extent such Program
Agreements and any Seller’s right thereunder relate to the Mezzanine Loans), any
Property relating to the Mezzanine

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Loans, all insurance policies and insurance proceeds relating to any Mezzanine Loans
or the related Mortgaged Property, including, but not limited to, any payments or
proceeds under any related primary insurance, hazard insurance and, Income, accounts
(including any interest of Mezzanine Loans in escrow accounts) and any other
contract rights, instruments, accounts, payments, rights to payment (including
payments of interest or finance charges) general intangibles and other assets
relating to the Mezzanine Loans (including, without limitation, any other accounts)
or any interest in the Mezzanine Loans, and any proceeds (including the related
securitization proceeds) and distributions with respect to any of the foregoing, in
all instances, whether now owned or hereafter acquired, now existing or hereafter
created (collectively, the “Mezzanine Loan Assets”). All Mezzanine Loan
Assets shall be deemed to be part of the Repurchase Assets. Sellers agree to
execute, deliver and/or file such documents and perform such acts as may be
reasonably necessary to fully perfect Buyer’s security interest created hereby.
Furthermore, each Seller hereby authorizes the Buyer to file financing statements
relating to the Mezzanine Loan Assets, as the Buyer, at its option, may deem
appropriate. Sellers shall pay the filing costs for any financing statement or
statements prepared pursuant to this paragraph. The foregoing paragraph is intended
to constitute a security agreement or other arrangement or other credit enhancement
related to the Agreement and transactions hereunder as defined under Section
101(47)(v) of the Bankruptcy Code.

d. The parties acknowledge and agree that the Mezzanine Loan Subsidiary is acquiring
the Mezzanine Loans subject to and subordinate to Buyer’s security interest.

9. Payment and Transfer

          Unless otherwise mutually agreed in writing, all transfers of funds to be made by Sellers
hereunder shall be made in Dollars, in immediately available funds, without deduction, set-off or
counterclaim, to Buyer at the following account maintained by Buyer: Account No. 066213630, ABA No.
021000021, Name of Bank: JPMorgan Chase, Bank City and State: New York, NY, Acct Name: Column
Financial, Inc. or such other account as Buyer shall specify to Sellers in writing. Each Seller
acknowledges that it has no rights of withdrawal from the foregoing account. All Purchased Assets
transferred by one party hereto to the other party shall be in the case of a purchase by Buyer in
suitable form for transfer or shall be accompanied by duly executed instruments of transfer or
assignment in blank and such other documentation as Buyer may reasonably request. All Purchased
Assets shall be evidenced by a Trust Receipt. Any Repurchase Price received by Buyer after 2:00
p.m. (New York City time) shall be deemed received on the next succeeding Business Day.

10. Conditions Precedent

a. Initial Transaction. As conditions precedent to the initial Transaction,
Buyer shall have received on or before the day of such initial Transaction the
following, in form and substance satisfactory to Buyer and duly executed by each
Seller, Guarantors, Mezzanine Loan Subsidiary and each other party thereto:

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     (1) Program Agreements. The Program Agreements (including without
limitation the Guaranty and a Custodial Agreement in a form acceptable to Buyer)
duly executed and delivered by the parties thereto and being in full force and
effect, free of any modification, breach or waiver.

     (2) Security Interest. Evidence that all other actions necessary or,
in the opinion of Buyer, desirable to perfect and protect Buyer’s interest in the
Purchased Assets and other Repurchase Assets have been taken, including, without
limitation, duly authorized and filed Uniform Commercial Code financing statements
on Form UCC-1.

     (3) Organizational Documents. A certificate of the corporate secretary
of each of Sellers, Guarantors, and Mezzanine Loan Subsidiary substantially in the
form of Exhibit G hereto, attaching certified copies of Sellers’,
Guarantors’ and Mezzanine Loan Subsidiary’s organizational documents and resolutions
approving the Program Agreements and transactions thereunder (either specifically or
by general resolution) and all documents evidencing other necessary corporate action
or governmental approvals as may be required in connection with the Program
Agreements.

     (4) Good Standing Certificate. A certified copy of a good standing
certificate from the jurisdiction of organization of Sellers, Guarantors and
Mezzanine Loan Subsidiary, dated as of no earlier than the date 10 Business Days
prior to the Purchase Date with respect to the initial Transaction hereunder.

     (5) Incumbency Certificate. An incumbency certificate of the corporate
secretary of each of Sellers, Guarantors and Mezzanine Loan Subsidiary, certifying
the names, true signatures and titles of the representatives duly authorized to
request transactions hereunder and to execute the Program Agreements.

     (6) Opinions of Counsel. An opinion of Sellers’, Guarantors’ and
Mezzanine Loan Subsidiary’s counsel, in form and substance substantially as set
forth in Exhibit F attached hereto.

     (7) Fees. Payment of any fees due to Buyer hereunder, including the
Facility Fee.

     (8) Insurance. Evidence that Sellers or Guarantors have added Buyer as
an additional loss payee under the Sellers’ Fidelity Insurance.

b. All Transactions. The obligation of Buyer to enter into each Transaction
pursuant to this Agreement is subject to the following conditions precedent:

     (1) Due Diligence Review. Without limiting the generality of Sections
3(c) and 36 hereof, Buyer shall have completed, to its satisfaction, its due
diligence review of the related Eligible Assets, Sellers, Guarantors, Mezzanine Loan
Subsidiary and the Servicer.

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          (2) Transaction Documents. Buyer or its designee shall have received
on or before the day of such Transaction (unless otherwise specified in this
Agreement) the following, in form and substance satisfactory to Buyer and (if
applicable) duly executed:

     (a) A Transaction Request delivered pursuant to Section 3(c) hereof and a
Purchase Confirmation;

     (b) The Trust Receipt or Table Funded Trust Receipt;

     (c) The Closing Data Tape;

     (d) Such certificates, opinions of counsel or other documents as Buyer may
reasonably request.

          (3) Asset File.

     (a) On or before each Purchase Date with respect to each Closed Asset, Sellers
shall deliver or cause to be delivered to Buyer or its designee (initially, the
Custodian) the Custodial Delivery Letter in the form attached hereto as Exhibit
D. In connection with each sale, transfer, conveyance and assignment of a
Closed Asset, on or prior to each Purchase Date with respect to such Closed Asset,
Sellers shall deliver or cause to be delivered and released to the Custodian the
documents set forth in the Asset File, pertaining to each of the Closed Assets
identified in the Custodial Delivery Letter delivered therewith.

     (b) With respect to each Table Funded Purchased Asset, the Sellers shall cause
the Bailee to deliver to the Custodian with a copy to the Buyer no later than 11:00
a.m. on the Purchase Date by facsimile or by other electronic means acceptable to
the parties the related Basic Mortgage Asset Documents, the insured closing letter
(if any), the escrow instructions (if any), a fully executed Bailee Agreement, a
Bailee’s Trust Receipt issued by the Bailee thereunder and such other evidence
satisfactory to the Buyer in its discretion that all documents necessary to effect a
transfer of the Table Funded Purchased Assets to the Buyer have been delivered to
Bailee. With respect to each Table Funded Purchased Asset, the Custodian shall
deliver to the Buyer a Table Funded Trust Receipt no later than 1:00 p.m. on the
Purchase Date, which documents shall be acceptable to the Buyer in its sole
discretion. In the case of a Table Funded Purchased Asset, Sellers shall deliver or
cause to be delivered and released to the Custodian the documents set forth in the
Asset File pertaining to the Table Funded Purchased Assets identified in the
Custodial Delivery Letter delivered therewith within three (3) Business Days
following the applicable Purchase Date, and on the second (2nd) Business Day
following the Custodian’s receipt of the Asset File, the Custodian shall deliver to
the Buyer a Trust Receipt certifying its receipt of the documents required to be
delivered pursuant to the Custodial Agreement, together with a Purchased Asset
Schedule and exception report relating to the Basic Mortgage Asset Documents, with
any exceptions identified by the Custodian as of

- 34 -

 

the date and time of delivery of such Purchased Asset Schedule and exception
report.

     (4) No Default. No Termination Event, Default or Event of Default
shall have occurred and be continuing;

     (5) Requirements of Law. Buyer shall not have determined that the
introduction of or a change in any Requirement of Law or in the interpretation or
administration of any Requirement of Law applicable to Buyer has made it unlawful,
and no Governmental Authority shall have asserted that it is unlawful, for Buyer to
enter into Transactions with a Pricing Rate based on LIBOR.

     (6) Representations and Warranties. Both immediately prior to the
related Transaction and also after giving effect thereto and to the intended use
thereof, the representations and warranties made by each Seller in each Program
Agreement shall be true, correct and complete on and as of such Purchase Date in all
material respects with the same force and effect as if made on and as of such date
(or, if any such representation or warranty is expressly stated to have been made as
of a specific date, as of such specific date).

     (7) Minimum Amount. Each Eligible Asset subject to a Transaction
Request shall be for a Purchase Price not less than $2,000,000.

     (8) Maximum Amount. Each Eligible Asset that is a Commercial Mortgage
Loan subject to a Transaction Request shall be for a Purchase Price less than or
equal to $60 million. Each Eligible Asset other than a Commercial Mortgage Loan
subject to a Transaction Request shall be for a Purchase Price less than or equal to
$40 million.

     (9) Material Adverse Change. None of the following shall have occurred
and/or be continuing:

     (a) an event or events shall have occurred in the good faith determination of
Buyer resulting in the effective absence of a “repo market” or comparable “lending
market” for financing debt obligations secured by mortgage loans or securities or an
event or events shall have occurred resulting in Buyer not being able to finance
Purchased Assets through the “repo market” or “lending market” with traditional
counterparties at rates which would have been reasonable prior to the occurrence of
such event or events; or

     (b) an event or events shall have occurred resulting in the effective absence
of a “securities market” for securities backed by mortgage loans or an event or
events shall have occurred resulting in Buyer not being able to sell securities
backed by mortgage loans at prices which would have been reasonable prior to such
event or events; or

     (c) there shall have occurred a material adverse change in the financial
condition of Buyer which affects (or can reasonably be expected to affect)

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materially and adversely the ability of Buyer to fund its obligations under
this Agreement.

     (10) Notice to Borrowers. The Sellers shall deliver to the Backup
Servicer a completed and signed Notice to Borrower, substantially in the form of
Exhibit N hereto, with respect to each Purchased Asset subject to a
Transaction.

c. Transaction Request. Each Transaction Request delivered by a Seller
hereunder shall constitute a certification by the Sellers that all the conditions
set forth in Section 10(b) (other than clause (9) thereof) have been satisfied (both
as of the date of such notice or request and as of the date of such purchase). Each
Purchase Confirmation, together with this Agreement, shall be evidence of the terms
of the Transaction(s) covered thereby unless specific objection is made no less than
two (2) Business Days after the date thereof and Sellers’ acceptance of the related
proceeds shall constitute Sellers’ agreement to the terms of such Purchase
Confirmation. An objection sent by a Seller with respect to any Purchase
Confirmation (as to which such Seller has not accepted or has returned the related
proceeds) must state specifically that the writing is an objection, must specify the
provision(s) of such Purchase Confirmation being objected to by such Seller, must
set forth such provision(s) in the manner that such Seller believes such provisions
should be stated, and must be received by Buyer no more than two (2) Business Days
after such Purchase Confirmation is received by Seller.

11. Program; Costs

a. Sellers shall reimburse Buyer for any of Buyer’s reasonable out-of-pocket costs,
including due diligence review costs and reasonable attorney’s fees, incurred by
Buyer in determining the acceptability to Buyer of any Eligible Assets. Sellers
shall also pay, or reimburse Buyer if Buyer shall pay, any termination fee, which
may be due any servicer. Sellers shall pay the fees and expenses of Buyer’s counsel
in connection with the Program Agreements. Legal fees for any subsequent amendments
to this Agreement or related documents shall be borne by Sellers. Sellers shall pay
ongoing custodial and bank fees and expenses and any other ongoing fees and expenses
under any other Program Agreement.

b. If Buyer determines that, due to the introduction of, any change in, or the
compliance by Buyer with (i) any eurocurrency reserve requirement or (ii) the
interpretation of any law, regulation or any guideline or request from any central
bank or other Governmental Authority (whether or not having the force of law), there
shall be an increase in the cost to Buyer in engaging in the present or any future
Transactions, then Sellers agree to pay to Buyer, from time to time, upon demand by
Buyer (with a copy to Custodian) the actual cost of additional amounts as specified
by Buyer to compensate Buyer for such increased costs.

- 36 -

 

c. With respect to any Transaction, Buyer may conclusively rely upon, and shall
incur no liability to any Seller in acting upon, any request or other communication
that Buyer reasonably believes to have been given or made by a person authorized to
enter into a Transaction on a Seller’s behalf, whether or not such person is listed
on the certificate delivered pursuant to Section 10(a)(5) hereof. In each such
case, each Seller hereby waives the right to dispute Buyer’s record of the terms of
the Purchase Confirmation, request or other communication.

d. Notwithstanding the assignment of the Program Agreements with respect to each
Purchased Asset to Buyer, each Seller agrees and covenants with Buyer to enforce
diligently Sellers’ rights and remedies set forth in the Program Agreements.

e. Any payments made by any Seller, any Guarantor or Mezzanine Loan Subsidiary to
Buyer shall be free and clear of, and without deduction or withholding for, any
taxes; provided, however, that if such payer shall be required by
law to deduct or withhold any taxes from any sums payable to Buyer, then such payer
shall (A) make such deductions or withholdings and pay such amounts to the relevant
authority in accordance with applicable law, (B) pay to Buyer the sum that would
have been payable had such deduction or withholding not been made, and (C) at the
time Price Differential is paid, pay to Buyer all additional amounts as specified by
Buyer to preserve the after-tax yield Buyer would have received if such tax had not
been imposed, and otherwise indemnify Buyer for any such taxes imposed.

12. Servicing

a. Sellers and Buyer shall contract with Servicer to service the Purchased Assets
pursuant to the Servicing Agreement, consistent with the degree of skill and care
that Servicer customarily requires with respect to similar Purchased Assets owned or
managed by it and in accordance with Accepted Servicing Practices. The Servicing
Agreement shall require, inter alia, that: Servicer (i) comply with all applicable
federal, state and local laws and regulations, (ii) maintain all state and federal
licenses necessary for it to perform its servicing responsibilities hereunder and
(iii) not impair the rights of Buyer in any Purchased Assets or any payment
thereunder. In addition, the Servicing Agreement shall require that the Servicer
deposit all collections of Income (other than amounts deposited in escrow accounts
pursuant to the Servicing Agreement) received by Servicer on account of the
Purchased Assets in the Securities Account no later than two Business Days following
receipt. On the Reporting Date the Servicer shall deliver all servicing and account
information it receives with respect to the Purchased Assets (including the
Servicing Report) to the Backup Servicer.

b. Upon the occurrence of any of (i) an Event of Default hereunder or (ii) an event
of default under the Servicing Agreement (beyond any applicable notice and cure
period), Buyer shall have the right to (i) immediately terminate the Servicer’s
right to service the Purchased Assets without payment of any penalty

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or termination fee and (ii) send or instruct the Backup Servicer to send a
Irrevocable Instruction Letter to each Mortgagor or payor related to the Purchased
Assets. Sellers and Servicer shall cooperate in transferring the servicing of the
Purchased Assets to a successor servicer appointed by Buyer in its sole discretion.

c. If any Seller should discover that, for any reason whatsoever, Servicer or any
entity responsible for managing or servicing any Purchased Assets has failed to
perform in all material respects any of the obligations of such entities with
respect to the Purchased Assets, or that an event of default under the Servicing
Agreement has occurred, Sellers shall promptly notify Buyer.

d. In the event that the Servicer is a master servicer of a Purchased Asset which is
serviced by a Third Party Servicer, the Sellers shall provide promptly to Buyer a
Servicer Notice addressed to and agreed to by the Third Party Servicer of the
related Purchased Assets, advising such Third Party Servicer of such matters as
Buyer may reasonably request, including, without limitation, recognition by the
master servicer of Buyer’s interest in such Purchased Assets and the Third Party
Servicer’s agreement that upon receipt of notice of an Event of Default from Buyer,
it will follow the instructions of Buyer with respect to the Purchased Assets and
any related Income with respect thereto.

e. Sellers shall not employ sub-servicers (other than the Servicer or Affiliates
thereof or Third Party Servicers) to service the Purchased Assets without the prior
written approval of Buyer, which such approval shall not be unreasonably withheld.
If the Purchased Assets are serviced, in whole or in part, by a sub-servicer (i)
Servicer shall nevertheless remain primarily liable to Buyer for the servicing of
the Purchased Assets under the Servicing Agreement; and (ii) any agreement with a
subservicer shall entitle Buyer to terminate such subservicer without fee or penalty
in the event that Servicer is replaced.

f. Upon the occurrence and continuance of, but not prior to, an Event of Default
hereunder the Buyer shall inform the Backup Servicer that an Event of Default has
occurred and shall instruct the Backup Servicer to deliver a Notice to Borrower with
respect to each Purchased Asset subject to a Transaction.

13. Representations and Warranties.

a. Each of each Seller, each Guarantor and Mezzanine Loan Subsidiary represents and
warrants to Buyer as of the date hereof and as of each Purchase Date for any
Transaction that:

     (1) Sellers, Guarantors and Mezzanine Loan Subsidiary Existence. Arbor
Realty SR, Inc. has been duly organized and is validly existing as a corporation in
good standing under the laws of the State of Maryland. Arbor TRS Holding Company
Inc. has been duly organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware. Mezzanine Loan Subsidiary has
been duly organized and is validly existing as a limited

- 38 -

 

liability company in good standing under the laws of the State of Delaware.
Arbor Realty Trust Inc. has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Maryland. Arbor Realty
Limited Partnership has been duly organized and is validly existing as a limited
partnership in good standing under the laws of the State of Delaware.

     (2) Licenses. Each of each Seller, each Guarantor and Mezzanine Loan
Subsidiary is duly licensed or is otherwise qualified in each jurisdiction in which
it transacts business for the business which it conducts and is not in default of
any applicable federal, state or local laws, rules and regulations unless, in either
instance, the failure to take such action is not reasonably likely (either
individually or in the aggregate) to cause a Material Adverse Effect and is not in
default of such state’s applicable laws, rules and regulations. Each of each
Seller, each Guarantor and Mezzanine Loan Subsidiary has the requisite power and
authority and legal right to originate and purchase Eligible Assets (as applicable)
and to own, sell and grant a lien on all of its right, title and interest in and to
the Eligible Assets, and to execute and deliver, engage in the transactions
contemplated by, and perform and observe the terms and conditions of, this
Agreement, each Program Agreement and any Transaction Request or Purchase
Confirmation.

     (3) Power. Each of each Seller, each Guarantor and Mezzanine Loan
Subsidiary has all requisite corporate or other power, and has all governmental
licenses, authorizations, consents and approvals necessary to own its assets and
carry on its business as now being or as proposed to be conducted, except where the
lack of such licenses, authorizations, consents and approvals would not be
reasonably likely to have a Material Adverse Effect.

     (4) Due Authorization. Each of each Seller, each Guarantor and
Mezzanine Loan Subsidiary has all necessary corporate or other power, authority and
legal right to execute, deliver and perform its obligations under each of the
Program Agreements, as applicable. This Agreement, any Transaction Request,
Purchase Confirmation and the Program Agreements have been (or, in the case of
Program Agreements and any Transaction Request, Purchase Confirmation not yet
executed, will be) duly authorized, executed and delivered by each Seller, each
Guarantor and Mezzanine Loan Subsidiary, all requisite or other corporate action
having been taken, and each is valid, binding and enforceable against each Seller,
each Guarantor and Mezzanine Loan Subsidiary in accordance with its terms except as
such enforcement may be affected by bankruptcy, by other insolvency laws, or by
general principles of equity.

     (5) Financial Statements. ART has heretofore furnished to Buyer a copy
of (a) its consolidated balance sheet and the consolidated balance sheets of its
consolidated Subsidiaries for the fiscal year of ART ended December 31, 2005 and the
related consolidated statements of income and retained earnings and of cash flows
for ART and its consolidated Subsidiaries for such fiscal year, setting forth in
each case in comparative form the figures for the previous year, with the

- 39 -

 

opinion thereon of Ernst & Young LLP and (b) its consolidated balance sheet and
the consolidated balance sheets of its consolidated Subsidiaries for the quarterly
fiscal periods of ART ended March 31, 2006 and June 30, 2006 and the related
consolidated statements of income and retained earnings and of cash flows for ART
and its consolidated Subsidiaries for such quarterly fiscal periods, setting forth
in each case in comparative form the figures for the previous year. All such
financial statements are complete and correct and fairly present, in all material
respects, the consolidated financial condition of ART and its Subsidiaries and the
consolidated results of their operations as at such dates and for such fiscal
periods, all in accordance with GAAP applied on a consistent basis. Since December
31, 2005, there has been no material adverse change in the consolidated business,
operations or financial condition of ART and its consolidated Subsidiaries taken as
a whole from that set forth in said financial statements nor is ART aware of any
state of facts which (with notice or the lapse of time) would or could result in any
such material adverse change. ART has, on the date of the statements delivered
pursuant to this Section (the “Statement Date”) no liabilities, direct or
indirect, fixed or contingent, matured or unmatured, known or unknown, or
liabilities for taxes, long-term leases or unusual forward or long-term commitments
not disclosed by, or reserved against in, said balance sheet and related statements,
and at the present time there are no material unrealized or anticipated losses from
any loans, advances or other commitments of ART except as heretofore disclosed to
Buyer in writing.

     (6) Event of Default. There exists no Event of Default under Section
15(b) hereof, which default gives rise to a right to accelerate indebtedness as
referenced in Section 15(b) hereof, under any mortgage, borrowing agreement or other
instrument or agreement pertaining to indebtedness for borrowed money or to the
repurchase of mortgage loans or securities.

     (7) Solvency. Each of each Seller, each Guarantor and Mezzanine Loan
Subsidiary is solvent and will not be rendered insolvent by any Transaction and,
after giving effect to such Transaction, will not be left with an unreasonably small
amount of capital with which to engage in its business. Neither any Seller, any
Guarantor or Mezzanine Loan Subsidiary intends to incur, nor believes that it has
incurred, debts beyond its ability to pay such debts as they mature and is not
contemplating the commencement of insolvency, bankruptcy, liquidation or
consolidation proceedings or the appointment of a receiver, liquidator, conservator,
trustee or similar official in respect of such entity or any of its assets. The
amount of consideration being received by Sellers upon the sale of the Purchased
Assets to Buyer constitutes reasonably equivalent value and fair consideration for
such Purchased Assets. Neither any Seller, any Guarantor or Mezzanine Loan
Subsidiary is transferring any Purchased Assets with any intent to hinder, delay or
defraud any of its creditors.

     (8) No Conflicts. The execution, delivery and performance by each of
each Seller, each Guarantor and Mezzanine Loan Subsidiary of this Agreement, any
Transaction Request or Purchase Confirmation hereunder and the

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Program Agreements do not conflict with any term or provision of the
certificate of incorporation or by laws of any Seller, any Guarantor or Mezzanine
Loan Subsidiary or any law, rule, regulation, order, judgment, writ, injunction or
decree applicable to any Seller, any Guarantor or Mezzanine Loan Subsidiary of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over any Seller, any Guarantor or Mezzanine Loan Subsidiary, which
conflict would have a Material Adverse Effect and will not result in any violation
of any such mortgage, instrument, agreement or obligation to which any Seller, any
Guarantor or Mezzanine Loan Subsidiary is a party.

     (9) True and Complete Disclosure. All information, reports, exhibits,
schedules, financial statements or certificates of each Seller, each Guarantor,
Mezzanine Loan Subsidiary, or any Affiliate thereof or any of their officers
furnished or to be furnished to Buyer in connection with the initial or any ongoing
due diligence of Sellers, Guarantors, Mezzanine Loan Subsidiary, or any Affiliate or
officer thereof, negotiation, preparation, or delivery of the Program Agreements are
true and complete and do not omit to disclose any material facts necessary to make
the statements herein or therein, in light of the circumstances in which they are
made, not misleading. All financial statements have been prepared in accordance
with GAAP.

     (10) Approvals. No consent, approval, authorization or order of,
registration or filing with, or notice to any governmental authority or court is
required under applicable law in connection with the execution, delivery and
performance by any Seller, any Guarantor or Mezzanine Loan Subsidiary of this
Agreement, any Transaction Request, Purchase Confirmation and the Program
Agreements.

     (11) Litigation. Except as disclosed in writing prior to the related
Purchase Date, there is no action, proceeding or investigation pending with respect
to which any Seller, any Guarantor, or Mezzanine Loan Subsidiary has received
service of process or, to the best of any Seller’s, any Guarantor’s or Mezzanine
Loan Subsidiary’s knowledge threatened against it before any court, administrative
agency or other tribunal (A) asserting the invalidity of this Agreement, any
Transaction, Transaction Request, Purchase Confirmation or any Program Agreement,
(B) seeking to prevent the consummation of any of the transactions contemplated by
this Agreement, any Transaction Request, Purchase Confirmation or any Program
Agreement, (C) makes a claim individually in an amount greater than $1,000,000 or in
an aggregate amount greater than $5,000,000, (D) which requires filing with the
Securities and Exchange Commission in accordance with the 1934 Act or any rules
thereunder or (E) which might materially and adversely affect the validity of the
Mortgage Loans or the performance by it of its obligations under, or the validity or
enforceability of, this Agreement, any Transaction Request, Purchase Confirmation or
any Program Agreement.

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     (12) Material Adverse Change. There has been no material adverse
change in the business, operations, financial condition, properties or prospects of
any Seller, any Guarantor, Mezzanine Loan Subsidiary or their Affiliates since the
date set forth in the most recent financial statements supplied to Buyer.

     (13) Ownership. Upon payment of the Purchase Price and the filing of
the financing statement and delivery of the Asset Files to the Custodian and the
Custodian’s receipt of the related Purchased Asset Schedule, Buyer shall become the
sole owner of the Purchased Assets and related Repurchase Assets, free and clear of
all liens and encumbrances.

     (14) Taxes. Each Seller, each Guarantor, Mezzanine Loan Subsidiary and
their Subsidiaries have timely filed all tax returns that are required to be filed
by them and have paid all taxes, 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. The
charges, accruals and reserves on the books of Sellers, Guarantors, Mezzanine Loan
Subsidiary and their Subsidiaries in respect of taxes and other governmental charges
are, in the opinion of Sellers or Guarantors or Mezzanine Loan Subsidiary, as
applicable, adequate.

     (15) Investment Company. Neither any Seller, any Guarantor, Mezzanine
Loan Subsidiary nor any of their Subsidiaries is an “investment company”, or a
company “controlled” by an “investment company,” within the meaning of the
Investment Company Act of 1940, as amended.

     (16) Chief Executive Office; Jurisdiction of Organization. On the
Effective Date, Arbor Realty SR, Inc.’s chief executive office, is, and has been,
located at 333 Earle Ovington Boulevard, Uniondale, New York 11553. On the
Effective Date, Arbor Realty SR, Inc.’s jurisdiction of organization is Maryland.
On the Effective Date, Arbor TRS Holding Company Inc.’s chief executive office, is,
and has been, located at 333 Earle Ovington Boulevard, Uniondale, New York 11553.
On the Effective Date, Arbor TRS Holding Company Inc.’s jurisdiction of organization
is Delaware. On the Effective Date, Mezzanine Loan Subsidiary’s chief executive
office, is, and has been, located at 333 Earle Ovington Boulevard, Uniondale, New
York 11553. On the Effective Date, Mezzanine Loan Subsidiary’s jurisdiction of
organization is Delaware. On the Effective Date, ART’s chief executive office, is,
and has been, located at 333 Earle Ovington Boulevard, Uniondale, New York 11553.
On the Effective Date, ART’s jurisdiction of organization is Maryland. On the
Effective Date, Arbor Realty Limited Partnership’s chief executive office, is, and
has been, located at 333 Earle Ovington Boulevard, Uniondale, New York 11553. On
the Effective Date, Arbor Realty Limited Partnership’s jurisdiction of organization
is Delaware. Sellers and Mezzanine Loan Subsidiary shall provide Buyer with thirty
days advance notice of any change in any Seller’s or Mezzanine Loan Subsidiary’s
principal office or place of business or jurisdiction. Neither any

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Seller nor Mezzanine Loan Subsidiary has any trade name. During the preceding
five years, neither any Seller nor Mezzanine Loan Subsidiary has been known by or
done business under any other name, corporate or fictitious, and has not filed or
had filed against it any bankruptcy receivership or similar petitions nor has it
made any assignments for the benefit of creditors.

     (17) Location of Books and Records. The location where Sellers and
Mezzanine Loan Subsidiary keeps their books and records, including all computer
tapes and records relating to the Purchased Assets and the related Repurchase Assets
is its chief executive office.

     (18) ERISA. Each Plan to which any Seller, Mezzanine Loan Subsidiary
or their Subsidiaries make direct contributions, and, to the knowledge of any Seller
or Mezzanine Loan Subsidiary, each other Plan and each Multiemployer Plan, is in
compliance in all material respects with, and has been administered in all material
respects in compliance with, the applicable provisions of ERISA, the Code and any
other Federal or State law.

     (19) Adverse Selection. Neither any Seller nor Mezzanine Loan
Subsidiary has selected the Purchased Assets in a manner so as to adversely affect
Buyer’s interests.

     (20) Agreements. Neither any Seller nor any Subsidiary of any Seller
is a party to any agreement, instrument, or indenture or subject to any restriction
materially and adversely affecting its business, operations, assets or financial
condition, except as disclosed in the financial statements described in Section
13(a)(5) hereof. Neither any Seller nor any Subsidiary of any Seller is in default
in the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any agreement, instrument, or indenture which default
could have a material adverse effect on the business, operations, properties, or
financial condition of any Seller as a whole. No holder of any indebtedness of any
Seller or of any of its Subsidiaries has given notice of any asserted default
thereunder.

     (21) Reserved.

     (22) No Reliance. Each of each Seller, each Guarantor and Mezzanine
Loan Subsidiary has made its own independent decisions to enter into the Program
Agreements and each Transaction and as to whether such Transaction is appropriate
and proper for it based upon its own judgment and upon advice from such advisors
(including without limitation, legal counsel and accountants) as it has deemed
necessary. Neither any Seller, any Guarantor or Mezzanine Loan Subsidiary is
relying upon any advice from Buyer as to any aspect of the Transactions, including
without limitation, the legal, accounting or tax treatment of such Transactions.

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     (23) Plan Assets. Neither any Seller nor Mezzanine Loan Subsidiary is
an employee benefit plan as defined in Section 3 of Title I of ERISA, or a plan
described in Section 4975(e)(1) of the Code, and the Purchased Assets are not “plan
assets” within the meaning of 29 CFR §2510.3-101 in any Seller’s hands.

     (24) No Prohibited Persons. Neither any Seller, Mezzanine Loan
Subsidiary nor any of their respective Affiliates, officers, directors, partners or
members, is an entity or person (or to any Seller’s or Mezzanine Loan Subsidiary’s
knowledge, owned or controlled by an entity or person): (i) that is listed in the
annex to, or is otherwise subject to the provisions of Executive Order 13224 issued
on September 24, 2001 (“EO13224”); (ii) whose name appears on the United
States Treasury Department’s Office of Foreign Assets Control (“OFAC”) most
current list of “Specifically Designated National and Blocked Persons” (which list
may be published from time to time in various mediums including, but not limited to,
the OFAC website, http:www.treas.gov/ofac/t11sdn.pdf); (iii) who commits, threatens
to commit or supports “terrorism”, as that term is defined in EO13224; or (iv) who
is otherwise affiliated with any entity or person listed above (any and all parties
or persons described in clauses (i) through (iv) above are herein referred to as a
“Prohibited Person”).

     (25) Asset File. Each Asset File delivered by Sellers represents a
true and correct copy of the documents contained therein and each Purchased Asset
Schedule and Closing Data Tape, together with all other information contained
therein prepared by Sellers or their Affiliates and delivered by Sellers to Buyer
immediately prior to the Purchase Date, is true and correct and conforms in all
material respects to the Summary Diligence Materials and Preliminary Data Tape
previously provided to Buyer and pursuant to which Buyer has elected to enter into
the Transaction.

     (26) Real Estate Investment Trust. ART has not engaged in any material
“prohibited transactions” as defined in Section 857(b)(6)(B)(iii) and (c) of the
Code. ART for its current “tax year” (as defined in the Code) is entitled to a
dividends paid deduction under the requirements of Section 857 of the Code with
respect to any dividends paid by it with respect to each such year for which it
claims a deduction in its Form 1120-REIT filed with the United States Internal
Revenue Service for such year.

b. With respect to every Purchased Asset and each Mezzanine Loan, each of each
Seller, each Guarantor and Mezzanine Loan Subsidiary represents and warrants to
Buyer as of the applicable Purchase Date for any Transaction and each date
thereafter that each representation and warranty set forth on Schedule 1 is
true and correct.

c. The representations and warranties set forth in this Agreement shall survive
transfer of the Purchased Assets to Buyer and shall continue for so long as the

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Purchased Assets and Mezzanine Loans are subject to this Agreement. Upon discovery
by any Seller, any Guarantor, Mezzanine Loan Subsidiary, Servicer or Buyer of any
breach of any of the representations or warranties set forth in this Agreement, the
party discovering such breach shall promptly give notice of such discovery to the
others. Buyer has the right to require, in its unreviewable discretion, Sellers to
repurchase within 1 Business Day after receipt of notice from Buyer any Purchased
Asset for which a breach of one or more of the representations and warranties
referenced in Section 13(b) exists and which breach has a material adverse effect on
the value of such Mortgage Loan or the interests of Buyer.

14. Covenants

Each of each Seller, each Guarantor, and Mezzanine Loan Subsidiary covenants with Buyer that,
during the term of this facility:

a. Litigation. Each Seller, each Guarantor, and Mezzanine Loan Subsidiary,
as applicable, will promptly, but no less frequently than monthly after service of
process on any of the following, give to Buyer notice of all litigation, actions,
suits, arbitrations, investigations (including, without limitation, any of the
foregoing which are threatened or pending) or other legal or arbitrable proceedings
affecting any Seller, any Guarantor, Mezzanine Loan Subsidiary or any of their
Subsidiaries or affecting any of the Property of any of them before any Governmental
Authority that (i) questions or challenges the validity or enforceability of any of
the Program Agreements or any action to be taken in connection with the transactions
contemplated hereby, (ii) makes a claim, with respect to the Sellers, in an
aggregate amount greater than $5 million, or with respect to the Guarantors, in an
aggregate amount greater than $10 million, or (iii) which, individually or in the
aggregate, if adversely determined, could be reasonably likely to have a Material
Adverse Effect. Each of Sellers, Guarantors, and Mezzanine Loan Subsidiary, as
applicable, will promptly provide notice of any judgment, which with the passage of
time, could cause an Event of Default hereunder.

b. Prohibition of Fundamental Changes. Neither any Seller, any Guarantor or
Mezzanine Loan Subsidiary shall enter into any transaction of merger or
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer
any liquidation, winding up or dissolution) or sell all or substantially all of its
assets; provided, that (i) any Seller and any Guarantor may merge or
consolidate with (1) any wholly owned subsidiary of a Seller, or (2) any other
Person if the respective Seller or the respective Guarantor is the surviving
corporation; and provided further, that if after giving effect
thereto, no Default would exist hereunder; and (ii) a Seller may sell substantially
all of its assets (x) in a CDO Transaction, or (y) to Buyer pursuant to this
Agreement.

c. Servicer. Upon the occurrence of any of the following (a) the occurrence
and continuation of an Event of Default, (b) the fifth Business Day of each month,
or

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(c) upon the request of Buyer, Sellers shall cause Servicer to provide to Buyer,
electronically, in a format mutually acceptable to Buyer and Sellers, by no later
than the Reporting Date. Sellers shall not cause the Purchased Assets to be
serviced by any servicer other than a servicer expressly approved in writing by
Buyer, which approval shall be deemed granted by Buyer with respect to Sellers
and/or Arbor Commercial Mortgage LLC with the execution of this Agreement.

d. Insurance. The Sellers or Guarantors shall continue to maintain, for
Sellers and their Subsidiaries, Fidelity Insurance in an aggregate amount at least
equal to $5 million. The Sellers or Guarantors shall maintain, for Sellers and
their Subsidiaries, Fidelity Insurance in respect of its officers, employees and
agents, with respect to any claims made in connection with all or any portion of the
Repurchase Assets. The Sellers or Guarantors shall notify the Buyer of any material
change in the terms of any such Fidelity Insurance.

e. No Adverse Claims. Each Seller warrants and will defend, and shall cause
any Servicer to defend, the right, title and interest of Buyer in and to all
Purchased Assets and the related Repurchase Assets against all adverse claims and
demands.

f. Assignment. Except as permitted herein, neither any Seller nor any
Servicer shall sell, assign, transfer or otherwise dispose of, or grant any option
with respect to, or pledge, hypothecate or grant a security interest in or lien on
or otherwise encumber (except pursuant to the Program Agreements), any of the
Purchased Assets or any interest therein, provided that this Section shall
not prevent any transfer of Purchased Assets in accordance with the Program
Agreements.

g. Security Interest. Each Seller shall do all things necessary to preserve
the Purchased Assets and the related Repurchase Assets so that they remain subject
to a first priority perfected security interest hereunder. Without limiting the
foregoing, each Seller will comply with all rules, regulations and other laws of any
Governmental Authority and cause the Purchased Assets or the related Repurchase
Assets to comply with all applicable rules, regulations and other laws. Sellers
will not allow any default for which any Seller is responsible to occur under any
Purchased Assets or the related Repurchase Assets or any Program Agreement and
Sellers shall fully perform or cause to be performed when due all of its obligations
under any Purchased Assets or the related Repurchase Assets and any Program
Agreement.

h. Records.

     (1) Sellers shall collect and maintain or cause to be collected and maintained
all Records relating to the Purchased Assets in accordance with industry custom and
practice for assets similar to the Purchased Assets, including those maintained
pursuant to the preceding subparagraph, and all such Records shall be in Custodian’s
possession unless Buyer otherwise approves. Sellers will not allow any such papers,
records or files that are an original or an only copy to leave Custodian’s
possession, except for individual items removed in connection

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with servicing a specific Mortgage Loan, in which event Sellers will obtain or
cause to be obtained a receipt from a financially responsible person for any such
paper, record or file. Sellers or the Servicer of the Purchased Assets will
maintain all such Records not in the possession of Custodian in good and complete
condition in accordance with industry practices for assets similar to the Purchased
Assets and preserve them against loss.

     (2) For so long as Buyer has an interest in or lien on any Purchased Asset,
Sellers will hold or cause to be held all related Records in trust for Buyer.
Sellers shall notify, or cause to be notified, every other party holding any such
Records of the interests and liens in favor of Buyer granted hereby.

     (3) Upon reasonable advance notice from Custodian or Buyer, Sellers shall (x)
make any and all such Records available to Custodian or Buyer to examine any such
Records, either by its own officers or employees, or by agents or contractors, or
both, and make copies of all or any portion thereof, and (y) permit Buyer or its
authorized agents to discuss the affairs, finances and accounts of any Seller with
its chief operating officer and chief financial officer and to discuss the affairs,
finances and accounts of any Seller with its independent certified public
accountants.

i. Books. Each Seller shall keep or cause to be kept in reasonable detail
books and records of account of its assets and business and shall clearly reflect
therein the transfer of Purchased Assets to Buyer.

j. Approvals. Each Seller shall maintain all licenses, permits or other
approvals necessary for such Seller to conduct its business and to perform its
obligations under the Program Agreements, and each Seller shall conduct its business
strictly in accordance with applicable law.

k. Material Change in Business. Neither any Seller, any Guarantor or
Mezzanine Loan Subsidiary shall make any material change in the nature of its
business as carried on at the date hereof. There shall be no material change in the
senior management of any Seller.

l. Distributions. Neither Seller shall pay any dividends greater than Net
Income in any given calendar year. Notwithstanding the foregoing, Sellers and
Guarantors, as applicable, may each declare and pay dividends in an amount necessary
to comply with any Requirements of Law governing real estate investment trusts so
long as no Default or Event of Default has occurred or will occur as a result
thereof. If an Event of Default has occurred and is continuing, neither any Seller,
any Guarantor or Mezzanine Loan Subsidiary shall pay any dividends with respect to
any capital stock or other equity interests in such entity, 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 any Seller, any
Guarantor or Mezzanine Loan Subsidiary.

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m. Applicable Law. Each of each Seller, each Guarantor and Mezzanine Loan
Subsidiary shall comply with the requirements of all applicable laws, rules,
regulations and orders of any Governmental Authority.

n. Existence. Each of each Seller, each Guarantor and Mezzanine Loan
Subsidiary shall preserve and maintain their legal existence and all of their
material rights, privileges, licenses and franchises.

o. Chief Executive Office; Jurisdiction of Organization. Neither Seller
shall move its chief executive office from the address referred to in Section
13(a)(17) or change its jurisdiction of organization from the jurisdiction referred
to in Section 13(a)(17) unless it shall have provided Buyer 30 days’ prior written
notice of such change.

p. Taxes. Each of each Seller, each Guarantor and Mezzanine Loan Subsidiary
shall timely file all tax returns that are required to be filed by them and shall
timely pay and discharge all taxes, assessments and governmental charges or levies
imposed on it or on its income or profits or on any of its property prior to the
date on which penalties attach thereto, except for any such tax, assessment, charge
or levy the payment of which is being contested in good faith and by proper
proceedings and against which adequate reserves are being maintained.

q. Transactions with Affiliates. Neither Seller will enter into any
transaction, including, without limitation, any purchase, sale, lease or exchange of
property or the rendering of any service, with any Affiliate unless such transaction
is (a) otherwise permitted under the Program Agreements, (b) in the ordinary course
of such Seller’s business and (c) upon fair and reasonable terms no less favorable
to such Seller than it would obtain in a comparable arm’s length transaction with a
Person which is not an Affiliate, or make a payment that is not otherwise permitted
by this Section to any Affiliate.

r. Reserved.

s. Irrevocable Instruction Letter. To the extent that either Seller enters
into an Interest Rate Protection Agreement or similar arrangement with the Buyer or
its Affiliate, such Seller shall execute and deliver an Irrevocable Instruction
Letter to Buyer and its Affiliate.

t. True and Correct Information. All information, reports, exhibits,
schedules, financial statements or certificates of Sellers, Guarantors, Mezzanine
Loan Subsidiary, any Affiliate thereof or any of their officers furnished to Buyer
hereunder and during Buyer’s diligence of Sellers, Guarantors and Mezzanine Loan
Subsidiary are and will be true and complete and do not omit to disclose any
material facts necessary to make the statements herein or therein, in light of the
circumstances in which they are made, not misleading. All required financial
statements, information and reports delivered by Sellers to Buyer pursuant to this

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Agreement shall be prepared in accordance with U.S. GAAP, or, if applicable, to SEC
filings, the appropriate SEC accounting regulations.

u. Plan Assets. Neither Seller shall be an employee benefit plan as defined
in Section 3 of Title I of ERISA, or a plan described in Section 4975(e)(1) of the
Code and neither Seller shall use “plan assets” within the meaning of 29 CFR
§2510.3-101 to engage in this Agreement or any Transaction hereunder.

v. Mezzanine Loan Subsidiary Separateness Covenant. Mezzanine Loan
Subsidiary shall (a) own no assets, and will not engage in any business, other than
the assets and transactions specifically contemplated by this Agreement; (b) not
incur any Indebtedness or obligation, secured or unsecured, direct or indirect,
absolute or contingent (including guaranteeing any obligation), other than pursuant
hereto; (c) not make any loans or advances to any third party, and shall not acquire
obligations or securities of its affiliates; (d) pay its debts and liabilities
(including, as applicable, shared personnel and overhead expenses) only from its own
assets; (e) comply with the provisions of its organizational documents; (f) do all
things necessary to observe organizational formalities and to preserve its
existence, and will not amend, modify or otherwise change its organizational
documents, or suffer same to be amended, modified or otherwise changed, without the
prior written consent of Buyer; (g) maintain all of its books, records, financial
statements and bank accounts separate from those of its Affiliates; (h) be, and at
all times will hold itself out to the public as, a legal entity separate and
distinct from any other entity (including any Affiliate), shall correct any known
misunderstanding regarding its status as a separate entity, shall conduct business
in its own name, shall not identify itself or any of its affiliates as a division or
part of the other and shall maintain and utilize a separate telephone number and
separate stationery, invoices and checks; (i) 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; (j) not engage in or suffer
any change of ownership, dissolution, winding up, liquidation, consolidation or
merger in whole or in part; (k) not commingle its funds or other assets with those
of any Affiliate or any other Person; (l) 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 affiliate or any other person; (m) not and will
not hold itself out to be responsible for the debts or obligations of any other
Person; (n) cause each of its direct and indirect owners to agree not to (i) file or
consent to the filing of any bankruptcy, insolvency or reorganization case or
proceeding with respect to Mezzanine Loan Subsidiary; institute any proceedings
under any applicable insolvency law or otherwise seek any relief under any laws
relating to the relief from debts or the protection of debtors generally with
respect to Mezzanine Loan Subsidiary; (ii) seek or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar
official for any Seller or a substantial portion of its properties; or (iii) make
any assignment for the benefit of Mezzanine Loan Subsidiary’s creditors.

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w. Hedging. Each Seller shall enter into and maintain Interest Rate
Protection Agreements in an amount and in accordance with Sellers’ written policy as
approved by Buyer. No Seller shall amend such written policy without the prior
written consent of Buyer.

x. Financial Covenants:

     (1) ART shall maintain a consolidated Adjusted Tangible Net Worth greater than
or equal to $200,000,000.

     (2) ART’s consolidated ratio of (i) Indebtedness minus Subordinated Debt) to
(ii) consolidated Adjusted Tangible Net Worth shall not exceed 5:1.

15. Events of Default; Termination Events.

          Section 15.01. Events of Default. Each of the following shall constitute an “Event of
Default” hereunder:

a. Payment Failure. Failure of Sellers to (i) make any payment of Price
Differential or Repurchase Price or any other sum which has become due, on a Price
Differential Payment Date or a Repurchase Date or otherwise, whether by acceleration
or otherwise, under the terms of this Agreement, any other warehouse and security
agreement or any other document evidencing or securing Indebtedness of any Seller to
Buyer or to any Affiliate of Buyer, or (ii) cure any Margin Deficit when due
pursuant to Section 6 hereof.

b. Cross Default. (i) any Seller, any Guarantor, Mezzanine Loan Subsidiary
or any of their Affiliates shall be in default under (i) any Indebtedness, in the
aggregate, in excess of $2,000,000 of any Seller, any Guarantor, Mezzanine Loan
Subsidiary or any of their Affiliates which default (1) involves the failure to pay
a matured obligation, or (2) permits the acceleration of the maturity of obligations
by any other party to or beneficiary with respect to such Indebtedness, or (ii) any
other contract or contracts, in the aggregate in excess of $2,000,000 to which any
Seller, any Guarantor, Mezzanine Loan Subsidiary or any of their Affiliates is a
party which default (1) involves the failure to pay a matured obligation, or (2)
permits the acceleration of the maturity of obligations by any other party to or
beneficiary of such contract.

c. Assignment. Assignment or attempted assignment by any Seller, any
Guarantor or Mezzanine Loan Subsidiary of this Agreement or any rights hereunder
without first obtaining the specific written consent of Buyer, or the granting by
any Seller of any security interest, lien or other encumbrances on any Purchased
Assets to any person other than Buyer.

d. Insolvency. An Act of Insolvency shall have occurred with respect to any
Seller, any Guarantor, Mezzanine Loan Subsidiary or any Affiliate.

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e. Material Adverse Change. Any material adverse change in the Property,
business, financial condition or operations of any Seller, any Guarantor, Mezzanine
Loan Subsidiary or any of its Affiliates shall occur, in each case as determined by
Buyer in its sole good faith discretion.

f. Breach of Identified Representation or Covenant or Obligation. A breach
by any Seller, any Guarantor or Mezzanine Loan Subsidiary of any of the
representations, warranties or covenants or obligations set forth in Sections
13(a)(1), 13(a)(7), 13(a)(19), 14b, 14n, 14t, 14u, 14v and 14x of this Agreement.

g. Breach of Non-Identified Representation or Covenant. A breach by any
Seller, any Guarantor or Mezzanine Loan Subsidiary of any other material
representation, warranty or covenant set forth in this Agreement (and not otherwise
specified in Section 15(f) above), if such breach is not cured within ten (10)
Business Days (other than the representations and warranties set forth in
Schedule 1, which shall be considered solely for the purpose of determining
the Market Value, the existence of a Margin Deficit and the obligation to repurchase
such Mortgage Loan) unless (i) such party shall have made any such representations
and warranties with knowledge that they were materially false or misleading at the
time made, (ii) any such representations and warranties have been determined by
Buyer in its sole discretion to be materially false or misleading on a regular
basis, or (iii) Buyer, in its sole discretion, determines that such breach of a
material representation, warranty or covenant materially and adversely affects (A)
the condition (financial or otherwise) of such party, its Subsidiaries or
Affiliates; or (B) Buyer’s determination to enter into this Agreement or
Transactions with such party, then such breach shall constitute an immediate Event
of Default and Sellers shall have no cure right hereunder).

h. Guarantor Breach. A breach by any Guarantor of any material
representation, warranty or covenant set forth in the Guaranty or any other Program
Agreement, any “event of default” by any Guarantor under the Guaranty (beyond any
applicable cure period), any repudiation of the Guaranty by any Guarantor, or if the
Guaranty is not enforceable against any Guarantor.

i. Change of Control. The occurrence of a Change in Control (other than
with respect to clause (f) of such definition).

j. Failure to Transfer. Sellers fail to transfer the Purchased Assets to
Buyer on the applicable Purchase Date (provided Buyer has tendered the related
Purchase Price).

k. Judgment. A final judgment or judgments (i) shall be rendered against
the Mezzanine Loan Subsidiary or (ii) for the payment of money in excess of
$2,000,000 individually or in the aggregate shall be rendered against any Seller,
any Guarantor, or Mezzanine Loan Subsidiary, in each case, by one or more courts,
administrative tribunals or other bodies having jurisdiction and the same

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shall not be satisfied, discharged (or provision shall not be made for such
discharge) or bonded, or a stay of execution thereof shall not be procured, within
30 days from the date of entry thereof.

l. Government Action. Any Governmental Authority or any person, agency or
entity acting or purporting to act under governmental authority shall have taken any
action to condemn, seize or appropriate, or to assume custody or control of, all or
any substantial part of the Property of any Seller, any Guarantor, Mezzanine Loan
Subsidiary or any Affiliate thereof, or shall have taken any action to displace the
management of any Seller, any Guarantor, Mezzanine Loan Subsidiary or any Affiliate
thereof or to curtail its authority in the conduct of the business of any Seller,
any Guarantor, Mezzanine Loan Subsidiary or any Affiliate thereof, or takes any
action in the nature of enforcement to remove, limit or restrict the approval of any
Seller, any Guarantor, Mezzanine Loan Subsidiary or Affiliate as an issuer, buyer or
a seller/servicer of Mortgage Loans or securities backed thereby, and such action
provided for in this subparagraph shall not have been discontinued or stayed within
30 days.

m. Inability to Perform. An officer of any Seller, any Guarantor or
Mezzanine Loan Subsidiary shall admit its inability to, or its intention not to,
perform any of any Seller’s Obligations or any Guarantor’s obligations or Mezzanine
Loan Subsidiary’s obligations hereunder or under the Guaranty.

n. Security Interest. This Agreement shall for any reason cease to create a
valid, first priority security interest in any material portion of the Purchased
Assets or other Repurchase Assets purported to be covered hereby.

o. Financial Statements. ART’s consolidated audited annual financial
statements or the notes thereto or other opinions or conclusions stated therein
shall be qualified or limited by reference to the status of ART as a “going concern”
or a reference of similar import.

p. Reserved.

q. Qualification as a REIT. The failure of Arbor Realty Trust Inc. (i) to
continue to be qualified as a REIT as defined in Section 856 of the Code or (ii) to
continue to be entitled to a dividend paid deduction under Section 857 of the Code
with respect to dividends paid by it with respect to each taxable year for which it
claims a deduction on its Form 1120- REIT filed with the United States Internal
Revenue Service for such year, or the entering into by Arbor Realty Trust Inc. of
“prohibited transactions” as defined in Sections 857(b)(6)(B)(iii) of the Code
(taking into account Sections 857(b)(6)(C), 857(b)(6)(d) and 857(b)(6)(e) of the
Code) or (iii) to satisfy any of the income or asset tests required to be satisfied
by a REIT.

          An Event of Default shall be deemed to be continuing unless expressly waived by Buyer in
writing.

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          Section 15.02.Termination Event. (a) If the following event (a “Termination Event”) occurs,
the Administrative Agent shall have the rights set forth in Section 15.02(b):

          a. Change in Control as defined in clause (f) of the definition thereof shall have occurred.

(b) Upon the occurrence of the Termination Event, the Buyer shall have the
right, in its sole discretion, to immediately terminate the Buyer’s obligation to
enter into any additional Transactions. The Sellers shall repurchase any Purchased
Assets subject to a Transaction hereunder within 90 days following receipt of a
request therefor from the Buyer following the occurrence of a Termination Event.

16. Remedies Upon Default

          In the event that an Event of Default shall have occurred:

a. Buyer may, at its option (which option shall be deemed to have been exercised
immediately upon the occurrence of an Act of Insolvency of any Seller or any
Guarantor), declare an Event of Default to have occurred hereunder and, upon the
exercise or deemed exercise of such option, the Repurchase Date for each Transaction
hereunder shall, if it has not already occurred, be deemed immediately to occur
(except that, in the event that the Purchase Date for any Transaction has not yet
occurred as of the date of such exercise or deemed exercise, such Transaction shall
be deemed immediately canceled). Buyer shall (except upon the occurrence of an Act
of Insolvency) give notice to Sellers, Guarantors and Mezzanine Loan Subsidiary of
the exercise of such option as promptly as practicable.

b. If Buyer exercises or is deemed to have exercised the option referred to in
subparagraph (a) of this Section, (i) Sellers’ obligations in such Transactions to
repurchase all Purchased Assets, at the Repurchase Price therefor on the Repurchase
Date determined in accordance with subparagraph (a) of this Section, shall thereupon
become immediately due and payable, (ii) all Income paid after such exercise or
deemed exercise shall be retained by Buyer and applied, in Buyer’s sole discretion,
to the aggregate unpaid Repurchase Prices for all outstanding Transactions and any
other amounts owing by Sellers hereunder, and (iii) Sellers shall immediately
deliver to Buyer the Asset Files relating to any Purchased Assets subject to such
Transactions then in Sellers’ possession or control.

c. Buyer also shall have the right to obtain physical possession, and to commence an
action to obtain physical possession, of all Records and files of Sellers relating
to the Purchased Assets and all documents relating to the Purchased Assets
(including, without limitation, any legal, credit or servicing files with respect to
the Purchased Assets) which are then or may thereafter come in to
the possession of Sellers or any third party acting for Sellers. To obtain physical

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possession of any Purchased Assets held by Custodian, Buyer shall present to
Custodian a Trust Receipt. Buyer shall be entitled to specific performance of all
agreements of Sellers contained in this Agreement.

d. Buyer shall have the right to direct all servicers then servicing any Purchased
Assets to remit all collections thereon to Buyer, and if any such payments are
received by Sellers, Sellers shall not commingle the amounts received with other
funds of Sellers and shall promptly pay them over to Buyer. Buyer shall also have
the right to terminate any one or all of the servicers then servicing any Purchased
Assets with or without cause. In addition, Buyer shall have the right to
immediately sell the Purchased Assets and liquidate all Repurchase Assets. Such
disposition of Purchased Assets may be, at Buyer’s option, on either a servicing
released or a servicing retained basis. Buyer shall not be required to give any
warranties as to the Purchased Assets with respect to any such disposition thereof.
Buyer may specifically disclaim or modify any warranties of title or the like
relating to the Purchased Assets. The foregoing procedure for disposition of the
Purchased Assets and liquidation of the Repurchase Assets shall not be considered to
adversely affect the commercial reasonableness of any sale thereof. Each Seller
agrees that it would not be commercially unreasonable for Buyer to dispose of the
Purchased Assets or the Repurchase Assets or any portion thereof by using Internet
sites that provide for the auction of assets similar to the Purchased Assets or the
Repurchase Assets, or that have the reasonable capability of doing so, or that match
buyers and sellers of assets. Buyer shall be entitled to place the Purchased Assets
in a pool for issuance of mortgage backed securities at the then prevailing price
for such securities and to sell such securities for such prevailing price in the
open market. Buyer shall also be entitled to sell any or all of such Purchased
Assets individually for the prevailing price. Buyer shall also be entitled, in its
sole discretion to elect, in lieu of selling all or a portion of such Purchased
Assets, to give the Sellers credit for such Purchased Assets and the Repurchase
Assets in an amount equal to the Market Value of the Purchased Assets against the
aggregate unpaid Repurchase Price and any other amounts owing by the Sellers
hereunder.

e. Upon the happening of one or more Events of Default, Buyer may apply any proceeds
from the liquidation of the Purchased Assets and Repurchase Assets to the Repurchase
Prices hereunder and all other Obligations in the manner Buyer deems appropriate in
its sole discretion.

f. Sellers shall be liable to Buyer for (i) the amount of all reasonable legal or
other expenses (including, without limitation, all costs and expenses of Buyer in
connection with the enforcement of this Agreement or any other agreement evidencing
a Transaction, whether in action, suit or litigation or bankruptcy, insolvency or
other similar proceeding affecting creditors’ rights generally, further including,
without limitation, the reasonable fees and expenses of counsel (including the costs
of internal counsel of Buyer) incurred in connection with or as a result of an Event
of Default, (ii) damages in an amount equal to the cost
(including all fees, expenses and commissions) of entering into replacement

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transactions and entering into or terminating hedge transactions in connection with
or as a result of an Event of Default, and (iii) any other loss, damage, cost or
expense directly arising or resulting from the occurrence of an Event of Default in
respect of a Transaction, but specifically excluding any special, indirect,
consequential or punitive damages, in each case, to the extent they are in excess of
any out of pocket amounts otherwise lost or expended by Buyer.

g. To the extent permitted by applicable law, Sellers shall be liable to Buyer for
interest on any amounts owing by Sellers hereunder, from the date Sellers become
liable for such amounts hereunder until such amounts are (i) paid in full by Sellers
or (ii) satisfied in full by the exercise of Buyer’s rights hereunder. Interest on
any sum payable by Sellers under this Section 16(g) shall be at a rate equal to the
Post Default Rate.

h. Buyer shall have, in addition to its rights hereunder, any rights otherwise
available to it under any other agreement or applicable law.

i. Buyer may exercise one or more of the remedies available to Buyer immediately
upon the occurrence of an Event of Default and, except to the extent provided in
subsections (a) and (d) of this Section, at any time thereafter without notice to
Sellers. All rights and remedies arising under this Agreement as amended from time
to time hereunder are cumulative and not exclusive of any other rights or remedies
which Buyer may have.

j. Buyer may enforce its rights and remedies hereunder without prior judicial
process or hearing, and each Seller hereby expressly waives any defenses such Seller
might otherwise have to require Buyer to enforce its rights by judicial process.
Each Seller also waives any defense (other than a defense of payment or performance)
such Seller might otherwise have arising from the use of nonjudicial process,
enforcement and sale of all or any portion of the Repurchase Assets, or from any
other election of remedies. Each Seller recognizes that nonjudicial remedies are
consistent with the usages of the trade, are responsive to commercial necessity and
are the result of a bargain at arm’s length.

k. Buyer shall have the right to perform reasonable due diligence with respect to
Sellers and the Purchased Assets, which review shall be at the expense of Sellers.

l. Each Seller recognizes the Buyer may be unable to effect a public sale of any or
all of the Purchased Assets. Each Seller acknowledges and agrees that any such
private sale may result in prices and other terms less favorable to the Buyer than
if such sale were a public sale and, notwithstanding such circumstances, agrees that
any such private sale shall be deemed to have been made in a commercially reasonable
manner.

m. Nothing contained in the Agreement shall obligate Buyer to segregate any
Purchased Assets delivered to Buyer by Sellers. Notwithstanding anything to the

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contrary set forth in the Agreement, in no event shall Purchased Assets remain in
the custody of Sellers or any Affiliate of any Seller.

17. Reports

a. Notices. Any Seller, any Guarantor or Mezzanine Loan Subsidiary shall
furnish to Buyer (x) promptly, copies of any material and adverse notices
(including, without limitation, notices of defaults, breaches, potential defaults or
potential breaches) and any material financial information that is not otherwise
required to be provided by Sellers hereunder which is given to Sellers’ lenders, (y)
immediately, notice of the occurrence of any Event of Default hereunder or default
or breach by any Seller, Servicer, any Guarantor or Mezzanine Loan Subsidiary of any
obligation under any Program Agreement or any material contract or agreement of any
Seller, Servicer, any Guarantor or Mezzanine Loan Subsidiary or the occurrence of
any event or circumstance that such party reasonably expects has resulted in, or
will, with the passage of time, result in, a Material Adverse Effect or an Event of
Default or such a default or breach by such party and (z) the following:

     (1) as soon as available and in any event within forty-five (45) calendar days
after the end of each calendar quarter, the unaudited consolidated balance sheets of
ART and its consolidated Subsidiaries as at the end of such period and the related
unaudited consolidated statements of income and retained earnings and of cash flows
for ART and its consolidated Subsidiaries for such period and the portion of the
fiscal year through the end of such period, accompanied by a certificate of a
Responsible Officer of ART, which certificate shall state that said consolidated
financial statements fairly present in all material respects the consolidated
financial condition and results of operations of ART and its consolidated
Subsidiaries in accordance with GAAP, consistently applied, as at the end of, and
for, such period (subject to normal year-end adjustments);

     (2) as soon as available and in any event within ninety (90) days after the end
of each fiscal year of ART, the consolidated balance sheets of ART and its
consolidated Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and of cash flows for the
ART and its consolidated Subsidiaries for such year, setting forth in each case in
comparative form the figures for the previous year, accompanied by an opinion
thereon of independent certified public accountants of recognized national standing,
which opinion and the scope of audit shall be acceptable to Buyer in its sole
discretion, shall have no “going concern” qualification and shall state that said
consolidated financial statements fairly present the consolidated financial
condition and results of operations of ART and its consolidated Subsidiaries as at
the end of, and for, such fiscal year in accordance with GAAP;

     (3) such other prepared statements that Buyer may reasonably request;

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     (4) if applicable, copies of any 10 Ks, 10 Qs, registration statements and
other “corporate finance” SEC filings (other than 8 Ks) by Sellers and
Guarantors, within 5 Business Days of their filing with the SEC; provided,
that, Sellers, Guarantors or any Affiliate will provide Buyer and Credit Suisse
First Boston Corporation with a copy of the annual 10 K filed with the SEC by
Sellers, Guarantors or their Affiliates, no later than 90 days after the end of the
year;

     (5) as soon as available, and in any event within thirty (30) days of receipt,
copies of relevant portions of all final written Governmental Authority and investor
audits, examinations, evaluations, monitoring reviews and reports of its operations
(including those prepared on a contract basis) which provide for or relate to (i)
material corrective action required, (ii) material sanctions proposed, imposed or
required, including without limitation notices of defaults, notices of termination
of approved status, notices of imposition of supervisory agreements or interim
servicing agreements, and notices of probation, suspension, or non-renewal, or (iii)
“report cards,” “grades” or other classifications of the quality of Sellers’
operations;

     (6) as soon as available, but in any event once per calendar quarter, financial
statements with respect to the underlying property related to the Purchased Assets
(to the extent received by Sellers or Servicer from the related borrower);

     (7) from time to time such other information regarding the financial condition,
operations, or business of the Guarantors, Mezzanine Loan Subsidiary or Sellers as
Buyer may reasonably request;

     (8) as soon as reasonably possible, and in any event within thirty (30) days
after a Responsible Officer of the Guarantors, Mezzanine Loan Subsidiary or any
Seller has knowledge of the occurrence of any Event of Termination, stating the
particulars of such Event of Termination in reasonable detail;

     (9) as soon as reasonably possible, notice of any of the following events:

     (a) change in the insurance coverage required of any Seller, any Guarantor,
Mezzanine Loan Subsidiary, Servicer or any other Person pursuant to any Program
Agreement, with a copy of evidence of same attached;

     (b) any material dispute, litigation, investigation, proceeding or suspension
between any Seller, any Guarantor, Mezzanine Loan Subsidiary or Servicer, on the one
hand, and any Governmental Authority or any Person;

     (c) any material change in accounting policies or financial reporting practices
of any Seller, any Guarantor, Mezzanine Loan Subsidiary or Servicer;

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     (d) with respect to any Purchased Asset, immediately upon receipt of notice or
knowledge thereof, that the underlying Mortgaged Property has been damaged by waste,
fire, earthquake or earth movement, windstorm, flood, tornado or other casualty, or
otherwise damaged so as to affect adversely the value of such Purchased Asset;

     (e) any material issues raised upon examination of any Seller or any Seller’s
facilities by any Governmental Authority;

     (f) promptly upon receipt of notice or knowledge of (i) any default related to
any Repurchase Asset, (ii) any lien or security interest (other than security
interests created hereby or by the other Program Agreements) on, or claim asserted
against, any of the Purchased Assets; and

     (g) any other event, circumstance or condition that has resulted, or has a
possibility of resulting, in a Material Adverse Effect with respect to any Seller or
Servicer.

     (10) as soon as available, but in any event once per calendar quarter, any
material change in the Indebtedness of any Seller, including, without limitation,
any default, renewal, non-renewal, termination, increase in available amount or
decrease in available amount related thereto.

b. Officer’s Certificates. Sellers will furnish to Buyer, at the time the
Sellers furnishes each set of financial statements pursuant to Section 17(a)(1) or
(2) above, a certificate of a Responsible Officer of each Seller in the form of
Exhibit D hereto.

c. Servicing Reports. Sellers will furnish to Buyer and Backup Servicer a
Servicing Report by no later than the Reporting Date.

d. Distribution Worksheet. Sellers shall provide to Buyer, electronically,
in a format mutually acceptable to Buyer and Sellers, a Distribution Worksheet by no
later than the Reporting Date.

e. Other. Sellers shall deliver to Buyer any other reports or information
reasonably requested by Buyer or as otherwise required pursuant to this Agreement.

18. Repurchase Transactions

          Buyer may, in its sole election, engage in repurchase transactions with the Purchased Assets
or otherwise pledge, hypothecate, assign, transfer or otherwise convey the Purchased Assets with a
counterparty of Buyer’s choice. Unless an Event of Default shall have occurred, no such
transaction shall relieve Buyer of its obligations to transfer Purchased Assets to Sellers pursuant
to Section 4 hereof, or of Buyer’s obligation to credit or pay Income to, or apply Income to the
obligations of, Sellers pursuant to Section 7 hereof. In the event Buyer engages in a repurchase
transaction with any of the Purchased Assets or otherwise pledges or

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hypothecates any of the Purchased Assets, Buyer shall have the right to assign to Buyer’s
counterparty any of the applicable representations or warranties herein and the remedies for breach
thereof, as they relate to the Purchased Assets that are subject to such repurchase transaction.

19. Single Agreement

          Buyer and Sellers acknowledge that, and have entered hereunto, and will enter into each
Transaction hereunder, in consideration of and in reliance upon the fact that, all Transactions
hereunder constitute a single business and contractual relationship and have been made in
consideration of each other. Accordingly, each of Buyer and Sellers agrees (i) to perform all of
its obligations in respect of each Transaction hereunder, and that a default in the performance of
any such obligations shall constitute a default by it in respect of all Transactions hereunder,
(ii) that each of them shall be entitled to set-off claims and apply property held by them in
respect of any Transaction against obligations owing to them in respect of any other Transactions
hereunder and (iii) that payments, deliveries and other transfers made by either of them in respect
of any Transaction shall be deemed to have been made in consideration of payments, deliveries and
other transfers in respect of any other Transactions hereunder, and the obligations to make any
such payments, deliveries and other transfers may be applied against each other and netted.

20. Notices and Other Communications

          Any and all notices (with the exception of Transaction Requests or Purchase Confirmations,
which shall be delivered via facsimile only), statements, demands or other communications hereunder
may be given by a party to the other by mail, facsimile, messenger or otherwise to the address
specified below, or so sent to such party at any other place specified in a notice of change of
address hereafter received by the other. All notices, demands and requests hereunder may be made
orally, to be confirmed promptly in writing, or by other communication as specified in the
preceding sentence.

          If to Sellers:

Arbor Realty SR, Inc.

Arbor TRS Holding Company Inc.’s

c/o Arbor Commercial Mortgage LLC

333 Earle Ovington Boulevard

Uniondale, NY 11553

Attention: Guy Milone, Esq.

Phone Number: (516) 832-7431

Fax Number: (516) 832-6431

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          with a copy to:

Kronish Lieb Weiner & Hellman LLP

1114 Avenue of the Americas

New York, NY 10036

Attention: Thomas D. O’Connor, Esq.

Phone Number: (212) 479-6265

Fax Number: (212) 479-6265

          If to Mezzanine Loan Subsidiary:

Arbor Realty Mezzanine LLC

c/o Arbor Commercial Mortgage LLC

333 Earle Ovington Boulevard

Uniondale, NY 11553

Attention: Guy Milone, Esq.

Phone Number: (516) 832-7431

Fax Number: (516) 832-6431

          If to Arbor Realty Trust Inc.:

Arbor Realty Trust Inc.

c/o Arbor Commercial Mortgage LLC

333 Earle Ovington Boulevard

Uniondale, NY 11553

Attention: Guy Milone, Esq.

Phone Number: (516) 832-7431

Fax Number: (516) 832-6431

          If to Arbor Realty Limited Partnership:

Arbor Realty Limited Partnership

c/o Arbor Commercial Mortgage LLC

333 Earle Ovington Boulevard

Uniondale, NY 11553

Attention: Guy Milone, Esq.

Phone Number: (516) 832-7431

Fax Number: (516) 832-6431

          If to Buyer:

Column Financial, Inc.

11 Madison Avenue

New York, New York 10010

Attention: Mason Sleeper and Lawrence Goland

Fax Number: (212) 325-8064

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          with a copy to:

Column Financial, Inc.

1 Madison Avenue

New York, New York 10010

Attention: Tessa Peters, Esq.

Fax Number: (917) 326-7980

21. 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.

22. Non assignability

          The Program Agreements are not assignable by any Seller, any Guarantor or Mezzanine Loan
Subsidiary. Buyer may from time to time assign all or a portion of its rights and obligations
under this Agreement and the Program Agreements; provided, however that Buyer shall
maintain as agent of Sellers, for review by Sellers upon written request, a register of assignees
and a copy of an executed assignment and acceptance by Buyer and assignee (“Assignment and
Acceptance”), specifying the percentage or portion of such rights and obligations assigned.
Upon such assignment, (a) such assignee shall be a party hereto and to each Program Agreement to
the extent of the percentage or portion set forth in the Assignment and Acceptance, and shall
succeed to the applicable rights and obligations of Buyer hereunder, and (b) Buyer shall, to the
extent that such rights and obligations have been so assigned by it to either (i) an Affiliate of
Buyer which assumes the obligations of Buyer or (ii) to another Person approved by Sellers (such
approval not to be unreasonably withheld) which assumes the obligations of Buyer, be released from
its obligations hereunder and under the Program Agreements. Unless otherwise stated in the
Assignment and Acceptance, Sellers shall continue to take directions solely from Buyer unless
otherwise notified by Buyer in writing; provided however that Buyer shall not
require Sellers to take directions from more than one (1) Person, whether as agent for multiple
parties or as principal. Buyer may distribute to any prospective assignee any document or other
information delivered to Buyer by Sellers.

          The Buyer may sell participations to one or more Persons in or to all or a portion of its
rights and obligations under this Agreement; provided, however, that (i) the
Buyer’s obligations under this Agreement shall remain unchanged, (ii) the Buyer shall remain solely
responsible to the other parties hereto for the performance of such obligations; and (iii) the
Sellers shall continue to deal solely and directly with the Buyer in connection with the Buyer’s
rights and obligations under this Agreement and the other Program Agreements.

          The Buyer may, in connection with any assignment or participation or proposed assignment or
participation pursuant to this Section 22, disclose to the assignee or participant or proposed
assignee or participant, as the case may be, any information relating to the Sellers,

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Mezzanine Loan Subsidiary or any of their respective Subsidiaries or to any aspect of the
Transactions that has been furnished to the Buyer by or on behalf of the Sellers, Mezzanine Loan
Subsidiary or any of their respective Subsidiaries; provided that such assignee or
participant agrees to hold such information subject to the confidentiality provisions of this
Agreement.

23. Set-off

          In addition to any rights and remedies of Buyer provided by law, Buyer shall have the right,
without prior notice to any Seller, any Guarantor or Mezzanine Loan Subsidiary, any such notice
being expressly waived by Sellers, Guarantors and Mezzanine Loan Subsidiary to the extent permitted
by applicable law, upon any amount becoming due and payable by Sellers, any Guarantor or Mezzanine
Loan Subsidiary hereunder (whether at the stated maturity, by acceleration or otherwise) to set-off
and appropriate and apply against such amount any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in
any currency, in each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by Buyer or any branch or agency thereof to or for the credit
or the account of any Seller, any Guarantor or Mezzanine Loan Subsidiary. Buyer agrees promptly to
notify Sellers, Guarantors and Mezzanine Loan Subsidiary after any such set-off and application
made by Buyer; provided, that the failure to give such notice shall not affect the validity
of such set-off and application.

24. Binding Effect; Governing Law; Jurisdiction

a. This Agreement shall be binding and inure to the benefit of the parties hereto
and their respective successors and permitted assigns. Each Seller acknowledges
that the obligations of Buyer hereunder or otherwise are not the subject of any
guaranty by, or recourse to, any direct or indirect parent or other Affiliate of
Buyer. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE
LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF.

b. EACH OF EACH SELLER, EACH GUARANTOR AND MEZZANINE LOAN SUBSIDIARY HEREBY WAIVES
TRIAL BY JURY. EACH OF EACH SELLER, EACH GUARANTOR AND MEZZANINE LOAN SUBSIDIARY
HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY COURT OF THE STATE
OF NEW YORK, OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK, ARISING OUT OF OR RELATING TO THE PROGRAM AGREEMENTS IN ANY ACTION OR
PROCEEDING. EACH OF EACH SELLER, EACH GUARANTOR AND MEZZANINE LOAN SUBSIDIARY
HEREBY SUBMITS TO, AND WAIVES ANY OBJECTION THEY MAY HAVE TO, EXCLUSIVE PERSONAL
JURISDICTION AND VENUE IN THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, WITH RESPECT TO ANY DISPUTES
ARISING OUT OF OR RELATING TO THE PROGRAM AGREEMENTS.

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25. No Waivers, Etc.

          No express or implied waiver of any Event of Default by either party shall constitute a waiver
of any other Event of Default and no exercise of any remedy hereunder by any party shall constitute
a waiver of its right to exercise any other remedy hereunder. No modification or waiver of any
provision of this Agreement and no consent by any party to a departure herefrom shall be effective
unless and until such shall be in writing and duly executed by both of the parties hereto. Without
limitation on any of the foregoing, the failure to give a notice pursuant to Section 6(a), 16(a) or
otherwise, will not constitute a waiver of any right to do so at a later date.

26. Intent.

a. The parties recognize that each Transaction is a “repurchase agreement”
as that term is defined in Section 101 of Title 11 of the United States Code, as
amended (except insofar as the type of Purchased Assets subject to such Transaction
or the term of such Transaction would render such definition inapplicable), and a
“securities contract” as that term is defined in Section 741 of Title 11 of
the United States Code, as amended (except insofar as the type of assets subject to
such Transaction would render such definition inapplicable).

b. It is understood that either party’s right to liquidate Purchased Assets
delivered to it in connection with Transactions hereunder or to exercise any other
remedies pursuant to Section 16 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.

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

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

e. This Agreement is intended to be a “repurchase agreement” and a “securities
contract,” within the meaning of Section 555 and Section 559 under the Bankruptcy
Code.

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27. 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 SEC under Section 15 of the 1934 Act, the Securities Investor
Protection Corporation has taken the position that the provisions of the 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 FDIC or the
National Credit Union Share Insurance Fund, as applicable.

28. Power of Attorney

          Each Seller hereby authorizes Buyer to file such financing statement or statements relating to
the Repurchase Assets without Seller’s signature thereon as Buyer, at its option, may deem
appropriate. Each Seller hereby appoints Buyer as Seller’s agent and attorney in fact to execute
any such financing statement or statements in Seller’s name and to perform all other acts which
Buyer deems appropriate to perfect and continue its ownership interest in and/or the security
interest granted hereby, if applicable, and to protect, preserve and realize upon the Repurchase
Assets, including, but not limited to, the right to endorse notes, complete blanks in documents,
transfer servicing, and sign assignments on behalf of Seller as its agent and attorney in fact.
This agency and power of attorney is coupled with an interest and is irrevocable without Buyer’s
consent. Notwithstanding the foregoing, the power of attorney hereby granted may be exercised only
during the occurrence and continuance of any Event of Default hereunder. Sellers shall pay the
filing costs for any financing statement or statements prepared pursuant to this Section 28.

29. Buyer May Act Through Affiliates

          Buyer may, from time to time, designate one or more affiliates for the purpose of performing
any action hereunder.

30. Indemnification; Obligations; Recourse

a. Each of each Seller, each Guarantor and Mezzanine Loan Subsidiary agrees to hold
Buyer and each of its respective Affiliates and their officers, directors,
employees, agents and advisors (each, an “Indemnified Party”) harmless from
and indemnify each Indemnified Party (and will reimburse each Indemnified Party as
the same is incurred) against all liabilities, losses, damages, judgments, costs and
expenses (including, without limitation, reasonable fees and expenses of counsel)

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of any kind which may be imposed on, incurred by, or asserted against any
Indemnified Party relating to or arising out of this Agreement, any Transaction
Request, Purchase Confirmation, any Program Agreement or any transaction
contemplated hereby or thereby resulting from anything other than the Indemnified
Party’s gross negligence or willful misconduct. Each Seller, each Guarantor and
Mezzanine Loan Subsidiary also agree to reimburse each Indemnified Party for all
reasonable expenses in connection with the enforcement of this Agreement and the
exercise of any right or remedy provided for herein, any Transaction Request,
Purchase Confirmation and any Program Agreement, including, without limitation, the
reasonable fees and disbursements of counsel. Sellers’, Guarantors’ and Mezzanine
Loan Subsidiary’s agreements in this Section 30 shall survive the payment in full of
the Repurchase Price and the expiration or termination of this Agreement. Each of
each Seller, each Guarantor and Mezzanine Loan Subsidiary hereby acknowledges that
its obligations hereunder are recourse obligations of Seller, Guarantors and
Mezzanine Loan Subsidiary and are not limited to recoveries each Indemnified Party
may have with respect to the Purchased Assets. Each Seller, each Guarantor and
Mezzanine Loan Subsidiary also agrees not to assert any claim against Buyer or any
of its Affiliates, or any of their respective officers, directors, employees,
attorneys and agents, on any theory of liability, for special, indirect,
consequential or punitive damages arising out of or otherwise relating to the
facility established hereunder, the actual or proposed use of the proceeds of the
Transactions, this Agreement or any of the transactions contemplated thereby. THE
FOREGOING INDEMNITY AND AGREEMENT NOT TO ASSERT CLAIMS EXPRESSLY APPLIES, WITHOUT
LIMITATION, TO THE NEGLIGENCE (BUT NOT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF
THE INDEMNIFIED PARTIES.

b. Without limiting the provisions of Section 30(a) hereof, if Sellers fail to pay
when due any costs, expenses or other amounts payable by it under this Agreement,
including, without limitation, fees and expenses of counsel and indemnities, such
amount may be paid on behalf of Sellers by Buyer, in its sole discretion.

c. The obligations of the Sellers from time to time to pay the Repurchase Price, the
Price Differential, and all other amounts due and Obligations owing under this
Repurchase Agreement shall be full recourse obligations of the Sellers.

31. Counterparts

          This Agreement may be executed in one or more counterparts, each of which shall be deemed to
be an original, and all such counterparts shall together constitute one and the same instrument.

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32. Confidentiality

          This Agreement and its terms, provisions, supplements and amendments, and notices hereunder,
are proprietary to Buyer and Agent and shall be held by Sellers, Guarantors and Mezzanine Loan
Subsidiary in strict confidence and shall not be disclosed to any third party without the written
consent of Buyer except for (i) disclosure to Sellers’, Guarantors’ and Mezzanine Loan Subsidiary’s
direct and indirect Affiliates and Subsidiaries, attorneys or accountants, but only to the extent
such disclosure is necessary and such parties agree to hold all information in strict confidence,
or (ii) disclosure required by law, rule, regulation or order of a court or other regulatory body.
Notwithstanding the foregoing or anything to the contrary contained herein or in any other Program
Agreement, the parties hereto may disclose to any and all Persons, without limitation of any kind,
the federal, state and local tax treatment of the Transactions, any fact relevant to understanding
the federal, state and local tax treatment of the Transactions, and all materials of any kind
(including opinions or other tax analyses) relating to such federal, state and local tax treatment
and that may be relevant to understanding such tax treatment; provided that Sellers may not
disclose the name of or identifying information with respect to Buyer or Agent or any pricing terms
(including, without limitation, the Pricing Rate, Exit Fee, Purchase Price Percentage and Purchase
Price) or other nonpublic business or financial information (including any sublimits and financial
covenants) that is unrelated to the federal, state and local tax treatment of the Transactions and
is not relevant to understanding the federal, state and local tax treatment of the Transactions,
without the prior written consent of the Buyer.

33. Recording of Communications

          Buyer, Sellers, Guarantors and Mezzanine Loan Subsidiary 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 and those of the other party with respect to Transactions. Buyer, Sellers,
Guarantors and Mezzanine Loan Subsidiary consent to the admissibility of such tape recordings in
any court, arbitration, or other proceedings. The parties agree that a duly authenticated
transcript of such a tape recording shall be deemed to be a writing conclusively evidencing the
parties’ agreement.

34. Exit Fee

          In the event that a Purchased Asset (a) is repurchased before the Termination Date and is not
directly placed in a CDO Transaction or placed into another investment banking transaction provided
by and acceptable to Buyer or an Affiliate of Buyer or (b) is not repurchased before the
Termination Date, the Sellers shall pay to the Buyer the applicable Exit Fee on such Repurchase
Date to the account set forth in Section 9; provided, that, no such Exit Fee shall be due
(x) with respect to a Purchased Asset which is repurchased before the Termination Date, if such
Purchased Asset is placed in (i) a CDO transaction for which Credit Suisse First Boston or an
Affiliate thereof acts as co-lead manager/underwriter or (ii) a CDO transaction related to Arbor
Realty Mortgage Securities Series 2006-1 or (y) with respect to a Purchased Asset not repurchased
before the Termination Date, if at any time during the Term, any Seller or an Affiliate entered
into a CDO transaction for which Credit Suisse First Boston or an Affiliate thereof acted as
co-lead manager/underwriter.

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35. Administration Fee

          The Sellers shall pay the Administration Fee to the Buyer in consideration of its
administration of the facility pursuant to the terms of the Fee Letter.

36. Periodic Due Diligence Review

          Each Seller acknowledges that Buyer has the right to perform continuing due diligence reviews
with respect to the Sellers and the Purchased Assets, for purposes of verifying compliance with the
representations, warranties and specifications and updating Market Value determinations, made
hereunder, or otherwise, and each Seller agrees that upon reasonable (but no less than five (5)
Business Days) prior notice unless an Event of Default shall have occurred, in which case no notice
is required, to Sellers, Buyer or its authorized representatives will be permitted during normal
business hours to examine, inspect, and make copies and extracts of, the Asset Files and any and
all documents, records, agreements, instruments or information relating to such Purchased Assets in
the possession or under the control of Sellers, Guarantors, Mezzanine Loan Subsidiary and/or the
Custodian. Sellers also shall make available to Buyer a knowledgeable financial or accounting
officer for the purpose of answering questions respecting the Asset Files and the Purchased Assets.
Without limiting the generality of the foregoing, each Seller acknowledges that Buyer may purchase
Purchased Assets from Sellers based solely upon the information provided by Sellers to Buyer in the
Purchased Asset Schedule and the representations, warranties and covenants contained herein, and
that Buyer, at its option, has the right at any time to conduct a partial or complete due diligence
review on some or all of the Purchased Assets purchased in a Transaction, including, without
limitation, ordering broker’s price opinions, new credit reports and new appraisals on the related
Mortgaged Properties and otherwise re-generating the information used to originate such Purchased
Asset. Buyer may underwrite such Purchased Assets itself or engage a mutually agreed upon third
party underwriter to perform such underwriting. Each Seller agrees to cooperate with Buyer and any
third party underwriter in connection with such underwriting, including, but not limited to,
providing Buyer and any third party underwriter with access to any and all documents, records,
agreements, instruments or information relating to such Purchased Assets in the possession, or
under the control, of Sellers. Each Seller further agrees that Sellers shall pay all out-of-pocket
costs and expenses incurred by Buyer in connection with Buyer’s activities pursuant to this Section
36 (“Due Diligence Costs”). In addition to the Due Diligence Costs set forth herein, the
Sellers shall also be responsible for the fees related to the Backup Servicer, as set forth in
Section 1.6 of the Backup Servicing Agreement, which shall not be subject to the Due Diligence Cap.

37. Reserved

38. Authorizations

          Any of the persons whose signatures and titles appear on Schedule 2 are authorized, acting
singly, to act for Sellers or Buyer, as the case may be, under this Agreement.

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39. Documents Mutually Drafted

          The Sellers, Guarantors, Mezzanine Loan Subsidiary and the Buyer agree that this Agreement
each other Program Agreement prepared in connection with the Transactions set forth herein have
been mutually drafted and negotiated by each party, and consequently such documents shall not be
construed against either party as the drafter thereof.

40. General Interpretive Principles

          For purposes of this Agreement, except as otherwise expressly provided or unless the context
otherwise requires:

a. the terms defined in this Agreement have the meanings assigned to them in this
Agreement and include the plural as well as the singular, and the use of any gender
herein shall be deemed to include the other gender;

b. accounting terms not otherwise defined herein have the meanings assigned to them
in accordance with generally accepted accounting principles;

c. references herein to “Articles”, “Sections”, “Subsections”, “Paragraphs”, and
other subdivisions without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs and other subdivisions of this Agreement;

d. a reference to a Subsection without further reference to a Section is a reference
to such Subsection as contained in the same Section in which the reference appears,
and this rule shall also apply to Paragraphs and other subdivisions;

e. the words “herein”, “hereof”, “hereunder” and other words of similar import refer
to this Agreement as a whole and not to any particular provision;

f. the term “include” or “including” shall mean without limitation by reason of
enumeration;

g. all times specified herein or in any other Program Agreement (unless expressly
specified otherwise) are local times in New York, New York unless otherwise stated;
and

h. all references herein or in any Program Agreement to “good faith” means good
faith as defined in Section 1-201(19) of the UCC as in effect in the State of New
York.

[Signature Page Follows]

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          IN WITNESS WHEREOF, Sellers, Guarantors, Mezzanine Loan Subsidiary and the Buyer have caused
their names to be signed hereto by their respective officers thereunto duly authorized as of the
date first above written.

	 	 	 	 	 
	 	COLUMN FINANCIAL, INC., as Buyer

 	 
	 	By:  	/s/ Lawrence Goland
 	 
	 	 	Name:  	Lawrence Goland 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	ARBOR REALTY SR, INC., as Seller

 	 
	 	By:  	John Natalone
 	 
	 	 	Name:  	John Natalone 	 
	 	 	Title:  	SVP, Treasurer 	 
	 

	 	 	 	 	 
	 	ARBOR TRS HOLDING COMPANY INC., as Seller

 	 
	 	By:  	John Natalone
 	 
	 	 	Name:  	John Natalone 	 
	 	 	Title:  	SVP, Treasurer 	 
	 

	 	 	 	 	 
	 	ARBOR REALTY LIMITED PARTNERSHIP, as Guarantor

 	 
	 	By:  	John Natalone
 	 
	 	 	Name:  	John Natalone 	 
	 	 	Title:  	SVP, Treasurer 	 
	 

 

 

	 	 	 	 	 
	 	ARBOR REALTY TRUST INC., as Guarantor

 	 
	 	By:  	John Natalone
 	 
	 	 	Name:  	John Natalone 	 
	 	 	Title:  	SVP, Treasurer 	 
	 

	 	 	 	 	 
	 	ARBOR REALTY MEZZANINE LLC, as Mezzanine
 	 
	 	 	Loan Subsidiary

 	 
	 	By:  	John Natalone
 	 
	 	 	Name:  	John Natalone 	 
	 	 	Title:  	SVP, Treasurer

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