Document:

Exhibit 10.15

 

EXECUTION COPY

 

 

PURCHASE AGREEMENT

 

 

BY AND AMONG

 

CAPMARK FINANCIAL GROUP INC.,

 

CAPMARK CAPITAL INC.,

 

CAPMARK SECURITIES INC.,

 

CAPMARK FINANCE INC.,

 

CITIGROUP GLOBAL MARKETS INC.

 

and

 

CITIBANK, N.A.

 

 

Dated December 20, 2006

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
  ARTICLE I DEFINITIONS

  	
   

  	
  2

  
	
  SECTION 1.1

  	
   

  	
  Definitions

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II THE ACQUISITION

  	
   

  	
  16

  
	
  SECTION 2.1

  	
   

  	
  Purchase and Sale

  	
   

  	
  16

  
	
  SECTION 2.2

  	
   

  	
  Consideration

  	
   

  	
  18

  
	
  SECTION 2.3

  	
   

  	
  Purchase Price Adjustments

  	
   

  	
  19

  
	
  SECTION 2.4

  	
   

  	
  Option to Exclude Certain New Contracts/Portfolio
  Assets

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III REPRESENTATIONS AND WARRANTIES WITH
  RESPECT TO THE COMPANIES       

  	
   

  	
  22

  
	
  SECTION 3.1

  	
   

  	
  Organization and Qualification

  	
   

  	
  22

  
	
  SECTION 3.2

  	
   

  	
  Capitalization of the Companies       

  	
   

  	
  23

  
	
  SECTION 3.3

  	
   

  	
  Subsidiaries and Equity Investments

  	
   

  	
  24

  
	
  SECTION 3.4

  	
   

  	
  Financial Statements

  	
   

  	
  24

  
	
  SECTION 3.5

  	
   

  	
  Compliance with Applicable Laws

  	
   

  	
  25

  
	
  SECTION 3.6

  	
   

  	
  Brokers’ Fees and Commissions

  	
   

  	
  25

  
	
  SECTION 3.7

  	
   

  	
  Contracts

  	
   

  	
  25

  
	
  SECTION 3.8

  	
   

  	
  Taxes

  	
   

  	
  26

  
	
  SECTION 3.9

  	
   

  	
  Real Property

  	
   

  	
  27

  
	
  SECTION 3.10

  	
   

  	
  Litigation

  	
   

  	
  27

  
	
  SECTION 3.11

  	
   

  	
  Environmental Matters

  	
   

  	
  27

  
	
  SECTION 3.12

  	
   

  	
  Books and Records

  	
   

  	
  27

  
	
  SECTION 3.13

  	
   

  	
  Hedge Contracts

  	
   

  	
  28

  
	
  SECTION 3.14

  	
   

  	
  Regulatory Reviews

  	
   

  	
  28

  
	
  SECTION 3.15

  	
   

  	
  Portfolio Assets

  	
   

  	
  28

  
	
  SECTION 3.16

  	
   

  	
  Bank and Brokerage Accounts

  	
   

  	
  29

  
	
  SECTION 3.17

  	
   

  	
  Absence of Changes

  	
   

  	
  29

  
	
  SECTION 3.18

  	
   

  	
  Affiliate Transactions

  	
   

  	
  30

  
	
  SECTION 3.19

  	
   

  	
  Securitizations

  	
   

  	
  30

  
	
  SECTION 3.20

  	
   

  	
  Employee Benefits

  	
   

  	
  31

  
	
  SECTION 3.21

  	
   

  	
  P-Floats and Roaring Forks

  	
   

  	
  31

  
	
  SECTION 3.22

  	
   

  	
  Disclaimer of Other Representations and Warranties

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV REPRESENTATIONS AND WARRANTIES WITH
  RESPECT TO THE SELLERS AND THE ACQUIRED ASSETS

  	
   

  	
  31

  
	
  SECTION 4.1

  	
   

  	
  Organization and Qualification

  	
   

  	
  31

  
	
  SECTION 4.2

  	
   

  	
  Authorization

  	
   

  	
  32

  
	
  SECTION 4.3

  	
   

  	
  No Violation

  	
   

  	
  32

  
	
  SECTION 4.4

  	
   

  	
  Consents and Approvals

  	
   

  	
  33

  
	
  SECTION 4.5

  	
   

  	
  Brokers’ Fees and Commissions

  	
   

  	
  33

  
	
  SECTION 4.6

  	
   

  	
  Title to Acquired Assets

  	
   

  	
  33

  
	
  SECTION 4.7

  	
   

  	
  Compliance with Applicable Laws

  	
   

  	
  33

  
	
  SECTION 4.8

  	
   

  	
  Purchased Contracts

  	
   

  	
  33

  

 

 

	
  SECTION 4.9

  	
   

  	
  Remarketing Agreements

  	
   

  	
  34

  
	
  SECTION 4.10

  	
   

  	
  Litigation

  	
   

  	
  34

  
	
  SECTION 4.11

  	
   

  	
  Intellectual Property

  	
   

  	
  34

  
	
  SECTION 4.12

  	
   

  	
  Real Property

  	
   

  	
  35

  
	
  SECTION 4.13

  	
   

  	
  Regulatory Reviews

  	
   

  	
  35

  
	
  SECTION 4.14

  	
   

  	
  Serviced Loans

  	
   

  	
  35

  
	
  SECTION 4.15

  	
   

  	
  Licenses

  	
   

  	
  35

  
	
  SECTION 4.16

  	
   

  	
  Absence of Changes

  	
   

  	
  36

  
	
  SECTION 4.17

  	
   

  	
  Entire Business

  	
   

  	
  36

  
	
  SECTION 4.18

  	
   

  	
  Investment Funds

  	
   

  	
  36

  
	
  SECTION 4.19

  	
   

  	
  Disclaimer of Other Representations and Warranties

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYERS

  	
   

  	
  36

  
	
  SECTION 5.1

  	
   

  	
  Organization and Qualification

  	
   

  	
  37

  
	
  SECTION 5.2

  	
   

  	
  Authorization

  	
   

  	
  37

  
	
  SECTION 5.3

  	
   

  	
  No Violation

  	
   

  	
  37

  
	
  SECTION 5.4

  	
   

  	
  Consents and Approvals

  	
   

  	
  38

  
	
  SECTION 5.5

  	
   

  	
  Brokers’ Fees and Commissions

  	
   

  	
  38

  
	
  SECTION 5.6

  	
   

  	
  Purchase for Investment

  	
   

  	
  38

  
	
  SECTION 5.7

  	
   

  	
  Financing

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI COVENANTS

  	
   

  	
  38

  
	
  SECTION 6.1

  	
   

  	
  Conduct of Business of the Sellers and the Companies
  Prior to the Closing

  	
   

  	
  38

  
	
  SECTION 6.2

  	
   

  	
  Access to Information

  	
   

  	
  41

  
	
  SECTION 6.3

  	
   

  	
  All Reasonable Efforts

  	
   

  	
  42

  
	
  SECTION 6.4

  	
   

  	
  Consents and Approvals; Purchased Contracts

  	
   

  	
  42

  
	
  SECTION 6.5

  	
   

  	
  Public Announcements

  	
   

  	
  44

  
	
  SECTION 6.6

  	
   

  	
  Disclosure Supplements

  	
   

  	
  44

  
	
  SECTION 6.7

  	
   

  	
  No Implied Representations or Warranties

  	
   

  	
  44

  
	
  SECTION 6.8

  	
   

  	
  No Solicitations

  	
   

  	
  45

  
	
  SECTION 6.9

  	
   

  	
  Employee Benefit Matters

  	
   

  	
  45

  
	
  SECTION 6.10

  	
   

  	
  Confidentiality

  	
   

  	
  46

  
	
  SECTION 6.11

  	
   

  	
  Resignation of Directors/Trustees

  	
   

  	
  47

  
	
  SECTION 6.12

  	
   

  	
  Control of Business

  	
   

  	
  47

  
	
  SECTION 6.13

  	
   

  	
  Names and Marks

  	
   

  	
  47

  
	
  SECTION 6.14

  	
   

  	
  Sales, Transfer and Similar Taxes

  	
   

  	
  48

  
	
  SECTION 6.15

  	
   

  	
  Capmark Finance Swaps

  	
   

  	
  48

  
	
  SECTION 6.16

  	
   

  	
  P-Floats and Roaring Forks

  	
   

  	
  48

  
	
  SECTION 6.17

  	
   

  	
  Termination of MMT

  	
   

  	
  49

  
	
  SECTION 6.18

  	
   

  	
  Tax Matters

  	
   

  	
  49

  
	
  SECTION 6.19

  	
   

  	
  Tax Cooperation

  	
   

  	
  52

  
	
  SECTION 6.20

  	
   

  	
  Excluded Portfolio Assets

  	
   

  	
  52

  
	
  SECTION 6.21

  	
   

  	
  Delivery of Books and Records and Acquired Assets

  	
   

  	
  53

  
	
  SECTION 6.22

  	
   

  	
  Non-Competition

  	
   

  	
  53

  
	
  SECTION 6.23

  	
   

  	
  Affiliate Transactions

  	
   

  	
  54

  
	
  SECTION 6.24

  	
   

  	
  Guarantees and Letter of Credit

  	
   

  	
  54

  
	
  SECTION 6.25

  	
   

  	
  Remarketing Agreements

  	
   

  	
  55

  

 

 

	
  SECTION 6.26

  	
   

  	
  Notice and Cure

  	
   

  	
  56

  
	
  SECTION 6.27 

  	
   

  	
  Assessment

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII CLOSING CONDITIONS

  	
   

  	
  57

  
	
  SECTION 7.1 

  	
   

  	
  Conditions to Each Party’s Obligations Under this
  Agreement

  	
   

  	
  57

  
	
  SECTION 7.2 

  	
   

  	
  Conditions to the Obligations of Buyers Under this
  Agreement

  	
   

  	
  57

  
	
  SECTION 7.3 

  	
   

  	
  Conditions to the Obligations of Sellers under this
  Agreement

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII CLOSING

  	
   

  	
  59

  
	
  SECTION 8.1 

  	
   

  	
  Closing

  	
   

  	
  59

  
	
  SECTION 8.2 

  	
   

  	
  Freddie Mac Closing

  	
   

  	
  61

  
	
  SECTION 8.3 

  	
   

  	
  Freddie Mac Purchase Price

  	
   

  	
  63

  
	
  SECTION 8.4 

  	
   

  	
  Effects of a Freddie Mac Closing

  	
   

  	
  63

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX TERMINATION AND ABANDONMENT

  	
   

  	
  63

  
	
  SECTION 9.1 

  	
   

  	
  Termination

  	
   

  	
  63

  
	
  SECTION 9.2 

  	
   

  	
  Procedure and Effect of Termination

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X SURVIVAL OF REPRESENTATIONS AND
  WARRANTIES; INDEMNIFICATION

  	
   

  	
  64

  
	
  SECTION 10.1 

  	
   

  	
  Survival of Representations and Warranties, Etc.

  	
   

  	
  64

  
	
  SECTION 10.2 

  	
   

  	
  Parent’s and Sellers’ Indemnification of Buyers

  	
   

  	
  64

  
	
  SECTION 10.3 

  	
   

  	
  Buyers’ Indemnification of Sellers

  	
   

  	
  65

  
	
  SECTION 10.4 

  	
   

  	
  Indemnified Party

  	
   

  	
  65

  
	
  SECTION 10.5 

  	
   

  	
  Method of Asserting Claims

  	
   

  	
  65

  
	
  SECTION 10.6 

  	
   

  	
  Third Party Claims

  	
   

  	
  66

  
	
  SECTION 10.7 

  	
   

  	
  Treatment of Indemnity Payments

  	
   

  	
  68

  
	
  SECTION 10.8 

  	
   

  	
  Limitations of Liability

  	
   

  	
  68

  
	
  SECTION 10.9 

  	
   

  	
  Scope of Sellers’ Liability

  	
   

  	
  69

  
	
  SECTION 10.10 

  	
   

  	
  Indemnification Payments 

  	
   

  	
  69

  
	
  SECTION 10.11 

  	
   

  	
  Nonduplication

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI MISCELLANEOUS PROVISIONS

  	
   

  	
  70

  
	
  SECTION 11.1 

  	
   

  	
  Amendment and Modification

  	
   

  	
  70

  
	
  SECTION 11.2 

  	
   

  	
  Waiver of Compliance; Consents

  	
   

  	
  70

  
	
  SECTION 11.3 

  	
   

  	
  Validity

  	
   

  	
  70

  
	
  SECTION 11.4 

  	
   

  	
  Expenses and Obligations

  	
   

  	
  70

  
	
  SECTION 11.5 

  	
   

  	
  Parties in Interest

  	
   

  	
  70

  
	
  SECTION 11.6 

  	
   

  	
  Construction

  	
   

  	
  70

  
	
  SECTION 11.7 

  	
   

  	
  Severability

  	
   

  	
  70

  
	
  SECTION 11.8 

  	
   

  	
  Notices

  	
   

  	
  71

  
	
  SECTION 11.9 

  	
   

  	
  Governing Law

  	
   

  	
  72

  
	
  SECTION 11.10 

  	
   

  	
  Counterparts

  	
   

  	
  72

  
	
  SECTION 11.11 

  	
   

  	
  Headings

  	
   

  	
  72

  
	
  SECTION 11.12 

  	
   

  	
  Entire Agreement

  	
   

  	
  72

  
	
  SECTION 11.13 

  	
   

  	
  Assignment

  	
   

  	
  73

  

 

 

	
  SECTION 11.14 

  	
   

  	
  Buyers’ Obligations

  	
   

  	
  73

  
	
  SECTION 11.15 

  	
   

  	
  Jurisdiction and Venue

  	
   

  	
  73

  
	
  SECTION 11.16 

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  73

  

 

EXHIBITS

 

	
  Exhibit A

  	
   

  	
  Form of Remarketing Transitional Services Agreement

  	
   

  	
   

  
	
  Exhibit B

  	
   

  	
  Pro Forma Balance Sheet

  	
   

  	
   

  
	
  Exhibit C1, C2
  and C3

  	
   

  	
  Forms of P-Floats Notices

  	
   

  	
   

  
	
  Exhibit D

  	
   

  	
  Form of Transition Services Agreement

  	
   

  	
   

  
	
  Exhibit E

  	
   

  	
  Form of Multifamily Mortgage Subservicing Agreement

  	
   

  	
   

  
	
  Exhibit F

  	
   

  	
  Form of Bill of Sale and General Assignment

  	
   

  	
   

  
	
  Exhibit G

  	
   

  	
  Form of Trademark Assignment

  	
   

  	
   

  
	
  Exhibit H

  	
   

  	
  Form of Assumption Agreement

  	
   

  	
   

  
	
  Exhibit I

  	
   

  	
  Form of License Agreement

  	
   

  	
   

  
	
  Exhibit J

  	
   

  	
  Form of Trademark License Agreement

  	
   

  	
   

  

 

SCHEDULES

 

	
  Schedule 1.1(i)

  	
   

  	
  Acquired Assets

  
	
  Schedule 1.1(ii)

  	
   

  	
  Assumed Liabilities

  
	
  Schedule
  1.1(iii)

  	
   

  	
  Adjusted Shareholders’ Equity Principles and
  Adjustments

  
	
  Schedule 1.1(iv)

  	
   

  	
  Designated Pipeline Commitments

  
	
  Schedule 2. l(b)

  	
   

  	
  Excluded Assets

  
	
  Schedule 2.2(d)

  	
   

  	
  Calculation of Adjusted Shareholders’ Equity

  
	
  Schedule 6.l(b)

  	
   

  	
  Conduct of Business of Companies Prior to Closing

  
	
  Schedule 6.l(c)

  	
   

  	
  Conduct of Business of Sellers Prior to Closing

  
	
  Schedule 6.11

  	
   

  	
  Resignation of Directors, Managers and Trustees

  
	
  Schedule 7.2(d)

  	
   

  	
  Freddie Mac Consents

  
	
  Schedule 7.2(e)

  	
   

  	
  Fannie Mae and Other Governmental Authority Consents

  

 

Disclosure Schedule

Buyers Disclosure Schedule

 

 

PURCHASE
AGREEMENT

 

 

PURCHASE AGREEMENT
(together with all Schedules and Exhibits, the “Agreement”), dated
December 20, 2006, by and among CITIGROUP GLOBAL MARKETS INC., a Delaware
corporation (“CGMI”), CITIBANK, N.A., a national banking association
chartered by the Office of the Comptroller of the Currency (“CBNA”),
solely with respect to the acquisition of the Agency Business (as hereinafter
defined) (CGMI and CBNA being hereinafter individually referred to as a “Buyer”
and collectively as “Buyers”), CAPMARK CAPITAL INC., a Colorado
corporation (“Capmark Capital”), CAPMARK FINANCE INC., a California
corporation (“Capmark Finance”) and CAPMARK SECURITIES INC., a Colorado
corporation (“Capmark Securities”) (Capmark Capital, Capmark Finance and
Capmark Securities being hereinafter collectively referred to as the “Sellers”)
and CAPMARK FINANCIAL GROUP INC., a Nevada Corporation (“Parent”).

 

RECITALS:

 

WHEREAS, Capmark
Capital is the record and beneficial owner of (i) all of the common stock of
Capmark Municipal Mortgage Inc., a Delaware statutory trust (“MMI”);
(ii) all of the limited liability company interests in Capmark Capital
Management LLC, a Delaware limited liability company (“Capmark Management”);
and (iii) all of the limited liability company interests in Newman Capital III
LLC, a Delaware limited liability company (“Newman III”);

 

WHEREAS, Capmark
Finance is the record and beneficial owner of all of the limited liability
company interests in Newman Capital I LLC, a Delaware limited liability company
(“Newman I”);

 

WHEREAS, Capmark
Capital and Capmark Finance desire to sell to CGMI, and CGMI desires to
purchase from Capmark Capital and Capmark Finance, all of the Equity Interests
(as hereinafter defined), all in accordance with the provisions of this
Agreement;

 

WHEREAS, the
Sellers are the owners of certain assets used, directly or indirectly, in the
Affordable Housing Business, which is comprised of the Conduit Business and the
Non-Conduit Business (as hereinafter defined);

 

WHEREAS, the
Sellers desire to sell to Buyers, and Buyers desire to purchase from the
Sellers, all of the Acquired Assets (as hereinafter defined), all in accordance
with the provisions of this Agreement;

 

WHEREAS, Capmark
Securities and Buyers (or one or more of their respective Affiliates) shall, as
of the Closing, enter into a remarketing transitional services agreement in the
form attached hereto as Exhibit A (the “Remarketing Transitional
Services Agreement”);

 

WHEREAS, the
Sellers and Buyers (or one or more of their respective Affiliates) shall, as of
the Closing, enter into a Multifamily Mortgage Subservicing Agreement, a
Trademark License Agreement and a Transition Services Agreement;

 

1

 

WHEREAS, Buyers
have obtained the appropriate authorizations for the acquisition by Buyers of
the Equity Interests and the Acquired Assets pursuant to this Agreement, and
the boards of directors of the Sellers have approved the sale by the Sellers of
the Equity Interests and the Acquired Assets pursuant to this Agreement; and

 

WHEREAS, Buyers
and the Sellers desire to make certain representations, warranties and
agreements in connection with the sale and acquisition of the Equity Interests
and the Acquired Assets, and also desire to set forth various conditions
precedent thereto.

 

NOW, THEREFORE, in
consideration of the mutual covenants, representations, warranties and
agreements herein contained, the Parties agree as follows:

 

ARTICLE I

DEFINITIONS

 

SECTION 1.1            Definitions. For purposes of
this Agreement, the term:

 

“Acquired
Assets” means all of the right, title and interest that the Sellers possess
and have the right to transfer in and to (a) the assets that are set forth in
Schedule 1.1(i) (as updated in accordance with Section 2.1(e)), provided
that such assets shall not include any assets that relate to (i) Conduit
Bonds, beneficial ownership interests in Bonds or Residual Interests no longer
owned by the Companies, (ii) loans or Contracts with respect to the Agency
Business that are not related to the Serviced Loans, forward purchase
contracts, commitments or pipeline transactions under the Mortgage Programs and
relating to the Affordable Housing Business or (iii) Contracts (other than
Designated Pipeline Commitments) for the underwriting of Bonds by the
investment banking segment of the Affordable Housing Business in respect of Conduit
Bonds, beneficial ownership interests in Bonds or Residual Interests no longer
owned by the Companies, and (b) any rights and interests under the Agency
Documents with respect to the Agency Business; provided  that the
Acquired Assets shall not include the Excluded Assets.

 

“Actions or
Proceedings” means any action, suit, proceeding or arbitration or any
investigation or audit by any Governmental Authority or SRO.

 

“Actual Closing
Adjusted Shareholders’ Equity” has the meaning set forth in Section 2.3(a).

 

“Adjusted
Shareholders’ Equity” means (i) the sum of the aggregate book value of the
assets of the Companies and the aggregate book value of the Acquired Assets,
less (ii) the sum of the aggregate book value of the Liabilities of the
Companies and the aggregate book value of the Assumed Liabilities, less (iii)
the excess of (y) the P-Floats Purchase Price over (z) any corresponding
liability accrued on the Estimated Closing Balance Sheet or the Final Closing
Balance Sheet, as the case may be, less (iv) the excess of (y) the Roaring
Forks Purchase Price over (z) any corresponding liability accrued on the
Estimated Closing Balance Sheet or the Final Closing Balance Sheet, as the case
may be, and shall be calculated in accordance with GAAP, subject to the accounting
principles, procedures, policies and methods used in preparing the Pro Forma
Balance Sheet, as adjusted in accordance with the Adjusted Shareholders’ Equity
Principles and Adjustments. No assets or Liabilities relating to Taxes shall be
reflected in the Estimated Closing Balance Sheet or the Final Closing Balance
Sheet, as the case may be. For

 

2

 

purposes of this
definition, (i) “P-Floats Purchase Price” shall mean (y) the Right of First
Refusal Price (as defined in the Standard Terms) for the P-Floats acquired
pursuant to Section 6.16(a) of this Agreement, together with the accrued and
unpaid fees under the related Credit Enhancement (as defined in the Custody
Agreement) and the Custody Agreement pursuant to Section 4.02(f) of the Custody
Agreement, and any other costs, expenses, fees and liabilities incurred in
connection with such acquisitions and provided for in the Standard Terms and
related documentation, less (z) any distribution received by any Company that
is a holder of the RITES (as defined in the Standard Terms) in connection with
such acquisition; and (ii) “Roaring Forks Purchase Price” shall mean the
Quotation of Bond Price (as defined in the Master Trust Agreement) with respect
to the Bonds listed on Section 6.16(b) of the Disclosure Schedule less any
distribution required to be paid to the holders of the Class B Certificates (as
defined in the Master Trust Agreement) pursuant to Section 5.01(e) of the
Master Trust Agreement in connection with the actions set forth in Section
6.16(b), and any other costs, expenses, fees and liabilities incurred in
connection with such acquisitions and provided for in the Master Trust
Agreement and related documentation.

 

“Adjusted
Shareholders’ Equity Principles and Adjustments” means those principles and
adjustments set forth on Schedule 1.1(iii).

 

“Adjustment
Period” has the meaning set forth in Section 2.3(a).

 

“Affiliate”
of any Person means another Person that directly or indirectly, through one or
more intermediaries, controls, is controlled by, or is under common control
with, such Person; provided, that with respect to the Sellers and
Parent, the term “Affiliate” shall only include Parent and its consolidated
Subsidiaries which are not investment funds managed by Parent or any of its
Affiliates.

 

“Affordable
Housing Business” means, collectively, the Conduit Business and the
Non-Conduit Business, which, for the avoidance of doubt, excludes business and
activities in respect of (i) low income housing tax credit equity financing,
syndication and asset management, (ii) providing debt financing for properties
in which low income housing tax credit investment funds managed by Affiliates
of the Sellers held equity interests prior to the provision of such debt
financing, (iii) financing transactions utilizing new markets tax credits under
a federal program promoting capital investment in low income communities, (iv)
military housing financing, (v) providing construction or permanent financing
of multifamily housing, senior housing and other housing properties where the
mortgage loans are insured by the Federal Housing Administration under the
National Housing Act, (vi) providing construction financing, construction
completion guarantees and construction phase servicing for affordable housing
projects, (vii) the financing of multifamily housing properties financed by
debt of which less than 20% is tax exempt debt and where such financing is not
eligible for low income housing tax credits, (viii) the financing of multifamily
properties by investment funds managed by Affiliates of the Sellers, (ix) debt
financing of properties eligible for low income housing tax credits that is
incidental to financing transactions for other properties, provided  that
such financing does not exceed 20% of the entire financing, (x) the remarketing
services provided by Capmark Securities under the Retained Remarketing
Agreements, or (xi) the financing of properties qualifying for New York City
tax abatements or benefits of which less than 20% of such financing is tax
exempt debt.

 

3

 

“Affordable
Housing Guarantee” means, as to the Sellers or any of their Affiliates
(other than a Company), any credit support for any Bond, Serviced Loan or Residual
Interest, including without limitation any guarantee, reimbursement agreement,
indemnification agreement, support agreement, letter of credit, loss sharing
agreement or other similar obligation (but excluding letters of credit provided
by the Sellers’ construction lending division), to the extent such obligations
are primarily related to (a) the Conduit Bonds (and beneficial ownership
interests in Bonds and Residual Interests) owned by the Companies as of the
Closing or (b) the Agency Business and, in each case, listed in the Disclosure
Schedule.

 

“Affordable
Housing Premium” means $140,000,000, less the Merrill Lynch Intercreditor
Bond Amount.

 

“Agency
Business” means, collectively, the Fannie Mae Business and the Freddie Mac
Business.

 

“Agency Documents”
means all of the Contracts relating to the Fannie Mae DUS affordable portfolio
and the Freddie Mac Program Plus and Freddie Mac Shadow Underwriting portfolios
set forth on Section 1.1(i) of the Disclosure Schedule, including any terms
incorporated by reference, such as the Fannie Mae or Freddie Mac Guidelines,
under which Sellers originated, service, share losses or have other obligations
with respect to such portfolios.

 

“Agreement”
has the meaning set forth in the introduction.

 

“Allocation
Schedule” has the meaning set forth in Section 8.1(d).

 

“Approval
Notice” has the meaning set forth in Section 2.3(a).

 

“Assumed
Liabilities” means (a) all Liabilities and obligations set forth on
Schedule 1.1(ii) (as updated in accordance with Section 2.1(e)), (b) all other
Liabilities to the extent accrued on the Estimated Closing Balance Sheet or the
Final Closing Balance Sheet, as the case may be and (c) all of Sellers’ duties,
obligations, representations, warranties, and Liabilities under the Agency
Documents with respect to the Agency Business, whether arising prior to, on, or
subsequent to the Closing Date; provided, that Assumed Liabilities shall
not include any Excluded Liabilities.

 

“Bond”
means a federally tax-exempt or taxable revenue bond issued by a state or local
Governmental Authority to provide for the financing of one of more multifamily
housing properties that are eligible for low income housing tax credits or
other programs that allow for the issuance of tax exempt bonds in connection
with low income multifamily housing.

 

“Business Day”
means any day other than a Saturday, a Sunday, a legal holiday in the State of
New York or a day on which banking institutions in the State of New York are
authorized or obligated by law to close.

 

“Business
Employees” has the meaning set forth in Section 6.9(a).

 

“Business
Licenses” has the meaning set forth in Section 4.15.

 

4

 

“Buyer” has
the meaning set forth in the introduction.

 

“Buyers
Disclosure Schedule” has the meaning set forth in the introductory
paragraph of Article V.

 

“Capmark
Capital” has the meaning set forth in the introduction.

 

“Capmark
Finance” has the meaning set forth in the introduction.

 

“Capmark
Management” has the meaning set forth in the recitals.

 

“Capmark
Securities” has the meaning set forth in the introduction.

 

“CBNA” has
the meaning set forth in the introduction.

 

“CGMI” has
the meaning set forth in the introduction.

 

“Citi
Remarketing Agent” has the meaning set forth in Section 6.25(a).

 

“Claim Notice”
means written notification pursuant to Section 10.6 of a Third Party Claim as
to which indemnity under Section 10.2 or 10.3 is sought by an Indemnified
Party, enclosing a copy of all papers served, if any, and specifying the nature
of and basis for such Third Party Claim and for the Indemnified Party’s claim
against the Indemnifying Party under Sections 10.2 or 10.3, together with the
amount or, if not then reasonably determinable, the estimated amount,
determined in good faith, of the Damages arising from such Third Party Claim.

 

“Closing”
has the meaning set forth in Section 8.1.

 

“Closing Date”
has the meaning set forth in Section 8.1.

 

“Closing
Shareholders’ Equity Payment” has the meaning set forth in Section 2.2(a).

 

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

 

“Companies”
means, collectively, Capmark Management, Newman I, Newman III, MMI, MMT, FM
Depositor and FM Taxable Depositor.

 

“Conduit Bond”
means a Bond owned by any of the Companies.

 

“Conduit
Business” means the business of investing in, holding and disposing of
Conduit Bonds, beneficial ownership interests in Bonds and Residual Interests,
as such business is conducted by the Companies on the date hereof.

 

“Confidential
Information” means any information concerning the business and affairs of
the Sellers or the Companies that is not already generally available to the
public.

 

“Contest”
has the meaning set forth in Section 10.6(b)(i).

 

5

 

“Contract”
means any contract, agreement, indenture, note, bond, loan, instrument, lease,
conditional sales contract, mortgage, license, franchise, insurance policy,
commitment or other arrangement or agreement.

 

“Credit
Obligation” has the meaning set forth in Section 6.24(b).

 

“Credit
Provider” has the meaning set forth in Section 6.24(c).

 

“Custody
Agreement” shall mean the Third Amended and Restated Custody Agreement,
dated as of December 4, 2003, between Merrill Lynch Portfolio Management Inc.
and U.S. Bank Trust National Association, as Custodian (or any predecessor
Custody Agreement that continues to apply).

 

“Damages”
has the meaning set forth in Section 10.2.

 

“Delegated
Remarketing Agreements” has the meaning set forth in Section 6.25(b).

 

“Designated
Pipeline Commitments” means the contemplated acquisitions of Portfolio
Assets set forth on Schedule 1.1 (iv).

 

“Disclosure
Schedule” has the meaning set forth in the introductory paragraph of
Article III.

 

“Dispute Notice”
has the meaning set forth in Section 2.3(a).

 

“Dispute Period”
means the period ending thirty (30) days following receipt by an Indemnifying
Party of either a Claim Notice or an Indemnity Notice.

 

“Document File”
means, with respect to any Bond or Serviced Loan, the legal files maintained by
the Companies with respect to such Bond or Serviced Loan (whether such files
are maintained in paper based form or electronic form).

 

“DOJ” has
the meaning set forth in Section 4.4(a).

 

“Due Date”
has the meaning set forth in Section 6.18(a).

 

“Employee
Benefit Plans” means each “employee benefit plan” within the meaning of
Section 3(3) of ERISA, each written employment, severance, retention,
termination, change in control, consulting, retirement, bonus or other
incentive compensation, stock purchase, stock option, stock award or other
equity-based compensation, leave of absence, lay-off, cafeteria, health,
accident, disability, workman’s compensation or other insurance, vacation or
other employee benefit agreement, plan or policy (other than any governmental
program), and any related trust, as to which (i) the Companies have or may have
any obligations or liability, contingent or otherwise (the “Company Employee
Benefit Plans”), or (ii) the Sellers have or may have any obligation or
liability, contingent or otherwise, including the plans of Parent and its
Affiliates to the extent applicable to the employees of the Companies or the
employees of the Sellers engaged in the Affordable Housing Business (the “Seller
Employee Benefit Plans”).

 

6

 

“Environmental,
Health, and Safety Requirements” means all federal, state, local, and
foreign statutes, regulations, and ordinances concerning public health and
safety, worker health and safety, pollution, or protection of the environment,
including all those relating to the presence, use, production, generation,
handling, transportation, treatment, storage, disposal, distribution, labeling,
testing, processing, discharge, release, threatened release, control, or
cleanup of any hazardous materials, substances, or wastes, as such requirements
are enacted and in effect on or prior to the Closing Date.

 

“Equity
Interests” means, collectively, all of the common stock of MMI and all of
the limited liability company interests in Capmark Management, Newman I and
Newman III.

 

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

 

“Estimated
Adjusted Shareholders’ Equity” has the meaning set forth in Section 2.2(b).

 

“Estimated
Closing Balance Sheet” has the meaning set forth in Section 2.2(b).

 

“Estimated
Freddie Mac Purchase Price” has the meaning set forth in Section 8.3(a).

 

“Estimated
Purchase Price” has the meaning set forth in Section 2.2(a).

 

“Excluded
Assets” has the meaning set forth in Section 2.1(b).

 

“Excluded
Liabilities” has the meaning set forth in Section 2.1(d).

 

“Excluded
Portfolio Assets” means (a) any Intercreditor Bond (in the event that
Merrill Lynch does not consent to the transfer of such Bonds prior to Closing),
(b) any Portfolio Asset excluded pursuant to Section 2.4 and (c) any Portfolio
Asset set forth in Schedule 2.1(b).

 

“Fannie Mae”
means the Federal National Mortgage Association.

 

“Fannie Mae
Business” means the origination, underwriting, debt financing and
refinancing and servicing activities (but excluding (i) any sub-servicing
activities by Capmark Finance and (ii) any servicing activities by the Sellers
for third parties) in respect of the Fannie Mae DUS program relating to
Serviced Loans, forward purchase contracts, commitments or pipeline
transactions with respect to the Affordable Housing Business.

 

“Fannie Mae
Transfer Agreement” means the transfer agreement by and among Fannie Mae,
the applicable Sellers and the applicable Buyers, relating to the assignment
and assumption by CBNA of the Sellers’ rights, liabilities and obligations
relating to the Fannie Mae Business and the release by Fannie Mae of the
Sellers and Parent of all liabilities with respect thereto.

 

7

 

“Fayne/Torrence
Liability” means any Liability to Steve Fayne or Joseph Torrence or their
successors in interest arising out of or in connection with any compensation
plan or other agreement between such individual and any Seller or any Affiliate
of any Seller.

 

“Final Closing
Balance Sheet” has the meaning set forth in Section 2.3(a).

 

“Financial
Statements” has the meaning set forth in Section 3.4.

 

“FM Depositor”
means FM Depositor LLC, a Delaware limited liability company and a wholly-owned
subsidiary of MMT.

 

“FM Taxable
Depositor” means FM Taxable Depositor LLC, a Delaware limited liability
company and a wholly-owned subsidiary of MMI.

 

“Freddie Mac”
means the Federal Home Loan Mortgage Corp.

 

“Freddie Mac
Business” means the origination, underwriting, debt financing and
refinancing and servicing activities (but excluding (i) any sub-servicing
activities by Capmark Finance and (ii) any servicing activities by the Sellers
for third parties) in respect of the Freddie Mac Multifamily Program Plus
Seller/Servicer program and the Freddie Mac Shadow Processing program relating
to Serviced Loans, forward purchase contracts, commitments or pipeline
transactions with respect to the Affordable Housing Business.

 

“Freddie Mac
Closing” has the meaning set forth in Section 8.2(b).

 

“Freddie Mac
Closing Date” has the meaning set forth in Section 8.2(b).

 

“Freddie Mac
Closing Notice” has the meaning set forth in Section 8.2.

 

“Freddie Mac
Letter of Credit” means that certain Irrevocable Standby Letter of Credit
Number SM218187W, currently in the amount of $2,456,800, issued by Wachovia
Bank, National Association for the benefit of Freddie Mac, as amended up to the
Closing Date.

 

“Freddie Mac
Purchase Price” means the book value of the Acquired Assets pertaining to
the Freddie Mac Business less the book value of the Assumed Liabilities
pertaining to the Freddie Mac Business and shall be calculated in accordance
with GAAP, consistent with the accounting principles, procedures, policies and
methods used by the Sellers in preparing the Pro Forma Balance Sheet, as adjusted
in accordance with the Adjusted Shareholders’ Equity Principles and
Adjustments.

 

“Freddie Mac
Transfer Agreement” means the transfer agreement by and among Freddie Mac,
the applicable Sellers and the applicable Buyers, relating to the assignment and
assumption by CBNA of the Sellers’ rights, liabilities and obligations relating
to the Freddie Mac Business, and the release by Freddie Mac of the Sellers and
Parent of all liabilities with respect thereto.

 

“GAAP” has
the meaning set forth in Section 3.4.

 

8

 

“Goodwill”
means assets described in Treasury Regulation Section 1.338-6(b)(2)(vii).

 

“Governmental
Authority” means any nation or government, any state or other political
subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.

 

“Guarantee
Payment” has the meaning set forth in Section 6.24(c).

 

“Guideline”
means any rule, regulation, handbook, published requirement or written
directive issued by a Mortgage Program Sponsor and that is applicable to the
Affordable Housing Business.

 

“Hedge Contract”
means any Contract relating to any transaction that is an interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement,
interest rate futures Contract, interest rate option Contract or other similar
arrangement, in each case designed to alter the risks of any Person arising
from fluctuations in interest rates, and in each case whether contingent or
matured.

 

“Hired Employee”
has the meaning set forth in Section 6.9(a).

 

“HSR Act”
has the meaning set forth in Section 4.4(a).

 

“Indebtedness”
of any Person means all obligations of such Person (a) for borrowed money, (b)
evidenced by notes, bonds, debentures or similar instruments (other than
Portfolio Assets owned by the Companies), (c) for the deferred purchase price
of goods or services (other than trade payables or accruals incurred in the
ordinary course of business consistent with past practice), and (d) under
capital leases.

 

“Indemnified
Party” has the meaning set forth in Section 10.4.

 

“Indemnifying
Party” has the meaning set forth in Section 10.4.

 

“Indemnity
Notice” means written notification pursuant to Section 10.5 of a claim for
indemnity under Article X by an Indemnified Party, specifying the nature of and
basis for such claim, together with the amount or, if not then reasonably
determinable, the estimated amount, determined in good faith, of the Damages
arising from such claim.

 

“Intellectual
Property” means (1) all registered and unregistered trademarks, service
marks, trade names, trade dress, logos, slogans, domain names, and the Goodwill
associated therewith; (2) all patents, inventions (whether or not patentable),
trade secrets, know-how, methods, and processes; (3) all copyrights and works
of authorship, including all computer programs (source and object code) and
related documentation; and (4) all registrations and applications for each of
the foregoing.

 

“Intercreditor
Agreements” means the following agreements: (a) the Intercreditor Agreement
dated October 14, 2005, by and among GMAC Municipal Mortgage Corporation, GMAC
Municipal Mortgage Trust, GMAC Commercial Holding Capital Corp, Zions First

 

9

 

National Bank and Merrill
Lynch Capital Services, Inc., (b) the Amended and Restated Intercreditor
Agreement dated as of June 30, 2005, by and among Roaring Fork Municipal
Products, LLC, GMAC Commercial Holding Capital Corp., GMAC Municipal Mortgage
Corporation, Zions First National Bank and Merrill Lynch Capital Services,
Inc., and (c) the Amended and Restated Intercreditor Agreement dated as of June
30, 2005, by and among Roaring Fork Municipal Products, LLC, GMAC Commercial
Holding Capital Corp., GMAC Municipal Mortgage Corporation, Zions First
National Bank and Merrill Lynch Capital Services, Inc.

 

“Intercreditor
Bonds” has the meaning set forth in Section 3.15(a)(ii).

 

“Knowledge”
of Sellers means the actual knowledge after reasonable due inquiry of any of
the Persons set forth on Section 1.1(ii) of the Disclosure Schedule.

 

“Laws”
means all laws, statutes, rules, regulations, ordinances and other
pronouncements having the effect of law of the United States, any foreign
country or any domestic or foreign state, county, city or other political
subdivision or of any Governmental Authority.

 

“Liabilities”
means all Indebtedness, obligations and other liabilities of a Person.

 

“LIBOR”
means the London Interbank Offered Rate, as published in the Wall Street
Journal.

 

“License”
means any license, permit or other governmental authorization and any license,
permit or other authorization granted by any Governmental Authority, SRO or
Mortgage Program Sponsor.

 

“License
Agreement” means the perpetual, non-exclusive, royalty-free license
agreement entered into on the date of this Agreement by and between CGMI and
the Sellers with respect to the current versions of the iDeal and DTS software
(excluding the third party Intellectual Property incorporated therein) (the “Licensed
IP”), in each case, on an “as is, where is” basis, for use in the
Affordable Housing Business following the Closing, in the form set out in Exhibit
I hereto.

 

“Licensed IP”
has the meaning set forth in the definition of License Agreement.

 

“Lien”
means any mortgage, pledge, lien, assessment, encumbrance, charge, or other
security interest, or any conditional sale Contract, title retention Contract
or other Contract to give any of the foregoing.

 

“Marks” has
the meaning set forth in Section 6.13(a).

 

“Master Trust
Agreement” means the Master Trust Agreement, dated as of June 1, 2005,
between Roaring Fork Municipal Products, LLC, as Trustor, and Zions First
National Bank, as Trustee.

 

10

 

“Material
Adverse Effect” means any event, change or effect, which individually or
together with other such events, results or would reasonably be expected to
result in a material adverse effect on the business, operations, assets and
properties, or condition (financial or otherwise) of the Affordable Housing
Business, taken as a whole; provided  that none of the following
shall be deemed to constitute, and none of the following shall be taken into
account in determining whether there has been, a Material Adverse Effect: (a)
any adverse change, event, development, or effect arising from or relating to
(i) business or economic conditions generally or the businesses in which the
Sellers or the Companies operate, (ii) national or international political or social
conditions, including the engagement by the United States in hostilities,
whether or not pursuant to the declaration of a national emergency or war, or
the occurrence of any military or terrorist attack upon the U.S. or any of its
territories, possessions, or diplomatic or consular offices or upon any
military installation, equipment or personnel of the U.S., (iii) financial,
banking, or securities markets (including any disruption thereof and any
decline in the price of any security or any market index), (iv) changes after
the date of this Agreement in GAAP, (v) the performance of any obligations
under this Agreement or the other agreements contemplated hereby, (vi) the
announcement or pendency of the transactions contemplated by this Agreement, (vii)
changes in laws, rules, regulations, orders, or other binding directives issued
by any Governmental Authority or (viii) any Business Employees not becoming
Hired Employees, (b) any existing event, occurrence or circumstance expressly
disclosed in the Disclosure Schedule and (c) any adverse change in or effect on
the Affordable Housing Business, that is cured by the Sellers before the
earlier of (i) the Closing Date and (ii) the date on which this Agreement is
terminated pursuant to Section 9.1 hereof.

 

“Material
Financing Document” means, with respect to a Conduit Bond or Serviced Loan,
the definitive bond, the related indenture, each Mortgage or other security
agreement, each deed of trust or other security agreement, each letter of
credit or other credit support, any bond purchase agreement, promissory note,
intercreditor or subordination agreement, financing agreement, commitment
letter and title insurance policy, and all modifications, amendments, renewals,
extensions, rearrangements, and substitutions with respect to the foregoing.

 

“Merrill Lynch”
means Merrill Lynch, Pierce, Fenner & Smith Incorporated.

 

“Merrill Lynch
Intercreditor Bond Amount” means $8,000,000.

 

“MIP” means
the Management Incentive Plan maintained by Sellers for the benefit of certain
Business Employees.

 

“MIP Liability”
means any Liability resulting from or arising out of or in connection with the
MIP.

 

“MMI” has
the meaning set forth in the recitals.

 

“MMT” means
Capmark Municipal Mortgage Trust, a Delaware statutory trust.

 

“Mortgage”
means a mortgage, deed of trust, pledge, or collateral assignment of a property
trust beneficiary interest or other instrument creating a Lien on or ownership
interest in a Mortgaged Property.

 

11

 

“Mortgage
Programs” means the Fannie Mae DUS program, the Freddie Mac Multifamily
Program Plus Seller/Servicer program and the Freddie Mac Shadow Processing
program, in each case relating solely to Serviced Loans, forward purchase
contracts, commitments or pipeline transactions under the Mortgage Programs and
relating to the Affordable Housing Business.

 

“Mortgage
Program Sponsor” means each of Fannie Mae and Freddie Mac.

 

“Mortgage
Program Sponsors Transfer Agreements” means the Freddie Mac Transfer
Agreement and the Fannie Mae Transfer Agreement.

 

“Mortgaged
Property” means the underlying property or properties securing any
Portfolio Asset or Serviced Loan.

 

“Multifamily
Mortgage Subservicing Agreement” means the servicing agreement to be
entered into between CBNA and Capmark Finance regarding the provision of
certain services relating to the Conduit Business and the Agency Business after
Closing, attached hereto as Exhibit E.

 

“Neutral
Auditor” has the meaning set forth in Section 2.3(a).

 

“Neutral
Auditor Determination” has the meaning set forth in Section 2.3(a).

 

“Newman I”
has the meaning set forth in the recitals.

 

“Newman III”
has the meaning set forth in the recitals.

 

“Newman Marks”
has the meaning set forth in Section 6.13(c).

 

“Non-Conduit
Business” means (i) the remarketing activities with respect to the
Remarketing Agreements conducted by any of the Business Employees of the
Sellers; (ii) the Agency Business; and (iii) the underwriting and related
activities conducted by any of the Business Employees of the Sellers in respect
of Bonds, in each case as conducted as of the date hereof.

 

“Order”
means any writ, judgment, decree, injunction, memorandum of understanding,
disciplinary action or similar order of any Governmental Authority, SRO or
Mortgage Program Sponsor (in each such case whether preliminary or final).

 

“Ordinary
Course of Business” means the ordinary course of business consistent with
past custom and practice.

 

“Organizational
Documents” means, with respect to an entity, its articles of incorporation,
by-laws, certificate of trust, trust agreement, certificate of formation,
limited liability company agreement or operating agreement, as applicable, as
the same has been amended from time to time.

 

“Parent”
has the meaning set forth in the introduction.

 

12

 

“Parties”
means collectively the Sellers and Buyers.

 

“Permitted Lien”
means (i) any Lien for Taxes not yet due or delinquent, or being contested in
good faith by appropriate proceedings for which adequate reserves have been
established in accordance with GAAP, (ii) any statutory Lien arising in the
Ordinary Course of Business by operation of Law with respect to a Liability
that is not yet due or delinquent, (iii) any minor imperfection of title or
similar Lien which individually or in the aggregate with other such Liens does
not materially impair the value of the property subject to such Lien or the use
of such property in the conduct of the Affordable Housing Business, (iv) any
Lien existing on the date hereof and set forth on Section 1.1(iii) of the
Disclosure Schedule and (v) any Lien arising in the Ordinary Course of Business
from and after the date hereof in respect of new or replacement Indebtedness
for the purchase of Portfolio Assets, which Indebtedness can be collapsed and
prepaid after the Closing without prepayment penalty or premium or the consent
of any third party.

 

“Person”
means an individual, corporation, partnership, joint venture, association,
trust, unincorporated organization or, as applicable, any other entity.

 

“Portfolio
Assets” means, collectively, all Conduit Bonds and Residual Interests owned
by the Companies, less the Excluded Portfolio Assets.

 

“Pre-Closing
Periods” has the meaning set forth in Section 6.18(a).

 

“Pre-Closing
Period Tax Returns” has the meaning set forth in Section 6.18(a).

 

“Preferred
Shares” has the meaning set forth in Section 3.2(a).

 

“Pro Forma
Balance Sheet” has the meaning set forth in Section 3.4.

 

“Purchased
Contracts” means the Contracts that are acquired by Buyers as part of the
Acquired Assets (as set forth on Schedule 1.1(i), as updated in accordance with
Section 2.1(e)).

 

“Purchase Price”
has the meaning set forth in Section 2.2(a).

 

“Purchased Real
Property Leases” has the meaning set forth in Section 4.12(a).

 

“Remarketing
Agreements” has the meaning set forth in Section 4.9(a).

 

“Remarketing
Transitional Services Agreement” has the meaning set forth in the recitals.

 

“Representatives”
means the officers, directors, employees, agents, counsel, accountants,
financial advisors, consultants and other representatives of any Person.

 

“Residual
Interests” means, collectively, any Class B Certificates (as defined in the
Master Trust Agreement), RITES (as defined in the Standard Terms) or Class B
Certificate issued in any Freddie Mac Securitization.

 

13

 

“Resolution
Period” means the period ending thirty (30) days following receipt by an
Indemnified Party of a written notice from an Indemnifying Party stating that
it disputes all or any portion of a claim set forth in a Claim Notice or an
Indemnity Notice.

 

“Restrictive
Covenant Contracts” has the meaning set forth in Section 6.4(e).

 

“Restrictive
Covenant Liability” has the meaning set forth in Section 6.4(e).

 

“Retained
Remarketing Agreements” has the meaning set forth in Section 6.25(b).

 

“Scheduled IP”
has the meaning set forth in Section 4.11.

 

“Securities Act”
means the Securities Act of 1933, as amended.

 

“Securitization”
means, generally, any transaction in which any Person transfers loans, other
debt instruments or interests therein to a trust, either taking back or selling
securities or other similar interests evidencing the ownership of such trust.

 

“Securitization
Documents” means each pooling and servicing agreement, transfer agreement,
sale and servicing agreement, indenture, assignment agreement and each and
every other document to which any Seller or any Company is or was a party in
respect of any Securitization relating to the Affordable Housing Business.

 

“Sellers”
has the meaning set forth in the introduction.

 

“Serviced Loan”
means a loan that is secured by a Mortgage on a multifamily housing property
that is eligible for low income housing tax credits or other programs that
allow for the issuance of tax exempt bonds in connection with low income
multifamily housing or a Bond, in each case, originated and serviced by a
Seller under the Mortgage Programs and as to which any Seller bears loss
sharing risk and/or holds Servicing Rights pursuant to agreements with a
Mortgage Program Sponsor. A list of Serviced Loans as of September 30, 2006 is
set forth on Section 1.1(v) of the Disclosure Schedule.

 

“Servicing
Rights” means rights to service loans pursuant to agreements with a
Mortgage Program Sponsor.

 

“Shareholders’
Equity Resolution Period” has the meaning set forth in Section 2.3(a).

 

“SRO” means
NASD Inc., the New York Stock Exchange, Inc. or any other organization or
entity that is not a federal or state regulatory agency, but that is under the
supervision of a federal regulatory agency and is authorized under federal law
to adopt and administer rules applicable to its members that are enforced by
such organization or entity, by a federal regulatory agency, or by another
self-regulatory organization.

 

“Standard Terms”
means the Standard Terms and Provisions of Series Trust Agreement, dated July
17, 1997, and dated November 1, 2004, in both cases among Merrill Lynch,
Pierce, Fenner & Smith Incorporated, as Trustor, Merrill Lynch Portfolio
Management

 

14

 

Inc., and the Series
Trustees and Tender Agents, each as identified in a Series Trust Agreement, and
U.S. Bank Trust National Association, as Delaware Trustee, as amended by the
Series Trust Agreement for each Series of F-FLOATS and RITES, as defined
therein, and any amendments thereto.

 

“Straddle
Periods” has the meaning set forth in Section 6.18(b).

 

“Straddle
Period Tax Returns” has the meaning set forth in Section 6.18(b).

 

“Subsidiary”
means any Person of which at least a majority of the outstanding shares or
other equity interests having ordinary voting power for the election of
directors or comparable managers of such Person are owned, directly or
indirectly, by another Person.

 

“Target Shareholders’
Equity” means 125% of the Adjusted Shareholders’ Equity of the Non-Conduit
Business as set forth on the Pro Forma Balance Sheet, plus the Adjusted
Shareholders’ Equity of the Conduit Business as of the Closing Date, as set
forth on the Estimated Closing Balance Sheet.

 

“Tax” or “Taxes”
means any federal, state, local, or foreign income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium, windfall
profits, environmental, customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty, or addition thereto, whether disputed or not.

 

“Tax Return”
means any return, informational return, report, declaration or other document
required to be filed with any Taxing authority with respect to Taxes.

 

“Termination
Date” has the meaning set forth in Section 9.1(b)(ii).

 

“Third Party
Claim” has the meaning set forth in Section 10.6(a).

 

“Trademark
License Agreement” means the agreement to be entered into by and between
Buyers, or designees of Buyers, and the Sellers with respect to the Newman
Marks, in the form set out in Exhibit J hereto.

 

“Transaction
Documents” means this Agreement and each other document or instrument
contemplated by this Agreement to be executed and delivered by any Party hereto
at the Closing and the License Agreement.

 

“Transfer Taxes”
has the meaning set forth in Section 6.14.

 

“Transition
Services Agreement” means the transition services agreement to be entered
into by and between Buyers, or designees of Buyers, and the Sellers with
respect to the provision of transition services for the Affordable Housing
Business following the Closing, in the form set out in Exhibit D hereto.

 

15

 

“Treasury
Regulations” means the U.S. income Tax regulations, including temporary
regulations, promulgated under the Code.

 

“Underwriting
Contract” means all open underwriting agreements that have been executed
with issuers and other underwriters but that have not yet closed relating to
the underwriting of Bonds by the investment banking segment of the Affordable
Housing Business.

 

ARTICLE
II

THE ACQUISITION

 

SECTION 2.1            Purchase and Sale.

 

(a)       On the terms and subject to the
conditions hereof (and subject to Section 8.2), at the Closing (i) Capmark
Capital and Capmark Finance, as applicable, will sell, assign, transfer and
convey to CGMI, and CGMI will purchase and acquire from Capmark Capital or
Capmark Finance, as applicable, all right, title and interest of Sellers in and
to the Equity Interests, free and clear of all Liens, other than Permitted
Liens, (ii) the Sellers will sell, assign, transfer and convey to CGMI, and
CGMI will purchase and acquire from the Sellers, all of the Acquired Assets
(other than Acquired Assets relating to the Agency Business) free and clear of
all Liens, other than Permitted Liens and (iii) the Sellers will sell, assign,
transfer and convey to CBNA, and CBNA will purchase and acquire from the
Sellers, all of the Acquired Assets relating to the Agency Business, free and
clear of all Liens, other than Permitted Liens.

 

(b)       The Sellers hereby acknowledge and agree
that Buyers shall not purchase, acquire or accept from the Sellers any of the
assets and properties of the Sellers or the Companies set forth in Schedule
2.1(b) to this Agreement or any other asset that is not an Acquired Asset (such
assets and properties of the Sellers and the Companies being referred to
herein, collectively, as the “Excluded Assets”).

 

(c)       On and subject to the terms and
conditions of this Agreement (and subject to Section 8.2), (i) CGMI will,
effective as of the Closing, assume and become responsible for, and thereafter
pay, perform or discharge when due, all of the Assumed Liabilities (other than
Assumed Liabilities relating to the Agency Business) and (ii) CBNA will,
effective as of the Closing, assume and become responsible for, and thereafter
pay, perform or discharge when due, all of the Assumed Liabilities relating to
the Agency Business. The assumption by Buyers of the Assumed Liabilities shall
in no way expand the rights or remedies of any third party against Buyers or
the Sellers as compared to the rights and remedies which such third party would
have had against the Sellers had Buyers not assumed such liabilities. Without
limiting the generality of the foregoing, the assumption by Buyers of the
Assumed Liabilities shall not create any third party beneficiary rights other
than with respect to the specific Person whose liability is expressly assumed
hereunder and then only to the extent provided herein.

 

(d)       Notwithstanding anything in this Section
2.1 or any other provision hereof to the contrary, the Sellers expressly
covenant and agree that Buyers shall assume only the Assumed Liabilities and
shall not accept, assume, agree to pay, perform or otherwise discharge or
satisfy or be liable for any and all other Liabilities of any Seller or its
Affiliates (the “Excluded Liabilities”). The Excluded Liabilities are
hereby expressly retained by and shall be

 

16

 

paid, performed, and discharged
solely by the Sellers or their Affiliates (not including the Companies). The
Excluded Liabilities shall include:

 

(i)        any Liabilities (including guarantees
of  Indebtedness) of the Sellers or their
Affiliates (not including the Companies) that Buyers have not expressly agreed
to assume in Section 2.1(c) of this Agreement;

 

(ii)       any Liability identified as an “excluded
liability” in the Pro Forma Balance Sheet;

 

(iii)      any Liabilities (including guarantees of
Indebtedness) in respect of the Excluded Assets;

 

(iv)      any Liability of the Sellers or their
Affiliates (not including the Companies) under this Agreement (or under any
other Transaction Document or any other agreement between the Sellers or their
Affiliates (not including the Companies) on the one hand and Buyers on the
other hand entered into on or after the date of this Agreement);

 

(v)       any Liability (including guarantees of
Indebtedness) or obligation for Taxes of the Sellers or their Affiliates (not
including the Companies);

 

(vi)      any Liability (including guarantees of
Indebtedness) of the Sellers in respect of Environmental, Health, and Safety
Requirements relating to the Purchased Real Property Leases arising out of
actions or omissions of the Sellers prior to the Closing Date;

 

(vii)     any Liability of the Sellers or their
Affiliates for any professional fees or expenses of advisors acting for or on
behalf of the Sellers or their Affiliates (not including any post-Closing
liabilities of the Companies);

 

(viii)    any Liability under an employment agreement
between a Seller or their Affiliates (not including the Companies) and any
Person (including any Hired Employee);

 

(ix)       any Liability, contingent, fixed or
otherwise, under the Sellers’ or their Affiliates’ Employee Benefit Plans;

 

(x)        any Liability of the Sellers or their
Affiliates arising out of or relating to any grievance or other claim brought
by an employee, former employee or director of the Sellers or their Affiliates
(not including the Companies) (or any predecessor in interest) or an unrelated
third party (including any Government Authority or regulatory body) in respect
of such employee, former employee or director, that is accrued as of, or
primarily relates to, periods ending on or before the Closing Date, in each
case, whether or not the affected employee, former employee, or director is
hired or otherwise retained by any Buyer; and

 

(xi)       any Liability of the Sellers or their
Affiliates (not including the Companies) that is not related to either (A) the
Equity Interests, (B) the Acquired Assets or (c) the Agency Business.

 

17

 

(e)       On the second Business Day prior to the
Closing Date, the Sellers shall cause to be prepared and delivered to Buyers an
updated Schedule 1.1 (i) of Acquired Assets and an updated Schedule 1.1 (ii) of
Assumed Liabilities as of a date no more than ten (10) Business Days prior to
the Closing Date. Such updated schedules shall (subject to Buyers’ right to
reject assets in accordance with Section 2.4) reflect solely those assets or
liabilities, as the case may be, in respect of the Affordable Housing Business
that are (i) acquired or assumed or (ii) disposed of or discharged, in each
case, between September 30, 2006 and the Closing Date, in accordance with the
terms of this Agreement and in the Ordinary Course of Business, provided
that such assets and liabilities shall not include any assets and
liabilities that relate to (i) Conduit Bonds, beneficial ownership interests in
Bonds or Residual Interests no longer owned by the Companies, (ii) loans or
Contracts with respect to the Agency Business that are not related to the
Serviced Loans, forward purchase contracts, commitments or pipeline
transactions under the Mortgage Programs and relating to the Affordable Housing
Business or (iii) Contracts (other than Designated Pipeline Commitments) for
the underwriting of Bonds by the investment banking segment of the Affordable
Housing Business in respect of Conduit Bonds, beneficial ownership interests in
Bonds or Residual Interests no longer owned by the Companies. On the second
Business Day prior to the Closing Date, the Sellers shall cause to be prepared
and delivered to Buyers a list of Serviced Loans as of a date no more than ten
(10) Business Days prior to the Closing Date.

 

SECTION 2.2            Consideration.

 

(a)       Subject to Sections 2.4 and 8.2, the
aggregate purchase price payable for the Affordable Housing Business pursuant
to this Agreement shall consist of the payment of cash at the Closing by Buyers
to the Sellers in an amount equal to the sum of (i) the lower of (A) the
Estimated Adjusted Shareholders’ Equity, as set forth on the Estimated Closing
Balance Sheet or (B) the Target Shareholders’ Equity (the “Closing
Shareholders’ Equity Payment”), and (ii) the Affordable Housing Premium,
and (iii) in the event the Intercreditor Bonds are owned by the Companies at
the Closing, the Merrill Lynch Intercreditor Bond Amount (together the “Estimated
Purchase Price” and the total consideration paid by Buyers to the Sellers
pursuant to this Section 2.2 as adjusted pursuant to Sections 2.3, 2.4 and 8.2,
the “Purchase Price”). The Estimated Adjusted Shareholders’ Equity shall
be subject to adjustment after the Closing as set forth in Section 2.3.

 

(b)       No later than the second Business Day
prior to the Closing Date, the Sellers shall cause to be prepared and delivered
to Buyers an estimated schedule, prepared in good faith, of the assets and
liabilities to be included in the calculation of Adjusted Shareholders’ Equity
as of the close of business on the date immediately prior to the Closing Date
(the “Estimated Closing Balance Sheet”), which shall include an
estimated calculation of the Adjusted Shareholders’ Equity as of the close of
business on the day immediately prior to the Closing Date (the “Estimated
Adjusted Shareholders’ Equity”). The Estimated Adjusted Shareholders’
Equity determined by Sellers shall be binding on Buyers and the Sellers for
purposes of determining the Estimated Purchase Price payable at the Closing in
accordance with Section 2.2(a).

 

18

 

(c)       On the Closing Date, Buyers will pay the
Estimated Purchase Price by wire transfer of immediately available funds to
such account or accounts as the Sellers shall have designated in writing to
Buyers prior to the Closing Date.

 

(d)       The Estimated Closing Balance Sheet, the
Final Closing Balance Sheet, the Estimated Adjusted Shareholders’ Equity and
the Actual Closing Shareholders’ Equity shall be prepared in accordance with
GAAP, consistent with the accounting principles, procedures, policies and
methods used in preparing the Pro Forma Balance Sheet, as adjusted in
accordance with the Adjusted Shareholders’ Equity Principles and Adjustments.
For illustrative purposes, the calculation of Adjusted Shareholders’ Equity as
of September 30, 2006, is set forth on Schedule 2.2(d).

 

SECTION 2.3            Purchase Price Adjustments.

 

(a)       As soon as practicable, but in no event
later than sixty (60) days following the Closing Date, Buyers shall cause to be
prepared and delivered to the Sellers a schedule of the assets and liabilities
included in the calculation of Adjusted Shareholders’ Equity as of the close of
business on the date immediately prior to the Closing Date (the “Final
Closing Balance Sheet”), which shall include a calculation of the amount of
the Adjusted Shareholders’ Equity as of the close of business on the day
immediately prior to the Closing Date (the “Actual Closing Adjusted
Shareholders’ Equity”) based on the Final Closing Balance Sheet and the
amount of any adjustment to the Closing Shareholders’ Equity Payment pursuant
to this Section 2.3, if any; provided, that if the transactions
contemplated by Section 6.16 have not been consummated within such sixty (60)
day period, Buyers shall provide an estimate of the financial impact of the
transactions contemplated by Section 6.16 for the purposes of the Final Closing
Balance Sheet and the Actual Closing Adjusted Shareholders’ Equity, which
estimate shall be updated following the consummation of the transactions set
forth in Section 6.16. For the avoidance of doubt, the Target Shareholders’
Equity shall not apply to the computation of the Purchase Price pursuant to
this Section 2.3 and Section 2.4. During the preparation of the Final Closing
Balance Sheet and the period of any review or dispute provided for in this
Section 2.3, each Party shall cooperate with the others to the extent
reasonably requested by such Parties to prepare the Final Closing Balance Sheet
or to investigate the basis for any dispute, as applicable. The Sellers may
notify Buyers in writing within thirty (30) days following delivery of the
Final Closing Balance Sheet (the “Adjustment Period”) that the Sellers
(i) agree with the Actual Closing Adjusted Shareholders’ Equity (an “Approval
Notice”) or (ii) disagree with the Actual Closing Adjusted Shareholders’
Equity, identifying with specificity the items with which the Sellers disagree
and the amount involved and the Sellers’ good faith estimate of the Actual
Closing Adjusted Shareholders’ Equity (a “Dispute Notice”); provided,
that Sellers may only dispute the calculation of the Actual Closing
Adjusted Shareholders’ Equity set forth in the Final Closing Balance Sheet and
solely on the basis (A) that such calculations were not made in accordance with
the principles set forth in Articles I and II of this Agreement or the
accounting principles, policies and methods employed by the Sellers in
preparing the Pro Forma Balance Sheet as adjusted by the Adjusted Shareholders’
Equity Principles and Adjustments, (B) of arithmetic error or (C) were not
prepared in good faith. Any items not specifically identified in the Dispute
Notice shall be deemed accepted by the Sellers. Upon receipt by Buyers of a
Dispute Notice, Buyers and Buyers’ accountants, on the one hand, and the
Sellers and the Sellers’ accountants, on the other hand, shall use good faith
efforts during the thirty (30) day period following the date

 

19

 

of receipt of a Dispute
Notice (the “Shareholders’ Equity Resolution Period”) to resolve any
differences they may have as to the calculations of the Actual Closing Adjusted
Shareholders’ Equity as identified in the Dispute Notice. The Sellers may
request, and Buyers shall provide, reasonable access during normal business
hours to the information and data used to calculate the Actual Closing Adjusted
Shareholders’ Equity. If the Sellers and Buyers cannot reach written agreement
during the Shareholders’ Equity Resolution Period, within ten (10) Business
Days thereafter, their disagreements, limited to only those issues specified in
the Dispute Notice still in dispute, may be submitted by any Party to BDO
Seidman, LLP (the “Neutral Auditor”), which firm shall conduct such
additional review as is necessary to resolve the specific disagreements
referred to it. Based upon such review, the Neutral Auditor shall determine the
Actual Closing Adjusted Shareholders’ Equity (the “Neutral Auditor
Determination”); provided, that in making such determination,
the Neutral Auditor may only consider those items and amounts which the Sellers
and Buyers have disputed within the time periods and on the terms specified
above and must resolve the matter in accordance with the terms and conditions
of this Agreement. Such determination shall be completed as promptly as
practicable but in no event later than thirty (30) days following the
submission of the dispute to the Neutral Auditor and shall be confirmed by the
Neutral Auditor in writing to, and shall be final and binding on, the Sellers
and Buyers for purposes of this Section 2.3. The fees and expenses of the
Neutral Auditor shall be borne by the Sellers and Buyers in the inverse
proportion as they may prevail on matters resolved by the Neutral Auditor,
which proportionate allocations shall also be determined by the Neutral Auditor
at the time the Neutral Auditor Determination is rendered on the merits of the
matters submitted.

 

(b)       Upon the definitive determination of the
Final Closing Balance Sheet and the Actual Closing Adjusted Shareholders’
Equity, the Estimated Purchase Price shall be adjusted as follows:

 

(i)        If the Actual Closing Adjusted
Shareholders’ Equity is less than the Closing Shareholders’ Equity Payment, the
Estimated Purchase Price shall be reduced by the amount equal to the amount by
which the Actual Closing Adjusted Shareholders’ Equity is less than the Closing
Shareholders’ Equity Payment, which amount shall be paid by the Sellers to
Buyers in accordance with the provisions of this Section 2.3(b).

 

(ii)       If the Actual Closing Adjusted
Shareholders’ Equity is greater than the Closing Shareholders’ Equity Payment,
the Estimated Purchase Price shall be increased by the amount equal to the
amount by which the Actual Closing Adjusted Shareholders’ Equity is more than
the Closing Shareholders’ Equity Payment, which amount shall be paid by Buyers
to Seller in accordance with the provisions of this Section 2.3(b).

 

(iii)      Any adjustment to the Estimated Purchase
Price pursuant to this Section 2.3(b) shall be made by wire transfer of
immediately available funds to an account or accounts designated by the
recipient prior to the applicable payment date.

 

(c)       Within five (5) Business Days after the
earlier of (i) the receipt by Buyers of an Approval Notice, (ii) the expiration
of the Adjustment Period if Buyers have not received an Approval Notice or a
Dispute Notice within such period, (iii) the expiration of the Shareholders’
Equity Resolution Period if the Sellers and Buyers have resolved all
differences

 

20

 

regarding the Actual
Closing Adjusted Shareholders’ Equity within such period and (iv) the receipt
of the Neutral Auditor Determination, the Sellers or Buyers, as applicable,
shall pay to the other any amounts due in accordance with Section 2.3(b) above
without set-off or deduction of any kind. The amount of any such payment shall
bear interest from and including the Closing Date to but excluding the date of
payment at a rate per annum equal to the 6-month LIBOR in effect from time to
time during the period from the Closing Date to the date of payment. Such
interest shall be payable at the same time as the payment to which it relates
and shall be calculated daily on the basis of a year of 365 days and the actual
number of days elapsed.

 

SECTION 2.4            Option to Exclude Certain New
Contracts/Portfolio Assets.

 

(a)       The Sellers covenant and agree that they
shall provide to Buyers written notice of the terms and conditions related to
(i) any Underwriting Contract entered into and any Portfolio Asset acquired by
the Companies after September 30, 2006 and prior to the date hereof and which
is not set forth on the Disclosure Schedule, promptly after the date of this
Agreement, and (ii) any Underwriting Contract to be entered into and any
Portfolio Asset (other than with respect to any Designated Pipeline Commitment)
to be acquired by the Companies (provided that in the case of Underwriting
Contracts such disclosure shall be subject to and in accordance with Section
6.4(c)) between the date hereof and the Closing Date prior to such entry or
acquisition or promptly thereafter. Upon receipt of such notice, Buyers have
the right not to acquire any such Underwriting Contract or Portfolio Asset
(other than with respect to a Designated Pipeline Commitment), and shall give
notice of such decision to the Sellers within two (2) Business Days of being
notified of such agreement or acquisition; provided that during the
first ten (10) Business Days after the date of this Agreement, Buyers may give
notice of such decision to the Sellers within ten (10) Business Days of being
notified of such agreement or acquisition. The Sellers covenant and agree that
other than with respect to Designated Pipeline Commitments, (i) they shall
remove and transfer all Portfolio Assets acquired between the date hereof and
the Closing Date that Buyers decide not to acquire out of the Companies prior
to the Closing, (ii) that such Portfolio Assets shall be designated as Excluded
Assets and (iii) that Underwriting Contracts acquired between the date of this
Agreement and the Closing Date which Buyers decide not to acquire shall not be
Acquired Assets and shall not be included on Schedule 1.1(i); provided, however,
that in the event the terms and conditions of a Designated Pipeline Commitment
are altered in a manner that is materially less favorable to the Buyers from
the terms and conditions provided to Buyers at the date hereof, Buyers shall be
entitled to not acquire such Designated Pipeline Commitment in accordance with
the provisions of this Section 2.4. The Parties agree that the computation of
Adjusted Shareholders’ Equity shall reflect the exclusion of any asset under
this Section 2.4, and that all costs and expenses incurred in connection with
the transfer and removal of such assets shall be paid by the Sellers.

 

(b)       Without the prior consent of Buyers, the
Companies shall not acquire any Portfolio Asset (other than pursuant to a
Designated Pipeline Commitment, provided that the terms and conditions of such
Designated Pipeline Commitment have not been altered in a manner that is
materially less favorable to the Buyers from the terms and conditions provided
to Buyers at the date hereof) between the date which is two Business Days prior
to the Closing Date and the Closing Date, unless such Portfolio Asset is
removed and transferred to the Sellers in accordance with Section 2.4(a).

 

21

 

(c)       The Sellers covenant and agree that
promptly after the date of this Agreement, they shall provide to Buyers copies
of the agreements listed in Section 4.8(O) of the Disclosure Schedule which
relate to Serviced Loans under a Freddie Mac Mortgage Program pursuant to which
the Sellers do not bear loss sharing risk. Upon receipt of such agreements,
Buyers have the right to exclude from the Serviced Loans under this Agreement
any such loans and shall give notice of any such decision to the Sellers within
ten (10) Business Days of their receipt of such copies. In the event Buyers
notify the Sellers that they are excluding any such loan in accordance with the
prior sentence, such loan shall not be deemed a Serviced Loan for purposes of
this Agreement and any related assets and liabilities shall be excluded from
the Acquired Assets and the Assumed Liabilities, respectively.

 

(d)       For purposes of clarification,
notwithstanding anything in this Agreement to the contrary, none of the Buyers
or Sellers shall engage in any conduct that violates the HSR Act or any other
applicable antitrust Law.

 

ARTICLE
III

REPRESENTATIONS AND WARRANTIES

WITH RESPECT TO THE COMPANIES

 

Each of the
Sellers represents and warrants, jointly and severally, to Buyers that the
statements contained in this Article III are correct and complete as of the
date of this Agreement and will be correct and complete as of the Closing Date
(as though made then and as though the Closing Date were substituted for the
date of this Agreement throughout this Article III), except as set forth in the
disclosure schedule accompanying this Agreement (the “Disclosure Schedule”).
The Disclosure Schedule will be arranged in paragraphs corresponding to the
lettered and numbered paragraphs contained in this Article III.

 

SECTION 3.1            Organization and Qualification.

 

(a)       Each of MMI and MMT is a statutory trust
duly organized, validly existing and in good standing under the laws of the
State of Delaware, with all requisite trust power and authority thereunder to
own, operate and lease its assets and properties and to carry on its business
as it is now being conducted.

 

(b)       Each of FM Taxable Depositor, FM
Depositor, Capmark Management, Newman I and Newman III is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware, with all requisite limited liability company power and
authority thereunder to own, operate and lease its assets and properties and to
carry on its business as it is now being conducted.

 

(c)       Each of the Companies is qualified or
licensed to do business and is in good standing in every jurisdiction where the
nature of the business conducted by it or the assets and properties owned or
leased by it requires qualification, except for those jurisdictions in which
the adverse effects of all such failures by a Company to be qualified, licensed
and in good standing (i) can in the aggregate be cured without material costs
or expense by the Company and (ii) will not adversely affect, in any material
respect, the enforceability of any Portfolio Asset.

 

22

 

(d)       Each of the Sellers has delivered to
Buyers complete and correct copies of the Organizational Documents of each of
the Companies.

 

(e)       Except as set forth in the Disclosure
Schedule, each Company has good title to, or has a valid leasehold interest in,
the assets and properties of the respective Company, free and clear of any Lien
(other than Permitted Liens) of any nature whatsoever.

 

SECTION 3.2            Capitalization of the Companies.

 

(a)       The authorized capital of MMI consists of
one share of Common Stock. The authorized capital of MMT consists of one share
of Common Stock and 50 shares of 4.15% Series A-1-1 Preferred Shares; 60 shares
of 4.90% Series A-1-2 Preferred Shares; 60 shares of 5.30% Series A-1-3
Preferred Shares; 40 shares of 4.80% Series A-2 Preferred Shares; 100 shares of
5.60% Series B-1 Preferred Shares; 30 shares of Series B-2 Preferred Shares and
90 shares of Series C-1 Preferred Shares (the preferred shares hereinafter
referred to as the “Preferred Shares”). The Common Stock of each of MMI
and MMT has been validly issued, is fully paid and non-assessable and was not
issued in violation of any preemptive rights. Capmark Capital holds of record
and owns beneficially the Common Stock of MMI, free and clear of any Liens or
restrictions on transfer (other than restrictions under the Securities Act and
state securities laws). MMI holds of record and owns beneficially the Common
Stock of MMT, free and clear of any Liens or restrictions on transfer (other
than restrictions under the Securities Act and state securities laws). Capmark
Capital is not a party to any option, warrant, purchase right, or other
Contract or commitment (other than this Agreement) that could require Capmark
Capital to sell, transfer, or otherwise dispose of the Common Stock, or any
other capital or equity interest of MMI. MMI is not a party to any option,
warrant, purchase right, or other contract or commitment (other than this
Agreement) that could require MMI to sell, transfer, or otherwise dispose of
the Common Stock, or any other capital or equity interest, of MMT. Neither
Capmark Capital nor MMI is a party to any voting trust, proxy, or other
agreement or understanding with respect to the voting of any capital stock of
MMI or MMT.

 

(b)       Capmark Capital is the sole Member of
each of Capmark Management and Newman Capital III, and holds of record and owns
beneficially all of the limited liability company interest of each of Capmark
Management and Newman Capital III, free and clear of any restrictions on
transfer (other than restrictions under the Securities Act and state securities
laws), Liens, options, warrants, purchase rights, Contracts, commitments,
equities, claims, and demands. Capmark Capital is not a party to any option,
warrant, purchase right, or other Contract or commitment that could require
Capmark Capital to sell, transfer, or otherwise dispose of the limited
liability company interest of Capmark Management or Newman Capital III,
respectively.

 

(c)       Capmark Finance is the sole Member of
Newman Capital I, and holds of record and owns beneficially all of the limited
liability company interest of Newman Capital I, free and clear of any
restrictions on transfer (other than restrictions under the Securities Act and
state securities laws), Liens, options, warrants, purchase rights, Contracts,
commitments, equities, claims, and demands. Capmark Finance is not a party to
any option, warrant, purchase right, or other Contract or commitment that could
require Capmark Finance to sell, transfer, or otherwise dispose of the limited
liability company interest of Newman Capital I.

 

23

 

(d)       MMI is the sole member of FM Taxable
Depositor, and holds of record and owns beneficially all of the limited
liability company interest of FM Taxable Depositor, free and clear of any
restrictions on transfer (other than restrictions under the Securities Act and
state securities laws), Liens, options, warrants, purchase rights, Contracts,
commitments, equities, claims, and demands. MMI is not a party to any option,
warrant, purchase right, or other Contract or commitment that could require MMI
to sell, transfer, or otherwise dispose of the limited liability company
interest of FM Taxable Depositor.

 

(e)       MMT is the sole member of FM Depositor,
and holds of record and owns beneficially all of the limited liability company
interest of FM Depositor, free and clear of any restrictions on transfer (other
than restrictions under the Securities Act and state securities laws), Liens,
options, warrants, purchase rights, contracts, commitments, equities, claims,
and demands. MMT is not a party to any option, warrant, purchase right, or
other contract or commitment that could require MMT to sell, transfer, or
otherwise dispose of the limited liability company interest of FM Depositor.

 

(f)        There has been no payment default under
the Preferred Shares or other default under a covenant or agreement which is
material to the rights, powers and privileges of the holders of the Preferred
Shares.

 

SECTION 3.3            Subsidiaries and Equity
Investments. None of the Companies has any Subsidiary which is not a
Company or any direct or indirect equity ownership in any other Person, other
than Residual Interests or holdings in instruments issued in connection with
any Securitization, as set out in Section 3.15(a) of the Disclosure Schedule.

 

SECTION 3.4            Financial Statements. Capmark
Capital has delivered to Buyers copies of (a) the audited consolidated balance
sheet of MMI as of, and the related consolidated statements of operations and
comprehensive income, changes in shareholder’s equity and cash flows of MMI for
the fiscal years ending, December 31, 2005 and December 31, 2004, together with
a true and complete copy of the report on such audited information by
PricewaterhouseCoopers, L.L.P.; and (b) the audited balance sheet of MMT as of,
and the related statements of operations and comprehensive income, changes in
shareholder’s equity and cash flows of MMT for the fiscal years ending,
December 31, 2005 and December 31, 2004, together with a true and complete copy
of the report on such audited information by PricewaterhouseCoopers, L.L.P.
(collectively, the “Financial Statements”). The Financial Statements (i)
were prepared in accordance with generally accepted accounting principles applied
on a consistent basis (“GAAP”) throughout the periods covered thereby,
(ii) present fairly in all material respects the financial position and results
of operations of MMI or MMT, as the case may be, of such dates and for the
periods then ended and (iii) were compiled from books and records of MMI and
MMT, as the case may be. Capmark Capital has also delivered to Buyers, a copy
of the pro forma consolidated balance sheet of the Affordable Housing Business
as of September 30, 2006 and the supporting documentation relating thereto (the
“Pro Forma Balance Sheet”), a copy of which is attached as Exhibit B
hereto. The Pro Forma Balance Sheet is a consolidated balance sheet of the
Affordable Housing Business, was prepared in accordance with GAAP, as adjusted
to give effect to the Adjusted Shareholders’ Equity Principles and Adjustments
and, except as described in the Adjusted Shareholders’ Equity Principles and
Adjustments, presents fairly in all material respects the financial condition
and results of operations of the Affordable

 

24

 

Housing Business as of
such date, and was compiled from books and records of the Sellers, Sellers’
Affiliates and the Companies. Except as reflected or reserved against in the Pro
Forma Balance Sheet or as disclosed in the Disclosure Schedule, there are no
Liabilities relating to or affecting any Company, other than Liabilities (a)
incurred in the Ordinary Course of Business, (b) which, individually or in the
aggregate, are not material to the Affordable Housing Business or (c) which
relate to any executory obligation under a Contract disclosed in any paragraph
of the Disclosure Schedule.

 

SECTION 3.5            Compliance with Applicable Laws.
Each of the Companies is in compliance with, and during the past five (5) years
has complied with, in all material respects, all applicable Laws, Orders and
Guidelines. Except as set forth in the Disclosure Schedule, within the last
five (5) years, no Company has received any written notice from any Governmental
Authority, SRO or Mortgage Program Sponsor regarding any actual, alleged, or
potential material violation of, or material failure to comply with, any Law,
Order or Guideline.

 

SECTION 3.6            Brokers’ Fees and Commissions.
None of the Companies has any liability or obligation to pay any fees or
commissions or any similar payment to any broker, finder, or agent with respect
to the transactions contemplated by this Agreement for which Buyers could
become liable or obligated.

 

SECTION 3.7            Contracts. Other than any
Contracts comprising part of the financing documents relating to the Portfolio
Assets, the Disclosure Schedule sets forth a true and complete list of the
following Contracts to which any of the Companies is a party or by which it is
bound as of the date of this Agreement (true and complete copies of which have
been delivered to Buyers prior to the date hereof):

 

(a)       any Contract (or group of related
Contracts) for the purchase or sale of assets, or for the furnishing or receipt
of services, the performance of which will extend over a period of more than
one year, or involve consideration in excess of $100,000;

 

(b)       any Contract (or group of related
Contracts) under which it has created, incurred, assumed, or guaranteed any
Indebtedness in excess of $100,000 individually or $500,000 in the aggregate,
or under which it has imposed a Lien on any of its assets, tangible or
intangible;

 

(c)       any Contract between a Company and any of
the Sellers or their Affiliates (other than another Company) involving consideration
in excess of $100,000;

 

(d)       any Contract, other than Licenses, with
any Mortgage Program Sponsor or Governmental Authority;

 

(e)       any material power of attorney given to a
third party by a Company that is currently effective and outstanding;

 

(f)        any servicing or management agreement or
any consultancy agreement;

 

(g)       any other Contract which is material to
any of the Companies or the Conduit Business; or

 

25

 

(h)       any outstanding written commitment to
enter into any Contract of the type described above;

 

except, in each case any
Contract that is terminable by such Company upon ninety (90) days’ notice or
less without the payment of any material penalty or material termination fee.

 

Each of the Contracts
listed on the Disclosure Schedule is in full force and effect, constitutes a
legal, valid and binding agreement, enforceable in accordance with its
respective terms, of each Company party thereto, and, to the knowledge of
Sellers, constitutes a legal, valid and binding agreement, enforceable in
accordance with its respective terms, of each other party thereto, and none of
the Companies and, to the Knowledge of Sellers, no other party to such
Contract, has committed any violation, breach or default thereunder (or with
notice or lapse of time or both, would be in violation or breach of or default
under any such Contract) in any material respect.

 

SECTION 3.8            Taxes. Except as set forth in
the Disclosure Schedule: (a) each of the Companies has (i) filed (or there has
been filed on its behalf) all Tax Returns required to be filed by it, and all
such Tax Returns are true, correct and complete, and (ii) paid all Taxes shown
to be due and payable on such Tax Returns; (b) there are no outstanding waivers
in writing or comparable consents regarding the application of the statute of
limitations in respect of Taxes of the Companies; (c) there is no action,
audit, claim or assessment pending or proposed in writing or, to the Knowledge
of Sellers, threatened with respect to Taxes or Tax Returns of any of the
Companies; (d) there are no Liens for Taxes upon the assets and properties of
any of the Companies other than Permitted Liens; (e) the Companies have
established on their books reserves adequate to pay all Taxes of the Companies
not yet due and payable; (f) none of the Companies are subject to any written
ruling from, or legally binding agreement with, the Internal Revenue Service or
similar state or local Taxing authority; (g) the Companies have complied with
all applicable Laws that impose obligations on the Companies to pay or withhold
Taxes and with respect to Tax-related reporting obligations of the Companies;
(h) there are no tax indemnification or similar agreements to which a Company
is a party that provide for any of the Companies to pay any other Person for
Taxes of such Person or amounts in respect thereof; (i) to the Knowledge of
Sellers, none of the Companies have entered into, or “participated” (within the
meaning of Treasury Regulations section 1.601l-4(c)(3)(A)), in a “listed
transaction” (within the meaning of Treasury Regulations section
1.601l-4(b)(2)); (j) to the Knowledge of the Sellers, the Sellers have not
received written notification from any Taxing authority challenging the
tax-exempt status of any of the Bonds (other than any Bond which is an Excluded
Portfolio Asset) or income or distributions from the Residual Interests; (k) no
election has been made under Treasury Regulations section 301.7701-3 or any similar
provision of Tax Law to treat any of the Companies as an association or
corporation; (1) (i) each of the Companies, except for MMT, FM Depositor and FM
Taxable Depositor, is and has always been, wholly-owned by Sellers (ii) all of
the Common Stock of MMT is, and has always been, owned by MMI, (iii) FM Taxable
Depositor is, and has always been, wholly-owned by MMI and (iv) FM Depositor
is, and has always been, wholly-owned by MMT; (m) for federal income tax
purposes, Sellers have always treated (i) each of the Companies, except for
MMT, as a disregarded entity within the meaning of Treasury Regulations section
301.7701-3 and (ii) MMT as a partnership; (n) to the Knowledge of the Sellers,
Sellers have not received any written notification of any presently pending or
threatened administrative or court proceedings challenging any of the entity
classifications set forth in clause (m) above; (o) the provisions of Section
5.05 of the Trust Agreement for MMT

 

26

 

have not been amended or
modified and to the Knowledge of the Sellers have not been waived since the
formation of MMT, and to the Knowledge of the Sellers, there have been no more
than two transfers of Preferred Shares (other than at initial issuance) since
the formation of MMT, one sale for approximately $5 million in 2004 and the
other sale for approximately $500,000 in 2005; and (p) there are no Tax
allocation, Tax sharing or similar agreements to which any of the Companies is
a party, on the one hand, and any former Affiliates of any Seller is a party,
on the other hand. Notwithstanding anything to the contrary contained in this
Agreement, except as and to the extent provided in Section 3.17(b), this
Section 3.8 is the only Section in this Agreement in which representations and
warranties relating or attributable to Taxes and/or Tax Returns are made,
including for purposes of any other Section in this Article III, Article IV and
Sections 7.2 and 10.2 of this Agreement.]

 

SECTION 3.9            Real Property. None of the
Companies owns or has owned any real property. None of the Companies is or has
been a party to a lease or other agreement with respect to the use or occupancy
of any land, buildings, structures, improvements, fixtures or other interest in
real property.

 

SECTION 3.10          Litigation. Except as set forth
in the Disclosure Schedule, (a) there are no Actions or Proceedings pending or,
to the Knowledge of the Sellers, threatened against, relative to or affecting
any of the Companies, which (i) would reasonably be expected to prevent the
consummation of the transactions contemplated by this Agreement or the other
Transaction Documents or are reasonably likely to otherwise result in a
material diminution of the benefits contemplated by the Transaction Documents
to Buyers or (ii) if determined adversely to any Seller or Company, could
reasonably be expected to result in material Damages to any Company, and (b)
none of the Companies is subject to any outstanding Order which would
reasonably be expected to prevent the consummation of the transactions
contemplated by this Agreement or the other Transaction Documents or is
reasonably likely to otherwise result in a material diminution of the benefits
contemplated by the Transaction Documents to Buyers and (c) there are, to the
Knowledge of Sellers, no facts or circumstances that are likely to give rise to
any Action or Proceeding that would be required to be disclosed pursuant to
clauses (a) or (b) above.

 

SECTION 3.11          Environmental Matters. Except
as set forth in the Disclosure Schedule, (a) there have been no private or
governmental claims, citations, complaints, notices of violation or letters
made, issued to or, to the Knowledge of Sellers, threatened against any of the
Companies by any Governmental Authority or private or other party for the
impairment or diminution of, or damage, injury or other adverse effects to, the
environment or public health resulting from any Company’s use or operation of
any real property, or asserting or seeking recovery for any violation of or any
liability or obligation under Environmental, Health and Safety Requirements,
and (b) the Companies are, and have been, in material compliance with
Environmental, Health, and Safety Requirements. This Section 3.11 contains the
sole and exclusive representations and warranties of Sellers with respect to
any environmental, health, or safety matters, including without limitation any
arising under any Environmental, Health, and Safety Requirements.

 

SECTION 3.12          Books and Records. The minute
books and stock record books of each of the Companies, all of which have been
made available to Buyers, are complete and correct in all material respects.
The books and records of the Companies contain a true and complete

 

27

 

record, in all material
respects, of all action taken at all meetings and by all written consents in
lieu of meetings of the shareholders, boards of trustees and committees of the
boards of trustees (or other comparable management boards) of the Companies.
The share transfer ledgers and other similar records of the Companies as made
available to Buyers prior to the execution of this Agreement accurately reflect
all record transfers prior to the execution of this Agreement in the common
shares (or comparable ownership interest) of the Companies.

 

SECTION 3.13          Hedge Contracts. The Hedge
Contracts set forth in the Disclosure Schedule represent all of the Hedge
Contracts related to notional principal amounts in excess of $5,000,000 to
which any Company is a party as of the date hereof.

 

SECTION 3.14          Regulatory Reviews. The
Disclosure Schedule sets forth all of the reviews and audits conducted by any
Governmental Agency with respect to the Companies in 2004, 2005 and 2006.

 

SECTION 3.15          Portfolio Assets.

 

(a)       Conduit Bonds. Section 3.15(a) of
the Disclosure Schedule sets forth a true and correct list of all Conduit Bonds
held by the Companies as of September 30, 2006, and such list contains, with
respect to each Conduit Bond, the following information:

 

(i)        the outstanding principal balance,
together with information on (A) the applicable maturity date, (B) the coupon
rate, (C) the identity of the issuer and (D) which entity such Conduit Bond is
held in;

 

(ii)       whether such Conduit Bond is subject to
the Intercreditor Agreements (such Conduit Bonds, together with the Bonds
underlying Residual Interests identified in clause (b)(ii)(E) below,
collectively referred to as the “Intercreditor Bonds”).

 

The information
provided in the Disclosure Schedule pursuant to this Section 3.15(a) shall be
updated as of two (2) Business Days prior to Closing.

 

(b)       Residual Interests. Section
3.15(a) of the Disclosure Schedule sets forth a true and correct list of all
Residual Interests held by the Companies as of September 30, 2006 and the Bonds
underlying such Residual Interests, and such list contains, with respect to:

 

(i)        each Residual Interest, the following
information: (A) whether such Residual Interest was issued under the Standard
Terms, the Master Trust Agreement or a Freddie Mac Securitization, (B) which
entity such Residual Interest is held in and (C) the CUSIP number for the Bonds
underlying such Residual Interest; and

 

(ii)       for each Bond underlying a Residual
Interest, (A) the outstanding principal balance thereof, (B) the applicable
maturity date therefore, (C) the coupon rate thereof, (D) the identity of the
issuer thereof, and (E) whether such Bond is subject to the Intercreditor
Agreements.

 

28

 

(c)       Each of the Companies is the sole legal,
beneficial, equitable and record owner and holder of its respective Portfolio
Assets, free and clear of any Liens (other than Permitted Liens).

 

(d)       The Companies do not own any subordinated
residual interest securities issued by a TOB issuer other than the Residual
Interests.

 

(e)       Except as set forth on the Disclosure
Schedule, (i) the Document File maintained by the Companies (or readily
available to the Companies) for each Portfolio Asset contains, in all material
aspects, an original or a true and correct copy of each of the Material
Financing Documents (including any material tax opinions with respect to any
Conduit Bonds or Bonds underlying Residual Interests) that are required to be
contained in such Document File in accordance with the applicable Company’s
underwriting policies in effect at the time of the origination or purchase of
the applicable Portfolio Asset and (ii) none of the Material Finance Documents
relating to any Portfolio Asset has been satisfied, canceled, rescinded, or
subordinated in any respect by the Companies, nor have the Companies waived any
rights thereunder except as reflected in the Document File relating to such
Portfolio Asset.

 

(f)        The Companies have not released or
authorized the release of any part of the security for any Portfolio Asset, in
whole or in any part, except as reflected in the Document File relating to such
Portfolio Asset.

 

(g)       To the Knowledge of Sellers, except as
set forth in the Disclosure Schedule and as of September 30, 2006, no issuer is
delinquent by more than thirty (30) days in the payment of any material amounts
due under any Conduit Bond or under any Bond underlying a Residual Interest.

 

SECTION 3.16          Bank and Brokerage Accounts.
The Disclosure Schedule sets forth (a) a true and complete list of the names
and locations of all banks, trust companies, securities brokers and other
financial institutions at which any Company has an account or safe deposit box
or maintains a banking, custodial, trading or other similar relationship and
(b) a true and complete list and description of each such account, box and
relationship, indicating in each case the account number and the names of the
respective officers, employees, agents or other similar representatives of any
Company having signatory power with respect thereto.

 

SECTION 3.17          Absence of Changes. Except for
the execution and delivery of this Agreement and the other Transaction
Documents, and the transactions to take place pursuant hereto and thereto on or
prior to the Closing Date, since the date of the Pro Forma Balance Sheet and as
of the date hereof, each of the Companies has been operated in all material
respects in the Ordinary Course of Business, and except as disclosed in the
Disclosure Schedule, there has not occurred, between the date of the Pro Forma
Balance Sheet and the date hereof, any of the following:

 

(a)       (i) other than in the Ordinary Course of
Business (including with respect to the financing of Portfolio Assets under the
P-Floats, Roaring Forks or similar programs), incurrence by a Company of
Indebtedness (including guarantees of Indebtedness) in an aggregate principal
amount exceeding $500,000 (net of any amounts discharged during such period),
or

 

29

 

(ii) other than in the
Ordinary Course of Business (including with respect to the Portfolio Assets),
any voluntary purchase, cancellation, prepayment or complete or partial
discharge in advance of a scheduled payment date with respect to, or waiver of
any right of any Company under, any Indebtedness (including guarantees of
Indebtedness) of or owing to a Company;

 

(b)       any material change in any accounting,
financial reporting, or Tax practice or policy of a Company;

 

(c)       (i) any acquisition or disposition of any
material assets and properties used or held for use by a Company, other than
acquisitions or dispositions in the Ordinary Course of Business; or (ii) any
creation or incurrence of a Lien (other than a Permitted Lien) on any assets
and properties used or held for use by any of the Companies;

 

(d)       any (i) amendment of any Organizational
Document of a Company, (ii) recapitalization, reorganization, liquidation or
dissolution of any Company or (iii) Business Combination involving a Company
and any other Person;

 

(e)       any entering into, amendment,
modification, termination (partial or complete) or granting of a material
waiver under or giving any material consent with respect to any material
Contract to which a Company is a party (other than in respect of any Portfolio
Asset in the Ordinary Course of Business); or

 

(f)        any entering into of an agreement to do
or engage in any of the foregoing after the date hereof.

 

SECTION 3.18          Affiliate Transactions. Except
as disclosed in the Disclosure Schedule or otherwise set forth in this
Agreement or the other Transaction Documents, (a) there are no intercompany
Liabilities (including guarantees of Indebtedness) between a Company, on the
one hand, and any Seller, any officer, director or Affiliate of any Seller, or
any Person controlled by Parent, on the other, (b) no Seller or any such
officer, director or Affiliate provides or causes to be provided any assets,
services or facilities to a Company, (c) the Companies do not provide or cause
to be provided any assets, services or facilities to any such officer, director
or Affiliate and (d) there are no agreements between any Company on the one
hand and any investment fund managed by the Sellers or Affiliates of the
Sellers on the other. Except as disclosed in the Disclosure Schedule, since the
date of the Pro Forma Balance Sheet, all settlements of intercompany
Liabilities between any Company, on the one hand, and any Seller or any such
officer, director or Affiliate, on the other hand, have been made, and all
allocations of intercompany expenses have been applied, in the Ordinary Course
of Business.

 

SECTION 3.19          Securitizations.

 

(a)       The Companies have not entered into or
otherwise engaged in any Securitization other than the Securitizations set
forth in the Disclosure Schedule.

 

(b)       The representations and warranties of any
Sellers and/or any of the Companies contained in the Securitization Documents
in respect of any Securitization with Freddie Mac were true and correct in all
material respects as of the respective dates such representations and
warranties were made.

 

30

 

(c)       None of the Sellers or the Companies have
received written notice of any material default by such party under the
Securitization Documents in respect of any Securitization with Freddie Mac.

 

SECTION 3.20          Employee Benefits.

 

(a)       There are no (and there have been no)
Company Employee Benefit Plans.

 

(b)       No Acquired Asset is an asset of any
Employee Benefit Plan.

 

(c)       None of the Companies has now, or has
ever had, (i) any employees or (ii) any actual or contingent obligations or
Liabilities with respect to any Employee Benefit Plan.

 

SECTION 3.21          P-Floats and Roaring Forks. To
the Knowledge of Sellers, the taking of the actions by Buyers set forth in
Section 6.16 will (a) cause the P-Floats listed on Section 6.16(a) of the
Disclosure Schedule to be purchased by the Companies and the applicable Bonds
to be withdrawn from the Custody Agreement without the benefit of Credit
Enhancement (as defined in the Custody Agreement) such that said Bonds will be
owned by the Company identified on such Section 6.16(a) free and clear of any
Liens, and (b) cause the applicable Bonds set forth in Section 6.16(b) to
either be withdrawn from each Trust (as defined in the Master Trust Agreement)
or such Trust (as defined in the Master Trust Agreement) to be terminated and
the Bonds to be purchased by the Companies, with the result, in either case,
that said Bonds will be owned by the Company set forth in Section 6.16(b) free
and clear of any Liens. All such actions are in accordance with, and not in
violation of, the Standard Terms, the Custody Agreement, the Master Trust
Agreement and any other applicable Contract.

 

SECTION 3.22          Disclaimer of Other Representations
and Warranties. Except as expressly set forth in this Article III and in
Article IV, none of the Sellers makes any representation or warranty, express
or implied, at law or in equity, in respect of itself, the Companies, or any of
its or their respective assets, liabilities or operations, including with
respect to merchantability or fitness for any particular purpose, and any such
other representations or warranties are hereby expressly disclaimed. Buyers
hereby acknowledge and agree that, except to the extent specifically set forth
in this Article III, CGMI is purchasing the Equity Interests on an “as-is,
where-is” basis.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

WITH RESPECT TO THE SELLERS AND THE ACQUIRED ASSETS

 

Each of the
Sellers represents and warrants, jointly and severally, to Buyers that the
statements contained in this Article IV are correct and complete as of the date
of this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date
of this Agreement throughout this Article IV), except as set forth in the
Disclosure Schedule.

 

SECTION 4.1            Organization and Qualification.
Parent and each of the Sellers is a corporation duly organized, validly
existing, and in good standing under the laws of the state of its jurisdiction
of incorporation, with all requisite corporate power and authority to own,
operate

 

31

 

and lease its assets and
properties and to carry on its business as it is now being conducted. Each of
the Sellers is qualified or licensed to do business and is in good standing in
every jurisdiction where the nature of the business conducted by it or the
properties owned or leased by it requires qualification, except for those
jurisdictions in which the adverse effects of all such failures by a Seller to
be qualified, licensed and in good standing can in the aggregate be eliminated
without material costs or expense by the Seller becoming qualified, licensed or
in good standing.

 

SECTION 4.2            Authorization.

 

(a)       Parent and each of the Sellers has full
power and authority (including full corporate or other entity power and
authority) to execute and deliver this Agreement and the other Transaction
Documents and to perform its obligations hereunder and thereunder.

 

(b)       This Agreement and each of the other
Transaction Documents has been duly and validly executed and delivered by each
of the Sellers and constitutes a legal, valid and binding obligation of such
Seller, enforceable against it in accordance with its terms, except to the
extent that such enforcement may be subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors’ rights generally, and the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. Except as set forth in the Disclosure
Schedule, neither Parent nor any of the Sellers or the Companies needs to give
any notice to, make any filing with, or obtain any authorization, consent, or
approval of any Governmental Authority, SRO or Mortgage Program Sponsor in
order to consummate the transactions contemplated by this Agreement or the
other Transaction Documents. The execution, delivery and performance of this
Agreement, the other Transaction Documents and all other agreements
contemplated hereby and thereby have been duly authorized by each of the
Sellers.

 

SECTION 4.3            No Violation. Except as set
forth in the Disclosure Schedule, neither the execution and delivery of this
Agreement or the other Transaction Documents by each of the Sellers, the
performance by each of the Sellers of its obligations hereunder and thereunder
nor the consummation by each of the Sellers of the transactions contemplated
hereby and thereby will (a) violate, conflict with or result in any breach of
any provision of its or the Companies’ Organizational Documents, (b) violate,
conflict with or result in a violation or breach of, or constitute a default
(with or without due notice or lapse of time or both) or result in or give any
Person any right of termination, cancellation, acceleration or modification,
under the terms, conditions or provisions of any note, bond, mortgage,
indenture or deed of trust, or any material License, lease or Contract to which
any Seller or any Company is a party, (c) violate, in any material respect, any
Law, Order or Guideline of any Governmental Authority, SRO or Mortgage Program
Sponsor applicable to any of the Sellers or any of the Companies, (d) result in
the imposition or creation of a Lien upon or with respect to the Equity
Interests, the Acquired Assets and the assets and properties of the Companies
or (e) require any Seller or any Company to obtain any material consent,
approval or action of, or make any material filing with or give any material
notice to any Person.

 

32

 

SECTION 4.4            Consents and Approvals.

 

(a)       Except as set forth in the Disclosure
Schedule, no material filing or registration with, material notice to or
permit, authorization, consent or approval of any Governmental Authority, SRO
or Mortgage Program Sponsor is necessary for the consummation by the Sellers or
the Companies of the transactions contemplated by this Agreement and the other
Transaction Documents other than (i) consents and approvals of or filings or
registrations with the Federal Trade Commission and the Antitrust Division of
the United States Department of Justice (the “DOJ”) pursuant to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR
Act”), and (ii) those already obtained.

 

(b)       Capmark Finance or Capmark Capital, as
the case may be, meets in all material respects all applicable requirements so
as to be entitled to originate and service Serviced Loans under the Mortgage
Programs.

 

SECTION 4.5            Brokers’ Fees and Commissions.
None of the Sellers has any liability or obligation to pay any fees or
commissions or any similar payment to any broker, finder, or agent with respect
to the transactions contemplated by this Agreement for which Buyers could
become liable or obligated.

 

SECTION 4.6            Title to Acquired Assets.
Except as set forth in the Disclosure Schedule, each of the Sellers has, title
to, or has a valid leasehold interest in, the Acquired Assets, in each case
free and clear of all Liens (other than Permitted Liens).

 

SECTION 4.7            Compliance with Applicable Laws.
Each of the Sellers is in compliance with, and during the past five (5) years
has complied with, in all material respects, all applicable Laws, Orders and
Guidelines with respect to the conduct of the Affordable Housing Business by
such Seller. Except as set forth in the Disclosure Schedule, within the last
five (5) years, no Seller (solely with respect to the conduct of the Affordable
Housing Business) has received any written notice from any Governmental
Authority, SRO or Mortgage Program Sponsor regarding any actual, alleged, or
potential material violation of, or material failure to comply with, any Law,
Order or Guideline.

 

SECTION 4.8            Purchased Contracts.

 

(a)       Schedule 1.1 (i) sets forth a true and
complete list of the Purchased Contracts and the Disclosure Schedule sets forth
a list of Purchased Contracts as of September 30, 2006. Each of the Purchased
Contracts listed in Schedule 1.1 (i) is in full force and effect and, to the
Knowledge of Sellers, constitutes a legal, valid and binding agreement,
enforceable in accordance with its terms, of each party thereto, and none of
the Sellers and, to the Knowledge of Sellers, no other party to such Contracts,
has committed any violation, breach or default thereunder (or with notice or
lapse of time or both, would be in violation or breach of or default under any
such Contract) in any material respect.

 

(b)       Each Affordable Housing Guarantee is in
full force and effect and, to the Knowledge of Sellers, constitutes a legal,
valid and binding agreement, enforceable in accordance with its terms, of each
party thereto, and none of the Sellers and, to the Knowledge of Sellers, no
other party to any Agency Document or Affordable Housing Guarantee, has
committed any violation, breach or default thereunder (or with notice or lapse
of time or both,

 

33

 

would be in violation or
breach of or default under any such Agency Document or Affordable Housing
Guarantee) in any material respect.

 

SECTION 4.9            Remarketing Agreements.

 

(a)       The Disclosure Schedule sets forth all
written Contracts to which Capmark Securities is a party pursuant to which
Capmark Securities acts as remarketing agent (“Remarketing Agreements”),
as well as the amounts charged for the services rendered under such Remarketing
Agreement for the period from January 1, 2006 to September 30, 2006.

 

(b)       Except as set forth on the Disclosure
Schedule, no Seller nor, to the Knowledge of Sellers, any other party to such
Remarketing Agreement is, or has received notice that it is, in violation or
breach of or default under any such Remarketing Agreement (or with notice or
lapse of time or both, would be in violation or breach of or default under any
such Remarketing Agreement) in any material respect.

 

SECTION 4.10          Litigation. Except as set forth
in the Disclosure Schedule, (a) there are no Actions or Proceedings pending or,
to the Knowledge of the Sellers, threatened against, relative to or affecting
any of the Sellers, which (i) would reasonably be expected to prevent the
consummation of the transactions contemplated by this Agreement or are
reasonably likely to otherwise result in a material diminution of the benefits
contemplated by the Transaction Documents to Buyers or (ii) if determined
adversely to any Seller, would reasonably be expected to result in material Damages
to any Seller; (b) none of the Sellers is subject to any outstanding Order
which could reasonably prevent the consummation of the transactions
contemplated by this Agreement or is reasonably likely to otherwise result in a
material diminution of the benefits contemplated by the Transaction Documents
to Buyers and (c) there are, to the Knowledge of Sellers, no facts or
circumstances that are likely to give rise to any Action or Proceeding that
would be required to be disclosed pursuant to clauses (a) or (b) above.

 

SECTION 4.11          Intellectual Property. Section
4.11 of the Disclosure Schedule sets forth a list of all material Intellectual
Property (including all registrations and applications) required for or used by
the Sellers or the Companies in the Affordable Housing Business (excluding
Intellectual Property within the Excluded Assets). The Sellers own all right,
title and interest in and to the Scheduled IP and have the right to use and
transfer the Intellectual Property listed on the Disclosure Schedule (the “Scheduled
IP”). All registrations and applications for registration in respect of
such Scheduled IP are valid and in full force and effect, have not lapsed,
expired or been abandoned (subject to the vulnerability of a registration for
trademarks to cancellation for lack of use), are not the subject of any
opposition filed with the United States Patent and Trademark Office or any
other applicable Intellectual Property registry. The Sellers have not, within
the last twelve (12) months, received any written claim, demand or notice
alleging that the Scheduled IP or the Licensed IP infringes any Intellectual
Property of any third party. To the Knowledge of Sellers, (a) no third party is
infringing the Scheduled IP and (b) the operation of the Affordable Housing
Business as currently conducted and the use of the Scheduled IP and the
Licensed IP in connection therewith does not infringe any Intellectual Property
or other proprietary rights of a third party.

 

34

 

SECTION 4.12          Real Property.

 

(a)       Each of the Sellers has, in all material
respects, a valid and subsisting leasehold estate in and the right to quiet
enjoyment of the real properties set forth in Schedule 1.1(i) (such leases the “Purchased
Real Property Leases”) for the full term thereof. No Seller owes any
brokerage commission with respect to any such leased space.

 

(b)       Each of the Sellers has delivered to
Purchaser prior to the execution of this Agreement true and complete copies of
all Purchased Real Property Leases (including any amendments and renewal
letters).

 

(c)       Except as disclosed in the Disclosure
Schedule, no tenant or, to the Knowledge of Sellers, other party in possession
of any of the real properties subject to the Purchased Real Property Leases has
any right to purchase, or holds any right of first refusal to purchase, such
properties.

 

SECTION 4.13          Regulatory Reviews. The
Disclosure Schedule sets forth all of the reviews and audits conducted by any
Governmental Authority, SRO or Mortgage Program Sponsor with respect to the
Sellers in 2004, 2005 and 2006, with respect to the Affordable Housing
Business.

 

SECTION 4.14          Serviced Loans.

 

(a)       Section 4.14(a) of the Disclosure
Schedule (other than Permitted Liens) sets forth a list of all Serviced Loans
as of September 30, 2006.

 

(b)       Each of the Sellers is the sole legal,
beneficial, equitable and record owner and holder of its respective Servicing
Rights in respect of Serviced Loans, free and clear of any Liens (other than
Permitted Liens).

 

(c)       (i) the Document File maintained by the
Sellers (or readily available to the Sellers) for each Serviced Loan contains,
in all material respects, an original or a true and correct copy of each of the
Material Financing Documents that are required to be contained in such Document
File in accordance with the applicable Sellers’ underwriting policies in effect
at the time of the origination of the applicable Serviced Loan, and (ii) none
of the Material Finance Documents relating to any Serviced Loan has, in any
material respects, been satisfied, canceled, rescinded, or subordinated in any
respect by the Sellers, nor have the Sellers waived any material rights
thereunder except as reflected in the Document File relating to such Serviced
Loan.

 

(d)       No borrower is delinquent by more than
thirty (30) days in the payment of any material amounts due under any Serviced
Loan.

 

SECTION 4.15          Licenses. The Disclosure
Schedule contains a true and complete list of all material Licenses used or
held for use in the Affordable Housing Business (the “Business Licenses”),
setting forth the name of the Business License and the name of the grantee.
Except as set forth in the Disclosure Schedule:

 

(a)       each Business License is valid, binding
and in full force and effect;

 

35

 

(b)       no Seller has received any written notice
that it is in default under or in violation of the terms of, any Business
License; and

 

(c)       no Seller is in material default under or
in material violation of the terms of any Business License.

 

SECTION 4.16          Absence of Changes. Except for
the execution and delivery of this Agreement and the other Transaction
Documents, and the transactions to take place pursuant hereto and thereto on or
prior to the Closing Date, during the period from the date of the Pro Forma
Balance Sheet to the date hereof, the Non-Conduit Business has been operated in
all material respects in the Ordinary Course of Business. Without limiting the
foregoing, except as disclosed in the Disclosure Schedule and in the Ordinary
Course of Business, between the date of the Pro Forma Balance Sheet and the
date hereof, the Sellers have not entered into any material amendment,
modification, termination (partial or complete) or granting of a material
waiver under or giving any material consent with respect to any material
Purchased Contract;

 

SECTION 4.17          Entire Business. Except as set
forth in the Disclosure Schedule, the sale of the Acquired Assets and the
Equity Interests by the Sellers to Buyers pursuant to this Agreement will
effectively convey to Buyers all of the assets that are material to the conduct
of the Affordable Housing Business as conducted by the Sellers and the
Companies (except for the services to be provided pursuant to the Transition
Services Agreement and the Multifamily Mortgage Subservicing Agreement, and the
licenses given under the License Agreement).

 

SECTION 4.18          Investment Funds. No investment
fund managed by the Sellers, the Parent or their Affiliates holds more than 20%
of its assets in low income multifamily housing properties financed by tax
exempt debt.

 

SECTION 4.19          Disclaimer of Other Representations
and Warranties. Except as expressly set forth in this Article IV and in
Article III, none of the Sellers makes any representation or warranty, express
or implied, at law or in equity, in respect of itself, the Acquired Assets, or
any of its other assets, Liabilities or operations, including with respect to
merchantability or fitness for any particular purpose, and any such other
representations or warranties are hereby expressly disclaimed. Buyers hereby
acknowledge and agree that, except to the extent specifically set forth in this
Article IV, Buyers are purchasing the Acquired Assets on an “as-is, where-is”
basis. Without limiting the generality of the foregoing, the Sellers make no
representation or warranty regarding any assets other than the Acquired Assets
or any Liabilities other than the Assumed Liabilities, and none shall be
implied at law or in equity.

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF BUYERS

 

Each Buyer
represents and warrants with respect to itself to each Seller, severally but
not jointly, that the statements contained in this Article V are correct and
complete as of the date of this Agreement and will be correct and complete as
of the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Article V), except
as set forth in the disclosure schedule accompanying this Agreement (the

 

36

 

“Buyers Disclosure
Schedule”). The Buyers Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered and numbered paragraphs contained in this Article
V.

 

SECTION 5.1            Organization and Qualification.
Each Buyer is a corporation duly organized, validly existing, and in good
standing under the laws of the state of its jurisdiction of incorporation, with
all requisite corporate power and authority to own, operate and lease its
assets and properties and to carry on its business as it is now being
conducted. Each Buyer is qualified or licensed to do business and is in good
standing in every jurisdiction where the nature of the business conducted by it
or the properties owned or leased by it requires qualification, except for
those jurisdictions in which the adverse effects of all such failures by such
Buyer to be qualified, licensed and in good standing can in the aggregate be
eliminated without material costs or expense by such Buyer becoming qualified, licensed
or in good standing.

 

SECTION 5.2            Authorization.

 

(a)       Each Buyer has full power and authority
(including full corporate power and authority) to execute and deliver this
Agreement and the other Transaction Documents and to perform its obligations
hereunder and thereunder.

 

(b)       This Agreement and each of the other
Transaction Documents has been duly and validly executed and delivered by each
Buyer and constitutes a legal, valid and binding obligation of such Buyer,
enforceable against it in accordance with its terms, except to the extent that
such enforcement may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors’ rights generally, and the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought. Except as set forth in the Buyers Disclosure Schedule,
neither Buyer needs to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any Governmental Authority or SRO in
order to consummate the transactions contemplated by this Agreement or the
other Transaction Documents. The execution, delivery and performance of this
Agreement, the other Transaction Documents and all other agreements
contemplated hereby and thereby have been duly authorized by each Buyer.

 

SECTION 5.3            No Violation. Except as set
forth in the Buyers Disclosure Schedule, neither the execution and delivery of
this Agreement or the other Transaction Documents by either Buyer, the
performance by a Buyer of its obligations hereunder and thereunder nor the
consummation by such Buyer of the transactions contemplated hereby and thereby
will (a) violate, conflict with or result in any breach of any provision of its
Organizational Documents, (b) violate, conflict with or result in a violation
or breach of, or constitute a default (with or without due notice or lapse of
time or both) or result in or give any Person any right of termination,
cancellation, acceleration or modification under the terms, conditions or
provisions of any note, bond, mortgage, indenture or deed of trust, or any
material License, lease or Contract to which such Buyer is a party, (c)
violate, in any material respect, any Law, Order or Guideline of any
Governmental Authority, SRO or Mortgage Program Sponsor applicable to such
Buyer, or (d) require such Buyer to obtain any material consent, approval or
action of, make any material filing with, or give any material notice to any
Person.

 

37

 

SECTION 5.4            Consents and Approvals.
Except as set forth in the Buyers Disclosure Schedule, no filing or
registration with, no notice to or permit, authorization, consent or approval
of any third party or any Governmental Authority, SRO or Mortgage Program
Sponsor is necessary for the consummation by each Buyer of the transactions
contemplated by this Agreement other than (a) consents and approvals of or
filings or registrations with the Federal Trade Commission and the DOJ pursuant
to the HSR Act, (b) requirements of federal and state securities laws and (c)
consents, registrations, approvals, authorizations, permits, filings or
notifications which, in the aggregate, are not reasonably likely to have a
material adverse effect on the ability of such Buyer to consummate the
transactions contemplated by this Agreement.

 

SECTION 5.5            Brokers’ Fees and Commissions.
Neither any of the Buyers nor any of their respective Affiliates has any
liability or obligation to pay any fees or commissions or any similar payment
to any broker, finder, or agent with respect to the transactions contemplated
by this Agreement for which any Seller could become liable or obligated.

 

SECTION 5.6            Purchase for Investment. CGMI
is acquiring the Equity Interests for its own account for investment purposes
and not with a view of the distribution thereof. CGMI has such knowledge and
experience in financial and business matters so as to be capable of evaluating
the merits and risks of its investment in the Equity Interests. CGMI is an “accredited
investor” as defined in Rule 501 of the Securities Act. CGMI will not, directly
or indirectly, dispose of the Equity Interests except in compliance with
applicable federal and state securities laws.

 

SECTION 5.7            Financing. Each Buyer has
sufficient funds available to satisfy, among other things, its obligation to
pay (a) the applicable portion of the Purchase Price and (b) all expenses
incurred by such Buyer in connection with the transactions contemplated hereby.

 

ARTICLE
VI

COVENANTS

 

SECTION 6.1            Conduct of Business of the
Sellers and the Companies Prior to the Closing.

 

(a)       Except as contemplated by this Agreement
or with the prior written consent of Buyers (which consent shall not be
unreasonably withheld), during the period from the date of this Agreement to
the Closing Date, each of the Sellers will conduct its Affordable Housing
Business, and Capmark Capital (and Capmark Finance with respect to Newman I)
will cause each of the Companies to conduct its business and operations, in
accordance with the Sellers’ or such Company’s Ordinary Course of Business.
Each Seller will use commercially reasonable efforts consistent therewith to
preserve intact its assets and properties and business organization with
respect to its Affordable Housing Business, to keep available the services of
its officers and employees engaged in the Affordable Housing Business and to
maintain satisfactory relationships with customers, suppliers, distributors and
others having commercially beneficial business relationships with such Seller
in respect of the Affordable Housing Business, in each case in the Ordinary
Course of Business, provided, that Sellers will have no
obligation to enter into retention bonus or similar arrangements to keep
available the services of its employees. Capmark Capital (and Capmark Finance
with respect to Newman I) will use commercially

 

38

 

reasonable efforts
consistent therewith to preserve intact each of the Companies’ assets,
properties and business organization, to keep available the services of each of
the Companies’ officers and employees (if any) and to maintain satisfactory relationships
with customers, suppliers, distributors and others having commercially
beneficial business relationships with such Company (if any), in each case in
the Ordinary Course of Business, provided, that Capmark Capital
will have no obligation to enter into retention bonus or similar arrangements
to keep available the services of its employees.

 

(b)       Except as set forth in Schedule 6.1(b) or
as otherwise provided in this Agreement, Capmark Capital (and Capmark Finance
with respect to Newman I) will cause each of the Companies not to take any of
the following actions, between the date of this Agreement and the Closing Date,
without the prior written consent of Buyers (which consent shall not be
unreasonably withheld):

 

(i)        issue, sell or pledge, or authorize or
propose the issuance, sale or pledge of additional shares of capital stock of
any class or interests, any limited liability company interests or membership
interests, or securities convertible into any such shares or interests, or any
rights, warrants or options to acquire any such shares or interests or other
convertible securities, or modify or amend any right of any holder of
outstanding shares of capital stock (or comparable ownership interest) or
options;

 

(ii)       redeem, purchase or otherwise acquire any
outstanding shares of its capital stock, limited liability company interest or
membership interest;

 

(iii)      propose or adopt any amendment to its
Organizational Documents, or take any action with respect to any such amendment
or any recapitalization, reorganization, liquidation or dissolution;

 

(iv)      except in the Ordinary Course of Business,
(A) sell, transfer or otherwise dispose of any of its material assets and
properties, (B) mortgage or encumber any of its material assets and properties
or (C) create or incur any Lien, other than a Permitted Lien; provided, however,
that no Portfolio Assets in an amount in excess of $10,000,000, individually or
in the aggregate, shall be sold, transferred or disposed of, without Buyers’
written consent;

 

(v)       (A) enter into other material Contracts,
except Contracts made in the Ordinary Course of Business or (B) materially
amend or modify, terminate (partially or completely), grant any material waiver
under or give any material consent with respect to any material Contract or
License (other than with respect to any Portfolio Asset in the Ordinary Course
of Business);

 

(vi)      declare, set aside or pay any dividend or
other distribution in respect of its capital stock, other than (i) in the case
of MMT, dividends to its holders of Preferred Shares, or (ii) in cash;

 

(vii)     violate, breach or default under, in any
material respect, or take or fail to take any action that (with or without
notice or lapse of time or both) would

 

39

 

constitute a material
violation or breach of, or default under, any term or provision of any material
Contract or License;

 

(viii)    incur, purchase, cancel, prepay or otherwise
provide for a complete or partial discharge in advance of a scheduled payment
date with respect to, or waiving any right of the Companies under, any
Liability of or owing to the Companies (other than in the Ordinary Course of
Business, including with respect to Portfolio Assets);

 

(ix)       engage with any Person in any Business Combination,
unless such Person agrees in a written instrument in form and substance
reasonably satisfactory to Buyers to adopt and comply with the terms and
conditions of this Agreement and the Transaction Documents as though such
Person was an original signatory hereto;

 

(x)        settle, release or forgive any material
Action or Proceeding;

 

(xi)       grant any power of attorney with respect
to any Company except in the Ordinary Course of Business;

 

(xii)      incur Indebtedness (including guarantees
of Indebtedness) other than Indebtedness in the Ordinary Course of Business in
respect of new or replacement Indebtedness for the purchase of Bonds, which
Indebtedness can be collapsed and prepaid after the Closing without prepayment
penalty or premium or consent of any party);

 

(xiii)     make any material change in the lines of
business in which a Company participates or is engaged;

 

(xiv)    make any change in any method of accounting
or accounting principle, method, estimate or practice, except for any such
change required by reason of a concurrent change in GAAP, or Tax practice or
policy or fiscal year of any Company, or write down the value of any inventory
or write off as uncollectible any accounts receivable except in the Ordinary
Course of Business;

 

(xv)     (A) make, revoke, amend or change any
material election concerning Taxes of any Company, (B) settle or compromise any
material Tax liability or refund of any Company, (C) file any amended Tax
Return of any Company, (D) enter into any closing agreement materially
affecting any Tax liability or refund of any Company, or (E) extend or waive
the application of any statute of limitations regarding the assessment or
collection of any material Tax of any Company; or

 

(xvi)    commit to do any of the foregoing.

 

(c)       Except as set forth in Schedule 6.1(c) or
as otherwise provided in this Agreement, the Sellers shall not take any of the
following actions, between the date of this Agreement and the Closing Date,
without the prior written consent of Buyers (which consent shall not be unreasonably
withheld):

 

40

 

(i)        except in the Ordinary Course of
Business, sell, transfer, assign or otherwise dispose of any of the Acquired
Assets;

 

(ii)       except in the Ordinary Course of
Business, subject any of the Acquired Assets to any Lien (other than a
Permitted Lien);

 

(iii)      (A) enter into material Contracts with
respect to the Affordable Housing Business, except Contracts made in the
Ordinary Course of Business or (B) materially amend or modify, terminate (partially
or completely), grant any material waiver under or give any material consent
with respect to any material Contract with respect to the Affordable Housing
Business, except in the Ordinary Course of Business);

 

(iv)      violate, breach or default under, in any
material respect, or take or fail to take any action that (with or without
notice or lapse of time or both) would constitute a material violation or
breach of, or default under, any term or provision of any material Contract or
License relating to the Affordable Housing Business;

 

(v)       other than in the Ordinary Course of
Business, settle, release or forgive any material Action or Proceeding relating
to the Assumed Liabilities; or

 

(vi)      commit to do any of the foregoing.

 

SECTION 6.2            Access to Information.

 

(a)       Between the date of this Agreement and
the Closing Date, upon reasonable notice and at reasonable times without
significant disruption to the businesses of the Sellers or the Companies, the
Sellers will give, and Capmark Capital (and Capmark Finance in the case of
Newman I) will cause each of the Companies to give, Buyers and their
Representatives reasonable access at all reasonable times, to all offices,
properties, facilities, personnel, books and records, Contracts, and documents
of or pertaining to such Company or the Affordable Housing Business of the
Sellers, as the case may be (and shall provide Buyers with reasonable access to
Business Employees, reasonably cooperate with Buyers in their efforts to obtain
the services of the Business Employees as of the Closing and not impede or
impair such Buyer access), and will permit Buyers to make and will fully
cooperate with regard to such inspections as it may reasonably require and will
cause its officers to furnish Buyers such financial and operating data and
other information with respect to the businesses and properties of such Company
or relating to the Affordable Housing Business of the Sellers, as the case may
be, as Buyers may from time to time reasonably request. Buyers will treat and
hold as such any Confidential Information it receives from any of the Sellers
or any Company in the course of the reviews contemplated by this Section 6.2,
will not use any of the Confidential Information except in connection with this
Agreement, and, if this Agreement is terminated for any reason whatsoever, will
return to such Seller, or such Company, as the case may be, all tangible
embodiments (and all copies) of the Confidential Information that are in its
possession.

 

(b)       Following the Closing, each Party shall
afford the other Party and its Representatives during normal business hours,
reasonable access to the books, records and other data to the extent relating
to the Affordable Housing Business in its possession with respect to periods
prior to the Closing and the right to make copies and extracts therefrom, to
the extent that

 

41

 

such access may be
reasonably required by the requesting Party in connection with (i) compliance
with the requirements of Law or any Governmental Authority, SRO or Mortgage
Program Sponsor or (ii) in connection with any actual or threatened Action or
Proceeding (excluding any action of proceeding between the Parties). Further
each Party agrees for a period extending three (3) years after the Closing Date
(or for such longer period as such Party is required to keep books, records and
other data under Law) not to destroy or otherwise dispose of any such books and
records unless such Party shall first offer in writing to surrender such books,
records and other data to the other Parties and such other Parties shall not
agree in writing to take possession thereof during the ten (10) day period
after such offer is made. Notwithstanding anything to the contrary contained
herein, this Section 6.2 shall not apply with respect to any books, records or
data relating or attributable to Taxes or Tax Returns, which shall be governed
exclusively by Sections 6.19 and 10.6(c).

 

(c)       If, in order properly to prepare
documents or reports required to be filed with any Governmental Authority, SRO
or Mortgage Program Sponsor or its financial statements, or to fulfill its
obligations hereunder, it is necessary that a Party be furnished with
additional information, documents or records relating to the Affordable Housing
Business not referred to in paragraph (b) above, and such information,
documents or records are in the possession or control of any other Party, such
other Party shall use its commercially reasonably efforts to furnish or make
available such information, documents or records (or copies thereof) at the
recipients’s reasonable request and out of pocket cost and expense. Any
information obtained by either Party in accordance with this paragraph shall be
held confidential by such Party in accordance with Section 6.10.

 

SECTION 6.3            All Reasonable Efforts.
Subject to the terms and conditions herein provided, each of the Parties hereto
agrees to use all commercially reasonable efforts to take, or cause to be
taken, all action, and to do, or cause to be done, all things necessary, proper
and advisable under applicable Laws and this Agreement to consummate and make
effective as promptly as practicable the transactions contemplated by this
Agreement, including satisfaction, but not waiver, of the Closing conditions
set forth below, and shall not take or fail to take any commercially reasonable
action that could reasonably be expected to result in the non-fulfillment of
any such Closing conditions. If at any time after the Closing any further
reasonable action is necessary or desirable to carry out the purposes of this
Agreement, including, without limitation, the execution of additional
instruments, the Parties shall take all such necessary action without further
consideration, provided  that no Party shall be obligated to pay
any fees or other amounts other than customary filing fees in connection with
such actions.

 

SECTION 6.4            Consents and Approvals; Purchased
Contracts.

 

(a)       The Parties will each cooperate with one
another and use all commercially reasonable efforts to, as promptly as
practicable, prepare all necessary documentation (including, without
limitation, furnishing all information required under the HSR Act or by the
Mortgage Program Sponsors), to give any notices to, to effect promptly all
necessary filings and to obtain all necessary Licenses, consents, approvals,
Orders and authorizations of, or any exemptions by, all third parties,
Governmental Authorities, SROs and Mortgage Program Sponsors necessary to
consummate the transactions contemplated by this Agreement or otherwise
reasonably required in connection therewith (including the filing by Sellers of
Forms U-5 with NASD, Inc.). Without

 

42

 

limiting the generality
of the foregoing, each of the Parties will file any Notification and Report
Forms and related material that it may be required to file with the Federal
Trade Commission and the DOJ under the HSR Act, will use all commercially
reasonable efforts to obtain a waiver from the applicable waiting period, and
will make any further filings pursuant thereto that may be necessary, proper,
or advisable in connection therewith, and comply at the earliest practicable
date with any request of additional information received from the Federal Trade
Commission or the Antitrust Division of the DOJ pursuant to the HSR Act. Each
Party will keep the other Parties apprised of the status of any inquiries made
of such Party by the Mortgage Program Sponsors, SRO, DOJ or any other
Governmental Authority or members of their respective staffs with respect to
this Agreement or the transactions contemplated hereby.

 

(b)       At the Closing, effective as of the
Closing Date, the Sellers shall assign their rights under the Purchased
Contracts. Notwithstanding the foregoing, to the extent that any Purchased
Contract is not assignable without the consent of another party, this Agreement
shall not constitute an assignment or an attempted assignment thereof if such
assignment or attempted assignment would constitute a breach thereof or a
default thereunder and, with respect to Purchased Contracts that cannot be
assigned to Buyers on the Closing Date, the performance obligations of the
Sellers thereunder shall, unless not permitted by such Contract, be deemed to
be subleased or subcontracted to Buyers until such Contract has been assigned.
The Sellers and Buyers shall use commercially reasonable efforts to obtain the
consent of such other party to the assignment of any such Purchased Contract to
Buyers in all cases in which such consent is or may be required for such
assignment. For purposes of this Agreement, “commercially reasonable efforts”
shall not require the payment of any fees or other amount to obtain any
consents under any Contract, other than customary filing fees. If any such
consent shall not be obtained, the Sellers and Buyers shall cooperate in any
reasonable arrangement designed to provide for Buyers the benefits and
obligations intended to be assigned to and assumed by Buyers under the relevant
Purchased Contract, including enforcement for the account of Buyers (and at
Buyers’ expense) of any and all rights of the Sellers against the other party
thereto arising out of the breach or cancellation thereof by such other party
or otherwise. If and to the extent that such arrangement cannot be made, Buyers
shall have no obligation or benefit pursuant to this Section 6.4(b) or
otherwise with respect to any such Purchased Contract.

 

(c)       The Sellers shall use commercially
reasonable efforts to ensure that each Purchased Contract entered into between
the date hereof and the Closing permits the assignment of such Contract to
Buyers at the Closing without the consent or approval of the parties thereto.
In addition, with respect to such Contracts which are Underwriting Contracts or
commitments with respect to Underwriting Contracts, the Sellers shall use
commercially reasonable efforts to promptly provide a written notice to Buyers
setting forth the name and credit rating of the issuer of the Bond covered by
each such Underwriting Contract or commitment with respect to an Underwriting
Contract; provided, that such notice shall not include any
pricing information.

 

(d)       Following the Closing, in the event any
amount due under a Purchased Contract or otherwise to a Party in accordance
with the terms of this Agreement or the other Transaction Documents is paid to
another Party, such other Party shall promptly remit such amount to the Party
to which such amount was due.

 

43

 

(e)       At any time prior to the date which is
ten (10) Business Days prior to the Closing Date (or, in the case of any
Purchased Contract or Company Contract which is disclosed by Sellers to Buyers
after such date, within five (5) Business Days from the date of such
disclosure), if any Purchased Contract or Company Contract contains a
non-competition, exclusivity, non-solicitation or similar provision with
respect to the conduct of the Buyers’ business post-Closing, Buyers may provide
the Sellers with a written notice of Buyers’ decision not to assume any such
Contract (the “Restrictive Covenant Contracts”). The Sellers covenant
and agree that the Restrictive Covenant Contracts shall be removed from the
Companies and/or excluded from the Purchased Contracts, as applicable, and that
the Restrictive Covenant Contracts shall be designated as Excluded Assets, provided,
however, that Buyers shall indemnify the Sellers for any Damages
incurred by the Sellers from and after the Closing Date in connection with the
Restrictive Covenant Contracts, as reduced to the extent such Damages relate to
a liability which (without regard to the terms of this Section 6.4(e)) is an
Excluded Liability (any amount to be so indemnified, the “Restrictive
Covenant Liability”).

 

SECTION 6.5            Public Announcements. At all
times at or before the Closing, Buyers and the Sellers will consult with each
other and will mutually agree (the agreement of each Party not to be
unreasonably withheld) upon the content and timing of any press release or
other public statements (including statements and releases to employees) with
respect to the transactions contemplated by this Agreement and shall not issue
any such press release or make any such public statement prior to such
consultation and agreement, except as may be required by either Party by
applicable Law or by obligations pursuant to any listing agreement with any
securities exchange or any stock exchange regulations; provided, however,
that Buyers and the Sellers will give prior notice to the other Party of the
content and timing of any such press release or other public statement required
by applicable Law or by obligations pursuant to any listing agreement with any
securities exchange or any stock exchange regulations. Each Party will also
obtain the other Party’s prior approval (such approval not to be unreasonably
withheld) of any press release to be issued immediately following the Closing
announcing the consummation of the transactions contemplated by this Agreement.

 

SECTION 6.6            Disclosure Supplements. From
time to time prior to the Closing, the Sellers will supplement or amend the
Disclosure Schedule with respect to any matter which, if existing or occurring
at or prior to the date of this Agreement, would have been required to be set
forth or described in the Disclosure Schedule or which is necessary to correct
any information in the Disclosure Schedule which has been rendered inaccurate
by an event occurring after the date hereof, provided, that such
supplement or amendment provided pursuant to this Section 6.6 shall have no
effect on the representations, warranties, covenants or agreements contained in
this Agreement for purposes of determining satisfaction of any condition
contained herein and shall in no way limit Buyers’ right to seek indemnity
under Article X.

 

SECTION 6.7            No Implied Representations or
Warranties. Buyers hereby acknowledge and agree that the Sellers are not
making any representation or warranty whatsoever, express or implied, except
those representations and warranties of the Sellers explicitly set forth in
this Agreement or in the Disclosure Schedule or in any certificate or other
Transaction Document contemplated hereby and delivered by the Sellers in
connection herewith. Subject to the foregoing, the assets and business of the
Sellers being acquired by Buyers at the Closing as a result of this Agreement
and the transactions contemplated hereby shall be acquired

 

44

 

by Buyers on an “as-is,
where-is” basis and in their then present condition, and Buyers shall rely
solely upon its own examination thereof and the representations and warranties
set forth in this Agreement or in the Disclosure Schedule or in any certificate
or any other Transaction Document delivered by the Sellers. In any event, except
as explicitly set forth herein, none of the Sellers, the Companies or any of
their respective officers, directors, partners, employees, Affiliates or
Representatives, as the case may be, has made or is making any representation,
express or implied, as to the value of any asset or business being so acquired,
or any warranty of merchantability, suitability or fitness for a particular
purpose or quality, with respect to any of the tangible assets being so
acquired, or as to the condition or workmanship thereof, or as to the absence
of any defects therein, whether latent or patent. Without limiting the
generality of the foregoing, the Sellers make no representation or warranty to
Buyers with respect to any financial projection or forecast relating to the
Companies or the Affordable Housing Business contained in any Confidential
Information or other document provided to Buyers. With respect to any such
projection or forecast delivered by or on behalf of the Sellers to Buyers, each
Buyer acknowledges that (i) there are uncertainties inherent in attempting to
make such projections and forecasts, (ii) it is familiar with such
uncertainties, (iii) it is taking full responsibility for making its own
evaluation of the adequacy and accuracy of all such projections and forecasts
so furnished to it and (iv) it shall have no claim against the Sellers with
respect thereto.

 

SECTION 6.8            No Solicitations. Parent and
Sellers shall not take, nor shall they authorize or permit, as applicable, any
Affiliate of any Seller (or authorize any investment banker, financial advisor,
attorney, accountant, employee or other Person retained by or acting for or on
behalf of Parent or Sellers or any such Affiliate) to take, directly or
indirectly, any action to solicit, encourage, receive, negotiate, assist or
otherwise facilitate (including by furnishing Confidential Information or
permitting access to the assets and properties and books and records of any
Seller or Company) any offer or inquiry from any Person concerning the direct
or indirect acquisition of the Affordable Housing Business by any Person other
than (i) Buyers or their Affiliates or (ii) any other Person which has proposed
any merger or other Business Combination or purchase of equity interests or
assets to which Parent or any Seller or any Affiliate of Parent or any Seller
is a party and which indirectly involves the Affordable Housing Business or any
Company, provided that the Person making such proposal expressly
recognizes the rights of Buyers hereunder in a written instrument reasonably
satisfactory to Buyers. If Parent or any Seller or any Affiliate of Parent or
any Seller (or any such Person acting for or on their behalf) receives from any
Person any offer, inquiry or informational request referred to above, the
Sellers shall promptly advise such Person, by written notice, of the terms of
this Section 6.8 and shall promptly, orally and in writing, advise Buyers of
such offer, inquiry or request and deliver a copy of such notice to Buyers.

 

SECTION 6.9            Employee Benefit Matters.

 

(a)       Employees. Effective as of the
Closing Date, Buyers agree to offer reasonably comparable employment to each of
the employees listed on the Disclosure Schedule (the “Business Employees”)
as measured in comparison to similarly situated employees of Buyers, including
compensation, terms, and benefits. Buyers shall include in any offer of
employment a provision to the effect that acceptance of such offer shall
constitute a resignation of employment with the Sellers or the Companies, as
the case may be, effective immediately before the Closing Date. Buyers’ offer
of employment shall be subject to the same terms and

 

45

 

conditions currently
applicable to any newly hired, similarly situated employees of Buyers. Sellers
shall reasonably cooperate and assist Buyers in fulfilling their obligations
under this Section 6.9(a). Each Business Employee that has accepted an offer of
employment with Buyers as of the Closing Date shall be deemed a “Hired
Employee.” Neither any Buyer nor any of their Affiliates shall be obligated
to continue to employ any Hired Employee for any specific period of time
following the Closing Date.

 

(b)       Benefit Arrangements. All Hired
Employees shall be entitled to receive, while in the employ of Buyers,
compensation and benefits that are, in the aggregate, substantially comparable
to the compensation and benefits provided by Buyers to similarly situated
employees of Buyers (and, if applicable, their eligible beneficiaries)
immediately prior to the Closing Date. Buyers shall (i) waive all limitations
as to preexisting conditions, exclusions and waiting periods with respect to
participation and coverage requirements applicable to all Hired Employees under
any welfare plan that such employees may be eligible to participate in after
the Closing Date, other than limitations or waiting periods that are already in
effect with respect to such Hired Employees and that have not been satisfied as
of the Closing Date under any welfare plan maintained for such employees
immediately prior to the Closing Date and (ii) provide each Hired Employee with
credit for any deductibles paid prior to the Closing Date in satisfying any
applicable deductible or out-of-pocket requirements under any welfare plans
that such employees are eligible to participate in after the Closing Date. Each
Buyer agrees to take such actions as may be necessary to permit the Hired
Employees to make a directed transfer or any other roll over of a distribution
(but not including outstanding loan balances) from the Sellers’ 401 (k) plan to
the respective Buyer’s 401(k) plan.

 

(c)       No Transfer of Assets or Liabilities.
Neither the Buyers nor any of their Affiliates shall assume any obligations
under or Liabilities with respect to, nor shall they receive any right or
interest in, any Seller Employee Benefit Plan. Effective as of the Closing
Date, the Sellers and their Affiliates shall take all necessary action, if any,
to effect the cessation of participation in the Seller Employee Benefit Plans
by the Hired Employees. No assets or Liabilities with respect to the Seller
Employee Benefit Plans shall be transferred to Buyers or any of their
Affiliates as a result of this Agreement.

 

(d)       Indemnification and Insurance.
Each Buyer agrees, with respect to Hired Employees hired by such Buyer, to
provide rights to indemnification or insurance to the same extent of any such
rights provided to similarly situated employees of such Buyer immediately prior
to the Closing Date.

 

SECTION 6.10          Confidentiality. Each Party
will hold, and will cause its Affiliates, and their respective Representatives
to hold, in strict confidence from any Person (other than any such Affiliate or
Representative), unless (a) compelled to disclose by judicial or administrative
process (including without limitation in connection with obtaining the
necessary approvals of this Agreement and the transactions contemplated hereby
by any Governmental Authority, SRO or Mortgage Program Sponsor) or by other
requirements of Law or (b) disclosed in an Action or Proceeding brought by a
Party in pursuit of its rights or in the exercise of its remedies hereunder,
all documents and information concerning the other Parties or any of its
Affiliates furnished to it by the other Party or such other Party’s Representatives
in connection with this Agreement or the transactions contemplated hereby and
in the case of the Sellers, the confidential terms and

 

46

 

conditions of the
Portfolio Assets, except to the extent that such documents or information can
be shown to have been (i) previously known by the Party receiving such
documents or information, (ii) in the public domain (either prior to or after
the furnishing of such documents or information hereunder) through no fault of
such receiving Party, or (iii) later acquired by the receiving Party from
another source if the receiving Party is not aware that such source is under an
obligation to another Party to keep such documents and information
confidential; provided that following the Closing the foregoing
restrictions will not apply to Buyers’ use of Confidential Information
furnished by the Sellers hereunder. In the event the transactions contemplated
hereby are not consummated, upon the request of another Party, each Party will,
and will cause its Affiliates and their respective Representatives to, promptly
(and in no event later than five (5) Business Days after such request)
redeliver or cause to be redelivered all documents and information furnished by
another Party in connection with this Agreement or the transactions
contemplated hereby, and, except to the extent required to retain copies of
such documents and information pursuant to either Party’s regular document
retention procedures and practices, destroy or cause to be destroyed all notes,
memoranda, summaries, analyses, compilations and other writings related thereto
or based thereon.

 

SECTION 6.11          Resignation of Directors/Trustees.
On or prior to the Closing, the Sellers will cause each of the directors,
managers or trustees of each of the Companies set forth on Schedule 6.11 to
resign as a director, manager or trustee of such Company effective as of the
Closing.

 

SECTION 6.12          Control of Business. Except as
set forth in this Agreement to the contrary, Buyers acknowledge on behalf of
themselves and their Affiliates and their respective directors, officers,
employees, Affiliates, agents, representatives, successors and assigns that the
operation of the Companies and the Affordable Housing Business remains in the dominion
and control of the Sellers and the Companies until the Closing and that none of
the foregoing Persons will provide, directly or indirectly, any directions,
orders, advice, aid, assistance or information to any director, officer or
employee of any of the Sellers or the Companies or solicit or request, directly
or indirectly, any information relating to either of the Companies from any
director, officer or employee of the Seller or the Companies, except as
specifically contemplated or permitted by this Article VI or as otherwise
consented to in advance by an authorized officer of Sellers.

 

SECTION 6.13          Names and Marks.

 

(a)       Each Buyer acknowledges and agrees that
neither Buyer has any rights in or to any marks or names owned, used or
licensed by the Companies incorporating, utilizing or otherwise including the “CAPMARK”
name, any logos associated with CAPMARK, and all related marks (the “Marks”)
and, following the Closing Date neither Buyer shall have any right, title or
interest in and to, or right to use, the Marks or any marks or names
confusingly similar thereto.

 

(b)       Each Buyer covenants that after the
Closing Date it will not adopt, use or register or authorize others to adopt,
use or register, any trade names, trademarks, service marks or Internet domain
names consisting of or incorporating the Marks or any marks, names or Internet
domain names confusingly similar thereto. On the Closing Date, Buyers shall
file a

 

47

 

certificate of amendment
with the Secretary of State of the State of Delaware and otherwise take all
actions necessary or appropriate to change the names of MMI and MMT so that
they no longer refer to “Capmark”.

 

(c)       From and after the Closing, neither the
Sellers nor any of their Affiliates shall have any rights in or to the “Newman”
name, the “Newman and Associates” name or any confusingly similar name (the “Newman
Marks”), and neither the Sellers nor any of their Affiliates shall use the
Newman Marks for any purpose without the prior written consent of Buyers; provided,
however, that Sellers shall have a limited right to continue to use the
Newman Marks pursuant to and in accordance with the Trademark License
Agreement. In furtherance hereof, the Sellers shall undertake such actions and
issue such documents and instruments as may be reasonably necessary to permit
Buyers to operate using the Newman Marks.

 

(d)       The Parties acknowledge and agree that
any remedy at Law for any breach of the provisions of this Section would be
inadequate, and hereby consent to the granting by any court of an injunction or
other equitable relief, without the necessity of actual monetary loss being
proved, in order that the breach or threatened breach of such provisions may be
effectively restrained.

 

SECTION 6.14          Sales, Transfer and Similar Taxes.
Notwithstanding anything to the contrary contained in this Agreement, all
sales, use, transfer, stamp, registration, value added and similar Taxes, and
any conveyance fees and recording and similar charges, incurred in connection
with the sale by the Sellers to the Buyers of the Acquired Assets and Equity
Interests pursuant to Section 2.1 of this Agreement (collectively, “Transfer
Taxes”) shall be paid by the Sellers. The Sellers shall be responsible for
preparing and filing all Tax Returns required to be filed with respect to
Transfer Taxes, and the Buyers shall cooperate with the Sellers in connection
with the preparation of any such Tax Return relating to Transfer Taxes.

 

SECTION 6.15          Capmark Finance Swaps. Prior to
the Closing, the Sellers shall terminate, or transfer out of the Companies, all
Hedge Contracts which are not Purchased Contracts and all rights and
obligations under any such Hedge Contracts.

 

SECTION 6.16          P-Floats and Roaring Forks

 

(a)       CGMI shall, promptly after the Closing
Date, take all actions necessary (i) to exercise its Right of First Refusal (as
defined in the Standard Terms) as promptly as possible following the Closing by
purchasing the P-Floats listed on Section 6.16(a) of the Disclosure Schedule in
accordance with the terms and conditions set forth in Section 6.2 of the
Standard Terms and withdrawing the related Bonds or Custodial Receipts (as
defined in the Custody Agreement) listed on Section 6.16(a) of the Disclosure
Schedule, as contemplated by Section 6.1 of the Standard Terms and (ii) to
exercise its right to receive Bonds (as defined in the Custody Agreement)
without the benefit of Credit Enhancement (as defined in the Custody Agreement)
in exchange for the foregoing Custodial Receipts in accordance with Section
4.02(f) of the Custody Agreement. Such actions shall include, without
limitation, (x) in the case of exercising its Right of First Refusal, causing
MMT to submit a notice in the form of Exhibit C1 hereto setting forth, inter alia, the aggregate Stated Amount
(as defined in the Standard Terms) of all such P-Floats, the Rate Determination
Time (as defined in the Standard Terms), on which such right of First

 

48

 

Refusal (as defined in
the Standard Terms) is to be exercised, an agreement to withdraw the principal
amount of bonds equal to the Stated Amount of the P-Floats and paying, or
causing to be paid, the Right of First Refusal Price (as defined in the
Standard Terms), and thereafter causing MMT to submit a notice in the form of Exhibit
C2 in connection with such withdrawal, and (y) in the case of withdrawing
Bonds from the Custody Agreement, causing MMT to submit a notice in the form of
Exhibit C3 hereto, payment of accrued and unpaid fees of the Credit
Enhancer and the Custodian (each as defined in the Custody Agreement),
delivering an investment letter, if required, and depositing cash or Eligible
Investments with the Custodian in the amount required by the Custody Agreement.

 

(b)       CGMI shall, promptly after the Closing
Date, take all actions necessary to withdraw the Bonds set forth on Section
6.16(b) of the Disclosure Schedule from each Trust (as defined in the Master
Trust Agreement) pursuant to the terms and conditions of the Master Trust
Agreement. CGMI shall effect such withdrawal either (i) by delivering written
notice to each Trustee, directing the sale of the Bonds of each Maturity (as
defined in the Master Trust Agreement) pursuant to Section 5.01(a)(xi) of the
Master Trust Agreement and purchasing such Bonds pursuant to Section 5.01(h) of
the Master Trust Agreement at a price equal to the Quotation of Bond Price (as
defined in the Master Trust Agreement) obtained by the Remarketing Agent (as
defined in the Master Trust Agreement) in respect of such Bonds, or (ii)
acquiring as promptly as possible after the Closing all of the Class A
Certificates (as defined in the Master Trust Agreement) issued pursuant to the
Master Trust Agreement related to the Bonds listed on Section 6.16(b) of the
Disclosure Schedule and withdrawing the related Bonds listed on Section 6.16(b)
of the Disclosure Schedule, in accordance with the terms and conditions of
Section 6.01 of the Master Trust Agreement.

 

SECTION 6.17          Termination of MMT. The Sellers
and Buyers agree to treat, for U.S. federal income Tax purposes (and applicable
state and local income tax purposes), the sale of all of the common stock of
MMI as resulting in a “termination” of MMT pursuant to Section 708 of the Code
(and applicable provisions of state and local income Tax law), and agree
further that, unless previously made and still in effect, an election under
Section 754 of the Code shall be made for MMT on the Tax Return for the taxable
period in which such termination is deemed to occur.

 

SECTION 6.18          Tax Matters.

 

(a)       Preparation and Filing of Tax Returns,
and Payment of Taxes, for Pre-Closing Periods. To the extent not previously
filed, the Sellers shall prepare and file (or cause to be prepared and filed)
all Tax Returns required to be filed by any Company for all periods ending on
or before the Closing Date (such periods, “Pre-Closing Periods” and such
Tax Returns “Pre-Closing Period Tax Returns”), including Internal
Revenue Service Form 1065 (and applicable state and local informational Tax
Returns) for the Pre-Closing Period ending on the Closing Date (in accordance
with Section 6.17). All such Pre-Closing Period Tax Returns shall be prepared
in a manner consistent with the past practice of the applicable Company (unless
otherwise required by Law). The Sellers shall deliver or cause to be delivered
drafts of all Pre-Closing Period Tax Returns to Buyers for their review at
least thirty (30) days prior to the due date (including extensions) (“Due
Date”) of any such Pre-Closing Period Tax Return; provided, however,
that such drafts of such Pre-Closing Tax Returns shall be subject to the Buyers’
review

 

49

 

and approval. If the
Buyers withhold their consent and dispute any item on a Pre-Closing Period Tax
Return, they shall notify the Sellers in writing of such disputed item (or
items) and the basis for their objection at least ten (10) days prior to the
Due Date of any such Pre-Closing Period Tax Return. In the event that Buyers do
not deliver such notice at least ten (10) days prior to the Due Date of any
such Pre-Closing Tax Return, Buyers shall be deemed to have approved such draft
Pre-Closing Period Tax Return. The Buyers and the Sellers shall act in good
faith to resolve any such dispute as promptly as practicable. If the Buyers and
the Sellers cannot resolve any such disputed item, the item in question shall
be resolved by the Neutral Auditor. The fees and expenses of the Neutral
Auditor shall be paid by the Buyers, except that if the Neutral Auditor shall
agree in whole or in part with an adjustment to the Pre-Closing Period Tax
Returns proposed by the Buyers, the Sellers shall pay a fraction of the fees
and expenses of the Neutral Auditor the numerator or which is the aggregate
dollar amount of adjustments to the Pre-Closing Period Tax Returns proposed by
the Buyers that are accepted by the Neutral Auditor and the denominator of
which is the aggregate dollar amount of adjustments to the Pre-Closing Period
Tax Returns proposed by the Buyers. The Sellers shall be responsible for all
Taxes due in respect of Pre-Closing Period Tax Returns.

 

(b)       Preparation and Filing of Tax Returns,
and Payment of Taxes, for Straddle Periods. The Buyers shall prepare and
timely file, or cause the applicable Company to prepare and timely file, all
Tax Returns required to be filed for any Company for all periods beginning on
or before and ending after the Closing Date (such periods, “Straddle Periods”
and such Tax Returns, “Straddle Period Tax Returns”). All Straddle
Period Tax Returns shall be prepared in a manner consistent with the past
practice of the applicable Company (unless otherwise required by Law). The
Buyers shall deliver or cause to be delivered drafts of all Straddle Period Tax
Returns to Sellers for their review at least thirty (30) days prior to the Due
Date of any such Straddle Period Tax Return and shall notify the Sellers of the
Buyers’ calculation of Sellers’ share of the Taxes of such Company (determined
in accordance with Section 6.18(c) of this Agreement); provided, however,
that such drafts of such Straddle Period Tax Returns and such calculations of
Sellers’ share of the Tax liability for such Straddle Period shall be subject
to the Sellers’ review and approval. If the Sellers withhold their consent and
dispute any item on a Straddle Period Tax Return, they shall notify the Buyers
in writing of such disputed item (or items) and the basis for its objection at
least ten (10) days prior to the Due Date of any such Straddle Period Tax
Return. In the event that Sellers do not deliver such notice at least ten (10)
days prior to the Due Date of any such Straddle Tax Return, Sellers shall be
deemed to have approved such draft Straddle Period Tax Return. The Buyers and
the Sellers shall act in good faith to resolve any dispute as promptly as
practicable. If the Buyers and the Sellers cannot resolve any disputed item,
the item in question shall be resolved by the Neutral Auditor. The fees and
expenses of the Neutral Auditor shall be paid by the Sellers except that if the
Neutral Auditor shall agree in whole or in part with an adjustment to the
Straddle Period Tax Returns proposed by the Sellers, the Buyers shall pay a
fraction of the fees and expenses of the Neutral Auditor the numerator of which
is the aggregate dollar amount of adjustments to the Straddle Period Tax
Returns proposed by the Sellers that are accepted by the Neutral Auditor and
the denominator of which is the aggregate dollar amount of adjustments to the
Straddle Period Tax Returns proposed by the Sellers. The Sellers shall be
responsible for the portion of Taxes due in respect of Straddle Period Tax
Returns that are finally determined to be allocable to the Sellers in
accordance with this Section 6.18(b) and Section 6.18(c) of this Agreement.

 

50

 

(c)       In the case of any Taxes of a Company
that are payable with respect to Straddle Periods, the portion of any such
Taxes that are attributable to the portion of the Straddle Period that ends on
the Closing Date shall (i) in the case of Taxes that are based upon or related
to income or receipts or imposed on a transactional basis be deemed equal to
the amount that would be payable if the Tax year or period ended on the Closing
Date; and (ii) in the case of other Taxes be allocated pro rata per day between
the period ending on the Closing Date and the period beginning the day after
the Closing Date. For purposes of clause (i) of the preceding sentence, any
exemption, deduction, credit or other item that is calculated on an annual
basis shall be allocated pro rata per day between the period ending on the
Closing Date and the period beginning after the Closing Date. The parties
hereto will, to the extent permitted by applicable Law, elect with the relevant
Tax authority to treat a portion of any Straddle Period as a short taxable
period ending as of the close of business on the Closing Date.

 

(d)       Tax Refunds. The Buyers shall pay
to the Sellers (a) all Tax refunds and credits of Taxes (including any interest
in respect thereof) received by any of the Buyers or their Affiliates or any
Company after the Closing Date and attributable to Taxes paid by any Company
with respect to any Pre-Closing Period and (b) the portion of all refunds of
Taxes or credits of Taxes (including any interest in respect thereof) received
by any of the Buyers or their Affiliates or any Company after the Closing Date
and attributable to Taxes paid by any Company with respect to any Straddle
Period (such portion to be allocated consistent with the principles set forth
in Section 6.18(c)). Any such refunds or credits of Taxes required to be paid
by the Buyers to the Sellers shall be paid within five (5) Business Days of the
receipt of such refunds or credits of Taxes by the Buyers, their Affiliates or
the Companies.

 

(e)       Limitations on Actions. Subject to
Section 10.6(b), unless required by one or more Laws, neither the Buyers nor
any of their Affiliates (including after the Closing, the Companies) shall take
any action after the Closing relating or attributable to (or that could affect
Taxes with respect to) a Pre-Closing Period or Straddle Period that could
result in any increased Taxed liability (or a reduction in a refund or credit)
in respect of a Pre-Closing Period or the portion of a Straddle Period ending
on the Closing Date (determined in accordance with the principles of Section
6.18(c)).

 

(f)        Amended Tax Returns.

 

(i)        Sellers shall be entitled to amend any
Pre-Closing Period Tax Return of any Company and the Buyers shall, and shall cause
their Affiliates, to cooperate with the Sellers to amend such Tax Returns, provided,
however, that the same procedures set forth in Section 6.18(a) shall
apply, and provided, further, that the Sellers shall promptly
reimburse the Buyers for all reasonable out-of-pocket expenses for advisors
incurred by Buyers in connection with the review or filing of such amended Tax
Return. Buyers shall not be entitled to amend any Pre-Closing Tax Return
without the consent of Sellers.

 

(ii)       Buyers shall be entitled to amend any
Straddle Period Tax Return of any Company and the Sellers shall, and shall
cause their Affiliates, to cooperate with the Buyers to amend such Tax Returns,
provided, however, that the same procedures set forth in Section
6.18(b) shall apply, and provided, further, that the Buyers shall
promptly reimburse the Sellers for all reasonable out-of-pocket expenses for
advisors incurred by Sellers in connection with the

 

51

 

review or filing of such
amended Tax Return. Sellers shall not be entitled to amend any Straddle Period
Tax Return without the consent of Buyers.

 

(g)       Termination of Tax Sharing Agreements.
On or before the Closing Date, Sellers shall cause to be terminated any Tax
allocation, Tax sharing or similar agreement to which any of the Companies is a
party, on the one hand, and any of the Sellers or their Affiliates (other than
the Companies) is a party, on the other hand, shall eliminate, through
satisfaction or otherwise, any liabilities thereunder and thereafter none of
the Companies shall have any liabilities or other obligations under any such
agreements. For purposes of this Section 6.18(g), the term Affiliate shall
include Parent and its consolidated Subsidiaries without regard to whether any
such Subsidiary is an investment fund managed by Parent or any of its
Affiliates.

 

SECTION 6.19          Tax Cooperation. Each Buyer and
the Sellers shall (a) use its reasonable best efforts to properly retain and
maintain the existing tax records of the Companies that relate to Tax periods
for which Sellers may have any indemnification obligations to Buyers pursuant
to Article X for six (6) years following the close of the period to which such
records relate, (b) transfer such records to Buyers upon their written request
prior to the destruction, abandonment or disposition of such records, and (c)
allow Sellers and their respective agents and representatives, at times and
dates reasonably and mutually acceptable to the parties, to from time to time
inspect and review such records as Sellers may deem necessary or appropriate; provided,
however, that in all cases, such activities are to be conducted by
Sellers during normal business hours and at the Sellers’ sole expense. Any
information obtained under this Section 6.19 shall be kept confidential, except
as may be otherwise necessary in connection with the filing of Tax Returns or
in the conduct of a Contest or other Tax proceedings.

 

SECTION 6.20          Excluded Portfolio Assets.

 

(a)       Prior to the Closing, (i) the Sellers
shall seek to obtain the consent of Merrill Lynch to the transfer of all of the
Intercreditor Bonds to CGMI, free and clear of all Liens and transfer and
foreclosure restrictions (other than Permitted Liens, which shall not include
transfer and foreclosure restrictions), and in the event such consent is
obtained and CGMI acquires said Bonds free and clear of all such Liens and
transfer and foreclosure restrictions (other than such Permitted Liens, which
shall not include transfer and foreclosure restrictions) at the Closing, CGMI
shall pay the Merrill Lynch Intercreditor Bond Amount to Sellers at the
Closing, and (ii) if the consent of Merrill Lynch is not obtained prior to
Closing, the Sellers shall transfer the Intercreditor Bonds out of the
respective Company owning such Bonds and take all steps necessary to ensure
that the Intercreditor Bonds are not transferred to Buyers by operation of Law
or by any other means and Buyers shall not pay the Merrill Lynch Intercreditor
Bond Amount at Closing (and all costs and expenses incurred in connection with
this transfer shall be paid by the Sellers). The Sellers may initiate the
transfer described in clause (ii) above at any time after the date of this
Agreement, upon their determination that Merrill Lynch will not grant such
consent. In the event such transfer pursuant to clause (ii) above occurs,
Buyers shall, subject to Buyers’ internal approval, provide to the Sellers
sufficient financing to allow the Sellers to redeem the outstanding debt in all
trusts in which such Intercreditor Bonds are held and such financing shall be
on terms no less favorable than the financing available through the applicable
Roaring Forks trusts.

 

52

 

(b)       Prior to the Closing, the Sellers shall
transfer the Bonds listed on Schedule 2.1(b) out of the respective Company
owning such Bonds. Buyers shall, subject to Buyers’ internal approval, provide
to the Sellers sufficient financing to fund the purchase of such excluded Bonds
and such financing shall be on terms no less favorable that the financing
available through the applicable P-Float or Roaring Forks trusts.

 

SECTION 6.21          Delivery of Books and Records and
Acquired Assets. On the Closing Date, the Sellers shall deliver or make
available to Buyers at the locations at which the Affordable Housing Business
is conducted, all of the books and records of the Companies, the books and
records relating to the Acquired Assets as are in the Sellers’ possession, or
where necessary, copies of the same, and all other Acquired Assets, and if at
any time after the Closing the Sellers discover in their possession or under
their control any other books and records of the Companies, books and records
relating to the Acquired Assets or Assumed Liabilities, they shall forthwith
deliver these to Buyers. Notwithstanding anything to the contrary contained
herein, this Section 6.21 shall not apply with respect to any books, records or
data relating or attributable to Taxes or Tax Returns, which shall be governed
exclusively by Sections 6.19 and 10.6(c).

 

SECTION 6.22          Non-Competition.

 

(a)       Except as otherwise permitted or required
under this Agreement or the other Transaction Documents, Parent and the Sellers
shall, for a period of two (2) years from the Closing Date, refrain from,
either alone or in conjunction with any other Person, or directly or indirectly
through their present or future Affiliates, (i) engaging in or having a profit
interest with voting rights or equity interest in any Person that is engaged in
the Affordable Housing Business and (ii) organizing or forming an investment
fund which holds more than 20% of its assets in low income multifamily housing
properties financed by tax exempt debt.

 

(b)       Notwithstanding the foregoing
restrictions, Parent, the Sellers and their Affiliates shall be deemed to not
have violated the provisions of this Section 6. 22 as a result of Parent, the
Sellers or their Affiliates:

 

(i)        engaging in any business which is not
part of the Affordable Housing Business; or

 

(ii)       acquiring, in the aggregate, a passive
interest representing 20% or less of any class of securities registered under
the Securities Exchange Act of 1934; or

 

(iii)      acquiring directly or indirectly any
diversified business (whether by merger, purchase of stock or assets or
otherwise) having less than 20% of its annual revenues (based on such business’s
latest annual financial statements) attributable to any of the lines of
business which comprised the Affordable Housing Business on the Closing Date.

 

(c)       The restrictions of the provisions of
this Section 6.22 shall be deemed to not apply to any third party who becomes
an Affiliate of the Sellers or Parent by way of a merger, consolidation,
combination with, or acquisition of substantially all the assets and properties
of, Parent or a Seller.

 

53

 

(d)       The Parties recognize that the Laws and
public policies of the various states of the United States may differ as to the
validity and enforceability of covenants similar to those set forth in this
Section. It is the intention of the Parties that the provisions of this Section
be enforced to the fullest extent permissible under the Laws and policies of
each jurisdiction in which enforcement may be sought, and that the unenforceability
(or the modification to conform to such Laws or policies) of any provisions of
this Section shall not render unenforceable, or impair, the remainder of the
provisions of this Section. Accordingly, if any provision of this Section shall
be determined to be invalid or unenforceable, such invalidity or
unenforceability shall be deemed to apply only with respect to the operation of
such provision in the particular jurisdiction in which such determination is
made and not with respect to any other provision or jurisdiction.

 

(e)       The Parties acknowledge and agree that
any remedy at Law for any breach of the provisions of this Section would be
inadequate, and Sellers hereby consent to the granting by any court of an
injunction or other equitable relief, without the necessity of actual monetary
loss being proved, in order that the breach or threatened breach of such
provisions may be effectively restrained.

 

SECTION 6.23          Affiliate Transactions. Except
as set forth in the Disclosure Schedule, immediately prior to the Closing, all
Indebtedness (including guarantees of Indebtedness) and other amounts owing
under Contracts between any Seller or any officer, director or Affiliate (other
than any Company) of any Seller or any Affiliate thereof or any Person controlled
by Parent, on the one hand, and any Company, on the other, shall be eliminated
(through payment in full, contribution or otherwise), and the Sellers shall
terminate and shall cause any such officer, director or Affiliate to terminate
each Contract with any Company. Prior to the Closing, except as otherwise
permitted under this Agreement, no Company shall enter into any Contract or
amend or modify any existing Contract, and shall not engage in any transaction
outside the Ordinary Course of Business (other than pursuant to Contracts set
forth in the Disclosure Schedule with respect to Section 3.7(c)), with the
Sellers or any such officer, director or Affiliate.

 

SECTION 6.24          Guarantees and Letter of Credit.

 

(a)       Prior to and from and after the Closing,
the Parties will each cooperate with one another and use all commercially
reasonable efforts to cause Buyers to assume and be substituted for the Sellers
as the obligor under all Affordable Housing Guarantees and to obtain the
release of the Sellers from all such Affordable Housing Guarantees. From and
after the Closing, neither the Sellers nor any of their Affiliates shall have
any obligation to extend, renew or increase the principal amount of any
Affordable Housing Guarantee that remains outstanding or create or enter into
any new or additional Affordable Housing Guarantee.

 

(b)       With respect to any Affordable Housing
Guarantee under which any Seller remains obligated after the Closing, from and
after the Closing, Buyers and the Companies shall not increase the amount of
any such Affordable Housing Guarantee or any obligation underlying any such
Affordable Housing Guarantee (each such Affordable Housing Guarantee or
obligation underlying any such Affordable Housing Guarantee, a “Credit
Obligation”), extend any expiration date of any such Credit Obligation,
extend the period of time for presentation of documents or demands under any
such Credit Obligation, agree to any substitution of any such

 

54

 

Credit Obligation, or
agree to any creation, material amendment, material supplement, material waiver
or other material modification of any such Credit Obligation, without the prior
written agreement of the Sellers.

 

(c)       From and after the Closing, Buyers shall
reimburse and otherwise jointly and severally indemnify and hold harmless each
Seller and each of their Affiliates for the full amount of all payments made or
other Liabilities incurred (each, a “Guarantee Payment”) by any Seller
or any of its Affiliates in connection with any Affordable Housing Guarantee,
which reimbursement shall be made by wire transfer of immediately available
funds in the full amount of any such Guarantee Payment. Any such reimbursement
shall be made within five (5) Business Days after written demand by the
Sellers. None of the Sellers nor any of its respective Affiliates, employees,
officers, directors, agents or stockholders assumes or shall have liability or
responsibility for: (A) any acts or omissions of any beneficiary or transferee
of any Credit Obligation or of any provider of credit pursuant to any Credit
Obligation, or any person purporting to act on behalf of the foregoing (each, a
“Credit Provider”), (B) the form, validity, sufficiency, correctness,
genuineness or legal effect of any demand, instrument, draft, document,
certificate or other writing given to any of the Sellers or any of their
Affiliates in connection with any Credit Obligation, or of any signatures or
endorsements thereon, (C) the failure of any Credit Provider to meet any
obligations owed to the Buyers or the Companies, (D) any act, omission, error,
breach, negligence, gross negligence or misconduct of any Credit Provider and
(E) any errors, inaccuracies, omissions, interruptions or delays in
transmission or delivery of any messages, directions or correspondence.

 

(d)       At Closing, the Buyers shall cause the
Freddie Mac Letter of Credit to be extinguished.

 

SECTION 6.25          Remarketing Agreements.

 

(a)       Prior to the Closing, the Sellers shall
use commercially reasonable efforts to obtain any required consents to the
appointment of CGMI as successor remarketing agent under each Remarketing
Agreement. Without limiting the generality of the foregoing, Capmark Securities
shall, promptly after the date of this Agreement, send a notice to the other
parties under each Remarketing Agreement (i) requesting that such other parties
consent to the appointment of CGMI or its designee (the “Citi Remarketing
Agent”) as its successor remarketing agent as of the Closing Date and (ii)
advising such other parties that Capmark Securities will be delegating its
duties under such Remarketing Agreement to the Citi Remarketing Agent as of the
Closing Date; provided that notices to other parties under Remarketing
Agreements which expressly prohibit the delegation of duties under such
Remarketing Agreement shall not address clause (ii) above.

 

(b)       At Closing, any Remarketing Agreement in
respect of which all consents to the appointment of the Citi Remarketing Agent
as successor remarketing agent has not been obtained shall be subject to the
terms of the Remarketing Transitional Services Agreement (collectively, the “Delegated
Remarketing Agreements”) and the rights and obligations of Capmark
Securities thereunder shall be delegated to the Citi Remarketing Agent pursuant
to such Remarketing Transitional Services Agreement; provided that any
Remarketing Agreement (x) which contains an express prohibition on delegation,
(y) which cannot be delegated as a matter

 

55

 

of applicable State law
or (z) with respect to which a counter party to such agreement has notified
Capmark Securities that the counterparty has objected to such delegation
(collectively, the “Retained Remarketing Agreements”) shall not be
subject to such delegation. Notwithstanding anything hereunder to the contrary,
Capmark Securities shall be entitled to have one employee of its choosing to
service the Retained Remarketing Agreements for a period of no more than two
(2) years.

 

(c)       For a period of two (2) years from and
after the Closing Date (or with respect to any Remarketing Agreement, the
expiration or termination thereof, if earlier), Capmark Securities shall: (i)
upon written request from the Citi Remarketing Agent, resign as remarketing
agent under any Delegated Remarketing Agreement or Retained Remarketing
Agreement; (ii) cooperate with the Citi Remarketing Agent to obtain any
required consents to the appointment of the Citi Remarketing Agent as
remarketing agent under the Delegated Remarketing Agreements and Retained
Remarketing Agreements; and (iii) pay to Buyers as an adjustment to the
Purchase Price an amount equal to the Net Revenue from all Retained Remarketing
Agreements. “Net Revenue”, as used in this Section 6.25(c), shall mean the
revenue received by Sellers under such Retained Remarketing Agreements less
the reasonable costs incurred by Sellers (including compensation and benefits
of the employee performing the remarketing services) of providing such
remarketing services, provided that the Sellers shall provide supporting
documentation evidencing such costs to Buyers upon Buyers’ request. After such
two (2) year period, Capmark Securities shall resign as remarketing agent under
any remaining Delegated Remarketing Agreements and Retained Remarketing
Agreements and its obligations under this Section 6.25 and the Remarketing
Transitional Services Agreement shall terminate.

 

SECTION 6.26          Notice and Cure. Buyers and the
Sellers shall notify the other Parties in writing of, and contemporaneously shall
provide the other Parties with true and complete copies of any and all
information or documents relating to, and shall use all commercially reasonable
efforts to cure before the Closing, any event, transaction or circumstance, as
soon as practicable after it becomes known to such Party, occurring after the
date hereof, that causes or shall cause any covenant or agreement of such Party
under this Agreement to be breached or that renders or shall render untrue any
representation or warranty of such Party contained in this Agreement as if the
same were made on or as of the date of such event, transaction or circumstance.
Sellers shall provide updates to Buyers with respect to ongoing Actions or
Proceedings relating to the Affordable Housing Business. No notice given
pursuant to this Section 6.26 shall have any effect on the representations,
warranties, covenants or agreements contained in this Agreement for purposes of
determining satisfaction of any condition contained herein or shall in any way
limit a Party’s right to seek indemnity under Article X.

 

SECTION 6.27          Assessment. Upon reasonable
prior notice from Buyers, the Sellers shall provide Buyers access, during
regular business hours, to the facilities and systems of the Sellers that are
to be used by Buyers pursuant to the Transition Services Agreement for the
purpose of Buyers performing assessments of the capabilities of the Sellers to
perform the services under the Transition Services Agreement. If, as a result
of any such assessment, Buyers reasonably determine that there exists a
deficiency or inadequacy in the capabilities of the Sellers to perform such
services, then Buyers shall notify the Sellers thereof. The Sellers shall
promptly, and at the cost and expense of Buyers, either (i) remediate any such
deficiency or inadequacy as

 

56

 

requested by Buyers or
(ii) engage a third-party servicer to perform such services in accordance with
the terms of the Transition Services Agreement; provided that the
Sellers shall not be obligated to conduct any such remediations in the event
any such action would adversely affect or unduly burden the ability of Buyers
to conduct their business or otherwise comply with applicable Laws.

 

ARTICLE VII

CLOSING CONDITIONS

 

SECTION 7.1            Conditions to Each Party’s
Obligations Under this Agreement. The respective obligations of each Party
under this Agreement shall be subject to the fulfillment at or prior to the
Closing of the following conditions:

 

(a)       Any waiting period applicable to the
consummation of the transactions contemplated hereby under the HSR Act shall
have expired or been terminated;

 

(b)       no injunction, restraining Order or other
ruling or Order issued by any court of competent jurisdiction or Governmental
Authority or other legal restraint or prohibition preventing the consummation
of the transactions contemplated hereby shall be in effect;

 

(c)       each Mortgage Program Sponsor Transfer
Agreement shall have been executed by the applicable Mortgage Program Sponsor;
and

 

(d)       Capmark Securities shall have received
any required approval from the NASD of the transfer of the Acquired Assets
unless Sellers determine that no such approval is required.

 

SECTION 7.2            Conditions to the Obligations of
Buyers Under this Agreement. The obligations of each Buyer under this
Agreement shall be further subject to the satisfaction, at or prior to the
Closing, of the following conditions:

 

(a)       Each of the covenants, agreements and
obligations of the Sellers required to be performed by them at or prior to the
Closing pursuant to this Agreement shall have been duly performed and complied
with in all material respects;

 

(b)       the representations and warranties of the
Sellers contained in this Agreement, disregarding all qualifications or limitations
of such representations and warranties by reference to materiality set forth
herein, shall be true and correct as of the date of this Agreement and as of
the Closing as though made at and as of the Closing (except as to any
representation or warranty which specifically relates to an earlier date),
except where the failure of such representations and warranties to be true and
correct, individually or in the aggregate, is not reasonably likely to have a
Material Adverse Effect;

 

(c)       Buyers shall have received a certificate
of a senior executive officer of Seller certifying as to the fulfillment of the
conditions set forth in Section 7.2(a) and (b) hereof;

 

(d)       all consents, Licenses, approvals,
waivers, clearances, authorizations and actions of, filings with and notices to
Freddie Mac necessary to permit Buyers to perform their

 

57

 

obligations under this
Agreement and the Transaction Documents and to consummate the transactions
contemplated hereby and thereby as set forth in Schedule 7.2(d), (i) shall have
been duly obtained, made or given, (ii) shall be in form and substance
reasonably satisfactory to Buyers, (iii) shall not be subject to the
satisfaction of any condition that has not been satisfied or waived and (iv)
shall be in full force and effect, and all terminations or expirations of
waiting periods imposed by Freddie Mac necessary for the consummation of the
transactions contemplated by this Agreement and the other Transaction Documents
shall have occurred;

 

(e)       all consents, Licenses, approvals,
waivers, clearances, authorizations and actions of, filings with and notices to
Fannie Mae or any Governmental Authority or SRO necessary to permit Buyers to
perform their obligations under this Agreement and the Transaction Documents
and to consummate the transactions contemplated hereby and thereby as set forth
in Schedule 7.2(e), (i) shall have been duly obtained, made or given, (ii)
shall be in form and substance reasonably satisfactory to Buyers and the Fannie
Mae License shall contain a 1/3 pari passu loss sharing obligation with respect
to risk sharing obligations (iii) shall not be subject to the satisfaction of
any condition that has not been satisfied or waived and (iv) shall be in full
force and effect, and all terminations or expirations of waiting periods
imposed by Fannie Mae or any Governmental Authority or SRO necessary for the
consummation of the transactions contemplated by this Agreement and the other
Transaction Documents shall have occurred;

 

(f)        since the date hereof, there shall not
have occurred any Material Adverse Effect; and

 

(g)       all Excluded Portfolio Assets shall have
been transferred out of the Companies.

 

SECTION 7.3            Conditions to the Obligations of
Sellers under this Agreement. The obligations of the Sellers under this
Agreement shall be further subject to the satisfaction, at or prior to the
Closing, of the following conditions:

 

(a)       Each of the covenants, agreements and
obligations of Buyers required to be performed by them at or prior to the
Closing pursuant to the terms of this Agreement shall have been duly performed
and complied with in all material respects;

 

(b)       the representations and warranties of
Buyers contained in this Agreement, disregarding all qualifications or limitations
of such representations and warranties by reference to materiality set forth
herein, shall be true and correct as of the date of this Agreement and as of
the Closing Date as though made at and as of the Closing Date (except as to any
representation or warranty which specifically relates to an earlier date),
except where the failure of such representations and warranties to be true and
correct, individually or in the aggregate, is not reasonably likely to have a
material adverse effect on the ability of Buyers to perform their obligations
under this Agreement or consummate the transactions contemplated by this
Agreement; and

 

(c)       the Sellers shall have received a
certificate of a senior executive officer of the Seller certifying as to the
fulfillment of the conditions set forth in Section 7.3(a) and (b) hereof.

 

58

 

ARTICLE VIII

CLOSING

 

SECTION 8.1            Closing. The closing of the
transactions contemplated by this Agreement (the “Closing”) shall take
place at the offices of Reed Smith LLP, 599 Lexington Avenue, New York, New
York, subject to the satisfaction or waiver of the conditions set forth in
Article VII, commencing at 9:00 a.m. local time on the Friday occurring at
least two (2) Business Days following the satisfaction or waiver of all
conditions to the obligations of the Parties to consummate the transactions
contemplated hereby (other than conditions with respect to actions the
respective Parties will take at the Closing itself) or such other date as the
Parties may mutually determine (the “Closing Date”). At the Closing:

 

(a)       The Sellers shall deliver or cause to be
delivered to Buyers an executed copy of the following:

 

(i)        the certificate described in Section
7.2(c);

 

(ii)       certificates representing all of the
Equity Interests in appropriate form for transfer to CGMI or accompanied by
powers duly executed in blank;

 

(iii)      certificates of good standing for each
Company dated within five (5) Business Days of the Closing Date;

 

(iv)      the Remarketing Transitional Services
Agreement;

 

(v)       the Transition Services Agreement;

 

(vi)      the Multifamily Mortgage Subservicing
Agreement;

 

(vii)     the Trademark License Agreement;

 

(viii)    subject to Section 8.2, the Mortgage Program
Sponsors Transfer Agreements;

 

(ix)       (A) a bill of sale and general assignment
in the form attached hereto as Exhibit F; (B) an assignment of the
Intellectual Property in the form attached hereto as Exhibit G; and (C)
such other instruments of conveyance, assignment and transfer, in form and
substance reasonably acceptable to Buyers’ counsel, as shall be necessary to
vest in Buyers good title to the Acquired Assets;

 

(x)        a duly executed certificate from each
Seller of non-foreign status in a form and manner that complies with Section
1442(b)(2) of the Code and Treasury Regulations thereunder; and

 

(xi)       all other previously undelivered
documents required to be delivered by the Sellers to Buyers at or prior to the
Closing pursuant to the terms of this Agreement, in form and substance
reasonably acceptable to Buyers, as may be reasonably necessary to effect the
Closing.

 

59

 

(b)       Buyers shall deliver or cause to be
delivered to the Sellers an executed copy of the following:

 

(i)        the certificate described in Section
7.3(c);

 

(ii)       the Remarketing Transitional Services
Agreement;

 

(iii)      the Transition Services Agreement;

 

(iv)      the Multifamily Mortgage Subservicing
Agreement;

 

(v)       the Trademark License Agreement;

 

(vi)      subject to Section 8.2, the Mortgage
Program Sponsors Transfer Agreements;

 

(vii)     an assumption in the form attached hereto
as Exhibit H and such other instruments of assumption with respect to
the Assumed Liabilities as the Sellers and their counsel may reasonably
request; and

 

(viii)    all other previously undelivered documents
required to be delivered by Buyers to the Sellers at or prior to the Closing
pursuant to the terms of this Agreement, in form and substance reasonably
acceptable to the Sellers, as may be reasonably necessary to effect the Closing.

 

(c)       Buyers shall pay the Estimated Purchase
Price to Sellers, in U.S. dollars by wire transfer of immediately available
funds to an account or accounts designated by the Sellers, such account to be
designated by the Sellers at least two (2) Business Days prior to the Closing
Date.

 

(d)       Purchase Price Allocation. Not
later than thirty (30) days following the definitive determination of the Final
Closing Balance Sheet (as provided by Section 2.3(a)), Sellers shall deliver to
Buyers a schedule setting forth the allocation of the Purchase Price (increased
to take into account any liabilities properly included therein) among the
Companies in accordance with Code Section 1060 and the Treasury Regulations
promulgated thereunder (and any similar provision of state, local or foreign
Law, as appropriate) (the “Allocation Schedule”). If Buyers disagree
with any items reflected on the Allocation Schedule, Buyers shall notify
Sellers of such disagreement in writing within thirty (30) days of receipt of
the proposed Allocation Schedule, which notice shall set forth the reasons for
Buyers’ disagreement. If Buyers do not notify Sellers of any objections to the
Allocation Schedule in the time and manner specified in the preceding sentence,
the Allocation Schedule shall be treated as agreed by Buyers. If the Buyers do
timely notify the Sellers of any disagreement with the Allocation Schedule,
Sellers and Buyers shall cooperate in good faith to resolve the disagreement.
To the extent Sellers and Buyers cannot agree on the contents of the Allocation
Schedule within sixty (60) days following the delivery of the schedule pursuant
to the first sentence of this Section 8.1(d), Sellers and Buyers shall be free
to use their own allocation schedule in preparing their respective U.S.
federal, state, local and foreign Tax Returns and other filings. If the Parties
are able to agree on the Allocation Schedule, Sellers and Buyers shall (subject
to any purchase price

 

60

 

adjustments as a result
of indemnity payments hereunder) report and file Tax Returns (including but not
limited to Internal Revenue Service Forms 8594, if required) in all respects
and for all purposes consistent with the Allocation Schedule and neither Buyers
nor Sellers shall take any position (whether in audits, Tax Returns or
otherwise) that is inconsistent with the Allocation Schedule unless required to
do so by applicable Law provided, however, that, in the event
that any of the allocations set forth in the final Allocation Schedule is
disputed by any Tax Authority, the Party receiving notice shall promptly notify
the other Party concerning resolution of the dispute.

 

SECTION 8.2            Freddie Mac Closing.
Notwithstanding anything contained in this Agreement to the contrary, in the
event that all of the conditions set forth in Article VII (other than Section
7.1(c) insofar as it relates to the Freddie Mac Transfer Agreement and Section
7.2(d)) have been satisfied or waived (other than conditions with respect to
actions the respective Parties will take at such Closing), Buyers may elect to
not acquire the Freddie Mac Business at the Closing and to consummate the
Closing with respect to the remaining parts of the Affordable Housing Business
by delivery of written notice (the “Freddie Mac Closing Notice”) to the
Sellers, and defer the acquisition of the Freddie Mac Business until the
Freddie Mac Closing Date on the terms and conditions hereinafter set forth; provided
that Buyers may not make such election if Freddie Mac shall have informed the
Sellers that a separate Closing would be in violation of Sellers’ obligations
to Freddie Mac with respect to the Freddie Mac Multifamily Plus Seller/Servicer
program or the Freddie Mac Shadow Processing program. Between the date of the
Closing and the date of the Freddie Mac Closing, Buyers shall cause the Hired
Employees to make themselves reasonably available to assist the Sellers with
the closing of any transactions contemplated in any forward commitment in
connection with the Freddie Mac Business. Upon delivery by Buyers of a Freddie
Mac Closing Notice to Sellers, the following shall apply:

 

(a)       At the Closing,

 

(i)        no Acquired Assets or Assumed
Liabilities pertaining to the Freddie Mac Business shall be acquired or assumed
by Buyers;

 

(ii)       Buyers and Sellers, respectively, shall
not deliver to the other Party the Freddie Mac Transfer Agreement;

 

(iii)      Buyers shall not be obligated to cause the
Freddie Mac Letter of Credit to be extinguished; and

 

(iv)      the Acquired Assets and Assumed Liabilities
pertaining to the Freddie Mac Business shall be disregarded in the Estimated
Closing Balance Sheet and the Final Closing Balance Sheet.

 

(b)       In the event a Freddie Mac Closing Notice
has been delivered to Sellers, and upon the satisfaction or waiver of the
conditions set forth in Sections 7.1(b) and (c), 7.2(a), (b), (c) and (d) and
7.3(a), (b) and (c) (each of such conditions to apply solely with respect to
the Freddie Mac Business) prior to April 30, 2007, the closing of the
acquisition of the Freddie Mac Business (the “Freddie Mac Closing”)
shall take place at the offices of Reed Smith LLP, 599 Lexington Avenue, New
York, New York, commencing at 9:00 a.m. local time on the Business Day
occurring at least two Business Days following the satisfaction or waiver such
conditions

 

61

 

(other than conditions
with respect to actions the respective Parties will take at such Closing) or
such other date as the Parties may mutually determine (the “Freddie Mac
Closing Date”). In the event the Freddie Mac Closing does not take place by
April 30, 2007, either Party shall be entitled to terminate this Agreement with
respect to the Freddie Mac Business. At the Freddie Mac Closing:

 

(i)        The Sellers shall deliver or cause to be
delivered to Buyers an executed copy of the following:

 

(A)      the certificate described in Section
7.2(c) (solely with respect to the Freddie Mac Business);

 

(B)       the Freddie Mac Transfer Agreement;

 

(C)       (1) a bill of sale in the form attached
hereto as Exhibit F, with respect to the Acquired Assets pertaining to
the Freddie Mac Business; and (2) such other instruments of conveyance,
assignment and transfer, in form and substance reasonably acceptable to Buyers’
counsel, as shall be necessary to vest in Buyers good title to the Acquired
Assets pertaining to the Freddie Mac Business; and

 

(D)       all other previously undelivered
documents required to be delivered by the Sellers to Buyers with respect to the
Acquired Assets pertaining to the Freddie Mac Business at or prior to the
Freddie Mac Closing pursuant to the terms of this Agreement, in form and
substance reasonably acceptable to the Buyers, as may be reasonably necessary
to effect the Freddie Mac Closing;

 

(ii)       Buyers shall deliver or cause to be
delivered to the Sellers an executed copy of the following:

 

(A)      the certificate described in Section
7.3(c) (solely with respect to the Freddie Mac Business);

 

(B)       the Freddie Mac Transfer Agreement;

 

(C)       an assumption in the form attached hereto
as Exhibit H with respect to the Assumed Liabilities pertaining to the
Freddie Mac Business and such other instruments of assumption with respect to
the Assumed Liabilities pertaining to the Freddie Mac Business as the Sellers
and their counsel may reasonably request; and

 

(D)       all other previously undelivered
documents required to be delivered by Buyers to the Sellers with respect to the
Acquired Assets pertaining to the Freddie Mac Business at or prior to the
Freddie Mac Closing pursuant to the terms of this Agreement, in form and
substance reasonably acceptable to the Buyers, as may be reasonably necessary
to effect the Freddie Mac Closing; and

 

62

 

(iii)      Buyers shall cause the Freddie Mac Letter
of Credit to be extinguished.

 

SECTION 8.3            Freddie Mac Purchase Price.

 

(a)       No later than the second Business Day
prior to the Freddie Mac Closing Date, the Sellers shall cause to be prepared
and delivered to Buyers a good faith calculation of the Freddie Mac Purchase
Price as of the close of business on the date immediately prior to the Freddie
Mac Closing Date (the “Estimated Freddie Mac Purchase Price”). The
Estimated Freddie Mac Purchase Price determined by Sellers shall be binding on
Buyers and the Sellers.

 

(b)       On the Freddie Mac Closing Date, Buyers
will pay the Estimated Freddie Mac Purchase Price by wire transfer of
immediately available funds to such account or accounts as the Sellers shall
have designated in writing to Buyers prior to the Freddie Mac Closing Date.

 

(c)       Section 2.3 shall in all relevant
respects apply mutatis mutandis to
adjustments to, payments of and disputes with respect to the Estimated Freddie
Mac Purchase Price.

 

SECTION 8.4            Effects of a Freddie Mac Closing.
In the event that there is a Freddie Mac Closing, for the purposes of Article
VI, the term “Closing” shall be deemed to also refer to the Freddie Mac Closing
in so far as the relevant provision relates to the assets and properties and
Assumed Liabilities pertaining to the Freddie Mac Business.

 

ARTICLE IX 

TERMINATION AND ABANDONMENT

 

SECTION 9.1            Termination. This Agreement
may be terminated and the transactions contemplated hereby may be abandoned at
any time prior to the Closing:

 

(a)       by mutual consent of the Sellers and
Buyers; or

 

(b)       by either the Sellers or Buyers:

 

(i)        if a court of competent jurisdiction or
Governmental Authority shall have issued an Order or ruling or taken any other
action (which Order or ruling the Parties shall use their best efforts to
lift), in each case permanently restraining, enjoining or otherwise prohibiting
the transactions contemplated by this Agreement, and such Order, ruling or
other action shall have become final and nonappealable; or

 

(ii)       if the Closing shall not have occurred on
or before February 28, 2007 (the “Termination Date”); provided  that
if the only conditions (other than conditions with respect to actions the
respective Parties will take at the Closing itself) that have not been
satisfied or waived on the Termination Date are (y) the condition set forth in
Section 7.1(a) or (z) the consent of Fannie Mae or Freddie Mac required under
Sections 7.1(c), 7.2(d) and (e) the Termination Date shall be extended to March
31, 2007.

 

63

 

provided,
however, that the right to terminate this Agreement shall not be
available to any Party whose breach of this Agreement has been the cause of, or
resulted in, the failure of the Closing to occur on or before such date.

 

SECTION 9.2            Procedure and Effect of
Termination. In the event of termination and abandonment of the
transactions contemplated hereby pursuant to Section 9.1, written notice
thereof shall forthwith be given to the other Parties and this Agreement shall
terminate and the transactions contemplated hereby shall be abandoned, without
further action by any of the Parties. If this Agreement is terminated as
provided herein, this Agreement shall become null and void and no Party shall
have any liability or further obligation to any other Party to this Agreement
resulting from such termination except (a) that the provisions of this Section
9.2 shall remain in full force and effect, (b) no Party waives any claim or
right against a breaching Party to the extent that such termination results
from the breach by a Party hereto of any of its representations, warranties,
covenants or agreements set forth in this Agreement and the Sellers or Buyers
may seek such remedies, including damages, against the other with respect to
such breach as provided in this Agreement, or, in the case of fraud or willful
breach, as are otherwise available at Law or in equity, and (c) the
confidentiality provisions contained in Section 6.10 above and the expense
provisions contained in Section 11.4 below, shall survive termination.

 

ARTICLE X

SURVIVAL OF REPRESENTATIONS AND WARRANTIES;

INDEMNIFICATION

 

SECTION 10.1          Survival of Representations and
Warranties, Etc. All of the representations, warranties, covenants and
agreements of the Parties contained in this Agreement will survive the Closing,
(a) indefinitely with respect to the representation and warranties contained in
Sections 3.1(e), 3.2(a), 3.2(b), 3.2(c), 3.2(d), 3.2(e), 3.15(c), 4.2(a), 4.6,
4.14(b) and 5.2(a), (b) until sixty (60) days after the expiration of all
applicable statute of limitations (taking into account all valid extensions)
with respect to any Tax representation or warranty set forth in Section 3.8 and
any covenant or agreement relating to Taxes set forth in Sections 6.1(b)(xv),
6.17, 6.18 and 6.19; (c) for three (3) years from the Closing Date in the case
of the covenants and agreements contained in 6.9 and 6.10 and the
representations and warranties contained in Sections 4.3 and 5.3; (d) for
eighteen (18) months from the Closing Date in the case of all other
representations and warranties and any covenant or agreement to be performed in
whole or in part on or prior to the Closing; or (e) with respect to each other
covenant or agreement contained in this Agreement, the date on which such
covenant or agreement is to be performed or, if no such date is not specified,
three years; provided that any representation, warranty, covenant or
agreement that would otherwise terminate in accordance with clause (b), (c),
(d) or (e) above will, if a reasonably specified Claim Notice or Indemnity Notice
(as applicable) shall have been timely given under this Article X on or prior
to such termination date, continue to survive with respect to such claim only
until the related claim for indemnification has been satisfied or otherwise
resolved as provided in this Article X.

 

SECTION 10.2          Parent’s and Sellers’
Indemnification of Buyers. Subject to the overall limitations, the minimum
amounts and the time limitations set forth in this Article X, Parent and the
Sellers will jointly and severally indemnify and hold Buyers harmless from and
with respect to any and all claims, fines, penalties, Liabilities (including
guarantees of Indebtedness), losses,

 

64

 

damages, costs and
expenses, including without limitation the reasonable fees and disbursements of
counsel, but excluding punitive or consequential damages (collectively, “Damages”)
caused by, resulting from or arising out of (i) the breach of any
representation or warranty of the Sellers contained in this Agreement, provided,
however, that for the purposes of this indemnification provision, any
qualification or limitation of such representation or warranty by reference to
materiality of the matters stated therein shall be disregarded in determining
the amount of Damages caused by any inaccuracy, incompleteness or breach
thereof; provided, further, that with respect to the
representations and warranties set forth in Section 3.19 and any representation
and warranties with respect to the Guidelines of the Mortgage Program Sponsor,
this indemnification provision shall be limited to Third Party Claims; (ii) the
breach or non-performance of any covenant or agreement made by Parent or the
Sellers in this Agreement, (iii) any Excluded Liability, (iv) any Excluded
Asset, (v) the MIP Liability (vi) the Fayne/Torrence Liability or (vii) any
Third Party Claims resulting from Buyer’s compliance with the covenants and
agreements contained in Section 6.16.

 

SECTION 10.3          Buyers’ Indemnification of Sellers.
Subject to the overall limitations, the minimum amounts and the time
limitations set forth in this Article X, each Buyer will, severally and not
jointly, indemnify and hold the Sellers harmless from and with respect to any
and all Damages caused by, resulting from or arising out of (i) the breach of
any representation or warranty of such Buyer contained in this Agreement, (ii)
the breach or non-performance of any covenant or agreement made by such Buyer
in this Agreement, (iii) any Assumed Liability (with respect to Liabilities assumed
by such Buyer only), (iv) any actions taken by the Sellers at the request of
such Buyer after the Closing Date pursuant to Section 6.4(b) or (v) any
Restrictive Covenant Liability.

 

SECTION 10.4          Indemnified Party. For purposes
of indemnification pursuant to this Article X, the term “Indemnifying Party”
shall mean the Sellers, jointly and severally, if they are indemnifying Buyers
pursuant to Section 10.2 and a Buyer if such Buyer is indemnifying the Sellers
pursuant to Section 10.3, and the term “Indemnified Party” shall mean
Buyers or the Sellers, as the case may be, and its or their permitted
successors, assigns and Affiliates, together with its or their respective
shareholders, members, directors, officers, employees, agents and
Representatives, if such Party is being indemnified pursuant to Sections 10.2
or 10.3.

 

SECTION 10.5          Method of Asserting Claims. In
the event any Indemnified Party should have a claim under this Article X
against any Indemnifying Party that does not involve a Third Party Claim (as
hereinafter defined), the Indemnified Party shall deliver an Indemnity Notice
with reasonable promptness to the Indemnifying Party. The failure by any
Indemnified Party to give the Indemnity Notice shall not impair such Party’s
rights hereunder except to the extent that an Indemnifying Party demonstrates
that it has been irreparably prejudiced thereby. If the Indemnifying Party
notifies the Indemnified Party that it does not dispute the claim described in
such Indemnity Notice or fails to notify the Indemnified Party within the
Dispute Period whether the Indemnifying Party disputes the claim described in
such Indemnity Notice, the Damages arising from the claim specified in such
Indemnity Notice will be conclusively deemed a liability of the Indemnifying
Party under this Article X and the Indemnifying Party shall pay the amount of
such Damages to the Indemnified Party on demand following the final
determination thereof. If the Indemnifying Party has timely disputed its
liability with respect to such claim, the Indemnifying Party and the
Indemnified Party will proceed in good faith to

 

65

 

negotiate a resolution of
such dispute, and if not resolved through negotiations within the Resolution
Period, such dispute shall be resolved by litigation in a court of competent
jurisdiction.

 

SECTION 10.6          Third Party Claims.

 

(a)       In the event that Indemnified Party
desires to make a claim against any Indemnifying Party under this Article X in
connection with any action, suit, proceeding or demand at any time instituted
against or made upon an Indemnified Party by any third Party for which the
Indemnified Party may seek indemnification hereunder (a “Third Party Claim”),
the Indemnified Party shall promptly (and in any event within five (5) Business
Days after receiving notice of the Third-Party Claim) deliver a Claim Notice to
each Indemnifying Party in writing of such Third Party Claim and of the
Indemnified Party’s claim of indemnification with respect thereto. An Indemnifying
Party shall have thirty (30) days after receipt of such Claim Notice to notify
the Indemnified Party if it has elected to assume the defense of such Third
Party Claim; provided, that the Indemnified Party shall in any
event be entitled to take such actions as are reasonably necessary to avoid
prejudicing the Indemnified Party’s rights with respect to such Third Party
Claim during such thirty (30) day period while it awaits notice from an
Indemnifying Party. Once an Indemnifying Party elects to assume the defense of
such Third Party Claim, such Indemnifying Party shall be entitled at its own
expense to conduct and control the defense and settlement of such Third Party
Claim through counsel of its own choosing and shall defend such proceeding to
final conclusion or settlement (but only with the consent of the Indemnified
Party in the case of any settlement that provides for any relief other than the
payment of monetary Damages as to which the Indemnified Party will be
indemnified in full, which consent shall not be unreasonably withheld); provided
that the Indemnified Party may participate in the defense of such Third Party
Claim with its own counsel at its own expense, except that the Indemnifying
Party will pay the costs and expenses of separate counsel if (x) in the
Indemnified Party’s good faith judgment, it is advisable, based on an opinion
of counsel, for the Indemnified Party to be represented by separate counsel
because a conflict or potential conflict exists between the Indemnifying Party
and the Indemnified Party or (y) the named parties to such Third Party Claim
include both the Indemnifying Party and the Indemnified Party and the
Indemnified Party determines in good faith, based on an opinion of counsel,
that defenses are available to it that are unavailable to the Indemnifying
Party. Notwithstanding the foregoing, the Indemnified Party may retain or take
over the control of the defense or settlement of any Third Party Claim, at any
point in time, the defense of which the Indemnifying Party has elected to
control if the Indemnified Party irrevocably waives its right to indemnity
under this Article X with respect to such Third Party Claim. If an Indemnifying
Party fails to notify the Indemnified Party within thirty (30) days after
receipt of Indemnified Party’s Claim Notice, the Indemnified Party shall be
entitled to assume the defense of such Third Party Claim at the expense of each
Indemnifying Party; provided that in no event will the Indemnified Party
consent to the entry of any judgment on or enter into any settlement with
respect to the Third Party Claim without the prior written consent of each
Indemnifying Party, such consent not to be unreasonably withheld. If the
Indemnified Party has properly assumed the defense of a Third Party Claim pursuant
to the immediately preceding sentence, the Indemnified Party will have full
control of such defense and proceedings, including any compromise or settlement
thereof (subject to the proviso of the previous sentence); provided, however,
that if requested by the Indemnified Party, the Indemnifying Party will provide
reasonable cooperation to the Indemnified Party and its counsel

 

66

 

in contesting any Third
Party Claim which the Indemnified Party is contesting. The Indemnifying Party
and the Indemnified Party will proceed in good faith to negotiate a resolution
of any dispute relating to their respective liability with respect to any Third
Party Claim, and if not resolved through negotiations within the Resolution
Period, such dispute shall be resolved by litigation in a court of competent
jurisdiction. Notwithstanding anything to the contrary contained in this
Agreement, the procedures for Third Party Claims set forth in this Section
10.6(a) shall not apply to any Third Party Claim relating or attributable to
Taxes or Tax Returns.

 

(b)       Third Party Claims Relating to Taxes.

 

(i)        Buyers shall deliver a Claim Notice to
the Sellers in writing promptly following any demand, claim, or notice of
commencement of a claim, audit, proposed adjustment, assessment, examination or
other administrative or court proceeding with respect to Taxes of the Companies
(or Taxes of Sellers or their Affiliates (other than the Companies) imposed on
Buyers as a result of transferee liability or otherwise) for which Sellers may
be liable pursuant to Section 10.2 (“Contest”), provided, however,
that the failure by the Buyers to promptly notify the Sellers pursuant to this
Section 10.6(b)(i) shall not release the Sellers from their obligations under
Section 10.2 except to the extent that the Seller is prejudiced as a
consequence of such failure.

 

(ii)       With respect to Contests for Taxes of any
Company for a Pre-Closing Period (or Taxes of Sellers or their Affiliates
(other than the Companies) imposed on Buyers as a result of transferee
liability or otherwise) whether or not such Taxes arise in connection with any
consolidated, combined or unitary Tax Return, the Sellers shall be entitled to
assume and control the defense of such Contest at their own cost and expense
and with their own counsel and may (A) pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with any Tax
authority, (B) either pay the Tax claimed or sue for refund where applicable
law permits such refund suits or (C) contest, settle or compromise the Contest
in any permissible manner, and the Buyers shall (and shall cause their
Affiliates to) cooperate with the Sellers in pursuing such Contest (including
by providing appropriate powers of attorney). If the Sellers elect to assume
the defense of any Contest, (X) the Sellers shall keep the Buyers reasonably
informed of all material developments and events relating to such Contest and
(Y) at their own cost and expense, the Buyers shall have the right to
participate in (but not control) the defense of such Contest.

 

(iii)      In connection with any Contest that
relates to Taxes of any Company for a Pre-Closing Period (or Taxes of Sellers
or their Affiliates (other than the Companies) imposed on Buyers as a result of
transferee liability or otherwise) that the Seller has the ability to control
but does not elect to control pursuant to Section 10.6(b)(ii), such Contest
shall be controlled by Buyers and the Sellers agree to cooperate with the
Buyers in pursing such Contest, provided, however, that none of
the Buyers or their Affiliates (including the Companies) shall enter into any
settlement with respect to any such Contest that relates to Taxes of any
Company for a Pre-Closing Period (or Taxes of Sellers or their Affiliates
(other than the Companies) imposed on Buyers as a result of transferee
liability or otherwise) without the prior written consent of the Sellers, which
consent shall not be unreasonably withheld or delayed. In connection with any

 

67

 

Contest that is described
in this Section 10.6(b)(iii) and controlled by Buyers, the Buyers shall keep
the Sellers reasonably informed of all material developments and events
relating to such Contest and, at their own cost and expense, the Sellers shall
have the right to participate in (but not control) the defense of such Contest.

 

(iv)      Unless a Contest is with respect to a Tax
Return of a consolidated, combined, unitary or similar group (other than a
United States federal affiliated group) of which Buyers or their Affiliates
(other than the Companies) is the common parent, the Buyers and the Sellers
shall jointly control (at each Party’s own cost and expense) all Contests
relating to Straddle Periods of any Company. The Parties agree to cooperate
with each other in pursuing such Contest and neither the Buyers nor the Sellers
shall (or shall permit any of their Affiliates) to settle a Contest relating to
a Straddle Period of any Company without the other Party’s prior written
consent, which consent shall not be unreasonably withheld or delayed.

 

(v)       Except as provided in Section 10.6(b)(ii)
or Section 10.6(b)(iv), Buyers shall have sole control of any Contest. For any
such Contest, the Buyers shall, within ten (10) Business Days of receipt of a
notice from the Tax authority, notify the Sellers in writing of its intent to
do so. The Buyers shall have the right to determine whether, when and on what
terms to settle such Contest; provided, however, that (i) the
Buyers shall provide the Sellers with a timely and reasonable detailed account
of each stage of such Contest, (ii) the Buyers shall consult with the Sellers
before taking any significant action in connection with such Contest, and (iii)
the Buyers shall consult with the Sellers and offer the Sellers an opportunity
to comment before submitting any written materials prepared or furnished in
connection with such Contest. Sellers shall not be entitled to any information
regarding or copy of any Tax Return of the Buyers or any of their Affiliates,
except to the extent that such information or Tax Return relates solely to one
of the Companies.

 

(c)       The Sellers and Buyers agree to furnish
or cause to be furnished to each other, upon request, as promptly as
practicable, such information (including access to books and records and the
Companies’ accountants) and assistance relating to any Company as is reasonably
requested for the filing of any Tax Returns of or relating to any Company and
the preparation, prosecution, defense or conduct of any Contest relating to
Pre-Closing Periods and Straddle Periods of the Companies. The Sellers and
Buyers shall reasonably cooperate with each other in the conduct of any Contest
or other proceeding involving or otherwise relating to any Company with respect
to any Pre-Closing Period or Straddle Period. Any information obtained under
this Section 10.6(c) shall be kept confidential, except as may be otherwise
necessary in connection with the filing of Tax Returns or in the conduct of a
Contest or other Tax proceeding.

 

SECTION 10.7          Treatment of Indemnity Payments.
All indemnification payments under this Article X shall be deemed adjustments
to the Purchase Price.

 

SECTION 10.8          Limitations of Liability.

 

(a)       Indemnifying Party shall not be required to
indemnify Indemnified Party hereunder for any Damages arising under Sections
10.2(i) or 10.3(i), except to the extent that the

 

68

 

aggregate amount of
Damages for which Indemnified Party is entitled to indemnification pursuant to
such Sections exceeds $2,700,000 (it being understood and agreed that the
$2,700,000 amount is intended as a deductible, and Indemnifying Party shall not
be liable for the first $2,700,000 of Damages for which the Indemnified Party
is entitled to indemnification).

 

(b)       The aggregate amounts payable by
Indemnifying Party with respect to all claims for indemnification arising under
Sections 10.2(i) or 10.3(i) shall not exceed $40,000,000 (after which point
Indemnifying Party will have no obligation to indemnify Indemnified Party from
and against any further Damages).

 

(c)       The limitations set forth in Sections
10.8(a) shall not apply to a breach of a representation or warranty contained
in Section 3.1(e), 3.2(a), 3.2(b), 3.2(c), 3.2(d), 3.2(e), 3.15(c), 4.2(a),
4.6, 4.14(b) and 5.2(a) or for any Damages arising from or related to any Tax.

 

(d)       Notwithstanding anything to the contrary
contained in this Agreement, (i) subject to Section 10.8(d)(ii); Sellers shall
not be required to indemnify and hold Buyers harmless from and in respect of
any Damages resulting from any breach of representation, warranty, covenant or
agreement set forth in this Agreement relating or attributable to Taxes or Tax
Returns other than (A) liabilities for Taxes of the Sellers or their Affiliates
(other than the Companies), (B) liabilities for Taxes of the Companies for any
Pre-Closing Period and the portion of any Straddle Period ending on the Closing
Date (determined in accordance with Section 6.18(c) of this Agreement), and (C)
reasonable out of pocket costs and expenses for advisors with respect to
Contests for Taxes that Buyers control the defense of in accordance with and
pursuant to Section 10.6(b)(iii) of this Agreement, provided, however,
that, the limitations imposed by this Section 10.8(d)(i) shall not apply to
Damages resulting from a breach of Sections 3.8(f), 3.8(h), 3.8(j), 3.8(k),
3.8(1), 3.8(m), 3.8(n), 3.8(o), 3.8(p), 6.17 or 6.18(g); and (ii) except with
respect to Damages resulting from a breach of Section 3.8(j), the Sellers shall
not be required to indemnify and hold Buyers harmless from and in respect of
any Damages resulting from any failure of any Bond held directly or indirectly
by any Company on the Closing Date (or income or distributions from Residual
Interests held by any Company as of the Closing Date or otherwise) to be
tax-exempt, including any obligation to any Person under any Tax sharing, Tax
indemnification or other Contract that is related or attributable to the
failure of any such Bond (or income or distributions from such Residual
Interests or otherwise) to be tax-exempt.

 

SECTION 10.9          Scope of Sellers’ Liability.
Buyers acknowledge and agree that their sole remedy against the Sellers for any
matter arising with respect to any claims arising from the subject matter of
this Agreement or the misrepresentations or failures of the warranties,
covenants or agreements contained in this Agreement is set forth in this
Article X except that the remedies of injunction and specific performance shall
remain available for the non-fulfillment or failure to perform any covenant or
agreement contained in this Agreement for the Parties and that, except to the
extent Buyers have asserted a claim for indemnification prior to the applicable
termination date set forth in Section 10.1, Buyers shall have no remedy against
the Sellers for any breach of any provision of this Agreement.

 

SECTION 10.10        Indemnification Payments. Any
payment hereunder shall be made by wire transfer of immediately available funds
to such account or accounts as the Indemnified Party shall designate to the
Indemnifying Party in writing.

 

69

 

SECTION 10.11        Nonduplication. Any liability for
indemnification under the Agreement shall be determined without duplication of
recovery by reason of the state of facts giving rise to such liability
constituting a breach of more than one representation, warranty, covenant or
agreement.

 

ARTICLE XI

MISCELLANEOUS PROVISIONS

 

SECTION 11.1          Amendment and Modification.
This Agreement may be amended, modified or supplemented by a written instrument
signed by all of the Parties.

 

SECTION 11.2          Waiver of Compliance; Consents.
Any failure of Buyers, on the one hand, or of Sellers or the Companies, on the
other hand, to comply with any obligation, covenant, agreement or condition
contained herein may be waived in writing by the Sellers or Buyers,
respectively, but such waiver or failure to insist upon strict compliance with
such obligation, covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any other failure.

 

SECTION 11.3          Validity. The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provisions of this Agreement, which
shall remain in full force and effect.

 

SECTION 11.4          Expenses and Obligations. All
costs and expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement by Buyers shall be paid by Buyers,
and all costs and expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement by the Sellers shall be paid by the
Sellers, it being understood that Buyers will pay any fees or expenses of
Buyers or the Companies incurred in connection with obtaining the necessary
Licenses to conduct the Affordable Housing Business from and after the Closing
Date as a result of transactions contemplated by this Agreement, including,
without limitation, Mortgage Program Sponsor fees and filing expenses, and
Sellers shall pay any fees and expenses of Sellers incurred in connection with
the modification, amendment, or supplement of any existing Contract or License
of Sellers, which Sellers shall retain post-Closing. All filing fees relating
to the HSR Act shall be split equally between the Sellers and Buyers.

 

SECTION 11.5          Parties in Interest. This
Agreement shall be binding upon and, except as provided below, inure solely to
the benefit of each Party hereto, and nothing in this Agreement, express or
implied, is intended to confer upon any other Person any rights or remedies of
any nature whatsoever under or by reason of this Agreement.

 

SECTION 11.6          Construction. The Parties have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the Parties and no
presumption or burden of proof shall arise favoring or disfavoring any Party by
virtue of the authorship of any of the provisions of this Agreement.

 

SECTION 11.7          Severability. Any term or
provision of this Agreement that is invalid or unenforceable in any situation
in any jurisdiction shall not affect the validity or enforceability

 

70

 

of the remaining terms
and provisions hereof or the validity or enforceability of the offending term
or provision in any other situation or in any other jurisdiction.

 

SECTION 11.8          Notices. All notices and other
communications hereunder shall be in writing and shall be deemed given upon the
earlier of delivery thereof if by hand or upon receipt if sent by mail
(registered or certified, postage prepaid, return receipt requested) or on the
second next Business Day after deposit if sent by a recognized overnight
delivery service or upon transmission if sent by telecopy or facsimile
transmission (with request of assurance of receipt in a manner customary for
communication of such type) as follows:

 

(a)       If to Buyers, to:

 

Citigroup Global Markets
Inc.

390 Greenwich Street

New York, NY 10013-2309

Attention: Joseph J. Geraci

Telecopy: (212) 723-8642

 

and to:

 

Citibank, N.A.

250 West Street

New York, NY 10013-0436

Attention: Hugh C. Conroy

Telecopy: (212) 801-4110

 

with copies to:

 

Citigroup Global Markets
Inc.

390 Greenwich Street 

New York, NY 10013-2309 

Attention: Eugene Kwon 

Telecopy: (646) 291-5754

 

and to:

 

Citigroup Inc.

399 Park Avenue

New York, NY 10022-4699

Attention: Andrew M. Felner

Telecopy: (212) 559 7057

 

and to:

 

Milbank, Tweed, Hadley
& McCloy LLP

1 Chase Manhattan Plaza 

New York, NY 10005

 

71

 

Attention: Charles J.
Conroy

Telecopy: (212) 822-5671

 

(b)       If to Sellers, to:

 

Capmark Financial Group
Inc.

200 Witmer Road

Horsham, PA 19044

Attention: Thomas L. Fairfield, Esq.

Telecopy: (215) 328-3774:

 

and to:

 

Capmark Securities Inc.

1801 California Street

Suite 3700 

Denver, CO 80202

Attention: David Cheung, Esq.

Telecopy: (303) 291-5854

 

with a copy to:

 

Reed Smith LLP

599 Lexington Avenue

New York, NY 1002

Attention: John Altorelli, Esq.

Telecopy: (212) 521-5450

 

SECTION 11.9          Governing Law. This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York without regard to the conflicts-of-laws rules thereof.

 

SECTION 11.10        Counterparts. This Agreement may
be executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
agreement.

 

SECTION 11.11        Headings. The article and section
headings contained in this Agreement are solely for the purpose of reference,
are not part of the agreement of the Parties and shall not affect in any way
the meaning or interpretation of this Agreement.

 

SECTION 11.12        Entire Agreement. This Agreement,
the Disclosure Schedule, the Buyers Disclosure Schedule, the other Transaction
Documents and the schedules, annexes and exhibits attached hereto embody the
entire agreement and understanding of the Parties in respect of the subject
matter contained herein or therein. There are no agreements, representations,
warranties or covenants other than those expressly set forth herein or therein.
This Agreement, the Disclosure Schedule, the Buyers Disclosure Schedule, the
other Transaction Documents and the schedules, annexes and exhibits attached
hereto supersede all prior agreements and

 

72

 

understandings between
the Parties with respect to such subject matter. The schedules, annexes and
exhibits attached hereto are incorporated herein by reference and made a part
hereof.

 

SECTION 11.13        Assignment. This Agreement shall
be binding upon and inure to the benefit of the Parties named herein and their
respective successors and permitted assigns. No Party may assign either this
Agreement or any of its rights, interests, or obligations hereunder without the
prior written approval of Buyers and the Sellers; provided, however,
that Buyers may (i) assign any or all of their rights and interests hereunder
to one or more of its Affiliates and (ii) designate one or more of its
Affiliates to perform its obligations hereunder (in any or all of which cases
each Buyer nonetheless shall remain responsible for the performance of all of
its respective obligations hereunder).

 

SECTION 11.14        Buyers’ Obligations. The
obligations of the Buyers pursuant to this Agreement shall be several and not
joint.

 

SECTION 11.15        Jurisdiction and Venue. Each of
the Parties irrevocably and unconditionally submits to the exclusive
jurisdiction of the United States District Court for the Southern District of
New York or any New York State court sitting in Manhattan for the purposes of
enforcing this Agreement. In any action, suit or other proceeding, each of the
Parties irrevocably and unconditionally waives and agrees not to assert by way
of motion, as a defense or otherwise any claims that it is not subject to the
jurisdiction of the above courts, that such action or suit is brought in an
inconvenient forum or that the venue of such action, suit or other proceeding
is improper. Each of the Parties also agrees that any final and nonappealable
judgment against a Party in connection with any action, suit or other
proceeding shall be conclusive and binding on such Party and that such award or
judgment may be enforced in any court of competent jurisdiction, either within
or outside of the United States. A certified or exemplified copy of such award
or judgment shall be conclusive evidence of the fact and amount of such award
or judgment.

 

SECTION 11.16        Waiver of Jury Trial. EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS PROVIDED FOR HEREBY.

 

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IN WITNESS WHEREOF, the
Parties have executed this Agreement as of the date first written above.

 

 

	
   

  	
   

  	
  CITIGROUP GLOBAL
  MARKETS INC.

  
	
  

  	
   

  	
  By: 

  	
  

  /s/ Dan Wisniewski

  	
   

  
	
   

  	
   

  	
  Name:

  	
  DAN WISNIEWSKI

  	
   

  
	
   

  	
   

  	
  Title:

  	
  MANAGING DIRECTOR

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CITIBANK, N.A.

  
	
  

  	
   

  	
  By: 

  	
  

  /s/ Joseph Geraci

  	
   

  
	
   

  	
   

  	
  Name:

  	
  JOSEPH GERACI

  	
   

  
	
   

  	
   

  	
  Title:

  	
  VICE PRESIDENT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CAPMARK CAPITAL INC.

  
	
  

  	
   

  	
  By: 

  	
  

  /s/ Gregory J. McManus

  	
   

  
	
   

  	
   

  	
  Name:

  	
  GREGORY J. MCMANUS

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice
  President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CAPMARK SECURITIES INC.

  
	
  

  	
   

  	
  By: 

  	
  

  /s/ Gregory J. McManus

  	
   

  
	
   

  	
   

  	
  Name:

  	
  GREGORY J. MCMANUS

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice
  President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CAPMARK FINANCE INC.

  
	
  

  	
   

  	
  By: 

  	
  

  /s/ Gregory J. McManus

  	
   

  
	
   

  	
   

  	
  Name:

  	
  GREGORY J. MCMANUS

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice
  President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CAPMARK FINANCIAL GROUP
  INC.

  
	
  

  	
   

  	
  By: 

  	
  

  /s/ Gregory J. McManus

  	
   

  
	
   

  	
   

  	
  Name:

  	
  GREGORY J. MCMANUS

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice
  PresidentExhibit 10.16

2006 EQUITY PLAN

FOR KEY EMPLOYEES OF

CAPMARK FINANCIAL GROUP INC.

AND ITS AFFILIATES

 

1.             Purpose
of Plan

 

The 2006 Equity Plan for Key Employees of
Capmark Financial Group Inc. and its Affiliates (the “Plan”) is
designed:

 

(a)           to promote the long term financial interests
and growth of Capmark Financial Group Inc. (the “Company”) and its
Subsidiaries by attracting and retaining management and other personnel with
the training, experience and ability to enable them to make a substantial
contribution to the success of the Company’s business;

 

(b)           to motivate management personnel by means of
growth-related incentives to achieve long range goals; and

 

(c)           to further the alignment of interests of
participants with those of the stockholders of the Company through
opportunities for increased stock, or stock-based ownership in the Company.

 

2.             Definitions

 

As used in the Plan, the following words
shall have the following meanings:

 

(a)           “Affiliate” means with respect to any
Person, any entity directly or indirectly controlling, controlled by or under
common control with such Person.

 

(b)           “Board” means the Board of Directors
of the Company.

 

(c)           “Change in Control” shall mean (i) the
sale of all or substantially all of the assets of Investor LLC, the Company, or
GMAC Mortgage Corporation to an Unaffiliated Person; or (ii) a sale by the
Company or Investor LLC, in a single transaction or in a related series of
transactions, of the voting stock of the Company resulting in more than 50% of
the voting stock of the Company being held (either directly or indirectly
through Investor LLC, and which for the avoidance of doubt includes the
distribution of any interests in the Investor LLC being distributed to any
limited partners of any Investor, which are not Affiliates of that Investor) by
an Unaffiliated Person; or (iii) a sale by the Company or Investor LLC, in
an unrelated series of transactions, of the voting stock of the Company, as a
result of which an Unaffiliated Person is (either directly or indirectly through
Investor LLC, and which for the avoidance of doubt includes the distribution of
any interests in the Investor LLC being distributed to any limited partners of
any Investor, which are not Affiliates of that Investor) the single largest
holder of voting stock of the Company; or 
(iv) a merger or consolidation of the Company or Investor LLC into
an Unaffiliated Person;  if and only if  any such event (or as a result of any such
event) listed in (i) – (iv) above results in the inability of the
Investors and any of their respective Affiliates, either as a Group or
individually (through Investor LLC or otherwise), to elect a majority of the
Board or board of directors of the resulting entity; 

 

 

provided, however,
to the extent any such event listed in (i) — (iv) above occurs but at
such time neither the Investors and their Affiliates as a Group, nor any of the
Investors or their respective Affiliates individually (through Investor LLC or
otherwise) retain the ability to elect a majority of the Board or the board of
directors of the resulting entity, a Change of Control shall be deemed to have
occurred upon any later date on which neither the Investors and their
respective Affiliates as a Group nor any of the Investors or their Affiliates
individually retain such ability. For purposes of this definition, the term “Unaffiliated
Person” means any Person or Group who is not (x) a Investor or any member
of a Investor, (y) an Affiliate of an Investor or any member of a Investor or
(z) an entity in which a Investor or any member of an Investor holds, directly
or indirectly, a majority of the economic interests in such entity.  Notwithstanding the foregoing, if any of the
transactions described in (i), (ii) or (iv) of the preceding sentence
shall occur and the other Person or Group involved in such transaction (or its
parent entity) is an Affiliate of any Investor because it is under common
control by an ultimate parent entity, but
the day-to-day operations of, and key business decisions regarding, such
Affiliate are controlled by an entity that is, or individuals who are,
principally engaged in a business other than the management or operations of
private equity funds (any such Affiliate, a “Strategic Business Affiliate”),
then the determination of whether a Change of Control has occurred shall be
made by applying the relevant test in clause (i), (ii) or (iv) above
(along with the test of whether the Investors and their Affiliates as a Group
any of the Investors or their Affiliates individually (through Investor LLC or
otherwise) lose the ability to elect a majority of the Board) as if the
Strategic Business Affiliate was not an Affiliate of any of the Investors and
by treating the voting power of the Strategic Business Affiliate in the Company
(or the resulting entity) as if it were held by a Person or Group unaffiliated
with any of the Investors.

 

(d)           “Code” means the United States
Internal Revenue Code of 1986, as amended.

 

(e)           “Committee” means the Compensation
Committee of the Board (or, if no such committee is appointed, the Board).

 

(f)            “Common Stock” or “Share”
means the common stock, par value $0.001 per share, of the Company, which may
be authorized but unissued, or issued and reacquired.

 

(g)           “Employee” means a person, including
an officer, in the regular employment of the Company or any other Service
Recipient who, in the opinion of the Committee, is, or is expected to have
involvement in the management, growth or protection of some part or all of the
business of the Company or any other Service Recipient.

 

(h)           “Exchange Act” means the Securities
Exchange Act of 1934, as amended.

 

(i)            “Fair Market Value” means, on a per
Share basis, (i) if there is a public market for the Shares on such date,
the average of the high and low closing bid prices of the Shares on such stock
exchange on which the Shares are principally trading on the applicable date,
or, if there were no sales on such date, on the closest preceding date on which
there were sales of Shares, or (ii) if there is no public market for the
Shares on such date, the fair market value of the as determined in good faith
by the Board without any discounts for minority interests.

 

(j)            “Grant” means an award made to a
Participant pursuant to the Plan and described in Section 5, including,
without limitation, an award of a Stock Option, Stock Appreciation Right or 

 

2

 

Other Stock-Based Award (as such terms are defined in Section 5),
or any combination of the foregoing.

 

(k)           “Grant Agreement” means an agreement
between the Company and a Participant that sets forth the terms, conditions and
limitations applicable to a Grant.

 

(l)            “Group” means “group,” as such term
is used for purposes of Section 13(d) or 14(d) of the Exchange
Act.

 

(m)          “Investor Group” shall mean, collectively,
Investor LLC, its members, the Investors, and any of the foregoing entity’s
respective Affiliates.

 

(n)           “Investor LLC” shall mean GMACCH
Investor LLC, a Delaware limited liability company.

 

(o)           “Investors” means, collectively,
Kohlberg Kravis Roberts & Co., Five Mile Capital Partners LLC, The
Goldman Sachs Group, Inc., and Dune Capital Management L.P.

 

(p)           “Management Stockholder’s Agreement”
shall mean that certain Management Stockholder’s Agreement between any given
Participant and the Company.

 

(q)           “Participant” means an Employee,
non-employee member of the Board, consultant or other person having a service
relationship with the Company or one of its Subsidiaries, to whom one or more
Grants have been made and remain outstanding.

 

(r)            “Person” means “person,” as such
term is used for purposes of Section 13(d) or 14(d) of the
Exchange Act.

 

(s)           “Qualified Public Offering” means any
public offering of the Company (whether an initial or subsequent offering)
after which at least 35% of the Company’s or any affiliated holding company’s,
outstanding common stock are listed on the New York Stock Exchange or the
Nasdaq National Market or other nationally recognized stock exchange or listing
system.

 

(t)            “Service Recipient” shall mean, the
Company, any Subsidiary of the Company, or any Affiliate of the Company that
satisfies the definition of “service recipient” within the meaning of Proposed
Treasury Regulation Section 1.409A-1(g) (or any successor
regulation), with respect to which the person is a “service provider” (within
the meaning of Proposed Treasury Regulation Section 1.409A-1(f) (or
any successor regulation).

 

(u)           “Subsidiary” means any corporation or
other entity in an unbroken chain of corporations or other entities beginning
with the Company if each of the corporations or other entities, or group of
commonly controlled corporations or other entities, other than the last
corporation or other entity in the unbroken chain then owns stock or other
equity interests possessing 50% or more of the total combined voting power of
all classes of stock or other equity interests in one of the other corporations
or other entities in such chain.

 

3

 

3.             Administration
of Plan

 

(a)           The Plan shall be administered by the Committee.  The Committee may adopt its own rules of
procedure, and action of a majority of the members of the Committee taken at a
meeting, or action taken without a meeting by unanimous written consent, shall
constitute action by the Committee.  The
Committee shall have the power and authority to administer, construe and
interpret the Plan, to make rules for carrying it out and to make changes
in such rules.  Any such interpretations,
rules, and administration shall be consistent with the basic purposes of the
Plan.

 

(b)           The Committee may delegate to the Chief
Executive Officer and to other senior officers of the Company its duties under
the Plan, subject to such conditions and limitations as the Committee shall
prescribe, except that only the Committee may designate and make Grants to
Participants who are subject to Section 16 of the Exchange Act.

 

(c)           The Committee may employ counsel,
consultants, accountants, appraisers, brokers or other persons.  The Committee, the Company, and the officers
and directors of the Company shall be entitled to rely upon the advice,
opinions or valuations of any such persons. 
All actions taken and all interpretations and determinations made by the
Committee in good faith shall be final and binding upon all Participants, the Company
and all other interested persons.  No
member of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan or
the Grants, and all members of the Committee shall be fully protected by the
Company with respect to any such action, determination or interpretation.

 

4.             Eligibility

 

The Committee may from time to time make
Grants under the Plan to such Employees, or other persons having a relationship
with Company or any other Service Recipient, and in such form and having such
terms, conditions and limitations as the Committee may determine.  The terms, conditions and limitations of each
Grant under the Plan shall be set forth in a Grant Agreement, in a form
approved by the Committee, consistent, however, with the terms of the Plan; provided,
however, that such Grant Agreement shall contain provisions dealing with
the treatment of Grants in the event of the termination of employment, death or
disability of a Participant, and may also include provisions concerning the
treatment of Grants in the event of a Change in Control of the Company.

 

5.             Grants

 

From time to time, the Committee will
determine the forms and amounts of Grants for Participants.  Such Grants may take the following forms in
the Committee’s sole discretion:

 

(a)           Stock Options - These are options to
purchase Common Stock (“Stock Options”). 
At the time of Grant the Committee shall determine, and shall include in
the Grant Agreement or other Plan rules, the option exercise period, the option
exercise price, vesting requirements, and such other terms, conditions or
restrictions on the grant or exercise of the option as the Committee deems
appropriate including, without limitation, the right to receive dividend
equivalent payments on vested options. 
In addition to other restrictions contained in the Plan, an option
granted under this Section 5(a) may not be exercised more than 10
years after the date it is granted. 
Payment of 

 

4

 

the option exercise price shall be made (i) in cash, (ii) with
the consent of the Committee, in Shares that the Participant has held for at
least six months (or such other period of time as may be required by the
Company’s accountants), (iii) following the occurrence of a Qualified
Public Offering, through the withholding of Shares otherwise issuable upon the
exercise of the Stock Option in a manner that is compliant with The
Sarbanes-Oxley Act of 2002 (or any successor legislation), or (iv) a
combination of the foregoing methods, in accordance with the terms of the Plan,
the Grant Agreement and of any applicable guidelines of the Committee in effect
at the time.

 

(b)           Stock Appreciation Rights - The
Committee may grant “Stock Appreciation Rights” (as hereinafter defined)
independent of, or in connection with, the grant of a Stock Option or a portion
thereof.  Each Stock Appreciation Right
shall be subject to such other terms as the Committee may determine.  The exercise price per Share of a Stock
Appreciation Right shall be an amount determined by the Committee, but in no
event shall such amount be less than the Fair Market Value of a Share on the
date the Stock Appreciation Right is granted or, in the case of a Stock
Appreciation Right granted in conjunction with a Stock Option, or a portion
thereof, the exercise price of such related Stock Option.  Each “Stock Appreciation Right” granted
independent of a Stock Option shall be defined as a right of a Participant,
upon exercise of such Stock Appreciation Right, to receive an amount equal to
the product of (i) the excess of (A) the Fair Market Value on the
exercise date of one Share over (B) the exercise price per Share of such
Stock Appreciation Right, multiplied by (ii) the number of Shares covered
by the Stock Appreciation Right.  Each “Stock
Appreciation Right” granted in conjunction with a Stock Option, or a portion
thereof, shall be defined as a right of a Participant to surrender to the
Company the unexercised Stock Option, or applicable portion thereof, and to
receive from the Company in exchange therefor an amount equal to the product of
(i) the excess of (A) the Fair Market Value of one Share on the
exercise date of such Stock Appreciation Right, over (B) the exercise
price per Share of such Stock Option, multiplied by (ii) the number of
Shares covered by the Stock Option, or portion thereof, which is
surrendered.  The date a notice of
exercise is received by the Company shall be the exercise date.  Payment of the Stock Appreciation Right shall
be made in Shares or in cash, or partly in Shares and partly in cash (any such
Shares valued at such Fair Market Value on the date of such payment), all as
shall be determined by the Committee.

 

(c)           Other Stock-Based Awards - The
Committee may grant or sell awards of Shares, awards of restricted Shares and
awards that are valued in whole or in part by reference to, or are otherwise
based on the Fair Market Value of, Shares (including, without limitations,
restricted stock unit).  Such Other
Stock-Based Awards shall be in such form, and dependent on such conditions, as
the Committee shall determine, including, without limitation, the right to
receive, or vest with respect to, one or more Shares (or the equivalent cash
value of such Shares) upon the completion of a specified period of service, the
occurrence of an event and/or the attainment of performance objectives.  Other Stock-Based Awards may be granted alone
or in addition to any other Grants under the Plan.  Subject to the provisions of the Plan, the
Committee shall determine to whom and when Other Stock-Based Awards will be
made, the number of Shares to be awarded under (or otherwise related to) such
Other Stock-Based Awards; whether such Other Stock-Based Awards shall be
settled in cash, Shares or a combination of cash and Shares; and all other
terms and conditions of such awards (including, without limitation, the vesting
provisions thereof and provisions ensuring that all Shares so awarded and
issued shall be fully paid and non-assessable).

 

5

 

6.             Limitations
and Conditions

 

(a)           The number of Shares available for Grants
under this Plan shall be 77,000,000
subject to adjustment as provided for in Sections 8 and 9, unless restricted by
applicable law.  Shares related to Grants
that are forfeited, terminated, canceled or expire unexercised, shall
immediately become available for new Grants.

 

(b)           No Grants shall be made under the Plan
beyond ten years after the effective date of the Plan, but the terms of Grants
made on or before the expiration of the Plan may extend beyond such
expiration.  At the time a Grant is made
or amended or the terms or conditions of a Grant are changed in accordance with
the terms of the Plan or the Grant Agreement, the Committee may provide for
limitations or conditions on such Grant.

 

(c)           Nothing contained herein shall affect the
right of the Company or any other Service Recipient to terminate any
Participant’s employment at any time or for any reason.

 

(d)           Other than as specifically provided in the
Management Stockholder’s Agreement, no benefit under the Plan shall be subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge, and any attempt to do so shall be void.  No such benefit shall, prior to receipt
thereof by the Participant, be in any manner liable for or subject to the
debts, contracts, liabilities, engagements, or torts of the Participant.

 

(e)           Participants shall not be, and shall not
have any of the rights or privileges of, stockholders of the Company in respect
of any Shares purchasable in connection with any Grant unless and until
certificates representing any such Shares have been issued by the Company to
such Participants (or book entry representing such Shares has been made and
such Shares have been deposited with the appropriate registered book-entry
custodian).

 

(f)            No election as to benefits or exercise of
any Grant may be made during a Participant’s lifetime by anyone other than the
Participant except by a legal representative appointed for or by the
Participant.

 

(g)           Absent express provisions to the contrary,
any Grant under this Plan shall not be deemed compensation for purposes of
computing benefits or contributions under any retirement or  severance plan of the Company or other
Service Recipient and shall not affect any benefits under any other benefit
plan of any kind now or subsequently in effect under which the availability or
amount of benefits is related to level of compensation.  This Plan is not a “Retirement Plan” or “Welfare
Plan” under the Employee Retirement Income Security Act of 1974, as amended.

 

(h)           Unless the Committee determines otherwise,
no benefit or promise under the Plan shall be secured by any specific assets of
the Company or any other Service Recipient, nor shall any assets of the Company
or any other Service Recipient be designated as attributable or allocated to
the satisfaction of the Company’s obligations under the Plan.

 

7.             Transfers
and Leaves of Absence

 

For purposes of the Plan, unless the Committee
determines otherwise: (a) a transfer of a Participant’s employment without
an intervening period of separation among the Company and 

 

6

 

any other Service Recipient shall not be deemed a termination of
employment, and (b) a Participant who is granted in writing a leave of
absence or who is entitled to a statutory leave of absence shall be deemed to
have remained in the employ of the Company (and other Service Recipient) during
such leave of absence.

 

8.             Adjustments

 

In the event of any change in, or exchange
of, the outstanding Common Stock by reason of a stock split, spin-off, stock
dividend, stock combination, reclassification, recapitalization, liquidation,
dissolution, reorganization, merger, Change in Control, or other event
affecting the capital stock of the Company, the Committee may adjust
appropriately (a) the number and kind of Shares subject to the Plan and
available for or covered by Grants and (b) exercise prices related to
outstanding Grants, and make such other revisions to outstanding Grants as it
deems, in good faith, are equitably required (including, without limitation, to
the exercise price of Stock Options).

 

9.             Merger,
Consolidation, Exchange, Acquisition, Liquidation or Dissolution

 

In its absolute discretion, acting in good
faith, and on such terms and conditions as it deems appropriate, coincident
with or after the grant of any Grant, the Committee may provide that such Grant
cannot be exercised or settled after the combination, merger or consolidation
of the Company with or into another corporation or other entity, the exchange
of all or substantially all of the assets of the Company for the securities of
another corporation or other entity, the acquisition by another person of 80%
or more of the Company’s then outstanding Shares of voting stock or the
recapitalization, reorganization, reclassification, liquidation, dissolution,
or other event affecting the capital stock of the Company.  The Committee shall, on such terms and conditions
as it deems appropriate, acting in good faith, also provide, either by the
terms of such Grant or by a resolution adopted prior to the occurrence of such
merger, consolidation, exchange, acquisition, recapitalization, reorganization,
reclassification, liquidation, dissolution or other event affecting the capital
stock of the Company, that, after written notice to all affected Participants
and for a reasonable period of time prior to such event, any such Grant that is
a Stock Option or Stock Appreciation Right which is being made unexercisable
after any such event shall be exercisable as to any Shares subject thereto, and
any such Grant that is not permitted to be vested or settled after any such
event shall be vested or settled no later than such event notwithstanding
anything to the contrary herein (but subject to the provisions of Section 6(b))
and that, upon the occurrence of such event, such Grant shall terminate and be
of no further force or effect.  The
Committee may also provide, in its absolute discretion, that (a) even if
the Grant shall remain exercisable or subject to vesting or being settled after
any such event, from and after such event, any such Grant shall be exercisable,
vested or settled only for, or (b) the Grant may be cancelled as of the
date of such event only in exchange for, the kind and amount of securities
and/or other property, or the cash equivalent thereof (as determined by the
Committee in good faith), receivable as a result of such event by the holder of
a number of Shares for which such Grant could have been exercised, vested or
settled immediately prior to such event. 
The Committee may further provide in its absolute discretion, an
opportunity for holders of such Grant to enter into new Grants in connection
with such event, on such terms and conditions as the Committee deems
appropriate.

 

7

 

10.           Amendment
and Termination

 

(a)           The Committee shall have the authority to
make such amendments to any terms and conditions applicable to outstanding
Grants as are consistent with this Plan provided that no such action shall
modify any Grant in a manner adverse to all Participants with respect to any
outstanding Grants, other than pursuant to Section 8 or 9 hereof, without
the Participant’s consent except as such modification is provided for or
contemplated in the terms of the Grant or this Plan (except that any adjustment
that is made pursuant to Section 8 or 9 hereof may be made by the
Committee in good faith).

 

(b)           The Board may amend, suspend or terminate
the Plan except that no such action, other than an action under Section 8
or 9 hereof, may be taken which would, without stockholder approval, increase
the aggregate number of Shares available for Grants under the Plan, decrease
the price of outstanding Grants, change the requirements relating to the
Committee, extend the term of the Plan or be materially adverse to all
Participants with respect to any outstanding Grants.

 

(c)           Notwithstanding anything herein to the
contrary, (i) if at the time of the Participant’s termination of
employment with any Service Recipient the Participant is a “specified employee”
as defined in Section 409A of the Code, and the deferral of the
commencement of any payments or benefits otherwise payable hereunder as a
result of such termination of employment is necessary in order to prevent the
imposition of any accelerated or additional tax under Section 409A of the
Code, then the Company will defer the commencement of the payment of any such
payments or benefits hereunder (without any reduction in such payments or
benefits ultimately paid or provided to the Participant) until the date that is
six months following the Participant’s termination of employment with all
Service Recipients (or the earliest date as is permitted under Section 409A
of the Code) and (ii) if any other payments of money or other benefits due
to the Participant hereunder would cause the application of an accelerated or
additional tax under Section 409A of the Code, such payments or other
benefits shall be deferred if deferral will make such payment or other benefits
compliant under Section 409A of the Code, or otherwise such payment or
other benefits shall be restructured, to the extent possible, in a manner,
determined by the Board, that does not cause such an accelerated or additional
tax or result in an additional cost to the Company.  The Company shall consult with its legal
counsel and tax accountants in good faith regarding the implementation of the provisions
of this Section 10(c), which shall be done only in a manner that is
reasonably acceptable to the senior executives of the Company; provided that
none of the Service Recipients nor any of its employees or representatives
shall have any liability to any Participant with respect thereto.

 

11.           Governing
Law; International Participants

 

(a)           This Plan shall be governed by and construed
in accordance with the laws of Delaware applicable therein.

 

(b)           With respect to Participants who reside or
work outside the United States of America and who are not (and who are not
expected to be) “covered employees” within the meaning of Section 162(m)
of the Code, the Committee may, in its sole discretion, amend the terms of the
Plan or awards with respect to such Participants in order to conform such terms
with 

 

8

 

the requirements of local law or to obtain more favorable tax or other
treatment for a Participant, the Company or any other Service Recipient.

 

12.           Withholding
Taxes

 

The Company shall have the right to deduct
from any payment made under the Plan any federal, state or local income or
other taxes required by law to be withheld with respect to such payment.  It shall be a condition to the obligation of
the Company to deliver Shares upon the exercise of a Stock Option that the
Participant pay to the Company such amount as may be requested by the Company
for the purpose of satisfying any liability for such withholding taxes.

 

13.           Effective
Date and Termination Dates

 

The Plan shall be effective on and as of the
date of its approval by the stockholders of the Company and shall terminate ten
years later, subject to earlier termination by the Board pursuant to Section 10.

 

9

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