Document:

Exhibit 10.1

    
      
EXECUTION
      COPY

     

    Exhibit
      10.1

     

     

     

    SECOND
      AMENDMENT AND WAIVER, dated
      as
      of November 4, 2005 (“Amendment”), to CREDIT
      AND SECURITY AGREEMENT, dated
      as
      of June 29, 2004 (as amended from time to time, the “Credit Agreement”), among
INFOTECH
      USA, INC.,
      a New
      Jersey corporation, as borrower (the “Borrower”), INFOTECH
      USA, INC.,
      a
      Delaware corporation, and INFORMATION
      TECHNOLOGY SERVICES, INC.,
      a New
      York corporation, as guarantors (together with the Borrower, the “Obligors”),
      and WELLS
      FARGO BANK, NATIONAL ASSOCIATION,
      acting
      through its Wells Fargo Business Credit operating division (the “Lender”). Terms
      which are capitalized in this Amendment and not otherwise defined shall have
      the
      meanings ascribed to such terms in the Credit Agreement.

     

    WHEREAS, the
      Obligors have requested that the Lender waive as an Event of Default a violation
      of one of the financial covenants contained in the Credit Agreement, and modify
      certain terms of the Credit Agreement, and the Lender has agreed to the
      foregoing request, on the terms and conditions set forth herein;

     

    NOW,
      THEREFORE,
      in
      consideration of the mutual promises contained herein, and for other good and
      valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the Obligors and the Lender hereby agree as follows:

     

    Section
      One.    
      Amendments.
      Effective as of the date hereof, upon satisfaction of the conditions precedent
      set forth in Section Five hereof, the Credit Agreement is hereby amended as
      follows:

     

    (a)    Clause (i)
      of the definition of the term “Eligible Accounts” in Section 1.1 of the
      Credit Agreement is deleted in its entirety and the following substituted in
      lieu thereof:

     

    “(i)
      (a) That portion of Accounts (other than Accounts owing by Hackensack
      University Medical Center to the Borrower) unpaid 91 days or more after the
      invoice date or 61 days or more after the original due date (without reducing
      such amount by the amount of any credit balances); and (b) that portion
      of
      Accounts owing by Hackensack University Medical Center to the Borrower unpaid
      121 days or more after the invoice date or 91 days or more after the original
      due date (without reducing such amount by the amount of any credit
      balances);”

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)    Section
      6.2(c) Minimum
      Net Income. As
      of the
      end of each period set forth below, the Obligors will have achieved Net Income,
      on a cumulative quarterly basis, of not less than the amount set forth below
      opposite such period:

     

    
      	 	
              “Period

            	
              Minimum

              Net
                Income

            
	
              A.

            	
              fiscal
                quarter ending in December 2005

            	
              $(200,000)

            
	 	 	 
	
              B.

            	
              two
                (2) fiscal quarters ending in March 2006

            	
              $(292,000)

            
	 	 	 
	
              C.

            	
              three
                (3) fiscal quarters ending in June 2006

            	
              $(301,000)

            
	 	 	 
	
              D.

            	
              four
                (4) fiscal quarters ending in September 2006

            	
              $(386,000)

            

    

     

    As
      of the
      end of each fiscal quarter ending after September 30, 2006, the Obligors will
      have Net Income on a cumulative quarterly basis of not less than eighty percent
      (80%) of the projected cumulative Net Income of the Obligors for such period,
      as
      set forth in the projections for such period delivered to the Lender. The
      Obligors’ failure to deliver projections to the Lender pursuant to Section
      6.1(d) that are acceptable to the Lender, in its sole discretion, shall
      constitute an Event of Default.”

     

    Section
      Two.    
      Waivers.
      The
      Obligors have notified the Lender that the Obligors’ cumulative Net Income for
      the fiscal year ended September 30, 2005, is expected to be less than $(60,000).
      The failure of the Obligors to have cumulative Net Income for the fiscal year
      ended September 30, 2005 in an amount equal to at least $(60,000) (which amount
      equals 80% of the projected cumulative Net Income for such period), in violation
      of Section 6.2(c) of the Credit Agreement, constitutes an Event of Default
      under
      Section 7.1(b) of the Credit Agreement. The Event of Default expressly referred
      to in this paragraph is herein referred to as the “Designated
      Default.”

     

    Effective
      as of the date hereof, upon the satisfaction of the conditions precedent set
      forth in Section Five hereof, the Lender hereby waives the Designated Default
      as
      an Event of Default. Nothing herein shall constitute a waiver by the Lender
      of
      any other Default or Event of Default, whether or not the Lender has any
      knowledge thereof, nor shall anything herein be deemed a waiver by the Lender
      of
      any Default or Event of Default which may occur after the date of this
      Amendment.

     

    Section
      Three.    
      Amendment
      and Waiver Fee.
      In
      consideration for the amendments and waiver provided herein, the Borrower shall
      pay to the Lender a non-refundable fee in the amount of $25,000 (the “Amendment
      Fee”), which fee shall be fully earned on the date hereof and shall be payable
      in three (3) installments as follows: (a) $10,000 on January 2,
      2006;
      (b) $10,000 on February 6, 2006; and (c) $5,000 on March 6,
      2006. The failure of the Borrower to pay any installment of the Amendment Fee
      shall constitute an Event of Default.

     

    Section
      Four.    
      Representations
      and Warranties.
      To
      induce the Lender to enter into this Amendment, each Obligor warrants and
      represents to the Lender as follows:

     

    
      
         

      

      
        -
          2
          -

        
          

        

      

      
         

      

    

    (a)    all
      of
      the representations and warranties contained in the Credit Agreement and each
      other Loan Document continue to be true and correct in all material respects
      as
      of the date hereof, as if repeated as of the date hereof, except for such
      representations and warranties which, by their terms, are only made as of a
      previous date;

     

    (b)    the
      execution, delivery and performance of this Amendment by each Obligor is within
      its corporate powers, has been duly authorized by all necessary corporate action
      on its part, and each Obligor has received all necessary consents and approvals
      (if any shall be required) for the execution and delivery of this
      Amendment;

     

    (c)    upon
      its
      execution, this Amendment shall constitute the legal, valid and binding
      obligation of each Obligor, enforceable against each Obligor in accordance
      with
      its terms, except as such enforceability may be limited by (i)
      bankruptcy, insolvency or similar laws affecting creditors’ rights generally and
(ii)
      general
      principles of equity;

     

    (d)    no
      Obligor is in default under any indenture, mortgage, deed of trust, or other
      material agreement or material instrument to which it is a party or by which
      it
      may be bound. Neither the execution and delivery of this Amendment, nor the
      consummation of the transactions herein contemplated, nor compliance with the
      provisions hereof will (i)
      violate
      any law or regulation applicable to any Obligor, (ii)
      cause a
      violation by any Obligor of any order or decree of any court or government
      instrumentality applicable to it, (iii)
      conflict
      with, or result in the breach of, or constitute a default under, any indenture,
      mortgage, deed of trust, or other material agreement or material instrument
      to
      which any Obligor is a party or by which it may be bound, (iv)
      result
      in the creation or imposition of any lien, charge, or encumbrance upon any
      property of any Obligor, except in favor of the Lender, to secure the
      Obligations, or (v)
      violate
      any provision of the Constituent Documents of any Obligor;

     

    (e)    no
      Default or Event of Default has occurred and is continuing, except for the
      Designated Default which has been waived pursuant to Section Two hereof;
      and

     

    (f)    since
      September 30, 2005, no change or event has occurred which has had or
      is
      reasonably likely to have a Material Adverse Effect.

     

    Section
      Five.    
      Conditions
      Precedent.
      This
      Amendment shall become effective upon the date on which all of the following
      events shall have occurred; provided,
      however,
      that in
      the event that all of the following events shall not have occurred on or before
      November 8, 2005, then this Amendment shall thereafter be null and void and
      cease to be of any force and effect:

     

    (a)    the
      Lender shall have received this Amendment, duly executed by each Obligor;

     

    (b)    the
      Lender shall have received payment of all fees and disbursements incurred by
      the
      Lender in connection with the preparation, negotiation and closing of this
      Amendment and the transactions contemplated to occur hereunder; and

     

    (c)    except
      for the Designated Default which has been waived pursuant to Section Two hereof,
      no Default or Event of Default shall have occurred and be continuing,
      and

     

    
      
         

      

      
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          3
          -

        
          

        

      

      
         

      

    

    no
      event
      or development which has had or is reasonably likely to have a Material Adverse
      Effect shall have occurred, in each case since the date of the financial
      statements referred to above.

     

    Section
      Six.    
      General
      Provisions.

     

    (a)    Except
      as
      herein expressly amended, the Credit Agreement and all of the other Loan
      Documents are ratified and confirmed in all respects and shall remain in full
      force and effect in accordance with their respective terms.

     

    (b)    All
      references to the Credit Agreement in the Loan Documents shall mean the Credit
      Agreement as amended as of the effective date hereof, and as amended hereby
      and
      as hereafter amended, supplemented and modified from time to time.

     

    (c)    This
      Amendment embodies the entire agreement between the parties hereto with respect
      to the subject matter hereof and supercedes all prior agreements, commitments,
      arrangements, negotiations or understandings, whether written or oral, of the
      parties with respect thereto.

     

    (d)    This
      Amendment shall be governed by and construed in accordance with the internal
      laws of the State of New York, without regard to the conflicts of law principals
      thereof.

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

    
      
         

      

      
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          4
          -

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the
      Obligors and the Lender have signed below to indicate their agreement with
      the
      foregoing and their intent to be bound thereby.

     

    
      	 	
              INFOTECH
                USA, INC.,
                a
                New Jersey corporation

               

               

              By:
                /s/ J. Robert Patterson

              Name: 
                J.
                Robert Patterson

              Title:   
                Secretary
                and Treasurer

            
	 	 
	 	
              INFOTECH
                USA, INC.,
                a
                Delaware corporation

               

               

              By:
                /s/ J. Robert Patterson

              Name: 
                J.
                Robert Patterson

              Title:   
                Chief
                Financial Officer, Vice President

                          
                and Treasurer

            
	 	 
	 	
              INFORMATION
                TECHNOLOGY SERVICES, INC.

               

               

              By:/s/
                J. Robert Patterson

              Name: J.
                Robert Patterson

              Title:  
                Chief
                Financial Officer, Vice President

                          
                and Treasurer

            
	 	 
	 	
              WELLS
                FARGO BANK, NATIONAL

              ASSOCIATION,
                acting
                through its Wells Fargo

              Business
                Credit operating division

               

               

              By:
                /s/ Sal Mutone

              Name: 
                Sal
                Mutone

              Title:   
                Vice
                President

            

    

    
 

     

     

    -
      5
      -Exhibit 10.1

 

MASTER
REPURCHASE AGREEMENT

 

Dated as of November 7, 2005

 

BETWEEN:

 

ALPINE
SECURITIZATION CORP. (“Alpine”) and each BANK (as defined below) (each, a “Buyer”
and, collectively, the “Buyers”);

 

CREDIT SUISSE, NEW YORK
BRANCH, as agent for the Buyers (the “Agent”);

 

and

 

SPIRIT FINANCE
CORPORATION, as seller (“Seller”).

 

1.                                      APPLICABILITY

 

Buyers and Seller may,
from time to time, enter into transactions in which Seller transfers to a Buyer
Eligible Assets against the transfer of funds by such Buyer, with a
simultaneous agreement by such Buyer to transfer to Seller such Purchased
Assets, at a date certain,  against the
transfer of funds by Seller. Each such transaction shall be referred to herein
as a “Transaction” and, unless otherwise agreed in writing, shall be governed
by this Agreement.

 

2.                                      DEFINITIONS
AND INTERPRETATION

 

a)             Defined Terms.

 

“Accepted Servicing
Standards” shall have the meaning assigned thereto in the Custody
Agreement.

 

“Additional Purchased
Assets” shall have the meaning assigned thereto in Section 6 hereof.

 

“Affiliate” shall
mean, with respect to any Person, any other Person which, directly or
indirectly, controls, is controlled by, or is under common control with, such
Person.  For purposes of this definition,
“control” (together with the correlative meanings of “controlled by” and “under
common control with”) means possession, directly or indirectly, of the power (a) to
vote 10% or more of the securities (on a fully diluted basis) having ordinary
voting power for the directors or managing general partners (or their
equivalent) of such Person, or (b) to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by contract, or otherwise.

 

“Agent” shall have
the meaning set forth in the preamble hereto.

 

 

“Agreement” shall
mean this Master Repurchase Agreement, as it may be amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof.

 

“ALTA” shall mean
the American Land Title Association.

 

“Appraisal” shall
mean, with respect to a Loan, an appraisal of the related Mortgaged Property
securing a Loan (i) from an MAI professional real estate appraiser who (A) is
a member in good standing of the Appraisal Institute and (B) if the state
in which the subject Mortgaged Property is located certifies or licenses
appraisers, is certified or licensed in such state, (ii) conducted in
accordance with the standards of the Appraisal Institute or such other
standards as mutually agreed to by the parties hereto and (iii) performed
within six months of the date such Appraisal is delivered to the Agent, or such
other form of appraisal approved by the Agent in its sole discretion.

 

“Appraised Value”
shall mean, with respect to any Purchased Asset, the value set forth in an
Appraisal (described on the Loan Schedule related to such Purchased Asset)
made in connection with the origination of the related Loan as the value of the
Mortgaged Property securing such Loan.

 

“Asset Base
Certificate” shall mean the certificate prepared by the Seller
substantially in the form of Exhibit L to the Custody Agreement.

 

“Bank” means
Credit Suisse, New York Branch and/or any assignee thereof.

 

“Bankruptcy Code”
shall mean Title 11, United States Code, 11 U.S.C. §§ 101 et seq., as
amended from time to time.

 

“Business Day”
shall mean any day other than (i) a Saturday or Sunday, (ii) a day on
which the New York Stock Exchange, the Federal Reserve Bank of New York, the
Custodian or banking and savings and loan institutions in New York, New York or
the city and state in which the Custodian’s offices are located are closed, or (iii) a
day on which trading in securities on the New York Stock Exchange or any other
major securities exchange in the United States is not conducted.

 

“Buyer’s Margin Amount”
shall mean, with respect to any Transaction as of any date of determination,
the amount obtained by application of the applicable Buyer’s Margin Percentage
to the Repurchase Price (exclusive of accrued Pricing Differential) for such
Transaction as of such date.

 

“Buyer’s Margin
Percentage” shall have the meaning assigned thereto in the Side Letter.

 

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

 

2

 

“Cash Equivalents”
shall mean (a) securities with maturities of 90 days or less from the date
of acquisition issued or fully guaranteed or insured by the United States
Government or any agency thereof, (b) certificates of deposit with
maturities of 90 days or less from the date of acquisition and overnight bank
deposits of any commercial bank having capital and surplus in excess of
$500,000,000, (c) repurchase obligations of any commercial bank satisfying
the requirements of clause (b) of this definition, having a term of
not more than seven days with respect to securities issued or fully guaranteed
or insured by the United States Government, (d) commercial paper of a
domestic issuer rated at least A-1 or the equivalent thereof by “S&P” or P-1
or the equivalent thereof by Moody’s and in either case maturing within 90 days
after the day of acquisition, (e) securities with maturities of 90 days or
less from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political subdivision or
taxing authority of any such state, commonwealth or territory, the securities
of which state, commonwealth, territory, political subdivision or taxing
authority (as the case may be) are rated at least A by S&P or A by Moody’s,
(f) securities with maturities of 90 days or less from the date of
acquisition backed by standby letters of credit issued by any commercial bank
satisfying the requirements of clause (b) of this definition, or (g) shares
of money market mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (a) through (f) of this
definition.

 

“Change in Control”
shall mean the acquisition, after the date of this Agreement, by any Person, or
two or more Persons acting in concert, of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended from time to time) of outstanding
shares of voting stock of the Seller at any time, if after giving effect to
such acquisition such Person or Persons owns twenty percent (20%) or more of
such outstanding voting stock.

 

“Change in Law”
shall mean (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Buyer (or any
Affiliate thereof) with any request, guideline or directive (whether or not
having the force of law) of any Governmental Authority made or issued after the
date of this Agreement.

 

“Closing Date”
shall mean November 7, 2005.

 

“Collection Account”
shall have the meaning assigned thereto in the Custody Agreement.

 

“Collection Account
Control Agreement” shall mean the Collection Account Agreement, dated as of
November 7, 2005, among PNC Bank, National Association, Midland Loan
Services, Inc, Seller and the Agent.

 

“Code” shall mean
the Internal Revenue Code of 1986, as amended from time to time.

 

“Collateral” shall
have the meaning assigned thereto in Section 9 hereof.

 

3

 

“Collateral
Agency Agreement” shall mean the Collateral Agency Agreement, dated as of
November 7, 2005, as amended, between Seller and Citibank, N.A.

 

“Collateral Value”
shall mean, with respect to each Purchased Asset, (i) on the applicable
Purchase Date, the value of such Purchased Asset as ascribed by the Agent, and (ii) on
any date of determination following the applicable Purchase Date, the least of (a) the
outstanding principal balance of such Purchased Asset, (b) the related
Market Value, (c) a value equal to 60% of the Appraised Value of such
Purchased Asset and (d) a value equal to 60% of the cost of acquiring such
Purchased Asset; provided, that, the Collateral Value shall be deemed to
be zero with respect to each Purchased Asset that is not an Eligible Asset.

 

“Collection Account”
shall have the meaning assigned thereto in the Custody Agreement.

 

“Computer Tape”
shall mean a computer tape or other electronic medium generated by or on behalf
of Seller and delivered to the Agent, on behalf of the Buyers, and Custodian
which provides information relating to the Purchased Assets, including the
information set forth in the Loan Schedule, in a format, and containing
information, acceptable to Agent.

 

“Confirmation”
shall have the meaning assigned thereto in Section 4(b) hereof.

 

“Contractual
Obligation” shall mean as to any Person, any material provision of any
agreement, instrument or other undertaking to which such Person is a party or
by which it or any of its property is bound or any material provision of any
security issued by such Person.

 

“Custodian” shall
mean LaSalle Bank, National Association, or its successors and permitted
assigns.

 

“Custodian’s Loan File”
shall have the meaning assigned thereto in the Custody Agreement.

 

“Custody Agreement”
shall mean the Custody and Servicing Agreement, dated as of November 7,
2005, as amended, among Seller, Agent, Servicer and Custodian.

 

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

 

“Default Rate”
shall mean, as of any date of determination, the lesser of (i) the Pricing
Rate plus 4% and (ii) the maximum rate permitted by applicable law.

 

“Delinquent Loan”
shall mean a Loan with respect to which (a) any related payment has not
been received on or before the date 30 days after the date on which such
payment is due pursuant to the related Master Loan Agreement or Note without
regard to any grace period or (b) the related Net Lease Borrower (i) has
applied for or consented to the appointment of, or the taking of possession by,
a receiver, custodian, trustee, examiner or liquidator of itself or of all or a
substantial part of its property, (ii) has made a general 

 

4

 

assignment for the
benefit of its creditors, (iii) is the subject of any proceeding under the
Bankruptcy Code, (iv) is the subject of any proceeding seeking to take
advantage of any other law relating to bankruptcy, insolvency, reorganization,
liquidation, dissolution, arrangement or winding-up, or composition or
readjustment of debts, or (v) has taken any corporate or other action for
the purpose of effecting any of the foregoing.

 

“Effective Date”
shall mean the date set forth on the top of the first page of this
Agreement.

 

“Eligible Asset”
shall have the meaning assigned thereto in the Side Letter.

 

“ERISA Affiliate”
shall mean any corporation or trade or business that is a member of any group
of organizations (i) described in Section 414(b) or (c) of
the Code of which  the Seller is a member
and (ii) solely for purposes of potential liability under Section 302(c)(11)
of ERISA and Section 412(c)(11) of the Code and the lien created under Section 302(f) of
ERISA and Section 412(n) of the Code, described in Section 414(m) or
(o) of the Code of which the Seller is a member.

 

“Event of Default”
shall have the meaning assigned thereto in Section 19 hereof.

 

“Foreign Buyer”
shall mean any Buyer that is organized under the laws of a jurisdiction other than
the one in which Seller is located.  For
purposes of this definition, the United States of America, each state thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.

 

“GAAP” shall mean
generally accepted accounting principles in the United States of America in
effect from time to time.

 

“Governmental
Authority” shall mean, with respect to any Person, any nation or
government, any state or other political subdivision thereof, or any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government and any court or arbitrator having
jurisdiction over such Person, any of its subsidiaries or any of their
properties.

 

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

 

5

 

“Hedge Counterparty”
shall mean a Person (i) (A) with commercial paper or short-term
deposit ratings of “P-1” by Moody’s and “A-1” by S&P and the equivalent
long-term ratings by Moody’s and S&P and (B) which shall agree in
writing that, in the event that any of its commercial paper or short-term
deposit ratings cease to be at or above “A-2” by Moody’s and “A” by S&P or
the equivalent long-term ratings by Moody’s and S&P, it shall secure its
obligations in accordance with the request of the Agent or Agent shall have the
option to treat such failure as an Early Termination Event (as defined in the
ISDA Master Agreement) by such Hedge Counterparty, (ii) that has entered
into a Hedge Instrument and (iii) that is acceptable to the Agent.

 

“Hedge Instrument”
shall mean any interest rate cap agreement, interest rate floor agreement,
interest rate swap agreement or other interest rate hedging agreement entered
into by the Seller with a Hedge Counterparty. 
Each Hedge Instrument shall be a hedging instrument as described in Section 856(c)(6).

 

“Improvements”
shall mean all buildings, structures, improvements, parking areas, landscaping,
fixtures and articles of property now erected on, attached to, or used or
adapted for use in the operation of any Mortgaged Property, including, without
limitation, all heating, air conditioning and incinerating apparatus and
equipment, all boilers, engines, motors, dynamos, generating equipment, piping
and plumbing fixtures, water heaters, ranges, cooking apparatus and mechanical
kitchen equipment, refrigerators, freezers, cooling, ventilating, sprinkling
and vacuum cleaning systems, fire extinguishing apparatus, gas and electric
fixtures, carpeting, floor covering, underpadding, storm sashes, awnings,
signs, furnishings of public spaces, halls and lobbies, and shrubbery and
plants.

 

“Income” shall
mean, with respect to any Purchased Asset at any time, any principal payments
and all interest payments thereon and all sale proceeds (including, without
limitation, any proceeds from the securitization of such Purchased Asset or
other disposition thereof) and all other collections and distributions thereon
or related thereto (including, without limitation, any proceeds received in
respect of mortgage insurance), but not including any commitment or origination
fees.

 

“Indebtedness”
shall mean, for any Person:  (a) obligations
created, issued or incurred by such Person for borrowed money (whether by loan,
the issuance and sale of debt securities or the sale of Property to another
Person subject to an understanding or agreement, contingent or otherwise, to
repurchase such Property from such Person); (b) obligations of such Person
to pay the deferred purchase or acquisition price of Property or services,
other than trade accounts payable (other than for borrowed money) arising, and
accrued expenses incurred, in the ordinary course of business so long as such
trade accounts payable are payable within ninety (90) days of the date the
respective goods are delivered or the respective services are rendered; (c) indebtedness
of others secured by a Lien on the Property of such Person, whether or not the
respective indebtedness so secured has been assumed by such Person; (d) obligations
(contingent or otherwise) of such Person in respect of letters of credit or
similar instruments issued or accepted by banks and other financial
institutions for account of such Person; (e) Capital Lease Obligations of
such Person; (f) obligations of such Person under repurchase 

 

6

 

agreements or like
arrangements; (g) indebtedness of others Guaranteed by such Person; (h) all
obligations of such Person incurred in connection with the acquisition or
carrying of fixed assets by such Person; (i) indebtedness of general
partnerships of which such Person is a general partner; and (j) any other
indebtedness of such Person by a note, bond, debenture or similar instrument.

 

“Investment Company
Act” shall mean the Investment Company Act of 1940, as amended, including
all rules and regulations promulgated thereunder.

 

“Intercreditor
Agreement” shall mean the Intercreditor Agreement, dated as of November 7,
2005, among Spirit Master Funding II, LLC, Seller, the Custodian, Citigroup
Global Markets Realty Corp., the Agent and the Buyers as amended, supplemented,
modified or restated from time to time.

 

“LIBO Rate” shall
mean with respect to each day a Transaction is outstanding (or if such day is
not a Business Day, the next succeeding Business Day), the rate (reset on a
daily basis) per annum equal to the rate published by Bloomberg or if such rate
is not available, the rate appearing at page 3750 of the Telerate Screen
as one-month LIBO Rate on such date, and if such rate shall not be so quoted,
the rate per annum at which the Agent is offered Dollar deposits at or about
11:00 A.M., New York City time, on such date by prime banks in the
interbank eurodollar market where the eurodollar and foreign currency and
exchange operations in respect of its Transactions are then being conducted for
delivery on such day for a period of one month and in an amount comparable to
the amount of the Transactions to be outstanding on such day.

 

“Lien” shall mean
any lien, claim, charge, restriction, pledge, security interest, mortgage, deed
of trust or other encumbrance.

 

“Loan” shall mean
a Net Lease Loan secured by specialty retailers, drug stores, movie theatres, education
facilities, restaurants, interstate travel plazas, automotive dealerships and
retailers and any other Net Lease Loan secured by any other asset type approved
by Agent in its sole discretion, in each case originated by Seller in
accordance with the Underwriting Guidelines.

 

“Loan Documents”
shall have the meaning assigned thereto in the Custody Agreement.

 

“Loan Schedule”
shall mean the schedule providing information regarding each Loan, which schedule is
delivered by the Seller to the Agent and the Custodian together with each
Transaction Notice and attached by the Custodian to each Trust Receipt and
setting forth, as to each Loan the related Net Lease Borrower name, the address
and Appraised Value of the related Mortgaged Property and the outstanding
principal balance of each Loan as of the Purchase Date with respect to such
Loan, together with any other information specified by the Agent from time to
time in good faith.

 

“Margin Call”
shall have the meaning assigned thereto in Section 6 hereof.

 

“Margin Deficit”
shall have the meaning assigned thereto in Section 6 hereof.

 

7

 

“Market Value”
shall mean the value, determined by the Agent in its sole discretion, of the
Purchased Assets if sold in their entirety to a single third-party
purchaser.  The Agent’s determination of
Market Value shall be conclusive upon the parties, absent manifest error on the
part of the Agent.  The Agent shall have
the right to mark to market the Purchased Assets on a daily basis, and the
Market Value determined by the Agent with respect to one or more of the
Purchased Assets may be determined to be zero. The Seller acknowledges that the
Agent’s determination of Market Value is for the limited purposes of
determining (i) the Purchase Price, (ii) whether there is a Margin
Deficit pursuant to Section 6 hereof and (iii) Collateral Value for
purchasing purposes hereunder without the ability to perform customary
purchaser’s due diligence and is not necessarily equivalent to a determination
of the fair market value of the Purchased Assets achieved by obtaining
competing bids in an orderly market in which the originator/servicer is not in
default under a repurchase facility and the bidders have adequate opportunity
to perform customary loan and servicing due diligence.

 

“Master Lease”
shall mean a master Triple Net Lease pursuant to which multiple Mortgaged
Properties are leased to a Tenant.

 

“Master Lease FCCR”
shall mean for all Purchased Assets with respect to which the related Mortgaged
Properties are under the same Master Lease:

 

(A) if information
with respect to the business enterprises being conducted by the Tenant on all
such Mortgaged Properties (the “Master Lease Units”) sufficient to calculate
the following ratio was available to the Seller, the ratio of (1) an
amount equal to all such Master Lease Units’ aggregate (i) pre-tax net
income, plus (ii) interest expense, plus (iii) non-cash amounts in
respect of depreciation and amortization, plus (iv) non-recurring
expenses, plus (v) specifically documented discretionary management fees,
plus (vi) operating lease or rent expense (including with respect to any
equipment loans) less (vii) non-recurring income and normalized overhead
based on such Tenant’s general and administrative expenses as a percent of
sales (if not available, industry standards applied), in each case for the
related fiscal year, to (2) the sum of all such Master Lease Units’
aggregate (i) total operating lease or rent expense, (ii) interest
expense and (iii) scheduled principal payments on indebtedness payable in
respect of all such Master Lease Units’ aggregate , in each case for the
related fiscal year; and

 

(B) if information
with respect to all such Master Lease Units sufficient to calculate the ratio
described in clause (A) above was not available to the Seller, the ratio
of (1) an amount equal to the related Tenant’s consolidated (i) pre-tax
net income, plus (ii) interest expense, plus (iii) non-cash amounts
in respect of depreciation and amortization, plus (iv) non-recurring
expenses, plus (v) specifically documented discretionary management fees,
plus (vi) operating lease or rent expense (including with respect to any
equipment loans) less (vii) non-recurring income and normalized overhead
based on such Tenant’s general and administrative expenses as a percent of
sales (if not available, industry standards applied), in each case, to the
extent available, determined in accordance with GAAP for the related fiscal
year, to (2) the sum of such Tenant’s (i) total operating lease or
rent expense, (ii) interest expense and (iii) scheduled principal
payments on 

 

8

 

indebtedness payable by
such Tenant, in each case, to the extent available, determined in accordance
with GAAP for the related fiscal year;

 

provided,
that, if information with respect to all such Master Lease Units or the related
Tenant sufficient to calculate the ratio described in clause (A) or (B) above
was not available to the Seller, such Purchased Asset shall be disregarded for
purposes of calculating Master Lease FCCR or Weighted Average Aggregate FCCR.

 

“Master Loan Agreement”
shall mean the Master Loan Agreement, dated as of November 7, 2005,
between Spirit Master Funding II, LLC and Seller, as amended, supplemented,
modified or restated from time to time, and any other master loan agreement
between Seller and a Net Lease Borrower approved by Agent from time to time.

 

“Master Note”
shall mean the master promissory note issued pursuant to the Master Loan Agreement
together with all riders thereto and amendments thereof or other evidence of
indebtedness of a Net Lease Borrower.

 

“Material Adverse
Effect” shall mean a material adverse effect on (a) the property,
business, operations, financial condition or prospects of the Seller, (b) the
ability of the Seller to perform in all material respects its obligations under
any of the Program Documents to which it is a party, (c) the validity or
enforceability of any of the Program Documents, (d) the rights and remedies
of the Buyers and/or the Agent under any of the Program Documents, (e) the
timely repurchase of the Purchased Assets or other amounts payable in
connection therewith or (f) the Collateral.

 

“Maximum Aggregate
Purchase Price” shall mean $200,000,000.

 

“Moody’s” shall
mean Moody’s Investors Service, Inc. and any successor or successors
thereto.

 

“Mortgage” shall
mean, with respect to a Loan, the mortgage, deed of trust or other instrument,
which creates a first lien on the fee simple estate in such real property which
secures the related Note.

 

“Mortgaged Property”
shall mean the real property (including all Improvements, buildings, fixtures,
building equipment and personal property thereon and all additions, alterations
and replacements made at any time with respect to the foregoing) and all other
collateral securing repayment of a Loan.

 

“Multiemployer Plan”
shall mean a multiemployer plan defined as such in Section 3(37) of ERISA
to which contributions have been or are required to be made by Seller or any
ERISA Affiliate and that is subject to Section 412 of the Code or Section 302
or by Title IV of ERISA.

 

“Net Income” shall
mean for any period the net income of the Seller for such period as determined
in accordance with GAAP.

 

9

 

“Net Lease Borrower”
shall mean Spirit Master Funding II, LLC, Spirit Master Funding III, LLC, and
any other Affiliate of Seller approved by the Agent.

 

“Net Lease Loan”
shall mean an advance made by the Seller to a Net Lease Borrower under a Master
Loan Agreement and evidenced by a Master Note or Supplemental Note which
advance shall have been made to finance the purchase by such Net Lease Borrower
of a Mortgaged Property securing such advance and, unless otherwise agreed by
the Agent, all other Net Lease Loans under such Master Loan Agreement.

 

“Net Worth” shall
mean, with respect to any Person, the excess of total assets of such Person,
over total liabilities of such Person, adding back accumulated depreciation but
excluding the impact of “other comprehensive income,” all as determined in
accordance with GAAP.

 

“Net Worth Increase
Amounts” shall mean, on any date of determination, 75% of the net proceeds
of any issuance of equity securities by the Seller subsequent to the date of this
Agreement.

 

“Net Worth
Requirements” shall have the meaning assigned thereto in Section 14(n)
hereof.

 

“Note” shall mean,
with respect to any Loan, the Master Note or any Supplemental Note, as
applicable, together with all riders thereto and amendments thereof or other
evidence of indebtedness of the related Net Lease Borrower.

 

“Notice Date”
shall have the meaning assigned thereto in Section 4 hereof.

 

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

 

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

 

“Person” shall
mean any legal person, including any individual, corporation, partnership,
association, joint venture, trust, limited liability company, unincorporated
organization, governmental entity or other entity of similar nature.

 

10

 

“Plan” shall mean
an employee benefit or other plan established or maintained by the Seller or
any ERISA Affiliate and that is subject to Section 412 of the Code or Section 302
or by Title IV of ERISA, other than a Multiemployer Plan.

 

“Price Differential”
shall mean, with respect to each Transaction and any period, the aggregate
amount obtained by daily application of the Pricing Rate to the Purchase Price
for the Purchased Asset related to such Transaction, on a 360-day-per-year
basis, for the actual number of days during such period (reduced by any amount
of such Price Differential in respect of such period previously paid by Seller
to Buyer).

 

“Pricing Rate”  shall have the meaning assigned thereto in
the Side Letter.

 

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

 

“Program
Documents” shall mean this Agreement, the Custody Agreement, the Collateral
Agency Agreement, the Intercreditor Agreement, each Master Loan Agreement, each
Master Note, any Mortgage related to a Mortgaged Property, each Servicing
Agreement, the Collection Account Control Agreement, any assignment of Hedge
Instrument, the Side Letter and any other agreement entered into by Seller, on
the one hand, and the Agent and/or any Buyer or one of their Affiliates (or
Custodian on its behalf) on the other, in connection herewith or therewith.

 

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

 

“Purchase Date”
shall mean the first date on which a particular Purchased Asset is transferred
by Seller to a Buyer.

 

“Purchase Price”
shall have the meaning assigned thereto in the Side Letter.

 

“Purchased Asset”
shall mean, with respect to a Transaction, collectively, the Loan under the Master
Loan Agreement related to such Transaction, together with the related Records
and Servicing Rights, all of the Seller’s rights in, to and under the related
Mortgage, all of the Seller’s rights, as a collateral assignee, in, to and
under the related Triple Net Lease and all of the Seller’s rights in, to and
under any related Hedge Instruments, all other related Collateral, such other
property, rights, titles or interests as are specified on a related Transaction
Notice, and all instruments, chattel paper, securities, investment property,
accounts, and general intangibles comprising or relating to all of the
foregoing.  The term “Purchased Asset”
with respect to any Transaction at any time also shall include Additional
Purchased Assets delivered pursuant to Section 6 hereof.

 

“Rating Agencies”
shall mean S&P and Moody’s.

 

“Records” shall
mean all instruments, agreements and other books, records, and reports and data
generated by other media for the storage of information maintained by Seller or

 

11

 

any other person or
entity with respect to a Purchased Asset. Records shall include the Notes, any
Mortgages, the Custodian’s Loan Files and any other instruments necessary to
document or service a Loan.

 

“Related Borrower”
shall have the meaning assigned in Appendix A hereto.

 

“Related Lease”
shall have the meaning assigned in Appendix A hereto.

 

“Related Mortgage”
shall have the meaning assigned in Appendix A hereto.

 

“Related Mortgaged
Property” shall have the meaning assigned in Appendix A hereto.

 

“Related Tenant”
shall have the meaning assigned in Appendix A hereto.

 

“Renewal Fee”
shall have the meaning mutually agreed to by the Buyers and the Seller.

 

“Repurchase Date”
shall have the meaning assigned thereto in Section 3(b) and shall
also include the date determined by application of Section 20.

 

“Repurchase Price”
shall mean the price at which the Purchased Asset related to a Transaction is
to be transferred from a Buyer to Seller upon termination of a Transaction,
which will be determined in each case (including Transactions terminable upon
demand) as the sum of the Purchase Price with respect to such Purchased Asset,
the Price Differential accrued with respect to such Transaction and not
previously paid to the Agent, and any of such Buyer’s costs relating to the
unwinding of a related Hedge Instrument, as applicable, as of the date of such
determination.

 

“Requirement of Law”
shall mean as to any Person, the certificate of incorporation and by laws or
other organizational or governing documents of such Person, and any law,
treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.

 

“Responsible Officer”
shall mean, as to any Person, the chief executive officer or, with respect to
financial matters, the chief financial officer of such Person; provided, that
in the event any such officer is unavailable at any time he or she is required
to take any action hereunder, Responsible Officer shall mean any officer
authorized to act on such officer’s behalf as demonstrated by a certificate of
corporate resolution.

 

“Restricted Payments”
shall mean with respect to any Person, collectively, all dividends or other
distributions of any nature (cash, securities, assets or otherwise), and all
payments, by virtue of redemption or otherwise, on any class of equity
securities (including, without limitation, warrants, options or rights
therefor) issued by such Person, whether such securities are now or may
hereafter be authorized or outstanding and any distribution in respect of any
of the foregoing, whether directly or indirectly.

 

“S&P” shall
mean Standard and Poor’s Ratings Services, a division of The McGraw Hill
Companies, Inc., and any successor or successors thereto.

 

12

 

“Servicer” shall
mean (i) Midland Loan Services, Inc., a Delaware corporation, or (ii) any
other servicer approved by Agent in its sole discretion.

 

“Servicer Termination
Event” shall have the meaning assigned thereto in the Custody Agreement.

 

“Servicing Agreement”
shall mean any agreement (other than the Custody Agreement) giving rise or
relating to Servicing Rights with respect to a Purchased Asset or any Triple
Net Lease, including any assignment or other agreement relating to such
agreement.

 

“Servicing Rights”
shall mean contractual, possessory or other rights of Seller, Servicer or any
other Person arising under a Servicing Agreement, the Custody Agreement or
otherwise, to administer or service a Purchased Asset or any Triple Net Lease
or to possess related Records.

 

“Servicing
Transmission” shall mean a computer-readable magnetic or other electronic
format acceptable to the parties containing the information described in Section 14(p)
hereof.

 

“Side Letter”
shall mean the Side Letter, dated as of November 7, 2005, between Seller
and the Agent, as the same may be amended, restated or modified from time to
time.

 

“State” shall mean
(i) a state of the United States of America or (ii) the District of
Columbia.

 

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

 

“Supplemental Note”
shall have the meaning set forth in the applicable Master Loan Agreement.

 

“Tangible Net Worth”
shall mean, with respect to any Person, as of any date of determination:  (i) the consolidated Net Worth of such
Person and its Subsidiaries, less (ii) the consolidated net book value of
all assets of such Person and its Subsidiaries (to the extent reflected as an
asset in the balance sheet of such Person or any Subsidiary at such date) which
will be treated as intangibles under GAAP, including, without limitation, such
items as deferred taxes, net leasehold improvements, good will, trademarks,
trade names, service marks, copyrights, patents, licenses and unamortized debt
discount and expense, but not including lease intangibles.

 

13

 

“Tenant” shall
mean the tenant of a Mortgaged Property pursuant to a Triple Net Lease of such
Mortgaged Property, together with such tenant’s Affiliates and any guarantor of
such tenant’s obligations under such lease.

 

“Termination Date”
shall have the meaning assigned thereto in Section 28.

 

“Tier One Asset”
shall have the meaning assigned thereto in the Side Letter.

 

“Total Indebtedness”
shall mean with respect to any Person, for any period, the aggregate
Indebtedness of such Person and its Subsidiaries during such period, less the
amount of any nonspecific consolidated balance sheet reserves maintained in
accordance with GAAP.

 

“Transaction”
shall have the meaning assigned thereto in Section 1.

 

“Transaction Notice”
shall mean a written request of Seller to enter into a Transaction, in the form
attached to the Custody Agreement, which is delivered to the Agent and
Custodian.

 

“Triple Net
Lease” shall mean a lease of a Mortgaged Property by a Net Lease Borrower
to a Tenant, under which such Tenant pays all operating expenses of the
property including, without limitation, insurance, taxes, maintenance and
capital expenditures (unless otherwise disclosed to the Agent in the
Underwriting Package related to such lease).

 

“Trust Receipt”
shall mean a Trust Receipt and Certification as defined in the Custody
Agreement.

 

“Underwriting
Guidelines” shall mean the Spirit Finance Corporation Underwriting Manual,
dated as of April 2005, which has been approved by Agent, as the same may be
amended from time to time in accordance with the terms hereof.

 

“Underwriting Package”
shall mean, with respect to each Loan, the Spirit Finance Credit Memorandum as
defined in the Underwriting Guidelines.

 

“Uniform Commercial
Code” shall mean the Uniform Commercial Code as in effect on the date
hereof in the State of New York; provided, that if by reason of
mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than New York, “Uniform
Commercial Code” shall mean the Uniform Commercial Code as in effect in such
other jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection.

 

“Unit-Level FCCR”
shall mean for a Purchased Asset:

 

(A) if information
with respect to the business enterprise being conducted by the Tenant on the
Mortgaged Property related to such Purchased Asset (the “Unit”) sufficient to
calculate the following ratio was available to the Seller, the ratio of (1) an
amount equal 

 

14

 

to such Unit’s (i) pre-tax
net income, plus (ii) interest expense, plus (iii) non-cash amounts
in respect of depreciation and amortization, plus (iv) non-recurring
expenses, plus (v) specifically documented discretionary management fees,
plus (vi) operating lease or rent expense (including with respect to any
equipment loans) less (vii) non-recurring income and normalized overhead
based on such Tenant’s general and administrative expenses as a percent of
sales (if not available, industry standards applied), in each case for the
related fiscal year, to (2) the sum of such Unit’s (i) total
operating lease or rent expense, (ii) interest expense and (iii) scheduled
principal payments on indebtedness payable in respect of the Unit, in each case
for the related fiscal year; and

 

(B) if information
with respect to the Unit sufficient to calculate the ratio described in clause (A) above
was not available to the Seller, the ratio of (1) an amount equal to the
related Tenant’s consolidated (i) pre-tax net income, plus (ii) interest
expense, plus (iii) non-cash amounts in respect of depreciation and
amortization, plus (iv) non-recurring expenses, plus (v) specifically
documented discretionary management fees, plus (vi) operating lease or
rent expense (including with respect to any equipment loans) less (vii) non-recurring
income and normalized overhead based on such Tenant’s general and
administrative expenses as a percent of sales (if not available, industry
standards applied), in each case, to the extent available, determined in
accordance with GAAP for the related fiscal year, to (2) the sum of such
Tenant’s (i) total operating lease or rent expense, (ii) interest
expense and (iii) scheduled principal payments on indebtedness payable by
such Tenant, in each case, to the extent available, determined in accordance
with GAAP for the related fiscal year;

 

provided,
that, if information with respect to the Unit or the related Tenant sufficient
to calculate the ratio described in clause (A) or (B) above was not
available to the Seller, such Purchased Asset shall be disregarded for purposes
of calculating Unit-Level FCCR or Weighted Average Aggregate FCCR.

 

“Weighted Average
Aggregate FCCR” shall mean, as of any date of determination, the weighted
average of Unit-Level FCCRs and Master Lease FCCRs for all Purchased Assets as
of such date of determination (calculated by weighting each Unit-Level FCCR and
each Master Lease FCCR on the basis of the Collateral Value of the related
Purchased Asset or Purchased Assets.

 

“Wet Funded Loan”
shall mean a Loan for which only the Wet Funded Custodian’s Loan File has been
delivered to the Custodian as of the related Purchase Date.  Upon delivery of the Custodian’s Loan File to
the Custodian, the Loan shall cease to be a Wet Funded Loan.

 

b)            Capitalized terms
used but not defined in this Agreement shall have the meanings assigned thereto
in the Custody Agreement.

 

c)             Interpretation.  Headings are for convenience only and do not
affect interpretation. The following rules of this subsection (c) apply
unless the context requires otherwise. The singular includes the plural and
conversely. A gender includes all genders. Where a word or phrase is defined,
its other grammatical forms have a corresponding meaning. A 

 

15

 

reference to a subsection, Section, Annex,
appendix or Exhibit is, unless otherwise specified, a reference to a Section of,
or annex, appendix or exhibit to, this Agreement. A reference to a party to
this Agreement or another agreement or document includes the party’s successors
and permitted substitutes or assigns. A reference to an agreement or document
is to the agreement or document as amended, modified, novated, supplemented or
replaced, except to the extent prohibited by any Program Document. A reference
to legislation or to a provision of legislation includes a modification or re-enactment
of it, a legislative provision substituted for it and a regulation or statutory
instrument issued under it. A reference to writing includes a facsimile
transmission and any means of reproducing words in a tangible and permanently
visible form. A reference to conduct includes, without limitation, an omission,
statement or undertaking, whether or not in writing. An Event of Default
subsists until it has been waived in writing by Agent. The words “hereof,” “herein,”
“hereunder” and similar words refer to this Agreement as a whole and not to any
particular provision of this Agreement. The term “including” is not limiting
and means “including without limitation.” In the computation of periods of time
from a specified date to a later specified date, the word “from” means “from
and including”; the words “to” and “until” each mean “to but excluding,” and the
word “through” means “to and including.” This Agreement may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are independent of each
other and shall each be performed in accordance with their terms. Unless the
context otherwise clearly requires, all accounting terms not expressly defined
herein shall be construed, and all financial computations required under this
Agreement shall be made, in accordance with GAAP, consistently applied.
References herein to “fiscal year” and “fiscal quarter” refer to such fiscal
periods of Seller. Except where otherwise provided in this Agreement any
determination, consent, approval, statement or certificate made or confirmed in
writing with notice to Seller by Agent, any Buyer or an authorized officer
thereof provided for in this Agreement is conclusive and binds the parties in
the absence of manifest error, except where the consent of the Seller is
required. A reference to an agreement includes a security interest, guarantee,
agreement or legally enforceable arrangement whether or not in writing related
to such agreement. A reference to a document includes an agreement (as so
defined) in writing or a certificate, notice, instrument or document, or any
information recorded in computer disk form. Where Seller is required to provide
any document to the Agent and/or any Buyer under the terms of this Agreement,
the relevant document shall be provided in writing or printed form unless the
Agent or such Buyer requests otherwise. At the request of the Agent and/or a
Buyer, any document shall be provided in computer disk form or both printed and
computer disk form, unless such computer disk copy requires Seller to pay an
unreasonable expense.  This Agreement is
the result of negotiations among and has been reviewed by counsels to the
Buyers and Seller, and is the product of all the parties. In the interpretation
of this Agreement, no rule of construction shall apply to disadvantage one
party on the ground that such party proposed or was involved in the preparation
of any particular provision of this Agreement or this Agreement itself. Except
where otherwise expressly stated the Agent and any Buyer may give or withhold,
or give conditionally, approvals and consents and may form opinions and make
determinations and exercise discretion at its absolute discretion.  Any requirement of good faith, discretion or
judgment by  the Agent or any Buyer shall
not be construed to require the Agent and/or such Buyer to request or await
receipt of information or documentation not immediately available from or with
respect to Seller, a servicer of the Purchased Assets, any other Person or the
Purchased Assets themselves.

 

16

 

3.                                      THE
TRANSACTIONS

 

a)             Seller shall
repurchase all Purchased Assets from the Buyers on each Repurchase Date.  Seller may also repurchase any Purchased
Assets pursuant to Section 11 hereof. 
Each obligation to repurchase exists without regard to any prior or
intervening liquidation or foreclosure with respect to a Mortgaged Property
related to a any Purchased Asset (but liquidation or foreclosure proceeds
received by a Buyer with respect to a Mortgaged Property related to a Purchased
Asset shall be applied to reduce the Repurchase Price with respect to such
Purchased Asset except as otherwise provided herein).  Seller is obligated to obtain the Purchased
Assets from the applicable Buyer or its designee (including the Custodian) at
Seller’s expense on (or after) the related Repurchase Date, unless such
Purchased Assets become subject to a new Transaction pursuant to Section 3(b).

 

b)            Provided that the
applicable conditions in Sections 10(a) and (b) have been satisfied,
each Eligible Asset that is repurchased by Seller on the 10th day of each
calendar month (or, if such 10th day is not a Business Day, the immediately
following Business Day) following the Purchase Date related to such Eligible
Asset (the day of the month so determined for each month, a “Repurchase Date,”
which term shall also include the date determined by application of Section 20)
shall automatically become subject to a new Transaction unless the Agent is
notified otherwise by Seller at least one Business Day prior to the related Repurchase
Date; provided, that, if the Repurchase Date so determined is later than
the Termination Date, the Repurchase Date for such Transaction shall
automatically reset to the Termination Date, and the provisions of this
sentence as it might relate to a new Transaction shall expire on such
date.  For each Purchased Asset subject
to a Transaction, the accrued and unpaid Price Differential shall be calculated
for the period beginning on the first day and ending on the last day of the
calendar month prior to the related Repurchase Date and (together with any
additional Price Differential accrued with respect to such Transaction and not
previously paid to the applicable Buyer) settled in cash on each related
Repurchase Date by means of a payment by Seller to the Agent, on behalf of the
applicable Buyer, at an account designated by the Agent.  The Repurchase Price and, if applicable,
Purchase Price to be paid on a Repurchase Date shall be paid as set forth in Section 15
hereof.

 

4.                                      ENTERING
INTO TRANSACTIONS; TRANSACTION NOTICE, CONFIRMATIONS

 

a)             Unless otherwise
agreed, Seller shall give Agent notice by no later than 5:00 p.m. (New
York City time) on the day that is two Business Days prior to any proposed
Purchase Date (the date on which such notice is given, the “Notice Date”). By
no later than 5:00 p.m. (New York City time) on the Notice Date, Seller
shall request that a Buyer enter into a Transaction by furnishing to Agent a
Transaction Notice, Loan Schedule and Asset Base Certificate.  The Seller shall deliver to Custodian a
Transaction Notice, the related Loan Schedule and the related Custodian’s
Loan File for each Loan subject to such Transaction in accordance with the
terms of the Custody Agreement.

 

b)            In the event that
the parties hereto desire to enter into a Transaction on terms other than as
set forth herein, the parties shall execute a confirmation (a “Confirmation”)
specifying such terms prior to entering into such Transaction. Any such
Confirmation and the 

 

17

 

related Transaction Notice, together with
this Agreement, shall constitute conclusive evidence of the terms agreed
between the applicable Buyer and Seller with respect to the Transaction to
which the Confirmation relates.

 

5.                                      PAYMENT
AND TRANSFER

 

Unless otherwise agreed,
all transfers of funds hereunder shall be in immediately available funds. Any
Repurchase Price received by the applicable Buyer after 2:00 p.m. New York
City time shall be applied on the next succeeding Business Day.

 

6.                                      MARGIN
MAINTENANCE

 

a)             If at any time the
aggregate Market Value of all Purchased Assets subject to all Transactions is
less than the aggregate Buyer’s Margin Amount for all such Transactions (a “Margin
Deficit”), then Agent may by notice to Seller require Seller, at Agent’s
option, to transfer to the applicable Buyer cash or additional Loans acceptable
to Agent in its sole discretion (“Additional Purchased Assets”), so that such
cash and aggregate Market Value of the Purchased Assets, including any such
Additional Purchased Assets, will thereupon equal or exceed such aggregate
Buyer’s Margin Amount (such requirement, a “Margin Call”).

 

b)            Notice required
pursuant to Section 6 may be given by any means provided in Section 36
hereof. Any notice given before 1:00 p.m. New York time on a Business Day
shall be met, and the related Margin Call satisfied, no later than 5:00 p.m.
New York time on the next succeeding Business Day; notice given after 1:00 p.m.
New York time on a Business Day shall be met, and the related Margin Call
satisfied, no later than 2:00 p.m. New York time on the second succeeding
Business Day. The failure of Agent, on any one or more occasions, to exercise
its rights hereunder, shall not change or alter the terms and conditions to
which this Agreement is subject or limit the right of Agent to do so at a later
date. Seller and Agent each agree that a failure or delay by Agent to exercise
its rights hereunder shall not limit or waive Agent’s rights under this
Agreement or otherwise existing by law or in any way create additional rights
for Seller.

 

7.                                      INCOME
PAYMENTS

 

Where a particular term
of a Transaction extends over the date on which Income is paid in respect of
the Purchased Asset subject to that Transaction, such Income shall be the
property of the Buyer that purchased that Purchased Asset. Notwithstanding the
foregoing, and provided no Default has occurred and is continuing, all Income
received, whether by Seller, any Buyer, Custodian, Servicer or any servicer or
any other Person, in respect of the Purchased Assets shall be applied in
accordance with Section 4.1(c) of the Custody Agreement.

 

8.                                      TAXES;
TAX TREATMENT

 

a)             All payments made
by the Seller under this Agreement shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities
(including penalties, interest and additions to tax) with respect thereto
imposed by any Governmental Authority thereof or therein, excluding income
taxes, branch profits taxes, franchise taxes or any other tax 

 

18

 

imposed on the net income by the United
States, a state or a foreign jurisdiction under the laws of which the
applicable Buyer is organized or of its applicable lending office, or any
political subdivision thereof, (all such non-excluded taxes, “Taxes”), all of
which shall be paid by the Seller for its own account not later than the date
when due. If the Seller is required by law or regulation to deduct or withhold
any Taxes from or in respect of any amount payable hereunder, it shall:  (a) make such deduction or withholding; (b) pay
the amount so deducted or withheld to the appropriate Governmental Authority
not later than the date when due; (c) deliver to the applicable Buyer,
promptly, original tax receipts and other evidence satisfactory to such Buyer
of the payment when due of the full amount of such Taxes; and (d) pay to
the applicable Buyer such additional amounts as may be necessary so that such
Buyer receives, free and clear of all Taxes, a net amount equal to the amount
it would have received under this Agreement, as if no such deduction or
withholding had been made.

 

b)            In addition, the
Seller agrees to pay to the relevant Governmental Authority in accordance with
applicable law any current or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies (including, without
limitation, mortgage recording taxes, transfer taxes and similar fees) imposed
by the United States or any taxing authority thereof or therein that arise from
any payment made hereunder or from the execution, delivery or registration of,
or otherwise with respect to, this Agreement (“Other Taxes”).

 

c)             The Seller agrees
to indemnify the Buyers for the full amount of Taxes (including additional
amounts with respect thereto) and Other Taxes, and the full amount of Taxes of
any kind imposed by any jurisdiction on amounts payable under this Section 8(c),
and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, provided that the Buyers shall have provided
the Seller with evidence, reasonably satisfactory to the Seller, of payment of
Taxes or Other Taxes, as the case may be; provided that the applicable
Buyer gives notice to Seller of all deficiency notices received by such Buyer.

 

d)            Any Foreign Buyer shall, at Seller’s
request, provide the Seller with properly completed United States Internal
Revenue Service (IRS) Form W 8BEN or W 8ECI or any successor form prescribed by
the IRS, certifying that such Buyer is entitled to benefits under an income tax
treaty to which the United States is a party which reduces the rate of
withholding tax on payments of interest or certifying that the income
receivable pursuant to this Agreement is effectively connected with the conduct
of a trade or business in the United States on or prior to the date upon which
each such Foreign Buyer becomes a Buyer. 
Each Foreign Buyer will resubmit the appropriate form on the earliest of
(A) the third anniversary of the prior submission or (B) on or before the
expiration of thirty (30) days after there is a “change in circumstances” with
respect to such Buyer as defined in Treas. Reg. Section 1.1441(e)(4)(ii)(D).  For any period with respect to which a
Foreign Buyer has failed to provide the Seller with the appropriate form or
other relevant document pursuant to this Section 8(d) (unless such failure is
due to a change in treaty, law, or regulation occurring subsequent to the date
on which a form originally was required to be provided), such Foreign Buyer
shall not be entitled to any “gross up” of Taxes or indemnification under
Section 8(c) with respect to Taxes imposed by the United States; provided,
however, that should a Foreign Buyer, which is otherwise exempt from a
withholding tax, become subject to Taxes because of its failure to deliver a
form required hereunder, the Seller shall take such steps as such Foreign Buyer
shall reasonably request to assist such Foreign Buyer to recover such Taxes.

 

19

 

e)             Without prejudice
to the survival of any other agreement of Seller hereunder, the agreements and
obligations of Seller contained in this Section 8 shall survive the termination
of this Agreement.  Nothing contained in
this Section 8 shall require any Buyer to make available any of its tax
returns or other information that it deems to be confidential or proprietary.

 

f)             Each party to this
Agreement acknowledges that it is its intent for purposes of U.S. federal,
state and local income and franchise taxes to treat each Transaction as
indebtedness of Seller that is secured by the Purchased Assets and to treat the
Purchased Assets as being owned by Seller in the absence of a Default by
Seller.  All parties to this Agreement
agree to such treatment and agree to take no action inconsistent with this
treatment in the absence of a Default by Seller, unless required by law.

 

9.                                      SECURITY
INTEREST

 

a)             Seller and Buyers
intend that the Transactions hereunder be sales to the applicable Buyer of the
Purchased Assets and not loans from the applicable Buyer to Seller secured by
the Purchased Assets. However, in order to preserve Buyers’ rights under this
Agreement in the event that a court or other forum recharacterizes the
Transactions hereunder as other than sales, 
Seller hereby grants to the Agent, on behalf of the Buyers, as security
for Seller’s performance of all of its Obligations, a fully perfected first
priority security interest in the following property, whether now existing or
hereafter acquired:  (i) the
Purchased Assets, (ii) the Records, (iii) all related Servicing
Rights, (iv) all mortgage guaranties and insurance relating to such
Purchased Assets (issued by governmental agencies or otherwise) or the related
Mortgaged Property and any mortgage insurance certificate or other document
evidencing such mortgage guaranties or insurance and all claims and payments
thereunder, (v) all instruments, chattel paper, agreements (including,
without limitation, the related Master Loan Agreement and Master Note)
securities, investment property and general intangibles and other assets
comprising or relating to the Purchased Assets, (vi) any securities or
deposit account related to the Transactions and the related Loans and/or Triple
Net Leases, including the Collection Account and all security entitlements to
financial assets (including cash) now or hereafter carried in or credited to
any such securities or deposit account, (vii) all rights to Income and the
rights to enforce such payments arising from any of the Purchased Assets, (viii) all
guarantees or other support for the Purchased Assets, (ix) any and all
replacements, substitutions, distributions on the Purchased Assets,
(x) any interest in the Purchased Assets or the servicing of the Purchased
Assets, and (xi) any now existing or hereafter arising proceeds and
distributions with respect to any of the foregoing and any other property,
rights, titles or interests as are specified on a Transaction Notice
(collectively, the “Collateral”).  Seller
acknowledges and agrees that its rights with respect to the Collateral
(including without limitation, its security interest in any portion of the
Purchased Assets and any other collateral granted to Seller pursuant to any
other agreement) are and shall continue to be at all times junior and
subordinate to the rights of the Buyers hereunder.

 

The parties acknowledge
and agree that the perfection of such security interest is intended to be
accomplished through, among other steps, possession of the related Note by a
Buyer, the Custodian or by any other Person on any Buyer’s behalf, and that
such possession unless otherwise agreed is for such Buyer’s own account.

 

20

 

b)            Seller hereby
irrevocably constitutes and appoints Agent and any officer or agent thereof,
with full power of substitution, as its true and lawful attorney in fact with
full irrevocable power and authority in the place and stead of Seller and in
the name of Seller or in its own name, from time to time in Agent’s discretion,
for the purpose of carrying out the terms of this Agreement, to take any and
all appropriate action and to execute any and all documents and instruments
which may be reasonably necessary or desirable to accomplish the purposes of
this Agreement, to file such financing statement or statements relating to the
Purchased Assets and the Collateral without Seller’s signature thereon as Agent
at its option may deem appropriate, and, without limiting the generality of the
foregoing, Seller hereby gives Agent the power and right, on behalf of Seller,
without assent by, but with notice to, Seller, if an Event of Default shall
have occurred and be continuing, to do the following:

 

(i)            in the name of Seller, or in its own
name, or otherwise, to take possession of and endorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of moneys due
with respect to any Purchased Assets and to file any claim or to take any other
action or proceeding in any court of law or equity or otherwise deemed
appropriate by Agent for the purpose of collecting any and all such moneys due
with respect to any Purchased Assets whenever payable;

 

(ii)           to pay or discharge taxes and Liens
levied or placed on or threatened against the Purchased Assets;

 

(iii)          (A) to direct any party liable
for any payment under any Purchased Assets to make payment of any and all
moneys due or to become due thereunder directly to Agent or as Agent shall
direct; (B) to ask or demand for, collect, receive payment of and receipt
for, any and all moneys, claims and other amounts due or to become due at any
time in respect of or arising out of any Purchased Assets; (C) to sign and
endorse any invoices, assignments, verifications, notices and other documents
in connection with any Purchased Assets; (D) to commence and prosecute any
suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Purchased Assets or any proceeds thereof and to
enforce any other right in respect of any Purchased Assets; (E) to defend
any suit, action or proceeding brought against Seller with respect to any
Purchased Assets; (F) to settle, compromise or adjust any suit, action or
proceeding described in clause (E) above and, in connection
therewith, to give such discharges or releases as Agent may deem appropriate;
and (G) generally, to sell, transfer, pledge and make any agreement with
respect to or otherwise deal with any Purchased Assets as fully and completely
as though Agent were the absolute owner thereof for all purposes, and to do, at
Agent’s option and Seller’s expense, at any time, and from time to time, all
acts and things which Agent deems necessary to protect, preserve or realize upon
the Purchased Assets and the Collateral and Agent’s Liens thereon and to effect
the intent of this Agreement, all as fully and effectively as Seller might do.

 

Seller hereby ratifies
all that said attorneys shall lawfully do or cause to be done by virtue
hereof.  This power of attorney is a
power coupled with an interest and shall be irrevocable until all Obligations
have been paid in full and this Agreement is terminated in accordance with the
terms hereof.

 

21

 

Seller also authorizes
Agent, if an Event of Default shall have occurred, from time to time, to
execute, in connection with any sale provided for in Section 20 hereof,
any endorsements, assignments or other instruments of conveyance or transfer
with respect to the Purchased Assets. 
The powers conferred on Agent hereunder are solely to protect the
applicable Buyer’s interests in the Purchased Assets and shall not impose any
duty upon it to exercise any such powers. 
Agent shall be accountable only for amounts that it actually receives as
a result of the exercise of such powers, and neither it nor any of its
officers, directors, employees or agents shall be responsible to Seller for any
act or failure to act hereunder, except for its or their own gross negligence
or willful misconduct.

 

10.                               CONDITIONS
PRECEDENT

 

a)             As conditions
precedent to the first Transaction to occur on or after the Effective Date,
Agent shall have completed the due diligence review pursuant to Section 39,
and such review shall be satisfactory to Agent in its sole discretion.  Agent shall have received on or before the
day of such first Transaction the following, in form and substance satisfactory
to Agent and duly executed by each party thereto:

 

(i)            The Program Documents duly executed
and delivered by the parties thereto and being in full force and effect, free
of any modification, breach or waiver;

 

(ii)           Evidence that all other actions
necessary or, in the opinion of Agent, desirable to perfect and protect the
Buyers’ interest in the Purchased Assets and other Collateral have been taken,
including, without limitation, duly executed and filed Uniform Commercial Code
financing statements on Form UCC-1;

 

(iii)          A certified copy of Seller’s corporate
resolutions, approving the Program Documents and Transactions thereunder
(either specifically or by general resolution), and all documents evidencing
other necessary limited liability company or corporate action or governmental
approvals as may be required in connection with the Program Documents;

 

(iv)          A secretary’s certificate of the
secretary of Seller, certifying the names, true signatures and titles of Seller’s
representatives duly authorized to request Transactions hereunder and to
execute the Program Documents and the other documents to be delivered
thereunder and attaching a copy of the true and complete bylaws and certificate
of incorporation of the Seller;

 

(v)           Opinions of Seller’s counsel as to
such matters as Agent may reasonably request (including, without limitation,
perfected security interest in the Collateral and non-substantive consolidation
of Seller and the Net Lease Borrower) and in form and substance acceptable to
Agent;

 

(vi)          A copy of the Underwriting Guidelines
certified by an officer of the Seller;

 

(vii)         Evidence of establishment of the
Collection Account; and

 

(viii)        Any other documents reasonably requested
by Agent.

 

22

 

b)            The obligation, if
any, of any Buyer to enter into each Transaction (including the initial Transaction)
pursuant to this Agreement is subject to the fulfillment of each of the
following conditions precedent:

 

(i)            Agent, on behalf of such Buyer, or
its designee shall have received on or before the day of a Transaction with
respect to the Purchased Asset related to such Transaction the following, in
form and substance satisfactory to Agent and (if applicable) duly executed:

 

(A)                              Transaction
Notice and Loan Schedule delivered pursuant to Section 4(a);

 

(B)                                The
Trust Receipt with respect to such Purchased Asset, with the Loan Schedule attached;

 

(C)                                To
the extent not delivered to the Agent previously, a secretary’s certificate of
the secretary of the Net Lease Borrower related to such Transaction, certifying
the names, true signatures and titles of such Net Lease Borrower’s
representatives duly authorized to 
execute the related Master Loan Agreement and the other documents to be
delivered thereunder and attaching a copy of the true and complete bylaws or
limited liability company agreement and certificate of incorporation or
formation of such Net Lease Borrower; and

 

(D)                               Such
certificates, customary opinions of counsel or other documents as Agent may
reasonably request, provided that such opinions of counsel shall not be
required routinely in connection with each Transaction but shall only be
required in connection with the first Transaction related to a new Net Lease
Borrower and otherwise from time to time as deemed necessary by Agent in good
faith.

 

(ii)           No Default or Event of Default shall
have occurred and be continuing.

 

(iii)          Buyers shall not have determined that
the introduction of or a change in any requirement of law or in the
interpretation or administration of any requirement of law applicable to any
Buyer has made it unlawful, and no Governmental Authority shall have asserted
that it is unlawful, for any such Buyer to enter into Transactions with a
Pricing Rate based on LIBO Rate.

 

(iv)          All representations and warranties in
the Program Documents shall be true and correct on the date of such Transaction
and Seller is in compliance with the terms and conditions of the Program
Documents.

 

(v)           The then aggregate outstanding
Purchase Price for all Purchased Assets, when added to the Purchase Price for
the requested Transaction, shall not exceed the Maximum Aggregate Purchase
Price.

 

23

 

(vi)          Agent shall have determined that all
actions necessary or, in the opinion of Agent, desirable to maintain the Agent’s
perfected security interest, on behalf of the Net Lease Borrowers, in the
Purchased Assets and other Collateral have been taken, including, without
limitation, duly executed and filed Uniform Commercial Code financing
statements on Form UCC-1.

 

(vii)         Seller shall have paid to Buyers, or
the Agent on their behalf, all fees and expenses owed to the Buyers in
accordance with this Agreement and the Side Letter.

 

(viii)        Buyers or Agent shall have received any
other documents reasonably requested by Buyers or Agent.

 

(ix)           There is no Margin Deficit at the
time immediately prior to, and there shall be no Margin Deficit immediately
following, such Transaction.

 

(x)            No event or events shall have been
reasonably determined by any Buyer to have occurred resulting in the effective
absence of a “repo market” respecting loans or mortgage-backed or asset-backed
securities such that such Buyer is or was unable to finance or fund purchases
under this Agreement through the “repo market” or such Buyer’s customers.

 

(xi)           Each secured party (including any
party that has a precautionary security interest in a Loan) has released all of
its right, title and interest in, to and under such Loan (including, without
limitation, any security interest that such secured party or secured party’s
agent may have by virtue of its possession, custody or control thereof) and has
filed Uniform Commercial Code termination statements in respect of any Uniform
Commercial Code filings made in respect of such Loan, and each such release and
Uniform Commercial Code termination statement has been delivered to the Agent
prior to such Transaction.

 

(xii)          Seller shall have delivered in such
Transaction to the Agent the Underwriting Package (A) for each Loan that
is a Tier One Asset, not less than four Business Days prior to the date of the
related Transaction Notice and (B) for each Loan that is not a Tier One
Asset, not less than ten Business Days prior to the date of the related
Transaction Notice, and the Agent, on behalf of the applicable Buyer, shall
have approved each such Loan in its sole discretion. Agent agrees that it
shall, on behalf of the applicable Buyer, notify Seller of the Agent’s approval
or disapproval of each such proposed Loan within ten Business Days after its
receipt of the complete Underwriting Package and supplemental requests (whether
requested orally or in writing) related to such proposed Loan. For purposes of
this provision, an Underwriting Package received by a Buyer after 1:00 p.m.
New York City time shall be deemed to be received on the following Business
Day.

 

(xiii)         The Loan included in the Purchased
Asset related to such Transaction shall have an interest rate not less
than:  (A) with respect to a
fixed-rate Loan, the 10-year U.S. Dollar Interest Rate Swaps plus 1.75% as of
the initial Purchase Date of such 

 

24

 

Purchased Asset or (B) with
respect to a floating-rate Loan, LIBO Rate plus 1.75% as of the initial
Purchase Date of such Purchased Asset.

 

(xiv)        Seller shall have delivered to the
Collateral Agent (as defined in the Collateral Agency Agreement) a Notice of
Designation (as defined in the Collateral Agency Agreement) with respect to the
Mortgage related to such Transaction.

 

(xv)         Satisfaction of any conditions
precedent to the first Transaction on or after the Effective Date as set forth
in clause (a) of this Section 10 that were not satisfied prior
to such first Purchase Date.

 

11.                               RELEASE
OF PURCHASED ASSETS

 

Upon timely payment in
full of the Repurchase Price and all other Obligations owing with respect to a
Purchased Asset (other than a Purchased Asset that became subject to a new
Transaction after the payment of such Repurchase Price pursuant to Section 3(b)),
if no Default or Event of Default has occurred and is continuing, Agent shall,
and shall direct Custodian to, release such Purchased Asset unless such release
would give rise to or perpetuate a Margin Deficit. Except as set forth in Section 16,
Seller shall give at least three Business Days’ prior written notice to Agent
if such repurchase shall occur on other than a Repurchase Date.

 

12.                               RELIANCE

 

With respect to any
Transaction, the Agent and any Buyer may conclusively rely upon, and shall
incur no liability to Seller in acting upon, any request or other communication
that the Agent or such Buyer reasonably believes to have been given or made by
a person authorized to enter into a Transaction on Seller’s behalf.

 

13.                               REPRESENTATIONS
AND WARRANTIES

 

Seller hereby represents
and warrants, and shall on and as of the Purchase Date for any Transaction and
on and as of each date thereafter through and including the final Repurchase
Date related to such Transaction be deemed to represent and warrant, that:

 

a)             Existence.  The Seller (a) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and qualifies as a real estate investment
trust under Section 856 of the Code and is in compliance with all
provisions of the Code governing its status as a real estate investment trust, (b) has
all requisite corporate or other power, and has all governmental licenses,
authorizations, consents and approvals, necessary to own its assets and carry
on its business as now being, or as proposed to be, conducted, except where the
lack of such licenses, authorizations, consents and approvals would not be
reasonably likely to have a Material Adverse Effect, (c) is qualified to
do business and is in good standing in all other jurisdictions in which the
nature of the business conducted by it makes such qualification necessary,
except where failure so to qualify would not be reasonably likely (either
individually or in the aggregate) to have a Material Adverse Effect, and (d) is
in compliance in all material respects with all Requirements of Law.

 

25

 

b)            Financial
Condition.  The Seller has heretofore
furnished to the Agent a copy of its audited consolidated balance sheets which
include its consolidated Subsidiaries, each as of December 31, 2004.  All such financial statements are materially
complete and correct and fairly present the consolidated financial condition of
the Seller and its Subsidiaries and the consolidated results of their
operations for the fiscal year ended on said date, all in accordance with GAAP
applied on a consistent basis. Since December 31, 2004, there has been no
development or event or any prospective development or event which has had or
should reasonably be expected to have a Material Adverse Effect.

 

c)             Litigation.  There are no actions, suits, arbitrations, investigations
or proceedings pending or, to its knowledge, threatened against the Seller or
any of its Subsidiaries or affecting any of the property thereof before any
Governmental Authority, (i) as to which individually or in the aggregate
there is a reasonable likelihood of an adverse decision which would be
reasonably likely to have a Material Adverse Effect or (ii) which
questions the validity or enforceability of any of the Program Documents or any
action to be taken in connection with the transactions contemplated hereby and
there is a reasonable likelihood of an adverse decision which would be
reasonably likely to have a Material Adverse Effect.

 

d)            No Breach.  Neither (a) the execution and delivery
of the Program Documents or (b) the consummation of the transactions
therein contemplated in compliance with the terms and provisions thereof will
conflict with or result in a breach of the charter or by-laws (or other
organizational or governing documents) of the Seller, or any applicable law, rule or
regulation, or any order, writ, injunction or decree of any Governmental
Authority, or other material agreement or instrument to which the Seller, or
any of its Subsidiaries, is a party or by which any of them or any of their
property is bound or to which any of them is subject, or constitute a default
under any such material agreement or instrument, or (except for the Liens
created pursuant to this Agreement) result in the creation or imposition of any
Lien upon any property of the Seller or any of its Subsidiaries, pursuant to
the terms of any such agreement or instrument.

 

e)             Action.  The Seller has all necessary corporate or
other power, authority and legal right to execute, deliver and perform its
obligations under each of the Program Documents to which it is a party; the
execution, delivery and performance by the Seller of each of the Program
Documents to which it is a party has been duly authorized by all necessary
corporate or other action on its part; and each Program Document has been duly
and validly executed and delivered by the Seller and constitutes a legal, valid
and binding obligation of the Seller, enforceable against the Seller in
accordance with its terms.

 

f)             Approvals.  No authorizations, approvals or consents of,
and no filings or registrations with, any Governmental Authority, or any other
Person, are necessary for the execution, delivery or performance by the Seller
of the Program Documents to which it is a party or for the legality, validity
or enforceability thereof, except for filings and recordings in respect of the
Liens created pursuant to this Agreement.

 

g)            Margin
Regulations.  Neither a Transaction
hereunder, nor the use of the proceeds thereof, will violate or be inconsistent
with the provisions of Regulation T, U or X.

 

26

 

h)            Taxes.  The Seller and its Subsidiaries have filed
all Federal income tax returns and all other material tax returns that are
required to be filed by them and have paid all taxes due pursuant to such
returns or pursuant to any assessment received by any of them, except for any
such taxes, if any, that are being appropriately contested in good faith by
appropriate proceedings diligently conducted and with respect to which adequate
reserves have been provided. The charges, accruals and reserves on the books of
the Seller and its Subsidiaries in respect of taxes and other governmental
charges are adequate.

 

i)              Investment
Company Act.  Neither the Seller nor
any of its Subsidiaries is an “investment company,” or a company “controlled”
by an “investment company,” within the meaning of the Investment Company Act of
1940, as amended from time to time. The Seller is not subject to any Federal or
state statute or regulation which limits its ability to incur indebtedness.

 

j)              No Legal Bar.  With the caveat as set forth in 13(d), the
execution, delivery and performance of this Agreement and the Transactions
hereunder and the use of the proceeds thereof will not violate any Requirement
of Law or Contractual Obligation of the Seller or of any of its Subsidiaries
and will not result in, or require, the creation or imposition of any Lien
(other than the Liens created hereunder) on any of its or their respective
properties or revenues pursuant to any such Requirement of Law or Contractual
Obligation.

 

k)             No Default.  Neither the Seller nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which should reasonably be expected to have a
Material Adverse Effect or cause the occurrence of an Event of Default under Section 19(o)
hereof. No Default or Event of Default has occurred and is continuing under
this Agreement.

 

l)              Collateral;
Collateral Security.

 

(i)            The Seller has not assigned,
pledged, or otherwise conveyed or encumbered any Purchased Asset to any other
Person, and immediately prior to the sale of any such Purchased Asset to the
applicable Buyer, the Seller was the sole owner of such Purchased Asset and had
good and marketable title thereto, free and clear of all Liens, in each case
except for Liens to be released simultaneously with the sale of such Purchased
Asset to the applicable Buyer hereunder and immediately after the sale of such
Purchased Asset to the applicable Buyer no Person other than the Agent, on
behalf of the Buyers, has any Lien on any Purchased Asset.

 

(ii)           The provisions of this Agreement are
effective to create in favor of the Agent, on behalf of the Buyers, a valid,
first priority security interest in all right, title and interest of the Seller
in, to and under the Collateral.

 

(iii)          Upon receipt by the Custodian of each
Note, endorsed in blank by a duly authorized officer of the payee or last
endorsee, the applicable Buyer shall have a fully perfected first priority
security interest therein, in the Loans evidenced thereby and in the Seller’s
interest in all related Mortgaged Property.

 

27

 

(iv)          Upon the filing of financing
statements on Form UCC-1, naming the Agent as “Secured Party” and the
Seller as “Debtor” and describing the Collateral, the security interests
granted hereunder in the Collateral will constitute fully perfected first
priority security interests under the Uniform Commercial Code in all right,
title and interest of the Seller in, to and under such Collateral to the extent
that such right, title and interest can be perfected by filing under the
Uniform Commercial Code..

 

m)            Chief Executive
Office; Chief Operating Office.  The
Seller’s chief executive office on the Effective Date is located at 14631 N.
Scottsdale Rd., Suite 200, Scottsdale, Arizona 85254 and the chief
operating office is located at 14631 N. Scottsdale Rd., Suite 200,
Scottsdale, Arizona 85254.

 

n)            Location of Books
and Records.  The location where the
Seller keeps its books and records, including all computer tapes and records
relating to the Purchased Assets and any Collateral, is its chief executive
office or chief operating office or the offices of the Custodian or the
Servicer.

 

o)            True and Complete
Disclosure.  The information,
reports, financial statements, exhibits and schedules furnished in writing by
or on behalf of the Seller to the Agent and/or the Buyers in connection with
the negotiation, preparation or delivery of this Agreement and the other
Program Documents or included herein or therein or delivered pursuant hereto or
thereto, individually or when taken as a whole, do not contain any untrue
statement of material fact or omit to state any fact necessary to make the
statements herein or therein, in light of the circumstances under which they
were made, not misleading in a material respect. All written information
furnished after the date hereof by or on behalf of the Seller to the Agent
and/or the Buyers in connection with this Agreement and the other Program Documents
and the transactions contemplated hereby and thereby will be true, complete and
accurate in every material respect, or (in the case of projections) based on
reasonable estimates, on the date as of which such information is stated or
certified. There is no fact known to a Responsible Officer of the Seller that,
after due inquiry, could reasonably be expected to have a Material Adverse
Effect that has not been disclosed herein, in the other Program Documents or in
a report, financial statement, exhibit, schedule, disclosure letter or other
writing furnished to the Agent for use in connection with the transactions
contemplated hereby or thereby.

 

p)            ERISA.  Each Plan to which the Seller or its
Subsidiaries make direct contributions, and, to the knowledge of the Seller,
each other Plan and each Multiemployer Plan, is in compliance in all material
respects with, and has been administered in all material respects in compliance
with, the applicable provisions of ERISA, the Code and any other Federal or
State law. No event or condition has occurred and is continuing as to which the
Seller would be under an obligation to furnish a report to the Agent under Section 14(a)(vi) hereof.

 

q)            Licenses.  No Buyer will be required solely as a result
of purchasing any Purchased Assets to be licensed, registered or approved or to
obtain permits or otherwise qualify (i) to do business in any state or (ii) under
any Federal, state or local consumer lending, fair debt collection or other
applicable Federal, state or local statute or regulation.

 

r)             [Intentionally
Omitted]

 

28

 

s)             No Burdensome
Restrictions.  No Requirement of Law
or Contractual Obligation of the Seller or any of its Subsidiaries has a
Material Adverse Effect.

 

t)             Subsidiaries.  All of the Subsidiaries of the Seller as of
the date hereof and, thereafter, as of the last Business Day of the most
recently ended Calendar Quarter are listed on Schedule A to this
Agreement (as updated as of the last Business Day of each Calendar Quarter by
the Seller).

 

u)            Origination and
Acquisition of Loans.  The Loans were
originated by the Seller, and the origination and collection practices used by
the Seller, as applicable, with respect to the Loans have been, in all material
respects legal, proper, prudent and customary in the franchise or commercial,
as applicable, mortgage loan origination business and in accordance with the
Underwriting Guidelines.  The servicing
of each of the Loans has been in all material respects, legal, proper, prudent
and customary in the commercial mortgage loan servicing business and in
accordance with the Accepted Servicing Standards.

 

v)            Seller Solvent;
Fraudulent Conveyance. As of the date hereof and immediately after giving
effect to each Transaction, the fair value of the assets of the Seller is
greater than the fair value of the liabilities (including, without limitation,
contingent liabilities if and to the extent required to be recorded as a
liability on the financial statements of the Seller in accordance with GAAP) of
the Seller and the Seller is and will be solvent, is and will be able to pay
its debts as they mature and does not and will not have an unreasonably small
amount of capital to engage in the business in which it is engaged and proposes
to engage. Seller does not intend to incur, or believe that it has incurred,
debts beyond its ability to pay such debts as they mature. Seller is not
contemplating the commencement of insolvency, bankruptcy, liquidation or
consolidation proceedings or the appointment of a receiver, liquidator,
conservator, trustee or similar official in respect of Seller or any of its
assets. Seller is not transferring any Purchased Asset with any intent to
hinder, delay or defraud any of its creditors.

 

w)            FCCR.  (i) The Weighted Average Aggregate FCCR
for all of the Purchased Assets is not less than 1.5; and (ii) (A) no
more than five percent (5%) of the Purchased Assets (by aggregate Collateral
Value) have a Unit-Level FCCR of between 1.25 and 1.10; provided that if
the aggregate Collateral Value of the Purchased Assets is less than
$100,000,000, then no more than the greater of (1) five percent (5%) of
the Purchased Assets (by aggregate Collateral Value) or (2) $6,500,000 in
Collateral Value of the Purchased Assets have a Unit-Level FCCR of between 1.25
and 1.10 and (B) no more than five percent (5%) of Purchased Assets have a
Master Lease FCCR of between 1.25 and 1.10; provided that if the
aggregate Collateral Value of the Purchased Assets is less than $100,000,000,
then no more than the greater of (1) five percent (5%) of the Purchased
Assets (by aggregate Collateral Value) or (2) $6,500,000 in Collateral
Value of the Purchased Assets have a Master Lease FCCR of between 1.25 and
1.10.

 

14.                               COVENANTS
OF SELLER

 

Seller hereby covenants
with the Agent and the Buyers as follows:

 

a)             Reporting.  The Seller shall deliver to the Agent on
behalf of the Buyers:

 

29

 

(i)            (A) annual consolidated audited
financial statements of the Seller and its Affiliates no later than 90 days
after year-end, (B) annual consolidating financial statements (consisting
of a balance sheet and an income statement) of the Seller and its Affiliates no
later than 90 days after year-end, all in accordance with, and certified by the
chief financial officer of the Seller as being in accordance with, GAAP,
consistently applied, as of the end of, and for, such period and (C) quarterly
unaudited consolidated and consolidating financial statements of the Seller and
its Affiliates no later than 45 days after quarter-end, all in accordance with,
and certified by the chief financial officer of the Seller as being in
accordance with, GAAP, consistently applied, as at the end of, and for, such
period (subject to normal year-end audit adjustments);

 

(ii)           as soon as reasonably practicable,
 all form 10-K, 10-Q, registration statements and other “corporate finance”
filings made with the Securities and Exchange Commission (“SEC”) other than Section 16
filings; provided, however, that the Seller will provide Agent
with a copy of the Seller’s or its affiliates’ annual SEC Form 10-K filing
no later than 90 days after year-end, all in accordance with GAAP, consistently
applied, as at the end of, and for, such period (subject to normal year-end
audit adjustments);

 

(iii)          no later than 45
days after the end of each fiscal quarter of the Seller, and from time to time
upon the request of the Agent, an officer’s compliance certificate as set forth
in Exhibit A hereto;

 

(iv)          on each Repurchase Date an Asset Base
Certificate and such additional monthly portfolio performance data with respect
to the Notes and associated Collateral, including, without limitation, any
outstanding delinquencies, prepayments in whole or in part, as may be requested
by the Agent;

 

(v)           by 2:00 P.M. (New York time) on
the second Business Day preceding each Repurchase Date, and on each Purchase
Date, the Computer Tape;

 

(vi)          from time to time such other
information regarding the Collateral and the financial condition, operations,
or business of the Seller as the Agent may reasonably request; and

 

(vii)         as soon as reasonably possible, and in
any event within thirty (30) days after a Responsible Officer of the Seller
knows, or with respect to any Plan or Multiemployer Plan to which the Seller or
any of its Subsidiaries makes direct contributions, has reason to believe, that
any of the events or conditions specified below with respect to any Plan or
Multiemployer Plan has occurred or exists, a statement signed by a senior financial
officer of the Seller setting forth details respecting such event or condition
and the action, if any, that the Seller or its ERISA Affiliate proposes to take
with respect thereto (and a copy of any report or notice required to be filed
with or given to PBGC by the Seller or an ERISA Affiliate with respect to such
event or condition):

 

(A)                              any
reportable event, as defined in Section 4043(b) of ERISA and the
regulations issued thereunder, with respect to a Plan, as to 

 

30

 

which PBGC has not by
regulation or otherwise waived the requirement of Section 4043(a) of
ERISA that it be notified within thirty (30) days of the occurrence of such
event (provided that a failure to meet the minimum funding standard of Section 412
of the Code or Section 302 of ERISA, including, without limitation, the
failure to make on or before its due date a required installment under Section 412(m)
of the Code or Section 302(e) of ERISA, shall be a reportable event
regardless of the issuance of any waivers in accordance with Section 412(d) of
the Code) (a “Reportable Event”); and any request for a waiver under Section 412(d) of
the Code for any Plan;

 

(B)                                the
distribution under Section 4041(c) of ERISA of a notice of intent to
terminate any Plan or any action taken by the Seller or an ERISA Affiliate to
terminate any Plan;

 

(C)                                the
institution by PBGC of proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by the Seller or any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by PBGC with respect to such Multiemployer
Plan;

 

(D)                               the
complete or partial withdrawal from a Multiemployer Plan by the Seller or any
ERISA Affiliate that results in liability under Section 4201 or 4204 of
ERISA (including the obligation to satisfy secondary liability as a result of a
purchaser default) or the receipt by the Seller or any ERISA Affiliate of
notice from a Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA or that it intends to terminate
or has terminated under Section 4041A of ERISA;

 

(E)                                 the
institution of a proceeding by a fiduciary of any Multiemployer Plan against
the Seller or any ERISA Affiliate to enforce Section 515 of ERISA, which
proceeding is not dismissed within thirty (30) days; and

 

(F)                                 the
adoption of an amendment to any Plan that, pursuant to Section 401(a)(29)
of the Code or Section 307 of ERISA, would result in the loss of
tax-exempt status of the trust of which such Plan is a part if the Seller or an
ERISA Affiliate fails to timely provide security to such Plan in accordance
with the provisions of said Sections; and

 

(viii)        at the time it furnishes the financial
statements pursuant to paragraph (i) above, a certificate of a Responsible
Officer of the Seller to the effect that, to the best of such Responsible
Officer’s knowledge, the Seller during such fiscal period has observed or
performed all of its covenants and other agreements, and satisfied every 

 

31

 

material condition contained in
this Agreement and the other Program Documents to be observed, performed or
satisfied by it, and that such Responsible Officer has obtained no knowledge of
any Default or Event of Default except as specified in such certificate (and,
if any Default or Event of Default has occurred and is continuing, describing
the same in reasonable detail and describing the action the Seller has taken or
proposes to take with respect thereto).

 

b)            Litigation.  The Seller will promptly, and in any event
within one (1)  Business Day after service of process, give to the Agent
notice of all legal or arbitrable proceedings affecting the Seller or any of
its Subsidiaries that questions or challenges the validity or enforceability of
any of the Program Documents or as to which there is a reasonable likelihood of
adverse determination which would result in a Material Adverse Effect or in
which the matter in controversy exceeds $1,000,000.

 

c)             Existence, Etc.  The Seller will, and will cause each of its
Subsidiaries (or, in the case of clause (i) below, the Net Lease
Borrowers) to:

 

(i)            preserve and maintain its legal
existence and all of its material rights, privileges, licenses and franchises;

 

(ii)           comply with the requirements of all
applicable material laws, rules, regulations and orders of Governmental
Authorities (including, without limitation, truth in lending, real estate
settlement procedures and all environmental laws);

 

(iii)          keep adequate records and books of
account, in which complete entries will be made in accordance with GAAP
consistently applied;

 

(iv)          pay and discharge all taxes,
assessments and governmental charges or levies imposed on it or on its income
or profits or on any of its Property prior to the date on which penalties
attach thereto, except for any such tax, assessment, charge or levy the payment
of which is being contested in good faith and by proper proceedings and against
which adequate reserves are being maintained; and

 

(v)           permit representatives of the Agent
or any Buyer, during normal business hours upon one (1) Business Day’s
prior written notice at a mutually desirable time, or at any time during the
continuance of an Event of Default, to examine, copy and make extracts from its
books and records, to inspect any of its Properties, and to discuss its
business and affairs with its officers, all to the extent reasonably requested
by the Agent or such Buyer.

 

d)            Prohibition of
Fundamental Changes.  The Seller
shall not enter into any transaction of merger or consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation, winding up or dissolution) or sell all or substantially all of its
assets; provided, that the Seller may merge or consolidate with (a) any
Subsidiary of the Seller or (b) any other Person if the Seller is the
surviving entity, or the Agent consents to such merger or consolidation; and
provided further, that after giving effect thereto, no Default would exist
hereunder.

 

32

 

e)             Margin Deficit.  If at any time there exists a Margin Deficit,
the Seller shall cure same in accordance with Section 6(a) hereof.

 

f)             Notices.  The Seller shall give notice to the Agent
promptly:

 

(i)            upon the Seller becoming aware of,
and in any event within one (1) Business Day after, the occurrence of any
Default or Event of Default or any event of default or default under any other
material agreement of the Seller;

 

(ii)           upon the Seller becoming aware of any
default related to any Purchased Asset or Collateral, any Material Adverse
Effect or any event or change in circumstances which should reasonably be
expected to have a Material Adverse Effect;

 

(iii)          upon the Seller becoming aware during
the normal course of its business that the Mortgaged Property in respect of any
Loan or Loans with an aggregate unpaid principal balance of at least $250,000
has been damaged by waste, fire, earthquake or earth movement, windstorm,
flood, tornado or other casualty, or otherwise damaged so as to materially and
adversely affect the value of such Loan;

 

(iv)          upon the entry of a judgment or decree
against the Seller or any of its Subsidiaries in an amount in excess of
$1,000,000; and

 

(v)           upon the termination of the Custody
and Servicing Agreement or any other Servicing Agreement; and

 

(vi)          of a move of the Seller’s chief
executive office or chief operating office from the addresses referred to in Section 13(m),
which such notice shall be written notice thirty (30) days prior to such move.

 

Each notice pursuant to
this Section 14(f) (other than pursuant to clause (v) and (vi))
shall be accompanied by a statement of a Responsible Officer of the Seller
setting forth details of the occurrence referred to therein and stating what
action the Seller has taken or proposes to take with respect thereto.

 

g)            Servicing.  The Seller shall cause the Servicer to
service, or cause to be serviced, the Purchased Assets, in accordance with
Accepted Servicing Standards, pending any transfer of such servicing pursuant
to the Custody and Servicing Agreement, employing at least the same procedures
and exercising the same care that the Servicer customarily employs in servicing
mortgaged properties and mortgage loans for its own account.  The Seller shall cause the Servicer to hold
or cause to be held all escrow funds collected with respect to such Purchased
Assets in trust accounts and shall apply the same for the purposes for which
such funds were collected.  If the Seller
should discover that, for any reason whatsoever, the Seller or any entity
responsible to the Agent or any Buyer by contract for managing or servicing any
such Purchased Asset has failed to perform fully the Servicer’s obligations
with respect to the servicing of the Purchased Assets or any of the obligations
of such entities with respect to the Loans, the Seller shall promptly notify
the Agent.  Prior to any Person other
than Midland Loan Services, Inc. becoming the Servicer or a subservicer of
the Purchased Assets, the Agent shall have the right to 

 

33

 

approve each such Servicer and the form of
all Servicing Agreements or servicing side letter agreements with respect
thereto.

 

h)            Underwriting
Guidelines.  The Seller shall notify
the Agent in writing of any material modification to the Underwriting
Guidelines prior to implementation of such change and no such material
modification shall be implemented which could affect any Purchased Asset, or
any other Loan under the Master Loan Agreement which may become a Purchased
Asset, without the Agent’s prior written consent.

 

i)              Lines of
Business.  The Seller will not engage
to any substantial extent in any line or lines of business activity other than
financing, acquiring, leasing, selling or exchanging commercial real estate,
interests in commercial real estate or interests in entities that own or
operate commercial real estate, and the businesses generally carried on by it
as of the Initial Purchase Date.

 

j)              Transactions
with Affiliates.  The Seller will not
enter into any transaction, including, without limitation, any purchase, sale,
lease or exchange of property or the rendering of any service, with any
Affiliate unless such transaction is (a) not expressly prohibited under
this Agreement, (b) in the ordinary course of the Seller’s business and (c) upon
fair and reasonable terms no less favorable to the Seller than it would obtain
in a comparable arm’s length transaction with a Person which is not an
Affiliate.

 

k)             Limitation on
Liens.  The Seller will not, nor will
it permit or allow others to, create, incur or permit to exist any Lien,
security interest or claim on or to any of its Collateral, except for:  (i) Liens (not otherwise permitted
hereunder) which are created in connection with the purchase of fixed assets
and equipment necessary in the ordinary course of the Seller’s business or to
finance residual certificates issued in connection with securitizations of
mortgage loans completed by the Seller which are financed solely based on a
pledge of such residual certificates; and (ii) Liens on the Collateral
created pursuant to this Agreement. The Seller will defend the Collateral
against, and will take such other action as is necessary to remove, any Lien,
security interest or claim on or to the Collateral, other than the security
interests created under this Agreement, and the Seller will defend the right,
title and interest of the Agent and the Buyers in and to any of the Collateral
against the claims and demands of all persons whomsoever.  The Seller will not permit or allow any of
its Subsidiaries to create, incur or permit to exist any Lien, security
interest or claim on or to any Mortgaged Property that is related to a
Purchased Asset, except in accordance with the Program Documents and any Master
Loan Agreement.

 

l)              Limitation on
Sale of Assets.  Except for sales and
securitizations of Purchased Assets with respect to which the Seller has paid
the Repurchase Price as set forth herein, the Seller and its Subsidiaries,
taken as a collective whole, shall not convey, sell, lease, assign, transfer or
otherwise dispose of (collectively, “Transfer”), all or substantially
all of its Property, business or assets (including, without limitation,
receivables and leasehold interests) whether now owned or hereafter acquired or
allow any Subsidiary to Transfer substantially all of Seller’s consolidated
assets taken as a whole to any Person; provided, that the Seller may after
prior written notice to the Agent allow such action with respect to any
Subsidiary which is not a Net Lease Borrower or a material part of the Seller’s
overall business operations.  During the
term of this Agreement, (i) Seller shall not pledge, sell or otherwise
transfer any Loans that it makes 

 

34

 

under a Master Loan Agreement to any Person
other than a Buyer hereunder while any other Loan under the same Master Loan
Agreement is a Purchased Asset hereunder and (ii) Seller shall not pledge,
sell or otherwise transfer any Loans that it makes under a Master Loan
Agreement to a Buyer hereunder, if any other Loan under the same Master Loan
Agreement has been pledged, sold or otherwise transferred to any Person other
than a Buyer hereunder.

 

m)            Limitation on
Distributions.  Without the Agent’s
consent, except for customary cash dividends and distributions of its common
stock, the Seller shall not make any payment on account of, or set apart assets
for a sinking or other analogous fund for the purchase, redemption, defeasance,
retirement or other acquisition of, any stock or senior or subordinate debt of
the Seller, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of the Seller.

 

n)            Maintenance of
Net Worth/Liquidity.  The Seller
shall ensure that, as of the end of each fiscal quarter of the Seller and, in
the case of clauses (i) and (iii) below, on each other date of
determination designated by the Agent, in its sole discretion, from time to
time, it meets the following requirements (the “Net Worth Requirements”):

 

(i)            The Seller shall not permit its
Tangible Net Worth to be less than (i) $400,000,000 plus (ii) Net
Worth Increase Amounts.

 

(ii)           The Seller shall ensure that the
Seller, together with its consolidated Subsidiaries, has cash and Cash
Equivalents in an amount of not less than $15,000,000.

 

(iii)          The Seller shall not permit the ratio
of Total Indebtedness to Tangible Net Worth to exceed 4:1.

 

o)            Restricted
Payments.  The Seller shall not make
any Restricted Payments following an Event of Default.

 

p)            Servicing
Transmission.  The Seller shall
provide to the Agent two (2) Business Days prior to each Repurchase Date (i) the
Servicing Transmission, with respect to the Mortgaged Properties serviced under
the Custody and Servicing Agreement by the Servicer which were a part of the
Purchased Assets prior to the first day of the current month, summarizing the
Servicer’s delinquency and loss experience with respect to Mortgaged Properties
serviced by the Servicer (including, in the case of the Mortgaged Properties
and, specifically, the Triple Net Leases thereof, the following
categories:  current, 30-59, 60-89, 90-119,
120-149 and 150+ days delinquent) and (ii) any other information
reasonably requested by the Agent with respect to the Mortgaged Properties. The
Servicer shall also include in the Servicing Transmission such information
relating to the servicing of the Purchased Assets as may be required by the
Agent under the Custody and Servicing Agreement.

 

q)            No Amendment or
Waiver.  Without the consent of the
Agent, the Seller will not, nor will it permit or allow others to amend,
modify, terminate or waive any provision of any Master Loan Agreement, Note or
other Loan Document related to a Purchased Asset in any manner which shall
reasonably be expected to materially and adversely affect the value of such
Purchased Asset as Collateral.

 

35

 

r)             Maintenance of
Property; Insurance.  The Seller
shall keep or cause the related operator of the Mortgaged Properties to keep
the related Mortgaged Property in good working order and condition.  The Seller shall maintain or cause the
related Net Lease Borrower, or the related Tenant under a Triple Net Lease as
operator of the Mortgaged Property, to maintain the insurance in form and
amount as required under the related Triple Net Lease and shall not reduce such
coverage without the written consent of the Agent, and shall also maintain or
cause  the related Net Lease Borrower or
the related Tenant to maintain such insurance with financially sound and
reputable insurance companies, and with respect to property and risks of a
character usually maintained by entities engaged in the same or similar
business similarly situated, against loss, damage and liability of the kinds
and in the amounts customarily maintained by such entities.  Seller shall deliver to the Agent monthly or
upon reasonable request a report in a form satisfactory to the Agent which shall
set forth the insurance in effect at the time of delivery thereof.

 

s)             Further
Identification of Collateral.  The
Seller will furnish to the Agent from time to time statements and schedules
further identifying and describing the Purchased Assets and such other reports
in connection with the Purchased Assets as the Agent may reasonably request,
all in reasonable detail.

 

t)             Purchased Asset
Determined to be Defective.  Upon
discovery by the Seller of any breach of any representation or warranty listed
on Appendix A hereto applicable to any Purchased Asset that would result in the
Purchased Asset not being an Eligible Asset, the Seller shall promptly give
notice of such discovery to the Agent.

 

u)            Illegal
Activities; Anti-Money Laundering Laws. 
The Seller has not engaged, is not engaging, and shall not in the future
engage in any conduct or activity that could subject its assets to forfeiture
or seizure, including without limitation, conduct or activities in violation of
the Racketeer Influenced and Corrupt Organizations Act, the Bank Secrecy Act or
narcotic drug laws.  The Seller has
complied with all applicable anti-money laundering laws and regulations,
including without limitation the USA Patriot Act of 200l (collectively, the “Anti
Money Laundering Laws”).  As and to the
extent required by the Anti Money Laundering Laws, the Seller (i) has
conducted the requisite due diligence in connection with the origination of
each Purchased Asset for purposes of the Anti-Money Laundering Laws, including
with respect to the legitimacy of the applicable mortgagor, dealership
guarantor, other obligor, and their respective principals, and the origin of
the assets used by the said mortgagor to purchase the property in question, and
(ii) maintains, and will maintain, sufficient information to identify the
applicable mortgagor and its principals, for purposes of the Anti-Money
Laundering Laws.  No Purchased Asset is
subject to nullification pursuant to Executive Order 13224 (the “Executive
Order”) or the regulations promulgated by the Office of Foreign Assets Control
of the United States Department of the Treasury (the “OFAC Regulations”) or in
violation of the Executive Order or the OFAC Regulations, and no mortgagor or
any of its principals, is subject to the provisions of such Executive Order or
the OFAC Regulations nor listed as a “blocked person” for purposes of the OFAC
Regulations.

 

v)            Amendment of
Triple Net Lease.  Without the
consent of the Agent, the Seller will not, nor will it permit or allow others
to terminate (unless permitted by the terms of such Triple Net Lease without
the consent of the lessor thereunder), make any material amendment or 

 

36

 

modification to, or waive any material
provision of, any Triple Net Lease related to a Purchased Asset.

 

w)            Non-Petition.  Until one year and one day after the date
that the Buyers have been paid all of the Repurchase Price with respect to each
Purchased Asset related to a Net Lease Borrower that they have purchased under
this Agreement and either (i) an ABS Transaction (as defined in the
applicable Master Loan Agreement) has occurred involving such Net Lease
Borrower and the Purchased Assets related thereto or (ii) all other
Obligations under this Agreement have been paid in full by the Seller and this
Agreement has been terminated, the Seller shall not petition or otherwise
invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against such Net Lease Borrower under any
federal or state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of such Net Lease Borrower or any substantial part of its
property, or ordering the winding up or liquidation of the affairs of such Net
Lease Borrower.

 

15.                               REPURCHASE
DATE PAYMENTS/COLLECTIONS

 

Subject to Section 3(b) hereof,
on each Repurchase Date, Seller shall remit, or shall cause the Servicer to
remit from the Collection Account, to the Agent, on behalf of the Buyers, the
aggregate Repurchase Price with respect to all Transactions (net of the
Purchase Price applicable to Purchased Assets, if any, that become subject to a
new Transaction on such Repurchase Date) together with any other Obligations
then due and payable.

 

16.                               REPURCHASE
OF PURCHASED ASSETS; CHANGE OF LAW

 

a)             Upon discovery by
Seller of a breach of any of the representations and warranties set forth in
Appendix A to this Agreement, Seller shall give prompt written notice thereof
to Agent.  Upon any such discovery by
Agent, Agent will notify Seller (provided that its failure to do so will not
limit any of its rights hereunder).  It
is understood and agreed that the representations and warranties set forth in
Appendix A to this Agreement shall survive delivery of the respective Custodian’s
Loan Files to the Custodian and shall inure to the benefit of the Agent, the
Buyers and their successors and assigns. 
The fact that the Agent or the Buyers have conducted or have failed to
conduct any partial or complete due diligence investigation in connection with
its purchase of any Purchased Assets shall not affect the Agent’s right to
demand repurchase as provided under this Agreement.  Seller shall within five Business Days of the
earlier of Seller’s discovery or Seller’s receiving notice, with respect to any
Purchased Assets, of (i) any breach of a representation or warranty
contained in Appendix A to this Agreement or (ii) any failure to deliver
any of the items required to be delivered as part of the Custodian’s Loan File
within the time period required for delivery pursuant to the Custody Agreement,
promptly cure such breach or delivery failure in all material respects.  If within five Business Days after the
earlier of Seller’s discovery of such breach or delivery failure or Seller’s
receiving notice thereof such breach or delivery failure has not been remedied
by Seller, Seller shall promptly upon receipt of written instructions from
Agent purchase such Purchased Assets at a purchase price equal to the
Repurchase Price with respect to such Purchased Assets by depositing such
Repurchase Price in the Collection Account or another account designated by the
Agent; provided, however, that, with the exception of the
delivery of a Note, if the Seller is 

 

37

 

diligently pursuing a cure of such breach or
delivery failure, Seller shall have ten days in addition to such five Business
Day period to cure such breach or delivery failure in all material respects.

 

b)            If any Buyer
determines that the introduction of, any change in, or the interpretation or
administration of any requirement of law has made it unlawful or commercially
impracticable to engage in any Transactions with a Pricing Rate based on LIBO
Rate, then Seller (i) shall, upon its receipt of notice of such fact and
demand from such Buyer (with a copy of such notice to Custodian), repurchase
the Purchased Asset subject to the Transaction on the next succeeding Business
Day and, at Seller’s election, concurrently enter into a new Transaction with
such Buyer with a Pricing Rate based on the Prime Rate plus the margin set
forth in the Side Letter as part of the Pricing Rate and (ii) may elect,
by giving notice to Buyer and Custodian, that all new Transactions shall have
Pricing Rates based on the Prime Rate plus such margin.

 

c)             If any Buyer
determines in its sole discretion that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on
such Buyer’s capital or on the capital of any Affiliate of such Buyer as a
consequence of such Change in Law affecting this Agreement, then from time to
time Seller will compensate such Buyer or Buyer’s Affiliate, as applicable, for
such reduced rate of return suffered as a consequence of such Change in Law.  Buyers shall provide Seller with prompt
notice as to any Change in Law. 
Notwithstanding any other provisions in this Agreement, in the event of
any such Change in Law, Seller will have the right to terminate all
Transactions then outstanding without any prepayment penalty as of a date
selected by Seller, which date shall be prior to the then applicable Repurchase
Date and which date shall thereafter for all purposes hereof be deemed to be
the Repurchase Date.

 

17.                               RESERVED

 

18.                               REPURCHASE
TRANSACTIONS

 

Any Buyer may, in its
sole election, engage in repurchase transactions with the Purchased Assets or
otherwise pledge, hypothecate, assign, transfer or otherwise convey the
Purchased Assets with a counterparty of such Buyer’s choice, in all cases
subject to such Buyer’s obligation to reconvey the Purchased Assets (and not
substitutes therefor) on the Repurchase Date. 
In the event any Buyer engages in a repurchase transaction with any of
the Purchased Assets or otherwise pledges or hypothecates any of the Purchased
Assets, such Buyer shall have the right to assign to such Buyer’s counterparty
any of the applicable representations or warranties in Appendix A to this
Agreement and the remedies for breach thereof, as they relate to the Purchased
Assets that are subject to such repurchase transaction.

 

19.                               EVENTS
OF DEFAULT

 

With respect to any Transactions covered by or related to this
Agreement, the occurrence of any of the following events shall constitute, if
declared as such by Agent, an “Event of Default” other than the events
described in clause (f) and (g) below which, upon their occurrence,
shall automatically constitute an Event of Default:

 

38

 

a)             Seller fails to
transfer any Purchased Asset to the applicable Buyer on the applicable Purchase
Date (provided such Buyer has tendered the related Purchase Price); or

 

b)            Seller either fails
to repurchase the Purchased Assets on any Repurchase Date or fails to perform
its obligations under Section 6; or

 

c)             any representation,
warranty or certification made or deemed made herein or in any other Program
Document by the Seller or any certificate furnished to the Agent or any Buyer
pursuant to the provisions thereof, shall prove to have been false or
misleading in any material respect (which falsity, or the cause for such
representation, warranty, certification or certificate being misleading, if it
is capable of being cured, is not cured within ten (10) Business Days of
the earlier of (i) the receipt of notice by the Seller and (ii) actual
knowledge of the Seller thereof; unless (A) the Seller shall have made any
such representations and warranties with knowledge that they were materially
false or misleading at the time made or (B) any such representations and
warranties have been determined by the Agent in its sole discretion to be
materially false or misleading on a regular basis and that falsity could
reasonably be expected to result in a Material Adverse Effect) as of the time
made or furnished (other than the representations and warranties set forth in
Appendix A which shall be considered solely for the purpose of determining the
Purchase Price of the Loans); or

 

d)            the Seller shall
fail to observe or perform any covenant or agreement (other than any covenant
or agreement described in clauses (a) or (b) above) contained in this
Agreement or any other Program Document and such failure to observe or perform
shall continue unremedied for a period of five (5) Business Days after the
earlier of (i) receipt of notice by the Seller or (ii) actual
knowledge of the Seller; or

 

e)             a final judgment or
judgments for the payment of money in excess of $2,000,000 in the aggregate (to
the extent that the Seller or any of its Subsidiaries, as applicable, is, in
the reasonable determination of the Agent, uninsured with respect to such
judgment or judgments and provided that any insurance or other credit posted in
connection with an appeal shall not be deemed insurance for these purposes)
shall be rendered against the Seller or any of its Subsidiaries by one or more
courts, administrative tribunals or other bodies having jurisdiction over them
and the same shall not be discharged (or provision shall not be made for such
discharge) or bonded, or a stay of execution thereof shall not be procured,
within sixty (60) days from the date of entry thereof and the Seller or any
such Subsidiary shall not, within said period of sixty (60) days, or such
longer period during which execution of the same shall have been stayed or
bonded, appeal therefrom and cause the execution thereof to be stayed during
such appeal; or

 

f)             the Seller, any Net
Lease Borrower, any Subsidiary of the Seller that is the issuer in a
securitization transaction or any other material Subsidiary of the Seller shall
admit in writing its inability to pay its debts as such debts become due; or

 

g)            the Seller or any of
its Subsidiaries shall (i) apply for or consent to the appointment of, or
the taking of possession by, a receiver, custodian, trustee, examiner or
liquidator of itself or of all or a substantial part of its property, (ii) make
a general assignment for the benefit of its creditors, (iii) commence a
voluntary case under the Bankruptcy Code, (iv) file 

 

39

 

a petition seeking to take advantage of any
other law relating to bankruptcy, insolvency, reorganization, liquidation,
dissolution, arrangement or winding-up, or composition or readjustment of
debts, (v) fail to controvert in a timely and appropriate manner, or
acquiesce in writing to, any petition filed against it in an involuntary case
under the Bankruptcy Code or (vi) take any corporate or other action for
the purpose of effecting any of the foregoing; or

 

h)            a proceeding or case
shall be commenced, without the application or consent of the Seller or any of
its Subsidiaries, in any court of competent jurisdiction, seeking (i) its
reorganization, liquidation, dissolution, arrangement or winding-up, or the
composition or readjustment of its debts, (ii) the appointment of, or taking
of possession by, a receiver, custodian, trustee, examiner, liquidator or the
like of the Seller or any such Subsidiary or of all or any substantial part of
its property, or (iii) similar relief in respect of the Seller or any such
Subsidiary under any law relating to bankruptcy, insolvency, reorganization,
liquidation, dissolution, arrangement or winding-up, or composition or
adjustment of debts, and such proceeding or case shall continue undismissed, or
an order, judgment or decree approving or ordering any of the foregoing shall
be entered and continue unstayed and in effect, for a period of sixty (60) or
more days; or an order for relief against the Seller or any such Subsidiary
shall be entered in an involuntary case under the Bankruptcy Code; or

 

i)              without the
express prior written consent of Agent, the Custody and Servicing Agreement or
any Program Document shall for whatever reason (including an event of default
thereunder) be terminated or the Lien on the Collateral created by this
Agreement or Seller’s material obligations hereunder shall cease to be in full
force and effect, or the enforceability thereof shall be contested by the
Seller; or

 

j)              the Agent
reasonably determines that there has occurred any Material Adverse Effect or
the Agent reasonably determines that there exists a material impairment of the
Seller’s ability to perform its obligations under this Agreement, the Note or
any other Program Document; or

 

k)             Except where it
would not result in a Material Adverse Effect: (i) any Person shall engage
in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975
of the Code) involving any Plan or Multiemployer Plan, (ii) any material “accumulated
funding deficiency” (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan or Multiemployer Plan or any Lien
in favor of PBGC or a Plan or Multiemployer Plan shall arise on the assets of
the Seller or any ERISA Affiliate, (iii) a Reportable Event shall occur
with respect to, or proceedings shall commence to have a trustee appointed, or
a trustee shall be appointed, to administer or to terminate, any Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee is,
in the reasonable opinion of the Agent, likely to result in the termination of
such Plan for purposes of Title IV of ERISA, (iv) any Plan shall terminate
for purposes of Title IV of ERISA, (v) the Seller or any ERISA Affiliate
shall, or in the reasonable opinion of the Agent is likely to, incur any material
liability in connection with a withdrawal from, or the insolvency or
reorganization of, a Multiemployer Plan or (vi) any other event or
condition shall occur or exist with respect to a Plan or Multiemployer Plan; or

 

40

 

l)              any Change in
Control shall have occurred without the prior consent of the Agent or the
Seller shall cease to own, directly or indirectly, 100% of the voting stock or
membership interests of any Net Lease Borrower; or

 

m)            the Seller shall
grant, or suffer to exist, any Lien on any of the Purchased Assets or any other
Collateral except the Liens contemplated hereby; or the Liens contemplated
hereby shall cease to be first priority perfected Liens on the Purchased Assets
or other Collateral in favor of the Agent, for the benefit of the Buyers, or
shall be Liens in favor of any Person other than the Agent, for the benefit of
the Buyers; or

 

n)            the Agent shall
reasonably request, specifying the reasons for such request, information,
and/or written responses to such requests, regarding the financial well-being
of the Seller and such information and/or responses shall not have been
provided within five (5) Business Days of such request; or

 

o)            the Seller or any
subsidiary or Affiliate of the Seller shall default under, or fail to perform
as required under, or shall otherwise materially breach the terms of any
instrument, agreement or contract between the Seller or such other entity, on
the one hand, and the Agent, any Buyer and/or any of the Buyer’s Affiliates on
the other; or the Seller or any subsidiary or Affiliate of the Seller shall
default under, or fail to perform as requested under, the terms of any
repurchase agreement, loan and security agreement or similar credit facility or
agreement for borrowed funds entered into by the Seller or such other entity
and any third party, which default or failure entitles any party to require
acceleration or prepayment of any indebtedness thereunder in an amount greater
than $250,000; or

 

p)            any report of
independent accountants with respect to the Seller includes a “going concern”
reference; or

 

q)            the funds available
to be withdrawn from the Collection Account pursuant to Section 4.1(c) of
the Custody Agreement on any Repurchase Date are insufficient to make payment
to the Agent, for the account of the Buyers, of all amounts due hereunder on
such Repurchase Date and such occurrence shall continue unremedied for a period
of five (5) Business Days after the earlier of (i) receipt of notice
by the Seller or (ii) actual knowledge of the Seller.

 

20.                               REMEDIES

 

Upon the occurrence of an
Event of Default:

 

a)             The Repurchase Date
for each Transaction hereunder shall, at the option of the Agent, be deemed
immediately to occur.

 

b)            (i)            Seller’s
obligations hereunder to repurchase all Purchased Assets at the Repurchase
Price therefor on the Repurchase Date for such Transactions shall, at the
election of the Agent, thereupon become immediately due and payable and all
Income paid after such election shall be remitted to and retained by the Agent
and applied to the payment of the aggregate Repurchase Prices and any other
amounts owing by Seller hereunder; Seller shall immediately deliver to the
Agent or its designee any and all 

 

41

 

original papers, records and
files relating to the Purchased Assets subject to such Transactions then in
Seller’s possession and/or control; and all right, title and interest in and
entitlement to such Purchased Assets and Servicing Rights thereon shall be
deemed, to the extent not previously transferred to Buyers, transferred to
Buyers.

 

(ii)           Agent shall have the right to (A) sell,
on or following the Business Day following the date on which the Repurchase
Price became due and payable pursuant to Section 20(b)(i) without
notice or demand of any kind, at a public or private sale and at such price or
prices as Agent may reasonably deem satisfactory any or all Purchased Assets or
(B) in its sole discretion, exercised in good faith, elect, in lieu of
selling all or a portion of such Purchased Assets, to give Seller credit for
such Purchased Assets in an amount equal to the Market Value of the Purchased
Assets against the aggregate unpaid Repurchase Price and any other amounts
owing by Seller hereunder.  The proceeds
of any disposition of Purchased Assets shall be applied first to the costs and
expenses incurred by Agent or any Buyer in connection with or as a result of an
Event of Default; second to the aggregate Repurchase Prices; third to all other
Obligations; and any amounts remaining shall be paid to Seller.

 

(iii)          The parties recognize that it may not
be possible to purchase or sell all of the Purchased Assets on a particular
Business Day, or in a transaction with the same purchaser, or in the same
manner because the market for such Purchased Assets may not be liquid.  In view of the nature of the Purchased
Assets, the parties agree that liquidation of a Transaction or the underlying
Purchased Assets does not require a public purchase or sale and that a good
faith private purchase or sale shall be deemed to have been made in a
commercially reasonable manner. 
Accordingly, the Agent may elect the time and manner of liquidating any
Purchased Asset and nothing contained herein shall obligate the Agent to
liquidate any Purchased Asset on the occurrence of an Event of Default or to
liquidate all Purchased Assets in the same manner or on the same Business Day
or constitute a waiver of any right or remedy of the Agent.  Notwithstanding the foregoing, the parties to
this Agreement agree that the Transactions have been entered into in
consideration of and in reliance upon the fact that all Transactions hereunder
constitute a single business and contractual obligation and that each
Transaction has been entered into in consideration of the other Transactions.

 

c)             In addition to its
rights hereunder, the Agent shall have the right to proceed against any of
Seller’s assets which may be in the possession of the Agent, any Buyer, any of
Buyer’s Affiliates or its designee (including the Custodian, to the extent
acting as a custodian for the benefit of the Buyers), including the right to
liquidate such assets and to set-off the proceeds against monies owed by Seller
to Buyers pursuant to this Agreement. 
The Agent and the Buyers may set off cash, the proceeds of the
liquidation of the Purchased Assets and Additional Purchased Assets, any other
Collateral or its proceeds and all other sums or obligations owed by Buyers to
Seller hereunder against all of Seller’s Obligations to Buyers, whether under
this Agreement, under a Transaction, or under any other agreement between the
parties, or otherwise, whether or not such Obligations are then due, without
prejudice to the Agent’s or the Buyers’ right to recover any deficiency.

 

42

 

d)            The Agent shall have
the right to obtain physical possession of the Records and all other files of
Seller relating to the Purchased Assets and all documents relating to the
Purchased Assets which are then or may thereafter come into the possession of
Seller or any third party acting for Seller and Seller shall deliver to the
Agent such assignments as the Agent shall request.

 

e)             The Agent may
direct all Persons servicing the Purchased Assets to take such action with
respect to the Purchased Assets as Agent determines appropriate.

 

f)             Seller shall be
liable to the Agent and the Buyers for the amount of all expenses (plus
interest thereon at a rate equal to the Default Rate), and all costs and
expenses incurred in connection with hedging or covering transactions related
to the Purchased Assets.

 

g)            Seller shall cause
all sums received by it or on its behalf with respect to the Purchased Assets
to be deposited with Custodian (or such other Person as Agent may direct) after
receipt thereof.

 

h)            The Agent shall
without regard to the adequacy of the security for the Obligations, be entitled
to the appointment of a receiver by any court having jurisdiction, without
notice, to take possession of and protect, collect, manage, liquidate, and sell
the Purchased Assets and any other Collateral or any portion thereof, collect
the payments due with respect to the Purchased Assets and any other Collateral
or any portion thereof, and do anything that the Agent or any Buyer is
authorized hereunder to do.  Seller shall
pay all costs and expenses incurred by the Agent or any Buyer in connection
with the appointment and activities of such receiver.

 

The Agent and each Buyer
may enforce its rights and remedies hereunder without prior judicial process or
hearing, and Seller hereby expressly waives, to the extent permitted by law,
any right Seller might otherwise have to require the Agent or any Buyer to
enforce its rights by judicial process. 
Seller also waives, to the extent permitted by law, any defense Seller
might otherwise have to the Obligations, arising from use of nonjudicial
process, enforcement and sale of all or any portion of the Purchased Assets and
any other Collateral or from any other election of remedies.  Seller recognizes that nonjudicial remedies
are consistent with the usages of the trade, are responsive to commercial
necessity and are the result of a bargain at arm’s length.

 

In addition to all the
rights and remedies specifically provided herein, the Agent and the Buyers
shall have all other rights and remedies provided by applicable federal, state,
foreign, and local laws, whether existing at law, in equity or by statute.

 

The Agent and the Buyers
shall have, except as otherwise expressly provided in this Agreement, the right
to exercise any of its rights and/or remedies without  presentment, demand, protest or further
notice of any kind other than as expressly set forth herein, all of which are
hereby expressly waived by Seller.

 

Seller hereby authorizes
the Agent, at Seller’s expense, to file such financing statement or statements
relating to the Purchased Assets and the Collateral without Seller’s signature
thereon as the Agent at its option may deem appropriate, and appoints the Agent
as Seller’s attorney-in-fact to execute any such financing statement or
statements in Seller’s name and to perform all 

 

43

 

other acts which the Agent deems appropriate to
perfect and continue the lien and security interest granted hereby and to
protect, preserve and realize upon the Purchased Assets and the Collateral,
including, but not limited to, the right to endorse notes, complete blanks in
documents and execute assignments on behalf of Seller as its attorney-in-fact.  This power of attorney is coupled with an
interest and is irrevocable without the Agent’s consent.

 

21.                               DELAY
NOT WAIVER; REMEDIES ARE CUMULATIVE

 

No failure on the part of
the Agent or any Buyer to exercise, and no delay in exercising, any right,
power or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise by the Agent or any Buyer of any right, power or
remedy hereunder preclude any other or further exercise thereof or the exercise
of any other right, power or remedy.  All
rights and remedies of the Agent and the Buyers provided for herein are
cumulative and in addition to any and all other rights and remedies provided by
law, the Program Documents and the other instruments and agreements
contemplated hereby and thereby, and are not conditional or contingent on any
attempt by the Agent or any Buyer to exercise any of its rights under any other
related document.  The Agent and any
Buyer may exercise at any time after the occurrence of an Event of Default one
or more remedies, as it so desires, and may thereafter at any time and from
time to time exercise any other remedy or remedies.

 

22.                               USE
OF EMPLOYEE PLAN ASSETS

 

No assets of an employee
benefit plan subject to any provision of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”) shall be used by either party hereto
in a Transaction.

 

23.                               INDEMNITY

 

a)             Seller agrees to
pay on demand (i) all reasonable out-of-pocket costs and expenses of the
Agent and the Buyers in connection with the preparation, execution, delivery,
modification, administration and amendment of the Program Documents (including,
without limitation, (A) all collateral review and UCC search and filing
fees and expenses and (B) the reasonable fees and expenses of counsel for
the Agent and the Buyers with respect thereto, with respect to advising the
Agent and the Buyers as to their rights and responsibilities, or the
perfection, protection or preservation of rights or interests, under this
Agreement, with respect to negotiations with Seller or with other creditors of
Seller or any of their Subsidiaries arising out of any Default or any events or
circumstances that may give rise to a Default and with respect to presenting
claims in or otherwise participating in or monitoring any bankruptcy,
insolvency or other similar proceeding involving creditors’ rights generally
and any proceeding ancillary thereto) and (ii) all costs and expenses of
the Agent and the Buyers in connection with the enforcement of this Agreement,
whether in any action, suit or litigation, any bankruptcy, insolvency or other
similar proceeding affecting creditors’ rights generally (including, without
limitation, the reasonable fees and expenses of counsel for the Agent and the
Buyers) whether or not the transactions contemplated hereby are consummated.

 

b)            Seller agrees to
indemnify and hold harmless the Agent, each Buyer and each of its respective
Affiliates and their officers, directors, employees, agents and advisors (each,
an 

 

44

 

“Indemnified Party”) from and against (and
will reimburse each Indemnified Party as the same is incurred) any and all
claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of
or in connection with or by reason of (including, without limitation, in
connection with any investigation, litigation or other proceeding (whether or not
such Indemnified Party is a party thereto) relating to, resulting from or
arising out of any of the Program Documents any other documents related
thereto, any breach of a representation or warranty of Seller or Seller’s
officer in this Agreement or any other Program Document, all actions taken
pursuant thereto, or any Purchased Assets) (i) the Purchased Assets, the
Transactions, the actual or proposed use of the proceeds of the Transactions,
this Agreement and the other the Program Documents and any of the transactions
contemplated thereby, including, without limitation, any acquisition or
proposed acquisition of Purchased Assets or any indemnity payable under any
Servicing Agreement or other servicing arrangement, (ii) the actual or
alleged presence of hazardous materials on any Mortgaged Property related to a
Purchased Asset or any environmental action relating in any way to any such
Mortgaged Property or (iii) the actual or alleged violation of any
federal, state, municipal or local predatory lending laws, except to the extent
such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party’s gross negligence or willful misconduct.  Seller also agrees not to assert any claim
against the Agent or any Buyer or any of its Affiliates, or any of their
respective officers, directors, employees, attorneys and agents, on any theory
of liability, for special, indirect, consequential or punitive damages arising
out of or otherwise relating to the Program Documents, the actual or proposed
use of the proceeds of the Transactions, this Agreement or any of the
transactions contemplated thereby.  THE
FOREGOING INDEMNITY AND AGREEMENT NOT TO ASSERT CLAIMS EXPRESSLY APPLIES,
WITHOUT LIMITATION, TO THE NEGLIGENCE (BUT NOT GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT) OF THE INDEMNIFIED PARTIES.

 

c)             If Seller fails to
pay when due any costs, expenses or other amounts payable by it under this
Agreement, including, without limitation, any amount payable in connection with
any repurchase obligation hereunder, such past due amounts shall accrue
interest from the time of such failure to pay at the Default Rate, such
interest to be paid by the Seller at the time of payment of the aforementioned
costs, expenses or other amounts.  If
Seller fails to pay when due any costs, expenses or other amounts payable by it
under this Agreement, including, without limitation, reasonable fees and
expenses of counsel and indemnities, such amount may be paid on behalf of
Seller by Agent or any Buyer, in its sole discretion and Seller shall remain
liable for any such payments to Agent or such Buyer.  No such payment by Agent or any Buyer shall
be deemed a waiver of any of Agent’s or Buyers’ rights under the Program
Documents.

 

d)            Without prejudice to
the survival of any other agreement of Seller hereunder, the agreements and
obligations of Seller contained in this Section shall survive the payment
in full of the Repurchase Price related to all Purchased Assets and all other
amounts payable hereunder and delivery of the Purchased Assets by Buyers
against full payment therefor.

 

45

 

24.                               WAIVER
OF REDEMPTION AND DEFICIENCY RIGHTS

 

Seller hereby expressly
waives, to the fullest extent permitted by law, every statute of limitation on
a deficiency judgment, any reduction in the proceeds of any Purchased Assets as
a result of restrictions upon the Agent, any Buyer or Custodian contained in
the Program Documents or any other instrument delivered in connection
therewith, and any right that it may have to direct the order in which any of
the Purchased Assets shall be disposed of in the event of any disposition
pursuant hereto.

 

25.                               REIMBURSEMENT

 

All sums reasonably expended
by the Agent or any Buyer in connection with the exercise of any right or
remedy provided for herein shall be and remain Seller’s obligation.  Seller agrees to pay, with interest at the
Default Rate to the extent that an Event of Default has occurred, the
reasonable out-of-pocket expenses and reasonable attorneys’ fees incurred by
the Agent, any Buyer and/or Custodian in connection with the enforcement of the
Program Documents, the taking of any action, including legal action, required
or permitted to be taken by the Agent or any Buyer and/or Custodian pursuant
thereto, any “due diligence” or loan agent reviews conducted by the Agent or
any Buyer or any refinancing or restructuring in the nature of a “workout.”  If any Buyer determines that, due to the
introduction of, any change in, or the compliance by such Buyer with (i) any
eurocurrency reserve requirement or (ii) the interpretation of any law,
regulation or any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
an increase in the cost to such Buyer in engaging in the present or any future
Transactions, then Seller agrees to pay to such Buyer, from time to time, upon
demand by such Buyer (with a copy to Custodian) the actual cost of additional
amounts as specified by such Buyer to compensate such Buyer for such increased
costs.  Notwithstanding any other
provisions in this Agreement, in the event of any such change in the eurocurrency
reserve requirement or the interpretation of any law, regulation or any
guideline or request from any central bank or other Governmental Authority,
Seller will have the right, after payment of all Obligations under this
Agreement including, without limitation, under this Section 25, to terminate
all Transactions then outstanding as of a date selected by Seller, which date
shall be prior to the applicable Repurchase Date and which date shall
thereafter for all purposes hereof, be deemed to be the Repurchase Date.  In addition, Buyers shall promptly notify
Seller if any events in clause (i) or (ii) of this Section 25
occur; provided, that their failure to do so will not limit any of their
rights hereunder except that no Buyer shall have the right to request
reimbursement of increased costs that were incurred more than 90 days prior to
the date of such request.

 

In addition to any rights
and remedies of the Agent or any Buyer hereunder and by law, the Agent or each
Buyer shall have the right, without prior notice to Seller, any such notice
being expressly waived by Seller to the extent permitted by applicable law,
upon any amount becoming due and payable by Seller hereunder (whether at the
stated maturity, by acceleration or otherwise) to set off and appropriate and
apply against such amount any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Agent or any Buyer or any Affiliate thereof to or for the credit
or the account of Seller or any Affiliate thereof.  The Agent 

 

46

 

and each Buyer agrees promptly to notify Seller after
any such set off and application made by the Agent or such Buyer; provided that
the failure to give such notice shall not affect the validity of such set off
and application.

 

26.                               FURTHER
ASSURANCES

 

Seller agrees to do such
further acts and things and to execute and deliver to the Agent or any Buyer
such additional assignments, acknowledgments, agreements, powers and
instruments as are reasonably required by the Agent or such Buyer to carry into
effect the intent and purposes of this Agreement, to perfect the interests of
the Agent or any Buyer in the Purchased Assets or to better assure and confirm
unto the Agent or any Buyer its rights, powers and remedies hereunder.

 

27.                               ENTIRE
AGREEMENT; PRODUCT OF NEGOTIATION

 

This Agreement supersedes
and integrates all previous negotiations, contracts, agreements and
understandings between the parties relating to a sale and repurchase of
Purchased Assets and Additional Purchased Assets thereto, and it, together with
the other Program Documents, and the other documents delivered pursuant hereto
or thereto, contains the entire final agreement of the parties.  No prior negotiation, agreement,
understanding or prior contract shall have any validity hereafter.

 

28.                               TERMINATION

 

This Agreement shall
remain in effect until the earlier of (i) 360 days following the date of
this Agreement, provided that such date may be extended, in the Buyers’
sole discretion, upon written request of the Seller delivered to the Agent not
less than 60 days prior to such date, or (ii) at Buyers’ option, the
occurrence of an Event of Default or a Servicer Termination Event unless, in
the case of such Servicer Termination Event, Servicer is replaced by a new
Servicer satisfactory to the Agent within 60 days of such Servicer Termination
Event (such date, the “Termination Date”). 
However, no such termination shall affect Seller’s outstanding
obligations to any Buyer at the time of such termination.  Pursuant to any extension of this Agreement,
the Seller shall pay to the Buyers the Renewal Fee.  Seller’s obligations to indemnify Buyer
pursuant to this Agreement shall survive the termination hereof.  Failure of the Buyers to respond to Seller’s
request for an extension pursuant to clause (i) above shall be deemed
a rejection of such request.

 

29.                               ASSIGNMENT

 

a)             The Program
Documents are not assignable by Seller. 
Any Buyer may from time to time assign all or a portion of its rights
and obligations under this Agreement and the Program Documents; provided,
however, that such Buyer shall maintain, for review by Seller upon
written request, a register of assignees and a copy of an executed assignment
and acceptance by such Buyer and assignee (“Assignment and Acceptance”),
specifying the percentage or portion of such rights and obligations
assigned.  Upon such assignment, (a) such
assignee shall be a party hereto and to each Program Document to the extent of
the percentage or portion set forth in the Assignment and Acceptance, and shall
succeed to the applicable rights and obligations of such Buyer hereunder, and (b) such
Buyer shall, to the extent that such rights and obligations have 

 

47

 

been so assigned by it to either (i) a
commercial paper conduit administered by Credit Suisse, New York Branch or an
Affiliate of Credit Suisse, New York Branch which assumes the obligations of
such Buyer or (ii) to another Person rated at least A-1 by S&P and P-1
by Moody’s which assumes the obligations of such Buyer, be released from its
obligations hereunder and under the Program Documents.  Unless otherwise stated in the Assignment and
Acceptance, Seller shall continue to take directions solely from the Buyers
unless otherwise notified by any Buyer in writing.  Each Buyer may distribute to any prospective
assignee any document or other information delivered to such Buyer by Seller.

 

b)            Each Buyer may sell
to one or more Persons participations in all or a portion of its rights and
obligations under this Agreement or otherwise enter into one or more
syndications of its rights and obligations under this Agreement.  In the event of any such sale or syndication,
such Buyer shall be entitled, after consultation with the Seller, to change the
structure, terms (including pricing) or amount, if such Buyer determines that
such changes are advisable in order to achieve a successful sale or
syndication; provided, however that such change to the structure,
terms (including pricing) or amount is not reasonably likely to trigger an
Event of Default.  With respect to any
such sale or syndication, Seller agrees to (a) provide and cause its
officers, directors and advisors to provide such Buyer and any other proposed
buyer that becomes part of the syndicate of such Buyer upon request with all
information reasonably deemed necessary by such Buyer to effectuate such sale
or syndication, (b) assist such Buyer upon its reasonable request in the
preparation of an offering memorandum to be used in connection with such sale
or syndication and (c) make available the officers, directors and advisors
of the Seller and its affiliates, from time to time, to attend and make
presentations regarding the business and prospects of the Seller and its
affiliates, as appropriate, at a meeting or meetings of prospective
buyers.  Notwithstanding the terms of Section 8,
each participant of any Buyer shall be entitled to the additional compensation
and other rights and protections afforded such Buyer under Section 8 to
the same extent as such Buyer would have been entitled to receive them with
respect to the participation sold to such participant.

 

30.                               AMENDMENTS,
ETC.

 

No amendment or waiver of
any provision of this Agreement nor any consent to any failure to comply
herewith or therewith shall in any event be effective unless the same shall be
in writing and signed by Seller, the Agent and the Buyers, and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.

 

31.                               SEVERABILITY

 

If any provision of
Program Document is declared invalid by any court of competent jurisdiction,
such invalidity shall not affect any other provision of the Program Documents,
and each Program Document shall be enforced to the fullest extent permitted by
law.

 

32.                               BINDING
EFFECT; GOVERNING LAW

 

This Agreement shall be
binding and inure to the benefit of the parties hereto and their respective
successors and assigns, except that Seller may not assign or transfer any of
its rights 

 

48

 

or obligations under this Agreement or any other
Program Document without the prior written consent of Agent.  THIS AGREEMENT SHALL, IN ACCORDANCE WITH SECTION 5-1401
OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY CONFLICTS OF LAW
PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER
JURISDICTION.

 

33.                               CONSENT
TO JURISDICTION

 

SELLER HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE PROGRAM DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY.  SELLER HEREBY IRREVOCABLY
AND UNCONDITIONALLY CONSENTS, ON BEHALF OF ITSELF AND ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF ANY COURT OF THE STATE OF NEW YORK, OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, ARISING OUT OF OR
RELATING TO THE PROGRAM DOCUMENTS IN ANY ACTION OR PROCEEDING.  SELLER HEREBY SUBMITS TO, AND WAIVES ANY
OBJECTION SELLER MAY HAVE TO, NON-EXCLUSIVE PERSONAL JURISDICTION AND
VENUE IN THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, WITH RESPECT TO ANY DISPUTES
ARISING OUT OF OR RELATING TO THE PROGRAM DOCUMENTS.  SELLER HEREBY IRREVOCABLY CONSENTS TO THE
SERVICE OF A SUMMONS AND COMPLAINT AND OTHER PROCESS IN ANY ACTION, CLAIM OR
PROCEEDING BROUGHT BY AGENT OR ANY BUYER IN CONNECTION WITH THIS AGREEMENT OR
THE OTHER PROGRAM DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER,
OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS, ON BEHALF OF ITSELF OR ITS
PROPERTY, IN THE MANNER SPECIFIED IN THIS SECTION 33 AND TO SELLER’S
ADDRESS SPECIFIED IN SECTION 36 OR SUCH OTHER ADDRESS AS SELLER SHALL HAVE
PROVIDED IN WRITING TO BUYER.  NOTHING IN
THIS SECTION 33 SHALL AFFECT THE RIGHT OF THE AGENT OR ANY BUYER TO
(I) SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW,
OR (II) BRING ANY ACTION OR PROCEEDING AGAINST SELLER OR ITS PROPERTIES IN THE
COURTS OF ANY OTHER JURISDICTIONS.

 

34.                               SINGLE
AGREEMENT

 

Seller, the Agent and the
Buyers acknowledge that, and have entered hereinto and will enter into each
Transaction hereunder in consideration of and in reliance upon the fact that,
all Transactions hereunder constitute a single business and contractual
relationship and have been made in consideration of each other.  Accordingly, Seller, the Agent and the Buyers
each agree (i) to perform all of its obligations in respect of each Transaction
hereunder, and that a default in the performance of any such obligations shall
constitute a default by it in respect of all Transactions hereunder, and (ii) that
payments, deliveries and other transfers made by any of them in respect of any
Transaction shall be deemed to have been made in consideration of 

 

49

 

payments, deliveries and other transfer in respect of
any other Transaction hereunder, and the obligations to make any such payments,
deliveries and other transfers may be applied against each other and netted.

 

35.                               INTENT

 

Seller, the Agent and the
Buyers recognize that each Transaction is a “repurchase agreement” as that term
is defined in Section 101 of Title 11 of the United States Code, as amended
(“USC”), a “forward contract” as that term is defined in Section 101 of
Title 11 of the USC and a “securities contract” as that term is defined in Section 741
of Title 11 of the USC.

 

It is understood that the
Agent’s and Buyers’ right to liquidate the Purchased Assets delivered to it in
connection with the Transactions hereunder or to exercise any other remedies
pursuant to Section 20 hereof is a contractual right to liquidate such
Transaction as described in Sections 555 and 559 of Title 11 of the USC.

 

36.                               NOTICES
AND OTHER COMMUNICATIONS

 

Except as provided
herein, any notice required or permitted by this Agreement shall be in writing
and shall be effective and deemed delivered only when received by the party to
which it is sent; provided, however, that a facsimile
transmission shall be deemed to be received when transmitted so long as the
transmitting machine has provided an electronic confirmation (without error
message) of such transmission.  Any such
notice shall be sent to a party at the address or facsimile transmission number
set forth below:

 

if to Seller:

 

	
  Spirit Finance Corporation

  	
   

  
	
  14631 N. Scottsdale Road

  	
   

  
	
  Suite 200

  	
   

  
	
  Scottsdale, AZ 85254

  	
   

  
	
  Attention:

  	
  Catherine Long

  
	
  Telephone:

  	
  (480) 606-0820

  
	
  Facsimile:

  	
  (480) 606-0826

  
	
   

  	
   

  
	
  with a copy to:

  	
   

  
	
  Kutak Rock LLP

  	
   

  
	
  1801 California St., Suite 3100

  	
   

  
	
  Denver, Colorado 80202

  	
   

  
	
  Attention:

  	
  Paul E. Belitz, Esq.

  
	
  Telephone:

  	
  (303) 297-2400

  
	
  Facsimile:

  	
  (303) 292-7799

  
			

 

if to any Buyer or Agent:

 

With respect to Transaction Notices and deliveries
required under Section 4 and notices under Section 3(b):

 

50

 

	
  Credit Suisse, New York Branch

  	
   

  
	
  Eleven Madison Avenue

  	
   

  
	
  New York, New York
  10010

  	
   

  
	
  Attention: Joseph Soave
  and Alex Smith

  	
   

  
	
  Telephone:

  	
  (212) 325-1209

  
	
  Facsimile:

  	
  (212) 325-0873

  
	
   

  	
   

  
	
  With respect to all
  other notices:

  	
   

  
	
   

  	
   

  
	
  Credit Suisse, New York
  Branch

  	
   

  
	
  Eleven Madison Avenue

  	
   

  
	
  New York, New York
  10010

  	
   

  
	
  Attention: Anthony
  Giordano

  	
   

  
	
  Telephone:

  	
  (212) 325-9103

  
	
  Facsimile:

  	
  (212) 743-1852

  
			

 

as such address or number may be changed by like
notice.

 

37.                               CONFIDENTIALITY

 

The Agent and each Buyer
acknowledge that Seller is a public company subject to the Securities Act of
1933 and Securities Exchange Act of 1934 and that the information furnished by
Seller to the Agent and the Buyers in the Collection Report, Asset Base
Certificate and otherwise under this Agreement may constitute material
non-public information (“Confidential Information”) within the meaning of such
acts.  Except as consented to by Seller
or if disclosure is required by law, rule, regulation or order of a court or
other regulatory body, the Agent and each Buyer hereby agrees that it will keep
all Confidential Information confidential and not disclose such Confidential
Information to any third party other than rating agencies and, to the extent
disclosure is required by applicable law or made in connection with an
inspection thereby, banking regulators and will not engage in, directly or
indirectly, any transactions involving the Seller’s publicly traded securities
based upon such Confidential Information. 
Notwithstanding the foregoing provisions of this Section 37,
nothing herein shall prevent any division or department of the Agent or the
Buyers from engaging in any lawful transaction in the Seller’s publicly traded
securities in connection with the ordinary course of the business of such
division or department, provided that the decision to enter into such
transaction is, as required by applicable law, not based, in whole or in part,
on any part of the Confidential Information that is material non-public
information.

 

This Agreement, the other
Program Documents and their terms, provisions, supplements and amendments, and
transactions and notices hereunder shall be held by Seller (and Seller shall
cause Servicer to hold it) in strict confidence and shall not be disclosed to
any third party without the consent of the Agent and the Buyers except for (i) disclosure
to Seller’s direct and indirect parent companies, directors, attorneys, agents
or accountants, provided that such attorneys or accountants likewise agree to
be bound by this covenant of confidentiality or (ii) upon prior written
notice to the Agent and the Buyers, disclosure required by law, rule,
regulation or order of a court or other regulatory body or (iii) to the
extent necessary in dealing with obligors or Tenants in connection with
Purchased Assets or (iv) with prior written notice to the Agent and 

 

51

 

the Buyers, to any new Hedge Counterparty to the
extent necessary to obtain any Hedge Instrument hereunder or (v) any
required Securities and Exchange Commission or state securities’ law
disclosures or filings.  Notwithstanding
anything herein to the contrary, each party (and each employee, representative,
or other agent of each party) may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure of the transaction
and all materials of any kind (including opinions or other tax analyses) that
are provided to it relating to such tax treatment and tax structure.  For this purpose, tax treatment and tax
structure shall not include (i) the identity of any existing or future
party (or any Affiliate of such party) to this Agreement or (ii) any
specific pricing information or other commercial terms, including the amount of
any fees, expenses, rates or payments arising in connection with the
transactions contemplated by this Agreement.

 

38.                               HEDGE
INSTRUMENTS

 

The Seller shall notify
the Agent two Business Days prior to entering into any Hedge Instruments.

 

39.                               DUE
DILIGENCE

 

Seller agrees to promptly
provide the Agent and its agents with access to, copies of and extracts from
any and all documents, records, agreements, instruments or information
(including, without limitation, any of the foregoing in computer data banks and
computer software systems) relating to its financial condition, the Purchased
Assets, the performance of its obligations under the Program Documents, the
documents contained in the Servicing File and/or in the possession, or under
the control, of Seller.  In
addition,  the Agent has the right to
perform continuing due diligence reviews of (x) Seller and its Affiliates,
and their directors, officers, employees and significant shareholders, including,
without limitation, their respective financial condition and performance of
their obligations under the Program Documents, (y) the Servicing File and
the Purchased Assets and (z) the Servicer. 
Seller shall also make available to the Agent a knowledgeable financial
or accounting officer for the purpose of answering questions respecting the
Purchased Assets.  Without limiting the
generality of the foregoing, Seller acknowledges that the Agent and Buyers
shall enter into transactions with Seller based solely upon the information
provided by Seller to  the Agent and
Buyers and the representations, warranties and covenants contained herein, and
that  the Agent, at its option, has the
right at any time to conduct a partial or complete due diligence review on some
or all of the Purchased Assets, including, without limitation, ordering new
credit reports, new Appraisals on the related Mortgaged Properties and
otherwise re-generating the information used to originate such Purchased
Assets.  Seller shall pay the Agent’s out
of pocket costs and expenses incurred by the Agent in connection with any due
diligence hereunder.

 

40.          NON-RECOURSE PROVISIONS

 

Notwithstanding anything
herein to the contrary, the Buyers acknowledge and agree that the Transactions
contemplated hereunder, and the amounts due hereunder, are non-recourse to the
Seller and that the Buyers are relying solely upon the value of, and payments
made with respect to, the Purchased Assets for repayment of the amounts due
hereunder, including the payment of any Repurchase Price; provided, however,
that notwithstanding the foregoing 

 

52

 

provision, upon the exercise by the Agent of any
remedies described in the first sentence of Section 20(b)(ii) hereof
(the “Section 20(b)(ii) Remedies”), the Seller shall be liable
to the Buyers for amounts, not in excess of 10% of the Maximum Aggregate
Purchase Price, that remain owing to either or both Buyers following the
exercise by the Agent of any Section 20(b)(ii) Remedy.

 

[Signature Page Follows]

 

53

 

IN WITNESS WHEREOF,
Seller, the Agent and the Buyers have caused their names to be signed to this
Agreement by their respective officers thereunto duly authorized as of the date
first above written.

 

	
   

  	
  SPIRIT FINANCE
  CORPORATION, as Seller

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christopher H. Volk

  
	
   

  	
  Name: Christopher
  H. Volk

  
	
   

  	
  Title: President
  and CEO

  
	
   

  	
   

  
	
   

  	
  CREDIT SUISSE, NEW YORK
  BRANCH., as a

  Buyer and Agent, as applicable

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Golombeck

  
	
   

  	
  Name: Mark
  Golombeck

  
	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael W.
  Koenitzer

  
	
   

  	
  Name: Michael W.
  Koenitzer

  
	
   

  	
  Title: 

  
	
   

  	
   

  
	
   

  	
  ALPINE SECURITIZATION
  CORP., as a Buyer

  
	
   

  	
   

  
	
   

  	
  By: Credit Suisse, New
  York Branch, as its

  Attorney-In-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph Soave

  
	
   

  	
  Name: Joseph Soave

  
	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Lengel

  
	
   

  	
  Name: Mark Lengel

  
	
   

  	
  Title: Director

  

 

 

AnnexI

 

[Reserved.]

 

Annex-1

 

EXHIBIT A

 

QUARTERLY CERTIFICATION

 

I,                            ,
                      ,
the [Chief Financial Officer] of Spirit Finance Corporation (the “Seller”), do
hereby certify that:

 

(i)            the
Seller is in compliance with all provisions and terms of the Master Repurchase
Agreement (the “Repurchase Agreement”) by and among Alpine Securitization
Corp., Credit Suisse, New York Branch (the “Agent”) and the Seller dated as of November 7,
2005;

 

(ii)           the
Seller’s Tangible Net Worth [at the end of the most recent fiscal quarter][as
of [    ], 20[  ]][other date of determination designated by the Agent, in its sole
discretion] was not less than (i) $400,000,000 plus (ii) Net
Worth Increase Amounts;

 

(iii)          as of the end of the most recent
fiscal quarter, Seller, together with its consolidated Subsidiaries, has cash
and Cash Equivalents in an amount of not less than $15,000,000;

 

(iv)          [as of the end of the most recent
fiscal quarter][as of [    ], 20[  ]][other date of determination designated by the Agent,
in its sole discretion], the ratio of Total Indebtedness to Tangible
Net Worth of Seller did not exceed 4:1;

 

(v)           true and complete calculations with
respect to the foregoing are attached hereto; and

 

(vi)          there have not been any material
modifications to the Underwriting Guidelines that have not been approved by the
Agent.

 

A-1

 

IN WITNESS WHEREOF, I
have signed this certificate and affixed the seal of the Seller.

 

Date:                    ,
200 .

 

	
   

  	
  [                                                      ]

  

 

 

[SEAL]

 

I,                            ,
the                     
of the Seller, do hereby certify that                      
is the duly elected or appointed, qualified and acting                   of
the Seller, and the signature set forth above is the genuine signature of such
officer in the date hereof.

 

	
   

  	
  SPIRIT FINANCE
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

A-2

 

EXHIBIT B

 

[Reserved]

 

B-1

 

EXHIBIT C

 

[Reserved]

 

C-1

 

SCHEDULE A

 

Spirit Finance Corporation

List of Subsidiaries

 

Spirit
Management Company

Spirit
Finance Acquisitions, LLC

Spirit
Property Holdings, LLC

Spirit
Limited Holdings, LLC

Spirit
Pocono Corporation and Camelback Acquisition Corporation

Spirit
Master Funding, LLC (formerly Spirit SPE Portfolio 2004-6, LLC)

Spirit
Master Funding II, LLC

Spirit
Master Funding III, LLC

Spirit
SPE Johnston, LLC

Spirit
SPE Raleigh, LLC

Spirit
SPE Missoula, LLC

Spirit
SPE Covina, LLC

Spirit
SPE Columbia, LLC

Spirit
SPE Portfolio 2005-1, LLC

Spirit
SPE Portfolio 2005-2, LLC

Spirit
SPE Portfolio 2005-3, LLC

Spirit
SPE Portfolio 2005-4, LP

Spirit
SPE Portfolio 2005-5, LLC

Spirit
SPE General Holdings, LLC

Spirit
SPE General Holdings II, LLC

Spirit
SPE US Lubbock, LP

Spirit
SPE US Levelland, LP

Spirit
SPE US Vernon, LP

Spirit
SPE US Burkburnett, LP

Spirit
SPE US Wichita Falls, LP

Spirit
SPE US Childress, LP

Spirit
SPE US Amarillo 522, LP

Spirit
SPE US Amarillo 526, LP

Spirit
SPE US Amarillo 527, LP

Spirit
SPE US Amarillo 533, LP

Spirit
SPE US Snyder, LP

Spirit
SPE US Perryton, LP

Spirit
SPE US Plainview, LLC (formerly Spirit SPE Portfolio 2005-4, LLC)

 

 

SCHEDULE B

 

[Reserved]

 

 

Appendix
A to Master Repurchase Agreement

 

Representations
and Warranties in Favor of

Agent, Buyers and Subsequent Purchasers with Respect to the Loans

 

Seller shall be deemed to
represent and warrant to the Agent and the Buyers, unless otherwise expressly
disclosed by Seller in a list of exceptions to these representations and
warranties (the “Exception Schedule”) delivered by Seller and approved by the
Agent, with respect to the Loan transferred on any Purchase Date, as of such
Purchase Date and as of each Purchase Date and each Repurchase Date thereafter,
as follows:

 

(a)           Immediately prior to the transfer and assignment of such
Loan to a Buyer, Seller had good title to, and was the sole owner and holder
of, such Loan, free and clear of any and all liens, encumbrances and other
interests on, in or to such Loan.  Either
(i) the Related Mortgage (as defined below) and, if any, Assignment of
Leases is in favor of the Collateral Agent or (ii) the related Assignment
of Mortgage to the Collateral Agent and, if any, Assignment of Leases in favor
of the Collateral Agent constitutes the legal, valid and binding assignment of
the Mortgage that was executed concurrently with the making of such Loan under
the Master Loan Agreement (the “Related Mortgage”) and the Related Lease
(as defined below) from Seller to the Collateral Agent for the benefit of the
Buyers.  The endorsement of the related
Note is genuine, properly endorsed and constitutes the legal, valid and binding
assignment of such Note to the Collateral Agent, on behalf of the applicable
Buyer, and, together with the Assignment of Mortgage and, if any, Assignment of
Leases, legally and validly conveys all right, title and interest in such Loan
and the related Collateral from Seller to the applicable Buyer.

 

(b)           Seller has full right and authority to sell, assign and
transfer such Loan to the applicable Buyer. 
The entire agreement with the related Net Lease Borrower is contained in
the related Master Loan Agreement and other related Loan Documents and there
are no warranties, agreements or options regarding such Loan or the Mortgaged
Property that was purchased by the Net Lease Borrower that is the obligor of
such Loan (the “Related Borrower”) with the proceeds of such Loan and is
the subject of the Related Mortgaged (the “Related Mortgaged Property”)
not set forth therein.  There are no
agreements between any predecessor in interest in the Loan, on one hand, and
the Borrower or Seller, on the other hand.

 

(c)           The information pertaining to such Loan set forth in the
related Loan Schedule is true and correct in all material respects.  Such Loan is an Eligible Asset.  The Loan was originated, and the related
Lease was entered into or acquired, in accordance with, and fully complies
with, the Underwriting Guidelines in all material respects.  The related Custodian’s Loan File contains
all of the documents and instruments required to be contained therein.

 

(d)           The Related Mortgaged Property is not subject to any Liens
other than any Lien created by the Loan Documents or Program Documents or the
following (“Permitted Exceptions”): (i) liens for real estate taxes
and special assessments not yet due and payable or due but not yet delinquent, (ii) covenants,
conditions and restrictions, rights-of-way, easements and other matters of
public record, such exceptions being of a type or nature that are acceptable to
mortgage lending institutions generally, (iii) certain purchase options
and (iv) other matters to which like properties are commonly subject,
which matters referred to in clauses (i), (ii), (iii), 

 

 

and (iv) do
not, individually or in the aggregate, materially interfere with the value of
the Related Mortgaged Property, do not materially interfere or restrict the
current use or operation of the Related Mortgaged Property and do not
materially interfere with the security intended to be provided by the Related
Mortgage or the current ability of the Related Mortgaged Property to generate
net operating income sufficient to service the Loan.  Financing Statements have been filed and/or
recorded (or, if not filed and/or recorded, have been submitted in proper form
for filing and recording), in all public places necessary to perfect a valid
first priority security interest in all items of personal property pledged by
the Related Borrower, if any, in connection with such Loan.

 

(e)           The Related Mortgage with respect to such Loan constitutes
a valid, legally binding and enforceable first priority lien upon the related
Mortgaged Property and the Improvements located thereon and forming a part
thereof, securing such Loan and, except where the payment of a mortgage
recording fee or tax based on the amount of the loan secured by the related
Mortgaged Property is payable in the jurisdiction where such Mortgaged Property
is located, all other Loans made and to be made under the related Master Loan
Agreement, which lien shall be prior to all other liens and encumbrances,
except for Permitted Exceptions.  The
lien under the Related Mortgage is insured by an ALTA lender’s title insurance
policy (“Title Policy”), or its equivalent as adopted in the applicable
jurisdiction, issued by a nationally recognized title insurance company,
insuring Seller and its successors and assigns (including, without limitation,
the Collateral Agent) or the Collateral Agent, as to the first priority lien
under the Related Mortgage in the original principal amount of the Loan,
subject only to Permitted Exceptions (or, if a title insurance policy has not
yet been issued in respect of the Loan, a policy meeting the foregoing
description is evidenced by a commitment for title insurance “marked up” (or by
“pro-forma” otherwise agreed to in a closing instruction letter countersigned
by the title company) as of the closing date of the Loan).  Each 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 material claims have been made
thereunder and no claims have been paid thereunder.  Seller has not, by act or omission, done anything
that would materially impair the coverage under such Title Policy.  Immediately following the transfer and
assignment of the Loan to a Buyer, such Title Policy (or, if it has yet to be
issued, the coverage to be provided thereby) will inure to the benefit of the
Agent and the Buyers without the consent of or notice to the insurer.

 

(f)            Seller has not waived any material default, breach,
violation or event of acceleration with respect to such Loan or otherwise
existing under the Related Mortgage, the related Note, the related Master Loan
Agreement or any of the related Loan Documents (excluding the Related Lease (as
defined below)).

 

(g)           The Related Mortgaged Property securing such Loan is
leased to a Tenant (the “Related Tenant”) under a Triple Net Lease (the “Related
Lease”).  The Related Borrower has
not waived any material default, breach, violation or event of acceleration by
the Related Tenant existing under the Related Lease.

 

(h)           There is no valid offset, defense or counterclaim to the
payment or performance obligations of such Loan.

 

2

 

(i)            The Related Mortgaged Property securing such Loan is free
and clear of any damage that would materially and adversely affect its value as
security for such Loan.  No proceeding
for the condemnation of all or any material portion of the Related Mortgaged
Property has been commenced and the Related Mortgaged Property is free and
clear of any damage that would materially and adversely affect the value or use
of such Related Mortgaged Property.

 

(j)            Such Loan complied with all applicable usury laws in
effect at its date of origination.

 

(k)           The proceeds of such Loan have been fully disbursed and
there is no requirement for future advances thereunder.  All costs, fees and expenses incurred in
making, closing and recording such Loan, including, but not limited to,
mortgage recording taxes and recording and filing fees relating to the
origination of such Loan and the recording of the Related Mortgage and, if any,
all related Assignments of Mortgage, have been paid.  Any and all requirements as to completion of
any on-site or off-site improvement by the Related Borrower and as to
disbursements of any escrow funds therefor that were to have been complied with
have been complied with.

 

(l)            The Related Borrower with respect to such Loan had the
power, authority and legal capacity to enter into, execute and deliver the
related Note, Master Loan Agreement and all other related Loan Documents to
which the Related Borrower is a party, and such documents have been duly
authorized, properly executed and delivered by the parties thereto, and each is
the legal, valid and binding obligation of the parties thereto, enforceable in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, receivership, moratorium or other laws
relating to or affecting the rights of creditors generally and by general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law).

 

(m)          All improvements upon the Related Mortgaged Property
securing such Loan were, as of the date of delivery of the insurance report
(the “Insurance Schedule”) most recently delivered to the Agent pursuant to Section 14(r)
of this Agreement, insured under insurance policies described in such Insurance
Schedule.  The Related Lease requires the
Related Tenant to maintain, (and, if the Related Tenant fails to maintain, the
Servicer or the Borrower maintains) insurance coverage described on the
Insurance Schedule and all insurance required under applicable law
including, without limitation, insurance against loss by hazards with extended
coverage in an amount (subject to a customary deductible) at least equal to the
full replacement cost of the Improvements located on such Related Mortgaged
Property, including without limitation, flood insurance if any portion of the
improvements located upon the Related Mortgaged Property is, at any time, in a
flood zone area as identified in the Federal Register by the Federal Emergency
Management Agency as a 100 year flood zone or special hazard area, and flood
insurance was available under the then current guidelines of the Federal
Insurance Administration is in effect with a generally acceptable insurance
carrier.  The Related Lease  requires the Related Tenant to maintain (and,
if the Related Tenant fails to maintain, the Servicer or the Borrower
maintains) on the Related Mortgaged Property securing such Loan a fire and
extended perils insurance policy, in an amount not less than the replacement
cost and the amount necessary to avoid the operation of any co-insurance
provisions with respect to the Related 

 

3

 

Mortgaged
Property.  All such insurance policies
contain a standard “additional insured” clause (or similar clause) naming the
Related Borrower (as landlord under the Related Lease), and its successors and
assigns (including, without limitation, the Collateral Agent), as additional
insured, and may not be reduced, terminated or canceled without thirty (30)
days’ prior written notice to the additional insured.  In addition, the Related Mortgage with
respect to such Loan requires the Related Borrower to (i) except in the
case of a workers’ compensation insurance policy, cause the holder of the
Related Mortgage, as the mortgagee, to be named as an additional insured
mortgagee under, and (ii) maintain (or require the Related Tenant to
maintain) in respect of the Related Mortgaged Property, workers’ compensation
insurance (if applicable), commercial general, liability insurance in amounts
generally required by Seller, and at least 6 months rental or business
interruption insurance.  The Loan
Documents with respect to such Loan obligate the Related Borrower to maintain
such insurance and, at the Related Borrower’s failure to do so, authorizes the
mortgagee to maintain such insurance at the Related Borrower’s cost and expense
and to seek reimbursement therefor from the Related Borrower.  Each such insurance policy (other than a
workers’ compensation insurance policy) is required, under the Loan Documents
with respect to such Loan, to name the holder of the Related Mortgage as an
additional insured or contain a mortgagee endorsement naming the holder of the
Mortgage as loss payee and requires prior notice to the holder of the Related
Mortgage of termination or cancellation, and no such notice has been received,
including any notice of nonpayment of premiums, that has not been cured.  There have been no acts or omissions that
would impair the coverage of any such insurance policy or the benefits of the
mortgage endorsement.  All insurance
contemplated in this section is maintained with insurance companies with a
General Policy Rating of “A” or better by S&P or A:VI or better by Best’s
Insurance Guide and are licensed to do business in the state wherein the
Related Borrower or the Related Mortgaged Property subject to the policy, as
applicable, is located.

 

(n)           The Related Mortgaged Property securing such Loan was subject
to one or more environmental site assessments or reports (or an update of a
previously conducted assessment or report) not more than six months prior to
the origination of such Loan, and Seller has no knowledge of any material and
adverse environmental conditions or circumstance affecting such Related
Mortgaged Property that was not disclosed in the related assessment or
report(s).  There are no material and
adverse environmental conditions or circumstances affecting the Related
Mortgaged Property securing such Loan other than, with respect to any adverse
environmental condition described in such report, those conditions for which
remediation has been completed and, if (i) a program of annual integrity
testing and/or monitoring was recommended, it was implemented in connection
with the Related Mortgaged Property securing such Loan or an adjacent or
neighboring property; (ii) an operations and maintenance plan or periodic
monitoring of such Related Mortgaged Property or nearby properties was
recommended, it was implemented or (iii) a follow-up plan was otherwise
required to be taken under CERCLA (as defined below) or under regulations
established thereunder from time to time by the Environmental Protection
Agency, such plan has been implemented and, in the case of (i), (ii) and (iii) above,
the Seller determined in accordance with the Underwriting Guidelines that
adequate funding was available for such program or plan, as applicable.  Seller has not taken any action with respect
to such Loan or the Related Mortgaged Property securing such Loan that could
subject the Agent, any Buyer, or its successors and assigns in respect of such
Loan, to any liability under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (“CERCLA”) or any other 

 

4

 

applicable
federal, state or local environmental law, and Seller has not received any
actual notice of a material violation of CERCLA or any applicable federal,
state or local environmental law with respect to the Related Mortgaged Property
securing such Loan that was not disclosed in the related report.  The Related Mortgage or other related Loan
Documents require the Related Borrower (and the Related Leases require the
Related Tenant) to comply with all applicable federal, state and local
environmental laws and regulations.

 

(o)           Such Loan is not cross-collateralized with any mortgage
loan that is not a Purchased Asset under this Agreement.

 

(p)           The terms of the Related Mortgage, the related Note, the
related Master Loan Agreement and other Loan Documents with respect to such
Loan have not been impaired, waived, altered, modified, satisfied, canceled or
subordinated in any material respect, except by written instruments, approved
by the Agent, that are part of the Custodian’s Loan File, and recorded or filed
in the applicable public office if necessary to maintain the priority of the
lien of the Related Mortgage.

 

(q)           There are no delinquent taxes, ground rents, assessments
for improvements or other similar outstanding lienable charges affecting the
Related Mortgaged Property with respect to such Loan which are or may become a
lien of priority equal to or higher than the lien of the Related Mortgage.  For purposes of this representation and
warranty, real property taxes and assessments shall not be considered unpaid
until the date on which interest and/or penalties would be payable thereon.

 

(r)            The interest of the Related Borrower in the Related
Mortgaged Property consists of a fee simple estate in real property and the
Related Borrower is the sole owner of the Related Mortgaged Property.

 

(s)           Such Loan is a whole loan and not a participation
interest.

 

(t)            The Assignment of Mortgage, if any, with respect to such
Loan constitutes the legal, valid and binding assignment of the Related
Mortgage from the Seller to the Collateral Agent, on behalf of the Buyers.  The assignment of leases and rents set forth
in the Related Mortgage or a separate Assignment of Leases related to and
delivered in connection with such Loan establishes and creates in favor of the
Collateral Agent, on behalf of the Buyers, a valid, subsisting and, subject
only to Permitted Exceptions, enforceable first priority lien and first
priority security interest in the Related Borrower’s interest in all leases,
subleases, licenses or other agreements pursuant to which any person is
entitled to occupy, use or possess all or any portion of the real property
subject to the Related Mortgage, and each assignor thereunder has the full right
to assign the same.  The related
Assignment of Mortgage, if any, and Assignment of Leases, if any, executed and
delivered in favor of the Collateral Agent are in recordable form and
constitute a legal, valid and binding assignment, sufficient to convey to the
Collateral Agent all of the assignor’s right, title and interest in, to and
under the Related Mortgage and all leases and rents related to the Related
Mortgaged Property.

 

(u)           All escrow deposits relating to such Loan that are
required to be deposited with the related Seller or its agent have been so
deposited.

 

5

 

(v)           The Related Mortgaged Property securing such Loan was and
is free and clear of any mechanics’ and materialmen’s liens or liens in the nature
thereof which create a lien prior to that created by the Related Mortgage,
except those which are (i) insured against by the Title Policy referred to
in (e) above or (ii) otherwise insured against or bonded within 45
days of the sooner to occur of (A) knowledge by, or (B) notice to,
the Seller with respect to such mechanics’ and materialmen’s liens or liens in
the nature thereof.

 

(w)          No improvement that was included for the purpose of
determining the Appraised Value of the Related Mortgaged Property securing such
Loan lay outside the boundaries and building restriction lines of such property
in any way that would materially and adversely affect the value of such
Mortgaged Property or the ability to operate the Mortgaged Property under the
related Lease (unless affirmatively covered by the Title Insurance referred to
in paragraph (e) above), and no improvements on adjoining properties
encroached upon such Mortgaged Property to any material extent.

 

(x)            (i) There exists no material default, breach or event
of acceleration under, or with respect to, such Loan, the Related Mortgage, the
related Master Loan Agreement, any of the related Loan Documents or the Related
Lease, (ii) there exists no event (other than payments due but not yet
delinquent) that, with the passage of time or with notice and the expiration of
any grace or cure period, would constitute such a material default, breach or
event of acceleration and (iii) no payment on such Loan is, or has
previously been, 30 or more days delinquent.

 

(y)           In connection with the origination of such Loan, Seller
inspected or caused to be inspected the Related Mortgaged Property securing
such Loan by inspection, appraisal or otherwise as required in Seller’s
Underwriting Guidelines then in effect.

 

(z)            No Loan Document related to such Loan provides for any
equity participation or shared appreciation rights and no such Loan Document
provides for any contingent or additional interest in the form of participation
in the cash flow of the Related Mortgaged Property securing the Loan, or for
negative amortization.

 

(aa)         Neither Seller nor any Affiliate thereof has advanced funds,
or induced, solicited or knowingly received any advance of funds from a party
other than the Related Borrower, directly or indirectly, for the payment of any
amount required under such Loan (other than amounts paid by the Related Tenant
as specifically provided under the Related Lease).

 

(bb)         To Seller’s knowledge, based on due diligence performed in
the origination or acquisition of comparable mortgage loans by Seller in
accordance with the Underwriting Guidelines, (i) the Related Borrower and
the Related Tenant each was in compliance with all applicable laws relating to
the ownership (in the case of the Related Borrower) and operation (in the case
of the Related Tenant) of the Related Mortgaged Property securing such Loan as
it is being operated and is in possession of all material licenses, permits and
authorizations required by applicable laws for the ownership (in the case of
the Related Borrower) and operation (in the case of the Related Tenant) of such
Related Mortgaged Property as it is being operated; and, (ii)(1) the
Related Borrower and the Related Tenant each is not in default of its
obligations under any such applicable license, permit or authorization and (2) each

 

6

 

such
license, permit and authorization is in full force and effect.  If the Related Mortgaged Property is operated
as a franchised property, except with respect to Loans for which the Related
Tenant is the franchisor, the Related Tenant of such Related Mortgaged Property
has entered into a legal, valid, and binding franchise agreement and (A) such
Tenant has represented in the applicable lease documents that, as of the date of
origination of the Related Lease, there have been no material defaults under
such franchise agreement by such Related Tenant and (B) to Seller’s
knowledge, there have been no material defaults under such franchise agreement
by such Related Tenant.

 

(cc)         The origination, servicing and collection practices Seller
uses with respect to such Loan, have complied with applicable law in all
material respects and are consistent and in accordance with the terms of the
related Loan Documents and in accordance with the applicable servicing standard
and customary industry standards.

 

(dd)         The Related Mortgage with respect to such Loan and the other
related Loan Documents contain customary and enforceable provisions such as to
render the rights and remedies of the Agent adequate for the practical
realization against the Related Mortgaged Property of the principal benefits of
the security intended to be provided by the Related Mortgage and the other
related Loan Documents, including the right of foreclosure under the laws of
the state in which the Related Mortgaged Property is located.

 

(ee)         The Related Mortgage with respect to such Loan provides that
insurance proceeds and condemnation proceeds will be applied for one of the
following purposes: either to restore or repair the Related Mortgaged Property
securing such Loan, to repay the principal of such Loan or as otherwise
directed by the holder of the Related Mortgage.

 

(ff)           There are no actions, suits, legal, arbitration or
administrative proceedings or investigations by or before any court or
governmental authority (or, to the best of Seller’s knowledge, pending) against
or affecting the Related Borrower or the Related Mortgaged Property securing
such Loan that, if determined adversely, would materially and adversely affect
the value of the Related Mortgaged Property securing such Loan, the ability of
the Related Borrower to pay principal, interest or any other amounts due under
such Loan or the ability of the Related Tenant to pay rent or any other amounts
due under the Related Lease.  To  Seller’s knowledge there are no actions,
suits, legal, arbitration or administrative proceedings or investigations by or
before any court or governmental authority or pending against or affecting the
Related Tenant that, if determined adversely, would materially and adversely
affect the value of the Related Mortgaged Property securing such Loan, the
ability of the Related Borrower to pay principal, interest or any other amounts
due under such Loan or the ability of the Related Tenant to pay rent or any
other amounts due under the Related Lease.

 

(gg)         If the Related Mortgage with respect to such Loan is a deed
of trust, a trustee, duly qualified under applicable law to serve as such, is
properly designated and serving under such Related Mortgage.  Except in connection with a trustee’s sale or
as otherwise required by applicable law, after default by the Related Borrower,
no fees or expenses are payable to such trustee.

 

7

 

(hh)         Except in cases where a release of a portion of the Related
Mortgaged Property securing such Loan was contemplated at origination of the
Loan and such portion was not considered (1) in the determination of the
Appraised Value and (2) material for purposes of underwriting the Loan,
the Related Mortgage and other related Loan Documents do not require any party
to release all or any portion of the Related Mortgaged Property from the lien
of the Related Mortgage except upon payment in full of all amounts due under
the Loan.

 

(ii)           The Related Mortgage does not permit the Related Mortgaged
Property securing such Loan to be encumbered by any lien junior to, or of equal
priority with, the lien of the Related Mortgage (excluding any lien relating to
another Loan under a Master Loan Agreement that is cross collateralized with
the Loan) without the prior written consent of the holder thereof.

 

(jj)           Neither the Related Borrower nor the Related Tenant with
respect to such Loan is a debtor in any state or federal bankruptcy or
insolvency proceeding.

 

(kk)         The Related Borrower with respect to such Loan is not a
natural person and is duly organized and validly existing under the laws of the
state of its jurisdiction.  The Related
Tenant with respect to such Loan is not a natural person and is duly organized
and validly existing under the laws of the state of its jurisdiction.

 

(ll)           The Loan Documents with respect to such Loan contain
provisions for the acceleration of the payment of the unpaid principal balance
of such Loan if, without complying with the requirements of such Loan
Documents, the Mortgaged Property securing such Loan, or any controlling
interest in the Related Borrower, is directly or indirectly transferred or
sold.

 

(mm)       The Loan Documents with respect to such Loan provide that the
Related Borrower is to provide periodic financial and operating reports
including, without limitation, annual profit and loss statements, statements of
cash flow and other related information that Agent reasonably requests from
time to time.

 

(nn)         To Seller’s knowledge, based upon zoning letters, zoning
reports, the title insurance policy insuring the lien of the Related Mortgage,
historical use and/or other due diligence performed by Seller in accordance
with the Underwriting Guidelines in connection with the origination of the
Loan, the improvements located on or forming part of the Related Mortgaged
Property securing such Loan comply in all material respects with applicable
zoning laws and ordinances (except to the extent that they may constitute legal
non-conforming uses).

 

(oo)         The Related Mortgaged Property with respect to such Loan is
located within one of the 50 United States or the District of Columbia.

 

(pp)         If such Loan is secured by a Related Mortgaged Property
located in California and/or “seismic zones” 3 or 4, (i) the Related
Borrower has obtained, and is required under the Loan Documents to maintain,
earthquake insurance with respect to the Improvements on such Related Mortgaged
Property (in an amount equal to the replacement value of such Improvements) or
is required to cause the Related Tenant to maintain (and the Related Tenant has
obtained) such earthquake insurance if such Related Mortgaged Property is
located in any 

 

8

 

such area,
(ii) self-insurance by the Tenant with respect to earthquake risk is
permitted under the Related Lease (and such information was included in the
Underwriting Package, or documentation related thereto, delivered to the Agent
in connection with such Loan) or (iii) a seismic study was performed in
connection with the origination of such Loan and such study indicates a
probable maximum loss of less than 20% of the appraised value of such Related
Mortgaged Property.

 

(qq)         Seller does not have knowledge of any circumstance or
condition with respect to such Loan, the Related Mortgaged Property securing
such Loan, the Related Lease or the Related Borrower’s or the Related Tenant’s
credit standing that could reasonably be expected to cause Related Buyer to
regard such Loan as unacceptable security, cause such Loan or Related Lease to
become delinquent or have a material adverse effect on the value or
marketability of such Loan.

 

(rr)           The Related Mortgaged Property securing such Loan has
adequate rights of access to public rights-of-way and is served by utilities,
including, without limitation, adequate water, sewer, electricity, gas,
telephone, sanitary sewer, and storm drain facilities.  All public utilities necessary to the continued
use and enjoyment of such Related Mortgaged Property securing such Loan as
presently used and enjoyed are located in such public right-of-way abutting
such Related Mortgaged Property or are the subject of access easements for the
benefit of the Related Mortgaged Property, and all such utilities are connected
so as to serve such Related Mortgaged Property without passing over other
property or are the subject of access easements for the benefit of such Related
Mortgaged Property.  All roads necessary
for the full use of the Related Mortgaged Property securing the Loan for its
current purpose have been completed and dedicated to public use and accepted by
all governmental authorities or are the subject of access easements for the
benefit of such Related Mortgaged Property.

 

(ss)         No payments required under the Related Lease with respect to
such Loan are, or were at any time after the Related Borrower executed or
assumed such Related Lease, 30 days or more delinquent.

 

(tt)           Neither the Related Lease with respect to such Loan nor
any other agreement, document or instrument executed in connection with such
Related Lease has been waived, modified, altered, satisfied, cancelled or
subordinated in any material respect, and such Related Lease has not been
terminated or cancelled, nor has any instrument been executed that would effect
any such waiver, modification, alteration, satisfaction, termination,
cancellation, subordination or release, except in each case by a written
instrument that has been approved by the Agent and is part of the related
Custodian’s Loan File.

 

(uu)         Such Loan is not a Delinquent Loan.

 

(vv)         There are no pending actions, suits or proceedings by or
before any court or governmental authority against or affecting, the Related
Lease, the Related Mortgaged Property or, to Seller’s knowledge, the Related
Tenant with respect to such Loan, that are reasonably likely to be determined
adversely and, if determined adversely, would materially and adversely effect
the value of such Related Lease or the use or value of such Related Mortgaged 

 

9

 

Property,
or the ability of such Related Tenant to pay any amounts due under such Related
Lease.

 

(ww)       All of the material improvements built or to be built on the
Related Mortgaged Property with respect to such Loan that were included for the
purpose of determining the Appraised Value of such Related Mortgaged Property
lay within the boundaries of such Related Mortgaged Property and there are no
encroachments into the building setback restriction lines of such Related
Mortgaged Property in any way that would materially and adversely affect the
value of such Related Mortgaged Property or the ability of the Related Tenant
to pay any amounts due under the Related Lease (unless affirmatively covered in
the applicable Title Policy described in (e) above.)

 

(xx)          There is no valid dispute, claim, offset, defense or
counterclaim to the Related Borrower’s or the Agents rights in the Related
Lease with respect to such Loan.

 

(yy)         The Related Lease with respect to such Loan, and each other
agreement, document or instrument executed in connection with such Related
Lease, is the legal, valid, binding and enforceable obligation of the Related
Tenant (subject to certain creditors’ rights exceptions and other exceptions of
general application) and is in full force and effect.

 

(zz)          The Related Lease with respect to such Loan contains
customary and enforceable provisions such as to render the rights and remedies
of the Related Borrower and its assignees adequate for the practical realization
against the Related Tenant of the principal benefits thereunder.

 

(aaa)       With respect to the Related Mortgaged Property with respect to
such Loan:

 

(1)           such Related Mortgaged Property is
not subject to any lease other than the related Lease and, if any, a sublease;
no person has any possessory interest in, or right to occupy, such Related
Mortgaged Property except under and pursuant to the Related Lease or such
sublease; the Related Tenant (or sub-tenant) is in occupancy of the Mortgaged
Property and is paying rent pursuant to the Lease; and, in the case of any
sublease, the Tenant remains primarily liable on the Lease;

 

(2)           the obligations of the Related
Tenant, including, but not limited to, the obligation to pay fixed and
additional rent, are not affected by reason of: any damage to or destruction of
any portion of such Related Mortgaged Property; any taking of such Related
Mortgaged Property or any part thereof by condemnation or otherwise; or any
prohibition, limitation, interruption, cessation, restriction, prevention or
interference of the Related Tenant’s use, occupancy or enjoyment of the leased
property, except the Related Tenant’s rights to abate or terminate its
obligation to pay fixed or additional rent during the last 42 months of the lease
term in the event of a casualty, if coupled with the requirement that insurance
proceeds or condemnation awards in an amount equal to such fixed or additional 

 

10

 

rent are paid to the Related
Borrower; or the right to abate as a result of a landlord’s default;

 

(3)           the Related Borrower as lessor under
the Lease does not have any monetary obligations under the Lease that have not
been satisfied;

 

(4)           the Related Tenant has not been
released, in whole or in part, from its obligations under the terms of the
Related Lease;

 

(5)           all obligations related to the
initial construction of the improvements on the Mortgaged Property have been
satisfied and except for the obligation to rebuild such improvements after a
casualty (which obligation is limited by available insurance proceeds), Seller
does not have any nonmonetary obligations under the Lease and has made no
representation or warranty under the Related Lease, the breach of which would
result in the abatement of rent, a right of setoff or termination of the
Related Lease;

 

(6)           there is no right of rescission,
set-off, abatement (except in the case of casualty or condemnation),
diminution, defense or counterclaim to the Related Lease, nor does  the operation of any of the terms of the
Related Lease, or the exercise of any rights thereunder, render the Related
Lease unenforceable, in whole or in part, or subject to any right of
rescission, set-off, abatement, diminution, defense or counterclaim, and no
such right has been asserted;

 

(7)           the Related Tenant has agreed to
indemnify the Related Borrower and its successors and assigns from any claims
of any nature relating to the Related Lease and the related leased property
(including, without limitation, arising as a result of violations of
environmental and hazardous waste laws resulting from the Tenant’s operation of
the property) other than claims relating to the Related Borrower’s gross
negligence or willful misconduct;

 

(8)           any obligation or liability imposed
on the Related Borrower by any easement or reciprocal easement agreement is
also an obligation or liability of the Related Tenant under the Related Lease;

 

(9)           the Related Tenant is required to
make rental payments as directed by the lessor and its successors and assigns;
and

 

(10)         except in certain cases where the
Related Tenant may exercise a right to purchase the Mortgaged Property upon
being notified of an intended sale of the Related Mortgaged Property (to the
extent that an assignment of the Related Lease would occur concurrently with
such a sale of the Related Mortgaged Property), the Related Lease is freely
assignable by the Related Borrower and its successors and assigns to any person
without the consent of the Tenant, and in the event the Related Borrower’s
interest is so assigned, the Tenant is obligated to recognize the assignee as
lessor under such Related Lease, whether under the Related Lease or by
operation of law.

 

11

 

(bbb)      In connection with Leases with a guaranty:

 

(1)           such guaranty, on its face, is
unconditional, irrevocable and absolute, and is a guaranty of payment and not
merely of collection and contains no conditions to such payment, other than a
notice and right to cure; and the guaranty provides that it is the guaranty of
both the performance and payment of the financial obligations of the Related
Tenant under the Related Lease and does not provide for offset, counterclaim or
defense; and

 

(2)           such guaranty is binding on the
successors and assigns of the guarantor and inures to the benefit of the lessor’s
successors and assigns and cannot be released or amended without the lessor’s
consent or unless a predetermined performance threshold is achieved.

 

(ccc)       No fraudulent acts were committed by Seller or the Related
Borrower during the origination process with respect to the Lease related to
such Loan.

 

(ddd)      The origination, servicing and collection of monthly Lease
payments on the Related Lease is in all respects legal, proper and prudent and
in accordance with customary industry standards.

 

(eee)       To the extent required under applicable law, Seller and the
Related Borrower are authorized to transact and do business in the jurisdiction
in which the Related Mortgaged Property with respect to such Loan is located,
except where such failure to qualify would not result in a material adverse
effect on the enforceability of the Related Lease.

 

(fff)         The Custodian’s Loan File contains a survey with respect to
the Related Mortgaged Property with respect to such Loan, which survey was
deemed sufficient to delete the standard title survey exception (to the extent
the deletion of such exception is available in the related state).

 

(ggg)      The Seller did not intentionally select such Loan, whether
individually or together with other Loans, in a manner adverse to the
applicable Buyer or in a manner that results in such Buyer receiving Loans that
are of lesser quality than Loans pledged to other lenders pursuant to any other
facility to which Seller or any of its Affiliates are a party.

 

(hhh)      If the Related Mortgaged Property with respect to such Loan is
the subject of a Master Lease all other Properties subject to such Master Lease
are also Mortgaged Properties.  The
Related Borrower is the sole lessor under the Related Lease.

 

(iii)          The Related Mortgaged Property with respect to such Loan is
(i) free of any damage that would materially and adversely affect the use
or value of such Related Mortgaged Property, (ii) in good repair and
condition so as not to materially and adversely affect the use or value of such
Related Mortgaged Property; and all building systems contained in such Related
Mortgaged Property are in good working order so as not to materially and
adversely affect the use or value of such Related Mortgaged Property.

 

12

 

(jjj)          All security deposits collected in connection with the
Related Mortgaged Property and the Related Lease with respect to such Loan are
being held in accordance with all applicable laws.

 

(kkk)       Seller has taken (or has caused to be taken) all such actions
and precautions as a reasonably prudent lender would take to protect and
preserve the Collateral  with respect to
such Loan and its security interest in such Collateral, including without
limitation, notation of the Seller as lien holder on any certificates of title
to property the nature of which is such that ownership thereof is evidenced by
a certificate of title, where such notation is required under applicable law to
perfect the interest therein.

 

(lll)          Each Related Mortgage and every other Loan Document with
respect to such Loan, contains customary and enforceable provisions so as to
render the rights and remedies of the holder thereof adequate for the practical
realization of the benefits of the security interests intended to be provided
thereby, including, where applicable, by judicial foreclosure, subject to the
limitations described in the next succeeding sentence.  There is no exemption under existing law
available to the Related Borrower which would interfere with the Collateral
Agent’s right to foreclose or to realize upon the Related Mortgage or, as
applicable, any other related Loan Document other than which may be available
under the insolvency laws, other laws of general application relating to or
affecting the enforcement of creditors’ rights generally, applicable debt
relief or homestead statutes or general principles of equity.

 

(mmm)    Such Loan is with full recourse to the Related Borrower.

 

(nnn)      With respect to such Loan, as of the date of origination, the
Appraised Value of the Mortgaged Property relating to such Loan was at least
100% of the principal amount of such Loan.

 

(ooo)      There has been performed, not more than six months prior to the
origination date for such Loan, an Appraisal of the related Mortgaged Property.

 

(ppp)      All principal, interest and any other amounts due under such
Loan are payable in U.S. dollars. 
Interest and, as applicable, principal with respect to such Loan is
payable on a monthly basis.

 

(qqq)      None of the Related Borrower, the Seller or any officer,
director, employee, member or Affiliate thereof is an officer, director,
employee, shareholder, partner or Affiliate of the Related Tenant (unless
otherwise disclosed to the Agent in the Underwriting Package).

 

(rrr)         The information furnished to the Agent or any Buyer by
Seller and its Affiliates in connection with the Agent’s or such Buyer’s
investigation of such Loan, whether before or after the date hereof, is true
and correct in all material respects and does not omit any information
necessary to make the statements contained therein not misleading.

 

(sss)       There is no action, suit, legal or arbitration proceeding or
administrative proceeding or investigation pending or, to the best of Seller’s
knowledge, threatened against or affecting such Loan, any related Loan
Document, the Related Borrower or 

 

13

 

any
related Collateral that have a reasonable probability of having a material
adverse effect on  such Loan or the
Related Mortgaged Property.

 

(ttt)         Seller is not subject to any judgment, writ, decree,
injunction or order of any federal, foreign, state or local court or
Governmental Authority relating to the acquisition, collection, administration
or enforcement of such Loan or the foreclosure, acquisition or disposition of
any Collateral related thereto or, in each case, any transactions or activities
incidental thereto.

 

(uuu)      The transfer and assignment of such Loan, together with any
other Loan, by Seller pursuant to this Agreement is not subject to the bulk
transfer, bulk sales or any similar statutory provisions in effect in any
applicable jurisdiction.

 

14

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