Document:

Exhibit 10.2

 

EXECUTION VERSION

 

GPMT 2019-FL2, LTD.,
  as Issuer,

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,
  as Preferred Share Paying Agent,

 

and

 

MAPLESFS LIMITED,
  as Preferred Share Registrar and Administrator

 

PREFERRED SHARE PAYING AGENCY AGREEMENT

 

Dated as of February 28, 2019

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
ARTICLE I.   DEFINITIONS
    	
1
    
	
 
    	
 
    	
 
    
	
Section 1.1.
    	
Definitions
    	
1
    
	
Section 1.2.
    	
Rules of   Construction
    	
6
    
	
 
    	
 
    
	
ARTICLE II.   THE PREFERRED SHARES
    	
6
    
	
 
    	
 
    	
 
    
	
Section 2.1.
    	
Form of Preferred   Shares
    	
6
    
	
Section 2.2.
    	
Execution; Delivery;   Dating and Cancellation
    	
6
    
	
Section 2.3.
    	
Registration
    	
8
    
	
Section 2.4.
    	
Registration of   Transfer and Exchange of Preferred Shares
    	
9
    
	
Section 2.5.
    	
Transfer and Exchange   of Preferred Shares
    	
10
    
	
Section 2.6.
    	
[Reserved]
    	
14
    
	
Section 2.7.
    	
Non-Permitted Holders
    	
14
    
	
Section 2.8.
    	
Certain Tax Matters
    	
14
    
	
Section 2.9.
    	
Provisions of the   Indenture and Servicing Agreement
    	
15
    
	
 
    	
 
    
	
ARTICLE III.   DISTRIBUTIONS TO THE HOLDERS
    	
15
    
	
 
    	
 
    	
 
    
	
Section 3.1.
    	
Disbursement of Funds
    	
15
    
	
Section 3.2.
    	
Condition to Payments
    	
17
    
	
Section 3.3.
    	
The Preferred Share   Distribution Account
    	
18
    
	
Section 3.4.
    	
Redemption
    	
18
    
	
Section 3.5.
    	
Fees or Commissions in   Connection with Disbursements
    	
18
    
	
Section 3.6.
    	
Liability of the   Preferred Share Paying Agent in Connection with Disbursements
    	
18
    
	
 
    	
 
    
	
ARTICLE IV.   ACCOUNTING AND REPORTS
    	
19
    
	
 
    	
 
    	
 
    
	
Section 4.1.
    	
Reports and Notices
    	
19
    
	
Section 4.2.
    	
Notice of Plan Assets
    	
19
    
	
Section 4.3.
    	
Requests by Independent   Accountants
    	
19
    
	
Section 4.4.
    	
Rule 144A   Information
    	
20
    
	
Section 4.5.
    	
Tax Information
    	
20
    
	
 
    	
 
    
	
ARTICLE V.   THE PREFERRED SHARE PAYING AGENT
    	
20
    
	
 
    	
 
    	
 
    
	
Section 5.1.
    	
Appointment of   Preferred Share Paying Agent
    	
20
    
	
Section 5.2.
    	
Resignation and Removal
    	
21
    
	
Section 5.3.
    	
Fees; Expenses;   Indemnification; Liability
    	
21
    

 

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ARTICLE VI.   [RESERVED]
    	
23
    
	
 
    	
 
    
	
ARTICLE VII.   MISCELLANEOUS PROVISIONS
    	
23
    
	
 
    	
 
    	
 
    
	
Section 7.1.
    	
Amendment
    	
23
    
	
Section 7.2.
    	
Notices;   Rule 17g-5 Procedures
    	
23
    
	
Section 7.3.
    	
Governing Law
    	
24
    
	
Section 7.4.
    	
Non-Petition; Limited   Recourse
    	
24
    
	
Section 7.5.
    	
No Partnership or Joint   Venture
    	
24
    
	
Section 7.6.
    	
Counterparts
    	
24
    
	
 
    	
 
    	
 
    
	
Exhibit A
    	
Form of Preferred   Share
    	
 
    
	
Exhibit B-1
    	
Form of Transferee   Certificate for Transfers of EHRI
    	
 
    
	
Exhibit B-2
    	
Form of Transferor   Certificate for Transfers of EHRI
    	
 
    

 

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This PREFERRED SHARE PAYING AGENCY AGREEMENT (this “Agreement”) is dated as of February 28, 2019, by and among GPMT 2019-FL2, LTD., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Issuer”), WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as paying agent for the Preferred Shares (in such capacity, the “Preferred Share Paying Agent”), and MAPLESFS LIMITED, a licensed trust company incorporated in the Cayman Islands, as administrator (in such capacity, the “Administrator”) and share registrar for the Preferred Shares (in such capacity, the “Preferred Share Registrar”).

 

PRELIMINARY STATEMENT

 

As authorized by the Issuer and permitted under the terms of the Issuer’s Amended and Restated Memorandum and Articles of Association (the “Memorandum and Articles”) as may be hereafter amended and in effect from time to time, the Issuer has a duly authorized share capital consisting of 250 ordinary voting shares, par value U.S.$1.00 per share, all of which will have been issued by the Issuer and are outstanding on the Closing Date, and 105,192.857 Preferred Shares, consisting of (i) 103,192.857 shares of Class P Preferred Shares (the “Class P Preferred Shares”), having a par value U.S.$0.001 per share and with an aggregate liquidation preference and notional amount equal to U.S.$1,000 per share; (ii) one share of Class X Preferred Shares (the “Class X Preferred Shares”), having a par value U.S.$0.001 per share and with an aggregate notional amount equal to the Class X Preferred Share Notional Amount (as defined herein) and a liquidation preference equal to U.S.$1,000 per share and (iii) one share of Class R Preferred Shares (the “Class R Preferred Shares”), having a par value U.S.$0.001 per share and with an aggregate liquidation preference and notional amount equal to U.S.$1,000 per share (the Class P Preferred Shares, the Class X Preferred Shares and the Class R Preferred Shares are collectively referred to herein as the  “Preferred Shares”), all of which have been issued on the date hereof on the terms and provisions set forth herein.  The distributions on each of the Preferred Shares will be payable in accordance with the Memorandum and Articles, the Indenture (as defined below), and this Agreement.  The Issuer has entered into this Agreement to provide for the payment of such distributions.

 

All representations, covenants and agreements made herein by the Issuer and the Preferred Share Paying Agent are for the benefit of the Holders.  The Issuer is entering into this Agreement, and the Preferred Share Paying Agent, the Administrator and the Preferred Share Registrar are accepting their obligations hereunder, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.

 

ARTICLE I.

 

DEFINITIONS

 

Section 1.1.                                 Definitions.

 

Capitalized terms used but not defined herein have the respective meanings given to such terms in the Indenture and, if not defined therein, in the Memorandum and Articles, and are incorporated by reference herein.  As used herein, the following terms have the following

 

 

respective meanings and the definitions of such terms are equally applicable both in the singular and the plural forms of such terms and in the masculine, feminine and neuter genders of such terms:

 

“Administrator”:  The meaning set forth in the preamble of this Agreement.

 

“Affiliate” or “Affiliated”:  With respect to a Person, (i) any other Person who, directly or indirectly, is in control of, or controlled by, or is under common control with, such Person or (ii) any other Person who is a director, Officer or employee (a) of such Person, (b) of any subsidiary or parent company of such Person or (c) of any Person described in clause (i) above.  For the purposes of this definition, control of a Person shall mean the power, direct or indirect, (i) to vote more than 50% of the securities having ordinary voting power for the election of directors of such Person, or (ii) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise; provided that neither the Administrator nor any other company, corporation or person to which the Administrator provides directors and/or administrative services and/or acts as share trustee shall be an Affiliate of the Issuer or Co-Issuer.

 

“Agreement”:  The meaning set forth in the Preliminary Statement to this Agreement.

 

“AML Compliance”:  Compliance with the Cayman AML Regulations.

 

“Authorized Denomination”:  Any integral number of Preferred Shares equal to or greater than 250 shares and integral multiples of one share in excess thereof.

 

“Available Funds”:  With respect to each Payment Date, the amount (if any) of distributions received by the Preferred Share Paying Agent from the Issuer or the Trustee under the Priority of Payments under the Indenture for payments on the Preferred Shares.

 

“Bank”:  Wells Fargo Bank, National Association, a national banking association.

 

“Benefit Plan Investor”:  (A) An “employee benefit plan” (as defined in Section 3(3) of ERISA) that is subject to Title I of ERISA, (B) a “plan” within the meaning of Section 4975(e)(1) of the Code that is subject to Section 4975 of the Code, or (C) any entity whose underlying assets include “plan assets” by reason of such employee benefit plan’s or plan’s investment in the entity or otherwise.

 

“Business Day”:  Each Business Day under the Indenture.

 

“Cayman AML Regulations”:  The Anti-Money Laundering Regulations (2018 Revision) and The Guidance Notes on the Prevention and Detection of Money Laundering and Terrorist Financing in the Cayman Islands, each as amended and revised from time to time.

 

“Class P Preferred Share”:  The Class P Preferred Shares issued by the Issuer pursuant to the Memorandum and Articles.

 

“Class P Preferred Share Notional Amount”:  $103,192,857.00.

 

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“Class P Preferred Shares Stated Redemption Price”:  The meaning set forth in Section 3.1(a) hereof.

 

“Class R Preferred Share”:  The Class R Preferred Shares issued by the Issuer pursuant to the Memorandum and Articles.

 

“Class X Preferred Share”:  The Class X Preferred Shares issued by the Issuer pursuant to the Memorandum and Articles.

 

“Class X Preferred Rate”:  With respect to any Payment Date, a per annum rate (greater than or equal to zero) equal to:  (a)(i) the total amount of Interest Proceeds available for actual payment to the holders of the Notes and the Preferred Shares on such Payment Date less (ii) the total amount of Interest Proceeds distributed on such Payment Date to the holders of the Notes and the Class P Preferred Shares, divided by (b) the outstanding Class X Preferred Share Notional Amount, expressed as a percentage and as an annualized rate on an actual/360 basis in order to produce the aggregate amount of interest described in clause (a) to accrue on the outstanding Class X Preferred Share Notional Amount during the related Interest Accrual Period.

 

“Class X Preferred Share Notional Amount”:  The meaning set forth in Section 3.1(b) hereof.

 

“Closing Date”:  February 28, 2019.

 

“Co-Issuer”:  GPMT 2019-FL2 LLC, a Delaware limited liability company.

 

“Code”:  The United States Internal Revenue Code of 1986, as amended.

 

“Credit Risk Retention Rules”:  Regulation RR (17 C.F.R. Part 244), as such rule may be amended from time to time, and subject to such clarification and interpretation as have been provided by the Department of Treasury, the Federal Reserve System, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the Securities and Exchange Commission and the Department of Housing and Urban Development in the adopting release (79 F.R. 77601 et seq.) or by the staff of any such agency, or as may be provided by any such agency or its staff from time to time, in each case, as effective from time to time.

 

“EHRI”:  The Preferred Shares, which are retained by the Retention Holder on the Closing Date.

 

“EHRI Transfer Restriction Period”:  The period from the Closing Date to the latest of (i) the date on which the total unpaid Principal Balance of the Mortgage Loans has been reduced to 33% of the Aggregate Collateral Interest Cut-off Date Balance; (ii) the date on which the total outstanding principal amount or notional amount, as applicable, of the Securities has been reduced to 33% of the total outstanding principal amount or notional amount, as applicable, of the Securities as of the Closing Date; or (iii) two years after the Closing Date.  However, if the Credit Risk Retention Rules are modified or repealed, the Securitization Sponsor may choose to comply with such Credit Risk Retention Rules as are then in effect.

 

“FATCA”: The meaning set forth in the Indenture.

 

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“Holder”:  With respect to any Preferred Shares, the Person in whose name such Preferred Shares are registered in the Preferred Share Register.

 

“Holder AML Obligations”:  The obligations of each Holder of Preferred Shares to (i) provide the Issuer or its agents with such information and documentation that may be required for the Issuer to achieve AML Compliance and (ii) update or replace such information or documentation as may be necessary.

 

“Indenture”:  The indenture dated as of February 28, 2019 among the Issuer, the Co-Issuer, the Bank, as note administrator, GPMT Seller LLC, as advancing agent and Wilmington Trust, National Association, as trustee (in such capacity, the “Trustee”), as amended from time to time in accordance with the terms thereof.

 

“Institutional Accredited Investor”: An institution that is an “accredited investor” as described in clause (1), (2), (3) or (7) of Rule 501(a) of Regulation D under the Securities Act or an entity in which all of the equity owners are such “accredited investors.”

 

“Investment Company Act”:  Investment Company Act of 1940, as amended.

 

“Issuer Order”:  A written order or request dated and signed in the name of the Issuer by an Authorized Officer of the Issuer.

 

“Majority”:  The Holders of more than 50% of the aggregate outstanding Preferred Shares.

 

“Memorandum and Articles”:  The meaning set forth in the Preliminary Statement to this Agreement.

 

“Non-Permitted AML Holder”:  A holder of Preferred Shares that fails to comply with the Holder AML Obligations.

 

“Non-Permitted Holder”:  (a) Any U.S. person (as defined in Regulation S) that becomes the beneficial owner of any Preferred Shares or interest in Preferred Shares and is not a Qualified Institutional Buyer and a Qualified Purchaser, (b) any Person for which the representations made, or deemed to be made, by such Person for purposes of ERISA, Section 4975 of the Code or applicable Similar Law in any representation letter or Purchaser Certificate, or by virtue of deemed representations are or become untrue, (c) any Benefit Plan Investor or (d) a Non-Permitted AML Holder.

 

“Notes”:  The Class A Notes, the Class A-S Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E Notes and the Class F Notes, collectively, authorized by, and authenticated and delivered under, the Indenture.

 

“Ordinary Shares”:  The 250 ordinary shares, U.S.$1.00 par value per share, of the Issuer which have been issued by the Issuer and are outstanding from time to time.

 

“Payment Date”:  Each Payment Date under the Indenture (including the Stated Maturity Date and any Redemption Date).

 

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“Plan Asset Regulation”:  U.S. Department of Labor regulations 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) of ERISA.

 

“Preferred Share Certificate”:  Any Preferred Share represented by a physical certificate in definitive, fully registered, certificated form set forth in Exhibit A.

 

“Preferred Share Distribution Account”:  The meaning set forth in Section 3.3.

 

“Preferred Share Paying Agent”:  The Bank, solely in its capacity as Preferred Share Paying Agent under this Agreement, unless a successor Person shall have become the Preferred Share Paying Agent pursuant to the applicable provisions of this Agreement, and thereafter “Preferred Share Paying Agent” shall mean such successor Person.

 

“Preferred Share Register”:  The register of members maintained by the Preferred Share Registrar.

 

“Preferred Shares”:  The meaning set forth in the Preliminary Statement to this Agreement.

 

“Purchaser”:  Each purchaser of an interest in Preferred Shares, including any account for which it is acting.

 

“Purchaser Certificate”:  A certificate substantially in the form attached as an exhibit to the Subscription Agreement, duly completed as appropriate.

 

“QEF”:  The meaning assigned in Section 4.5(ii).

 

“Qualified Institutional Buyer”:  Any Person that, at the time of its acquisition, purported acquisition or proposed acquisition of Preferred Shares, is a qualified institutional buyer within the meaning of Rule 144A.

 

“Qualified Purchaser”:  Any Person that, at the time of its acquisition, purported acquisition or proposed acquisition of Preferred Shares, is a qualified purchaser within the meaning of the Investment Company Act.

 

“Record Date”:  Each Record Date under the Indenture.

 

“Redemption Date”:  The earlier of (i) the Stated Maturity Date and (ii) the Payment Date on which a redemption of the Preferred Shares occurs.

 

“Redemption Price”:  The Redemption Price for the Preferred Shares calculated in accordance with the procedures set forth in the Indenture.

 

“Retention Holder”:  GPMT CLO Holdings LLC, a Delaware limited liability company.

 

“Rule 144A Information”:  The meaning set forth in Section 4.4.

 

“Securities Act”:  The Securities Act of 1933, as amended.

 

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“Securitization Sponsor”:  Granite Point Mortgage Trust Inc., a Maryland corporation.

 

“Similar Law”:  Any local, state, federal, non-U.S. or other law that is substantially similar to the fiduciary responsibility or prohibited transaction provisions of ERISA or Section 4975 of the Code.

 

“Specified Person”: The meaning set forth in Section 2.2(g).

 

“Subscription Agreement”:  The Junior Note and Preferred Share Subscription Agreement, dated as of the date hereof, between the Issuer and the Retention Holder, as amended from time to time in accordance with the terms thereof.

 

“U.S. Person”:  As defined in Regulation S under the Securities Act.

 

Section 1.2.                                 Rules of Construction.

 

(a)                                 The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

 

(b)                                 References to Preferred Shares and Certificates shall, when the context requires, be construed to mean the Preferred Share Certificate representing the same.

 

ARTICLE II.

 

THE PREFERRED SHARES

 

Section 2.1.                                 Form of Preferred Shares.

 

The Preferred Shares shall be represented by a physical certificate and issued in the form of definitive, fully registered securities.  The Preferred Share Certificates shall be duly executed by the Issuer or the Administrator on its behalf (and, with respect to any Preferred Share Certificate issued after the Closing Date, shall additionally be executed by the Preferred Share Paying Agent) and delivered by the Preferred Share Paying Agent as hereinafter provided.

 

Section 2.2.                                 Execution; Delivery; Dating and Cancellation.

 

(a)                                 Any Preferred Share Certificates shall be executed on behalf of the Issuer by one or more Authorized Officers of the Issuer (or by the Administrator on the Issuer’s behalf).  The signature of such Authorized Officer on a Preferred Share Certificate shall be manual and may not be a facsimile or other electronic transmission (including a Portable Document Format (PDF) copy sent by email).

 

(b)                                 Preferred Share Certificates bearing the signatures of individuals who were at any time the Authorized Officers of the Issuer shall bind the Issuer, notwithstanding the fact that such individuals or any of them have ceased to hold such offices prior to the delivery of such Preferred Share Certificates or did not hold such offices at the date of issuance of such Preferred Shares.

 

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(c)                                  At any time and from time to time after the execution of this Agreement, the Issuer may deliver Preferred Share Certificates executed by the Issuer to the Preferred Share Paying Agent for authentication, and the Preferred Share Paying Agent, upon Issuer Order, shall authenticate and deliver such Preferred Share Certificates as directed by the Issuer.

 

(d)                                 All Preferred Share Certificates authenticated and delivered by the Preferred Share Paying Agent upon Issuer Order on the Closing Date shall be dated on the Closing Date.  All other Preferred Share Certificates that are authenticated after the Closing Date for any other purpose under this Agreement shall be dated on the date of their execution.

 

(e)                                  No Preferred Share Certificate (other than the Preferred Share Certificate issued on the Closing Date) shall be entitled to any benefit under this Preferred Share Paying Agency Agreement or be valid or obligatory for any purpose, unless there appears on such Preferred Share Certificate a Preferred Share Certificate of Authentication, substantially in the form provided for herein, executed by the Preferred Share Paying Agent by the manual signature of one of their Authorized Officers and executed by the Issuer, and such certificate upon any Preferred Share Certificate shall be conclusive evidence, and the only evidence, that such Preferred Share Certificate has been duly authenticated and delivered hereunder.

 

(f)                                   All Preferred Share Certificates surrendered for registration of transfer or exchange, or deemed lost or stolen, shall, if surrendered to any Person other than the Preferred Share Paying Agent, be delivered to the Preferred Share Paying Agent, and shall promptly be canceled.  No Preferred Share Certificates shall be issued in lieu of or in exchange for any Preferred Share Certificates canceled as provided in this Section 2.2(f), except as expressly permitted by this Agreement.  All canceled Preferred Share Certificates held by the Preferred Share Paying Agent shall be destroyed or held by the Preferred Share Paying Agent in accordance with its standard retention policy.

 

(g)                                  If (i) any mutilated or defaced Preferred Share Certificate is surrendered to the Preferred Share Paying Agent, or if there shall be delivered to the Issuer or the Preferred Share Paying Agent (each, a “Specified Person”) evidence to their reasonable satisfaction of the destruction, loss or theft of any Preferred Share Certificate, and (ii) there is delivered to each Specified Person such security or indemnity as may be required by each Specified Person to save each of them and any agent of any of them harmless, then, in the absence of notice to the Specified Persons that such Preferred Share Certificate has been acquired by a bona fide purchaser, the Issuer shall execute in lieu of any such mutilated, defaced, destroyed, lost or stolen Preferred Share Certificate, a new Preferred Share Certificate, of like tenor (including the same date of issuance) and equal principal amount, registered in the same manner, dated the date of its authentication, bearing interest from the date to which interest has been paid on the mutilated, defaced, destroyed, lost or stolen Preferred Share Certificate and bearing a number not contemporaneously outstanding.

 

If, after delivery of such new Preferred Share Certificate, a bona fide purchaser of the predecessor Preferred Share Certificate presents for payment, transfer or exchange such predecessor Preferred Share Certificate, any Specified Person shall be entitled to recover such new Preferred Share Certificate from the Person to whom it was delivered or any Person taking therefrom, and each Specified Person shall be entitled to recover upon the security or indemnity

 

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provided therefor to the extent of any loss, damage, cost or expense incurred by such Specified Person in connection therewith.

 

In case any such mutilated, defaced, destroyed, lost or stolen Preferred Share Certificate has become due and payable, the Issuer, in its discretion may, instead of issuing a new Preferred Share Certificate, pay such Preferred Share Certificate without requiring surrender thereof except that any mutilated or defaced Preferred Share Certificate shall be surrendered.

 

Upon the issuance of any new Preferred Share Certificate under this Section 2.2(g), the Issuer may require the payment by the registered Holder thereof of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Preferred Share Paying Agent) connected therewith.

 

Every new Preferred Share Certificate issued pursuant to this Section 2.2(g) in lieu of any mutilated, defaced, destroyed, lost or stolen Preferred Share Certificate shall constitute an original additional contractual obligation of the Issuer, and such new Preferred Share Certificate shall be entitled, subject to this Section 2.2(g), to all the benefits of this Agreement equally and proportionately with any and all other Preferred Share Certificates duly issued hereunder.

 

The provisions of this Section 2.2(g) are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, defaced, destroyed, lost or stolen Preferred Share Certificates.

 

Section 2.3.                                 Registration.

 

(a)                                 The Issuer shall keep or cause to be kept the Preferred Share Register in which, subject to such reasonable regulations as it may prescribe, the Preferred Share Registrar shall provide for the registration of holders of, and the registration of transfers and exchanges of, Preferred Shares and Ordinary Shares.  The Administrator is hereby initially appointed as agent of the Issuer to act as the “Preferred Share Registrar” for the purpose of maintaining the Preferred Share Register and registering and recording in the Preferred Share Register the Preferred Shares and transfers of such Preferred Shares as herein provided.  Upon any resignation or removal of the Preferred Share Registrar, the Issuer shall promptly appoint a successor.  The Preferred Share Paying Agent shall promptly provide the Preferred Share Registrar with all information necessary to prepare and maintain the Preferred Share Register (upon receipt by the Preferred Share Paying Agent thereof).  The Preferred Share Registrar shall be entitled to rely on such information provided to it pursuant to the preceding sentence without any liability on its part.

 

(b)                                 The Preferred Share Paying Agent shall maintain a duplicate share register and shall be entitled to conclusively rely on such duplicate share register for the purpose of payment on the Preferred Shares.  The Preferred Share Paying Agent shall have the right to inspect the Preferred Share Register at all reasonable times and to obtain copies thereof and the Preferred Share Paying Agent shall have the right to rely upon a certificate executed on behalf of such Preferred Share Registrar by an Authorized Officer thereof as to the names and addresses of the Holders and the numbers of such Preferred Shares.  If either party becomes aware of any

 

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discrepancies between the Preferred Share Register and the duplicate share register, it shall promptly inform the other of the same and the Preferred Share Registrar and the Preferred Share Paying Agent shall cooperatively ensure that the Preferred Share Register and the duplicate share register are reconciled in a timely manner and in any case prior to the next Record Date.  Notwithstanding anything to the contrary herein, the Preferred Share Paying Agent shall have no duty to monitor or determine whether any discrepancies exist between the two registers.

 

Section 2.4.                                 Registration of Transfer and Exchange of Preferred Shares.

 

(a)                                 Subject to this Section 2.4 and Section 2.5, upon surrender for registration of transfer of any Preferred Share Certificates at the offices of the Preferred Share Paying Agent in compliance with the restrictions set forth in any legend appearing on any such Preferred Share Certificate, the Preferred Share Paying Agent shall, upon receipt of all related transfer exhibits, authenticate such Preferred Share Certificate and deliver such Preferred Share Certificate (together with any related transfer exhibits) to the Issuer (or to the Administrator on its behalf) for execution.  Upon execution of the Preferred Share Certificate by the Issuer (or the Administrator on its behalf), the Issuer shall deliver the Preferred Share Certificate to the Preferred Share Paying Agent, and the Preferred Share Paying Agent shall deliver, in the name of the designated transferee or transferees, one or more new Preferred Share Certificates, each in an Authorized Denomination, of like terms and of a like number.

 

(b)                                 Subject to this Section 2.4 and Section 2.5, at the option of the Holder, Preferred Shares may be exchanged for Preferred Shares, each in an Authorized Denomination, of like terms and of like number upon surrender of the related Preferred Share Certificate at such office as the Preferred Share Paying Agent may designate for such purposes.  Whenever any Preferred Share Certificate is surrendered for exchange, the Preferred Share Paying Agent shall authenticate such Preferred Share Certificate and thereafter deliver such Preferred Share Certificate to the Issuer for execution (together with any related transfer exhibits).  Upon execution of the Preferred Share Certificate by the Issuer (or the Administrator on its behalf), the Issuer shall deliver the Preferred Share Certificate to the Preferred Share Paying Agent, and the Preferred Share Paying Agent shall deliver such Preferred Share Certificate to the Holder making the exchange.

 

(c)                                  Preferred Share Certificates representing Preferred Shares issued upon any registration of transfer or exchange of Preferred Shares shall represent equity interests of the Issuer entitled to the same benefits under this Agreement and the Memorandum and Articles as the Preferred Shares represented by the Preferred Share Certificate surrendered upon such registration of transfer or exchange.

 

(d)                                 All Preferred Share Certificates presented or surrendered for registration of transfer or exchange shall be accompanied by an assignment form and a written instrument of transfer each in a form satisfactory to the Issuer and the Preferred Share Paying Agent, duly executed by the Holder thereof or its attorney duly authorized in writing.

 

(e)                                  No service charge shall be made to a Holder for any registration of transfer or exchange of Preferred Shares, but the Preferred Share Paying Agent may require payment of a sum sufficient to cover the expenses of delivery (if any) not made by regular mail or any tax or other governmental charge payable in connection therewith.

 

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(f)                                   The Issuer, the Preferred Share Paying Agent, the Preferred Share Registrar, and any agent of the Issuer, the Preferred Share Paying Agent or the Preferred Share Registrar shall treat the Person in whose name any Preferred Shares are registered on the Preferred Share Register as the owner of such Preferred Shares on the applicable Record Date for the purpose of receiving payments in respect of such Preferred Shares and on any other date for all other purposes whatsoever, and none of the Issuer, the Preferred Share Paying Agent, the Preferred Share Registrar or any agent of the Issuer, the Preferred Share Paying Agent or the Preferred Share Registrar shall be affected by notice to the contrary.

 

Section 2.5.                                 Transfer and Exchange of Preferred Shares.

 

(a)                                 Restrictions on Transfer.

 

(i)                                     As long as any Note is outstanding, the Retention Holder must at all times own (for U.S. federal income tax purposes) 100% of both the Preferred Shares and the Ordinary Shares, and will not transfer (whether by means of actual transfer or a transfer of beneficial ownership for U.S. federal income tax purposes), pledge or hypothecate any of the Preferred Shares or the Ordinary Shares to any other person, entity or entities, as long as the Issuer receives an opinion of Dechert LLP, Sidley Austin LLP or another nationally recognized tax counsel experienced in such matters that such transfer, pledge or hypothecation will not cause the Issuer to be treated as a foreign corporation engaged in a trade or business within the United States for U.S. federal income tax purposes or otherwise to become subject to U.S. federal income tax on a net income basis (or has previously received an opinion of Dechert LLP, Sidley Austin LLP or another nationally recognized tax counsel experienced in such matters that the Issuer will be treated as a foreign corporation that is not engaged in a trade or business within the United States for U.S. federal income tax purposes, which opinion may be conditioned, in each case, on compliance with certain restrictions on the investment or other activities of the Issuer and the Collateral Manager or the Servicer on behalf of the Issuer).

 

(ii)                                  No Preferred Shares may be sold or transferred (including, without limitation, by pledge or hypothecation) unless such sale or transfer is exempt from the registration requirements of the Securities Act and is exempt under applicable securities laws of any state or other jurisdiction of the United States.

 

(iii)                               At all times, if a sale or transfer (including without limitation, by pledge or hypothecation) of all or a portion of the EHRI is to be made, then the Preferred Share Registrar and the Preferred Share Paying Agent shall refuse to register such sale or transfer unless:

 

(A)                               such sale or transfer is to a “majority-owned affiliate,” as such term is defined in the Credit Risk Retention Rules, of the Securitization Sponsor;

 

(B)                               such sale or transfer will occur after the termination of the EHRI Transfer Restriction Period; or

 

(C)                               the Issuer, the Preferred Share Paying Agent and the Preferred Share Registrar receives an opinion of Dechert LLP or another nationally recognized

 

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securities law counsel experienced in such matters that such sale or transfer will not result in a violation of the Credit Risk Retention Rules or that the Credit Risk Retention Rules no longer apply to such sale or transfer.

 

In connection with any sale or transfer pursuant to clause (A) or (B) above, the Preferred Share Paying Agent shall refuse to register such Transfer unless, in addition to a Purchaser Certificate, it receives (and, upon receipt, may conclusively rely upon) (x) a certification from the prospective transferee substantially in the form attached hereto as Exhibit B-1, which certification must be countersigned by the Securitization Sponsor and (y) a certification from the Holder desiring to effect such sale or transfer, substantially in the form attached hereto as Exhibit B-2, which certification must be countersigned by the Securitization Sponsor.  Upon receipt of the foregoing certifications or opinion, as applicable, the Preferred Share Registrar and the Preferred Share Paying Agent shall, subject to Section 2.4 and the other provisions of this Section 2.5, reflect all or any such portion of the EHRI in the name of the prospective transferee.

 

Any purported transfer or exchange in violation of the foregoing requirements shall be null and void ab initio.

 

(b)                                 No Preferred Shares may be offered, sold, delivered or transferred (including, without limitation, by pledge or hypothecation) except to (i) (A) a non-U.S. person (as defined under Regulation S) in accordance with the requirements of Regulation S or (B) both (x) a Qualified Institutional Buyer and (y) a Qualified Purchaser and (ii) in accordance with any other applicable law.

 

(c)                                  No Preferred Shares may be offered, sold or delivered within the United States or to, or for the benefit of, U.S. persons (as defined in Regulation S) except in accordance with Rule 144A or an exemption from the registration requirements of the Securities Act, to Persons purchasing for their own account or for the accounts of one or more Qualified Institutional Buyers for which the purchaser is acting as a fiduciary or agent.  Preferred Shares may be sold or resold, as the case may be, in offshore transactions to non-U.S. persons (as defined in Regulation S) in reliance on Regulation S. None of the Issuer, the Preferred Share Paying Agent, the Preferred Share Registrar or any other Person may register the Preferred Shares under the Securities Act or any state securities laws or the applicable laws of any other jurisdiction.

 

(d)                                 No transfer of Preferred Shares to a proposed transferee that is or will be, or is acting on behalf of or using any assets of any Person that is or will become, a Benefit Plan Investor will be effective, and the Preferred Share Paying Agent will not process or recognize any such transfer.

 

Beneficial interests in Preferred Shares may not at any time be acquired or held by or on behalf of a Benefit Plan Investor.

 

No transfer of Preferred Shares will be effective, and the Issuer and the Preferred Share Paying Agent will not recognize any such transfer, if the transferee’s acquisition, holding or disposition of such interest constitutes or will constitute or otherwise result in a prohibited transaction under Section 406 of ERISA or Section 4975 of the Code (or, in the case of a plan

 

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subject to Similar Law, a violation of Similar Law) unless an exemption is available (all of the conditions of which have been satisfied) or any other violation of an applicable requirement of ERISA, the Code or other applicable law.

 

Notwithstanding anything contained herein to the contrary, the Preferred Share Paying Agent and the Preferred Share Registrar shall not be responsible for ascertaining whether any transfer complies with the registration provisions of or any exemptions from the Securities Act, applicable state securities laws or the applicable laws of any other jurisdiction, ERISA, the Code or the Investment Company Act; provided, that if a Purchaser Certificate is specifically required by the express terms of this Section 2.5 to be delivered to the Preferred Share Paying Agent, the Preferred Share Paying Agent shall be under a duty to receive and examine the same to determine whether or not the certificate conforms on its face to the terms of this Agreement and shall promptly notify the party delivering the same if such Purchaser Certificate does not comply with such terms.

 

(e)                                  Transfers and exchanges of Certificates, in whole or in part, shall only be made in accordance with this Section 2.5(e).  Any purported transfer or exchange in violation of the following requirements shall be null and void ab initio, the Issuer shall not execute and the Preferred Share Paying Agent shall not deliver Preferred Share Certificates with respect to the transfer or exchange and the Preferred Share Registrar shall not register any such purported transfer.

 

(i)                                     Transfer—Preferred Share Certificate to Preferred Share Certificate.  If a Holder of a Preferred Share Certificate wishes at any time to transfer such Preferred Share Certificate to a Person that will take delivery in the form of Certificates, such Holder may transfer or cause the transfer of such interest for an equivalent interest in one or more Certificates (in Authorized Denominations), but only upon delivery of the documents set forth in the following sentence.  Upon receipt by the Preferred Share Paying Agent of:

 

(A)                               the Preferred Share Certificates properly endorsed for assignment to the transferee; and

 

(B)                               a Purchaser Certificate;

 

the Preferred Share Paying Agent shall cancel such Preferred Share Certificates, authenticate such new Preferred Share Certificate and arrange for new Preferred Share Certificates to be executed by the Issuer and, upon the Preferred Share Paying Agent’s receipt of such executed Preferred Share Certificates, the Preferred Share Paying Agent shall deliver one or more Preferred Share Certificates registered in the name and number specified in the Purchaser Certificate (the aggregate number of such Preferred Shares being equal to the interest delivered to the Preferred Share Paying Agent) and in Authorized Denominations.  The Preferred Share Paying Agent shall record the exchange on the duplicate share register and instruct the Preferred Share Registrar to, and the Preferred Share Registrar shall upon such instruction, record the exchange in the Preferred Share Register.

 

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(ii)                                  Exchange—Preferred Share Certificate to Preferred Share Certificate.  If a Holder of a Preferred Share Certificate wishes at any time to exchange such Preferred Share Certificate for one or more Certificates, such Holder may exchange or cause such exchange for an equivalent interest in one or more Certificates (in Authorized Denominations), but only upon delivery of the documents set forth in the following sentence.  Upon receipt by the Preferred Share Paying Agent of:

 

(A)                               the Preferred Share Certificates properly endorsed for exchange; and

 

(B)                               a Purchaser Certificate;

 

the Preferred Share Paying Agent shall cancel such Preferred Share Certificates, authenticate such new Preferred Share Certificate and arrange for new Preferred Share Certificates to be executed by the Issuer and, upon the Preferred Share Paying Agent’s receipt of such executed Preferred Share Certificates, the Preferred Share Paying Agent shall deliver one or more Preferred Share Certificates, registered in the names and numbers specified in the Purchaser Certificate (the aggregate number of Preferred Shares being equal to the number of Preferred Shares delivered to the Preferred Share Paying Agent) and in Authorized Denominations.  The Preferred Share Paying Agent shall record the exchange on the duplicate share register and instruct the Preferred Share Registrar to, and the Preferred Share Registrar shall upon such instruction, record the transfer in the Preferred Share Register.

 

(f)                                   Preferred Share Certificates shall bear a legend substantially in the form set forth in Exhibit A unless there is delivered to the Issuer such satisfactory evidence, which may include an Opinion of Counsel, as may be reasonably required by the Issuer to the effect that neither such applicable legend nor the restrictions on transfer set forth therein are required to ensure that transfers thereof comply with the provisions of Rule 144A under, Section 4(a)(2) of, or Regulation S under, the Securities Act, as applicable, and to ensure that neither the Issuer nor the pool of Collateral becomes an investment company required to be registered under the Investment Company Act.  Preferred Share Certificates that are delivered to the Preferred Share Paying Agent by or on behalf of the Issuer without such legend shall be conclusive evidence that the Issuer has satisfied any conditions precedent, and the Preferred Share Paying Agent shall have no obligation to determine whether such legend is required.  The Preferred Share Paying Agent shall make no representation or warranty to the validity of any Preferred Share, except to the extent of its own signature thereon.

 

(g)                                  The Preferred Share Registrar may rely conclusively on any directions given by the Issuer or the Preferred Share Paying Agent in accordance with this Agreement without further review, to effect the transfer of Preferred Shares by making all necessary entries in the Preferred Share Register and shall have no liability for acting in reliance on any such directions.

 

(h)                                 Notwithstanding anything contained herein to the contrary, at all times, if a transfer of all or any portion of the EHRI after the Closing Date is to be made, then the Preferred Share Registrar shall refuse to register such transfer unless it receives (and, upon receipt, may conclusively rely upon) (i) a certification from such Holder’s prospective transferee and (ii) a certification from the Holder of the EHRI desiring to effect such transfer, each, in form and

 

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substance, acceptable to the Securitization Sponsor.  Upon receipt of the foregoing certifications, the Preferred Share Registrar shall, subject to this Section 2.5, reflect such EHRI in the name of the prospective transferee.

 

Section 2.6.                                 [Reserved]

 

Section 2.7.                                 Non-Permitted Holders.

 

(a)                                 Notwithstanding any other provision in this Agreement, any transfer of a beneficial interest in Preferred Shares to a Non-Permitted Holder shall be null and void ab initio and any such purported transfer of which the Issuer or the Preferred Share Paying Agent shall have notice may be disregarded by the Issuer and the Preferred Share Paying Agent for all purposes at any time after either of them learns that any Person is or has become a Non-Permitted Holder.

 

(b)                                 If any Non-Permitted Holder becomes the beneficial owner of Preferred Shares, the Issuer shall, promptly after discovery of any such Non-Permitted Holder by the Issuer or the Preferred Share Paying Agent (and notice by the Preferred Share Paying Agent to the Issuer, if the Preferred Share Paying Agent makes the discovery), send notice to such Non-Permitted Holder demanding that such Non-Permitted Holder transfer its Preferred Shares or interest to a Person that is not a Non-Permitted Holder within 30 days of the date of such notice.  If such Non-Permitted Holder fails to so transfer such Preferred Shares or interest, the Issuer shall have the right, without further notice to the Non-Permitted Holder, to sell such Preferred Shares or interest in Preferred Shares to a purchaser selected by the Issuer that is not a Non-Permitted Holder on such terms as the Issuer may choose.  The Issuer may retain an investment bank to act on the Issuer’s behalf or request one or more bids from one or more brokers or other market professionals that regularly deal in securities similar to the Preferred Shares, and the Issuer will sell such Preferred Shares or interest to the highest such bidder.  However, the Issuer may select a purchaser by any other means determined by it in its sole discretion.  Each Holder of Preferred Shares, the Non-Permitted Holder and each other Person in the chain of title from the Holder to the Non-Permitted Holder, by its acceptance of an interest in the applicable Preferred Shares, agrees to cooperate with the Issuer and the Preferred Share Paying Agent to effect such transfers.  The proceeds of such sale, net of any commissions, expenses and taxes due in connection with such sale shall be remitted to the Non-Permitted Holder.  The terms and conditions of any sale under this subsection shall be determined in the sole discretion of the Issuer, and none of the Issuer, Preferred Share Registrar or the Preferred Share Paying Agent shall be liable to any Person having an interest in the Preferred Shares sold as a result of any such sale or the exercise of such discretion.

 

Section 2.8.                                 Certain Tax Matters.

 

(a)                                 The Issuer, and each Holder by acceptance of such Preferred Shares, each agree, where permitted by applicable law and unless the Issuer is a Qualified REIT Subsidiary, to treat such Preferred Shares as an equity interest in the Issuer for U.S. federal, State and local income and franchise tax purposes.

 

(b)                                 The Issuer and the Preferred Share Paying Agent agree that they do not intend for this Agreement to represent an agreement to enter into a partnership, a joint venture or any other business entity for U.S. federal income tax purposes. The Issuer and the Preferred Share

 

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Paying Agent shall not represent or otherwise hold themselves out to the IRS or other third parties as partners in a partnership or members of a joint venture or other business entity for U.S. federal income tax purposes.

 

(c)           The Issuer shall not elect to be treated as a partnership and neither the Issuer, nor the Preferred Share Paying Agent shall file or cause to be filed any U.S. federal, State or local partnership tax return with respect to this Agreement.

 

(d)           The Issuer shall take all actions necessary or advisable to allow the Issuer to comply with FATCA, including, appointing any agent or representative to perform due diligence, withholding or reporting obligations of the Issuer pursuant to FATCA.  The Issuer shall provide any certification or documentation (including the applicable IRS Form W-9 (or if required, the applicable IRS Form W-8) or any successor form) to any payor (as defined in FATCA) from time to time as provided by law to minimize U.S. withholding tax under FATCA.

 

Section 2.9.           Provisions of the Indenture and Servicing Agreement.

 

Each Holder of the Preferred Shares, by its acceptance of the Preferred Shares issued hereunder, agrees to be bound by the provisions of the Indenture and Servicing Agreement relating to the Preferred Shares.  Notwithstanding the foregoing, the Issuer may, without the consent of any party other than any Holder of Preferred Shares affected thereby, reorganize the Preferred Shares with different or additional classes or components so long as the aggregate liquidation preference of the Preferred Shares and their aggregate entitlement to dividends and distributions is not increased, and the Issuer may amend its organizational documents to effect such reorganization of Preferred Shares.

 

ARTICLE III.

 

DISTRIBUTIONS TO THE HOLDERS

 

Section 3.1.           Disbursement of Funds.

 

(a)           The Class P Preferred Shares outstanding will have an aggregate stated redemption price from time to time equal to the Aggregate Outstanding Portfolio Balance minus the Aggregate Outstanding Amount of all Classes of Notes (the “Class P Preferred Shares Stated Redemption Price”). The Class P Preferred Shares will have a stated dividend rate equal to the weighted average of the interest rates on the Mortgage Assets with respect to the related Interest Accrual Period.  Such dividend rate will be applied to the outstanding Class P Preferred Share Notional Amount.

 

(b)           The Class X Preferred Shares outstanding will have a notional amount from time to time equal to the outstanding Class P Preferred Share Notional Amount (the “Class X Preferred Share Notional Amount”).  The Class X Preferred Shares will have a stated dividend rate of the Class X Preferred Rate.  Such dividend rate will be applied to the outstanding Class X Preferred Share Notional Amount.

 

(c)           The Class R Preferred Shares will be entitled to any amount remaining after all distributions to the Class P Preferred Shares and the Class X Preferred Shares (including,

 

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without limitation, any accrued and unpaid dividends and Class P Preferred Shares Stated Redemption Price) have been made in accordance with the priority of distribution described herein.

 

(d)           Subject to Section 3.2, on each Payment Date (including any Redemption Date and the Stated Maturity Date) the Preferred Share Paying Agent shall apply the Available Funds to make payment (i) of dividends and (ii) with respect to any Redemption Date or Stated Maturity Date, the Redemption Price, to each Holder on the relevant Record Date, on a pro rata basis in accordance with the priority of distribution described herein.

 

(e)           Notwithstanding the foregoing, in accordance with the provisions of Section 12.2(b) of the Indenture and at any time when the Retention Holder holds 100% of the Preferred Shares, the Retention Holder may designate all or any portion of the Available Funds, which would otherwise be distributed to the Preferred Share Paying Agent for payment on the Preferred Shares, for deposit into the Preferred share Distribution Account as a contribution to the Issuer.  Any such amounts paid to the Issuer as a contribution shall be deemed for all purposes as having been paid to the Preferred Share Paying Agent pursuant to the Priority of Payments in the Indenture.

 

(f)            Payments will be made by wire transfer to a U.S. dollar account maintained by such Holder as notified to the Preferred Share Paying Agent or, in the absence of such notification, by U.S. dollar check delivered by first class mail to the Holder at its address of record.  The Preferred Share Registrar shall, upon request, provide the Preferred Share Paying Agent with a certified list of the Holders and all relevant information regarding the Holders as the Preferred Share Paying Agent may require promptly and in each case no later than five Business Days after receipt of such request (or each relevant Record Date, if sooner or if no such request is made); provided, that in no event shall the Preferred Share Registrar be expected to respond in less than two Business Days from receipt of such request.

 

(g)           Subject to Section 3.1(d), the Preferred Share Paying Agent shall distribute all amounts to be paid in accordance with the Priority of Payments to the holders of the Preferred Shares as follows:

 

(i)            Interest Proceeds.  On each Payment Date, Available Funds that constitute Interest Proceeds under the Indenture shall be distributed in the following order of priority:

 

(A)          to the Class P Preferred Shares, to the extent of accrued and unpaid dividends thereon;

 

(B)          to the Class X Preferred Shares, to the extent of accrued and unpaid dividends thereon; and

 

(C)          to the Class R Preferred Shares, the remaining Interest Proceeds (if any) in the Preferred Share Distribution Account.

 

(ii)           Principal Proceeds.  On each Payment Date, Available Funds that constitute Principal Proceeds under the Indenture shall be distributed in the following order of priority:

 

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(A)          to the Class P Preferred Shares, pro rata based on the aggregate Class P Preferred Shares Notional Amount, in partial redemption thereof, until the Class P Preferred Shares Notional Amount has been reduced to zero; and

 

(B)          to the Class R Preferred Shares, the remaining Principal Proceeds (if any) in the Preferred Share Distribution Account.

 

Section 3.2.           Condition to Payments.

 

(a)           As a condition to payment of any amount hereunder without the imposition of U.S. withholding tax, the Preferred Share Paying Agent, on behalf of the Issuer, shall require certification acceptable to it to enable the Issuer and the Preferred Share Paying Agent to determine their duties and liabilities with respect to any taxes or other charges that they may be required to deduct or withhold from payments in respect of the Preferred Shares under any present or future law or regulation of the United States or any present or future law or regulation of any political subdivision thereof or taxing authority therein or to comply with any reporting or other requirements under such law or regulation.  Without limiting the foregoing, as a condition to any payment on the Preferred Shares without U.S. federal back-up withholding, the Issuer shall require the delivery of properly completed and signed applicable U.S. federal income tax certifications (generally, an IRS Form W-9 (or applicable successor form) in the case of a Person that is a “United States person” as defined in the Code or an IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable (or applicable successor form), in the case of a Person that is not a “United States person” within the meaning of the Code).  In addition, the Issuer or any of its agents shall require (i) complete and accurate information and documentation that may be required to enable the Issuer or any of its agents to comply with FATCA and (ii) each Holder to agree that the Issuer and/or any of its agents may (1) provide such information and documentation and any other information concerning its investment in the Preferred Shares to the Cayman Islands Tax Information Authority (including, without limitation, the properly completed and executed “Entity Self-Certification Form” or “Individual Self-Certification Form” (in the forms published by the Cayman Islands Department for International Tax Cooperation, which forms can be obtained at http://www.tia.gov.ky/pdf/CRS_Legislation.pdf)), the U.S. Internal Revenue Service and any other relevant tax authority and (2) take any other actions necessary for the Issuer or the Co-Issuer to comply with FATCA or necessary to provide to the Cayman Islands Tax Information Authority pursuant to the Cayman Islands Tax Information Authority Law (2017 Revision) and the Organization for Economic Co-operation and Development’s Standard for Automatic Exchange of Financial Account Information — Common Reporting Standard (each as amended) (including any implementing legislation, rules, regulations and guidance notes with respect to such laws).

 

Amounts properly withheld under the Code or other applicable law by any Person from a payment of dividends to any Holder shall be considered as having been paid by the Issuer to such Holder for all purposes of this Agreement.

 

(b)           [Reserved]

 

(c)           Notwithstanding anything in this Agreement to the contrary, distributions of Available Funds on any Payment Date (including any Redemption Date or the Stated Maturity Date), shall be subject to the Issuer being solvent under Cayman Islands law (defined as the Issuer

 

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being able to pay its debts as they become due in the ordinary course of business) immediately prior to, and after giving effect to, such payment as determined by the Issuer.

 

(d)           If the Issuer determines that the condition set forth in subsection (c) above is not satisfied with respect to any portion of the Available Funds on such Payment Date, the Issuer shall instruct the Preferred Share Paying Agent in writing on or before one Business Day prior to such Payment Date that such portion should not be paid, and the Preferred Share Paying Agent shall not pay the same until the first succeeding Payment Date or, in the case of any payments which would otherwise be payable on any Redemption Date or the Stated Maturity Date, until the first succeeding Business Day, upon which the Issuer notifies the Preferred Share Paying Agent in writing that each condition is satisfied.  Any amounts so retained will be held in the Preferred Share Distribution Account until such amounts are paid, subject to the availability of such funds under Cayman Islands law to pay any liability of the Issuer.  In the absence of such notification from the Issuer, the Preferred Share Paying Agent may conclusively assume that the condition set forth in subsection (c) has been satisfied and shall pay the amounts due under this Agreement.

 

Section 3.3.           The Preferred Share Distribution Account.

 

The Preferred Share Paying Agent shall, prior to the Closing Date, establish a single, segregated, non-interest bearing trust account, which shall be designated as the “Preferred Share Distribution Account” for the benefit of the Issuer (the “Preferred Share Distribution Account”).  The Preferred Share Paying Agent shall promptly credit all Available Funds to the Preferred Share Distribution Account.  All sums payable by the Preferred Share Paying Agent hereunder shall be paid out of the Preferred Share Distribution Account.  For the avoidance of doubt, the Preferred Share Distribution Account (and interest, if any, earned on amounts on deposit therein) shall be owned by the Issuer (or the related REIT so long as the Issuer is a Qualified REIT Subsidiary) for U.S. federal income tax purposes.

 

Section 3.4.           Redemption.

 

The Preferred Shares shall be redeemed (in whole but not in part) by the Issuer at the Redemption Price on any Redemption Date or on the Stated Maturity Date (if not redeemed earlier).  Notwithstanding any other provision herein, if no funds are available to pay Holders pursuant to the Indenture and this Agreement, the Issuer may redeem the Preferred Shares (in whole but not in part) for no consideration (i) on any Redemption Date, (ii) on the Stated Maturity Date or (iii) upon an acceleration of the Notes as a result of an Event of Default, as defined in the Indenture.

 

Section 3.5.           Fees or Commissions in Connection with Disbursements.

 

All payments by the Preferred Share Paying Agent hereunder shall be made without charging any commission or fee to the Holders.

 

Section 3.6.           Liability of the Preferred Share Paying Agent in Connection with Disbursements.

 

(a)           Notwithstanding anything herein, the Preferred Share Paying Agent shall not incur any personal liability to pay amounts due to Holders and shall only be required to make

 

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payments, including the payment of dividends, if there are sufficient funds in the Preferred Share Distribution Account to make such payments.

 

(b)           Except as otherwise required by applicable law, any funds deposited with the Preferred Share Paying Agent and held in the Preferred Share Distribution Account or otherwise held for payment on the Preferred Shares and remaining unclaimed for two years after such payment has become due and payable shall be paid to the Issuer; and the Holder of such Preferred Shares shall thereafter look only to the Issuer for payment of such amounts and all liability of the Preferred Share Paying Agent with respect to such funds (but only to the extent of the amounts so paid to the Issuer) shall thereupon cease.  The Preferred Share Paying Agent, before being required to make any such release of payment, may, but shall not be required to, adopt and employ at the expense of the Issuer any reasonable means of notification of such release of payment, including, but not limited to, arranging with the Preferred Share Registrar for the Preferred Share Registrar to mail notice of such release to Holders whose right to or interest in amounts due and payable but not claimed is determinable from the records of the Issuer or Preferred Share Paying Agent, as applicable, at the last address of record of each such Holder.

 

ARTICLE IV.

 

ACCOUNTING AND REPORTS

 

Section 4.1.           Reports and Notices.

 

(a)           The Preferred Share Paying Agent shall cause to be made available to the Holders the reports required to be made available by the Note Administrator pursuant to Section 10.12 of the Indenture.

 

(b)           The Preferred Share Paying Agent shall notify the Preferred Shareholders of the occurrence of an Event of Default under the Indenture of which it receives notice from the Trustee or the Issuer.

 

Section 4.2.           Notice of Plan Assets.

 

The Preferred Share Paying Agent has no duty to investigate whether the assets of the Issuer are reasonably likely to be deemed “plan assets” (within the meaning of the Plan Asset Regulation); however, in the event that any officer within the corporate trust office of the Preferred Share Paying Agent (or any successor thereto) working on matters related to the Issuer has actual knowledge that the assets of the Issuer are “plan assets,” the Preferred Share Paying Agent will promptly provide notice to the Preferred Share Registrar for forwarding to the Issuer and the Holders.

 

Section 4.3.           Requests by Independent Accountants.

 

Upon written request by Independent accountants appointed by the Issuer, the Preferred Share Registrar shall provide to them that information contained in the Preferred Share Register needed for them to provide tax information to the Holders.

 

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Section 4.4.           Rule 144A Information.

 

At any time when the Issuer is not subject to Section 13 or 15(d) of the Exchange Act and is not exempt from reporting pursuant to Rule 12g3-2(b) under the Exchange Act, upon the written request of a Holder, the Issuer shall promptly furnish or cause to be furnished Rule 144A Information, and deliver such Rule 144A Information to such Holder, to a prospective purchaser designated by such Holder or beneficial owner or to the Preferred Share Paying Agent for delivery to such Holder or a prospective purchaser designated by such Holder, in order to permit required or protective compliance by any such Holder with Rule 144A in connection with the resale of any such Preferred Shares.  “Rule 144A Information” shall be information that is required by subsection (d)(4) of Rule 144A.

 

Section 4.5.           Tax Information.

 

If the Issuer is no longer a Qualified REIT Subsidiary, the Issuer shall provide to each beneficial owner of Preferred Shares any information that the beneficial owner reasonably requests in order for the beneficial owner to (i) comply with its federal state, or local tax and information returns and reporting obligations, (ii) make and maintain a “qualified electing fund” election (as defined in the Code) with respect to the Issuer (including a “PFIC Annual Information Statement” as described in Treasury Regulation §1.1295-1(g) (or any successor Treasury Regulation or IRS release or notice), including all representations and statements required by such statement), or (iii) comply with filing requirements that arise as a result of the Issuer being classified as a “controlled foreign corporation” for U.S. federal income tax purposes (such information to be provided at such beneficial owner’s expense); provided that the Issuer shall not file, or cause to be filed, any income or franchise tax return in the United States or any state of the United States unless it shall have obtained advice from Dechert LLP, Sidley Austin LLP or an opinion of other nationally recognized U.S. tax counsel experienced in such matters prior to such filing that, under the laws of such jurisdiction, the Issuer is required to file such income or franchise tax return.

 

If required to prevent the withholding or imposition of United States income tax, (i) the Issuer and each beneficial owner shall deliver or cause to be delivered an IRS Form W-9, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, or successor applicable form, and (ii) the Issuer, with respect to (as applicable) an item included in the Collateral, shall deliver or cause to be delivered an IRS Form W-9 or IRS Form W-8BEN-E to each issuer, counterparty or Preferred Share Paying Agent at the time such item included in the Collateral is purchased or entered into (or if such item is held at the time that the Issuer ceases to be a Qualified REIT Subsidiary, at that time) and thereafter prior to the expiration or obsolescence of such form.

 

ARTICLE V.

 

THE PREFERRED SHARE PAYING AGENT

 

Section 5.1.           Appointment of Preferred Share Paying Agent.

 

The Issuer hereby appoints the Bank to act as the Preferred Share Paying Agent, and the Bank hereby accepts such appointment.  The Issuer hereby appoints the Administrator to

 

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act as the Preferred Share Registrar, and the Administrator hereby accepts such appointment.  The Issuer hereby authorizes the Preferred Share Paying Agent and the Administrator to perform their respective obligations as provided in this Agreement.

 

Section 5.2.           Resignation and Removal.

 

The Preferred Share Paying Agent may at any time resign as Preferred Share Paying Agent by giving written notice to the Issuer of its resignation, specifying the date on which its resignation shall become effective (which date shall not be less than 60 days after the date on which such notice is given unless the Issuer shall agree to a shorter period).  The Issuer may remove the Preferred Share Paying Agent at any time by giving written notice of not less than 60 days to the Preferred Share Paying Agent specifying the date on which such removal shall become effective.  Such resignation or removal shall only take effect upon the appointment by the Issuer of a successor Agent and upon the acceptance of such appointment by such successor Agent or, in the absence of such appointment, the assumption of the duties of the Preferred Share Paying Agent by the Issuer; provided, however, that in any event, such resignation or removal shall take effect not later than one year from the date of such notice of resignation or removal.  The Issuer shall provide notice to the Rating Agencies of any successor Preferred Share Paying Agent appointed pursuant to this section to the Rating Agencies pursuant to this Agreement, provided that no such notice shall be required in the event that the successor Preferred Share Paying Agent is a Person succeeding to all or substantially all of the institutional trust services business of the Preferred Share Paying Agent.  If the same Person is acting as the Note Administrator under the Indenture and the Preferred Share Paying Agent hereunder, and the Note Administrator has resigned or has been terminated under the Indenture, then the Preferred Share Paying Agent shall also be deemed to have been resigned or terminated hereunder.

 

Section 5.3.           Fees; Expenses; Indemnification; Liability.

 

(a)           Pursuant to, and at the times and to the extent contemplated by the Indenture, the Issuer shall pay to the Preferred Share Paying Agent compensation at such amounts and/or rates as shall be agreed between the Issuer and the Preferred Share Paying Agent and from time to time shall reimburse the Preferred Share Paying Agent for its reasonable out-of-pocket expenses (including reasonable legal fees and expenses), disbursements, and advances incurred or made in accordance with any provisions of this Agreement, except any such expense, disbursement, or advance that may be attributable to its gross negligence, bad faith or willful misconduct.  The obligations of the Issuer to the Preferred Share Paying Agent pursuant to the Indenture and this Section 5.3(a) shall survive the resignation or removal of the Preferred Share Paying Agent and the satisfaction or termination of this Agreement.

 

(b)           The Issuer shall indemnify and hold harmless the Preferred Share Paying Agent, the Preferred Share Registrar and their respective directors, officers, employees, and agents from and against any and all liabilities, costs and expenses (including reasonable legal fees and expenses) relating to or arising out of or in connection with its or their performance under this Agreement, except to the extent that they are caused by the gross negligence, bad faith, or willful misconduct of the Preferred Share Paying Agent or the Preferred Share Registrar, as the case may be, or any of their respective directors, officers, employees and agents.  The foregoing indemnity includes, but is not limited to, any action taken or omitted in good faith within the scope of this

 

21

 

Agreement upon telephone, facsimile or other electronically transmitted instructions, if authorized herein, received from or reasonably believed by the Preferred Share Paying Agent or the Preferred Share Registrar, as the case may be, acting in good faith, to have been given by, an Authorized Officer of the Issuer.  This indemnity shall be payable in accordance with the Priority of Payments set forth in the Indenture and shall survive the resignation or removal of the Preferred Share Paying Agent or the Preferred Share Registrar, as the case may be, and the satisfaction or termination of this Agreement.

 

(c)           The Preferred Share Paying Agent shall carry out its duties hereunder in good faith and without gross negligence or willful misconduct.  None of the Preferred Share Paying Agent, the Preferred Share Registrar or their respective directors, officers, employees or agents shall be liable for any act or omission hereunder except in the case of gross negligence, bad faith, or willful misconduct of the Preferred Share Paying Agent or the Preferred Share Registrar, as the case may be, in violation of its duties under this Agreement.  The duties and obligations of the Preferred Share Paying Agent and the Preferred Share Registrar, as the case may be, and their respective employees or agents shall be determined solely by the express provisions of this Agreement, and they shall not be liable except for the performance of such duties and obligations as are specifically set forth herein, and no implied covenants shall be read into this Agreement against them.  The Preferred Share Paying Agent and the Preferred Share Registrar, as the case may be, may consult with counsel and shall be protected in any action reasonably taken in good faith in accordance with the advice of such counsel.  Notwithstanding anything contained herein, in no event shall the Preferred Share Paying Agent be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Preferred Share Paying Agent has been advised of such loss or damage and regardless of the form of action.

 

(d)           Each of the Preferred Share Paying Agent and the Preferred Share Registrar may rely conclusively on any notice, certificate or other document furnished to it hereunder and reasonably believed by it in good faith to be genuine.  Neither the Preferred Share Paying Agent nor the Preferred Share Registrar shall be liable for any action taken by it in good faith and reasonably believed by it to be within the discretion or powers conferred upon it, or taken by it pursuant to any direction or instruction by which it is governed hereunder, or omitted to be taken by it by reason of the lack of direction or instruction required hereby for such action.  The Preferred Share Paying Agent and the Preferred Share Registrar shall in no event be liable for the application or misapplication of funds by any other Person, or for the acts or omissions of any other Person.  The Preferred Share Paying Agent and the Preferred Share Registrar shall not be bound to make any investigation into the facts or matters stated in any certificate, report or other document; provided that, if the form thereof is prescribed by this Agreement, the Preferred Share Paying Agent and the Preferred Share Registrar shall examine the same to determine whether it conforms on its face to the requirements hereof.  The Preferred Share Paying Agent and the Preferred Share Registrar may exercise or carry out any of its duties under this Agreement either directly or indirectly through agents or attorneys, and shall not be responsible for any acts or omissions on the part of any such agent or attorney appointed with due care.  To the extent permitted by applicable law, the Preferred Share Paying Agent and the Preferred Share Registrar shall not be required to give any bond or surety in the execution of its duties.  The Preferred Share Paying Agent and the Preferred Share Registrar shall not be deemed to have knowledge or notice of any matter unless actually known to a Responsible Officer of the Preferred Share Paying Agent or

 

22

 

unless the Preferred Share Paying Agent or the Preferred Share Registrar, as the case may be, has received written notice thereof from the Issuer, the Note Administrator, the Trustee or the Holder of a Preferred Share.

 

ARTICLE VI.

 

[RESERVED]

 

ARTICLE VII.

 

MISCELLANEOUS PROVISIONS

 

Section 7.1.           Amendment.

 

This Agreement may not be amended by any party hereto except (i) in writing executed by each party hereto and (ii) with the prior written consent of Holders of a Majority of the Preferred Shares.

 

Section 7.2.           Notices; Rule 17g-5 Procedures.

 

(a)           Except as otherwise expressly provided herein, any notice or other document provided or permitted by this Agreement or the Indenture to be made upon, given or furnished to, or filed with any of the parties hereto shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing and mailed by certified mail, return receipt requested, hand delivered, sent by courier service guaranteeing delivery within two Business Days or transmitted by electronic mail or facsimile in legible form at the following addresses.  Any such notice shall be deemed delivered upon receipt unless otherwise provided herein.

 

(i)            to the Preferred Share Paying Agent at Wells Fargo Bank, National Association, 9062 Old Annapolis Road, Columbia, Maryland, 21045-1951 Attention: Corporate Trust Services (CMBS), GPMT 2019-FL2, or at any other address previously furnished in writing by the Preferred Share Paying Agent;

 

(ii)           to the Issuer at c/o MaplesFS Limited, PO Box 1093, Boundary Hall, Cricket Square, KY1-1102, Cayman Islands, or at any other address previously furnished in writing by the Issuer; or

 

(iii)          to the Preferred Share Registrar at MaplesFS Limited, PO Box 1093, Boundary Hall, Cricket Square, KY1-1102, Cayman Islands, or at any other address previously furnished in writing by the Preferred Share Registrar.

 

(b)           Each of the parties hereto agrees that (i) it will not orally communicate information to the Rating Agencies for purposes of determining the initial credit rating of the Notes or undertaking surveillance of the Notes unless such oral communication is summarized in writing and the summary is promptly delivered to the 17g-5 Information Provider to be posted on the
 17g-5 Website pursuant to the Indenture, and (ii) it shall cause any notice or other written communication provided by such Person to the Rating Agencies to be delivered to the 17g-5 Information Provider at 17g5informationprovider@wellsfargo.com for posting to the 17g-5

 

23

 

Website prior to its delivery to the Rating Agencies, and otherwise comply with the Rule 17g-5 Procedures set forth in Section 14.13 of the Indenture.

 

Section 7.3.           Governing Law.

 

THIS AGREEMENT AND ALL DISPUTES ARISING HEREFROM OR RELATING HERETO SHALL BE GOVERNED IN ALL RESPECTS (WHETHER IN CONTRACT OR IN TORT) BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK.

 

Section 7.4.           Non-Petition; Limited Recourse.

 

None of the Preferred Share Paying Agent, the Preferred Share Registrar or any Holder may, prior to the date which is one year (or if longer the applicable preference period then in effect) plus one day after the payment in full of the Notes, institute against, or join any other Person in instituting against, the Issuer, the Co-Issuer or any Permitted Subsidiary any bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation proceedings, or other proceedings under Cayman Islands, U.S. federal or state bankruptcy or similar laws of any jurisdiction.

 

Notwithstanding any other provisions of this Agreement, recourse in respect of any obligations of the Issuer hereunder arising from time to time and at any time will be limited to the cash proceeds of the Collateral at such time as applied in accordance with the Priority of Payments and, on the exhaustion thereof, all obligations of, and any remaining claims against, the Issuer arising from this Agreement or any transactions contemplated hereby shall be extinguished and shall not thereafter revive.

 

The provisions of this Section 7.4 shall survive termination of this Agreement for any reason whatsoever.

 

Section 7.5.           No Partnership or Joint Venture.

 

The Issuer, the Preferred Share Registrar and the Preferred Share Paying Agent are not partners or joint venturers with each other and nothing in this Agreement shall be construed to make them such partners or joint venturers or impose any liability as such on any of them.

 

Section 7.6.           Counterparts.

 

This Agreement may be signed in two or more counterparts with the same effect as if the signatures thereto and hereto were upon the same instrument.

 

[SIGNATURE PAGES FOLLOW]

 

24

 

IN WITNESS WHEREOF, we have set our hands as of the date first written above.

 

	
 
    	
GPMT 2019-FL2, LTD., a   Cayman Islands exempted company, as Issuer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Michael J. Karber
    
	
 
    	
 
    	
Name: Michael J. Karber
    
	
 
    	
 
    	
Title:  Authorized Signatory
    

 

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

 

GPMT 2019-FL2 – Preferred Share Paying Agency Agreement

 

 

	
 
    	
WELLS FARGO BANK, NATIONAL ASSOCIATION,   as Preferred Share Paying Agent
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Amber Nelson
    
	
 
    	
 
    	
Name:
    	
Amber Nelson
    
	
 
    	
 
    	
Title:
    	
Assistant Vice   President
    

 

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

 

GPMT 2019-FL2 – Preferred Share Paying Agency Agreement

 

 

	
 
    	
MAPLESFS   LIMITED, as Preferred Share Registrar and Administrator
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Mora Goddard
    
	
 
    	
 
    	
Name: Mora Goddard
    
	
 
    	
 
    	
Title:   Authorised Signatory
    

 

GPMT 2019-FL2 – Preferred Share Paying Agency Agreement

 

 

EXHIBIT A

 

PREFERRED SHARE CERTIFICATE

 

GPMT 2019-FL2, LTD.

 

PREFERRED SHARES, PAR VALUE US $0.001 PER SHARE AND WITH AN AGGREGATE LIQUIDATION PREFERENCE AND NOTIONAL AMOUNT EQUAL TO U.S.$1,000 PER SHARE

 

[FOR EHRI ONLY:  THE PREFERRED SHARES REPRESENTED HEREBY CONSTITUTE AN ELIGIBLE HORIZONTAL RESIDUAL INTEREST FOR PURPOSES OF THE CREDIT RISK RETENTION RULES AND THEREFORE ARE SUBJECT TO THE ADDITIONAL TRANSFER RESTRICTIONS AND REQUIREMENTS IMPOSED BY SECTION 2.5(a)(iii) OF THE PREFERRED SHARE PAYING AGENCY AGREEMENT AND THE CREDIT RISK RETENTION RULES, AND EACH HOLDER OF THE PREFERRED SHARES REPRESENTED HEREBY SHALL BE DEEMED TO HAVE AGREED TO COMPLY WITH SUCH ADDITIONAL RESTRICTIONS AND REQUIREMENTS.  ANY PURPORTED TRANSFER OR EXCHANGE IN VIOLATION OF THE FOREGOING SHALL BE NULL AND VOID AB INITIO.]

 

THE PREFERRED SHARES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER RELEVANT JURISDICTION, AND MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) (1) ON THE CLOSING DATE TO GPMT CLO HOLDINGS LLC, A DELAWARE LIMITED LIABILITY COMPANY, IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT PURSUANT TO THE EXEMPTION PROVIDED BY SECTION 4(a)(2) THEREOF, (2) PERSONS THAT ARE BOTH (X) A “QUALIFIED INSTITUTIONAL BUYER” (“QUALIFIED INSTITUTIONAL BUYER”) WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) AND (Y) A “QUALIFIED PURCHASER” AS DEFINED IN SECTION 2(a)(51) OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”) AND THE RULES THEREUNDER, PURCHASING FOR ITS OWN ACCOUNT OR ONE OR MORE ACCOUNTS WITH RESPECT TO WHICH IT EXERCISES SOLE INVESTMENT DISCRETION, EACH OF WHICH THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER, AND NONE OF WHICH ARE (X) A DEALER OF THE TYPE DESCRIBED IN PARAGRAPH (a)(1)(ii) OF RULE 144A UNLESS IT OWNS AND INVESTS ON A DISCRETIONARY BASIS NOT LESS THAN $25,000,000 IN SECURITIES OF CO-ISSUERS THAT ARE NOT AFFILIATED TO IT OR (Y) A PARTICIPANT-DIRECTED EMPLOYEE PLAN, SUCH AS A 401(k) PLAN, OR ANY OTHER TYPE OF PLAN REFERRED TO IN PARAGRAPH (a)(1)(i)(D) OR (a)(1)(i)(E) OF RULE 144A, OR A TRUST FUND REFERRED TO IN PARAGRAPH (a)(1)(i)(F) OF RULE 144A THAT HOLDS THE ASSETS OF SUCH A PLAN, UNLESS INVESTMENT DECISIONS WITH RESPECT TO THE PLAN ARE MADE SOLELY BY THE FIDUCIARY, TRUSTEE OR SPONSOR OF SUCH PLAN, TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE

 

 

OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON THE EXEMPTION FROM SECURITIES ACT REGISTRATION PROVIDED BY RULE 144A, OR (3) TO AN INSTITUTION THAT IS NOT A U.S. PERSON (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT (“REGULATION S”)), PURCHASING FOR ITS OWN ACCOUNT OR ONE OR MORE ACCOUNTS WITH RESPECT TO WHICH IT EXERCISES SOLE INVESTMENT DISCRETION, EACH OF WHICH IS NEITHER A U.S. PERSON NOR A U.S. RESIDENT (WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT), IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF REGULATION S, AND (B) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ANY OTHER RELEVANT JURISDICTION. THE ISSUER HAS NOT BEEN REGISTERED UNDER THE INVESTMENT COMPANY ACT.  NO TRANSFER OF THE PREFERRED SHARES REPRESENTED HEREBY MAY BE MADE (AND NEITHER THE PREFERRED SHARE PAYING AGENT NOR THE PREFERRED SHARE REGISTRAR WILL RECOGNIZE ANY SUCH TRANSFER) IF (A) SUCH TRANSFER WOULD BE MADE TO A TRANSFEREE WHO IS EITHER A U.S. PERSON (AS DEFINED IN REGULATION S) OR A U.S. RESIDENT (WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT) WHO IS NOT A QUALIFIED INSTITUTIONAL BUYER AND A QUALIFIED PURCHASER, (B) SUCH TRANSFER WOULD HAVE THE EFFECT OF REQUIRING EITHER OF THE ISSUER OR THE PLEDGED OBLIGATIONS TO REGISTER AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OR (C) SUCH TRANSFER WOULD BE MADE TO A PERSON WHO IS OTHERWISE UNABLE TO MAKE THE CERTIFICATIONS AND REPRESENTATIONS DEEMED TO BE MADE BY SUCH PERSON IN THE INDENTURE REFERRED TO HEREIN.  ACCORDINGLY, AN INVESTOR IN THE PREFERRED SHARES REPRESENTED HEREBY MUST BE PREPARED TO BEAR THE ECONOMIC RISK OF THE INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.  NO TRANSFER OF THE PREFERRED SHARES REPRESENTED HEREBY MAY BE MADE (AND NONE OF THE ISSUER, THE PREFERRED SHARE PAYING AGENT OR THE PREFERRED SHARE REGISTRAR WILL RECOGNIZE ANY SUCH TRANSFER) IF AFTER GIVING EFFECT TO SUCH TRANSFER, ANY PREFERRED SHARES WOULD BE HELD BY ANY “BENEFIT PLAN INVESTOR,” AS DEFINED IN 29 C.F.R. §2510.3-101 (INCLUDING, WITHOUT LIMITATION, AN INSURANCE COMPANY GENERAL ACCOUNT, IF APPLICABLE) OR SUCH TRANSFER WOULD BE MADE TO A PERSON WHO IS OTHERWISE UNABLE TO MAKE THE CERTIFICATIONS AND REPRESENTATIONS REQUIRED BY THE APPLICABLE TRANSFER CERTIFICATE ATTACHED AS AN EXHIBIT TO THE JUNIOR NOTE AND PREFERRED SHARE SUBSCRIPTION AGREEMENT.

 

AS A CONDITION TO THE PAYMENT OF ANY AMOUNT HEREUNDER WITHOUT THE IMPOSITION OF WITHHOLDING TAX, THE PREFERRED SHARE PAYING AGENT SHALL REQUIRE CERTIFICATION ACCEPTABLE TO IT TO ENABLE THE ISSUER AND THE PREFERRED SHARE PAYING AGENT TO DETERMINE THEIR DUTIES AND LIABILITIES WITH RESPECT TO ANY TAXES OR OTHER CHARGES THAT THEY MAY BE REQUIRED TO PAY, DEDUCT OR WITHHOLD IN RESPECT OF THE PREFERRED SHARES REPRESENTED HEREBY OR THE HOLDER HEREOF UNDER ANY PRESENT OR FUTURE LAW OR REGULATION OF THE CAYMAN ISLANDS OR THE UNITED STATES OR ANY PRESENT OR FUTURE LAW OR REGULATION OF ANY POLITICAL SUBDIVISION THEREOF OR TAXING AUTHORITY THEREIN OR TO COMPLY WITH

 

A-2

 

ANY REPORTING OR OTHER REQUIREMENTS UNDER ANY SUCH LAW OR REGULATION.

 

SO LONG AS ANY NOTE ISSUED BY THE ISSUER OF THE PREFERRED SHARES REPRESENTED HEREBY IS OUTSTANDING, GRANITE POINT MORTGAGE TRUST INC. MUST AT ALL TIMES BENEFICIALLY OWN (FOR U.S. FEDERAL INCOME TAX PURPOSES) 100% OF THE PREFERRED SHARES REPRESENTED HEREBY AND THE ORDINARY SHARES, AND ANNALY SUB REIT, INC. WILL NOT TRANSFER (WHETHER BY MEANS OF ACTUAL TRANSFER OR A TRANSFER OF BENEFICIAL OWNERSHIP FOR U.S. FEDERAL INCOME TAX PURPOSES), PLEDGE OR HYPOTHECATE ANY OF THE PREFERRED SHARES OR THE ORDINARY SHARES TO ANY OTHER PERSON, ENTITY OR ENTITIES EXCEPT IN COMPLIANCE WITH SECTION 2.5 OF THE PREFERRED SHARE PAYING AGENCY AGREEMENT.  IF A SALE OR TRANSFER (INCLUDING WITHOUT LIMITATION, BY PLEDGE OR HYPOTHECATION) OF ALL OR A PORTION OF THE EHRI IS TO BE MADE, THEN THE PREFERRED SHARE REGISTRAR AND THE PREFERRED SHARE PAYING AGENT SHALL REFUSE TO REGISTER SUCH SALE OR TRANSFER UNLESS THE CONDITIONS IN SECTION 2.5(a)(iii) OF THE PREFERRED SHARE PAYING AGENCY AGREEMENT HAVE BEEN SATISFIED.

 

THE ISSUER MAY REQUIRE ANY HOLDER OF THE PREFERRED SHARES REPRESENTED HEREBY WHO IS A U.S. PERSON (AS DEFINED IN REGULATION S) OR A U.S. RESIDENT (WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT) WHO IS DETERMINED NOT TO HAVE BEEN A (1) QUALIFIED PURCHASER AND (2) A QUALIFIED INSTITUTIONAL BUYER (EXCEPT IN THE CASE OF GPMT CLO HOLDINGS LLC) AT THE TIME OF ACQUISITION OF THE PREFERRED SHARES REPRESENTED HEREBY TO SELL THE PREFERRED SHARES REPRESENTED HEREBY TO A TRANSFEREE THAT IS (A) BOTH (X) A QUALIFIED INSTITUTIONAL BUYER AND (Y) AN QUALIFIED PURCHASER OR (B) NOT A U.S. PERSON (AS DEFINED IN REGULATION S) NOR A U.S. RESIDENT (WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S.

 

GPMT CLO HOLDINGS LLC, AND EACH TRANSFEREE OF THE PREFERRED SHARES REPRESENTED HEREBY WILL BE REQUIRED TO DELIVER A TRANSFER CERTIFICATE IN THE FORM REQUIRED BY THE PREFERRED SHARES PAYING AGENCY AGREEMENT.  ANY TRANSFER IN VIOLATION OF THE FOREGOING WILL BE OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO, AND WILL NOT OPERATE TO TRANSFER ANY RIGHTS TO THE TRANSFEREE, NOTWITHSTANDING ANY INSTRUCTIONS TO THE CONTRARY TO THE ISSUER, THE TRUSTEE, THE PREFERRED SHARE PAYING AGENT OR ANY INTERMEDIARY.

 

A-3

 

GPMT 2019-FL2, LTD.

 

	
Number P-1
    	
 
    	
CUSIP   [  ]
    

 

Incorporated under the laws of the Cayman Islands
 105,192.857 Preferred Shares of a par value of U.S.$0.001 per share and
 with an aggregate liquidation preference and notional amount equal to U.S.$1,000 per share

 

THIS IS TO CERTIFY THAT                                                      is the registered holder of 103,192.857 Class P Preferred Shares, one Class X Preferred Share and one Class R Preferred Share in the above named Company, subject to the Amended and Restated Memorandum and Articles of Association thereof, as may be hereafter amended and in effect from time to time.

 

A-4

 

THIS CERTIFICATE IS ISSUED BY the said Company on this       day of           , 20  .

 

EXECUTED AS A DEED on behalf of the said Company by:

 

 

	
AUTHORIZED SIGNATORY
    	
 
    	
 
    

 

 

CERTIFICATE OF AUTHENTICATION

 

This Certificate evidences the Preferred Shares referred to in the within-mentioned Preferred Share Paying Agency Agreement.

 

	
 
    	
WELLS FARGO BANK, NATIONAL ASSOCIATION,
    
	
 
    	
as Preferred Share Paying Agent
    
	
 
    	
 
    
	
 
    	
By: 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

 

ASSIGNMENT FORM

	
For value received
    
	
 
    
	
 
    	
 
    
	
does hereby sell, assign and transfer unto
    
	
 
    
	
 
    
	
Please insert social security or
    
	
other identifying number of assignee
    	
 
    	
 
    
	
 
    
	
Please print or type name and address,
    
	
including zip code, of assignee:
    
				

 

 

                          Preferred Shares in the share capital of GPMT 2019-FL2, Ltd. (the “Issuer”) and does hereby irrevocably constitute and appoint               Attorney to transfer the Preferred Shares on the books of the Issuer with full power of substitution in the premises.

 

 

	
Date:
    	
 
    	
 
    	
Your Signature:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
(Sign exactly as your   name
    
	
 
    	
 
    	
 
    	
 
    	
appears on the   Preferred Share Certificate)
    

 

 

SCHEDULE I

 

Capitalized terms used in this Schedule I that are defined in Regulation S are used as defined therein.

 

1.             (A) The Holder is aware that the sale of such Preferred Shares to it is being made in reliance on the exemption from registration provided by Regulation S and understands that the Preferred Shares offered in reliance on Regulation S will bear the appropriate legend set forth herein.  The Preferred Shares so represented may not at any time be held by or on behalf of U.S. Persons or U.S. Residents.  The Holder is not, and will not be, a U.S. Person or a U.S. Resident.  Before any Preferred Share issued in reliance on Regulation S may be offered, resold, pledged or otherwise transferred, the transferee will be required to provide the Trustee with a written certification substantially in the form attached to the Preferred Shares Paying Agency Agreement as to compliance with the transfer restrictions.  The Holder understands that it must inform a prospective transferee of the transfer restrictions; or

 

(B) The Holder (1) is both (x) a Qualified Institutional Buyer and (y) a Qualified Purchaser; (2) is aware that the sale of the Preferred Shares to it is being made in reliance on the exemption from registration provided by Rule 144A or Rule 501(a) of Regulation D and (3) is acquiring the Preferred Shares for its own account or for one or more accounts, each of which is a Qualified Institutional Buyer, and as to each of which the owner exercises sole investment discretion.

 

2.             The Holder understands that the Preferred Shares are being offered only in a transaction not involving any public offering within the meaning of the Securities Act, the Preferred Shares have not been and will not be registered under the Securities Act, and, if in the future the Holder decides to offer, resell, pledge or otherwise transfer the Preferred Shares, such Preferred Shares may only be offered, resold, pledged or otherwise transferred only in accordance with the Issuer Charter and the Preferred Shares Paying Agency Agreement and the applicable legend on such Preferred Shares set forth herein.  The Holder acknowledges that no representation is made by the Issuer or the Placement Agents as to the availability of any exemption under the Securities Act or any State securities laws for resale of the Preferred Shares.

 

3.             The Holder understands that the Preferred Shares have not been approved or disapproved by the United States Securities and Exchange Commission (“SEC”) or any other governmental authority or agency or any jurisdiction and that neither the SEC nor any other governmental authority or agency has passed upon the accuracy of the final offering memorandum relating to the Preferred Shares. The Holder further understands that any representation to the contrary is a criminal offense.

 

4.             The Holder is not purchasing the Preferred Shares with a view to the resale, distribution or other disposition thereof in violation of the Securities Act.  The Holder understands that an investment in the Preferred Shares involves certain risks, including the risk of loss of all or a substantial part of its investment under certain circumstances.

 

 

5.             In connection with the purchase of the Preferred Shares (A) none of the Issuer, the Placement Agents or the Preferred Share Paying Agent is acting as a fiduciary or financial or investment adviser for the Holder; (B) the Holder is not relying (for purposes of making any investment decision or otherwise) upon any advice, counsel or representations (whether written or oral) of the Issuer, the Placement Agents or the Preferred Share Paying Agent other than in, if applicable, a current offering memorandum for such Preferred Shares; (C) none of the Issuer, the Placement Agents or the Preferred Share Paying Agent has given to the Holder (directly or indirectly through any other person) any assurance, guarantee, or representation whatsoever as to the expected or projected success, profitability, return, performance, result, effect, consequence, or benefit (including legal, regulatory, tax, financial, accounting, or otherwise) of its purchase; (D) the Holder has consulted with its own legal, regulatory, tax, business, investment, financial, accounting and other advisers to the extent it has deemed necessary, and it has made its own investment decisions (including decisions regarding the suitability of an investment in the Preferred Shares) based upon its own judgment and upon any advice from such advisers as it has deemed necessary and not upon any view expressed by the Issuer, the Placement Agents or the Preferred Share Paying Agent; and (E) the Holder is purchasing the Preferred Shares with a full understanding of all of the terms, conditions and risks thereof (economic and otherwise), and is capable of assuming and willing to assume (financially and otherwise) these risks.

 

6.             The Holder understands that the certificates representing the Preferred Shares will bear the applicable legend set forth herein.  The Preferred Shares may not at any time be held by or on behalf of any U.S. Person that is not both (x) a Qualified Institutional Buyer and (y) a Qualified Purchaser. The Holder understand that it must inform a prospective transferee of the transfer restrictions.

 

7.             The Holder understands and agrees that a legend in substantially the following form will be placed on each certificate representing any Preferred Shares unless the Issuer determines otherwise in compliance with applicable law:

 

THE PREFERRED SHARES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND THE ISSUER HAS NOT BEEN REGISTERED AS AN INVESTMENT COMPANY UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”).  THE PREFERRED SHARES REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, EXCEPT (A) (1) PERSONS THAT ARE BOTH (X) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT (A “QIB”) AND (Y) A QUALIFIED PURCHASER AS DEFINED IN SECTION 2(a)(51) OF THE INVESTMENT COMPANY ACT (A “QUALIFIED

 

Schedule I-2

 

PURCHASER), AND IS EITHER PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER AND FOR EACH SUCH ACCOUNT, IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT SO LONG AS THE PREFERRED SHARES REPRESENTED HEREBY ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, SUBJECT TO THE SATISFACTION OF CERTAIN CONDITIONS SPECIFIED IN THE PREFERRED SHARES PAYING AGENCY AGREEMENT, OR (2) TO AN INSTITUTION THAT IS NOT A U.S. PERSON IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF REGULATION S UNDER THE SECURITIES ACT, SUBJECT TO THE SATISFACTION OF CERTAIN CONDITIONS SPECIFIED IN THE PREFERRED SHARES PAYING AGENCY AGREEMENT, AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ANY OTHER APPLICABLE JURISDICTION.  EACH PURCHASER OF A PREFERRED SHARE WILL BE REQUIRED TO MAKE THE REPRESENTATIONS AND AGREEMENTS SET FORTH IN SCHEDULE I OF THE PREFERRED SHARES PAYING AGENCY AGREEMENT.  ANY TRANSFER IN VIOLATION OF THE FOREGOING WILL BE OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO, AND WILL NOT OPERATE TO TRANSFER ANY RIGHTS TO THE TRANSFEREE, NOTWITHSTANDING ANY INSTRUCTIONS TO THE CONTRARY TO THE ISSUER, THE PREFERRED SHARE REGISTRAR, THE PREFERRED SHARE PAYING AGENT OR ANY INTERMEDIARY.  IF AT ANY TIME, THE ISSUER DETERMINES OR IS NOTIFIED THAT THE HOLDER OF SUCH PREFERRED SHARE WAS IN BREACH, AT THE TIME GIVEN, OF ANY OF THE REPRESENTATIONS SET FORTH IN THE PREFERRED SHARES PAYING AGENCY AGREEMENT, THE ISSUER AND THE PREFERRED SHARE PAYING AGENT MAY CONSIDER THE ACQUISITION OF THE PREFERRED SHARES REPRESENTED HEREBY VOID AND REQUIRE THAT THE PREFERRED SHARES REPRESENTED HEREBY BE TRANSFERRED TO A PERSON DESIGNATED BY THE ISSUER.  NO TRANSFER OF THE PREFERRED SHARES REPRESENTED HEREBY MAY BE MADE (AND THE ISSUER AND THE PREFERRED SHARE PAYING AGENT WILL NOT RECOGNIZE ANY SUCH TRANSFER) IF  (A) SUCH TRANSFER WOULD HAVE THE EFFECT OF REQUIRING THE ISSUER TO REGISTER AS AN INVESTMENT COMPANY

 

Schedule I-3

 

UNDER THE INVESTMENT COMPANY ACT OR (B) SUCH TRANSFER WOULD BE MADE TO A PERSON WHO IS OTHERWISE UNABLE TO MAKE THE CERTIFICATIONS AND REPRESENTATIONS DEEMED TO BE MADE BY SUCH PERSON IN THE PREFERRED SHARES PAYING AGENCY AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, AN INVESTOR IN THE PREFERRED SHARES REPRESENTED HEREBY MUST BE PREPARED TO BEAR THE ECONOMIC RISK OF THE INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. EXCEPT AS OTHERWISE PERMITTED BY THE CO-ISSUERS, NO TRANSFER OF THE PREFERRED SHARES REPRESENTED HEREBY MAY BE MADE (AND NONE OF THE CO-ISSUERS, PREFERRED SHARE PAYING AGENT OR THE PREFERRED SHARE REGISTRAR WILL RECOGNIZE ANY SUCH TRANSFER) IF AFTER GIVING EFFECT TO SUCH TRANSFER, ANY PREFERRED SHARES WOULD BE HELD BY “BENEFIT PLAN INVESTORS,” AS DEFINED IN 29 C.F.R. §2510.3-101 (EITHER DIRECTLY OR THROUGH AN INSURANCE COMPANY GENERAL ACCOUNT) OR SUCH TRANSFER WOULD BE MADE TO A PERSON WHO IS OTHERWISE UNABLE TO MAKE THE CERTIFICATIONS AND REPRESENTATIONS REQUIRED BY THE APPLICABLE TRANSFER CERTIFICATE ATTACHED AS AN EXHIBIT TO THE PREFERRED SHARES PAYING AGENCY AGREEMENT.

 

AS A CONDITION TO THE PAYMENT OF ANY AMOUNT UNDER THE PREFERRED SHARES REPRESENTED HEREBY WITHOUT THE IMPOSITION OF BACKUP WITHHOLDING TAX, THE ISSUER AND THE PREFERRED SHARE PAYING AGENT SHALL REQUIRE CERTIFICATION ACCEPTABLE TO THEM TO ENABLE THE ISSUER AND THE PREFERRED SHARE PAYING AGENT TO DETERMINE THEIR DUTIES AND LIABILITIES WITH RESPECT TO ANY TAXES OR OTHER CHARGES THAT THEY MAY BE REQUIRED TO PAY, DEDUCT OR WITHHOLD IN RESPECT OF THE PREFERRED SHARES REPRESENTED HEREBY OR THE HOLDER THEREOF UNDER ANY PRESENT OR FUTURE LAW OR REGULATION OF THE CAYMAN ISLANDS OR THE UNITED STATES OR ANY PRESENT OR FUTURE LAW OR REGULATION OF ANY POLITICAL SUBDIVISION THEREOF OR TAXING AUTHORITY THEREIN OR TO COMPLY WITH ANY REPORTING OR OTHER REQUIREMENTS UNDER ANY SUCH LAW OR REGULATION.

 

8.             The Holder will not, at any time, offer to buy or offer to sell the Preferred Shares by any form of general solicitation or advertising, including, but not limited to, any advertisement, article, notice or other communication published in any newspaper,

 

Schedule I-4

 

magazine or similar medium or broadcast over television or radio or at a seminar or meeting whose attendees have been invited by general solicitations or advertising.

 

9.             The Holder is not a member of the public in the Cayman Islands, within the meaning of Section 175 of the Cayman Islands Companies Law (2018 Revision).

 

10.          The Holder understands that each of the Issuer, the Trustee or the Preferred Share Paying Agent shall require certification acceptable to it (A) as a condition to the payment of distributions in respect of any Preferred Shares without, or at a reduced rate of, U.S. withholding or backup withholding tax, and (B) to enable the Issuer, the Trustee and the Preferred Share Paying Agent to determine their duties and liabilities with respect to any taxes or other charges that they may be required to pay, deduct or withhold from payments in respect of such Preferred Shares or the Holder of such Preferred Shares under any present or future law or regulation of the Cayman Islands or the United States or any present or future law or regulation of any political subdivision thereof or taxing authority therein or to comply with any reporting or other requirements under any such law or regulation.  Such certification may include U.S. federal income tax forms (such as IRS Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)), IRS Form W-8BEN-E (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities)), IRS Form W-8IMY (Certificate of Foreign Intermediary, Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding and Reporting), IRS Form W-9 (Request for Taxpayer Identification Number and Certification), or IRS Form W-8ECI (Certificate of Foreign Person’s Claim That Income Is Effectively Connected with Conduct of a Trade or Business in the United States) or any successors to such IRS forms) and the properly completed and executed “Entity Self-Certification Form” or “Individual Self-Certification Form” (in the forms published by the Cayman Islands Department for International Tax Cooperation, which forms can be obtained at http://www.tia.gov.ky/pdf/CRS_Legislation.pdf).  In addition, the Issuer or the Preferred Share Paying Agent may require certification acceptable to it to enable the Issuer to qualify for a reduced rate of withholding in any jurisdiction from or through which the Issuer receives payments on its assets.  Each owner agrees to provide any certification requested pursuant to this paragraph and to update or replace such form or certification in accordance with its terms or its subsequent amendments.

 

11.          The Holder hereby agrees that, for purposes of U.S. federal, state and local income and franchise tax and any other income taxes, if the Issuer is no longer a Qualified REIT Subsidiary (A) the Issuer will be treated as a foreign corporation and (B) the Notes will be treated as equity in the Issuer; the Holder agrees to such treatment and agrees to take no action inconsistent with such treatment, unless required by law.

 

12.          The Holder, if not a “United States person” (as defined in Section 7701(a)(30) of the Code), either: (A) is not a bank (within the meaning of Section 881(c)(3)(A) of the Code); (B) is a bank (within the meaning of Section 881(c)(3)(A) of the Code) and after giving effect to its purchase of the Preferred Shares, the Holder (x) shall not own more than 50% of the Preferred Shares (by number) or 50% by value of the aggregate of the Preferred Shares and all Classes of Notes that are treated as equity for U.S. federal income tax purposes either directly or indirectly, and will not otherwise be related to the Issuer (within the meaning of section 267(b) of the Code) and (y) has not purchased

 

Schedule I-5

 

the Preferred Shares in whole or in part to avoid any U.S. federal income tax liability (including, without limitation, any U.S. withholding tax that would be imposed on the Preferred Shares with respect to the Collateral if held directly by the Holder); (C) is a bank (within the meaning of Section 881(c)(3)(A) of the Code) has provided an IRS Form W-8ECI representing that all payments received or to be received by it from the Issuer are effectively connected with the conduct of a trade or business in the United States; or (D) is a bank (within the meaning of Section 881(c)(3)(A) of the Code) is eligible for benefits under an income tax treaty with the United States that eliminates U.S. federal income taxation of U.S. source interest not attributable to a permanent establishment in the United States and the Issuer is treated as a fiscally transparent entity (as defined in Treasury regulations section 1.894-1(d)(3)(iii)) under the laws of Holder’s jurisdiction with respect to payments made on the Collateral held by the Issuer.

 

13.          The Holder will, prior to any sale, pledge or other transfer by such owner of any Preferred Share, obtain from the prospective transferee, and deliver to the Preferred Share Paying Agent, a duly executed transferee certificate addressed to each of the Preferred Share Paying Agent and the Issuer in the form of the relevant exhibit attached to the Preferred Shares Paying Agency Agreement, and such other certificates and other information as the Issuer or the Preferred Share Paying Agent may reasonably require to confirm that the proposed transfer complies with the transfer restrictions contained in the Issuer Charter and the Preferred Shares Paying Agency Agreement.

 

14.          The Holder agrees that no Preferred Share may be purchased, sold, pledged or otherwise transferred in a number less than the minimum number set forth in the Preferred Shares Paying Agency Agreement.  In addition, the Holder understands that the Preferred Shares will be transferable only upon registration of the transferee in the Preferred Share Register of the Issuer following delivery to the Preferred Share Registrar of a duly executed share transfer certificate, the Preferred Share to be transferred (if applicable) and any other certificates and other information required by the Issuer Charter and the Preferred Shares Paying Agency Agreement.

 

15.          The Holder is aware and agrees that no Preferred Share (or beneficial interest therein) may be offered or sold, pledged or otherwise transferred (i) to a transferee taking delivery of such Preferred Shares represented by a certificate representing a Preferred Share except to both (x) a transferee that the Holder reasonably believes is a Qualified Institutional Buyer, purchasing for its account, to which notice is given that the resale, pledge or other transfer is being made in reliance on the exemption from the registration requirements of the Securities Act provided by Rule 144A or another person the sale to which is exempt under the Securities Act and (y) a Qualified Purchaser, and if such transfer is made in accordance with any applicable securities laws of any state of the United States and any other relevant jurisdiction, (ii) to a transferee taking delivery of such Preferred Share represented by a certificate representing a Preferred Share issued in reliance on Regulation S except (A) to a transferee that is acquiring such interest in an offshore transaction in accordance with Rule 904 of Regulation S, (B) to a transferee that is not a U.S. resident (within the meaning of the Investment Company Act) unless such transferee is a Qualified Purchaser, (C) such transfer is made in compliance with the other requirements set forth in the Preferred Shares Paying Agency Agreement and (D) if such

 

Schedule I-6

 

transfer is made in accordance with any applicable securities laws of any state of the United States and any other jurisdiction or (iii) if such transfer would have the effect of requiring the Issuer to register as an “investment company” under the Investment Company Act.

 

16.          The Holder understands that, although the Placement Agents may from time to time make a market in the Preferred Shares, the Placement Agents are not under any obligation to do so and, following the commencement of any market-making, may discontinue the same at any time.  Accordingly, the Holder must be prepared to hold the Preferred Shares until the scheduled Redemption Date for the Preferred Shares.

 

17.          The Holder also understands that the Preferred Shares are equity interests in the Issuer and are not secured by the Collateral securing the Notes.  As such, the Holder and any other Holders of the Preferred Shares will, on a winding up of the Issuer, rank behind all of the creditors, whether secured or unsecured and known or unknown, of the Issuer, including, without limitation, the Holders of the Notes, the Hedge Counterparties and any judgment creditors.  Payments in respect of the Preferred Shares are subject to certain requirements imposed by Cayman Islands law. Any amounts paid by the Preferred Share Paying Agent as distributions by way of dividend on the Preferred Shares will be payable only if the Issuer has sufficient distributable profits and/or share premium.  In addition, such distributions and any redemption payments will be payable only to the extent that the Issuer is and remains solvent after such distributions or redemption payments are paid.  Under Cayman Islands law, a company generally is deemed solvent if it is able to pay its debts as they come due in the ordinary course of business.  To the extent the requirements under Cayman Islands law described above are not met, amounts otherwise payable to the Holders of the Preferred Shares will be retained in the Preferred Shares Distribution Account until the next succeeding Payment Date, or (in the case of any payment that would otherwise be payable on a redemption of the Preferred Shares) the next succeeding Business Day, on which the Issuer notifies the Preferred Share Paying Agent that such requirements are met. Amounts on deposit in the Preferred Shares Distribution Account (unless deposited in error) will not be available to pay amounts due to the Holders of the Notes, the Note Administrator, the Trustee or any other creditor of the Issuer the claim of which is limited in recourse to the Collateral.  However, amounts on deposit in the Preferred Shares Distribution Account may be subject to the claims of creditors of the Issuer that have not contractually limited their recourse to the Collateral.

 

18.          The Holder agrees that (i) any sale, pledge or other transfer of a Preferred Share made in violation of the transfer restrictions contained in the Preferred Shares Paying Agency Agreement, or made based upon any false or inaccurate representation made by the Holder or a transferee to the Issuer, the Preferred Share Paying Agent or the Preferred Share Registrar, will be void and of no force or effect and (ii) none of the Issuer, the Preferred Share Paying Agent and the Preferred Share Registrar has any obligation to recognize any sale, pledge or other transfer of a Preferred Share (or any beneficial interest therein) made in violation of any such transfer restriction or made based upon any such false or inaccurate representation.

 

19.          The Holder acknowledges that the Issuer, the Trustee, the Preferred Share Paying Agent, the Preferred Share Registrar, the Placement Agents and others will rely

 

Schedule I-7

 

upon the truth and accuracy of the foregoing acknowledgments, representations and agreements and agrees that, if any of the acknowledgments, representations or warranties made or deemed to have been made by it in connection with its purchase of the Preferred Shares are no longer accurate, the Holder will promptly notify the Issuer, the Trustee, the Note Administrator, the Preferred Share Paying Agent, the Preferred Share Registrar and the Placement Agents.

 

Schedule I-8

 

EXHIBIT B-1

 

FORM OF TRANSFEREE CERTIFICATE FOR TRANSFERS OF EHRI

 

	
[Date]
    
	
 
    
	
MaplesFS Limited
    
	
PO Box 1093, Boundary Hall, Cricket Square
    
	
KY1-1102, Cayman Islands
    
	
Attention: The Directors
    
	
 
    
	
Wells Fargo Bank, National Association
    
	
600 South 4th Street, 7th Floor
    
	
MAC N9300-070
    
	
Minneapolis, Minnesota 55479
    
	
Attention — Note Transfers (CTS) GPMT 2019-FL2
    
	
 
    
	
Granite Point Mortgage Trust Inc.
    
	
590 Madison Avenue, 38th Floor
    
	
New York, New York 10022
    
	
Attention: General Counsel
    

 

GPMT 2019-FL2, Transfer of EHRI

 

[       ] (the “Purchaser”) hereby certifies, represents and warrants to you, as Preferred Share Registrar, Preferred Share Paying Agent and as “retaining sponsor” as such term is defined in the Credit Risk Retention Rules, that:

 

1.                                      The Purchaser is acquiring [      ] Preferred Shares evidencing the EHRI from [       ] (the “Transferor”).

 

2.                                      The Purchaser is aware that the Preferred Share Registrar will not register any transfer of Preferred Shares evidencing the EHRI by the Transferor unless the Purchaser, or such Purchaser’s agent, delivers to the Preferred Share Registrar, among other things, a certificate in substantially the same form as this certificate.  The Purchaser expressly agrees that it will not consummate any such transfer if it knows or believes that any representation contained in such certificate is false.

 

3.                                      Check one of the following:

 

o                                    The Purchaser certifies, represents and warrants to you, as Preferred Share Registrar, Preferred Share Paying Agent and as “retaining sponsor” as such term is defined in the Credit Risk Retention Rules, that the transfer will occur during the EHRI Transfer Restriction Period and that:

 

A.                                    The Purchaser is a “majority-owned affiliate,” as such term is defined in Regulation RR, of the Securitization Sponsor (a “Majority-Owned Affiliate”);

 

B.                                    The Purchaser is not acquiring the Preferred Shares evidencing the EHRI Interest as a nominee, trustee or agent for any person that is not a Majority-

 

Exh. B-1-1

 

Owned Affiliate, and that for so long as it retains its interest in the EHRI, it will remain a Majority-Owned Affiliate;

 

C.                                    The Purchaser consents to any additional restrictions or arrangements that shall be deemed necessary upon advice of counsel to constitute a reasonable arrangement to ensure that its ownership of the EHRI will satisfy the risk retention requirements of the Transferor, in its capacity as [sponsor] [originator] under Regulation RR.

 

o                                    The Purchaser certifies, represents and warrants to you, as Preferred Share Registrar, Preferred Share Paying Agent and as “retaining sponsor” as such term is defined in the Credit Risk Retention Rules, that the transfer will occur after the termination of the EHRI Transfer Restriction Period.

 

Any transfer or pledge of any Preferred Shares constituting the EHRI that is in violation of the Credit Risk Retention Rules shall be absolutely null and void ab initio and shall vest no rights in the purported transferee or pledgee, as applicable.  Capitalized terms used but not defined herein have the meanings assigned thereto in the Preferred Share Paying Agency Agreement dated as of February 28, 2019, among GPMT 2019-FL2, Ltd., as issuer, Wells Fargo Bank, National Association, as paying agent for the Preferred Shares, and MaplesFS Limited, as administrator and share registrar for the Preferred Shares.

 

[SIGNATURE PAGES FOLLOW]

 

Exh. B-1-2

 

IN WITNESS WHEREOF, the Purchaser has caused this instrument to be duly executed on its behalf by its duly authorized senior officer this     day of        , 20  .

 

	
 
    	
By: 
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

The foregoing certificate is hereby confirmed, and the transfer is accepted, as of the date first above written:

 

	
 
    	
GRANITE POINT MORTGAGE TRUST INC.
    
	
 
    	
 
    
	
 
    	
By: 
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

EXHIBIT B-2

 

FORM OF TRANSFEROR CERTIFICATE FOR TRANSFERS OF EHRI

 

	
[Date]
    
	
 
    
	
MaplesFS Limited
    
	
PO Box 1093, Boundary Hall, Cricket Square
    
	
KY1-1102, Cayman Islands
    
	
Attention: The Directors
    
	
 
    
	
Wells Fargo Bank, National Association
    
	
600 South 4th Street, 7th Floor
    
	
MAC N9300-070
    
	
Minneapolis, Minnesota 55479
    
	
Attention — Note Transfers (CTS) GPMT 2019-FL2
    
	
 
    
	
Granite Point Mortgage Trust Inc.
    
	
590 Madison Avenue, 38th Floor
    
	
New York, New York 10022
    
	
Attention: General Counsel
    

 

GPMT 2019-FL2, Transfer of EHRI

 

Ladies and Gentlemen:

 

This is delivered to you in connection with the transfer by [        ] (the “Transferor”) to [        ] (the “Transferee”) of [            ] Preferred Shares evidencing the EHRI.  All capitalized terms used but not otherwise defined herein shall have the respective meanings set forth in the Preferred Share Paying Agency Agreement dated as of February 28, 2019 (the “Preferred Share Paying Agency Agreement”), among GPMT 2019-FL2, Ltd., as issuer, Wells Fargo Bank, National Association, as paying agent for the Preferred Shares, and MaplesFS Limited, as administrator and share registrar for the Preferred Shares.  The Transferor hereby certifies, represents and warrants to you that:

 

1.                                      The transfer is in compliance with Sections 2.4 and 2.5 of the Preferred Share Paying Agency Agreement.

 

2.                                      Check one of the following:

 

o                                    The Transferor certifies, represents and warrants to you that the transfer will occur during the EHRI Transfer Restriction Period and that the Transferee is a “majority-owned affiliate,” as such term is defined in Regulation RR, of the Transferor;

 

o                                    The Transferor certifies, represents and warrants to you that the transfer will occur after the termination of the EHRI Transfer Restriction Period.

 

3.                                      The Transferor understands that the Transferee has delivered to you a Transferee Certificate in the form attached to the Preferred Share Paying Agency Agreement as Exhibit B-1.  The Transferor does not know or believe that any representation contained therein is false.

 

Exh. B-2-1

 

[SIGNATURE PAGES FOLLOW]

 

 

IN WITNESS WHEREOF, the Transferor has caused this instrument to be duly executed on its behalf by its duly authorized senior officer this        day of      , 20  .

 

	
 
    	
[TRANSFEROR]
    
	
 
    	
 
    
	
 
    	
By: 
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

The foregoing certificate is hereby confirmed, and the transfer is accepted, as of the date first above written:

 

	
 
    	
GRANITE POINT MORTGAGE TRUST INC.
    
	
 
    	
 
    
	
 
    	
By: 
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:Exhibit 10.3

 

EXECUTION VERSION

 

COLLATERAL INTEREST PURCHASE AGREEMENT

 

This COLLATERAL INTEREST PURCHASE AGREEMENT (this “Agreement”) is made as of February 28, 2019, by and among GPMT Seller LLC, a Delaware limited liability company (the “Seller”), GPMT 2019-FL2, Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Issuer”), and Granite Point Mortgage Trust Inc., a Maryland corporation (“GPMT” and, together with the Seller, the “Seller Parties”).

 

W I T N E S S E T H:

 

WHEREAS, the Issuer desires to purchase from the Seller and the Seller desires to sell to the Issuer an initial portfolio of Collateral Interests (as defined in the Indenture), each as identified on Exhibit A attached hereto (the “Closing Date Collateral Interests”);

 

WHEREAS, the Seller may transfer to the Issuer, and the Issuer may acquire from the Seller, from time to time, certain other Mortgage Loans, Combined Loans or Pari Passu Participations, including Reinvestment Collateral Interests and Exchange Collateral Interests (each as defined in the Indenture and, together with the Closing Date Collateral Interests, the “Collateral Interests”), and all payments and collections thereon after the related Subsequent Seller Transfer Date (as defined below);

 

WHEREAS, in connection with the sale of any Collateral Interests to the Issuer, the Seller desires to release any interest it may have in such Collateral Interests and desires to make certain representations and warranties regarding such Collateral Interests;

 

WHEREAS, the Issuer and GPMT 2019-FL2 LLC, a Delaware limited liability company (the “Co-Issuer”), each intend to issue (a) the U.S.$386,731,000 Class A Senior Secured Floating Rate Notes Due 2036 (the “Class A Notes”), (b) the U.S.$92,816,000 Class A-S Second Priority Secured Floating Rate Notes Due 2036 (the “Class A-S Notes”), (c) the U.S.$54,658,000 Class B Third Priority Secured Floating Rate Notes Due 2036 (the “Class B Notes”), (d) the U.S.$55,690,000 Class C Fourth Priority Secured Floating Rate Notes Due 2036 (the “Class C Notes”), (e) the U.S.$63,940,000 Class D Fifth Priority Secured Floating Rate Notes Due 2036 (the “Class D Notes” and, together with the Class A Notes, the Class A-S Notes, the Class B Notes and the Class C Notes, the “Offered Notes”) and the Issuer intends to issue the U.S.$42,285,000 Class E Sixth Priority Floating Rate Notes Due 2036 (the “Class E Notes”) and the U.S.$23,720,000 Class F Seventh Priority Floating Rate Notes Due 2036 (the “Class F Notes” and, together with the Class E Notes and the Offered Notes, the “Notes”) pursuant to an indenture, dated as of February 28, 2019 (the “Indenture”), by and among the Issuer, the Co-Issuer, Seller, as advancing agent, Wilmington Trust, National Association, as trustee (the “Trustee”) and Wells Fargo Bank, National Association, as note administrator (in such capacity, the “Note Administrator”);

 

WHEREAS, pursuant to its Governing Documents, certain resolutions of its Board of Directors and a preferred share paying agency agreement, the Issuer also intends to issue the

 

 

U.S.$105,192,857 aggregate notional amount preferred shares (the “Preferred Shares” and, together with the Notes, the “Securities”); and

 

WHEREAS, the Issuer intends to pledge the Collateral Interests purchased hereunder by the Issuer to the Trustee as security for the Offered Notes.

 

NOW, THEREFORE, the parties hereto agree as follows:

 

1.                                      Defined Terms.

 

Capitalized terms used and not otherwise defined herein shall have the same meanings ascribed to such terms in the Indenture.

 

“Assignment of Leases, Rents and Profits”:  With respect to any Mortgage, an assignment of leases, rents and profits thereunder, notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the Mortgaged Property is located to reflect the assignment of leases to the Mortgagee.

 

“Assignment of Mortgage”:  With respect to any Mortgage, an assignment of the Mortgage, notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect the assignment of the Mortgage to the Mortgagee.

 

“Borrower”:  With respect to any Commercial Real Estate Loan, the related borrower or other obligor thereunder.

 

“Collateral Interest”:  As defined in the Indenture.

 

“Collateral Interest File”:  As defined in the Indenture.

 

“Combined Loan”:  Collectively, any Mortgage Loan and a related Mezzanine Loan secured by a pledge of all the equity interests in the Borrower under such Mortgage Loan, as if they are a single loan.  Each Combined Loan shall be treated as a single loan for all purposes hereunder.

 

“Commercial Real Estate Loan”:  Any Mortgage Loan, Combined Loan or Participated Loan.

 

“Companion Participation Holder”:  The holder of any Companion Participation.

 

“Cut-off Date”:  With respect to (i) each Closing Date Collateral Interest, February 9, 2019, and (ii) each Reinvestment Collateral Interest and Exchange Collateral Interest, the date specified as such in the related Subsequent Transfer Instrument; provided that the Stated Principal Balance of the Closing Date Collateral Interests is calculated as of December 31, 2018.

 

“Document Defect”: Any document or documents constituting a part of a Collateral Interest File that has not been properly executed, has not been delivered within the time periods

 

2

 

provided for herein, has not been properly executed, is missing, does not appear to be regular on its face or contains information that does not conform in any material respect with the corresponding information set forth in the Collateral Interest Schedule attached hereto as Exhibit A or as set forth on an exhibit to a Subsequent Transfer Instrument.

 

“Exception Schedule”: The schedule identifying any exceptions to the representations and warranties made with respect to the Collateral Interests to be conveyed hereunder, which is attached hereto as Schedule 1(a) to Exhibit B or as attached to any Subsequent Transfer Instrument.

 

“Future Funding Amount”:  As defined in the Indenture.

 

“Loan Documents”:  The documents evidencing and securing a Collateral Interest.

 

“Material Breach”: As defined in Section 4(e).

 

“Material Document Defect”: A Document Defect that materially and adversely affects the value of a Collateral Interest, the interest of the Noteholders or the ownership interests of the Issuer or any assignee thereof in such Collateral Interest.

 

“Mezzanine Loan”: A mezzanine loan secured by a pledge of all of the equity interest in a Borrower under a Mortgage Loan.

 

“Mortgage”:  With respect to each Commercial Real Estate Loan, the mortgage, deed of trust, deed to secure debt or similar instrument that secures the Mortgage Note and creates a lien on the fee or leasehold interest in the related Mortgaged Property.

 

“Mortgage Loan”:  A commercial or multifamily real estate mortgage loan secured by a first-lien mortgage or deed-of-trust on commercial, multifamily and/or manufactured housing properties.

 

“Mortgage Note or Note”:  With respect to each Mortgage Loan, the promissory note evidencing the indebtedness of the related Borrower, together with any rider, addendum or amendment thereto, or any renewal, substitution or replacement of such note.

 

“Mortgage Rate”:  The stated rate of interest on a Mortgage Loan.

 

“Mortgaged Property”:  With respect to any Mortgage Loan or Mezzanine Loan, the property or properties directly or indirectly securing such Mortgage Loan or Mezzanine Loan, as applicable.

 

“Mortgagee”:  With respect to each Collateral Interest, the party secured by the related Mortgage.

 

“Non-CLO Custody Collateral Interest”:  The Closing Date Collateral Interests identified on Exhibit A as Shippan Landing, with respect to which a Participation Agreement was entered into in connection with the GPMT 2018-FL1 offering.

 

3

 

“Offering Memorandum”:  The offering memorandum, dated February 14, 2019, with respect to the offering of the Notes issued pursuant to the Indenture.

 

“Pari Passu Participation”:  A fully funded pari passu participation interest in a Participated Loan.

 

“Participated Loan”:  Any Mortgage Loan or Combined Loan in which a Pari Passu Participation represents an interest.

 

“Participation”: Any Pari Passu Participation and/or the related Companion Participation, as applicable and as the context may require.

 

“Participation Agreement”: With respect to each Participated Loan, the participation agreement that governs the rights and obligations of the holders of the related Pari Passu Participation and the related Companion Participation.

 

“Participation Custodial Agreement”:  With respect to each Participated Loan that is a Non-CLO Custody Collateral Interest, that certain Custodial Agreement entered into in accordance with the related Participation Agreement and pursuant to which the Participation Custodian holds the loan file with respect to such Participated Loan.

 

“Participation Custodian”:  With respect to each Participated Loan that is a Non-CLO Custody Collateral Interest, the document custodian or similar party under the related Participation Custodial Agreement.

 

“Repurchase Price”: The sum of the following (in each case, without duplication) as of the date of such repurchase: (i) the then-Stated Principal Balance of such Collateral Interest, discounted based on the percentage amount of any discount that was applied when such Collateral Interest was purchased by the Issuer, plus (ii) accrued and unpaid interest on such Collateral Interest, plus (iii) any unreimbursed advances made under the Indenture or the Servicing Agreement, plus (iv) accrued and unpaid interest on advances made under the Indenture or the Servicing Agreement on the Collateral Interest, plus (v) any reasonable costs and expenses (including, but not limited to, the cost of any enforcement action incurred by the Issuer or the Trustee in connection with any such repurchase).

 

“Retained Interest”:  Any origination fees paid on the Collateral Interests and any interest in respect of any Collateral Interest that accrued prior to the Closing Date or Subsequent Seller Transfer Date, as applicable, and has not been paid to Seller.

 

“Servicing File”:  The file maintained by the Servicer with respect to each Collateral Interest.

 

“Stated Principal Balance”:  With respect to each Collateral Interest, the principal balance as of the Cut-off Date as reduced (to not less than zero) on each Payment Date by (i) all payments or other collections of principal of such Collateral Interest received or deemed received thereon during the related Collection Period and (ii) any principal forgiven by the Special Servicer and other principal losses realized in respect of such Collateral Interest during the related Collection Period.

 

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“Subsequent Seller Transfer Date”: As defined in Section 2(b).

 

“Subsequent Transfer Instrument”: As defined in Section 2(b).

 

2.                                      Purchase and Sale of the Collateral Interests.

 

(a)                                 Set forth on Exhibit A hereto is a list of the Closing Date Collateral Interests sold to the Issuer on the Closing Date and certain other information with respect to each of the Closing Date Collateral Interests.  The Seller agrees to sell to the Issuer, and the Issuer agrees to purchase from the Seller, all of the Closing Date Collateral Interests at an aggregate purchase price of U.S.$824,235,116 (the “Purchase Price”).  Immediately prior to such sale, the Seller hereby conveys and assigns all right, title and interest it may have in such Closing Date Collateral Interests to the Issuer.  The sale and transfer of the Closing Date Collateral Interests to the Issuer is inclusive of all rights and obligations from the Closing Date forward, with respect to such Closing Date Collateral Interests, provided, that the sale and transfer of Closing Date Collateral Interests that are Pari Passu Participations are made subject to the rights and obligations of the Companion Participation Holder under the related Participation Agreement, and provided, however, it expressly excludes any conveyance of any Retained Interest which shall remain the property of the Seller and shall not be conveyed to the Issuer.  The Issuer shall cause any Retained Interest to be paid to the Seller (or the Seller’s designee) promptly upon receipt in accordance with the terms and conditions hereof, the Servicing Agreement and the Indenture.  For the avoidance of doubt, the Seller is not transferring any obligation to fund any Future Funding Amounts under the Participated Loans, all of which will remain the obligation of the party specified under the related Participation Agreement.  Delivery or transfer of the Closing Date Collateral Interests shall be made on February 28, 2019 (the “Closing Date”), at the time and in the manner agreed upon by the parties.  Upon receipt of evidence of the delivery or transfer of the Closing Date Collateral Interests to the Issuer or its designee, the Issuer shall pay or cause to be paid to the Seller the Purchase Price in the manner agreed upon by the Seller and the Issuer.

 

(b)                                 From time to time, during the period commencing on the Closing Date and ending on the last day of the Reinvestment Period (or, in the case of Reinvestment Collateral Interests for which the Collateral Manager has entered into binding commitments to purchase during the Reinvestment Period, ending 30 days after the Reinvestment Period), the Seller may present Reinvestment Collateral Interests to the Issuer for purchase hereunder, and at any time, the Issuer may acquire an Exchange Collateral Interest in exchange for a Defaulted Collateral Interest or a Credit Risk Collateral Interest.  If the Eligibility Criteria, the Acquisition Criteria and the Acquisition and Disposition Requirements and other conditions set forth in the Indenture and the conditions set forth in Section 3 below are satisfied with respect to such Collateral Interests, the Issuer may purchase and the Seller shall sell and assign, without recourse, except as expressly provided in this Agreement, to the Issuer, but subject to the other terms and provisions of this Agreement, all of the right, title and interest of the Seller in and to (i) such Collateral Interests as identified on the schedule attached to the related subsequent transfer instrument (a “Subsequent Transfer Instrument”), which Subsequent Transfer Instrument shall be in the form of Exhibit C hereto and delivered by the Seller on the date of such sale (each, a “Subsequent Seller Transfer Date”), and (ii) all amounts received or receivable on such Collateral Interests, whether now existing or hereafter acquired, after the related Subsequent Seller Transfer Date (other than amounts due prior to the related Subsequent Seller Transfer Date).  Such sale and assignment of

 

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Collateral Interests to the Issuer is inclusive of all rights and obligations from the Subsequent Seller Transfer Date forward, with respect to such Collateral Interests, provided, however, it expressly excludes any conveyance of any Retained Interest which shall remain the property of the Seller and shall not be conveyed to the Issuer hereunder.  The purchase price with respect to each such Collateral Interest shall be determined by the Collateral Manager or the Advisory Committee, as applicable, as set forth in the related Subsequent Transfer Instrument.

 

The sale to the Issuer of Collateral Interests identified on the schedule attached to the related Subsequent Transfer Instrument shall be absolute and is intended by the Seller and the Issuer to constitute and to be treated as an absolute sale of such Collateral Interests by the Seller to the Issuer, conveying good title free and clear of any liens, claims, encumbrances or rights of others from the Seller to the Issuer and such Collateral Interests shall not be part of the Seller’s estate in the event of the insolvency or bankruptcy of the Seller.  Each schedule attached to a Subsequent Transfer Instrument pursuant to a sale of one or more of the Collateral Interests is hereby incorporated and made a part of this Agreement.

 

(c)                                  Within 45 days after the Closing Date (or, in the case of any Reinvestment Collateral Interest or Exchange Collateral Interest, within 45 days of the Subsequent Seller Transfer Date), each UCC financing statement in favor of the Issuer that is required to be filed in accordance with the definition of “Collateral Interest File” in the Indenture shall be submitted for filing.  In the event that any such UCC financing statement is lost or returned unrecorded or unfiled, as the case may be, because of a defect therein, the Seller shall promptly prepare or cause the preparation of a substitute therefor or cure or cause the curing of such defect, as the case may be, and shall thereafter deliver the substitute or corrected document for recording or filing, as appropriate, at the Seller’s expense.  In the event that the Seller receives the original filed copy, the Seller shall, or shall cause a third party vendor or any other party under its control to, promptly upon receipt of the original recorded or filed copy (and in no event later than 5 Business Days following such receipt) deliver such original to the Custodian, with evidence of filing thereon.

 

3.                                      Conditions.

 

The obligations of the parties under this Agreement are subject to satisfaction of the following conditions:

 

(a)                                 the representations and warranties contained herein shall be accurate and complete (i) as of the Closing Date, except as set forth in the Exception Schedule, with respect to the Closing Date Collateral Interests and (ii) as of each Subsequent Seller Transfer Date, except as set forth in the applicable Subsequent Transfer Instrument, with respect to any Reinvestment Collateral Interests or Exchange Collateral Interests acquired hereunder on such Subsequent Seller Transfer Date;

 

(b)                                 on the Closing Date and on each Subsequent Seller Transfer Date, counsel for the Issuer shall have been furnished with all such documents, certificates and opinions as such counsel may reasonably request in order to evidence the accuracy and completeness of any of the representations, warranties or statements of the Seller Parties, the performance of any of the Collateral Interests of the Seller hereunder or the fulfillment of any of the conditions herein contained;

 

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(c)                                  with respect to the Closing Date Collateral Interests, the issuance of the Securities and receipt by the Issuer of full payment therefor; and

 

(d)                                 (i) with respect to the Reinvestment Collateral Interests sold on a Subsequent Seller Transfer Date, such Collateral Interests shall, collectively and individually (as applicable, after giving effect to the sale and assignment of such Collateral Interests to the Issuer) be acquired in accordance with the terms of Section 12.2 of the Indenture and the purchase price therefor shall be paid to the Seller, and (ii) with respect to the Exchange Collateral Interests sold on a Subsequent Seller Transfer Date, such Collateral Interests shall, collectively and individually (as applicable, after giving effect to the sale and assignment of such Collateral Interests to the Issuer) be acquired in accordance with the terms of Section 12.1(d) of the Indenture.

 

4.                                      Covenants, Representations and Warranties.

 

(a)                                 Each party to this Agreement hereby represents and warrants to the other party that (i) it is duly organized or incorporated, as the case may be, and validly existing as an entity under the laws of the jurisdiction in which it is incorporated, chartered or organized, (ii) it has the requisite power and authority to enter into and perform this Agreement, and (iii) this Agreement has been duly authorized by all necessary action, has been duly executed by one or more duly authorized officers and is the valid and binding agreement of such party enforceable against such party in accordance with its terms.

 

(b)                                 The Seller further represents and warrants to the Issuer (i) with respect to the Closing Date Collateral Interests, as of the Closing Date and (ii) with respect to any Reinvestment Collateral Interests and Exchange Collateral Interests, as of the respective Subsequent Seller Transfer Date, that:

 

(i)                                     immediately prior to the sale of the Collateral Interests to the Issuer, the Seller shall own the Collateral Interests, shall have good and marketable title thereto, free and clear of any pledge, lien, security interest, charge, claim, equity, or encumbrance of any kind, and upon the delivery or transfer of the Collateral Interests to the Issuer as contemplated herein, the Issuer shall receive good and marketable title to the Collateral Interests, free and clear of any pledge, lien, security interest, charge, claim, equity or encumbrance of any kind;

 

(ii)                                  the Seller acquired its ownership in the Collateral Interests in good faith without notice of any adverse claim, and upon the delivery or transfer of the Collateral Interests to the Issuer as contemplated herein, the Issuer shall acquire ownership in the Collateral Interests in good faith without notice of any adverse claim;

 

(iii)                               the Seller has not assigned, pledged or otherwise encumbered any interest in the Collateral Interests (or, if any such interest has been assigned, pledged or otherwise encumbered, it has been released);

 

(iv)                              none of the execution, delivery or performance by the Seller of this Agreement shall (x) conflict with, result in any breach of or constitute a default (or an event which, with the giving of notice or passage of time, or both, would constitute a default) under, any term or provision of the organizational documents of the Seller, or any material

 

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indenture, agreement, order, decree or other material instrument to which the Seller is party or by which the Seller is bound which materially adversely affects the Seller’s ability to perform its obligations hereunder or (y) violate any provision of any law, rule or regulation applicable to the Seller of any regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Seller or its properties which has a material adverse effect;

 

(v)                                 no consent, license, approval or authorization from, or registration or qualification with, any governmental body, agency or authority, nor any consent, approval, waiver or notification of any creditor or lessor is required in connection with the execution, delivery and performance by the Seller of this Agreement the failure of which to obtain would have a material adverse effect except such as have been obtained and are in full force and effect;

 

(vi)                              it has adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations.  It is generally able to pay, and as of the date hereof is paying, its debts as they come due.  It has not become or is not presently, financially insolvent nor will it be made insolvent by virtue of its execution of or performance under any of the provisions of this Agreement within the meaning of the bankruptcy laws or the insolvency laws of any jurisdiction.  It has not entered into this Agreement or the transactions effectuated hereby in contemplation of insolvency or with intent to hinder, delay or defraud any creditor;

 

(vii)                           no proceedings are pending or, to its knowledge, threatened against it before any federal, state or other governmental agency, authority, administrative or regulatory body, arbitrator, court or other tribunal, foreign or domestic, which, singularly or in the aggregate, could materially and adversely affect the ability of the Seller to perform any of its obligations under this Agreement; and

 

(viii)                        the consideration received by it upon the sale of the Collateral Interests owned by it constitutes fair consideration and reasonably equivalent value for such Collateral Interests.

 

(c)                                  The Seller further represents and warrants to the Issuer (i) with respect to the Closing Date Collateral Interests, as of the Closing Date and (ii) with respect to any Reinvestment Collateral Interests and Exchange Collateral Interests, as of the respective Subsequent Seller Transfer Date, that:

 

(i)                                     the Loan Documents with respect to each Collateral Interest do not prohibit the Issuer from granting a security interest in and assigning and pledging such Collateral Interest to the Trustee;

 

(ii)                                  none of the Collateral Interests will cause the Issuer to have payments subject to foreign or United States withholding tax;

 

(iii)                               (A) with respect to each Closing Date Collateral Interest, except as set forth in the Exception Schedule and (B) with respect to each Reinvestment Collateral Interest and Exchange Collateral Interest, except as set forth in the applicable Subsequent Transfer

 

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Instrument, the representations and warranties set forth in Exhibit B are true and correct in all material respects; and

 

(iv)                              the Seller has delivered to the Issuer or its designee the documents required to be delivered with respect to each Collateral Interest set forth in the definition of “Collateral Interest File” in the Indenture.

 

(d)                                 For purposes of the representations and warranties set forth in Exhibit B, the phrases “to the knowledge of the Seller” or “to the Seller’s knowledge” shall mean, except where otherwise expressly set forth in a particular representation and warranty, the actual state of knowledge of the Seller or any servicer acting on its behalf regarding the matters referred to, in each case:  (i) at the time of the Seller’s origination or acquisition of the particular Collateral Interest, after the Seller having conducted such inquiry and due diligence into such matters as would be customarily performed by a prudent institutional commercial or multifamily, as applicable, mortgage lender; and (ii) subsequent to such origination, the Seller having utilized monitoring practices that would be utilized by a prudent commercial or multifamily, as applicable, mortgage lender and having made prudent inquiry as to the knowledge of the servicer servicing such Collateral Interest on its behalf.  Also, for purposes of such representations and warranties, the phrases “to the actual knowledge of the Seller” or “to the Seller’s actual knowledge” shall mean, except where otherwise expressly set forth below, the actual state of knowledge of the Seller or any servicer acting on its behalf without any express or implied obligation to make inquiry.  All information contained in documents which are part of or required to be part of a Collateral Interest File shall be deemed to be within the knowledge and the actual knowledge of the Seller.  Wherever there is a reference to receipt by, or possession of, the Seller of any information or documents, or to any action taken by the Seller or not taken by the Seller, such reference shall include the receipt or possession of such information or documents by, or the taking of such action or the failure to take such action by, the Seller or any servicer acting on its behalf.

 

(e)                                  The Seller shall, not later than ninety (90) days from discovery by the Seller or receipt of written notice from any party to the Indenture of (i) its breach of a representation or a warranty pursuant to this Agreement that materially and adversely affects the ownership interests of the Issuer (or the Trustee as its assignee) in a Collateral Interest or the value of a Collateral Interest or the interests of the Noteholders therein (a “Material Breach”), or (ii) any Material Document Defect relating to any Collateral Interest, (1) cure such Material Breach or Material Document Defect, provided, that, if such Material Breach or Material Document Defect cannot be cured within such 90-day period (any such 90-day period, the “Initial Resolution Period”), the Seller shall repurchase the affected Collateral Interest not later than the end of such Initial Resolution Period at the Repurchase Price; provided, however, that if the Seller certifies to the Issuer and the Trustee in writing that (x) any such Material Breach or Material Document Defect, as the case may be, is capable of being cured in all material respects but not within the Initial Resolution Period and (y) the Seller has commenced and is diligently proceeding with the cure of such Material Breach or Material Document Defect, as the case may be, then the Seller shall have an additional 90-day period to complete such cure or, failing such, to repurchase the affected Collateral Interest  (or the related Mortgaged Property); provided, further, that, if any such Material Document Defect is still not cured in all material respects after the Initial Resolution Period and any such additional 90-day period solely due to the failure of the Seller to have received the recorded or filed document, then the Seller shall be entitled to continue to defer its cure and

 

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repurchase obligations in respect of such Material Document Defect so long as the Seller certifies to the Trustee every 30 days thereafter that such Material Document Defect is still in effect solely because of its failure to have received the recorded or filed document and that the Seller is diligently pursuing the cure of such Material Document Defect (specifying the actions being taken); and provided, further, notwithstanding anything to the contrary, the Seller shall not be entitled to continue to defer its cure and repurchase obligations in respect of any Material Document Defect for more than 18 months after beginning of the Initial Resolution Period with respect to such Material Document Defect, or (2) subject to the consent of a Majority of the Holders of each Class of Notes (excluding any Note held by the Seller or any of its affiliates), the Seller shall make a cash payment to the Issuer in an amount that the Collateral Manager on behalf of the Issuer determines is sufficient to compensate the Issuer for such breach of representation or warranty or defect (such payment, a “Loss Value Payment”), which Loss Value Payment will be deemed to cure such Material Breach or Material Document Defect.  Such repurchase, cure or Loss Value Payment obligation by the Seller and GPMT’s guarantee of such obligations pursuant to Section 13 shall be the Issuer’s sole remedy for any Material Breach or Material Document Defect pursuant to this Agreement with respect to any Collateral Interest sold to the Issuer by the Seller.

 

(f)                                   Each Seller Party hereby acknowledges and consents to the collateral assignment by the Issuer of this Agreement and all right, title and interest thereto to the Trustee, for the benefit of the Secured Parties, as required in Sections 15.1(f)(i) and (ii) of the Indenture.

 

(g)                                  The Seller hereby covenants and agrees that it shall perform any provisions of the Indenture made expressly applicable to the Seller by the Indenture, as required by Section 15.1(f)(i) of the Indenture.

 

(h)                                 Each Seller Party hereby covenants and agrees that all of the representations, covenants and agreements made by or otherwise entered into by it in this Agreement shall also be for the benefit of the Secured Parties, as required by Section 15.1(f)(ii) of the Indenture and agrees that enforcement of any rights hereunder by the Trustee, the Note Administrator, the Servicer, or the Special Servicer, as the case may be, shall have the same force and effect as if the right or remedy had been enforced or executed by the Issuer but that such rights and remedies shall not be any greater than the rights and remedies of the Issuer under Section 4(e) above.

 

(i)                                     On or prior to the Closing Date or Subsequent Seller Transfer Date, as applicable, the Seller shall deliver the Loan Documents to the Issuer or, at the direction of the Issuer, to the Custodian, with respect to each Collateral Interest sold to the Issuer hereunder.  The Seller hereby covenants and agrees, as required by Section 15.1(f)(iii) of the Indenture, that it shall deliver to the Trustee duplicate original copies of all notices, statements, communications and instruments delivered or required to be delivered to the Issuer by each party pursuant to this Agreement.

 

(j)                                    Each Seller Party hereby covenants and agrees, as required by Section 15.1(f)(iv) of the Indenture, that it shall not enter into any agreement amending, modifying or terminating this Agreement (other than in respect of an amendment or modification to cure any inconsistency, ambiguity or manifest error, in each case, so long as such amendment or

 

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modification does not affect in any material respects the interests of any Secured Party), without notifying the Rating Agencies through the 17g-5 Website as set forth in the Indenture.

 

(k)                                 GPMT and the Issuer hereby covenant, that at all times (1) GPMT will qualify as a REIT for U.S. federal income tax purposes and the Issuer will qualify as a Qualified REIT Subsidiary or other disregarded entity of GPMT for U.S. federal income tax purposes, or (2) based on an Opinion of Counsel, the Issuer will be treated as a Qualified REIT Subsidiary or other disregarded entity of a REIT other than GPMT, or (3) based on an Opinion of Counsel, the Issuer will be treated as a foreign corporation that is not engaged in a trade or business within the United States for U.S. federal income tax purposes (which Opinion may be conditioned on compliance with certain restrictions on the investment or other activities of the Issuer and/or the Servicer on behalf of the Issuer).

 

(l)                                     Except for the agreed-upon procedures report obtained from the accounting firm engaged to provide procedures involving a comparison of information in loan files for the Collateral Interests to information on a data tape relating to the Collateral Interests (the “Accountants’ Due Diligence Report”), the Seller Parties have not obtained (and, through and including the Closing Date, will not obtain) any “third party due diligence report” (as defined in Rule 15Ga-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) in connection with the transactions contemplated herein and the Offering Memorandum and, except for the accountants with respect to the Accountants’ Due Diligence Report, the Seller Parties have not employed (and, through and including the Closing Date, will not employ) any third party to engage in any activity that constitutes “due diligence services” within the meaning of Rule 17g-10 under the Exchange Act in connection with the transactions contemplated herein and in the Offering Memorandum.  The Placement Agents are third-party beneficiaries of the provisions set forth in this Section 4(l).

 

(m)                             The Issuer (A) prepared or caused to be prepared one or more reports on Form ABS-15G (each, a “Form 15G”) containing the findings and conclusions of the Accountants’ Due Diligence Report and meeting all other requirements of that Form 15G, Rule 15Ga-2 under the Exchange Act, any other rules and regulations of the Securities and Exchange Commission and the Exchange Act; (B) provided a copy of the final draft of the Form 15G to the Placement Agents at least six business days before the first sale of any Offered Notes; and (C) furnished each such Form 15G to the Securities and Exchange Commission on EDGAR at least five business days before the first sale of any Offered Notes as required by Rule 15Ga-2 under the Exchange Act.

 

(n)                                 With respect to the Closing Date Collateral Interest referred to on Exhibit A as “St. Paul Place,” if (i) the related Mortgage Loan has not been amended to be cross-defaulted with the related Mezzanine Loan and (ii) the related Mortgage Loan and Mezzanine Loan have not been re-constituted as a single Mortgage Loan, in each case, on or before the date that is six (6) months after the Closing Date, the Seller shall promptly repurchase such Collateral Interest from the Issuer for the Par Purchase Price.

 

5.                                      Sale.

 

It is the intention of the parties hereto that each transfer and assignment contemplated by this Agreement shall constitute a sale of the Collateral Interests from the Seller

 

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to the Issuer and the beneficial interest in and title to the Collateral Interests shall not be part of the Seller’s estate in the event of the filing of a bankruptcy petition by or against the Seller under any bankruptcy law. In the event that, notwithstanding the intent of the parties hereto, the transfer and assignment contemplated hereby is held not to be a sale (for non-tax purposes), this Agreement shall constitute a security agreement under applicable law, and, in such event, the Seller shall be deemed to have granted, and the Seller hereby grants, to the Issuer a security interest in the Collateral Interests for the benefit of the Secured Parties and its assignees as security for the Seller’s obligations hereunder and the Seller consents to the pledge of the Collateral Interests to the Trustee.

 

6.                                      Non-Petition.

 

Each Seller Party agrees not to institute against, or join any other Person in instituting against the Issuer any bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation proceedings or other proceedings under U.S. federal or state bankruptcy or similar laws in any jurisdiction until at least one year and one day or, if longer, the applicable preference period then in effect after the payment in full of all Notes issued under the Indenture.  This Section 6 shall survive the termination of this Agreement for any reason whatsoever.

 

7.                                      Amendments.

 

This Agreement may not be modified, amended, altered or supplemented, except upon the execution and delivery of a written agreement by the parties hereto and satisfaction of the Rating Agency Condition.

 

8.                                      Communications.

 

Except as may be otherwise agreed between the parties, all communications hereunder shall be made in writing to the relevant party by personal delivery or by courier or first-class registered mail, or the closest local equivalent thereto, or by facsimile transmission confirmed by personal delivery or by courier or first-class registered mail as follows:

 

To the Seller:                                                                         GPMT Seller LLC 
 590 Madison Avenue, 38th Floor
 New York, New York 10022
 Attention:  General Counsel
 Email:  GPMT2019-FL2@gpmortgagetrust.com

 

To the Issuer:                                                                      GPMT 2019-FL2, Ltd. 
 590 Madison Avenue, 38th Floor
 New York, New York 10022
 Attention:  General Counsel
 Email:  GPMT2019-FL2@gpmortgagetrust.com

 

with a copy to the Seller (as addressed above);

 

To GPMT:                                                                                      Granite Point Mortgage Trust Inc.

 

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590 Madison Avenue, 38th Floor
 New York, New York 10022
 Attention:  General Counsel
 Email:  GPMT2019-FL2@gpmortgagetrust.com

 

or to such other address, telephone number or facsimile number as either party may notify to the other in accordance with the terms hereof from time to time. Any communications hereunder shall be effective upon receipt.

 

9.                                      Governing Law and Consent to Jurisdiction.

 

(a)                                 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 LAW PROVISIONS THEREOF (OTHER THAN TITLE 14 OF ARTICLE 5 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

(b)                                 The parties hereto hereby irrevocably submit to the non-exclusive jurisdiction of the United States District Court for the Southern District of New York and any court in the State of New York located in the City and County of New York, and any appellate court hearing appeals from the Courts mentioned above, in any action, suit or proceeding brought against it and to or in connection with this Agreement or the transaction contemplated hereunder or for recognition or enforcement of any judgment, and the parties hereto hereby irrevocably and unconditionally agree that all claims in respect of any such action or proceeding may be heard or determined in such New York State court or, to the extent permitted by law, in such federal court. The parties hereto agree that a final judgment in any such action, suit or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. To the extent permitted by applicable law, the parties hereto hereby waive and agree not to assert by way of motion, as a defense or otherwise in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such courts, that the suit, action or proceeding is brought in any inconvenient forum, that the venue of the suit, action or proceeding is improper or that the subject matter thereof may not be litigated in or by such courts.

 

(c)                                  To the extent permitted by applicable law, the parties hereto shall not seek and hereby waive the right to any review of the judgment of any such court by any court of any other nation or jurisdiction which may be called upon to grant an enforcement of such judgment.

 

(d)                                 The Issuer irrevocably appoints Corporation Service Company, as its agent for service of process in New York in respect of any such suit, action or proceeding. The Issuer agrees that service of such process upon such agent shall constitute personal service of such process upon it.

 

(e)                                  Each Seller Party irrevocably consents to the service of any and all process in any action or proceeding by the mailing by certified mail, return receipt requested, or delivery requiring proof of delivery of copies of such process to it at the address set forth in Section 8 hereof.

 

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10.                               Counterparts.

 

This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page of this Agreement in Portable Document Format (PDF) or by facsimile transmission shall be as effective as delivery of a manually executed original counterpart to this Agreement.

 

11.                               Limited Recourse Agreement.

 

All obligations of the Issuer arising hereunder or in connection herewith are limited in recourse to the Collateral and to the extent the proceeds of the Collateral, when applied in accordance with the Priority of Payments, are insufficient to meet the obligations of the Issuer hereunder in full, the Issuer shall have no further liability in respect of any such outstanding obligations and any obligations of, and claims against, the Issuer, arising hereunder or in connection herewith, shall be extinguished and shall not thereafter revive.  The obligations of the Issuer hereunder or in connection herewith will be solely the corporate obligations of the Issuer and the Seller Parties will not have recourse to any of the directors, officers, employees, shareholders or affiliates of the Issuer with respect to any claims, losses, damages, liabilities, indemnities or other obligations in connection with any transactions contemplated hereby or in connection herewith.  This Section 11 shall survive the termination of this Agreement for any reason whatsoever.

 

12.                               Assignment and Assumption.

 

With respect to the Collateral Interests that are subject to a Participation Agreement, the parties hereto intend that the provisions of this Section 12 serve as an assignment and assumption agreement between the Seller, as the assignor, and the Issuer, as the assignee.  Accordingly, the Seller hereby (and in accordance with and subject to all other applicable provisions of this Agreement) assigns, grants, sells, transfers, delivers, sets over, and conveys to the Issuer all right, title and interest of the Seller in, to and arising out of the related Participation Agreement and the Issuer hereby accepts (subject to applicable provisions of this Agreement) the foregoing assignment and assumes all of the rights and obligations of the Seller with respect to related Participation Agreement from and after the Closing Date.  In addition, the Issuer acknowledges that each of such Collateral Interests will be serviced by, and agrees to be bound by, the terms of the applicable Servicing Agreement (as defined in the related Participation Agreement).

 

13.                               Guarantee by GPMT.

 

(a)                                 GPMT hereby unconditionally and irrevocably guarantees to the Issuer the due and punctual payment of all sums due by, and the performance of all obligations of, the Seller under Section 4(e) of this Agreement, as and when the same shall become due and payable (after giving effect to any applicable grace period) according to the terms hereof.  In the case of the failure of the Seller to make any such payment or perform such obligation as and when due, GPMT hereby agrees to make such payment or cause such payment to be made or perform such obligation or cause such obligation to be performed, promptly upon written demand by the Issuer to GPMT,

 

14

 

but any delay in providing such notice shall not under any circumstances reduce the liability of GPMT or operate as a waiver of Issuer’s right to demand payment or performance.

 

(b)                                 This guarantee shall be a guaranty of payment and performance, and the obligations of GPMT under this guarantee shall be continuing, absolute and unconditional.  GPMT waives any and all defenses it may have arising out of:  (i) the validity or enforceability of this Agreement; (ii) the absence of any action to enforce the same; (iii) the rendering of any judgment against the Seller or any action to enforce the same; (iv) any waiver or consent by the Issuer or any amendment or other modification to this Agreement; (v) any defense to payment hereunder based upon suretyship defenses; (vi) the bankruptcy or insolvency of the Seller, (vii) any defense based on (A) the entity status of the Seller, (B) the power and authority of the Seller to enter into this Agreement and to perform its obligations hereunder or (C) the legality, validity and enforceability of Seller’s obligation under this Agreement, or (viii) any other defense, circumstances or limitation of any nature whatsoever that would constitute a legal or equitable discharge of a guarantor or other third party obligor.  This guarantee shall continue to remain in full force and effect in accordance with its terms notwithstanding the renewal, extension, modification, or waiver, in whole or in part, of any of Seller’s obligations under this Agreement or the Indenture that are subject to this guarantee.

 

(c)                                  GPMT waives (i) diligence, presentment, demand for payment, protest and notice of nonpayment or dishonor and all other notices and demands relating to this Agreement and (ii) any requirement that the Issuer proceed first against the Seller under this Agreement or otherwise exhaust any right, power or remedy under this Agreement before proceeding hereunder.

 

[SIGNATURE PAGES FOLLOW]

 

15

 

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Collateral Interest Purchase Agreement as of the day and year first above written.

 

	
 
    	
GPMT SELLER LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Michael J. Karber
    
	
 
    	
 
    	
Name:
    	
Michael J. Karber
    
	
 
    	
 
    	
Title:
    	
Deputy General Counsel
    

 

GPMT 2019-FL2 – Collateral Interest Purchase Agreement

 

 

	
 
    	
GPMT   2019-FL2, LTD.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Michael J. Karber
    
	
 
    	
 
    	
Name:
    	
Michael J. Karber
    
	
 
    	
 
    	
Title:
    	
Authorized Signatory
    

 

GPMT 2019-FL2 – Collateral Interest Purchase Agreement

 

 

	
 
    	
GRANITE POINT MORTGAGE   TRUST INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Michael J. Karber
    
	
 
    	
 
    	
Name:
    	
Michael J. Karber
    
	
 
    	
 
    	
Title:
    	
Deputy General Counsel
    

 

GPMT 2019-FL2 – Collateral Interest Purchase Agreement

 

 

EXHIBIT A

 

LIST OF CLOSING DATE COLLATERAL INTERESTS

 

	
Collateral Interest
    	
 
    	
Cut-Off Date Balance
    	
 
    	
Collateral Interest Type
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
The Meier & Frank Building
    	
 
    	
$
    	
58,967,901
    	
 
    	
Pari Passu   Participation
    
	
Shippan Landing
    	
 
    	
$
    	
54,298,318
    	
 
    	
Pari Passu   Participation
    
	
100 Jefferson Road
    	
 
    	
$
    	
47,484,318
    	
 
    	
Pari Passu   Participation
    
	
St. Paul Place
    	
 
    	
$
    	
46,002,213
    	
 
    	
Pari Passu   Participation/Senior Mezz
    
	
One Union Center
    	
 
    	
$
    	
44,593,151
    	
 
    	
Pari Passu   Participation
    
	
Snow King Resort
    	
 
    	
$
    	
41,000,000
    	
 
    	
Pari Passu   Participation
    
	
St. Jean Apartments
    	
 
    	
$
    	
40,478,228
    	
 
    	
Pari Passu   Participation
    
	
Andover Landing
    	
 
    	
$
    	
39,572,154
    	
 
    	
Pari Passu   Participation/Senior Mezz
    
	
The Quinn at Westchase
    	
 
    	
$
    	
38,325,871
    	
 
    	
Pari Passu   Participation
    
	
Mill and Main
    	
 
    	
$
    	
32,012,287
    	
 
    	
Pari Passu   Participation
    
	
58-30 Grand Avenue
    	
 
    	
$
    	
29,403,500
    	
 
    	
Pari Passu Participation
    
	
The Bloc
    	
 
    	
$
    	
28,966,000
    	
 
    	
Whole Mortgage Loan
    
	
South City Plaza
    	
 
    	
$
    	
28,569,014
    	
 
    	
Pari Passu   Participation
    
	
Flats on LaSalle
    	
 
    	
$
    	
26,885,000
    	
 
    	
Pari Passu   Participation
    
	
Moxy Hotel
    	
 
    	
$
    	
26,000,000
    	
 
    	
Whole Mortgage Loan
    
	
100 Park
    	
 
    	
$
    	
24,330,000
    	
 
    	
Pari Passu   Participation
    
	
One Commerce
    	
 
    	
$
    	
23,779,823
    	
 
    	
Pari Passu   Participation
    
	
446 West 14th Street
    	
 
    	
$
    	
21,060,843
    	
 
    	
Pari Passu   Participation
    
	
The Grand Hotel
    	
 
    	
$
    	
20,500,000
    	
 
    	
Pari Passu   Participation
    
	
Kenwood Village
    	
 
    	
$
    	
19,500,000
    	
 
    	
Pari Passu   Participation
    
	
Gramercy Plaza
    	
 
    	
$
    	
18,980,249
    	
 
    	
Pari Passu   Participation
    
	
Pueblo del Sol
    	
 
    	
$
    	
18,700,000
    	
 
    	
Whole Mortgage Loan
    
	
Vantage on the Park
    	
 
    	
$
    	
18,423,346
    	
 
    	
Pari Passu   Participation
    
	
500 EJC
    	
 
    	
$
    	
18,187,500
    	
 
    	
Pari Passu   Participation
    
	
Wilton Shoppes
    	
 
    	
$
    	
16,353,142
    	
 
    	
Pari Passu   Participation
    
	
Alpine Creek Apartments
    	
 
    	
$
    	
16,000,000
    	
 
    	
Pari Passu   Participation
    
	
One Pine Apartments
    	
 
    	
$
    	
13,500,000
    	
 
    	
Pari Passu   Participation
    
	
Plaza at Eastlake
    	
 
    	
$
    	
13,160,000
    	
 
    	
Pari Passu   Participation
    

 

Exhibit A-1

 

EXHIBIT B

 

COLLATERAL INTEREST REPRESENTATIONS AND WARRANTIES

 

A.                                    Representations and Warranties Concerning Collateral Interests.  With respect to each Collateral Interest:

 

(1)         Ownership of Collateral Interest.  At the time of the sale, transfer and assignment to the Issuer, no Collateral Interest was subject to any assignment (other than assignments to the Seller) or pledge, and the Seller had good title to, and was the sole owner of, each Collateral Interest free and clear of any and all liens, charges, pledges, encumbrances, participations (other than with respect to the related Participation Agreement), any other ownership interests on, in or to such Collateral Interest other than any servicing rights appointment or similar agreement.  Seller has full right and authority to sell, assign and transfer each Collateral Interest, and the assignment to the Issuer constitutes a legal, valid and binding assignment of such Collateral Interest  free and clear of any and all liens, pledges, charges or security interests of any nature encumbering such Mortgage Loan.

 

(2)         Collateral Interest Schedule.  The information pertaining to each Collateral Interest which is set forth in Exhibit A to the Collateral Interest Purchase Agreement is true and correct in all material respects as of the Cut-off Date and contains all information required by the Collateral Interest Purchase Agreement to be contained therein.

 

B.                                    Representations and Warranties Concerning Mortgage Loans.  With respect to each Mortgage Loan:

 

(1)         Whole Loan.  Each Mortgage Loan is a whole loan and not a participation interest in a loan.

 

(2)         Loan Document Status. Each related Mortgage Note, Mortgage, Assignment of Leases, Rents and Profits (if a separate instrument), guaranty and other agreement executed by or on behalf of the related Borrower, guarantor or other obligor in connection with such Mortgage Loan is the legal, valid and binding obligation of the related Borrower, guarantor or other obligor (subject to any non-recourse provisions contained in any of the foregoing agreements and any applicable state anti-deficiency, one action, or market value limit deficiency legislation), as applicable, and is enforceable in accordance with its terms, except (i) as such enforcement may be limited by (a) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (b) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law) and (ii) that certain provisions in such Loan Documents (including, without limitation, provisions requiring the payment of default interest, late fees or prepayment/yield maintenance fees, charges and/or premiums) are, or may be, further limited or rendered unenforceable by or under applicable law, but (subject to the limitations set forth in clause (i) above) such limitations or unenforceability will not render such Loan Documents invalid as a whole or materially interfere with the mortgagee’s realization of the principal benefits and/or security provided thereby (clauses (i) and (ii) collectively, the “Standard Qualifications”).

 

Except as set forth in the immediately preceding sentences, there is no valid offset, defense, counterclaim or right of rescission available to the related Borrower with respect to any of the

 

Exhibit B-1

 

related Mortgage Notes, Mortgages or other Loan Documents, including, without limitation, any such valid offset, defense, counterclaim or right based on intentional fraud by Seller in connection with the origination of the Mortgage Loan, that would deny the mortgagee the principal benefits intended to be provided by the Mortgage Note, Mortgage or other Loan Documents.

 

(3)   Mortgage Provisions.  The Loan Documents for each Mortgage Loan contain provisions that render the rights and remedies of the holder thereof adequate for the practical realization against the Mortgaged Property of the principal benefits of the security intended to be provided thereby, including realization by judicial or, if applicable, non-judicial foreclosure subject to the limitations set forth in the Standard Qualifications.

 

(4)   Loan Document Status; Waivers and Modifications.  Since origination and except by written instruments set forth in the related Collateral Interest File or as otherwise provided in the related Loan Documents (a) the material terms of the Mortgage, Mortgage Note, Mortgage Loan guaranty, Participation Agreement, if applicable, and related Loan Documents have not been waived, impaired, modified, altered, satisfied, canceled, subordinated or rescinded in any respect that could be reasonably expected to have a material adverse effect on such Mortgage Loan; (b) no related Mortgaged Property or any portion thereof has been released from the lien of the related Mortgage in any manner which materially interferes with the security intended to be provided by such Mortgage or the use or operation of the remaining portion of such Mortgaged Property; and (c) neither the related Borrower nor the related guarantor nor the related participating institution has been released from its material obligations under the Mortgage Loan or Participation, if applicable.  With respect to each Mortgage Loan, except as contained in a written document included in the Collateral Interest File, there have been no modifications, amendments or waivers, that could be reasonably expected to have a material adverse effect on such Mortgage Loan consented to by Seller on or after the Cut-off Date.

 

(5)   Lien; Valid Assignment.  Subject to the Standard Qualifications, each Assignment of Mortgage and assignment of Assignment of Leases, Rents and Profits to the Issuer constitutes a legal, valid and binding assignment to the Issuer.  Each related Mortgage and Assignment of Leases, Rents and Profits is freely assignable without the consent of the related Borrower.  Each related Mortgage is a legal, valid and enforceable first lien on the related Borrower’s fee or leasehold interest in the Mortgaged Property in the principal amount of such Mortgage Loan or allocated loan amount (subject only to Permitted Encumbrances (as defined below) and the exceptions to paragraph (6) set forth in Schedule 1(a) to this Exhibit B (each such exception, a “Title Exception”)), except as the enforcement thereof may be limited by the Standard Qualifications. Such Mortgaged Property (subject to and excepting Permitted Encumbrances and the Title Exceptions) as of origination was, and as of the Cut-off Date, to the Seller’s knowledge, is free and clear of any recorded mechanics’ liens, recorded materialmen’s liens and other recorded encumbrances which are prior to or equal with the lien of the related Mortgage, except those which are bonded over, escrowed for or insured against by a lender’s title insurance policy (as described below), and, to the Seller’s knowledge and subject to the rights of tenants (as tenants only) (subject to and excepting Permitted Encumbrances and the Title Exceptions), no rights exist which under law could give rise to any such lien or encumbrance that would be prior to or equal with the lien of the related Mortgage, except those which are bonded over, escrowed for or insured against by a lender’s title insurance policy (as described below).

 

Exhibit B-2

 

Notwithstanding anything herein to the contrary, no representation is made as to the perfection of any security interest in rents or other personal property to the extent that possession or control of such items or actions other than the filing of Uniform Commercial Code (“UCC”) financing statements is required in order to effect such perfection.

 

(6)   Permitted Liens; Title Insurance.  Each Mortgaged Property securing a Mortgage Loan is covered by an American Land Title Association loan title insurance policy or a comparable form of loan title insurance policy approved for use in the applicable jurisdiction (or, if such policy is yet to be issued, by a pro forma policy, a preliminary title policy with escrow instructions or a “marked up” commitment, in each case binding on the title insurer) (the “Title Policy”) in the original principal amount of such Mortgage Loan (or with respect to a Mortgage Loan secured by multiple properties, an amount equal to at least the allocated loan amount with respect to the Title Policy for each such property) after all advances of principal (including any advances held in escrow or reserves), that insures for the benefit of the owner of the indebtedness secured by the Mortgage, the first priority lien of the Mortgage, which lien is subject only to (a) the lien of current real property taxes, water charges, sewer rents and assessments not yet due and payable; (b) covenants, conditions and restrictions, rights of way, easements and other matters of public record; (c) the exceptions (general and specific) and exclusions set forth in such Title Policy or appearing of record; (d) other matters to which like properties are commonly subject; (e) the rights of tenants (as tenants only) under leases (including subleases) pertaining to the related Mortgaged Property and condominium declarations; and (f) if the related Mortgage Loan is cross-collateralized and cross-defaulted with another Mortgage Loan (each a “Crossed Mortgage Loan”), the lien of the Mortgage for another Mortgage Loan that is cross-collateralized and cross-defaulted with such Crossed Mortgage Loan, provided that none of which items (a) through (f), individually or in the aggregate, materially and adversely interferes with the value or current use of the Mortgaged Property or the security intended to be provided by such Mortgage or the Borrower’s ability to pay its obligations when they become due (collectively, the “Permitted Encumbrances”).  Except as contemplated by clause (f) of the preceding sentence, none of the Permitted Encumbrances are mortgage liens that are senior to or coordinate and co-equal with the lien of the related Mortgage.  Such Title Policy (or, if it has yet to be issued, the coverage to be provided thereby) is in full force and effect, all premiums thereon have been paid and no claims have been made by the Seller thereunder and no claims have been paid thereunder. Neither the Seller, nor to the Seller’s knowledge, any other holder of the Mortgage Loan, has done, by act or omission, anything that would materially impair the coverage under such Title Policy.

 

(7)   Junior Liens.  It being understood that B notes secured by the same Mortgage as a Mortgage Loan are not subordinate mortgages or junior liens, except for any Crossed Mortgage Loan, there are, as of origination, and to the Seller’s knowledge, as of the Cut-off Date, no subordinate mortgages or junior liens securing the payment of money encumbering the related Mortgaged Property (other than Permitted Encumbrances and the Title Exceptions, taxes and assessments, mechanics and materialmen’s liens (which are the subject of the representation in paragraph (5) above), and equipment and other personal property financing).  Other than any Mezzanine Loan that is part of a Combined Loan, the Seller has no knowledge of any mezzanine debt secured directly by interests in the related Borrower except as set forth in Schedule 1(b).

 

Exhibit B-3

 

(8)   Assignment of Leases, Rents and Profits.  There exists as part of the related Collateral Interest File an Assignment of Leases, Rents and Profits (either as a separate instrument or incorporated into the related Mortgage). Subject to the Permitted Encumbrances and the Title Exceptions, each related Assignment of Leases, Rents and Profits creates a valid first-priority collateral assignment of, or a valid first-priority lien or security interest in, rents and certain rights under the related lease or leases, subject only to a license granted to the related Borrower to exercise certain rights and to perform certain obligations of the lessor under such lease or leases, including the right to operate the related leased property, except as the enforcement thereof may be limited by the Standard Qualifications.  The related Mortgage or related Assignment of Leases, Rents and Profits, subject to applicable law, provides that, upon an event of default under the Mortgage Loan, a receiver is permitted to be appointed for the collection of rents or for the related mortgagee to enter into possession to collect the rents or for rents to be paid directly to the mortgagee.

 

(9)   UCC Filings.  If the related Mortgaged Property is operated as a hospitality property, the Seller has filed and/or recorded or caused to be filed and/or recorded (or, if not filed and/or recorded, have been submitted in proper form for filing and/or recording), UCC financing statements in the appropriate public filing and/or recording offices necessary at the time of the origination of the Mortgage Loan to perfect a valid security interest in all items of physical personal property reasonably necessary to operate such Mortgaged Property owned by such Borrower and located on the related Mortgaged Property (other than any non-material personal property, any personal property subject to a purchase money security interest, a sale and leaseback financing arrangement as permitted under the terms of the related Loan Documents or any other personal property leases applicable to such personal property), to the extent perfection may be effected pursuant to applicable law by recording or filing, as the case may be.  Subject to the Standard Qualifications, each related Mortgage (or equivalent document) creates a valid and enforceable lien and security interest on the items of personalty described above.  No representation is made as to the perfection of any security interest in rents or other personal property to the extent that possession or control of such items or actions other than the filing of UCC financing statements are required in order to effect such perfection.

 

(10)    Condition of Property.  Seller or the originator of the Mortgage Loan inspected or caused to be inspected each related Mortgaged Property within six months of origination of the Mortgage Loan and within twelve months of the Cut-off Date.

 

An engineering report or property condition assessment was prepared in connection with the origination of each Mortgage Loan no more than twelve months prior to the Cut-off Date.  To the Seller’s knowledge, based solely upon due diligence customarily performed in connection with the origination of comparable mortgage loans, as of the Closing Date, each related Mortgaged Property was free and clear of any material damage (other than (i) any damage or deficiency that is estimated to cost less than $50,000 to repair, (ii) any deferred maintenance for which escrows were established at origination and (iii) any damage fully covered by insurance) that would affect materially and adversely the use or value of such Mortgaged Property as security for the Mortgage Loan.

 

(11)    Taxes and Assessments.  All real estate taxes, governmental assessments and other similar outstanding governmental charges (including, without limitation, water and sewage charges),

 

Exhibit B-4

 

or installments thereof, that could be a lien on the related Mortgaged Property that would be of equal or superior priority to the lien of the Mortgage and that prior to the Cut-off Date have become delinquent in respect of each related Mortgaged Property have been paid, or an escrow of funds has been established in an amount sufficient to cover such payments and reasonably estimated interest and penalties, if any, thereon.  For purposes of this representation and warranty, real estate taxes and governmental assessments and other outstanding governmental charges and installments thereof shall not be considered delinquent until the earlier of (a) the date on which interest and/or penalties would first be payable thereon and (b) the date on which enforcement action is entitled to be taken by the related taxing authority.

 

(12)    Condemnation.  As of the date of origination and to the Seller’s knowledge as of the Cut-off Date, there is no proceeding pending, and, to the Seller’s knowledge as of the date of origination and as of the Cut-off Date, there is no proceeding threatened, for the total or partial condemnation of such Mortgaged Property that would have a material adverse effect on the value, use or operation of the Mortgaged Property.

 

(13)    Actions Concerning Mortgage Loan.  To the Seller’s knowledge, based on evaluation of the Title Policy (as defined in paragraph 6), an engineering report or property condition assessment as described in paragraph 10, applicable local law compliance materials as described in paragraph 24, reasonable and customary bankruptcy, civil records, UCC-1, and judgment searches of the Borrowers and guarantors, and the ESA (as defined in paragraph 40), on and as of the date of origination and as of the Cut-off Date, there was no pending or filed action, suit or proceeding, involving any Borrower, guarantor, or Borrower’s interest in the Mortgaged Property, an adverse outcome of which would reasonably be expected to materially and adversely affect (a) such Borrower’s title to the Mortgaged Property, (b) the validity or enforceability of the Mortgage, (c) such Borrower’s ability to perform under the related Mortgage Loan, (d) such guarantor’s ability to perform under the related guaranty, (e) the principal benefit of the security intended to be provided by the Loan Documents or (f) the current principal use of the Mortgaged Property.

 

(14)    Escrow Deposits.  All escrow deposits and payments required to be escrowed with lender pursuant to each Mortgage Loan are in the possession, or under the control, of the Seller or its servicer, and there are no deficiencies (subject to any applicable grace or cure periods) in connection therewith, and all such escrows and deposits (or the right thereto) that are required to be escrowed with lender under the related Loan Documents are being conveyed by the Seller to the Issuer or its servicer.

 

(15)    No Holdbacks.  The Stated Principal Balance as of the Cut-off Date of the Collateral Interest attached as Exhibit A to this Agreement has been fully disbursed as of the Cut-off Date and there is no requirement for future advances thereunder except in those cases where the full amount of the Mortgage Loan has been disbursed but a portion thereof is being held in escrow or reserve accounts pending the satisfaction of certain conditions relating to leasing, repairs or other matters with respect to the related Mortgaged Property, the Borrower or other considerations determined by Seller to merit such holdback.

 

(16)    Insurance.  Each related Mortgaged Property is, and is required pursuant to the related Mortgage to be, insured by a property insurance policy providing coverage for loss in accordance with coverage found under a “special cause of loss form” or “all risk form” that

 

Exhibit B-5

 

includes replacement cost valuation issued by an insurer meeting the requirements of the related Loan Documents and having a claims-paying or financial strength rating of any one of the following:  (i) at least “A-:VII” from A.M. Best Company, (ii) at least “A3” (or the equivalent) from Moody’s Investors Service, Inc. (“Moody’s”)  or (iii) at least “A-” from Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC Business (“S&P”) (collectively the “Insurance Rating Requirements”), in an amount (subject to a customary deductible) not less than the lesser of (1) the original principal balance of the Mortgage Loan and (2) the full insurable value on a replacement cost basis of the improvements, furniture, furnishings, fixtures and equipment owned by the Borrower and included in the Mortgaged Property (with no deduction for physical depreciation), but, in any event, not less than the amount necessary or containing such endorsements as are necessary to avoid the operation of any coinsurance provisions with respect to the related Mortgaged Property.

 

Each related Mortgaged Property is also covered, and required to be covered pursuant to the related Loan Documents, by business interruption or rental loss insurance which (subject to a customary deductible) covers a period of not less than 12 months (or with respect to each Mortgage Loan on a single asset with a principal balance of $50 million or more, 18 months).

 

If any material part of the improvements, exclusive of a parking lot, located on a Mortgaged Property is in an area identified in the Federal Register by the Federal Emergency Management Agency as having special flood hazards, the related Borrower is required to maintain insurance in an amount that is at least equal to the lesser of (1) the outstanding principal balance of the Mortgage Loan and (2) the maximum amount of such insurance available under the National Flood Insurance Program.

 

If the Mortgaged Property is located within 25 miles of the coast of the Gulf of Mexico or the Atlantic coast of Florida, Georgia, South Carolina or North Carolina, the related Borrower is required to maintain coverage for windstorm and/or windstorm related perils and/or “named storms” issued by an insurer meeting the Insurance Rating Requirements or endorsement covering damage from windstorm and/or windstorm related perils and/or named storms.

 

The Mortgaged Property is covered, and required to be covered pursuant to the related Loan Documents, by a commercial general liability insurance policy issued by an insurer meeting the Insurance Rating Requirements including coverage for property damage, contractual damage and personal injury (including bodily injury and death) in amounts as are generally required by the Seller for loans originated for securitization, and in any event not less than $1 million per occurrence and $2 million in the aggregate.

 

An architectural or engineering consultant has performed an analysis of each of the Mortgaged Properties located in seismic zones 3 or 4 in order to evaluate the structural and seismic condition of such property, for the sole purpose of assessing either the scenario expected limit (“SEL”) or the probable maximum loss (“PML”) for the Mortgaged Property in the event of an earthquake. In such instance, the SEL or PML, as applicable, was based on a 475-year return period, an exposure period of 50 years and a 10% probability of exceedance. If the resulting report concluded that the SEL or PML, as applicable, would exceed 20% of the amount of the replacement costs of the improvements, earthquake insurance on such Mortgaged Property was

 

Exhibit B-6

 

obtained by an insurer rated at least “A:VII” by A.M. Best Company or “A3” (or the equivalent) from Moody’s or “A-” by S&P, in an amount not less than 100% of the SEL or PML, as applicable.

 

The Loan Documents require insurance proceeds in respect of a property loss to be applied either (a) to the repair or restoration of all or part of the related Mortgaged Property, with respect to all property losses in excess of 5% of the then outstanding principal amount of the related Mortgage Loan, the lender (or a trustee appointed by it) having the right to hold and disburse such proceeds as the repair or restoration progresses, or (b) to the reduction of the outstanding principal balance of such Mortgage Loan together with any accrued interest thereon.

 

All premiums on all insurance policies referred to in this section required to be paid as of the Cut-off Date have been paid, and such insurance policies name the lender under the Mortgage Loan and its successors and assigns as a loss payee under a mortgagee endorsement clause or, in the case of the general liability insurance policy, as named or additional insured. Such insurance policies will inure to the benefit of the Trustee.  Each related Mortgage Loan obligates the related Borrower to maintain all such insurance and, at such Borrower’s failure to do so, authorizes the lender to maintain such insurance at the Borrower’s cost and expense and to charge such Borrower for related premiums.  All such insurance policies (other than commercial liability policies) require at least 10 days’ prior notice to the lender of termination or cancellation arising because of nonpayment of a premium and at least 30 days prior notice to the lender of termination or cancellation (or such lesser period, not less than 10 days, as may be required by applicable law) arising for any reason other than non-payment of a premium and no such notice has been received by Seller.

 

(17)    Access; Utilities; Separate Tax Lots.  Each Mortgaged Property (a) is located on or adjacent to a public road and has direct legal access to such road, or has access via an irrevocable easement or irrevocable right of way permitting ingress and egress to/from a public road, (b) is served by or has uninhibited access rights to public or private water and sewer (or well and septic) and all required utilities, all of which are appropriate for the current use of the Mortgaged Property, and (c) constitutes one or more separate tax parcels which do not include any property which is not part of the Mortgaged Property or is subject to an endorsement under the related Title Policy insuring the Mortgaged Property, or in certain cases, an application has been, or will be, made to the applicable governing authority for creation of separate tax lots, in which case the Mortgage Loan requires the Borrower to escrow an amount sufficient to pay taxes for the existing tax parcel of which the Mortgaged Property is a part until the separate tax lots are created or the non-recourse carveout guarantor under the Mortgage Loan has indemnified the mortgagee for any loss suffered in connection therewith.

 

(18)    No Encroachments.  To Seller’s knowledge based solely on surveys obtained in connection with origination (which may have been a previously existing “as built” survey) and the lender’s Title Policy (or, if such policy is not yet issued, a pro forma title policy, a preliminary title policy with escrow instructions or a “marked up” commitment) obtained in connection with the origination of each Mortgage Loan, all material improvements that were included for the purpose of determining the appraised value of the related Mortgaged Property at the time of the origination of such Mortgage Loan are within the boundaries of the related Mortgaged

 

Exhibit B-7

 

Property, except encroachments that do not materially and adversely affect the value or current use of such Mortgaged Property or for which insurance or endorsements were obtained under the Title Policy.  No improvements on adjoining parcels encroach onto the related Mortgaged Property except for encroachments that do not materially and adversely affect the value or current use of such Mortgaged Property or for which insurance or endorsements were obtained under the Title Policy.  No material improvements encroach upon any easements except for encroachments the removal of which would not materially and adversely affect the value or current use of such Mortgaged Property or for which insurance or endorsements have been obtained under the Title Policy.

 

(19)    No Contingent Interest or Equity Participation.  No Mortgage Loan has a shared appreciation feature, any other contingent interest feature or a negative amortization feature or an equity participation by Seller.

 

(20)    [Intentionally left blank.]

 

(21)    Compliance with Usury Laws.  The Mortgage Rate (exclusive of any default interest, late charges, yield maintenance charges, exit fees, or prepayment premiums) of such Mortgage Loan complied as of the date of origination with, or was exempt from, applicable state or federal laws, regulations and other requirements pertaining to usury.

 

(22)    Authorized to do Business.  To the extent required under applicable law, as of the Cut-off Date and as of each date that Seller held the Mortgage Note, Seller was authorized to transact and do business in the jurisdiction in which each related Mortgaged Property is located, or the failure to be so authorized does not materially and adversely affect the enforceability of such Mortgage Loan by the Issuer.

 

(23)    Trustee under Deed of Trust.  With respect to each Mortgage which is a deed of trust, as of the date of origination and, to the Seller’s knowledge, as of the Closing Date, a trustee, duly qualified under applicable law to serve as such, currently so serves and is named in the deed of trust or has been substituted in accordance with the Mortgage and applicable law or may be substituted in accordance with the Mortgage and applicable law by the related mortgagee.

 

(24)    Local Law Compliance.  To the Seller’s knowledge, based upon any of a letter from any governmental authorities, a legal opinion, an architect’s letter, a zoning consultant’s report, an endorsement to the related Title Policy, or other affirmative investigation of local law compliance consistent with the investigation conducted by the Seller for similar commercial, multifamily and manufactured housing community mortgage loans intended for securitization, with respect to the improvements located on or forming part of each Mortgaged Property securing a Mortgage Loan as of the date of origination of such Mortgage Loan and as of the Cut-off Date, there are no material violations of applicable zoning ordinances, building codes and land laws (collectively “Zoning Regulations”) other than those which (i) constitute a legal non-conforming use or structure, as to which the Mortgaged Property may be restored or repaired to the full extent necessary to maintain the use of the structure immediately prior to a casualty or the inability to restore or repair to the full extent necessary to maintain the use or structure immediately prior to the casualty would not materially and adversely affect the use or operation of the Mortgaged Property, (ii) are insured by the Title Policy or other insurance policy, (iii) are insured by law and ordinance insurance coverage in amounts customarily

 

Exhibit B-8

 

required by the Seller for loans originated for securitization that provides coverage for additional costs to rebuild and/or repair the property to current Zoning Regulations or (iv) would not have a material adverse effect on the Mortgage Loan.  The terms of the Loan Documents require the Borrower to comply in all material respects with all applicable governmental regulations, zoning and building laws.

 

(25)    Licenses and Permits.  Each Borrower covenants in the Loan Documents that it shall keep all material licenses, permits and applicable governmental authorizations necessary for its operation of the Mortgaged Property in full force and effect, and to the Seller’s knowledge based upon a letter from any government authorities or other affirmative investigation of local law compliance consistent with the investigation conducted by the Seller for similar commercial, multifamily and manufactured housing community mortgage loans intended for securitization, all such material licenses, permits and applicable governmental authorizations are in effect.  The Mortgage Loan requires the related Borrower to be qualified to do business in the jurisdiction in which the related Mortgaged Property is located.

 

(26)    Recourse Obligations.  The Loan Documents for each Mortgage Loan provide that such Mortgage Loan is non-recourse to the related parties thereto except that (a) the related Borrower and at least one individual or entity shall be fully liable for actual losses, liabilities, costs and damages arising from certain acts of the related Borrower and/or its principals specified in the related Loan Documents, which acts generally include the following: (i) acts of fraud or intentional material misrepresentation, (ii) misappropriation of rents (following an Event of Default), insurance proceeds or condemnation awards, (iii)  intentional material physical waste of the Mortgaged Property, and (iv) any breach of the environmental covenants contained in the related Loan Documents, and (b) the Mortgage Loan shall become full recourse to the related Borrower and at least one individual or entity, if the related Borrower files a voluntary petition under federal or state bankruptcy or insolvency law.

 

(27)    Mortgage Releases.  The terms of the related Mortgage or related Loan Documents do not provide for release of any material portion of the Mortgaged Property from the lien of the Mortgage except (a) a partial release, accompanied by principal repayment of not less than a specified percentage at least equal to the lesser of (i) 110% of the related allocated loan amount of such portion of the Mortgaged Property and (ii) the outstanding principal balance of the Mortgage Loan, (b) upon payment in full of such Mortgage Loan, (c) releases of out-parcels that are unimproved or other portions of the Mortgaged Property which will not have a material adverse effect on the underwritten value of the Mortgaged Property and which were not afforded any material value in the appraisal obtained at the origination of the Mortgage Loan and are not necessary for physical access to the Mortgaged Property or compliance with zoning requirements, or (d) as required pursuant to an order of condemnation.

 

(28)    Financial Reporting and Rent Rolls.  The Loan Documents for each Mortgage Loan require the Borrower to provide the owner or holder of the Mortgage with quarterly or monthly (other than for single-tenant properties) and annual operating statements, and quarterly or monthly (other than for single-tenant properties) rent rolls for properties that have leases contributing more than 5% of the in-place base rent and annual financial statements, which annual financial statements with respect to each Mortgage Loan with more than one Borrower are in the form of an annual combined balance sheet of the Borrower entities (and no other entities), together with the related combined statements of operations, members’ capital and cash flows,

 

Exhibit B-9

 

including a combining balance sheet and statement of income for the Mortgaged Properties on a combined basis.

 

(29)    Acts of Terrorism Exclusion.  With respect to each Mortgage Loan over $20 million, the related special-form all-risk insurance policy and business interruption policy (issued by an insurer meeting the Insurance Rating Requirements) do not specifically exclude Acts of Terrorism, as defined in the Terrorism Risk Insurance Act of 2002, as amended by the Terrorism Risk Insurance Program Reauthorization Act of 2007 (collectively referred to as “TRIA”), from coverage, or if such coverage is excluded, it is covered by a separate terrorism insurance policy.  With respect to each other Mortgage Loan, the related special-form all-risk insurance policy and business interruption policy (issued by an insurer meeting the Insurance Rating Requirements) did not, as of the date of origination of the Mortgage Loan, and, to Seller’s knowledge, do not, as of the Cut-off Date, specifically exclude Acts of Terrorism, as defined in TRIA, from coverage, or if such coverage is excluded, it is covered by a separate terrorism insurance policy.  With respect to each Mortgage Loan, the related Loan Documents generally only require that the related Borrower take commercially reasonable efforts to obtain insurance against damage resulting from acts of terrorism and other acts of sabotage unless lack of such insurance will result in a downgrade of the ratings of the related Mortgage Loan.

 

(30)    Due on Sale or Encumbrance.  Subject to specific exceptions set forth below, each Mortgage Loan contains a “due on sale” or other such provision for the acceleration of the payment of the principal balance of such Mortgage Loan if, without the consent of the holder of the Mortgage (which consent, in some cases, may not be unreasonably withheld) and/or complying with the requirements of the related Loan Documents (which provide for transfers without the consent of the lender which are customarily acceptable to the Seller lending on the security of property comparable to the related Mortgaged Property, including, without limitation, transfers of worn-out or obsolete furnishings, fixtures, or equipment promptly replaced with property of equivalent value and functionality and transfers by leases entered into in accordance with the Loan Documents), (a) the related Mortgaged Property, or any equity interest of greater than 50% in the related Borrower, is directly or indirectly pledged, transferred or sold, other than as related to (i) family and estate planning transfers or transfers upon death or legal incapacity, (ii) transfers to certain affiliates as defined in the related Loan Documents, (iii) transfers that do not result in a change of Control of the related Borrower or transfers of passive interests so long as the guarantor retains Control, (iv) transfers to another holder of direct or indirect equity in the Borrower, a specific Person designated in the related Loan Documents or a Person satisfying specific criteria identified in the related Loan Documents, such as a qualified equityholder, (v) transfers of stock or similar equity units in publicly traded companies or (vi) a substitution or release of collateral within the parameters of paragraph (27) herein, or (vii) by reason of any mezzanine debt that existed at the origination of the related Mortgage Loan, or future permitted mezzanine debt in, each case as set forth in Schedule 1(b) or Schedule 1(c) to this Exhibit B, or (b) the related Mortgaged Property is encumbered with a subordinate lien or security interest against the related Mortgaged Property, other than (i) any Companion Loan or any subordinate debt that existed at origination and is permitted under the related Loan Documents, (ii) purchase money security interests, (iii) any Crossed Mortgage Loan as set forth in Schedule 1(d) to this Exhibit B or (iv) Permitted Encumbrances.  For purposes of the foregoing representation, “Control” means the power to

 

Exhibit B-10

 

direct the management and policies of an entity, directly or indirectly, whether through the ownership of voting securities or other beneficial interests, by contract or otherwise.

 

(31)    Single-Purpose Entity.  Each Mortgage Loan requires the Borrower to be a Single-Purpose Entity for at least as long as the Mortgage Loan is outstanding.  Both the Loan Documents and the organizational documents of the Borrower with respect to each Mortgage Loan with a Stated Principal Balance as of the Cut-off Date in excess of $5 million provide that the Borrower is a Single-Purpose Entity, and each Mortgage Loan with a Stated Principal Balance as of the Cut-off Date of $20 million or more has a counsel’s opinion regarding non-consolidation of the Borrower.  For this purpose, a “Single-Purpose Entity” shall mean an entity, other than an individual, whose organizational documents (or if the Mortgage Loan has a Stated Principal Balance as of the Cut-off Date equal to $5 million or less, its organizational documents or the related Loan Documents) provide substantially to the effect that it was formed or organized solely for the purpose of owning and operating one or more of the Mortgaged Properties securing the Mortgage Loans and prohibit it from engaging in any business unrelated to such Mortgaged Property or Properties, and whose organizational documents further provide, or which entity represented in the related Loan Documents, substantially to the effect that it does not have any assets other than those related to its interest in and operation of such Mortgaged Property or Properties, or any indebtedness other than as permitted by the related Mortgage(s) or the other related Loan Documents, that it has its own books and records and accounts separate and apart from those of any other person (other than a Borrower for a Crossed Mortgage Loan), and that it holds itself out as a legal entity, separate and apart from any other person or entity.

 

(32)    Intentionally left blank.

 

(33)    Floating Interest Rates.  Each Mortgage Loan bears interest at a floating rate of interest that is based on LIBOR plus a margin (which interest rate may be subject to a minimum or “floor” rate).

 

(34)    Ground Leases.  For purposes of this Agreement, a “Ground Lease” shall mean a lease creating a leasehold estate in real property where the fee owner as the ground lessor or sub ground lessor conveys for a term or terms of years its entire interest in the land and buildings and other improvements, if any, comprising the premises demised under such lease to the ground lessee (who may, in certain circumstances, own the building and improvements on the land), subject to the reversionary interest of the ground lessor as fee owner and does not include industrial development agency (IDA) or similar leases for purposes of conferring a tax abatement or other benefit.

 

With respect to any Mortgage Loan where the Mortgage Loan is secured by a leasehold estate under a Ground Lease in whole or in part, and the related Mortgage does not also encumber the related lessor’s fee interest in such Mortgaged Property, based upon the terms of the Ground Lease and any estoppel or other agreement received from the ground lessor in favor of Seller, its successors and assigns, Seller represents and warrants that:

 

(a)   The Ground Lease or a memorandum regarding such Ground Lease has been duly recorded or submitted for recordation in a form that is acceptable for recording in the applicable jurisdiction.  The Ground Lease or an estoppel or other agreement received

 

Exhibit B-11

 

from the ground lessor permits the interest of the lessee to be encumbered by the related Mortgage and does not restrict the use of the related Mortgaged Property by such lessee, its successors or assigns in a manner that would materially adversely affect the security provided by the related Mortgage;

 

(b)    The lessor under such Ground Lease has agreed in a writing included in the related Collateral Interest File (or in such Ground Lease) that the Ground Lease may not be amended or modified, or canceled or terminated by agreement of lessor and lessee, without the prior written consent of the lender (except termination or cancellation if (i) notice of a default under the Ground Lease is provided to lender and (ii) such default is curable by lender as provided in the Ground Lease but remains uncured beyond the applicable cure period), and no such consent has been granted by the Seller since the origination of the Mortgage Loan except as reflected in any written instruments which are included in the related Collateral Interest File;

 

(c)     The Ground Lease has an original term (or an original term plus one or more optional renewal terms, which, under all circumstances, may be exercised, and will be enforceable, by either Borrower or the mortgagee) that extends not less than 20 years beyond the stated maturity of the related Mortgage Loan, or 10 years past the stated maturity if such Mortgage Loan fully amortizes by the stated maturity (or with respect to a Mortgage Loan that accrues on an actual 360 basis, substantially amortizes);

 

(d)    The Ground Lease either (i) is not subject to any liens or encumbrances superior to, or of equal priority with, the Mortgage, except for the related fee interest of the ground lessor and the Permitted Encumbrances, or (ii)  is subject to a subordination, non-disturbance and attornment agreement to which the mortgagee on the lessor’s fee interest in the Mortgaged Property is subject;

 

(e)     The Ground Lease does not place commercially unreasonable restrictions on the identity of the Mortgagee and the Ground Lease is assignable to the holder of the Mortgage Loan and its successors and assigns without the consent of the lessor thereunder, and in the event it is so assigned, it is further assignable by the holder of the Mortgage Loan and its successors and assigns without the consent of the lessor;

 

(f)      The Seller has not received any written notice of material default under or notice of termination of such Ground Lease.  To the Seller’s knowledge, there is no material default under such Ground Lease and no condition that, but for the passage of time or giving of notice, would result in a material default under the terms of such Ground Lease and to the Seller’s knowledge, such Ground Lease is in full force and effect as of the Closing Date;

 

(g)     The Ground Lease or ancillary agreement between the lessor and the lessee requires the lessor to give to the lender written notice of any default, and provides that no notice of default or termination is effective against the lender unless such notice is given to the lender;

 

(h)    A lender is permitted a reasonable opportunity (including, where necessary, sufficient time to gain possession of the interest of the lessee under the Ground Lease through

 

Exhibit B-12

 

legal proceedings) to cure any default under the Ground Lease which is curable after the lender’s receipt of notice of any default before the lessor may terminate the Ground Lease;

 

(i)        The Ground Lease does not impose any restrictions on subletting that would be viewed as commercially unreasonable by the Seller in connection with loans originated for securitization;

 

(j)       Under the terms of the Ground Lease, an estoppel or other agreement received from the ground lessor and the related Mortgage (taken together), any related insurance proceeds or the portion of the condemnation award allocable to the ground lessee’s interest (other than (i) de minimis amounts for minor casualties or (ii) in respect of a total or substantially total loss or taking as addressed in clause (k) below) will be applied either to the repair or to restoration of all or part of the related Mortgaged Property with (so long as such proceeds are in excess of the threshold amount specified in the related Loan Documents) the lender or a trustee appointed by it having the right to hold and disburse such proceeds as repair or restoration progresses, or to the payment of the outstanding principal balance of the Mortgage Loan, together with any accrued interest;

 

(k)    In the case of a total or substantially total taking or loss, under the terms of the Ground Lease, an estoppel or other agreement and the related Mortgage (taken together), any related insurance proceeds, or portion of the condemnation award allocable to ground lessee’s interest in respect of a total or substantially total loss or taking of the related Mortgaged Property to the extent not applied to restoration, will be applied first to the payment of the outstanding principal balance of the Mortgage Loan, together with any accrued interest; and

 

(l)        Provided that the lender cures any defaults which are susceptible to being cured, the ground lessor has agreed to enter into a new lease with lender upon termination of the Ground Lease for any reason, including rejection of the Ground Lease in a bankruptcy proceeding.

 

(35)         Servicing.  The servicing and collection practices used by the Seller with respect to the Mortgage Loan have been, in all material respects, legal and have met customary industry standards for servicing of similar commercial loans.

 

(36)                          Origination and Underwriting.  The origination practices of the Seller (or the related originator if the Seller was not the originator) with respect to each Mortgage Loan have been, in all material respects, legal and as of the date of its origination, such Mortgage Loan and the origination thereof complied in all material respects with, or was exempt from, all requirements of federal, state or local law relating to the origination of such Mortgage Loan; provided that such representation and warranty does not address or otherwise cover any matters with respect to federal, state or local law otherwise covered in this Exhibit B.

 

(37)                          No Material Default; Payment Record.  No Mortgage Loan has been more than 30 days delinquent, without giving effect to any grace or cure period, in making required payments since origination, and as of the date hereof, no Mortgage Loan is more than 30 days delinquent (beyond any applicable grace or cure period) in making required payments as of the Closing

 

Exhibit B-13

 

Date.  To the Seller’s knowledge, there is (a) no material default, breach, violation or event of acceleration existing under the related Mortgage Loan or (b) no event (other than payments due but not yet delinquent) which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a material default, breach, violation or event of acceleration, which default, breach, violation or event of acceleration, in the case of either clause (a) or clause (b), materially and adversely affects the value of the Mortgage Loan or the value, use or operation of the related Mortgaged Property, provided, however, that this representation and warranty does not cover any default, breach, violation or event of acceleration that specifically pertains to or arises out of an exception scheduled to any other representation and warranty made by the Seller in Schedule 1(a) to this Exhibit B.  No person other than the holder of such Mortgage Loan (subject to the related Participation Agreement) may declare any event of default under the Mortgage Loan or accelerate any indebtedness under the Loan Documents.

 

(38)                          Bankruptcy.  As of the date of origination of the related Mortgage Loan and to the Seller’s knowledge as of the Cut-off Date, no Borrower, guarantor or tenant occupying a single-tenant property is a debtor in state or federal bankruptcy, insolvency or similar proceeding.

 

(39)                          Organization of Borrower.  With respect to each Mortgage Loan, in reliance on certified copies of the organizational documents of the Borrower delivered by the Borrower in connection with the origination of such Mortgage Loan, the Borrower is an entity organized under the laws of a state of the United States of America, the District of Columbia or the Commonwealth of Puerto Rico.  Except with respect to any Crossed Mortgage Loan, no Mortgage Loan has a Borrower that is an Affiliate of another Borrower. (An “Affiliate” for purposes of this paragraph (39) means, a Borrower that is under direct or indirect common ownership and control with another Borrower.)

 

(40)                          Environmental Conditions.  A Phase I environmental site assessment (or update of a previous Phase I and or Phase II site assessment) and, with respect to certain Mortgage Loans, a Phase II environmental site assessment (collectively, an “ESA”) meeting ASTM requirements was conducted by a reputable environmental consultant in connection with such Mortgage Loan within 12 months prior to its origination date (or an update of a previous ESA was prepared), and such ESA either (i) did not identify the existence of recognized environmental conditions (as such term is defined in ASTM E1527-05 or its successor, hereinafter “Environmental Condition”) at the related Mortgaged Property or the need for further investigation with respect to any Environmental Condition that was identified, or (ii) if the existence of an Environmental Condition or need for further investigation was indicated in any such ESA, then at least one of the following statements is true:  (A) an amount reasonably estimated by a reputable environmental consultant to be sufficient to cover the estimated cost to cure any material noncompliance with applicable environmental laws or the Environmental Condition has been escrowed by the related Borrower and is held or controlled by the related lender; (B) if the only Environmental Condition relates to the presence of asbestos-containing materials, radon in indoor air, lead based paint or lead in drinking water, and the only recommended action in the ESA is the institution of such a plan, an operations or maintenance plan has been required to be instituted by the related Borrower that can reasonably be expected to mitigate the identified risk; (C) the Environmental Condition identified in the related environmental report was remediated or abated in all material respects prior to the date hereof,

 

Exhibit B-14

 

and, if and as appropriate, a no further action or closure letter was obtained from the applicable governmental regulatory authority (or the Environmental Condition affecting the related Mortgaged Property was otherwise listed by such governmental authority as “closed” or a reputable environmental consultant has concluded that no further action is required); (D) a secured creditor environmental policy or a pollution legal liability insurance policy that covers liability for the Environmental Condition was obtained from an insurer rated no less than A- (or the equivalent) by Moody’s, S&P and/or Fitch; (E) a party not related to the Borrower was identified as the responsible party for such Environmental Condition and such responsible party has financial resources reasonably estimated to be adequate to address the situation; or (F) a party related to the Borrower having financial resources reasonably estimated to be adequate to address the situation is required to take action.  To Seller’s knowledge, except as set forth in the ESA, there is no Environmental Condition (as such term is defined in ASTM E1527-05 or its successor) at the related Mortgaged Property.

 

(41)                          Appraisal.  The Servicing File contains an appraisal of the related Mortgaged Property with an appraisal date within 6 months of the Mortgage Loan origination date, and within 12 months of the Closing Date.  The appraisal is signed by an appraiser who is either a Member of the Appraisal Institute (“MAI”) and/or has been licensed and certified to prepare appraisals in the state where the Mortgaged Property is located. Each appraiser has represented in such appraisal or in a supplemental letter that the appraisal satisfies the requirements of the “Uniform Standards of Professional Appraisal Practice” as adopted by the Appraisal Standards Board of the Appraisal Foundation and has certified that such appraiser had no interest, direct or indirect, in the Mortgaged Property or the Borrower or in any loan made on the security thereof, and its compensation is not affected by the approval or disapproval of the Mortgage Loan.  The appraisal (or a separate letter) contains a statement by the appraiser to the effect that the appraisal guidelines of Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 were followed in preparing the appraisal.

 

(42)                          Cross-Collateralization.  No Mortgage Loan is cross-collateralized or cross-defaulted with any mortgage loan that is not held by the Issuer.

 

(43)                          Advance of Funds by the Seller.  After origination, no advance of funds has been made by Seller to the related Borrower other than in accordance with the Loan Documents, and, to Seller’s knowledge, no funds have been received from any person other than the related Borrower or an affiliate for, or on account of, payments due on the Mortgage Loan (other than as contemplated by the Loan Documents, such as, by way of example and not in limitation of the foregoing, amounts paid by the tenant(s) into a lender-controlled lockbox if required or contemplated under the related lease or Loan Documents).  Neither Seller nor any affiliate thereof has any obligation to make any capital contribution to any Borrower under a Mortgage Loan, other than contributions made on or prior to the date hereof.

 

(44)                          Compliance with Anti-Money Laundering Laws.  Seller has complied in all material respects with all applicable anti-money laundering laws and regulations, including without limitation the USA Patriot Act of 2001 with respect to the origination of the Mortgage Loan, the failure to comply with which would have a material adverse effect on the Mortgage Loan.

 

Exhibit B-15

 

C.       Representations and Warranties Concerning Mezzanine Loans.  With respect to each Mezzanine Loan:

 

(1)    Whole Loan.  Each Mezzanine Loan is a whole loan and not a participation interest in a loan.

 

(2)    Loan Document Status. Each related mezzanine note, pledge agreement, guaranty and any other agreement executed by or on behalf of the related mezzanine Borrower, guarantor or other obligor in connection with such Mezzanine Loan is the legal, valid and binding obligation of the related mezzanine Borrower, guarantor or other obligor (subject to any non-recourse provisions contained in any of the foregoing agreements and any applicable state anti-deficiency, one action, or market value limit deficiency legislation), as applicable, and is enforceable in accordance with its terms, except the Standard Qualifications.

 

Except as set forth in the immediately preceding sentences, there is no valid offset, defense, counterclaim or right of rescission available to the related mezzanine Borrower with respect to any of the related note or other Mezzanine Loan documents, including, without limitation, any such valid offset, defense, counterclaim or right based on intentional fraud by Seller in connection with the origination of the Mezzanine Loan, that would deny the mezzanine lender the principal benefits intended to be provided by the note or other Mezzanine Loan documents.

 

(3)    Pledged Equity.  The Mezzanine Loan is secured by a pledge of 100% of the direct or indirect equity interests the entity or entities that own the related Mortgaged Property or Mortgaged Properties.

 

(4)    Pledge Provisions.  The Mezzanine Loan documents for each Mezzanine Loan contain provisions that render the rights and remedies of the holder thereof adequate for the practical realization against the pledged equity interests of the principal benefits of the security intended to be provided thereby, including realization by UCC foreclosure subject to the limitations set forth in the Standard Qualifications.

 

(5)    Loan Document Status; Waivers and Modifications.  Since origination and except by written instruments set forth in the related Collateral Interest File or as otherwise provided in the related Mezzanine Loan documents (a) the material terms of the related Mezzanine Loan documents have not been waived, impaired, modified, altered, satisfied, canceled, subordinated or rescinded in any respect that could be reasonably expected to have a material adverse effect on such Mezzanine Loan; (b) no pledged equity has been released from the lien of the related pledge agreement in any manner which materially interferes with the security intended to be provided by such pledge agreement; and (c) neither the related mezzanine Borrower nor the related guarantor has been released from its material obligations under the Mezzanine Loan.  With respect to each Mezzanine Loan, except as contained in a written document included in the Collateral Interest File, there have been no modifications, amendments or waivers, that could be reasonably expected to have a material adverse effect on such Mezzanine Loan consented to by Seller on or after the Cut-off Date.

 

(6)    Lien; Valid Assignment.  Subject to the Standard Qualifications, each assignment of Mezzanine Loan and agreements executed in connection therewith to the Issuer constitutes a legal, valid and binding assignment to the Issuer.  Each Mezzanine Loan is freely assignable without the consent of the related Borrower.  The pledge of the collateral for the Mezzanine

 

Exhibit B-16

 

Loan creates a legal, valid and enforceable first priority security interest in such collateral, except as the enforcement thereof may be limited by the Standard Qualifications. Notwithstanding anything herein to the contrary, no representation is made as to the perfection of any security interest in personal property to the extent that possession or control of such items or actions other than the filing of UCC financing statements is required in order to effect such perfection.

 

(7)    UCC 9 Policies.  If the Seller’s security interest in the Mezzanine Loan is covered by a UCC 9 insurance policy, with respect to the “UCC 9” policy relating to the Mezzanine Loan: (i) such policy is assignable by the Seller to the Issuer, (ii) such policy is in full force and effect, (iii) all premiums thereon have been paid, (iv) no claims have been made by or on behalf of the Seller thereunder, and (v) no claims have been paid thereunder.

 

(8)    Cross-Defaults.  An event of default under the related Mortgage Loan will constitute an event of default with respect to the related Mezzanine Loan.

 

(9)    Payment Procedure.  If a cash management agreement is in place with respect to the Mortgage Loan and Mezzanine Loan, except following the occurrence and during the occurrence of a Mortgage Loan event of default, any funds remaining in the related lockbox account for the Mortgage Loan after payment of all amounts due under the Loan Documents are required to be distributed to the holder of the Mezzanine Loan and distributed by the holder or the servicer of the Mortgage Loan, to the holder of the Mezzanine Loan in accordance with the Mezzanine Loan documents.

 

(10)                          Insurance Proceeds.  The Mezzanine Loan documents require that all insurance policies procured by the Mortgage Loan Borrower with respect to the property under the related Loan Documents name the mezzanine lender, the related mezzanine Borrower and their respective successors and assigns as the insured or additional insured, as their respective interests may appear.

 

(11)                          Actions Concerning Mezzanine Loan.  To the Seller’s knowledge, based on judgment searches of the mezzanine Borrowers and guarantors, on and as of the date of origination and as of the Cut-off Date, there was no pending or filed action, suit or proceeding, involving any mezzanine Borrower an adverse outcome of which would reasonably be expected to materially and adversely affect (a) the validity or enforceability of the Mezzanine Loan, (b) such mezzanine Borrower’s ability to perform under the Mezzanine Loan, (c) such guarantor’s ability to perform under the related guaranty or (d) the principal benefit of the security intended to be provided by the Loan Documents.

 

(12)                          Escrow Deposits.  All escrow deposits and payments required to be escrowed with lender pursuant to each Mezzanine Loan are in the possession, or under the control, of the Seller or its servicer, and there are no deficiencies (subject to any applicable grace or cure periods) in connection therewith, and all such escrows and deposits (or the right thereto) that are required to be escrowed with lender under the related Mezzanine Loan documents are being conveyed by the Seller to the Issuer or its servicer.

 

(13)                          No Holdbacks.  The Stated Principal Balance as of the Cut-off Date of the Mezzanine Loan attached as Exhibit A to this Agreement has been fully disbursed as of the Cut-off Date and

 

Exhibit B-17

 

there is no requirement for future advances thereunder except in those cases where the full amount of the Mezzanine Loan has been disbursed but a portion thereof is being held in escrow or reserve accounts pending the satisfaction of certain conditions relating to leasing, repairs or other matters with respect to the related Mortgaged Property, the Borrower or other considerations determined by Seller to merit such holdback.

 

(14)                          No Contingent Interest or Equity Participation.  No Mezzanine Loan has a shared appreciation feature, any other contingent interest feature or a negative amortization feature or an equity participation by Seller.

 

(15)                          Compliance with Usury Laws.  The Interest Rate (exclusive of any default interest, late charges, yield maintenance charges, exit fees, or prepayment premiums) of such Mezzanine Loan complied as of the date of origination with, or was exempt from, applicable state or federal laws, regulations and other requirements pertaining to usury.

 

(16)                          Single-Purpose Entity.  Each Mezzanine Loan requires the mezzanine Borrower to be a Single-Purpose Entity for at least as long as the Mezzanine Loan is outstanding.  Both the Mezzanine Loan documents and the organizational documents of the Borrower with respect to each Mezzanine Loan with a Stated Principal Balance as of the Cut-off Date in excess of $5 million provide that the Borrower is a Single-Purpose Entity, and each Mezzanine Loan with a Stated Principal Balance as of the Cut-off Date of $20 million or more has a counsel’s opinion regarding non-consolidation of the Borrower.  For this purpose, a “Single-Purpose Entity” shall mean an entity, other than an individual, whose organizational documents (or if the Mezzanine Loan has a Stated Principal Balance as of the Cut-off Date equal to $5 million or less, its organizational documents or the related Loan Documents) provide substantially to the effect that it was formed or organized solely for the purpose of owning the equity collateral securing the Mezzanine Loans and prohibit it from engaging in any business unrelated to its ownership of the equity collateral, and whose organizational documents further provide, or which entity represented in the related Mezzanine Loan documents, substantially to the effect that it does not have any assets other than those related to the equity collateral securing the Mezzanine Loans, or any indebtedness other than as permitted by the related Mezzanine Loan documents, that it has its own books and records and accounts separate and apart from those of any other person, and that it holds itself out as a legal entity, separate and apart from any other person or entity.

 

(17)                          Floating Interest Rates.  Each Mezzanine Loan bears interest at a floating rate of interest that is based on LIBOR plus a margin (which interest rate may be subject to a minimum or “floor” rate).

 

(18)                          Servicing.  The servicing and collection practices used by the Seller with respect to the Mezzanine Loan have been, in all material respects, legal and have met customary industry standards for servicing of similar commercial loans.

 

(19)                          Origination and Underwriting.  The origination practices of the Seller (or the related originator if the Seller was not the originator) with respect to each Mezzanine Loan have been, in all material respects, legal and as of the date of its origination, such Mezzanine Loan and the origination thereof complied in all material respects with, or was exempt from, all requirements of federal, state or local law relating to the origination of such Mezzanine Loan;

 

Exhibit B-18

 

provided that such representation and warranty does not address or otherwise cover any matters with respect to federal, state or local law otherwise covered in this Exhibit B.

 

(20)                          No Material Default; Payment Record.  No Mezzanine Loan has been more than 30 days delinquent, without giving effect to any grace or cure period, in making required payments since origination, and as of the date hereof, no Mezzanine Loan is more than 30 days delinquent (beyond any applicable grace or cure period) in making required payments as of the Closing Date.  To the Seller’s knowledge, there is (a) no material default, breach, violation or event of acceleration existing under the related Mezzanine Loan or (b) no event (other than payments due but not yet delinquent) which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a material default, breach, violation or event of acceleration, which default, breach, violation or event of acceleration, in the case of either clause (a) or clause (b), materially and adversely affects the value of the Mezzanine Loan, provided, however, that this representation and warranty does not cover any default, breach, violation or event of acceleration that specifically pertains to or arises out of an exception scheduled to any other representation and warranty made by the Seller in Schedule 1(a) to this Exhibit B.  No person other than the holder of such Mezzanine Loan (subject to the related Participation Agreement) may declare any event of default under the Mezzanine Loan or accelerate any indebtedness under the Mezzanine Loan documents.

 

(21)                          Bankruptcy.  As of the date of origination of the related Mezzanine Loan and to the Seller’s knowledge as of the Cut-off Date, no mezzanine Borrower is a debtor in state or federal bankruptcy, insolvency or similar proceeding.

 

(22)                          Organization of Mezzanine Borrower.  With respect to each Mezzanine Loan, in reliance on certified copies of the organizational documents of the Borrower delivered by the Borrower in connection with the origination of such Mezzanine Loan, the Borrower is an entity organized under the laws of a state of the United States of America, the District of Columbia or the Commonwealth of Puerto Rico.

 

(23)                          Advance of Funds by the Seller.  After origination, no advance of funds has been made by Seller to the related Borrower other than in accordance with the Mezzanine Loan documents, and, to Seller’s knowledge, no funds have been received from any person other than the related mezzanine Borrower or an affiliate for, or on account of, payments due on the Mezzanine Loan (other than as contemplated by the Mezzanine Loan documents, such as, by way of example and not in limitation of the foregoing, amounts paid by the tenant(s) into a lender-controlled lockbox if required or contemplated under the related lease or Mezzanine Loan documents).  Neither Seller nor any affiliate thereof has any obligation to make any capital contribution to any Borrower under a Mezzanine Loan, other than contributions made on or prior to the date hereof.

 

(24)                          Compliance with Anti-Money Laundering Laws.  Seller has complied in all material respects with all applicable anti-money laundering laws and regulations, including without limitation the USA Patriot Act of 2001 with respect to the origination of the Mezzanine Loan, the failure to comply with which would have a material adverse effect on the Mezzanine Loan.

 

D.                                    Representations and Warranties Concerning Pari Passu Participations.  With respect to each Pari Passu Participation (the “CLO Participation”):

 

Exhibit B-19

 

(1)    The custodian under the Indenture or, with respect to the Non-CLO Custody Collateral Interest, the Participation Custodian under the Participation Custodial Agreement, in each case on behalf of the holder of the CLO Participation and each holder (each, a “Third Party Participant”) of any related participation (the “Other Participation Interests”) is the record mortgagee of the related Mortgage Loan and, if applicable, Mezzanine Loan, pursuant to a Participation Agreement and the Indenture or, with respect to the Non-CLO Custody Collateral Interest, the Participation Custodial Agreement, in each case that is legal, valid and enforceable as between its parties.  Each Participation Agreement provides that the holder of the CLO Participation has full power, authority and discretion to appoint the Servicer to service the Mortgage Loan and, if applicable, Mezzanine Loan, subject to the consent or approval rights of the Third Party Participants;

 

(2)    The holder of each Other Participation Interest is required to pay its pro rata share of any expenses, costs and fees associated with servicing and enforcing rights and remedies under the related Mortgage Loan and, if applicable, Mezzanine Loan, upon request therefor by the holder of the CLO Participation;

 

(3)    Each Participation Agreement is effective to convey the CLO Participation to the Seller and the related Other Participation Interests to the related Third Party Participants and is not intended to be or effective as a loan or other financing secured by the Mortgage Loan and, if applicable, Mezzanine Loan.  The holder of the CLO Participation owes no fiduciary duty or obligation to any Third Party Participant pursuant to the Participation Agreement;

 

(4)    All amounts due and owing to any Third Party Participant pursuant to each Participation Agreement have been duly and timely paid.  There is no default by the holder of the CLO Participation, or to the Seller’s knowledge, by any Third Party Participant under any Participation Agreement;

 

(5)    To the Seller’s knowledge, no Third Party Participant is a debtor in any outstanding proceeding pursuant to the federal bankruptcy code;

 

(6)    The Seller has not received written notice of any outstanding liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind for which the holder of the CLO Participation is or may become obligated;

 

(7)    The role, rights and responsibilities of the holder of the CLO Participation are assignable by the Seller without consent or approval other than those that have been obtained.

 

(8)    The terms of the Participation Agreement do not require or obligate the holder of the CLO Participation or its successor or assigns to repurchase any Other Participation Interest under any circumstances;

 

(9)    The Seller, in selling any Other Participation Interest to a Third Party Participant made no misrepresentation, fraud or omission of information necessary for such Third Party Participant to make an informed decision to purchase the Other Participation Interest; and

 

(10)                          Either (A) the CLO Participation is treated as a real estate asset for purposes of Section 856(c) of the Code, and the interest payable pursuant to such Participation is treated as interest on an obligation secured by a mortgage on real property for purposes of

 

Exhibit B-20

 

Section 856(c) of the Code, or (B) the CLO Participation qualifies as a security that would not otherwise cause GPMT to fail to qualify as a REIT under the Code (including after the sale, transfer and assignment to the Issuer of such Participation).

 

For purposes of these representations and warranties, the phrases “the Seller’s knowledge” or “the Seller’s belief” and other words and phrases of like import shall mean, except where otherwise expressly set forth herein, the actual state of knowledge or belief of the Seller, its officers and employees directly responsible for the underwriting, origination, servicing or sale of the Commercial Real Estate Loans regarding the matters expressly set forth herein.

 

Exhibit B-21

 

SCHEDULE 1(a) TO EXHIBIT B

 

EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES

 

Representation numbers referred to below relate to the corresponding Collateral Interest representations and warranties set forth in this Schedule 1(a) to Exhibit B.

 

	
Representation
   and Warranty
    	
 
    	
Property Name
    	
 
    	
Exception
    
	
(B)(4)
   (Mortgage Status; Waivers and Modifications)
    	
 
    	
“St. Paul Place”
    	
 
    	
The related Loan Documents are currently in the   process of being amended. The related Mortgage Loan is being amended to be   cross-defaulted with the related Mezzanine Loan. It is expected that such   amendment will be executed and effective on or before the date that is six   (6) months after the Closing Date. The Offering Memorandum was drafted   assuming such amendment was completed, however, no assurance can be given   that the currently contemplated amendment will be executed and effective   after the Closing Date. If such amendment is not completed, the related   borrower is obligated to reconstitute the related Mortgage Loan and Mezzanine   Loan as a single Mortgage Loan, on or before the date that is six   (6) months after the Closing Date. If neither the amendment nor the   reconstitution has been completed by such date, the Seller will be required   to promptly repurchase such Collateral Interest from the Issuer for the Par   Purchase Price (as defined in the Indenture).
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(4)
   (Mortgage Status; Waivers and Modifications)
    	
 
    	
“The Quinn at   Westchase”
    	
 
    	
The related deed of trust, security agreement,   assignment of leases and fixture filing is currently in the process of being   amended to alter the legal definition found in Exhibit A thereof. It is   expected that such amendment will be executed and effective after the Closing   Date. The Offering Memorandum was drafted assuming such amendment was   completed, however, no assurance can be given that the currently contemplated   amendment will be executed and effective after the Closing Date.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(4)
   (Mortgage Status; Waivers and Modifications)
    	
 
    	
“Wilton Shoppes”
    	
 
    	
The related mortgage, assignment of leases and rents   and security agreement is currently in the process of being amended to alter   the legal definition found in Exhibit A thereof. It is expected that   such amendment will be executed and effective after the Closing Date. The   Offering Memorandum was drafted assuming such amendment was completed,   however, no assurance can be given that the currently contemplated amendment   will be executed and effective after the Closing Date.
    

 

Schedule (1)(a)-1

 

	
Representation
   and Warranty
    	
 
    	
Property Name
    	
 
    	
Exception
    
	
(B)(5)
   (Lien, Valid Assignment)
    	
 
    	
“Shippan Landing”
    	
 
    	
The full right to assign the related Mortgage Loan   is limited by the related Loan Documents, which provide that, except during   continuance of a Commercial Real Estate Loan Event of Default, any portion of   the related Mortgage Loan that constitutes the unfunded future tenant   improvement advances cannot be transferred to any person that has a net worth   of less than $35,000,000 (provided that this requirement does not apply to   any repurchase or warehouse facility).
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(5)
   (Lien, Valid Assignment)
    	
 
    	
“100 Jefferson Road”
    	
 
    	
So long as no Commercial Real Estate Loan Event of   Default has occurred and is continuing, Lender may not sell, transfer or   assign the related Mortgage Loan or any portion thereof, to a list of   “Prohibited Transferees” (as more particularly identified in the related Loan   Documents); provided, however, Lender is not prohibited from transferring all   or any portion of the related Mortgage Loan to (i) any person in   connection with a collateralized loan obligation securitization or (or any   similar securitization) or (ii) the bondholders (as a collective whole)   (or their nominee, collateral agent or security trustee) under, or the   trustee, administrator or receiver (or their respective nominees, collateral   agents or collateral trustees) of a mortgage pool securing covered mortgage   bonds issued under German Pfandbrief legislation.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(5)
   (Lien, Valid Assignment)
    	
 
    	
“St. Jean Apartments”
    	
 
    	
The full right to assign the related Mortgage Loan   is limited by the related Loan Documents, which provide that, except during   continuance of a Commercial Real Estate Loan Event of Default, the related   Mortgage Loan cannot be transferred to any person that is a Prohibited   Transferee (as defined in the related Loan Documents).
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(5)
   (Lien, Valid Assignment)
    	
 
    	
“58-30 Grand Avenue”
    	
 
    	
The Mortgaged Property is encumbered by two loans,   both of which are, in part, included in the related Collateral Interest: a   subordinate Mortgage Loan, which is a legal, valid and enforceable second   lien on the related borrower’s fee or leasehold interest in the related   Mortgaged Property; and the senior Mortgage Loan which is a legal, valid and   enforceable first lien on the related borrower’s fee or leasehold interest in   the related Mortgaged Property.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(5)
   (Lien, Valid Assignment)
    	
 
    	
“One Commerce”
    	
 
    	
The property secured by the sub-leasehold interest   on the parking garage parcel (the “Parking Garage Ground Lease”) is   encumbered by a mortgage lien on the fee interest in the property in   connection with a certain bond financing obtained by the Parking Authority of   the City of Memphis and County 
    

 

Schedule (1)(a)-2

 

	
Representation
   and Warranty
    	
 
    	
Property Name
    	
 
    	
Exception
    
	
 
    	
 
    	
 
    	
 
    	
of Shelby, Tennessee from the Memphis City Center   Revenue Finance Corporation (the “Bond Financing Mortgage”). However,   in the estoppel certificate delivered to Lender at closing, both the ground   lessor under the Parking Garage Ground Lease’s master ground lease (the “Master   Ground Lease”) and the sub-ground lessor under the Parking Garage Ground   Lease agreed that neither would further encumber their interests and, so long   as the related borrower is not in default under the terms of the Parking   Garage Ground Lease, such borrower’s rights, interests and privileges under   the Parking Garage Ground Lease and such borrower’s use and enjoyment shall   not be affected or disturbed by the exercise of the rights of the lessor   under the Master Ground Lease under the bond financing, nor by any   foreclosure or sale of the property or deed in lieu thereof. In addition, the   Lender has notice and cure periods in the event of a default under the terms   of the Parking Garage Ground Lease.
    
   In addition, the full right to assign the related Mortgage Loan is limited by   the related Loan Documents, which provide that, except during continuance of   a Commercial Real Estate Loan Event of Default, the related Mortgage Loan   cannot be transferred to any person that is not an Eligible Assignee (as   defined in the related Loan Documents).
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(5)
   (Lien, Valid Assignment)
    	
 
    	
“446 West 14th Street”
    	
 
    	
So long as no Commercial Real Estate Loan Event of   Default has occurred and is continuing Lender may not sell, transfer or   assign the related Mortgage Loan or any portion thereof, to a short list of   “Prohibited Transferees” (as more particularly identified in the related Loan   Documents).
    
   In addition, the related Mortgaged Property is encumbered by three loans, all   of which are included in the related Mortgage Asset: the Term Loan, the   Building Loan and the Project Loan (each as defined in the related Loan   Documents). The Project Loan is a legal, valid and enforceable third lien on   the related borrower’s fee interest in the related Mortgaged Property; the   Building Loan is a legal, valid and enforceable second lien on the related   borrower’s fee interest in the related Mortgaged Property; and the Term Loan   is a legal, valid and enforceable first lien on the related borrower’s fee   interest in the related Mortgaged Property.
    

 

Schedule (1)(a)-3

 

	
Representation
   and Warranty
    	
 
    	
Property Name
    	
 
    	
Exception
    
	
(B)(6)
   (Permitted Liens; Title Insurance)
    	
 
    	
“58-30 Grand Avenue”
    	
 
    	
The related subordinate Mortgage Loan constitutes a   second priority lien and is subordinate to the related senior Mortgage Loan,   which is a first priority lien.
    
   In addition, the related Mortgaged Property is covered by two (2) Title   Policies corresponding to the two (2) mortgages. The covered amounts   under the two Title Policies equal the principal loan amount.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(6)
   (Permitted Liens; Title Insurance)
    	
 
    	
“One Commerce”
    	
 
    	
The related Mortgage Loan is secured by a fee and   leasehold mortgage encumbering certain property owned in fee and certain   property leased by the related borrower. Additionally, the related Mortgage   Loan is secured by a fee mortgage encumbering the ground lessor’s interest in   one of the leasehold properties (the “Fee Mortgage”). Such Fee   Mortgage is not insured by a loan policy.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(6)
   (Permitted Liens; Title Insurance)
    	
 
    	
“446 West 14th Street”
    	
 
    	
The Project Loan (as defined in the related Loan   Documents) constitutes a third priority lien and is subordinate to the   Building Loan and the Term Loan (each as defined in the related Loan   Documents). The Building Loan constitutes a second priority lien and is   subordinate to the Term Loan, which is a first priority lien.
    
   In addition, the related Mortgaged Property is covered by three   (3) Title Policies corresponding to the three (3) mortgage loans.   The covered amounts under the three Title Policies equal the principal loan   amount.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(6)
   (Permitted Liens; Title Insurance)
    	
 
    	
“Gramercy Plaza”
    	
 
    	
The related Title Policy does not provide coverage   over mechanic’s liens to insure the priority of the lien of the mortgage with   respect to advances made after the date of such related Title Policy;   provided that, to the related seller’s knowledge, with respect to the related   Mortgaged Property, there are no filed mechanic’s liens in existence other   than Permitted Encumbrances (as defined in the related Loan Documents).
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(7)
   (Junior Liens)
    	
 
    	
“St. Paul Place”
   “Andover Landing”
    	
 
    	
There is existing mezzanine debt secured directly by   interests in the related borrower and the related borrower’s general partner   as evidenced by the related mezzanine loan originated by the underlying   seller, which is included in the Closing Date Collateral Interest.
    

 

Schedule (1)(a)-4

 

	
Representation
   and Warranty
    	
 
    	
Property Name
    	
 
    	
Exception
    
	
(B)(7)
   (Junior Liens)
    	
 
    	
“58-30 Grand Avenue”
    	
 
    	
The related Mortgage Loan is composed of two   (2) mortgages, constituting first and second priority liens encumbering   the related Mortgaged Property.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(7)
   (Junior Liens)
    	
 
    	
“446 West 14th Street”
    	
 
    	
The related Commercial Real Estate Loan is   structured into three loans: a term loan, a building loan, and a project   loan. The building loan mortgage and project loan mortgage are each   subordinate to the term loan mortgage.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(7)
   (Junior Liens)
    	
 
    	
“The Grand Hotel”
    	
 
    	
The related borrower has obtained a “key money loan”   from Hyatt in the amount of $1,360,000, which is due and payable to the   extent required by the related franchise agreement.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(8)
   (Assignment of Leases, Rents and Profits)
    	
 
    	
“446 West 14th Street”
    	
 
    	
The related Term Loan Assignment of Leases, Rents   and Profits (as defined in the related Loan Documents) creates a valid   first-priority collateral assignment of, or a valid first-priority lien or   security interest in, rents and certain rights under the related lease or   leases; the Building Loan Assignment of Leases, Rents and Profits (as defined   in the related Loan Documents) creates a valid second-priority collateral   assignment of, or a valid second-priority lien or security interest in, rents   and certain rights under the related lease or leases and the Project Loan   Assignment of Leases, Rents and Profits (as defined in the related Loan   Documents) creates a valid third-priority collateral assignment of, or a   valid second-priority lien or security interest in, rents and certain rights   under the related lease or leases.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(10)
   (Condition of Property)
    	
 
    	
“The Meier &   Frank Building”
   “Shippan Landing”
   “St. Paul Place”
   “One Union Center”
   “St. Jean Apartments”
   “Andover Landing”
   “South City Plaza”
   “Moxy Hotel”
   “Pueblo del Sol”
    	
 
    	
The property condition assessments for the related   Mortgaged Properties are dated more than twelve months prior to the Cut-off   Date.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(10)
   (Condition of Property)
    	
 
    	
“St. Jean Apartments”
    	
 
    	
A widespread casualty event occurred in Baton Rouge,   Louisiana on August 15, 2016 in which the related Mortgaged Property   sustained extensive damage due to flooding, causing all tenants to vacate   their apartment units and relocate to other apartment complexes.   Notwithstanding the foregoing, the related Mortgaged Property is not located   in an identified 
    

 

Schedule (1)(a)-5

 

	
Representation
   and Warranty
    	
 
    	
Property Name
    	
 
    	
Exception
    
	
 
    	
 
    	
 
    	
 
    	
flood zone. The related Loan Documents do, however,   require the related borrower to maintain significant flood insurance.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(10)
   (Condition of Property)
    	
 
    	
“The Quinn at   Westchase”
    	
 
    	
There were two fires at the related Mortgaged   Property that occurred in two of the buildings due to separate unrelated   electrical fires. Prior to origination, the related borrower sponsor sent an   independent third party engineer to assess all of the attics in order to   avoid any potential future risk.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(10)
   (Condition of Property)
    	
 
    	
“Mill and Main”
    	
 
    	
The property condition report disclosed certain   required repairs in an amount exceeding $50,000. The related borrower did not   escrow for such required repairs on the date of origination of the related   Commercial Real Estate Loan, provided however, that the related Loan   Documents include a borrower covenant to complete such required repairs   within a specific time frame.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(10)
   (Condition of Property)
    	
 
    	
“100 Park”
    	
 
    	
The property condition report disclosed certain   immediate required repairs in an amount equal to $2,065,000. The related   borrower did not specifically escrow for such required repairs on the date of   origination of the related Commercial Real Estate Loan, however, the related   borrower sponsor reported that certain portions of the capital expenditures   reserve have been earmarked for the immediate repairs required.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(15)
   (No Holdbacks)
    	
 
    	
“The Meier &   Frank Building”
   “Shippan Landing”
   “100 Jefferson Road”
   “St. Paul Place”
   “One Union Center”
   “St. Jean Apartments”
   “Andover Landing”
   “The Quinn at Westchase”
   “Mill and Main”
   “58-30 Grand Avenue”
   “South City Plaza”
   “Flats on LaSalle”
   “100 Park”
   “One Commerce”
   “446 West 14th Street
   “The Grand Hotel”
    	
 
    	
The related Commercial Real Estate Loan has not been   fully funded and the related Loan Documents contemplate future funding of the   related Commercial Real Estate Loan subject to satisfaction of the conditions   set forth in such Loan Documents. The holder of the future funding pari passu participation interest has the obligation to   fund such future advances.
    

 

Schedule (1)(a)-6

 

	
Representation
   and Warranty
    	
 
    	
Property Name
    	
 
    	
Exception
    
	
 
    	
 
    	
“Kenwood Village”
   “Gramercy Plaza”
   “Vantage on the Park”
   “500 EJC”
   “Wilton Shoppes”
   “Alpine Creek Apartments”
   “One Pine Apartments”
   “Plaza at Eastlake”
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(16)
   (Insurance)
    	
 
    	
“Snow King Resort”
   “Andover Landing”
   “Moxy Hotel”
   “The Grand Hotel”
   “Kenwood Village”
   “Plaza at Eastlake”
    	
 
    	
The related Commercial Real Estate Loan is covered   by a blanket insurance policy.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(16)
   (Insurance)
    	
 
    	
“The Meier &   Frank Building”
    	
 
    	
The related Commercial Real Estate Loan has a   principal balance exceeding $50 million, however, the related Loan Documents   require business interruption insurance to continue for only 12 months rather   than 18 months.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(16)
   (Insurance)
    	
 
    	
“58-30 Grand Avenue”
    	
 
    	
Regarding proceeds received in respect of a property   loss, the net proceeds threshold for the Commercial Real Estate Loan is   $300,000 of the then outstanding principal amount of the related Commercial   Real Estate Loan).
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(16)
   (Insurance)
    	
 
    	
“South City Plaza”
    	
 
    	
The related Loan Documents require insurance   proceeds in respect of a property loss to be applied to the repair or   restoration of all or part of the related Mortgaged Property, with respect to   all property losses in excess of approximately 5.9% of the then outstanding   principal amount of the related
   Commercial Real Estate Loan.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(16)
   (Insurance)
    	
 
    	
“Wilton Shoppes”
    	
 
    	
The related Loan Documents require only that the   related borrower restore the related Mortgaged Property following a casualty   if the insurance proceeds are made available for such restoration.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(17)
   (Access; Utilities; Separate Tax Lots)
    	
 
    	
“St. Paul Place”
    	
 
    	
A portion of subsurface property adjacent to the   related Mortgaged Property was abandoned and quitclaimed to the related   borrower by the city of Dallas on September 12, 2018. The related seller   intends to record a supplemental deed of trust and supplemental assignment of   leases and rents against the subject subsurface property and obtain a loan   policy of title insurance in connection therewith.
    

 

Schedule (1)(a)-7

 

	
Representation
   and Warranty
    	
 
    	
Property Name
    	
 
    	
Exception
    
	
(B)(24)
   (Local Law Compliance)
    	
 
    	
“Shippan Landing”
   “Andover Landing”
   “Mill and Main”
   “58-30 Grand Avenue”
   “Moxy Hotel”
   “446 West 14th Street
   “Pueblo del Sol”
   “Vantage on the Park”
   “Wilton Shoppes”
   “Alpine Creek Apartments”
   “One Pine Apartments”
    	
 
    	
With respect to the individual properties comprising   the related Mortgaged Properties, such properties are generally legal   nonconforming with regard to one or more of the following factors: use,   parking, size/height, density and/or setbacks.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(26)
   (Recourse Obligations)
    	
 
    	
“Shippan Landing”
   “100 Jefferson Road”
    	
 
    	
The related borrower and related guarantor are   liable for losses relating to the intentional material physical waste at the   related Mortgaged Property to the extent there exists sufficient cash flow   from the property that is made available to the related borrower.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(26)
   (Recourse Obligations)
    	
 
    	
“St. Paul Place”
    	
 
    	
The related Commercial Real Estate Loan is fully   recourse with respect to bankruptcy of the guarantor only if the guarantor   consents to or otherwise joins in any involuntary bankruptcy petition filed   against it (as opposed to any involuntary petition even if the guarantor does   not consent or join in).
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(26)
   (Recourse Obligations)
    	
 
    	
“Snow King Resort”
    	
 
    	
The related Commercial Real Estate Loan is recourse   for losses in the event of intentional (as opposed to material)   misrepresentation by the related mortgagor or the related guarantor, and the   related Commercial Real Estate Loan is recourse for losses in the event of   the commission of material physical waste at the Mortgaged Property only to   the extent it is caused by active, intentional acts of the related mortgagor,   the related guarantor, or any affiliate of the related borrower.
    
   In addition, the related Commercial Real Estate Loan is recourse for losses   in connection with (i) defaults by the related borrower and its   affiliates under any franchise agreement that would allow the franchisor to   terminate any franchise agreement, and (ii) the related borrower’s   indemnification obligations in connection with the liquor license concession   agreement are each loss recourse carveouts.
    

 

Schedule (1)(a)-8

 

	
Representation
   and Warranty
    	
 
    	
Property Name
    	
 
    	
Exception
    
	
(B)(26)
   (Recourse Obligations)
    	
 
    	
“Mill and Main”
    	
 
    	
The related Loan Documents provide for recourse if   the related borrower, guarantor or any affiliate of any of them commits   deliberate, material physical waste of the Mortgaged Property but the   performance of alterations, renovations, demolition in accordance with the   terms of the Loan Documents is not considered waste and the failure by the   guarantor or any direct or indirect owner in the related borrower to   contribute additional capital is not deemed to be deliberate physical waste.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(26)
   (Recourse Obligations)
    	
 
    	
“Moxy Hotel”
    	
 
    	
The related Commercial Real Estate Loan is recourse   if (A) the related hotel management agreement expires and is not   promptly replaced in accordance with the terms of the related Loan Documents   or the related borrower cancels, terminates, surrenders, amends or modifies   the hotel management agreement without the prior written consent of Lender;   (B) the related franchise agreement expires and is not promptly replaced   in accordance with the terms of the related Loan Documents or the related   borrower cancels, terminates the franchise agreement without the prior   written consent of Lender; or (C) there is any modification or amendment   of the terms or provisions of the related ground lease in violation of the   loan agreement.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(26)
   (Recourse Obligations)
    	
 
    	
“One Commerce”
    	
 
    	
The related Commercial Real Estate Loan is recourse   for losses in the event of a modification or amendment of any of the Master   Ground Lease, the Parking Garage Ground Lease or the leasehold interest on   the office tower parcel (the “Office Tower Ground Lease”), in each   case, in violation of the related Loan Documents. Additionally, it is full   recourse in the event that any of the Master Ground Lease, the Parking Garage   Ground Lease or the Office Tower Ground Lease is terminated.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(26)
   (Recourse Obligations)
    	
 
    	
“The Grand Hotel”
    	
 
    	
The related borrower will be liable to Lender for   losses due to the failure to repay all or a portion of that certain loan from   Hyatt to the related borrower in the amount of $1,360,000, to the extent due   and payable pursuant to the related franchise agreement.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(27)
   (Mortgage Releases)
    	
 
    	
“The Meier &   Frank Building”
    	
 
    	
The related Loan Documents permit the related   borrower and the owner of one hospitality unit on floors 6 through 16 of the   Mortgaged Property (which operates as a hotel and is not collateral for the   related Mortgage Loan) to exchange certain of their respective condominium   units with each other (the 
    

 

Schedule (1)(a)-9

 

	
Representation
   and Warranty
    	
 
    	
Property Name
    	
 
    	
Exception
    
	
 
    	
 
    	
 
    	
 
    	
“Meier & Frank Parcel Swap),   provided that certain conditions are satisfied, including, but not limited to   the completion of certain construction work as described in the related Loan   Documents and an amendment to the related condominium documents, which amendment   is subject to Lender approval. The Meier & Frank Parcel Swap will   reduce the related borrower’s ownership in the entire condominium building   from a 45% ownership interest to an approximately 42.2% ownership interest.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(27)
   (Mortgage Releases)
    	
 
    	
“Shippan Landing”
    	
 
    	
The partial release amount for the related Mortgaged   Property is equal to the greater of (x) the net proceeds for each   released property, and (y) the product of the allocated loan amount each   released property times one hundred twenty percent (120%), together with the   applicable portion of the prepayment premium and exit fee, if any.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(27)
   (Mortgage Releases)
    	
 
    	
“Andover Landing”
    	
 
    	
The related borrower is permitted to release   unimproved, non-income producing parcels of the related Mortgaged Property to   governmental authorities for dedication or public use pursuant to immaterial   transfers permitted under the related Loan Documents, provided that so long   as the related Commercial Real Estate Loan is included in a REMIC trust no   release will be permitted unless certain REMIC requirements are satisfied,   which may include an opinion of counsel to such effect.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(27)
   (Mortgage Releases)
    	
 
    	
“Mill and Main”
    	
 
    	
The related Loan documents expressly permit the   release of a certain portion of land from the loan collateral in response to   a contemplated condemnation by the Town of Maynard as set forth in that   certain Notice of Taking from the Office of the Town Administrator for the   Town of Maynard dated August 20, 2018. The condemnation proceeding has   occurred and the award from the condemnation proceeding was deposited into   the clearing account. The condemned parcel will be released from the   collateral for the related Commercial Real Estate Loan upon satisfaction of   certain conditions more particularly set forth in the related Loan Documents
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(28)
   (Financial Reporting and Rent Rolls)
    	
 
    	
“The Quinn at   Westchase”
   “The Bloc”
   “446 West 14th Street”
   “Pueblo del Sol”
   “Vantage on the Park”
    	
 
    	
Under the terms of the related Loan Documents, each   related borrower is required to deliver monthly and/or quarterly, but not   annual, operating statements.
    

 

Schedule (1)(a)-10

 

	
Representation
   and Warranty
    	
 
    	
Property Name
    	
 
    	
Exception
    
	
 
    	
 
    	
“500 EJC”
   “Wilton Shoppes”
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(28)
   (Financial Reporting and Rent Rolls)
    	
 
    	
“100 Jefferson Road”
    	
 
    	
The related Mortgage Loan is with more than one   borrower, however the related borrowers are not required to prepare combined   financial statements.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(28)
   (Financial Reporting and Rent Rolls)
    	
 
    	
“The Grand Hotel”
    	
 
    	
Under the terms of the related Loan Documents, the   related borrower is required to deliver rent rolls only upon request, but not   monthly and/or quarterly.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(30)
   (Due on Sale or Encumbrance)
    	
 
    	
“100 Jefferson Road”
    	
 
    	
The related Loan Documents permit a change of   control pursuant to the exercise of the Harbor Group International entities’   rights under the joint venture agreement so long as certain conditions are   satisfied, including certain Harbor Group International entities are required   to control the related borrower and maintain a certain ownership interest in   the related borrower, and the Harbor Group International entities are   required to deliver a replacement guaranty.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(30)
   (Due on Sale or Encumbrance)
    	
 
    	
“St. Jean Apartments”
    	
 
    	
Permitted transfers include specified transfers of   interests between the joint venture members of the related borrower, as more   specifically described in the related Loan Documents.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(30)
   (Due on Sale or Encumbrance)
    	
 
    	
“Andover Landing”
    	
 
    	
The related borrower may, without Lender’s consent,   make certain immaterial transfers of unimproved, non-income producing   portions of the related Mortgaged Property to governmental authorities for   dedication or public use and grant easements in the ordinary course of   business, as more particularly described in the related Loan Documents.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(30)
   (Due on Sale or Encumbrance)
    	
 
    	
“The Quinn at   Westchase”
    	
 
    	
The related Loan Documents permit a specified buyout   or removal of one joint venture member of the related borrower by another   joint venture member of the related borrower, pursuant to the terms of the   related joint venture agreement and subject to certain conditions contained   in the related Loan Documents, without Lender consent provided that all   conditions to such buyout or removal contained in the loan agreement are satisfied   (i.e. putting up a replacement guarantor, replacing the affiliated manager   with a new property manager, delivery of opinions, etc.).
    

 

Schedule (1)(a)-11

 

	
Representation
   and Warranty
    	
 
    	
Property Name
    	
 
    	
Exception
    
	
(B)(30)
   (Due on Sale or Encumbrance)
    	
 
    	
“The Bloc”
    	
 
    	
The related Loan Documents permit a sale or merger   of Preferred Apartment Communities, Inc. to or with a qualified public   company, provided that (i) either Preferred Apartment   Communities, Inc., Preferred Apartment Communities Operating   Partnership, L.P., or such qualified public company (a) directly or   indirectly control the related borrower and (b) owns a direct or   indirect 51% or more interest of the related borrower after such sale,   (ii) the related borrower remains a special purpose vehicle,   (iii) if the related guarantor is no longer under common control with   the related borrower as a result of such sale, a satisfactory replacement   guarantor has assumed all of the obligations under the related guaranty and   environmental indemnity, (iv) such qualified public company is a   qualified transferee pursuant to the related Loan Documents, and   (v) certain other conditions to such public sale contained in the related   loan agreement.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(30)
   (Due on Sale or Encumbrance)
    	
 
    	
“Gramercy Plaza”
    	
 
    	
Under the related Loan Documents, AIM Torrance   Office LLC has the right to remove Gramercy SB, LLC as the managing member of   Preylock Gramercy Holdings, LLC pursuant to that certain limited liability   company agreement of Preylock Gramercy Holdings, LLC for (i) bad acts   and (ii) pursuant to certain buy/sell rights triggered by   (A) deadlock, (B) at any time following 6 months after the   effective date or (C) if the related Mortgaged Property has achieved a   70% occupancy rate.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(30)
   (Due on Sale or Encumbrance)
    	
 
    	
“500 EJC”
    	
 
    	
The related Loan Documents permit a removal of one   joint venture partner by the other joint venture partner pursuant to the   terms of the joint venture agreement and subject to certain conditions   contained in the related Loan Documents without Lender consent, provided that   all conditions to such buyout or removal contained in the loan agreement are   satisfied (i.e. putting up a pre-approved replacement guarantor who satisfies   the net worth and liquidity covenants in the guaranty and delivers an   anti-money laundering letter with respect to such replacement guarantor,   replacing any affiliated manager with a new property manager, delivery of   opinions, etc.).
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(31)
   (Single Purpose Entity)
    	
 
    	
“Snow King Resort”
   “Mill and Main”
   “Vantage on the Park”
   “Moxy Hotel”
   “446 West 14th Street”
    	
 
    	
The single-purpose entity is a recycled   single-purpose entity.
    

 

Schedule (1)(a)-12

 

	
Representation
   and Warranty
    	
 
    	
Property Name
    	
 
    	
Exception
    
	
(B)(31)
   (Single Purpose Entity)
    	
 
    	
“The Bloc”
   “The Grand Hotel”
   “Pueblo del Sol”
   “Vantage on the Park”
   “500 EJC”
   “Wilton Shoppes”
    	
 
    	
The balance of the related Commercial Real Estate   Loan exceeds $20 million, however, a non-consolidation opinion was not   obtained at origination.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(33)
   (Floating Interest Rates)
    	
 
    	
All Collateral   Interests
    	
 
    	
The interest rate can be based on an “Alternative   Index,” “Static LIBOR Rate,” “Prime Rate,” or “Substitute Rate” (each as   defined in the related Loan Documents) instead of LIBOR under certain   circumstances.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(34)
   (Ground Leases)
    	
 
    	
“100 Jefferson Road”
    	
 
    	
The Mortgaged Property consists of property owned in   fee by one of the related mortgagors and a leasehold interest held in such   property on the roof pursuant to a rooftop lease by the other related   mortgagor.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(34)(j)
   (Ground Leases)
    	
 
    	
“Moxy Hotel”
    	
 
    	
The related ground lease estoppel provides that any   proceeds payable in the event of casualty or any condemnation award   attributable to the interests of the related borrower must be paid over to   Lender (or a trustee) and disbursed in accordance with the related security   instrument.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(34)
   (Ground Leases)
    	
 
    	
“100 Park”
    	
 
    	
(b) The related master ground lease does not   contain a prohibition on amendment, however, the related Loan Documents   provide for an event of default if such master ground lease is amended in a   materially adverse way.
    
   (f) The master ground lease estoppel confirms there are no defaults   under the master ground lease but notes that the tenant thereunder has not   delivered certain project close-out documentation which could, with the   passage of time, become an event of default. Borrower has a post-closing obligation   to deliver this documentation which includes, as-built surveys for the hotel   and apartment components, as built plans and specs for the hotel, retail and   apartment components, copies of final lien releases from general contractors   and subcontractors ($50,000 or more) and copies of the title policy   endorsements to the ground lessee’s title policy regarding mechanic’s and   materialman’s liens for all components, copies of warranties obtained for the   subprojects from the general contractor(s) as well as for any particular   piece of equipment or component of the work which required a separate   warranty, and upon delivery of these items the 
    

 

Schedule (1)(a)-13

 

	
Representation
   and Warranty
    	
 
    	
Property Name
    	
 
    	
Exception
    
	
 
    	
 
    	
 
    	
 
    	
related borrower is obligated to deliver a clean   estoppel from the landlord under the master ground lease.
    
   (j)  Per the related ground lease, any amounts under $250,000 are held   by the related borrower and any amounts over $250,000 are held by a national   bank selected by the related borrower from the three national banks then   doing business in Houston, Harris County, Texas, which have the largest   aggregate amount of capital and surplus.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(34)(j)
   (Ground Leases)
    	
 
    	
“One Commerce”
    	
 
    	
The Mortgaged Property is comprised of three parcels   of property, two of which are each subject to ground lease. The part of the   Mortgaged Property consisting of an office tower is subject to a ground   lease, and the related borrower has an option to purchase the fee interest in   the leased premises for $1,000. The part of the Mortgaged Property consisting   of a parking garage is subject to a ground sublease, and the related borrower   has an option to purchase the fee interest in the leased premises subject to   payment of any amounts outstanding under a certain bond financing obtained by   the ground sublessor (which amount, as of the origination of the related   Commercial Real Estate Loan, was equal to $1,870,880.50).
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(39)
   (Organization of Borrower
    	
 
    	
“Flats on LaSalle”
   “100 Park”
    	
 
    	
The related borrower under the Flats on LaSalle Loan   Documents and the related borrower under the 100 Park Loan Documents are   affiliates of one another.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(39)
   (Organization of Borrower
    	
 
    	
“Alpine Creek   Apartments”
   “One Pine Apartments”
    	
 
    	
The related borrower under the Alpine Creek   Apartments Loan Documents and the related borrower under the One Pine   Apartments Loan Documents are affiliates of one another.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(B)(40)
   (Environmental Conditions)
    	
 
    	
“The Meier &   Frank Building”
   “Shippan Landing”
   “St. Paul Place”
   “One Union Center”
   “St. Jean Apartments”
   “Andover Landing”
   “South City Plaza”
   “Moxy Hotel”
   “Pueblo del Sol”
    	
 
    	
The Phase I environmental reports for the related   Mortgaged Properties are dated more than twelve months prior to the Cut-Off   Date.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(C)(6)
    	
 
    	
“St. Paul Place”
   “Andover Landing”
    	
 
    	
The related Mezzanine Loan is not a first priority   mortgage lien but rather a subordinate loan.
    

 

Schedule (1)(a)-14

 

	
Representation
   and Warranty
    	
 
    	
Property Name
    	
 
    	
Exception
    
	
(Lien; Valid   Assignment)
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(C)(9)
   (Payment Procedure)
    	
 
    	
“St. Paul Place”
    	
 
    	
Unless there is an event of default under the   related Mortgage Loan, any funds remaining after payment of all amounts due   under the related Loan Documents during a “Cash Sweep Period” (as defined in   the related Loan Documents) (following the payment to mezzanine lender   amounts due under the Mezzanine Loan) are held by the holder or servicer of   the related Mortgage Loan in a reserve account as collateral for the related   Mortgage Loan.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(C)(13)
   (No Holdbacks)
    	
 
    	
“St. Paul Place”
    	
 
    	
The related Mezzanine Loan has not been fully funded   and the Mezzanine Loan documents contemplate future funding of the Mezzanine   Loan subject to satisfaction of the conditions set forth in the Mezzanine   Loan documents. The holder of the future funding pari passu   participation interest in the Mezzanine Loan, has the obligation to fund such   future advances.
    

 

Schedule (1)(a)-15

 

SCHEDULE 1(b) TO EXHIBIT B

 

EXISTING MEZZANINE DEBT

 

Collateral Interests with Existing Mezzanine Debt included as a part of the Collateral Interest:

 

St. Paul Place

 

Andover Landing

 

Collateral Interests with Existing Mezzanine Debt included as a part of the Collateral Interest:

 

None

 

Schedule 1(b)-1

 

SCHEDULE 1(c) TO EXHIBIT B

 

FUTURE MEZZANINE DEBT

 

None.

 

Schedule 1(c)-1

 

SCHEDULE 1(d) TO EXHIBIT B

 

CROSSED COMMERCIAL REAL ESTATE LOANS

 

None.

 

Schedule 1(d)-1

 

EXHIBIT C

 

FORM OF SUBSEQUENT TRANSFER INSTRUMENT

 

THIS SUBSEQUENT TRANSFER INSTRUMENT is made as of [DATE] between GPMT Seller LLC, a Delaware limited liability company (the “Seller”) and GPMT 2019-FL2, Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Issuer”) and Granite Point Mortgage Trust Inc. (“GPMT”).

 

In accordance with the Collateral Interest Purchase Agreement (the “Agreement”) dated as of February 28, 2019, between the Seller, the Issuer and GPMT, the Seller does hereby transfer, assign, set over and otherwise convey, as of the date hereof, without recourse, to the Issuer or directly to the Issuer as its designee all of its right, title and interest in the Collateral Interest identified on Schedule A attached hereto which shall supplement Exhibit A to the Agreement, and any and all rights to receive payments on or with respect to the Collateral Interests after the date hereof (other than payments due before the date hereof, which shall belong to and promptly be remitted to the Seller).

 

Except as set forth on Schedule B attached hereto, the Seller hereby reaffirms that all of the representations and warranties made by it in Section 4 of the Agreement, relating to itself and the Collateral Interests are true and correct as of the date hereof.  The Seller further represents, warrants and confirms the satisfaction of the conditions precedent specified in Section 3 of the Agreement.  GPMT reaffirms that all of the representations and warranties made by it in Section 4(k) of the Agreement are true and correct as of the date hereof.  In addition, each party hereby represents and warrants to the other party that (i) it is duly organized and validly existing as an entity under the laws of the jurisdiction in which it is chartered or organized, (ii) it has the requisite organization power and authority to enter into and perform this Subsequent Transfer Instrument, and (iii) this Subsequent Transfer Instrument has been duly authorized by all necessary organizational action, has been duly executed by one or more duly authorized officers and is the valid and binding agreement of such party enforceable against such party in accordance with its terms.

 

The purchase price and Cut-off Date with respect to the Collateral Interests transferred hereby are each set forth on Schedule A hereto.

 

All capitalized terms used herein and not otherwise defined shall have the meanings given them in the Agreement.

 

As supplemented by this Subsequent Transfer Instrument, the Agreement is in all respects ratified and confirmed and the Agreement as so supplemented, shall be read, taken and construed as one and the same instrument.

 

This Subsequent Transfer Instrument shall be construed in accordance with the laws of the State of New York.

 

 

IN WITNESS WHEREOF, the undersigned has caused this Subsequent Transfer Instrument to be duly executed as of the date first written above.

 

	
 
    	
GPMT   SELLER LLC, as Seller
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
GPMT   2019-FL2, LTD., as Issuer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
GRANITE   POINTE MORTGAGE TRUST INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

SCHEDULE A

 

LIST OF COLLATERAL INTERESTS

 

	
Name
    	
 
    	
Purchase Price
    	
 
    	
Cut-off Date
    	
 
    	
Retained Interest
    	
 
    
	
[            ]
    	
 
    	
$
    	
[            ]
    	
 
    	
[            ]
    	
 
    	
$
    	
[            ]
    	
 
    
										

 

 

SCHEDULE B

 

EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES

 

	
Rep. No. on
   Exhibit B
    	
 
    	
Mortgaged Property
    	
 
    	
Description of Exception

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